Date: 7 January 2013
The Coalition’s Benefits Uprating Bill to be implemented tomorrow (8 January) will cost families with two children more than £1,000 in the next three years, says shopworkers’ Union Usdaw.
The 1% cap on increases to tax credits and child benefit at a
time when inflation is predicted to be between at least 2-3% will
make a massive difference to families on low and middle
incomes.
"These are the cruellest of cuts at a time when families are
struggling to make ends meet," said General Secretary John
Hannett. "How can the Coalition justify taking money out
of the pockets of families on low incomes who rely on in-work
benefits to provide the basic necessities for their children."
Usdaw's calculations show that by 2015-16, a family with one
child will have lost £784, those with two children will lose £1,091
and families with three children a massive £1,398 as their tax
credits and child benefit fail to increase with the cost of
living.
Families on low and middle incomes have already lost out from
previous freezes for three years to Child Benefit and Working Tax
Credit.
The Treasury has admitted that a lone parent or a couple with
one parent working full-time on the minimum wage would receive £660
less in Working Tax Credit from April 2013 than they would have
done if tax credits had continued to rise in line with RPI (note 3)
and that a family with two children will have received over £500
less in Child Benefit by April 2014 due to the freeze (note 4).
Usdaw's General Secretary John Hannett is very
concerned at the impact the changes will have on Union members and
working people throughout the country,
"Working people on low and middle incomes have already borne a
disproportionate cost from the Government's cuts. The freeze on
Working Tax Credit and on Child Benefit has already substantially
cut the incomes of working people at a time when the cost of basic
necessities like food and fuel has been rising so sharply.
"Many of our members are reporting that they struggle to afford
to feed their families and heat their homes. That cannot be
right for people who are already working as many hours as they
can.
"The further cuts announced in the Benefits Uprating Bill are a
kick in the teeth for working people that will fill many households
with despair. Our members cannot understand how this Government can
give a tax cut to millionaires at the same time as cutting the
support that working people rely on to keep them above the
breadline."
Paul, an Usdaw member from Kent who lives with
his partner and two children aged four and two, works on the night
shift in a warehouse to support his family, said:
"My pay isn't brilliant. It just about covers
our outgoings and like most families at the minute, we need our tax
credits to get us through week to week. My partner and I are really
worried about the changes and that we will not be able to afford to
live.
"My family and families like mine are urging the Government not
to crucify working families. Right now, it is a big enough
struggle. If these plans to cut tax credits over the next couple of
years go ahead, then I worry that I will be forced into joining the
queue at my local job centre because I would be better off."
Notes to Editors:
- Usdaw (the Union of Shop, Distributive and Allied Workers) is
the UK's fourth biggest and fastest growing trade union with over
420,000 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.
- Hansard 18 Dec 2012: Col 688W
http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm121218/text/121218w0001.htm#12121870000235
- Hansard 18 Dec 2012: Col 685W
http://www.publications.parliament.uk/pa/cm201213/cmhansrd/cm121218/text/121218w0001.htm#12121870000235
- The Benefits Uprating Bill confirms that:
In 2013-14:
- Child Benefit and the basic and 30 hour elements of Working Tax
Credit will be frozen
- The couples & lone parents element of Working Tax Credit
and the Child Tax Credit will rise by 1%
In 2014-15 and 2015-16 Child Benefit and all elements of Working
Tax Credit and Child Tax Credit will rise by 1%
Families with 1 Child
|
Year
|
Loss from
Tax Credits
|
Loss from Child
Benefit
|
Total Loss
|
|
2013-14
|
- 115
|
- 23
|
- 138
|
|
2014-15
|
- 230
|
- 39
|
- 269
|
|
2015-16
|
- 325
|
- 52
|
- 377
|
|
Total
|
- 670
|
- 114
|
- 784
|
Families with 2 Children
|
Year
|
Loss from
Tax Credits
|
Loss from Child
Benefit
|
Total Loss
|
|
2013-14
|
- 150
|
- 40
|
- 190
|
|
2014-15
|
- 310
|
- 65
|
- 375
|
|
2015-16
|
- 440
|
- 86
|
- 526
|
|
Total
|
- 900
|
- 191
|
- 1,091
|
Families with 3 Children
|
Year
|
Loss from
Tax Credits
|
Loss from Child
Benefit
|
Total Loss
|
|
2013-14
|
- 185
|
- 57
|
- 242
|
|
2014-15
|
- 390
|
- 91
|
- 481
|
|
2015-16
|
- 555
|
- 120
|
- 675
|
|
Total
|
- 1,130
|
- 268
|
- 1,398
|
Comparisons have been made against increases by the Consumer
Prices Index (CPI) for couples or lone parents receiving Working
Tax Credit
For 2013-14, CPI was 2.2% in Sept 2012
The OBR estimate CPI at 2.5% for 2014-15 and 2.2% for
2015-16.