Labour finds allies across the nations in tax credit attack

The Scottish deputy first minister branded the budget a 'con-trick'

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As the country continues to consider the fallout from the chancellor’s budget statement, Labour can at least find comfort from the support it’s been getting from across the nations for its focus on cuts to tax credits.

Speaking in the Commons yesterday, Sammy Wilson, formerly the DUP’s finance minister at Stormont, warned that many on low wages “will find themselves worse off” as a result of the chancellor’s statement. Outlining his concerns, he told the Commons:

“Given the number of people in Northern Ireland who unfortunately are still in low paid jobs I am very worried about the impact of changes in working tax credits. The government has argued that the reduction in these benefits will be replaced by higher wages paid by employers as he National living wage is introduced.

“Given that the benefit changes will not go hand in hand with implementation of the living wage many on low wages will find themselves worse off. This is unfair and economically unwise and we will oppose this along with the first step to have different benefit payments for different parts of the country a first step in regionalisation of benefits.”

In Scotland meanwhile, deputy first minister John Swinney has branded the statement a con-trick, with the chancellor trying to convince people that things will be better as a result of a living wage going hand in hand with cuts to tax credits. Outlining his concerns, he declared:

“The reality is this budget is an attack on the low paid, the young and those entering the jobs market. This budget is a series of con tricks to try and hide the fact that individual households will now bear the brunt of austerity cuts.

“I support a meaningful living wage paid for by business – one that pays what people need to live, not one that fails to compensate for cuts to valuable tax credits. The chancellor has not even promised to meet the current living wage of £7.85 and under 25’s will face the brunt of cuts but receive no increase in wages.”

He continued:

“As the Resolution Foundation – cited by the chancellor – make clear the real living wage is based on people receiving tax credits and housing benefit so any new living wage must be far higher to compensate for it. The chancellor’s con trick does not come close to meeting those costs.”

In Wales, similar feelings were expressed by finance minister Jane Hutt, who warned of the impact the budget will have on the lowest paid in Wales. Picking up on the tax credits point she argued:

“Whilst we cautiously welcome the National Living Wage and have in fact already delivered it for NHS staff in Wales, it is unlikely to cover the cuts to tax credits for most families. Let’s be clear freezing working age benefits for four years will hit low income households hardest.

“Our initial estimates show that around 5,000 households in Wales will be affected by the lowering of household benefit cap to £20k. A further 1,200 claimants in Wales could be affected by the changes to the entitlement of Housing benefit for 18-21 year olds.”

Ed Jacobs is a contributing editor to Left Foot Forward. Follow him on Twitter

6 Responses to “Labour finds allies across the nations in tax credit attack”

  1. gunnerbear

    This will sound harsh – but if Brown hadn’t sprayed cash around the system – even up to those on above £30K and let the benefits get above the average wage, then perhaps the cash would be available for those that really need it. Perhaps someone on this website or the author can explain why some one on the average wage should be taxed to pay subsidise employers?

  2. CaseyAAvera


  3. treborc

    So you have fallen for that one as well, my welfare payments are in total £96 a week, I thought the min-wage was higher then that, maybe I’ve been out of work to long wages have gone down.

  4. gunnerbear

    Tre’, Gordon Brown ensure a household were no one worked could benefits totally over £26K a year. For a person to get that net wage, they’d have to be earning about £39K. That level of benefits can’t go on.

  5. JoeDM

    The Government has made a good start in reintroducing common sense into the State welfare system.

    Why should anyone earning £30k receive benefits !!!!!

  6. remarx

    “John Swinney has branded the statement a con-trick”

    Couldn’t agree more. All the promises about pay rises with working class families being better off is smoke and mirrors trickery. Mark my words, it won’t be long before reality hits the wallets of many young working couples with families. A young niece of mine and her husband who both works long hours to support their two children – due to the cut in tax credits – will now be worse off. She is already regretting voting Tory. I sincerely hope that soon a loud voice is soon heard from a conned working class.

    Of course, the cuts to many other areas of welfare will bring more hardship to those already struggling, but who cares? Extra money in peoples pockets (soon to disappear) take focus away from the needy.

    The Tories (Gaelic definition ‘thieves and robbers’), have never done anything for the working classes and never will.

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