Union research suggests average workers are £150 a month worse off – and crisis of falling incomes is hitting the children of low paid and part-time workers hardest


Donna and Jim live in Guisborough in Cleveland. They have three children aged 10, 9 and 2.

Next month, they will lose 20% of their income.

And that’s before George Osborne waves his red budget box to the cameras in Downing Street.

Jim works for 16 hours a week.  Donna was made redundant before Christmas and can now only find work for 6 hours a week.

In April they will lose £70 a week thanks to plans to change the system of tax credits.

Donna says: “We cannot cut back any more than we are doing and we face the uncertainty of whether or not we will be able to feed our children.

“We are a normal hard working family, we have three lovely kids who understand and appreciate all they are given but it is becoming increasingly hard to manage and if they reduce our money even further I am afraid for the future.

“My husband and I should not have to choose between us which one eats tonight.”

Late last year, the Institute for Fiscal Studies warned the period between 2009 and 2013 is likely to be dominated by a large decline in real incomes across the working population.

It forecast absolute poverty would rise by about 600,000 children and 800,000 working-age adults.

Median income would fall by around 7% in real terms. That would would be the largest three-year fall for 35 years.

The study predicted absolute and relative child poverty in the UK will rise to 24% in 2021.

This truly shocking forecast compares to a target of 10%, set out in the Child Poverty Act (2010) and passed with cross-party support, especially when new figures from Usdaw and the Child Poverty Action Group show two thirds of those families about to lose tax credits are already living in poverty.

From 6th April, around 200,000 couples with children face losing £3,870 if they cannot increase the total number of hours they work from 16 to 24 per week.

An analysis by Howard Reed of Landman Economics shows that around 140,000 of these families are already living below the poverty line.

A further 35,000 families with around 80,000 children will fall below the poverty line if they are unable to find extra hours of work.

Usdaw and the Child Poverty Action Group – which describes the change to tax credits as “a precision-guided attack on the poorest working households” – are making another urgent call on the Chancellor George Osborne to use his Budget today to postpone the changes.

Unite has been talking to thousands of working people since January 2011 about how they are managing under the government’s austerity policy.

The research has been conducted by an independent polling company, Mass 1, which has calculated that the average worker is worse off by £150 per month so far this year; this is almost twice the figure from 2011 of £83 per month.

In the north-east, the figures are the most acute.

According to Kevin Rowan, regional secretary of the Northern TUC: “We already have the lowest pay, the highest unemployment and we’re losing 2,000 public sector jobs a month.

“So we are hoping for a budget for growth, because there has been absolutely no sign of that in this region for years.”

A TUC report yesterday found the north east, the region with the lowest overall wages and therefore the cheapest place to recruit, also has the highest unemployment rate with nearly ten dole claimants chasing each job vacancy.

But what has George Osborne been leaking in the last week about the contents of that red box?

A tax break for the super-rich and bringing in regional pay rates for public sector workers – ramping up geographical disparities between the richest and poorest in the UK and pounding the least able to pay with more regressive taxation.

So, that’s what re-balancing really means, is it?

As TUC general secretary Brendan Barber put it: “The government is more interested in picking a fight with public sector workers than boosting the economy outside of London and the South East.”

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