Minister accused of getting sums wrong on £20 Universal Credit cut

Therese Coffey's suggestion that people claiming Universal Credit can work an extra two hours to make up for the £20 cut has elicited quite a response, ITV News Political Reporter Shehab Khan explains

The Work and Pensions Secretary has been accused of getting her figures wrong after suggesting that people who lose £20 a week from their Universal Credit could work an extra two hours to make up for it.

Welfare experts assessed that some would need to work closer to an extra nine hours a week to make up for the cut, and Labour branded Therese Coffey’s remarks an “insult to hard-working families”.

The Cabinet minister had been defending the move to end the increase introduced in response to the coronavirus pandemic by saying it had always been “temporary”.

The Government has faced growing calls to keep the extra money in place amid concern that the plans will heap further pressure on struggling families.

Ms Coffey told BBC Breakfast: “I’m conscious that £20 a week is about two hours’ extra work every week – we will be seeing what we can do to help people perhaps secure those extra hours, but ideally also to make sure they’re also in a place to get better paid jobs as well.”

But the Resolution Foundation contradicted her remarks due to the taper rate meaning that – over their work allowance – Universal Credit claimants only take home 37p per extra pound earned due to a lower benefit award, a figure that falls to 25p if they earn enough to pay tax and National Insurance.

The think tank’s analysis cited the example of a Universal Credit claimant earning the national living wage and making an income of at least £6,100 a year.

Secretary of State for Work and Pensions Thérèse Coffey. Credit: PA

They would see their take-home pay fall to £2.24 an hour once taxes, National Insurance, pension contributions or additional childcare or travel costs are taken into account.

This means they would have to work an extra nine hours a week to make up for the loss.

The analysis also noted that more than one in four Universal Credit claimants are not expected to work due to health problems or they are caring for a young child.

Targeting Ms Coffey, Labour deputy leader Angela Rayner said: “This is a lie and the Work and Pensions Secretary either knows she’s lying or shouldn’t be in the job.”

The Resolution Foundation’s principal economist, Adam Corlett, said: “The Government has tried to justify the coming cut to Universal Credit – and the huge income loss facing millions of households – by saying that it can easily be offset by simply working a few more hours. If only it were that simple.

“A small increase in working hours will be nowhere near enough to cover the £20-a-week cut coming their way in just one month’s time.

“Given the scale of losses coming to millions of low and-middle income households this autumn at the same time as bills are rising, the Chancellor should change course on Universal Credit.”