Labour calls for halt to credit scheme as family incomes hit
LABOUR ARE calling for an urgent halt to the rollout of the Government’s flagship universal credit scheme, as new figures reveal working families could be left more than £3,000 a year worse off as a result of the changes.
According to a new House of Commons analysis, a single parent working 35 hours a week could see their income reduced by £3,150 a year by 2019 under UC when compared to the old tax credit system.
A further assessment carried out by the Department for Work and Pensions (DWP) reveals women and those from ethnic minority backgrounds will bear the brunt of the reforms. But Labour argues nurses and teachers will also be hit hard by the switch due to the continuation of the public-sector pay cap.
“It is shocking that most people on low and middle incomes are no better off than they were five years ago, and in some cases they are worse off,” said Shadow Work and Pensions Secretary Debbie Abrahams. “The Government’s cuts to in-work support of both tax credits and universal credit are having a dramatic effect on people’s lives, on top of stagnating wages and rising prices.
“These analyses make clear that the Government’s abject failure on living standards will get dramatically worse if UC is rolled out in its current form. That’s why Labour is calling for the roll-out to be stopped while urgent reform and redesign of universal credit is undertaken, making sure work always pays and that hardworking families are supported, creating a fair society for the many, not the few.”
Universal credit was introduced to simplify the welfare system by rolling several difference benefits into one payment. The roll-out of the scheme has been blighted by issues with a new IT system but is now available in England, Wales and Scotland and is due to be extended to Northern Ireland this year.
The Commons analysis uses 13 scenarios to examine how different kinds of households might be affected by the shake-up. While some will see little change, the most extreme examples will see their income fall by thousands of pounds a year when compared with their income when receiving tax credits in 2011/12.
A DWP spokesman said: “We are committed to helping people improve their lives and raise their incomes. Universal Credit does that by providing additional, tailored support not available under the old benefit system.”