Sunak ‘fails own test of moral duty’ in Budget with Universal Credit decision

Sunak did not mention the scrapping of the extra £20 a week, leading to anti poverty campaigners saying he has failed to support those suffering the most hardship.

The Chancellor instead, announced changes to the taper for those in work to allow people to keep more of what they earn without losing out in benefits.

Sunak said the taper which is set at 63% would be reduced to 55%.

He said it was helping with the cost of living.

He said: “For many of the lowest paid there is a hidden tax on work, adding on the taper of 63%, “It’s too high”.

The Chancellor added: “To make sure work pays I’ve decided to cut it by not 1% or 2%, but by 8%

“This is a tax on working people and we’re cutting it to 55%.”

He said it was worth £1000 a year and it would be introduced no later than December 1.

He said a single mother of two renting on National Minimum Wage would be better off by £1200.

A couple renting with two children, one working full time, one part time would be better off by £1800.

Sunak said: “This budget helps with cost of living.”

He also announced the increase in the National Living Wage for people aged 25 and over to £9.80 an hour.

Peter Kelly, director of the Poverty Alliance said: “”The Chancellor said today that there is a ‘moral dimension to the economic challenge we face’.

“That moral economic challenge ought to be about how we best support those who face hardship and how economic recovery can help everyone.

“The increase in National Living Wage and reduction in Universal Credit taper rate are welcome moves. But welcome though they are, they will do little to help people who are not in employment and who are struggling.

“Significantly, in failing to use his Budget to reinstate the £20 Universal Credit lifeline, Rishi Sunak has failed in his moral duty to protect people from poverty. “

Citizens Advice Scotland Chief Executive, Derek Mitchell, said: “Changes to Universal Credit so working people can keep more of what they earn are very welcome,.

“However, for many it will not make up for the impact of reducing Universal Credit by £20 per week earlier in the month, particularly as inflation is rising and energy bills have gone up.”

The Chancellor also announced the tax system on alcohol is to be reformed .

Sunak said the alcohol duties would be changed so that higher strength drinks are taxed at a higher rate than lower alcohol drinks.

He said the system was “outdated, complex and full of historical anomalies”.

Sunak said it would mean “The stronger the drink the higher the rate”.

He added: “Stronger red wines or high strength ciders will see an increase. It will help end the era of cheap high strength drinks.”

Sunak announced that sparking wines, like prosecco and champagne, that have been taxed at a higher rate, will be taxed at the same rate as still wines.

He said: “Over last decade consumption sparkling wine has doubled.”

He also announced changes to the price of a pint in pubs.

He said: “Pubs were struggling before the pandemic, consumption fell and are often “safer drinking environment than being at home”.

The Chancellor announced a “draught relief, a lower rate of duty on draught” beer and cider in pubs.

It means a 5% cut, which Sunak said was the biggest cut to beer duty in 50 years, stating it was a “cut of 3p per pint”.

The reforms, however, will not come into effect until February 2023.

The planned increase on duty on spirits wine cider and beer will be cancelled.

Pub bosses however said the price cut claim was “disingenuous” and said prices will still rise.

Colin Wilkinson, managing director of the Scottish Licensed Trade Association, said: “This is only a small step forward and we are disappointed that this did not go further to include spirits and wine sold through the on-trade.

“His announcement that this will equate to a 3p cut in the cost of a pint is certainly most disingenuous, most unwelcome and unrealistic.

“With increased costs to business including staff costs, crippling increases in utility supplies and with inflation of over 4% next year, this will soon be swallowed up with operators having to explain potential rises of 30p a pint to offset the increased costs.”

The Chancellor also announced increases in spending that said meant £4.6bn for Scotland in Barnett consequentials each year.

He used it as reason for Scotland being better off in the UK.

Sunak said: “This will always will be secondary It is our collective history culture and security we will always be one family one United Kingdom.”

SNP Westminster Leader Ian Blackford MP said: “It’s increasingly clear that there will be no fair recovery under Westminster control. The only way to keep Scotland safe from Tory cuts is to become an independent country.

“No amount of smoke and mirrors can disguise the fact the UK Budget has short-changed Scotland, and left millions of families hundreds of pounds worse off next year due to Tory cuts, tax hikes and the soaring cost of Brexit.”