Almost three million working families with children across the UK who receive tax credits could between them lose around £3.5bn, according to UNISON research. This average loss per tax credit household of £1,300 could see businesses and high streets suffer as families have much less money to spend.
Although last month’s vote in the House of Lords forced George Osborne to look again at his tax credit plans, the issue has certainly not gone away, says UNISON. As a result more than 2.7m low-income working families across the UK are nervously awaiting today’s autumn statement.
UNISON General Secretary Dave Prentis said: “The Lords might have forced a reluctant Chancellor to think again, but we’re not out of the woods yet. Tax credit cuts have not gone away, far from it. Even if the Chancellor announces a pause to their introduction today, it will only be delaying untold financial misery for working families.
“Tax credits are not a luxury, but are quite simply a lifeline for hardworking families. Taking away a large proportion of the tax credits they rely upon will turn their already precarious finances upside down.
“Nearly three million low income families across the UK will be hoping that the Chancellor has good news for them today. They will want to hear that he’s decided against grabbing billions back in tax credits from working parents who are trying to provide a decent start in life for their children.
Notes to editors:
|Region/nation||Regional reduction in household spending by working families with children due to cuts in tax credits £m|
|Yorkshire and Humberside||332.02|
Source: House of Commons Briefing Paper CBP7300; 15 October 2015; Tax Credit Changes from April 2016
|Number of working families with children claiming tax credits||Number of children in working families receiving tax credits|
|Yorkshire and the Humber||255,400||492,900|
Source: HMRC child and working tax credit statistics provisional awards 2015
Unless the Chancellor announces otherwise in today’s spending review, next April the point at which tax credits start to be reduced (the threshold) will be cut from £6,420 to £3,850, and the rate at which they will be reduced (the taper) will be increased from 41p for every £1 earned above the threshold to 48p.
With many UNISON members – for example, teaching assistants, hospital cleaners, home care workers, healthcare assistants, nurses, PCSOs and street cleaners – set to be affected by the changes, the union has developed an online calculator so people can work out how the tax credit changes are likely to affect them and their families.
UNISON has also produced a map showing the numbers of families that will be affected across the UK. By clicking on each constituency people can see whether their local MP voted for or against the cuts to tax credits.
UNISON General Secretary Dave Prentis is available for interview on tax credits or on other aspects of the spending review.