UNDER the government’s Welfare Reform Act – sounds a lot better than Benefit Cuts Act – Working Tax Credit will be replaced by the Universal Credit, which will by its very nature be much less than universal.
Many low-earning, self-employed people, such as fishermen, crofters, hairdressers, island dwellers and others who presently qualify for Tax Credit will no longer be entitled to it, as Universal Credit demands that you pay yourself at least the minimum wage for 35 hours a week and keep monthly profit and loss accounts, never mind such accounts are usually submitted to the taxman annually.
So the net effect of this will be a new Highland and Island clearance, since the low-paid poor will have to abandon their jobs and homes and move, destitute, to the cities and towns.
It is ironic that it was a Conservative chancellor, Anthony Barber, who introduced the tax credit in his 1970 budget in the form of Family Income Supplement (FIS), a type of negative income tax, to help the lowest earners with children.
FIS started in August 1971 and continued under successive governments until today, renamed Family Credit, Child Tax Credit and Working Tax Credit. The present government even claims that Labour is to “blame” for its costs.
I cannot imagine what those people who presently rely on Tax Credits will do when the Universal Credit is imposed on rural Scotland.