Government faces more pressure to extend £20-a-week Covid top-up

The government has come under renewed pressure from Tory backbenchers to extend the £20-a-week Covid top-up to universal credit as part of a range of measures to increase the level of pandemic welfare support.

A report published on Monday by the all-party parliamentary group on poverty – co-chaired by Conservative MP Kevin Hollinrake – asks for the top up, worth £1,050 a year, to be retained beyond April and for the benefit cap to be suspended.

It also urges ministers to widen the £20-a-week boost to about 2 million people on so-called legacy benefits, including hundreds of thousands of disabled claimants who have received no extra social security support during the pandemic. It warns that failure to do so will create a two-tier benefits system.

Hollinrake, the MP for Thirsk and Malton in Yorkshire, said: “Although UK social security is above the median level in Europe, its support for the unemployed is relatively low, so there is a compelling case for making the uplift permanent.”

Separately, a group of Tory MPs are backing a bill by fellow backbencher Paul Maynard calling for a review of council-run local welfare schemes in England, which provide food, clothes, replacement cookers, fridges and beds for people in extreme hardship, but which have withered in recent years.

The government has so far resisted pressure to extend the £20-a-week boost, saying it will outline its plans in March. The Treasury, which is understood to oppose making the £6bn-a-year payment permanent, is reported to be considering a range of cheaper alternatives, including a £500 lump sum, or a six-month extension.

Nearly 700,000 households, caring for more than 800,000 children, would be unable to meet the cost of everyday living if the uplift was withdrawn, the report says, while black, asian and ethnic minority people would be disproportionately affected.

It calls for the benefit cap, which limits the level of benefits workless households can claim, to be suspended for the duration of the pandemic. Thousands of people had not seen the benefit of the £20-a-week uplift because they are capped, with no realistic chance of escaping it by getting a job.

Six backbenchers – but not Hollinrake – recently voted with Labour to retain the £20-a-week payment, including former welfare secretary Stephen Crabb. Other Tory MPs in favour of retaining it include David Davis, and Sir Iain Duncan Smith.

Maynard, the MP for Blackpool North and Cleveleys, said the government should consider issuing guidance to all councils requiring them to put in place adequately funded local welfare schemes to help people in extreme hardship.

There had been a steep rise in the numbers of people requiring emergency assistance in his own constituency, he said: “We need to ensure we learn the lessons of the pandemic to embed a better provision of emergency support for some of the most vulnerable in our society.”

Many local welfare schemes have collapsed in recent years as a result of funding cuts, with at least 23 councils having scrapped them entirely. However, the arrival of Covid and the consequent economic crisis has triggered an increase in destitution and demand for emergency assistance.

Local welfare provision was created in 2013 after the national social fund was scrapped. Some schemes were criticised for being hard to access and restrictive. Most councils offered “in kind” help through charities or faith groups, rather than cash grants. In one notorious case, a 62-year-old homeless woman in the Isle of White was offered a voucher to buy a tent.

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Tory MPs expected to support Maynard’s 10-minute rule bill on Tuesday include Commons education committee chair, Robert Halfon, Iain Duncan Smith, Peter Aldous and Jason McCartney. Other backers include Green party MP Caroline Lucas and Labour’s Stephen Timms, chair of the work and pensions select committee.

A government spokesperson said: “We are committed to supporting the lowest-paid families and have targeted our support to those most in need by raising the living wage, boosting welfare support by billions and introducing the £170m Covid winter grant scheme, which is distributed by local authorities to help children and families stay warm and well-fed during the coldest months.”

Thomas Lawson, chief executive of poverty charity Turn2us, said: “Households have been left adrift as councils struggle to provide local grant schemes due to lack of funding and lack of statutory obligations.”