The Conservatives are proposing to cut the tax credits of millions of working people which will have a huge impact on the living standards of people in Halifax and across the country.
As part of my work as a Labour Party whip I have been highly involved in the committee which is scrutinising the tax credits proposals and have been shocked at quite how casually the Conservatives brush aside the potential impact of these changes.
It is predicted that the cuts will mean that 13m families would lose an average of £260 a year as a result of extending the freeze in benefits until 2020. In addition, changes to the amount people can earn before tax credits start to be withdrawn will cost 3m families an average of £1,000 a year.
In Halifax alone the 12,700 children who live in families claiming tax credits will see their family income fall by an average of £1,300 a year. This is money that ensures that parents are incentivised to work and most importantly that their children do not grow up in poverty.
To see the true unfairness of these cuts consider a medical secretary with two children who today earns £22,236. Instead of being £2,437.70 better off during the life of this parliament from a 1% pay rise each year, she will instead be £9,423.11 worse off, as a result of the changes to tax credits.
It is no surprise that my mailbox is already packed full of worried letters from people who don’t know how they’ll manage to pay the bills.
Yet the government refuse to rethink these harmful proposals.
They have attempted to justify their cuts by claiming that people will be no worse off as a rise in the minimum wage will compensate all losses.
However no-one who has seen the figures can possibly agree with them on this.
The total increase in employment income from the higher minimum wage is about £4 billion. Yet even excluding the effects of the four year freeze, tax credit spending is due to be cut by getting on for £6 billion. It is clear that people will be significantly worse off.
Another government defence is that all changes to the welfare system need to be considered when working out how people will be affected. They point to things like a higher personal allowance and increased free childcare.
It is almost farcical to see them doggedly stick to the assertion that people will be better off while in the next breath demanding £12 billion more in welfare cuts. The IFS are right to conclude that “unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average”.
As living standards have stalled for six years, people have been working harder than ever to make ends meet, yet faced with these cuts they will rightly feel that the Government is working against them.
To show your opposition to these cuts sign the petition here