Nearly a million people have signed up to claim Universal Credit in the last fortnight, as the scale of the economic crisis caused by the coronavirus outbreak begins to become clear.
Around 950,000 successful new claimants – more than one and a half times the number of people living in Liverpool, England’s third largest city, have asked for the allowance, in an unprecedented surge.
The rise in new welfare claimants between March 16 and 31 is almost 10 fold – with the normal number of applicants in a two-week period standing at roughly 100,000. It comes as businesses struggle to survive the Covid-19 crisis and despite a government pledge to do ‘whatever it takes’ to bail out struggling companies – amid scores of job losses and employees being ‘furloughed’ in various industries.
Meanwhile, a survey by the British Chambers of Commerce found that around 44 per cent of companies have said at least half of their staff will be paid through the scheme, which sees the government pay 80% of wages in an effort to reduce job losses. Another third plan to furlough 75% to 100% of staff in the next week, while a fifth of companies have temporarily closed, the survey said.
Applications for Universal Credit — which varies in value depending on your circumstances, but is worth £124.72 per week for a couple over 25 — soared after the Prime Minister announced a lockdown to stop the virus’ spread. A single person under 25 receives £62.94 a week.
The BBC’s political editor, Laura Kuenssberg, labelled the new statistics ‘absolutely astonishing’.
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A Department for Work and Pensions spokesman insisted to Metro.co.uk that the rise does not mean there has been a similar increase in unemployment, since people apply for UC for a variety of reasons.
Torsten Bell, Director of the think tank the Resolution Foundation, tweeted: ‘We’ve never seen anything like this.
‘Attention has focused on the new retention and self-employment schemes but Universal Credit delivering is the key to avoiding real hardship.
‘We should add hard working DWP civil servants to our (ever growing) list of people to be grateful for. Their job in processing these claim and getting cash to families couldn’t be more crucial.’
In a post explaining the scale of the crisis, the Foundation compared the surge with the figures from the 2008 economic crash – which saw 92,000 on Jobseeker’s Allowance in February 2008 rise to 165,000 in February 2009 – compared to the 900,000 rise on Universal Credit in the last fortnight.
The organisation wrote: ‘This recession is going to be a labour market recession.
‘We already know that the measures that the Government has announced are not going to be enough to prevent unemployment from rising.’
Criticising the five-week wait for money, Labour’s Shadow Secretary of State for Work and Pensions, Margaret Greenwood, said: ‘The number of people now trying to claim Universal Credit is truly shocking. The Government must wake up and take action, not leave people waiting days to verify their identity and five weeks to get the support they need.
‘People need help now, but neither the Job Retention Scheme nor the Self-employment Income Support Scheme are up and running, and 2 million self-employed people will not be covered at all.
‘The Government should turn advances into non-repayable grants to end the five week wait and make sure people get the support they need quickly at a level that genuinely protects them from poverty.’
A DWP spokesperson said: ‘With such a huge increase in claims, there are pressures on our services. But the system is standing up well to these and our dedicated staff are working flat out to get people the support they need. We’re taking urgent action to boost capacity.’
‘How to claim universal credit’ is also among some of the most Googled phrases in the UK in recent weeks.
Applications for Universal Credit can be made, as normal, through the Department for Work and Pensions (DWP) but long waits are anticipated.
Self-employed people now in need of Universal Credit will also be able to get an advance credit to tide them over, Chancellor Rishi Sunak has said.
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