Labour is calling for the roll out of Universal Credit to be
halted as new data shows that while wages are failing to keep up with
inflation, cuts to in-work social security support have meant most net
incomes of recipients have flat-lined in real terms and in some cases
worsened, with women and people from ethnic minority communities worst
affected.
Analysis from the House of Commons Library, shows real wages
stagnating and in-work support contracting for both private and public sector
workers.
The analysis looked at different types of households and income
groups all working full time. It shows single parents with dependent children
being particularly badly affected, with up to £3,100 a year less than they
received with Tax Credits.
The analysis also shows that nurses and teachers will be hit
particularly hard by the combination of stagnating wages and cuts to social
security.
A single parent of two working full-time as a teacher who is a
new claimant to Universal Credit will be around £3,700 a year worse off in
2018/19 compared to 2011/12. A single parent of two working in the NHS on
average full time earnings for the public sector who is a new tax credit
claimant will be over £2,000 a year worse off in real-terms in 2018/19 compared
to 2011/12.
Equality analysis published in response to a Freedom of
Information request submitted by Labour, predicts cuts to Universal Credit will
fall most heavily on women and ethnic minorities. This analysis shows that households
with a woman or member of an ethnic minority are more likely to be adversely
affected by cuts to Universal Credit work allowances.
Debbie Abrahams MP, Labour’s Shadow Secretary of State for Work
and Pensions, commenting on the newly-published analyses, said:
“It is shocking that most people on low and middle incomes are
no better off than they were five years ago, and in some cases they are worse
off. The Government’s cuts to in-work support of both tax credits and Universal
Credit are having a dramatic effect on people’s lives, on top of stagnating
wages and rising prices.
“It’s no wonder we are seeing record levels of in-work poverty,
now standing at a shocking 7.4 million people.
“These analyses make clear that the Government’s abject failure
on living standards will get dramatically worse if Universal Credit is rolled
out in its current form.
“That’s why Labour is calling for the roll out to be stopped
while urgent reform and redesign of Universal Credit is undertaken, making sure
work always pays and that hardworking families are supported, creating a fair
society for the many, not the few.”
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