‘Minimum Wage Must Work With Universal Credit Reform to Reduce Inequality’

New analysis by the Resolution Foundation has predicted a slow reduction in low pay. The Resolution Foundation has warned that post-Brexit uncertainty makes it unlikely that previous forecasts that pay will reach £9 an hour by 2020 will be met. 

Responding to this analysis, Executive Director of The Equality Trust, Dr Wanda Wyporska, said: 

“While the new minimum wage has successfully boosted the incomes of at least some of those on low pay, cutting in-work support through Universal Credit will ensure that many working families will still be worse off. The Government is giving with one hand, and taking far more with the other.

“It’s a national scandal that those receiving Universal Credit lose 76p of every extra pound they earn in taxation and withdrawal of social security. We must allow those on low incomes to keep more of the money they earn, to prevent them being trapped on the minimum wage, and to allow them to progress.  This could be paid for by freezing the planned increase to the income tax personal allowance.

“The huge inequality we see in this country damages our economy and our society, it means poorer mental and physical health, higher violent crime, and lower levels of trust in others. The new minimum wage is only a start in reducing this inequality and bridging the gap between those ‘just managing’ and the well off. A fairer tax system and better in-work support must also accompany this if we’re to see a real reduction in our extreme inequality.”

For further comments or to arrange an interview, contact info@equalitytrust.org.uk