A ‘tax’ on work? | CPAG

A ‘tax’ on work?

Published on: 
11 November 2016
Written by: 

Jessica Sinclair Taylor
Former senior communications and campaigns officer

Universal Credit, the new benefit for families on low incomes, was claimed to have huge potential to reduce child poverty, incentivise work and make life easier for struggling families.

But this isn’t how it is turning out. Universal Credit could be the new government’s biggest missed opportunity. If the Chancellor doesn’t take action at the Autumn Statement to reverse George Osborne’s sweeping cuts to Universal Credit, then working families – the ‘just about managing’ families the Prime Minister has pledged to support – will lose out in a big way.

One of the big problems is the changes to the ‘work allowance’ – how much people on Universal Credit can earn through work before their benefits start to be withdrawn. In the summer of 2015, George Osborne, imposed harsh cuts that mean that a working couple will lose out on up to £1,370 a year through a combination of the freeze on benefits and the lower work allowance. Single parents do even worse. CPAG research published earlier this year revealed that a single parent on minimum wage would need to work 46 days extra a year, just to carry on providing for their kids at the same level as before the cuts.

These cuts aren’t fair. They amount to a tax on work for the low paid, reducing incentives to work and making it harder for struggling families to afford to give their children the basics every child needs. The cuts mean that Universal Credit in its current form simply isn’t fit for families.

It’s not just us who thinks so. Independent experts like the Resolution Foundation, and even the architect of Universal Credit, former Work & Pensions Secretary Iain Duncan-Smith, believe these cuts must not go ahead.

We have a week until the Autumn Statement to convince the Chancellor to get on board and cancel this tax on work.

Will you ask your MP to make this a priority for the Chancellor’s next financial statement? With so many people calling out the tax on work, this is real opportunity to help make Universal Credit Fit for FamiliesFit for families infographic