Friday, February 11, 2011, 12:02
Welfare cuts to be made over the coming years will leave low-paid families thousands of pounds worse-off despite the coalition government’s claim that there will be “no losers” from its austerity measures.
Research carried out by the TUC has found that a family with two children, with both parents in minimum wage jobs, could lose more than £2,700 a year by April 2013 as a direct result of changes to the tax credits and benefits systems.
The loss to the lowest income groups could be much higher once housing benefit is capped, elements of working tax credit and child benefit are frozen and the child trust fund is abolished. Middle-income earners will suffer from the ending of child benefit for higher rate taxpayers.
The Treasury’s plan to switch the inflationary measure of benefit increases from RPI to CPI will also hit the poor and save the government an estimated £5.8 billion by April 2015.
Brendan Barber, general secretary of the TUC, said: “The government’s ‘no losers’ welfare pledge will ring hollow if families suffer thousands of pounds worth of cuts in the years running up to the switch to universal credit. Workers are already suffering an income squeeze and government austerity will make low and middle-income families even worse off. Welfare cuts of over £2,700 a year on top of service cuts like the end of free antenatal classes and the closure of Sure Start centres are the worst possible conditions in which to introduce universal credit.
“The TUC wants to see the removal of barriers that penalise workers for earning more money while they’re trying to get off benefits, but rushed reforms which are based on swinging welfare cuts risk creating a whole new set of obstacles to work, leaving many families worse or little better off than they are now. The government cannot allow short-term cost cutting to undermine long-term welfare reform.”
Work and Pensions Secretary Ian Duncan-Smith promised last November that no deserving claimants would lose out from the switch to universal credit in April 2013. When launching his proposals he said: “We will protect those people who for whatever reason may find themselves with less.”
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