Chancellor Rishi Sunak said in his budget announcement that the reduction in the graduated rate – the tax on a claimant’s payment for every £ 1 they earn above their working allowance – from 63% to 55% , was to “reward work” among low-income families.
Data from the Department of Work and Pensions shows that 41% of the 24,139 universal credit applicants in Northumberland were working as of August 12, meaning the tax burden of 10,004 applicants will be alleviated when the move takes effect before the 1st. December.
Mr Sunak has come under criticism that the graduated rate cut does not offset the general £ 20 per week reduction in universal credit in early October, nor does it help people who are not working.
In Northumberland, around 14,000 universal credit applicants were out of work as of August 12.
Mr Sunak said: ‘This is a £ 2 billion tax cut for the lowest paid workers in our country. It supports working families, helps pay the cost of living and rewards hard work.
The changes mean nearly two million families nationwide will keep on average an additional £ 1,000 a year, he said.
Labor fictitious chancellor Rachel Reeves said that “never has a chancellor asked the people of Britain to pay so much for so little.
“After taking £ 6bn out of the pockets of some of the poorest people in this country, he expects them to be happy to receive £ 2bn to compensate.”