In the run up to Christmas, over 3 million families will receive news that they are facing an average loss of well over £1,000 a year.
There are currently just over 3 million in-work families receiving tax credits, of whom 2.7 million have children
– almost every one of them will be hit by the Tories’ cuts to tax credits.
That’s why Labour has launched a campaign to fight these cuts – all the way.
You can do your bit – by signing up here to support us.
The tax credit changes proposed by Osborne, and voted through by his Tory majority, will produce an average £1,300 cut in the annual income of around 3.2 million families, affecting 5.2 million children, if they come into effect as planned in April 2016.
Some families on middle-incomes will lose entitlement to tax credits altogether.
Those families losing out from the cuts to tax credits include earners who already earn above the minimum wage.
The highly-respected independent Institute for Fiscal Studies has also shown how working families who are eligible for benefits or tax credits will only be compensated for around a quarter of their losses as a result of the ‘National Living Wage’.
“Among the 8.4 million working age households who are currently eligible for benefits or tax credits who do contain someone in paid work the average loss from the cuts to benefits and tax credits is £750 per year. Among this same group the average gain from the new NLW, is estimated at £200 per year (in a “better case” scenario). This suggests that those in paid work and eligible for benefits or tax credits are, on average, being compensated for 26% of their losses from changes to taxes, tax credits and benefits through the new NLW.”
The IFS has rubbished any suggestion that the so-called ‘National Living Wage’ will compensate families hit by the cuts to tax credits. Paul Johnson, director of the IFS, has said that this is “arithmetically impossible.”
“But the key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients. That is just arithmetically impossible.”
The statistics are horrifying – and behind them are real people:
– like Sarah and Paul from Gateshead – who were both made redundant, but who found work and now put in 57 hours a week between them to support their two young daughters – and who’ll lose £1450 a year;
– or George from Dundee – who’s worked for 15 years in a call centre – 36 hours a week – whose wife has had to stop work because of multiple sclerosis and whose daughter has rheumatoid arthritis. They’ll be losing £2,300 a year.
Labour voted against the cuts in Parliament – but we were defeated when over 200 Tory MPs voted in favour.
But the fight is not yet lost.
It is clear that many Tories are now running scared of a voter backlash when people working hard to earn just enough to get by become aware that they are losing out.
And Labour has announced a major Stop the Tax Credits Cuts campaign
The campaign will put more pressure on the government to rethink plans which punish the working poor.
As Seema Malhotra, Labour’s shadow Chief Secretary to the Treasury said
“Over the next weeks and months Labour will be taking its campaign to stop to Stop the Tax Credit Cuts to high streets and homes across the UK. If George Osborne doesn’t back down we will make sure that the millions of those low and middle income families know exactly who is to blame for the savage cuts that will hit them next April.”
The government have tried to hide the truth about this change but we are exposing it for what it is.
If you get tax credits, you can check the impact of the changes on your income by using public sector Unison’s easy-to-use calculator here.
And if you want to support our campaign, you can sign our petition by clicking here.
We’ll be fighting this one = to the end.