Many firms have been paying their staff too little for years, Boris Johnson said yesterday, as he suggested rising wages could plug the gap left by a controversial Universal Credit cut.
The Prime Minister also said the Government would press ahead next month with plans to scrap the £20-a-week uplift in universal credit, which was introduced at the start of the Covid pandemic.
He said he had 'every sympathy' with families who are 'finding it tough'. But he warned that maintaining the extra payment would require a tax rise equal to more than 1p on the basic rate of income tax.
Last night, it emerged that ministers are considering softening the blow from the universal credit cut by allowing claimants to keep more money as they earn, it emerged yesterday.
The Treasury is discussing cutting the taper rate – the amount of benefit withdrawn for every pound someone earns – from 63p to 60p, according to the Daily Mirror.
Many firms have been paying their staff too little for years, Boris Johnson said
Work and Pensions Secretary Therese Coffey made the proposal in her submission to the Government's spending review.
Mr Johnson told reporters while travelling in the United States: 'I have every sympathy for people who are finding it tough, I really really do – but we have to recognise that in order to maintain the Covid uplift you've got to find another five to £6billion in tax. That has got to come out of some people's pockets.'
Mr Johnson said many firms had paid their staff too little for years – and suggested that rising wages seen in recent months could help plug the gap for some workers on low incomes.
He added: 'Wages are now rising faster than they have been for a long time, and the philosophy of this government is to try to deliver a high-wage, high-skill economy in which we invest in people, we invest in capital, we encourage businesses to put their profits back into people, back into the capital of the business, in order to drive productivity gain.
'If you look at the UK since 2008, you look at our companies, they've been paying very low wages and they've been not investing, and productivity has fallen.'
The Prime Minister also said the Government would press ahead next month with plans to scrap the £20-a-week uplift in universal credit, which was introduced at the start of the Covid pandemic (file image)
The PM suggested rising wages could plug the gap left by a controversial Universal Credit cut
The planned cut in