Labour finds allies across the nations in tax credit attack

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


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

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