Call for an email campaign to influence the March budget

Last year I emailed Rishi Sunak suggesting some policies for his summer economic statement, which incorporated some improvement to working-age benefit including making permanent the £1000 Universal Credit increase and some economic actions. I think these were far too radical for the Conservatives, so this year I am calling on him to:

  • Extend the £1000 temporary increase in Universal Credit to April 2022 and consider making it permanent;
  • Increase the Benefit Cap by £1000 plus £1105 to cover some of the increase in LHA rates brought in last year (based on the difference between the non-London average for Category D rates) and the inflation uplifts for the last year (1.7%) and this year (0.5%) so the unemployed can benefit from these recent changes. When rounded to the nearest pound the new couple rates would be increased to £22,557 for outside London and £25,623 for London.
  • Make it illegal for anyone to be evicted if they pay the LHA rate they receive and consider what actions can be taken to reduce rent levels and increase LHA gradually back to the 50th percentile.

I think we should email Conservative MPs asking them to write to Rishi Sunak asking him to do these things.

If you agree with me you might wish send an email to your Conservative MP similar to the one below.

I wrote:

Dear MP,

This March Budget can make a difference to the poorest people living in Britain and the government could also reduce the economic effects of increasing unemployment. I hope you will lobby Rishi Sunak to include some suggestions for his March Budget.

I am sure you are aware that aggregate demand will fall as more people are made unemployed and have to rely on an income capped by the Benefit Cap.

Hopefully an example will illustrate this.

Imagine a couple (both aged over 26) with two children living in rented accommodation in Basingstoke and one of them is employed earning the National Living Wage of £17142.84 (£8.91 x 37 hours x 52 weeks) and having a take home pay of £15,482.10. They rent a three bedroom house for £1,000 a month. The LHA for a category D house in Basingstoke is currently £218.63. The benefit calculator states they would receive £332.14 a week in Universal Credit and £35 in child benefit. This gives them a net income of £36,234.14 and after rent £24,234.12 a year.

If instead of one being employed neither of them is employed then the benefit calculator states they would receive £349.62 a week in Universal Credit and £35 in child benefit. This is £20,000.24. This is because the Benefit Cap for this couple is set at £20,000 a year. After they have paid their rent they are left with only £8,000.24 which is only £153.85 a week.

If there were 100,000 couples going from the first case to being unemployed this would mean that the economy would lose £1.623 billion.

Predictions for unemployment have a large range with the OBR and ONS forecasting the rate be at worst about 11% and their November forecast is over 7.5%. An unemployment rate of 5% equates to about 1.72 million people. An increase of 2.5% is about 860,000 and 6% is about 2 million people. I am not sure if the UK economy reached a GDP of £2,000 billion but the reduction in the size of the economy from just 100,000 couples as outlined above becoming unemployed reduces its size by 0.08%. If there were 800,000 such couples this would mean there would a direct decline in the economy of 0.64% and there would be further contractions caused by the knock on effects of this reduction. Of course if the couple had a larger income the effects of being made unemployed would be greater. For example if their pre-unemployment income was £31,500 then the reduction in the economy would be 0.72%. I hope you agree with me that the government should take some action to reduce this possible decline in the economy.

The furlough scheme is very good because it ensures people’s incomes are not cut as radically as would happen if they had to rely on the benefits people receive if unemployed.

I hope you can request that Rishi Sunak take the following actions to alleviate the worse economic effects of being unemployed:

  • Extend the £1000 temporary increase in Universal Credit to April 2022 and consider making it permanent;
  • Increase the Benefit Cap by £1000 plus £1105 to cover some of the increase in LHA rates brought in last year (based on the difference between the non-London average for Category D rates) and the inflation uplifts for the last year (1.7%) and this year (0.5%) so the unemployed can benefit from these recent changes. When rounded to the nearest pound the new couple rates would be increased to £22,557 for outside London and £25,623 for London.
  • Make it illegal for anyone to be evicted if they pay the LHA rate they receive and consider what actions can be taken to reduce private sector rent levels and increase LHA gradually back to the 50th percentile.

I hope it is not too late for you to endorse and pass these three suggestions on to Rishi Sunak to ask him to include in his March budget.

If you include a rent example then you might wish to include the LHA Category D for your area, which you can download from here.

 

 

 

* Michael Berwick-Gooding is a Liberal Democrat member in Basingstoke and has held various party positions at local, regional and English Party level. He posts comments as Michael BG.

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13 Comments

  • Lorenzo Cherin 12th Feb '21 - 4:11pm

    As usual, fine from Michael.

    Can i remind all, to include mention of tax credits, especially working tax credits, and disability working tax credits. Tax credits got the uplift, Michael refers to, till April, after that in doubt as re: universal credit.

    These campaigns are important. I well appreciate the efforts of Michael, Katharine on this agenda which I share emphasis on a lot!

  • Peter Hayes 12th Feb '21 - 4:18pm

    Any email to my Tory MP is a waste of time. A boiler plate reply eventually, he has never voted against the whips, greasy pole politician.

