Labour’s manifesto states: “The cuts to work allowances in Universal Credit (UC), and the decision to limit tax credit and UC payments to the first two children in a family, are an attack on low-income families and will increase child poverty. Labour will reform and redesign UC, ending six-week delays in payment and the ‘rape clause’.”
Usdaw’s analysis reveals that a couple with children, both working in retail, earning just above the so-called ‘National Living Wage’, one working full-time and one part-time, would be £1,866 worse off on Universal Credit.
A worker on Universal Credit earning the National Living Wage 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: “Universal Credit will plunge far more working families into poverty, which will be almost impossible to work their way out of. 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,
“Although we won the argument on the proposed massive cuts to tax credits, forcing a u-turn from the Government; those cuts are still being applied to Universal Credit and will hit millions of working families over the next 3 years. This is a ticking time bomb that will leave many working families thousands of pounds worse-off when they are transferred onto Universal Credit.
“We are looking to a Labour Government to restore the original purpose of Universal Credit, to encourage entry to and progression in work. The low work allowance and high clawback of net earnings are particular disincentives to work. There needs to be a fresh look at what Universal Credit means in practice for low and middle income earners and get this troubled project back on track to support not penalise working families.
“Whilst the Prime Minister has talked about supporting families struggling to make ends meet, only Labour has the policies to provide crucial support to help make working family incomes meet the cost of living.”
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