Today the Chancellor announced that the taper rate for Universal Credit will be reduced by 8%, effective from no later than 1 December. I am delighted by this having called for the taper rate to be reduced and this will mean that nearly 2 million families will keep on average £1000 more per year.
Universal Credit Claimants receive a work allowance which sets out the amount of money that they can earn before your maximum Universal Credit award starts to be reduced. The taper rate is the rate at which payments are reduced when claimants earn above the Work Allowance. The aim is to ensure those with the greatest need receive the support they need but also that that people are better off in work. However, the high level of the taper rate operates as a ‘participation tax’ and I along with colleagues and a number of charities and other organisations have been calling for this to be reduced so UC claimants can keep more of the money they earn. On 15 September I specifically called on the Government to lower this rate, which you can watch here: https://youtu.be/Aa6eEnpoiZM. This change will make a huge difference for low income families, who will also benefit from a 6.6% rise in the National Living Wage, to £9.50 per hour worth over £1000 for a full time worker.
Families will also benefit from a range of other measures announced in the Budget, including:
- An extra £4.7billion in funding for schools by 2024/25
- £1.8bn of addition funding to help schools and colleges to recover from the pandemic
- £300m will be spent on a "Start for Life" parenting programmes, with an additional £170m by 2024-25 promised for childcare
- 200m a year for our holiday activity and food programmes
- £2.6billion for 30,000 additional special needs school places
In addition, the Chancellor announced:
- An additional £5.9billion for the NHS to reduce waiting lists
- Reform of business rates, and a 50% reduction for one year for businesses within the retail, hospitality and leisure sectors
- £11.5bn for up to 180,000 affordable homes
- A 4% on property developers to help create a £5bn fund to remove unsafe cladding
- Core science funding to rise to £5.9bn a year by 2024-25
- Additional funding for road, rail and broadband infrastructure
- £20 billion investment in research and development by the end of this Parliament.
These measures are possible due to the success of the Government’s economic response to the pandemic. This has seen growth forecasts increase from 4% to 6.5%, and predictions of peak unemployment reduce from 12% to 5.2% - meaning 2 million more people will be in work as a result of the measures taken. The Chancellor has also committed to ensuring fiscal responsibility with the introduction of a new Charter for budget responsibility. This will ensure net debt continues to fall as a percentage of GDP and that Governments will only borrow to invest for future growth and prosperity, with everyday spending being paid for from tax receipts.
For further information on the Budget, please visit https://www.gov.uk/government/publications/autumn-budget-and-spending-review-2021-documents
