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Forum Home  →  Discussion  →  Other universal credit issues  →  Thread

UC cuts attacked by…The Telegraph!

 

Andrew Dutton
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Derbyshire Welfare Rights Service

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Joined: 12 October 2012

http://www.telegraph.co.uk/news/politics/georgeosborne/11978065/Why-does-George-Osborne-have-it-in-for-the-workers.html

Selected bits:

‘No moral thread runs through his plans for working tax credit cuts….
…it’s a battle that baffles and appals many Tory MPs. They will be just as appalled when they find out what the Chancellor is planning to do next.

I understand that he is proposing to come after those claiming [UC]…
The Treasury demanded that the first workers on Universal Credit would face an eye-watering effective tax rate of 65 per cent. And now, to pay for a partial retreat on tax credits, the Chancellor is planning to take this to 75 per cent – and perhaps even higher.
Such a high rate, of course, destroys the whole point of Universal Credit.’

     
Mike Hughes
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Senior Welfare Rights Officer (Take-Up), Salford WRS.

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Explain it to me again. Why do we ever look for any logic in these things? Ideologically driven redistribution of wealth. Telegraph readers are only anxious because no Tory voter wants to feel that redistribution from the poor to the rich is a bad thing that might upset anyone. I wonder what “moral thread” they would find acceptable?

     
Gareth Morgan
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Managing Director, Ferret, Cardiff

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Andrew Dutton - 06 November 2015 09:22 AM

The Treasury demanded that the first workers on Universal Credit would face an eye-watering effective tax rate of 65 per cent. And now, to pay for a partial retreat on tax credits, the Chancellor is planning to take this to 75 per cent – and perhaps even higher

Worse than that.

If you look at earnings over tax and National Insurance levels then, for each pound, there would be a deduction of:

20p Tax
12p National Insurance

That leaves 68p net.  From that Universal Credit reduces it (simplest / worst-case with no work allowances to worry about) by the current and possible tapers

44.2p current

51p under telegraph figures


So we have a overall deduction on:

current rules of 76.2%
Telegraph rules of 83%