Chancellor Rishi Sunak said in his budget announcement that reducing the reduction rate – the tax on a claimant’s payment for every pound they earn above their work allowance – from 63% to 55 %, was to “reward the work” of low-income families.
Data from the Department for Work and Pensions shows that 33% of the 17,471 Universal Credit claimants in Hartlepool were working as of August 12, meaning the tax burden for 4,504 claimants will be eased when the move comes into effect before December 1 .
Mr Sunak has come under criticism that the reduction in the cut rate does not make up for the overall £20-a-week reduction in Universal Credit at the start of October, or help people who are not working.
In Hartlepool, around 9,000 Universal Credit claimants were out of work as of August 12.
Mr Sunak said: ‘This is a £2billion tax cut for the lowest paid workers in our country. It supports working families, contributes to the cost of living and rewards hard work.
The changes mean nearly two million families nationwide will keep an extra £1,000 a year on average, he said.
Labor Shadow Chancellor Rachel Reeves said: “Never has a Chancellor asked the British people to pay so much for so little.
“After taking £6billion out of the pockets of some of the poorest people in this country, he expects them to be happy to have received £2billion to make up for it.”