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News / Tax credits cuts criticised

THE LOCAL Citizens Advice Bureau (CAB) says the UK Government’s decision to slash tax credits for working families risk pushing more people into poverty and debt.

Shetland’s CAB branch has joined Northern Isles MP Alistair Carmichael in criticising the government for plans that will leave the average household living in social housing up to £1,700 a year worse off – far outstripping any benefit gained from the Tories’ plans to increase the national minimum wage to £9 an hour by 2020.

Carmichael said he felt the reason there was “not more public outrage about the proposed changes is a reflection of the sheer complexity of our tax and benefit system”.

The changes were voted through by 325 to 290 in the House of Commons on Tuesday – with just two Conservative MPs dissenting.

CAB manager Karen Eunson said the bureau witnessed first-hand the number of folk in Shetland who are already struggling to pay their bills every day.

“Many Shetland families rely on tax credits to top up low incomes,” she said. “They need every penny they can get, and changes like these will be a real blow to them, especially given the high cost of living locally.

“These changes could push more people into poverty and debt. And for those families already in that situation, these changes will make things even worse. We would encourage anyone who needs advice on money or benefits, budgeting or debt to contact us. Our advice and support is free, confidential and impartial.”

Carmichael said he agreed with the Treasury minister Damian Hinds on the importance of raising the personal tax allowance, raise the minimum wage and provide better childcare.

“It ought surely to be a matter of common consensus in all parts of the house that the best route out of poverty is through work,” he said, “but what the government are doing is giving with one hand and taking away with the other.

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“The average household in social housing could lose up to £1,700 a year under the changes. That means for every extra £1 earned, they will lose up to 93p in benefits. That is why the government are not true to their stated intent to encourage people off welfare and into work by bringing forward changes of this sort.”

Following the debate, Carmichael said that he “opposed cuts of this sort when I was a minister in government and so I have no problem opposing them in opposition”.

“Not a day passes without us hearing that the Conservatives are on the side of ‘hardworking people’, yet these cuts will hit those very people they claim to stick up for. I welcome plans to introduce a new £9 national living wage, however, it means nothing when you penalize workers on low income who rely on the additional support in the tax system.”

He added: “Instead of supporting the single mother or hard-pressed families through work the government are removing a lifeline source of income. It is a bad policy and I am disappointed that only two Conservative backbenchers were brave enough to take a stand.”

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