MOST people in Scotland who receive Universal Credit will get nothing out of the changes announced in the budget, Citizens Advice Scotland has warned.  

CAS said six in ten recipients would still lose money because of the recent end to the £20-a-week Covid-related uplift, as the budget change only helps those with jobs.

Chancellor Rishi Sunak today announced a £2billion-a-year reform to the Universal Credit taper for those people who get the benefit while in work.

Instead of losing 63p in UC for every extra £1 they earn, they will lose 55p from December.

Delivering his budget to the Commons, Mr Sunak said: “The Universal Credit taper withdraws support as people work more hours. The rate is currently 63%, so for every extra £1 someone earns, their Universal Credit is reduced by 63p.

“Let us be in no doubt: this is a tax on work – and a high rate of tax at that.”

He added: “To make sure work pays, and help some of the lowest income families in the country keep more of their hard-earned money, I have decided to cut this rate, not by 1%, not by 2% - but by 8%.”

Mr Sunak said the tax cut would be worth more than £2 billion and would be introduced by no later than December 1.

Labour said it was an insult to crow about £2bn when more than £6bn was being taken out of Universal Credit with the end of the £20-a-week uplift, worth £1040 a year.

According to the latest official figures, 470,894 people in Scotland are on Universal Credit, of whom 178,100 are in work and 292,793 are jobless. 

Citizens Advice Scotland Chief Executive Derek Mitchell said: “Changes to Universal Credit so working people can keep more of what they earn are very welcome, and something Citizens Advice Scotland has been campaigning for.

“However, for many it will not make up for the impact of reducing Universal Credit by £20 per week earlier in the month, particularly as inflation is rising and energy bills have gone up.

“In Scotland, around 4 in 10 people in Universal Credit are in work – so changes to the taper rate don’t help 6 in 10 claimants.

“Analysis by Citizens Advice Scotland revealed that over 1.4million people ran out of money before pay day during the pandemic, people are facing a perfect storm this winter and the CAB network is here to help, nearly 60% of the advice we gave last year was helping people maximise their incomes.”

Paul Johnson, the director of the Institute for Fiscal Studies (IFS), tweeted: “Big cut to Universal Credit taper. And increase in work allowance. Targeted at working claimants. Out of work UC claimants get nothing. Trade-offs as ever. Improves work incentives for current recipients but will drag more into the system.”

SNP Westminster Leader Ian Blackford MP said: "No amount of smoke and mirrors can disguise the fact that the UK Budget has short-changed Scotland, and left millions of families hundreds of pounds worse off next year due to Tory cuts, tax hikes and the soaring cost of Brexit.

"Under the Tories, the UK has the worst levels of poverty and inequality in north west Europe and the highest levels of in-work poverty this century.

"Yet, this Budget did nothing to tackle the Tory cost of living crisis. The piecemeal measures won't even offset Tory Universal Credit cuts, National Insurance hikes or rising inflation, let alone boost incomes." 

"It beggars belief that the Tories expect us to be grateful even though they are making families poorer and robbing Scotland of investment."

Scottish Liberal Democrat leader Alex Cole-Hamilton addedd: "Today the Chancellor missed the chance to avoid a cost-of-living crisis which will cause sleepless nights for families up and down the country. 

"Almost half of the minimum wage rise is wiped out by their national insurance hike and his announcement on the Universal Credit taper is giving back a fraction of what he snatched away."