Stephen Timms
The Minister mentioned Martin Lewis, and I wonder if she could provide the information that the Chief Secretary said she might be able to give in winding up this debate about the effect of this national insurance measure on people claiming universal credit. Martin Lewis has made the point that they will lose 55% of the £330 a year benefit. Will she confirm if that is correct?
Lucy Frazer
I was going to come back to that point, but I am very happy to deal with it now. The right hon. Gentleman is right that an individual may be affected by the taper, but they will be better off overall as a result of the change. If they are earning below the work allowance, they will get the full benefit. It is important to point out the changes we have already made for those on universal credit. As a result of those changes, 1.7 million households will benefit from the taper rate change, which is £1,000 of additional income for them.
[Official Report, 24 March 2022, Vol. 711, c. 508.]
Letter of correction from the Financial Secretary to the Treasury:
Errors have been identified in my response to the right hon. Member for East Ham (Stephen Timms).
The correct response should have been:
Lucy Frazer
I was going to come back to that point, but I am very happy to deal with it now. The right hon. Gentleman is right that an individual may be affected by the taper, but they will be better off overall as a result of the change. If they are earning below the work allowance, they will already benefit from the existing national insurance threshold. It is important to point out the changes we have already made for those on universal credit. As a result of those changes, 1.7 million households will benefit from the taper rate change and the increase to work allowances, which is on average around £1,000 of additional income for them.
Clive Efford
I am wondering whether the Minister missed new clause 2, because she did not address the problem. Yes, increases were introduced in the autumn Budget last year, but this year, people are getting less than they were anticipating due to the increase in the threshold of national insurance. People were being told yesterday that they should get an extra £330, but they will actually get less than half of that. What is the Government going to do about that? The Treasury is clawing back several hundred million pounds from some of the poorest workers in the country.
Lucy Frazer
I do not know whether the hon. Member was in the Chamber when the right hon. Member for East Ham (Stephen Timms) raised this point and I addressed it. He is right to point out that an individual may be affected by the taper, but overall they will be better off as a result of this change. If those people are earning below the work allowance, they will get the full benefit. I reiterate that the changes that we have already made mean that those who are on universal credit will benefit by £1,000 from the cut to the taper rate.
[Official Report, 24 March 2022, Vol. 711, c. 524.]
Letter of correction from the Financial Secretary to the Treasury:
Errors have been identified in my response to the hon. Member for Eltham (Clive Efford).
The correct response should have been:
Lucy Frazer
If those people are earning below the work allowance, they will already benefit from the existing national insurance threshold. I reiterate that the changes that we have already made mean that those who are on universal credit will benefit by around £1,000 from the cut to the taper rate and the increase to work allowances.