Witnesses raised concerns about the UK Tory Government’s plans to cut Universal Credit by £1,040 annually next month and to raise National Insurance contributions.
They did so at This week’s Finance and Public Administration Committee, of which Kenneth is the Convenor.
Kenneth asked Polly Tolley, Director of Impact at Citizens Advice Scotland, about the impact the Tory Government’s £20 reduction of Universal Credit.
Ms Tolley said:
“We are worried about what will happen in autumn, when the £20 reduction comes in and furloughs wind down, and when we are also seeing an increase in energy prices for consumers. Those elements could be a perfect storm when it comes to people’s ability to manage their household budgets.
“Even as far back as May, one in seven people who were polled by YouGov on our behalf indicated that they were struggling on their present income.”
Kenneth furthermore asked Joanne Walker, Technical Officer at the Chartered Institute of Taxation, how the Tory-proposed rise on National Insurance would stroke with the Low Incomes Tax Reform Group’s “seven principles for the tax system.”
Ms Walker expressed concerns at the proposals, saying:
“I have a few comments on the current proposals that we are hearing from the UK Government.
“National Insurance affects only employment and self-employment income; it does not even affect all the elements of income that are affected by the Scottish income tax, which covers the whole of income other than savings and dividend income.
“It covers only very specific earned income for people of working age. From that point of view, it therefore does not necessarily meet all those principles.”
The seven principles for the tax system are that taxes should be “Clear and up to date ... Simple ... Equitable ... Just ... Accessible and responsive ... Joined up” and “Inclusive”.
ENDS
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