The cut to the Work Allowance from April next year will slash the income of working Universal Credit claimants, pushing working people into poverty. The Institute for Fiscal Studies have calculated in the long-term that over 3 million working families will lose an average of over £1,000 a year as a result of the Work Allowance cut. By cutting the Work Allowance, the Tory UK Government are going to impose an eye-watering level of marginal taxation on people in low-paid jobs and make it harder than ever for those in low-income households to break out of the poverty trap.
This cut to the Work Allowance, on top of the other cuts to social security that the UK Government have imposed including cuts to child tax credit, a freeze on benefits, and a £30-a-week cut to disability benefits, will have a devastating impact on ‘just about managing’ families on low and middle incomes. Before the Autumn Statement my colleague Eilidh Whiteford MP, the SNP Westminster Group’s Social Justice Spokesperson, made a direct plea to the Chancellor to reverse the reduction in the Work Allowance.
Although the Chancellor’s announcement on the Work Allowance taper rate was welcome; in the context of damning economic forecasts it is extremely disappointing that the Chancellor did not go further in his Autumn Statement to protect ‘just about managing’ families from the impact of the Work Allowance cut. Changing taper rates will not on its own mitigate the impact that cuts will have on lower income families. Instead the UK Government should reverse cuts to the work allowance in full so that working parents in low paid jobs don’t lose out. My SNP colleagues and I will continue to call on the UK Government to reverse the cut to the Work Allowance.