Thursday, October 6, 2022

Labour pledges higher Universal Credit for 2.3 million workers

LABOUR will pledge to give higher benefits to 2.3million of Britain’s worst-paid workers under the party’s plans to replace Universal Credit reports The Mirror.

The party will vow to abolish the current ‘taper rate’ – which takes away 63p of benefits for every £1 a claimant earns from a job.

It would be replaced with a lower taper rate, Jonathan Reynolds will announce today.

The move could cost billions, but would mean claimants in low-wage jobs get a more generous UC payment.

The Shadow Work and Pensions Secretary is expected to say in a speech that the taper rate has destroyed the Tories’ claim that UC would “make work pay”.

Almost 40% of the nation’s 6million UC claimants have a job, so would gain in the change.

Currently, the majority of money they make in low-wage or short-hours jobs is cancelled out by benefits being taken away.

However, Labour has not said what its new taper rate would be under a Keir Starmergovernment.

Tory ministers cut the taper rate from 65p to 63p in every pound in 2017, after an outcry at the benefit not being generous enough.

But Mr Reynolds will argue the taper rate is still too high, because it doesn’t account for National Insurance and Income Tax workers pay – making the “real” rate more like 75p.

He is set to argue that those on low incomes pay a marginal rate of tax higher than even the best-off earners in the country.

It is the latest part of Labour’s plans to overhaul Universal Credit after Jeremy Corbynvowed to “scrap” the system as leader. 

Labour has already pledged to end the five-week wait for first payment and axe the two-child limit and benefit cap.

The party would also cancel the Tories’ £20-a-week cut, which is due to hit 6million Brits at the end of September.

However, Mr Reynolds is expected to use the language of “replacing” Universal Credit rather than scrapping it.

Tory ministers have long used ex-leader Mr Corbyn’s pledge to “scrap” the benefit as an attack line against Labour, despite the party offering a £3bn reform package at the same time.

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