Wednesday, June 24, 2015

Mid Suffolk: what does cutting tax credits mean here?

Amidst all the talk of cutting the welfare budget by £12 billion per annum, the focus has been on tax credits – after all, given that pensions have been fixed through the ‘triple lock’, there is less scope for reductions otherwise. But, whilst there is a general acceptance that we need to ensure that benefits follow need, the actual impact on families, working or otherwise, can easily be lost in a snowstorm of statistics.

So, what is at stake for residents of Mid Suffolk? The average number of families (rounded to the nearest hundred) claiming either Working Tax Credit (WTC), or Child Tax Credit (CTC), or both, was as follows in 2013-14;
  • 1,100 out-of-work families
  • 1,800 in-work families with children, claiming WTC and CTC
  • 1,500 in-work families with children, claiming CTC only
  • 500 in-work families with no children, claiming WTC
Of the 3,300 families with children claiming WTC and/or CTC, 1,200 of them were single parent households.

The average amount received per household was;
  • £6,291 - out-of-work families
  • £8,601 - in-work families with children, claiming WTC and CTC
  • £3,513 - in-work families with children, claiming CTC only
  • £2,447 - in-work families with no children, claiming WTC
The average amount received, per household, was £5,951.

Given the suggestion that an average of £1,400 will be lost per household through the cuts, one might assume that the biggest blow in cash terms will fall upon in-work families with children, ironically, the very group of people that politicians of all hues have been saying need to be focused on most.

There is no doubt that, here in Mid Suffolk, we’re relatively fortunate. Unemployment is low - 2.7%, compared to 5.3% across the county, and 6.4% in England (Q4, 2014) - and earnings relatively good. But, for those people who have come to rely on the top-up to their income that tax credits provide, and who are unlikely to have much in the way of financial resilience - low (or no) savings, little scope to increase earnings immediately - any cut will lead to, at the very least, transitional hardship, and in some cases, to domestic crisis.

Yes, we need to ensure that we develop a social security system that is sustainable in the long-term and which protects the poor and vulnerable, but Iain Duncan-Smith, George Osborne and their Conservative colleagues need to understand that government is not just about numbers, it's about people.


* Interested in the data, either for MId Suffolk or for your own area? Here's the data...

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