News / Tax credit cuts to hit 1,900 Northern Isles families
CUTS TO tax credits will “hit the poorest hardest” and cost 1,900 families in Shetland and Orkney £1.4 million, according to Northern Isles MP Alistair Carmichael.
He said figures from the House of Commons library showed that 3,300 children in the Northern Isles will be affected by the controversial changes, which will take effect from April 2016.
Prior to May’s general election, Prime Minister David Cameron categorically stated that his government would not cut child tax credits but went back on his word after the Tories won a surprise majority.
Now even some Conservative MPs are voicing disquiet at cuts to credits paid to low income people who are in work, which forms part of a drive to cut £12 billion a year from welfare spending.
Last month Shetland Citizens Advice Bureau manager Karen Eunson said the cuts could “push more people into poverty and debt”, saying they would be a “real blow” to families working for low incomes who “need every penny they can get”
Carmichael said: “Families across the country will suffer from these changes to tax credits, including nearly 2,000 in the Northern Isles.
“These are lifeline benefits to those on low or middle incomes striving to provide for their families. They are the very people that just a few months ago David Cameron was claiming to stick up for.”
Independent analysts including the Institute for Fiscal Studies (IFS) have said the changes would take “much more” from the poor than the rich, leaving many families around £1,000 a year worse off. The Resolution Foundation says it could push around 200,000 children into poverty.
The IFS estimates that only a quarter of money families lose through tax credit cuts will be restored by the increase in the minimum wage – due to reach £9 an hour by 2020.
Carmichael said: “The Prime Minister points to increases in the minimum wage and the amount that you can earn before paying tax as the means by which these cuts in tax credits will be restored.
“The problem is that these changes will bring in money in the future but these cuts are in the here and now. I have never shirked from the need to bring public spending under control.
“In government, Liberal Democrats constantly blocked this sort of change because we felt that it hit the poorest hardest. Now that the Conservatives are a majority government they can do whatever they want.
“As wage increases kick in the amount paid out in tax credits will automatically reduce. That is why these cuts are unnecessary.
“I have heard that there is now plenty of disquiet on the Conservative backbenches about the political cost of these reforms. I hope that the Chancellor will see some sense and row back on these plans. The Liberal Democrats will continue to work with other parties to campaign against these cuts.”
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