Wednesday 15 September 2021 / 12:58 PM Keir Starmer / Work and Pensions

Government set to clobber working people, by taking over 75p in every additional £1 earned, Labour reveals

Labour Leader Keir Starmer 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’.

Keir Starmer, 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.”