Budget 2021: Sunak announces Universal Credit taper cut
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Yesterday the Manchester Mayor said he was expecting Rishi Sunak to U-turn on his decision to remove the £20 temporary uplift in Universal Credit. Praising the Labour frontbench, he said a decision to reimpose the £20 a week extra payment would be “a credit to the Labour Party” which has campaigned for temporary uplift to be made permanent.
Speaking to BBC Radio 4’s Today programme yesterday morning ahead of Rishi Sunak’s announcement to the House he said he had been told to expect a reversal.
“On the rabbit out of the hat, I’m hearing that they are about to U-turn on Universal Credit,” he said.
“We’re hearing that there’s going to be a change, particularly for those on Universal Credit in work.”
He added: “If he’s going to do that, it’s the right thing to do.
“This pandemic is not over, people are still feeling its impact but credit to those who have campaigned particularly those on the Labour front bench who have been consistent on this point.”
No such U-turn took place in the Budget when it was unveiled.
The Chancellor kept Universal Credit at the same rate he had originally planned, much to the disappointment of Labour MPs.
He did however announce a change to the taper which determines how much credit claimants can continue to receive while they earn.
The taper rate will be cut by eight percent “within weeks”, bringing it down from 63 percent to 55 percent.
The taper rate is the amount of benefit taken away from every £1 earned above the claimant’s work allowance – meaning claimants will now be able to keep an additional 8p per £1 of net income.
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Mr Sunak said the current taper represents a “hidden tax on work” for many of the lowest paid in society and a “high rate of tax at that”.
Announcing the changes, he said: “This is a £2billion tax cut for the lowest-paid workers in our country.
“It supports working families, it helps with the cost of living and it rewards work.”
Mr Burnham has not given his reaction to the decision not to U-turn on the £20 a week uplift.
However, Labour’s shadow chancellor Rachel Reeves said the increase in the cost of living meant that the change to the taper would not counterbalance the income lost from the removal of the £20 a week uplift.
“Never has a Chancellor asked the British people to pay so much for so little,” she said.
“After taking £6billion out of the pockets of some of the poorest people in this country, he is expecting them to cheer today at being given £2billion to compensate.”
MPs will spend the next week debating the Budget.
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