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Eddie Mair grills Tory MP on self-admitted 'crazy' pre-budget Universal Credit taper rate
27 October 2021, 17:40
Eddie: "Why have you presided over a 'crazy' policy all these years?"
Eddie Mair has grilled Tory MP Mel Stride on the current Universal Credit taper rate, which the politician described as "absolutely crazy" after the Chancellor announced it's set to change.
Once Universal Credit claimants earn more than their work allowance, payments are reduced at a steady rate, which is known as the Universal Credit earnings taper rate.
The taper rate is currently 63%, meaning that for every £1 earnt over the work allowance payments are reduced by 63p. In coming weeks, this will be reduced to 55%.
Discussing the Chancellor's cut to the Universal Credit taper rate, Mr Stride said: "When I was a treasury minister some years ago it was something I often pushed on, and the problem is it's hugely expensive.
IFS Deputy Director Carl Emmerson reacts to the budget announcement.
"But it is absolutely crazy that somebody who is working on low pay is, because of the way the taper works, basically paying a marginal tax rate prior to this announcement of about 63%."Eddie replied: "Why have you presided over a 'crazy' policy all these years?"
Mr Stride said: "I think it is and it has been, and the problem is that it has been there and it's very expensive to unwind it."
"But you introduced it," Eddie replied.
Mr Stride claimed the taper rate cut came about because of the "room for maneuver" the Chancellor created by his handling of the pandemic.