Labour Leader has called on the Prime Minister to ‘stop clobbering
working’ people, as he unveiled new research showing the shock
impact of tax rises and Universal Credit cuts on working people.
Analysis for the Labour Party by the House of Commons Library has
revealed that after the Government’s National Insurance rise
kicks in, for every pound that a full time worker on Universal
Credit earns the Government will take more than 75p away from
them.
The research reveals that a single parent working a full-time job
would have to work more than nine hours extra every week to get
back the £20 a week the Prime Minister plans to take away from
them in his Universal Credit cut.
The double whammy of hitting working people with tax rises and
Universal Credit cuts means that:
- A newly qualified band 5 nurse would lose £1,143
- A care worker would lose £1,092
- A supermarket worker would lose 1,093
- A teaching assistant would lose £1,081.
This is backed by independent analysis by the Resolution
Foundation who found a working Universal Credit claimant paying
tax would have to work more than nine hours extra every week to
cover the costs, potentially more if accounting for childcare and
travel costs.
They concluded that ‘such large overnight increases in hours
worked are simply not viable’ and called on the Chancellor to
‘change course’.
, Leader of the Labour Party, speaking at Prime
Minister’s Questions, said:
“This country’s success is built by working people. But the tax
system is loaded against them.
“The Prime Minister may not understand the pressures facing
families across the country. But we do.
“It’s time this Prime Minister got in the real world and
understood the terrible impact his decisions will have on the
finances of families right across the country.”
Ends
Notes to editors
· Analysis for the Labour Party by the House of Commons Library
showed that the marginal rate of tax for a working parent is
75.3%.
· Based on the national living wage of £8.91, and marginal rate
of tax of 75.3%, a working parent would earn an extra £2.20 for
every extra hour worked. This means that someone would have to
work an extra 9.09 hours to earn £20.
· Further analysis, based on numbers provided by the House of
Commons Library, shows that the impact of both hitting working
people with tax rises and Universal Credit cuts means that newly
qualified band 5 nurse would lose £1,143, a care worker £1,092, a
supermarket worker £1,093 and a teaching assistant £1,081
Additional Labour analysis of HoC Lib figures
· In August 2021, Labour’s Shadow Work and Pensions Secretary,
, pledged to reduce the taper rate, as part of
Labour’s plan to replace Universal Credit, to help those on low
incomes who currently pay a high marginal rate of tax. - Labour
Press
· 'Universal Credit claimants take home as little as £2.24 for
every extra hour worked – highlighting how hard it is to work
their way out of a huge living standards loss this Autumn' -
Resolution
Foundation, 13 September 2021
