Universal Credit

Treasury written question – answered on 29th April 2019.

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Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

To ask the Chancellor of the Exchequer, what estimate he has made of the cost to the public purse of the £1,000 work allowance increase announced in Budget 2018.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

To ask the Chancellor of the Exchequer, what estimate his Department has made of the distributional effect by decile of the work allowance increase announced in Budget 2018; and what proportional increase in the income of each income decile will be.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

To ask the Chancellor of the Exchequer, what the fiscal cost would be of a further £1,000 increase to the same work allowances which were increased in Budget 2018.

Photo of Neil O'Brien Neil O'Brien Conservative, Harborough

To ask the Chancellor of the Exchequer, what estimate his Department has made of the distributional effect of a further £1,000 increase to the same work allowances which were increased in Budget 2018 on the percentage increase in the incomes of each decile.

Photo of Elizabeth Truss Elizabeth Truss The Chief Secretary to the Treasury

The £1,000 increase to the Universal Credit (UC) work allowance, announced in Budget 2018, will increase the amount that 2.4 million households can earn before their UC begins to be withdrawn. This change will enable working parents and people with disabilities on Universal Credit to keep over £630 extra income each year. The Budget 2018 work allowance change increased government support for UC by £1.7bn per year by 2023-24. No assessment has been made of the cost of a further £1,000 increase in the work allowances over and above those which were increased in Budget 2018.

HM Treasury’s distributional analysis, published alongside Budget 2018, shows the cumulative effect on household incomes of policies on welfare, tax, and public service spending measures. Because different measures often interact with each other, this cumulative assessment provides the best representation of the overall intended policy effect. This shows that since this Chancellor and Prime Minister took office, their decisions have benefited households throughout the income distribution, with the poorest households gaining the most as a percentage of net income.

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