LibLink: Stephen Lloyd: Universal Credit was meant to make work pay – it’s causing nothing but grief, pain and anger

Our social security spokesperson Stephen Lloyd has been talking about how badly the Government has cocked up the implementation of Universal Credit for a while. We supported it in coalition but as soon as we were consigned to the back benches, depleted, the Tories ripped loads of money out of it.

He’s now written for the Huffington Post about what a nightmare this new system is.

And a crucial part of this incentive was the Work Allowance. This is the maximum amount a UC claimant can earn through employment, before their benefit payments are reduced. However in the Summer 2015 budget, with the Lib Dems no longer in Government and unable to keep the Tories in check, the then Chancellor George Osborne tore the Work Allowance to shreds – to the tune of £3billion a year.

These savage reductions in the amount of money a UC claimant can earn before their benefits are reduced has adversely affected almost all in-work UC households. Research from the House of Commons Library has shown for instance that some families have been made worse off by as much as £4,849 per year, a staggering amount if you are on a low income

To put that into perspective, the tax-free Personal Allowance threshold is £11,800, above which the income tax rate is 20%, rising to 40% and eventually a maximum of 45% at the very top end. Meanwhile a UC claimant earning just £2,376 (if UC includes housing costs) will lose 63% of their earnings above that amount, or put another way, they’ll pay back almost two thirds of their salary!

Stephen is trying to raise awareness of this and has submitted a motion to Parliament:

That is why I have submitted an Early Day Motion to Parliament calling on the Government to restore the Work Allowance to its original levels. I am aware that some Tories have begun to publicly acknowledge the dreadful consequences of the cuts to UC made in 2015, so this is an opportunity for them to clear their consciences before Philip Hammond presents his Autumn Budget. He must right this wrong before it’s too late and the rollout of UC accelerates next year.

If he does so then one of the truly revolutionary aspirations of the Coalition Government will finally take off. If not, Universal Credit will continue to cause nothing but grief, pain and anger for our poorest citizens. Without restoring the Work Allowance to its original levels, the government will be stating a clear intention to tax these families back into benefit dependency.

And if that happens my question to the Tories is simple – what’s the point of Universal Credit?

* Newshound: bringing you the best Lib Dem commentary published in print or online.

Read more by or more about , or .
This entry was posted in News.
Advert

One Comment

Post a Comment

Lib Dem Voice welcomes comments from everyone but we ask you to be polite, to be on topic and to be who you say you are. You can read our comments policy in full here. Please respect it and all readers of the site.

If you are a member of the party, you can have the Lib Dem Logo appear next to your comments to show this. You must be registered for our forum and can then login on this public site with the same username and password.

To have your photo next to your comment please signup your email address with Gravatar.

Your email is never published. Required fields are marked *

*
*
Please complete the name of this site, Liberal Democrat ...?

Advert



Recent Comments

  • User AvatarCazz B 24th Sep - 4:46pm
    I had no official notification of the retirement age change, but my manager at the time was due to retire at 60 (I'm about 5...
  • User AvatarGraham Jeffs 24th Sep - 4:44pm
    Chris Bertram: we won't be changing it because they won't be voting for us based on that as a campaign issue!
  • User AvatarTony Lloyd 24th Sep - 4:25pm
    We haven’t left yet! If we rescind Article 50, it seems overwhelmingly likely that the UK will continue in the EU on exactly the same...
  • User AvatarChris Bertram 24th Sep - 4:00pm
    Graham Jeffs: "Sorry, pontificating about PR is a complete waste of time in electoral terms. The vast majority don’t care a toss." In which case...
  • User AvatarKatharine Pindar 24th Sep - 3:57pm
    Lorenzo is right, Richard, there is nothing wrong with declaring ourselves moderates, who can identify probably with most of these new supporters. (How do you...
  • User AvatarMick Taylor 24th Sep - 3:32pm
    I have just completed the government questionnaire on changes to the GRA. I was amazed at the level of my ignorance about the restrictions that...