Budget 2012: So the first shall be first and the last shall be last

Amidst all the bleating of the wealthy over 50p tax rates and the ‘injustice’ of higher rate taxpayers losing out on Child Benefit, who is prepared to speak up for low income working families who are set to lose almost £4,000 a year?

Who will gain and who will lose in this Wednesday’s Budget?  If the media coverage is anything to go by, the Chancellor is likely to listen to the loudest voices – and the interests of the wealthy will again drown out the calls of those struggling to make ends meet…

If you were the Chancellor, and had only the media as your guide in deciding who to prefer with what little largesse you might have to give out on Wednesday, there would be a simple choice to make:

Do you listen to the loud calls from Britain’s wealthiest businessmen, calling for a cut in the 50p top rate of income tax for the 0.6% of adults in the UK earning more than £150,000 a year?

Or do you listen to the equally loud calls from the merely average wealthy (ie 1.5 million families with one person earning in excess of £43,000 a year), complaining at the injustices of losing Child Benefit?

But wait, what about the still small voice?

What about the 212,000 low income families set to lose £3,870 a year?

For all the headlines over 50p and Child Benefit, it is poor working families who are facing the biggest cut in incomes come April.

If you hadn’t already picked this up (and there’s no reason why you should – as most of the media have ignored them), from April 2012 the rules for Working Tax Credit for couples with children will change. Currently, couples have to work at least 16 hours a week between both parents. From April they will have to increase their working hours to at least 24 hours, or they will lose their whole entitlement to Working Tax Credit, worth £3,870 a year.

According to the Government’s own estimates, 894,000 people will be affected. Official figures placed in the House of Commons Library show that 212,000 couples (424,000 adults) will be affected.  These households include 470,000 children. This is an average of 1,375 people in each parliamentary constituency.

  • 78% say they cannot find the extra hours of work they need. With high levels of unemployment and increasing levels of ‘underemployment’ – the majority of people in part time work simply can’t get all the hours of work they want.
  • Child poverty will surge. The families affected by this change are likely to already be close to the poverty threshold. The loss of Working Tax Credit of £3,870 will mean many will be plunged below the poverty line.
  • Families will be better off out of work. The current margin between those out of work on benefits, and those in work between 16 and 24 hours, will be erased by this change.

What is even more crazy, is that the Government’s own proposals to introduce Universal Credit in 18 months time will reverse the policy … which is why I recently signed an open letter to the Prime Minister calling for a change of heart…

So, Mr Osborne, why make hard working families on low incomes suffer in the meantime?

But the chances are slim, and the message is sadly clear: In the eyes of journalists and politicans (most, if not all, themselves paid well in excess of £43,000 a year), families on £43,000 a year count for more than families earning less than half that amount.

And loud mouthed businessmen on £150,000 a year and more count more than both…

But as it is written:

“So the last shall be first, and the first shall be last”

 

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One Response to Budget 2012: So the first shall be first and the last shall be last

  1. Pingback: Wealthy win out, Grannies lose out, but the poorest suffer most from Budget | Niall Cooper

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