Coalition's tax credits cuts will leave thousands better off on the dole
Millions of families will be worrying about how they will cope with another hit to their household finances
The talk at David Cameron’s dinner parties for Tory donors may have been all about cutting the 50p rate of tax for those on over £150,000.
But at kitchen tables around the country this week, millions of families will be worrying about how they will cope with another hit to their household finances.
Already families with children have been made an average of £450 a year worse off by the Conservative-led government’s VAT rise.
But Chancellor George Osborne is coming back for more.
From this weekend a total of £2.4 billion is being cut from tax credits alone – 70 per cent of it from households on or below average incomes.
Yet last month’s Budget announced a £3 billion tax cut for the richest – a boost of over £40,000 for 14,000 millionaires.
How can it be fair to ask families on modest and middle incomes to pay more so millionaires can pay less? How out of touch can you get?
And while Ministers talk about making work pay, their policies are doing the exact opposite.
From this month low paid couples with children will have to find extra working hours or lose every penny of their working tax credits. But with extra shifts being so hard to come by this will leave thousands better off quitting work and claiming the dole instead.
That isn’t just unfair, it makes no sense at all. There do have to be difficult decisions on tax, spending and pay.
But adding to the dole queue will just make it harder to get the deficit down.
And in tough times it’s even more important to be fair. That’s why last week Ed Miliband and Ed Balls launched Labour’s action plan to protect family budgets.
And it’s why we are demanding the government cancels its tax cut for the very richest, instead of clobbering hard pressed families on modest incomes once again.
Labour MP Rachel Reeves is Shadow Chief Secretary to the Treasury