Tax credits cuts 'will leave key workers up to £12,000 poorer by 2020'

Research reveals impact of cuts on public sector staff, including teaching assistants, community and childcare workers

Teaching assistants, social workers and other key public sector workers could lose more than £1,500 a year as a result of controversial government cuts to working tax credits, according to calculations by the public sector workers union Unison.

The general secretary, Dave Prentis, warned of the damage to “precarious family finances” from George Osborne’s proposals, while highlighting the cases of five employees in the public sector who voiced their fears over the impact of the cuts.

The union said it hoped its research would add to the pressure on the chancellor, who is facing calls from some Conservative MPs to reconsider the plans, which it has been estimated will leave 3.2 million families worse off by an average of £1,300 a year from next April.

The individual cases highlighted include Donna Hanson, a childcare officer in a residential home in south Wales, who has an 11-year-old daughter. The 42-year-old would be £1,715 worse off next year, based on Unison’s calculations, and was set to lose more than £7,000 cumulatively by 2020.

“It is going to have a huge impact on us,” Hanson said. “It will be the difference for us of getting by and not … to think it is not going to be there next year is frightening. We don’t live an extravagant life now so I genuinely don’t know where we can make savings.

What are tax credits?

“To be honest I don’t want the new year to come because then April will be just round the corner and I don’t know what we will do.” Prentis said the combination of the cuts to tax credits and the ongoing public sector pay freeze meant many people were facing a bleak future.

“Many working families are still finding life incredibly tough,” Prentis said. “Were it not for their tax credits, many low- and middle-income households would struggle to get through each month.

“These families simply don’t know what they will do next April when George Osborne pulls the rug from under their feet. By snatching £4.4bn from almost 3 million working families, George Osborne will turn their already precarious finances upside down.”

Unison has set up an online calculator so people can work out how the proposed cuts will affect them. About 60,000 people had used it in the last month, the union said.

Lord Lawson: you can’t remove tax credits without people being worse off – audio

In each case highlighted by the union, the cuts to tax credits coupled with the ongoing public sector pay limit meant they would be significantly worse off by the end of the current parliament.

Rosa Walden, 33, lives in Camden, north London, with her two daughters. She works 30 hours a week as a project manager in a community centre and would be £2,454 worse off next year and lose more than £11,000 by the end of the parliament.

“Once this happens I really don’t know what we can cut,” she said. “Maybe I will have to take the mobile phone off my daughter but then we need to be able to contact each other … it is really going to cut to the bone.

“I work hard – I don’t get back before 6pm and I do something that is useful as well as looking after my two girls. I don’ t know what more I can do … it just feels like they are determined to punish us.”

The other cases highlighted by Unison were:

• Lee Marshall, 42, a local government worker in Hull, earns £22,000 a year. He is married with three children (aged 20, 16 and 14), one of whom has a disability. Unison calculates that the family will be £2,800 worse off next year and lose more than £12,000 by the end of the parliament.

• Stacey Tutty, 34, lives near Lincoln with her seven-year-old son and works as a teaching assistant. She will be £1,400 worse off next year and is set to lose almost £6,500 by 2020.

• Kati Conway, 25, is a local government worker in Grantham, where she live with her two children, aged eight and six. Next year she will be £1,810 worse off and is set to lose more than £8,000 by 2020.

The plans face a crucial test when they go before the Lords on Monday. Peers have the opportunity to vote to kill the cuts outright by supporting a “fatal motion” or to vote for a separate motion that would delay the bill.

In a statement, the Treasury said the government was “determined to deliver a new settlement for the British people”, adding that the cuts to tax credits were part of welfare reforms that were a “fair and necessary part of this new settlement with most working households better off once all welfare reforms have come into force”.

It said the government was introducing a “national living wage” for the over 25s worth £7.20 an hour from April 2016 and further increases to the tax-free personal allowance.

“This will mean people will keep more of the money they earn by paying less income tax. We’re also taking action to support working families by offering 30 hours of free childcare to all working parents, because evidence shows that the best route out of poverty is work, not benefits.”

Osborne fended off Conservative MPs’ concerns at a private meeting of the party’s 1922 backbench committee earlier this week by insisting the changes had to go ahead and claiming that, without them, £15bn of spending cuts would have to be made elsewhere.

Giving evidence to the Treasury select committee, the chancellor insisted there had been a clear indication about the makeup of the cuts and a subsequent debate during the election campaign.

Research showed 71 Tory MPs, including 23 new members of parliament in marginal seats, had more families who were set to lose substantial sums than was the size of their majority in the May elections.


Matthew Taylor

The GuardianTramp

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