John Hannett – Usdaw General Secretary says: “Low paid workers have already paid a high price from the last Government’s policies with working tax credit frozen for 3 years, then pegged to a 1% increase for two years and the ‘clawback’ of earnings raised from 39% to 41%.
“So, with tax credits now worth an average £891 a year less, yesterday’s announcements were yet another kick in the teeth for low-paid working families. The increase in the ‘clawback’ to 48% is effectively a 7% tax on the lowest paid and combined with the halving of the earnings disregard which will cost most families on tax credits £1,233 a year, many families in receipt of tax credits will be worse off by thousands of pounds a year.
“The proposed changes to income tax and minimum wage go nowhere near compensating these workers for the loss of tax credits. At a time when many low-paid workers are struggling to make ends meet, despite doing the right thing and going out to work to provide for their children, this Government has just made the situation a whole lot worse.”
Notes for editors:
Usdaw (Union of Shop, Distributive and Allied Workers) is the UK's fourth biggest and the fastest growing trade union with over 430,000 members. Membership has increased by more than 17% in the last five years and by nearly a third in the last decade. Most Usdaw members work in the retail sector, but the Union also has many members in transport, distribution, food manufacturing, chemicals and other trades.
Example of how Usdaw members are affected by tax credit changes: A couple with three children - both working for a major supermarket that already pays over £7.20 per hour, he works full-time, she works 12 hours a week - stand to lose £38.02 a week, which amounts £1,976.89 annually.
For Usdaw press releases visit: www.usdaw.org.uk/news and you can follow us on Twitter @UsdawUnion