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Daily Mirror
Daily Mirror
Politics
Ben Glaze

Universal Credit loans creating poverty gap in Red Wall seats as £8million deducted

Universal Credit claimants in Red Wall constituencies were more likely to have cash deducted from their payments then those in the country as a whole, researchers have revealed.

An analysis of official data shows that in previously-Labour seats won by the Tories in the 2019 general election, almost £12million was deducted from 168,100 people's UC claims in just one month.

Two-thirds of the sum – £8m – was to repay loans taken out by people to bridge the five-week wait for new UC claims to be processed and paid.

The study of figures from last August shows 47% of UC payments to people in Red Wall seats were cut, compared with a nationwide of average of 41%.

The average deduction per Red Wall claimant was £71.

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Deductions from Universal Credit are 'the single biggest challenge facing people who seek [foodbank staff's] help', a charity tonight warned (Dominic Lipinski/PA Wire)

In some iconic seats Boris Johnson's party seized in traditional Labour strongholds, more than one in two payments faced deductions.

Some 57% of Blackpool South's 11,000 UC claimants had an average £73 deducted.

Fifty-five per cent of the 7,500 UC claimants in Redcar, Teesside, had average cuts of £75.

And 55% of the 9,800 UC recipients in Great Grimsby, faced average deductions of £73.

The study was carried out by the charity Feeding Britain, which wants the £20-a-week temporary rise in Universal Credit, announced last March but which is due to axed at the end of next month(MAR), to be extended.

Keir Starmer wants to replace Universal Credit

Feeding Britain director Andrew Forsey said: “Foodbank staff and volunteers across our network have described deductions from Universal Credit as the single biggest challenge facing people who seek their help.

“While the Government has promised new measures that will reduce the rate of deductions, they aren’t due to start until October.

“Bringing them forward with immediate effect would prevent much hardship in the months ahead.”

Scottish National Party MP Chris Stephens, who sits on the Commons Work and Pensions Select Committee, uncovered the figures using a written parliamentary question.

He said: “The five-week wait for Universal Credit leaves too many people having to choose between five weeks with no income or the risk of debt and hardship later.

“The Select Committee has recommended the introduction of a non-repayable grant at the beginning of a claim, for those who need it, to ensure that nobody is without money for food and other essentials.

“These figures, and the human suffering they represent, emphasise the urgent need for our proposal to be enacted.”

Answering the written Commons question, Welfare Minister Will Quince said deductions were suspended for three-months from last April as the country battled the first coronavirus wave.

He said: “This was done to ease the financial pressure of debt recovery on benefit claimants and to also allow debt management staff to be redeployed to focus on the unprecedented volume of new claims received during the Covid-19 pandemic.

“Universal Credit advance repayments are made gradually over 12 months, and deductions are capped at 30% of a claimant’s standard allowance.

“This is further to the reduction of the overall maximum level of deductions from 40% to 30% of the standard allowance since October 2019.

“From October 2021, the repayment period will be extended from 12 months to 24 months deductions cap will be reduced from 30% to 25%.

“For those who find themselves in unexpected hardship, advance repayments can be deferred for up to three months in certain cases.”

A DWP spokeswoman said: “Universal Credit has delivered during this pandemic, providing vital support to millions, and will play a crucial role as we build back better.

“Deductions are made for a number of reasons including to help claimants pay back rent arrears or debt to energy companies so they are not evicted and can heat their homes, as well as to pay court fines.

“To protect vulnerable claimants there’s a cap limiting the amount deducted and for those who find themselves in unexpected hardship, advance repayments can be deferred for up to three months in certain cases.”

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