Government cuts to tax credits next April will leave more than 2.7 million low to middle income working families across the UK – and their 5.2 million children – significantly worse off, according to new research published today (Saturday) by UNISON.
Using official figures published by HM Revenue & Customs (HMRC) UNISON has calculated that across the UK more than 2.7m working families – or two in five of all working families with dependent children – could lose as much as £3,000 a year next April. This is equivalent to the entire population of Greater Manchester, where the Conservative party conference gets underway tomorrow (Sunday).
And in working households where the parents are in receipt of tax credits there are 5.2m children, equivalent to the entire population of Scotland.
In his July Budget, the Chancellor announced changes to the tax credit taper and threshold, a move that will see £4.4bn a year taken out of the pockets of low to middle income families across the UK. In some cases people stand to lose more than ten per cent of their take home pay.
According to the UNISON research, London has the highest number of working families (357,000) who will be hit by the tax credit changes, closely followed by the West Midlands (269,000), and Yorkshire and the Humber (255,000).
Unsurprisingly, says UNISON, the most deprived parts of the country have the largest number of families affected by George Osborne’s proposals, while in more affluent places there are far fewer families who stand to lose out.
The worst affected constituency in the country is West Ham in East London where 10,900 families will suffer as a result of the proposed tax credit cuts. The capital features heavily in the 20 worst affected places with nine constituencies, including Barking, Tottenham, Brent Central and Ilford South all registering large numbers of tax credit families.
And at the other end of the scale, Winchester, Beaconsfield, Kensington, Henley are amongst the more affluent parts of the UK where there are far fewer families relying on tax credits to top up their wages.
In cities across the UK, 65,000 families in Birmingham will see their incomes hit next April, in Leeds it will be 35,000, and in Manchester and Glasgow, 31,000 and 27,000 respectively.
Commenting on the research UNISON General Secretary Dave Prentis said:
“Many of the millions of families who will be the victims of the Chancellor’s cruel tax credits snatch and grab still have no idea that they are going to lose out next year. When they start receiving letters in the post from HMRC just before Christmas, it will mean chaos for family finances.
“Tax credits are a lifeline for these families – quite simply they are the difference between them keeping their heads above water and going under.
“The huge loss of income – of between £1,000-£3,000 a year – will have a devastating impact upon the millions of family budgets that have yet to recover from the living standards crisis. Parents, who will go without in a vain attempt to make sure their children don’t, will be forced deeper into debt.
“The government is full of praise for people who go out to work to try and provide better lives for their children. Yet these are the very people these punitive changes will hurt. It’s time for the Chancellor to admit that he’s got this one very wrong, and back down before it’s too late.”