Tories must reverse Universal Credit cuts to show they’re serious about helping savers, says Smith

The Tories have been criticised for inconsistency following the announcement of their ‘Help to Save’ scheme.

Shadow Work and Pensions Secretary Owen Smith has added calls for the reversal of cuts to Universal Credit benefits, which would see same working families thousand of pounds poorer.

Smith criticised the simultaneous attacks on families’ incomes with the introduction of a savings scheme:

“This is like stealing someone’s car and offering them a lift to the bus stop.

“Universal Credit cuts will take £1,600 a year from over 2 million low and middle paid working families. While new analysis shows that 2.3 million of the 3.1 million families on tax credits will see their in-work support fall as they are moved to Universal Credit. With some families up to £3,000 a year worse off.

“These cuts will mean families are going to struggle to have enough money to make it to the end of the week, let alone save for the future. If the Tories were serious about supporting low and middle paid workers in the Budget they would listen to Labour’s calls to fully reverse the Universal Credit cuts.”

The scheme is similar to Labour’s Saving Gateway project, which was cut by Osborne in 2010, calling it “not affordable”. Labour’s scheme would have added 50p to every pound saved by low earners on benefits or tax credits.

However, the Government’s scheme adds 50p to every pound saved but for a much smaller group of low earners. 4.5 million fewer people are eligible for the new scheme than under Labour’s proposals.

Help to Save accounts will be introduced in 2018, with the Government’s contributions being delivered after two years.