  • Helen Dudden 12th Feb '21 - 5:18pm

    My MP is Jacob Rees Mogg, I think I won’t bother either.

  • Katharine Pindar 12th Feb '21 - 5:26pm

    I think an accumulation of voters writing to their MPs to point out the loss to the economy of unemployed citizens having no spending money because of the Benefit Cap or Universal Credit going back to its original miserable amount might have some effect. Living myself in a ‘red Tory’ area unfortunately, in Workington, I will certainly add my tiny bit of pressure to my MP, and am pleased that my friend Michael has provided the details.

  • @Helen – What’s the general perception of Jacob Rees Mogg in the constituency? I’ve been genuinely curious for a while, because whatever someone’s political views may be, I struggle to understand how anybody could think that man a suitable representative in Parliament? Have we not tried to go at him (I know Labour had a bit of a go at the last election)?

  • Helen Dudden 12th Feb '21 - 9:06pm

    Alexander. In this constituency he was respected, and I never saw until now, any indication that he could be so thoughtless and judgemental.
    I can’t bring myself to write to him, and a few children’s charities have asked me, but I said no.
    You know from my comments I have little respect for this government, and the way it’s not treated with any compassion, those who need it.
    I’m shocked by the lack of treatment for cancer patients, and other serious conditions. The subject of the food supplement for children during furlough.
    Rees Mogg did not come across here, as anything other than someone with old fashioned ideals.

  • Thank you everyone who has posted a comment.

    Lorenzo Cherin.

    Indeed both the temporary increase to Universal Credit and Tax Credits should be extended.

    Peter Hayes and Helen Dudden

    I was hoping that the logic of the email would convinced the most staunch Conservative MP and I am not asking them to vote against the government just support some suggestions mainly to help the economy. I don’t think what I am suggesting is very radical.

  • Helen Dudden 13th Feb '21 - 9:14am

    I will email the MP for my area later.

  • Katharine Pindar 13th Feb '21 - 8:50pm

    I will certainly urge my Tory MP to write to Rishi Sunak as Michael suggests. It is surely a winning argument to put to the Chancellor, that his measures will deplete the economy of the spending power of millions of our citizens. From our caring viewpoint as Liberal Democrats, it is monstrous that they can suddenly be reduced to penury by the Benefit Cap, which it is our policy to have ended, and probably then have to move to poorer accommodation at least for the time being, with all the disruption to work, home life and schooling that that may well entail.

    The idea of removing the extra £1000 a year on Universal Credit is also appalling, As anyone newly on UC soon finds out, you can live on the benefit, if you can avoid falling into debt while adjusting to it, reasonably enough for a while, but not when the ordinary accidents of life, such as household equipment breaking down, children needing new shoes and so on, require extra funding. There are now about 5.7 million people on UC. Protecting them and demanding better for them is a more urgent task than planning an eventual UBI, and should be part of a new Beveridge-2 Plan to be worked out for the post-Covid post-Brexit difficult times everyone faces.

  • Thank you Helen and Katharine for writing to your MP.

    If anyone is considering doing likewise and they wish to change the example from Basingstoke to their own area they will also need to use a benefit calculator. Here is a link to the one I used:

    https://benefits-calculator.turn2us.org.uk/AboutYou?utm_source=BAdviser&utm_medium=referral&utm_campaign=GovUK

    There are many figures in the email which need to be changed if it is customised to a different local area.

  • Helen Dudden 14th Feb '21 - 9:37am

    I also, read online today on another subject, cold, damp homes.
    Ipswich Council, is putting solar panels onto some of its approved stocks.
    Decent Homes, was a government incentive many years ago. Providing electric heating should be cost effective. The subject of gas boilers and future installation, has been discussed in the past.
    We have the technology to improve on the cost of heating and insulation. Fuel poverty is still alive and well. Damp and cold does cause health issue’s.
    I have spoken with Tim Ball on Housing in the BANES area, always a libdem councillor willing to listen.
    I think in the future, those voting, will be looking for more than we have been receiving during this Virus.

  • Katharine Pindar 14th Feb '21 - 12:24pm

    Helen, I think you are right to raise cold, damp houses and fuel poverty as an issue. To me, extra heating allowances in winter should not be exclusively for senior citizens, as health is indeed affected by cold and damp houses, and the worst-off people can’t afford to be turning up the heating even if they have a good basic system.

    On a related subject, I was pleased there was a feature on the problems of people living with disabilities on BBC 2’s Newsnight last night. They are apparently, sadly, one of the groups worst hit by the Covid 19 pandemic. I hope of course that you are keeping safe and well – and warm – yourself, and am glad that you have a responsive Lib Dem local councillor.

  • On Sunday I received via email a party briefing sent by Bansri Buddhdev. It included a link to a questionnaire asking members to say what they want in the Budget. Question 3 allows members to write a comment. If you agree with me, please write in answer to this question that you would like to see the three things I am requesting.

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