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Universal Credit is a ticking time bomb for many low-paid working families, says Usdaw

Date: 04 May 2016 Shopworkers' trade union leader John Hannett has welcomed a call by the Resolution Foundation for major reforms as full roll-out of Universal Credit begins this month.
John Hannett – Usdaw General Secretary says: “The Government has allowed severe cost cutting to turn the initial intentions of Universal Credit to simplify benefits and improve incentives to work, which we support in principle, into a real threat to the incomes of low-paid working families.

“We were delighted to have won the argument on tax credit cuts, having forced the Government into a u-turn, but Universal Credit is a ticking time bomb that will leave many working families much worse-off when they are transferred onto it.”

“We welcome the Resolution Foundation’s three-point plan for restoring Universal Credit’s original purpose of encouraging entry and progression in work. We call on the new Secretary of State for Work and Pensions to act urgently, look afresh at the impact of Universal Credit on low and middle income earners and get this troubled project back on track to support not penalise working families."

Analysis from the Resolution Foundation shows that around 2.5 million working households will be worse off by an average of £41 a week, while around 2 million households will be better off by an average of £34 a week.

Further analysis by Liverpool Economics shows that from April cuts to the work allowance will also mean an annual reduction of £2,000 a year in support for disabled people in work.

Usdaw’s own analysis reveals that a parent couple, both working in retail, earning just above the so-called National Living Wage, one working full-time and one part-time, would be £1,866 worse off on Universal Credit.

Notes for editors:

Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fourth biggest and the fastest growing trade union with over 440,000 members. Membership has increased by more than 17% in the last five years and by nearly a third in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.

The Resolution Foundation report says that in order to make the most of Universal Credit, the new Secretary of State should reclaim the policy from the Treasury and follow a three-point plan:
  • Focus on those most likely to respond to financial incentives to work.
  • Offer more practical support to boost in-work progression.
  • Address practical concerns about UC’s interaction with people’s lives.

For Usdaw press releases visit: http://www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion

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