The Transport Secretary wrongly claimed keeping the payments would need an income tax rise of ‘several pennies’. He was defending the Tories decision to scrap the £20-a-week uplift.
Grant Shapps has made it apparent that he still cannot understand the Universal Credit system as he defended the Tories decision to scrap the uplift.
Mr Shapps wrongly said dropping the £20-a-week cut UC payments would cost “several pennies” on income tax.
On Sunday morning’s media round, which is also day 2 of Labour’s Party Conference, the Transport Secretary claimed keeping the payments would create an income tax hike paid by workers.
Mr Shapps told the Andrew Marr show: “I think most people recognise that if it’s brought in for the pandemic, it’s going to end as we move back to people going back to work and more normal times.
“We can’t keep all these things in place otherwise you’d have to put several pennies on income tax to pay for the policy to run.”
It is thought keeping the £20-a-week UC uplift would cost around £5billion a year.
And putting an extra penny on income tax could raise around £6-7billion a year, the IFS said in 2019.
Mr Shapps said the Government scrapped the UC uplift because salaries are on the rise.
“You mentioned some costs will be going up – that’s undoubtedly true – but fortunately I can also report that salaries are going up faster than that.
“I think we’ve seen a 4.2% increase in salaries this year.
“We’ve got more people in work than even before the pandemic. A lot of people on Universal Credit are working, so it’s not unconnected.”
His error comes weeks after the Tories welfare chief suggested Brits should work longer hours to make up for the benefit cut.
Therese Coffey claimed Universal Credit claimants could make up for the reduction by working “about two hours extra” per week.
The Work and Pensions Secretary said: “£20 a week is about two hours’ extra work every week.
“We’ll be seeing what we can do to help people perhaps secure those extra hours, but ideally also make sure they’re in a place to get better-paid jobs as well.”
Asked if she was “entirely happy” with the cut, she replied: “Yes”.
But Labour, experts and UC claimants said Ms Coffey’s comments were factually incorrect.
Many families on UC would need to work more than six hours extra a week to make up for the cut.