Income tax set to rise to keep benefit increase of £ 20 per week, business minister says

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Business Secretary Paul Scully has said income tax and fuel taxes should increase to keep the universal credit increase of £ 20 per week.

He told Sky News: “The Chancellor… will look at the whole aspect of public finances in the budget and the upcoming spending review.

“But if you were to cancel the universal credit as it is, you would have to increase income tax by the equivalent of a dime and 3 pence on fuel.

“You have to find £ 6 billion somewhere.”

But when told that “most people would take a dime in income tax” to pay to keep the increase going, Mr Scully said: “What I’m saying is you have to find £ 6bn somewhere and what you don’t want to do, especially for the lower paid, is give with one hand and take and raise taxes with the other.

His comments come as Citizens Advice warns the cut will leave 1.5 million workers struggling.

The charity expects an increase in the number of families seeking its support, as rising energy prices and rising costs of living are compounded by the reduction in universal credit.

Its latest research shows that two-thirds (67 percent) of working providers say they will face difficulties if the reduction continues.

This includes struggling to pay their bills, going into debt, or being forced to sell goods to make up for lost income.
About one in four job seekers, which equates to 600,000 people, fear that they will not be able to afford food or other basic necessities such as toiletries.

The universal credit increase was first introduced at the start of the first lockdown and was intended to support people during the pandemic.

But the government has confirmed that the scheme will officially end on 6 October, leaving beneficiaries £ 1,040 a year worse off every year.

The move was widely criticized, with Conservative backbenchers opposing the cut in the advantage.


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