Chancellor’s tax credit cuts could see the UK’s poorest workers lose up to £1,300 a year
The Chancellor’s proposals would see some of the UK’s poorest workers lose up to £1,300 a year, prompting outrage from trade union leaders.
TUC general secretary Frances O’Grady said: “This is an astonishing attack on working people. They are so severe that, even with a higher minimum wage and higher tax threshold, most low-paid families will be much worse off. But despite people from his own party urging the Chancellor to think again, he has refused to listen.
“The Chancellor has finally recognised infrastructure investment as the priority it should have been five years ago. But if he keeps cutting public investment, then it will all be pie in the sky. We need a properly capitalised National Investment Bank to ensure the infrastructure that Britain needs gets built.
“We all want more decisions to be made locally. But by devolving business rates without any national safeguards, regional inequalities will get wider. The communities that most need investment are often those with the weakest business revenue base, so it is vital that the Treasury retains a significant role in regional economic development.”
UNISON general secretary Dave Prentis said: “The government is on the back foot over tax credits and ministers know it. They keep saying that families will be better off, but figures published by the House of Commons Library, and a host of other organisations, tell a very different story.
“The reality is that the incomes of almost three million working households will take a huge hit next April as the tax credits they rely on to get through each month are taken away.
“Many may get a pay rise from the government’s ‘national living wage’, but will end up losing more than they gain in the tax credits grab. And families on slightly higher, but still very low incomes, will lose out significantly.
“The loss of as much as £50 a week could push many households that are already surviving on a shoestring, deeper and deeper into debt.
“The government should either come clean and admit that many working households across the UK will be worse off, or publish the details behind its claims and prove everyone else wrong.”
Unite general secretary Len McCluskey said: “George Osborne continues to peddle his snake oil but the reality is that he has made a clear and heartless choice to make the poor pay through slashing the working tax credits while giving the rich a handout.
“The combined cost of his cuts in inheritance tax and corporation tax from the this summer was £3,415 million, which is enough not to make any cuts to in work support.
“So he has made a deliberate choice to make millions of working people over £1,000 worse off, while a few thousand millionaires get to hold onto their wealth. This was a choice based on political and class dogma, and not economic necessity.
“Increasingly, this government’s claims to be on the side of hardworking families yet granting the rich and powerful the constant indulgence of successive tax breaks is fast becoming a sick joke.
“Osborne’s looming working tax credits cuts are bringing terror to those working long hours on low incomes. To them, George Osborne does not look so much like a leader in waiting as the hammer of the ordinary working people and their children. His appalling plans to attack working incomes must be dropped, now.”
Usdaw general secretary John Hannett said: “The Chancellor had a chance to reverse his deeply damaging tax credit cuts that will lead to many working parents losing thousands of pounds. He could at least have commissioned an Impact Assessment, which has not been done, and promised a review given the grave concerns from all sides of the political spectrum, including within the Conservative Party.
“Increasing income tax thresholds, raising the minimum wage and extending free childcare are welcome, but go nowhere near compensating for the significant loss of income that tax credit recipients will suffer. Many of the families who stand to lose significantly in April will gain nothing from the minimum wage rise, there are also concerns about the funding of the extra free childcare and doubts as to whether the policy can be delivered on the ground.
“The Prime Minister has broken his promise on tax credits, which tells us very clearly they are not the party of working people, as he claims.”
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