I am appalled by what has been trailed for next week’s budget regarding £12billion of cuts to tax credits and disability benefits. If George Osborne cuts taxes for the highest earners –those earning £150,000 and more- at the same time, this will be even more shocking.
I believe that tax credits have been a force for good- helping to ensure that ‘work pays’ and making a substantial difference to the income of low earners and (especially) families with children. There are 607,000 London households who get some tax credit- 67% of them in work.
Slashing tax credits will reduce the living standards of millions of people and it will hurt children the most. As it is, there are 500,000 more children living in absolute poverty in this country compared with 2010- and progress on reducing ‘relative’ poverty has stalled. For the first time, the number of households in poverty where someone is in work has exceeded poverty in workless households. This is shameful.
Of course, we all agree that it would be good if employers raised wages, so fewer people needed to top up their incomes with tax credits. The Labour government brought in the Minimum wage so that there was a floor beneath which wages couldn’t fall, and I have been a strong campaigner for the London ‘Living Wage’. Yet the truth is the number of Londoners earning below the Living wage has actually gone up, not down- more people are low paid!
If the Conservatives cut tax credits by up to £5billion, as has been predicted, the National Minimum wage would need to jump by 25% overnight to fill the gap. Can anyone see that happening?
I can assure you I will do all I can to oppose any measures which take money away from low income working people and those who need help, whilst continuing to campaign for better pay and measures like cheaper childcare to support working parents. I believe very strongly that those who can work should do so, but wages should be fair and government should do what it can to support those who need support.
Karen Buck MP