Let them eat ketchup: Hardship drives 1 million surge in universal credit claims, says TUC

Low-paid workers are now having their incomes topped up by the state, but the value of the benefit has been tumbling in real terms leading to rising debt and food poverty

The pandemic has led to a surge in hardship related universal credit claims (Reuters)

This morning sees the release of some fairly awful numbers by the TUC, which has found that the number of workers on universal credit has ballooned by 1.3 million since the dawn of the pandemic.

The union body focussed its analysis – based on figures from the Office for National Statistics – on people in some kind of work, which may be part-time, may be self-employed. These are people who earn so little that they qualify to have their incomes topped up by the state.

Some of increase in claims will be down to the steady migration of people from the smorgasbord of benefits which were replaced by universal credit. They include child tax credit, housing benefit, income support, Working Tax Credit.

But the vast majority – the TUC says – are there as a result of hardship. The pandemic created an awful lot of that so this isn’t terribly surprising.

The problem isn’t going away. On the contrary. The government is fond of making boastful, and sometimes dubious, claims about the performance of the UK economy on the way out of Covid (it’s not absolutely certain that we are actually out of it but we’ll park that).

Trouble is, the majority of people working within UK plc are seeing their real, inflation adjusted, incomes fall.

Sure there were sticking plasters announced last week to reduce the impact of the near £700 annual increase in energy bills announced by Ofgem, which will come into force in April. But most people will still take a hit, and often a considerable hit, even after accounting for that. And remember, there is also the impact of rising food prices and the soaring cost of other essentials to consider.

While this makes for an unpleasant situation for most of us, it turns into something much nastier for those already on the breadline, people who toil away for threadbare pay packets. People who will probably already have made all the economies that they can. I’m talking here about the sort of families that were facing the uncomfortable choice of heat or eat even before Ofgem delivered its gut punch. And then had its chief executive say how much he sympathised with those affected.

There have been an awful lot of crocodile tears shed of late. I’m looking at you Rishi Sunak and you Andrew “don’t ask for a big pay rise” Bailey. He’s the governor of the Bank of England, which has just juiced interest rates – and is set to do so again before too long.

TUC estimates show that the value of universal credit has fallen by £12 a month in real terms when measured against CPI inflation, £21 a month when measured against RPI inflation, which includes housing costs, compared to just before the pandemic.

This will have had a brutal impact. The union body’s polling bears that out. It found that one in six (17 per cent) of low-paid workers – those earning less than £15,000 a year – said they would struggle to afford basics in the next six months.

The figures dovetail with research by StepChange, the debt advice charity, which found that 4.4 million people struggling to keep up with household bills and credit commitments last year. Some £13bn was borrowed just to pay for essentials.

These numbers are disturbing, or they ought to be. There might be more horror stories hidden within them than you’ll find in even Amazon’s Kindle store.

Perhaps a narrative explanation might help here. When I think of universal credit, and poverty in Britain, I’m always reminded of the story of Menelik Watson, who grew up on an estate in Longsight, Manchester, which was once infamous for its guns and gangs.

Watson avoided those pitfalls to become an American football player for the Oakland Raiders and then the Denver Broncos. Prior to being drafted by the former, he told the BBC he remembered being so hungry growing up that, when accompanying his mum on a cleaning job, he would help himself to ketchup from the canteen.

There will likely be an army of Menelik Watsons doing the same, or similar, right now. If it isn’t ketchup, maybe it’s mayonnaise, or whatever else you might find in a sachet that you could maybe put between a couple of slices of bread.

The number of working claimants publicised by the TUC is roughly equivalent to the population of the Leeds-Bradford metropolitan area. Looks like their kids are going to have to find an awful lot of ketchup to keep the hunger pangs at bay, in this rich country of ours.