Credit cuts and energy increases to affect Cumbria

The Department for Work and Pensions figures show there were 8,849 people claiming Universal Credit in Carlisle in July – the latest available data. Of those, 45 percent were in work.

Anti-poverty charity the Joseph Rowntree Foundation said the end of the uplift represented the ‘biggest ever overnight cut to social security’, and claimed the Government’s decision could plunge up to half a million people into poverty.

Katie Schmuecker, from the JRF, said: “The Prime Minister is abandoning millions to hunger and hardship with his eyes wide open.”

She added the decision ‘flies in the face’ of the Government’s mission to unite and level up the country.

“People’s bills won’t get cheaper from Wednesday and families are already anxious about how they will get through a looming cost of living crisis,” she said.

“This decision shows a total disregard for the consequences.”

But a Government spokesperson said: “We’ve always been clear that the uplift to Universal Credit and the furlough scheme were temporary.

“They were designed to help claimants through the economic shock and financial disruption of the toughest stages of the pandemic, and they have done so.”

The spokesperson said that Universal Credit would continue to provide support for people in and out of work and added that it was right for the Government to focus on its ‘Plan for Jobs’, which aims to support people back into work and help those already working to progress.

The cut is also unpopular among private landlords, who see it as a threat to their tenants’ ability to pay rent.

Responding to the changes, Meera Chindooroy, deputy policy director at the National Residential Landlords Association, said: “During the pandemic we have found that many renters have built high levels of arrears, which they will struggle to pay off in future.

“With this in mind, the cut to Universal Credit is a short-sighted move that will only serve to worsen this ongoing rent debt crisis.

“Most landlords have offered flexibility where tenants have faced the financial impact of the pandemic, but they cannot absorb these losses indefinitely.

“Practical steps to address this problem can and should be taken to ensure those tenants in receipt of benefits can cover their rents. It is our view that not only must the Government end the five-week wait for the first payment of Universal Credit, it should also ensure they can choose to have the housing element of their Universal Credit payments sent directly to their landlord.

“Besides addressing the consequences of this cut to Universal Credit, it is our belief that adopting this new approach will go a long way towards the creation of a fairer, more inclusive private rented sector which works in the interests of both landlords and tenants.”

Concern over the ending of the uplift is exacerbated by another looming challenge – rising energy prices. As we begin to move into winter and temperatures begin to drop, some will be left struggling to keep warm.

Andy Auld, CEO of Citizens Advice Carlisle & Eden (CACE) said: “Cutting Universal Credit as we head into a very tough winter is a recipe for disaster. With household budgets already being squeezed from all sides, families on the lowest incomes simply cannot afford to lose £20 a week.

“If the government is serious about ‘levelling up’ it must change course. Otherwise, our frontline advisers could see many more facing desperate choices between ‘heating and eating’ in the months ahead.”

Mr Auld pointed out that the cut does not just affect people out of work, highlighting that 43 percent of UC claimants in Carlisle are in-work and 46 percent of claimants in Eden are also in employment.

He continued: “This cut is going to affect those on the lowest income who will struggle to afford food and heating and will result in increased reliance on food-banks because there is no money left over after essential bills.

“CACE can help people facing financial difficulties this winter – helping to budget, maximising income, and managing debts.”

On top of the end to the extra £20 a week, people of Cumbria will be forced to pay more for their energy bills over winter, resulting in a double blow for many who struggle to make ends meet.

In a statement to the BBC, energy regulator Ofgem - which reviews the price cap once every six months and changes it based on the cost that suppliers must pay for their energy, cost of policies and operating costs – said it was a “worrying time for many people”.

The regulator added: “The energy price cap covers around 15 million households and will ensure that consumers don’t pay more than is absolutely necessary this winter.

“However, if global gas prices remain high, then when we update the price cap unfortunately the level would increase.”

Craig Lowrey, senior consultant at Cornwall Insight, said: “With wholesale gas and electricity prices continuing to reach new records, successive supplier exits during September 2021 and a new level for the default tariff cap - £1,277 for a typical dual fuel direct debit customer - for Winter 2021-22, the GB energy market remains on edge for fresh volatility and further consolidation.”

It may not all be doom and gloom - help is available. Cumbria Action for Sustainability (CAfS) has said it can help households cut their bills with their free Cold to Cosy Homes Cumbria service.

Gareth Field, who manages the service, said: “For households that are eligible, we can arrange home visits or advice telephone call from one of our friendly, trained advisers who will spot ways to help you save energy and keep heat inside your home.

“We can also provide draught proofing by a professional installer and energy saving equipment. All of this is completely free of charge, and we can also refer you on to other grants and support that you may be entitled to.

“If you are worried that you might not be eligible, give us a call and we’ll make sure.

“You’d be surprised how many people are entitled to support without even knowing it.”