Government needs to go much further to make Universal Credit fit for purpose

Date: 14 March 2017 Shopworkers' trade union leader John Hannett has called on the Government to do much more to prevent children in working families falling into poverty after their parents are moved on to Universal Credit.

Today the Government tabled a statutory instrument, implementing a reduction in the Universal Credit taper from 65% to 63%, as announced in the Autumn Statement.

Usdaw’s analysis reveals that even after the reduced taper, a worker on Universal Credit earning the new National Living Wage rate of £7.50 an hour, takes home just £7.55 for doing an additional 4 hour shift. That amounts to £1.89 per hour, often barely covering their travel costs. 

John Hannett – Usdaw General Secretary says: “The very modest reduction in the high clawback rate of 65% of net earnings to 63% is a tiny step in the right direction, but is worth less than £300 for most working parents. It goes nowhere near offsetting the enormous £2,000 to £3,000 annual cuts that Universal Credit represents or taking the taper back to the 55% rate that was originally intended.

“Universal Credit is a ticking time bomb that will plunge far more working families into poverty, when they are transferred on to it. We supported the initial intentions of Universal Credit, to simplify benefits and improve incentives to work.  However, severe cost cutting has turned Universal Credit into a real threat to the incomes of low-paid working families.

“The Prime Minister pledged to support families struggling to make ends meet, yet this minor measure is the sum total of changes to help the poorest working families, who do not benefit from the income tax personal allowance increases.

“Millions of low and middle income workers have suffered the double-whammy of a 15 year collapse in average incomes and severe Government cuts to in-work benefits. They are still facing a struggle to afford the basic costs of living.  The cuts to Universal Credit are already plunging recipients into debt and turning families from just about managing into just can’t manage.”

Notes for editors:

Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fourth biggest with nearly 430,000 members. Membership has increased by more than 17% in the last five years and by nearly a third in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.

For Usdaw press releases visit: www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion

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The official website of the Union of Shop, Distributive and Allied Workers