Paul Morrison introduces our Essentials Guarantee campaign, breaking down the current low rates of benefit and imagining what the way forward could look like.
You might imagine that the rates of Universal Credit (UC) were calculated carefully, perhaps using a formula that looks at criteria such as families’ needs, and what meeting those needs might cost. If so, you would be mistaken. This blog looks at how the rate is set, but for those without the time to read a full blog, the answer is “arbitrarily”.
The JPIT churches are partners in the Essentials Guarantee campaign, which simply asks for the rate to be set rationally, so that Universal Credit enables families to afford the essentials. Something most people think is already happening.
Release families’ potential by rationally deciding level of Universal Credit
‘…dependence on Universal Credit almost guaranteed the recipient would be food insecure, consuming insufficient micronutrients to support health’ – Journal of Nutrition (2025) 64:115.
The above quote is from a major long-term study into benefits and nutrition run by three UK universities. What it found was appalling, but not surprising to anyone who has worked alongside UC claimants for any length of time. The current mechanism used to set Universal Credit rates ’almost guarantees’ that three million children live in families that cannot afford decent nutrition. That is just one effect of having the wrong rate for UC, which impacts health, education, life chances and much else besides.
To be clear, benefit rates in the UK are unusually low by international standards, especially for the recently sick or unemployed, and have been falling as a proportion of average incomes for more than 50 years. That means the poorest people in the UK are among the poorest in Europe, with the poor health, education and social mobility that go with that. Our system does not even do the basics and protect families from hunger, never mind level the playing field so that children from less well-off families have the same chances to succeed as those from the rest of society.
Many churches see how struggling to meet the essentials weighs families down, creates constant debilitating worry and makes progress so much harder, whether that is getting a job, progressing in work or helping children attend and flourish at school. Setting the rate of Universal Credit rationally would unburden so many people and release so much potential.
How did we get here?
The 1942 Beveridge Report was the blueprint for the modern social security system. In it Beveridge stated that the system should provide a ‘healthy minimum’. He used the best data available to him to estimate the levels of benefit needed to meet this aim.
The National Insurance Act 1946 established the framework for the modern social security system, which was introduced in 1948. Benefit rates were set at around two-thirds of the level Beveridge believed was required to provide a “healthy minimum”. From 1946 until the 1970s there was no annual uprating of benefits to keep pace with prices or wages, just ad hoc adjustments made largely because of political expediency. By the 1970s annual uprating became the norm, at first in line with earnings or prices, and from the 1980s benefits were generally uprated only in line with prices. Because earnings grew faster than prices, those needing benefits fell further and further behind the rest of society. The last government uprated most benefits by 1% a year, far below inflation, for three years and then froze them for four additional years: an effective real-terms cut of over 10%.1
The way forward
The critical point is that today’s Universal Credit rate is not the product of any assessment of what people need to live on. It is the result of decades of unsystematic political decisions, uprating conventions and cuts layered on top of one another.
At no time in this story was a realistic assessment made of how much families actually needed to live on. Governments changed benefit rates for their own purposes but without reference to the founding principle of providing a ‘healthy minimum’. The solution is to go back to basics: do the calculation that Beveridge did, using the excellent data we have today, and identify a ‘healthy minimum’.
We, alongside others who support the Essentials Guarantee, are asking that as a first step the Government sets up an independent process, similar to the one that recommends the minimum wage. It would recommend the level of Universal Credit needed to ensure families can afford the essentials. A level that would provide a ’healthy minimum’, release families from the constant worry they experience today, and enable them to build healthier, more secure lives for themselves and their children.
You can join the call for an Essentials Guarantee here.
There are specific resources for churches and church members engaging with the campaign here.
Our friends at Trussell are running local events on this issue across the country – find out more here.