Families To Be £4,600 A Year Worse Off Due To Cuts, Warns Union

Money

First Posted: 9/09/2011 15:57 Updated: 9/11/2011 10:12   PA

PRESS ASSOCIATION -- A typical family will see their living standards fall by more than £4,600 a year by 2013 because of public service cuts, benefit changes and below-inflation pay rises, the TUC has warned.

A report, Unhappy Families, said an average-income single parent living in London with two children will lose the most, seeing their salary reduced by 10%, while a high income, two-earner family living in the South East with three children will lose the least at 6% of their pay.

The study, published ahead of next week's TUC gathering in London, warned that living standards had fallen more than at any time since the 1970s.

TUC general secretary Brendan Barber said: "People should be angry at the effect that the crash and Government policies are having on living standards.

"The wrong people are paying the price for what went wrong over 30 years and the coalition's naive belief that they can put right the damage in just four years.

"As experts worry about a double-dip recession it is time to change course to invest in jobs, growth and getting the economy moving. This is the only sure way to repair the damage done by the crash."

The TUC said it is assuming that wages will go up in line with the Government's projections, took into account the likely effects of RPI inflation, and changes to tax credits and child benefits. The union organisation said it had also worked out the value of the public services being cut which were used by different families.

Mr Barber told a press conference that if the Government imposes its controversial changes on public sector pensions, there will be an "extraordinarily hostile" reaction from unions. He did not know if the current round of talks would succeed, adding that ministers are making it difficult to reach a deal because of the stance they are taking.

He said the TUC is meeting at a "crucial" time, adding: "The Government is starting to lose its central argument on the economy. A year ago we were told that everything was set for recovery. Yet here we are 12 months later facing a real prospect of a double-dip recession.

"Trying to eliminate the deficit in just four years can now be seen as nothing more than a national programme of self-harm. It has killed both consumer and business confidence. With the cuts already putting the brake on Government investment, the net result is that almost no-one is investing. Yet without growth there is no prospect of closing the deficit gap in the short, medium or long term."

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Filed by Ned Simons  |