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Real People Talk About How Tory Tax Credit Cuts Will Affect Them

03/10/2015 09:31 | Updated 03 October 2015

People have spoken out on the effect Tory cuts to tax credits will have on them and their families, as a new Labour campaign is launched to stop them.

The House of Commons Library estimates that the cuts will lead to an average £1,300 cut in the annual income of around 3.2 million families, including 2.7 million families with 5.2 million children in them, if they come into effect as planned in April 2016.

Data supplied by HM Revenue & Customs (HMRC) shows that some may lose as much as £3,000 a year next April if the cuts are implemented as planned, the campaign says,

Some people have spoken out about the effect the cuts will have.

Sarah, 33, and her husband Paul, 32, (not their real names) both work for a large supermarket. He works 37 hours per week whilst she works 20 hours per week. They have two daughters aged 5 and 1. Natalie only recently returned to work after the birth of their second child. The proposed changes to tax credits will mean that they could lose £1,450 a year.

Sarah said: “These proposed cuts really frighten us. My husband and I were both made redundant during the financial crash and were lucky to get other jobs. We took what we could find - so we don’t work as close to home as we would want but we need a job and wanted to work.

“Financially, things are already tight having had our tax credits cut this year. But losing almost £150 a month more from the family income is going to mean big changes. We already have little left at the end of the month; we are going to have to cut back on everything.

tax credits

Proposed cuts to tax credits have left many extremely worried

“I’m really worried that when interest rates go up, on top of these changes, we could lose our girls’ home.”

Gordon has worked for 15 years in a call-centre. He works 36 hours a week. Gordon has two daughters, aged 8 and 4, and a son, aged 6. His wife has been forced to stop working as a class room assistant because of multiple sclerosis. His oldest daughter has been diagnosed with rheumatoid arthritis. The proposed changes to tax credits will mean his family could lose £2,300 a year.

He said: “These cuts will make an already difficult financial situation for us even worse. We’ll have to cut back on the food we buy and clothes for the kids – even then I don’t know how we will manage. It doesn’t bear thinking about.

“I work hard and want to keep doing so – but these proposed cuts will mean will penalise me and my family.”

Elaine, 37, lives with her 2-year-old son Jackson. She works 16 hours a week in retail, which allows her to work and manage child care.

The proposed cuts will mean that she will see her tax credits cut by £1,260 a year.

Elaine said: “Right now every penny I earn is already accounted for. I know how much I can spend on food, how much I can spend on gas and electricity.

“Since Jackson arrived, I haven’t bought myself one new item of clothing - every spare penny is spent on him, as he grows so quickly. He is my priority.

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“If what I receive in tax credits is cut by more than £1,200, I just don’t know how I’ll manage. The only way I think I’ll be able to get by is by cutting back on heating electricity by sitting in the dark and in the cold. I might be able to cut down on the grocery bill if I skip meals to make sure that my son has food.”

Seema Malhotra, Shadow Chief Secretary to the Treasury, officially launched Labour’s Stop the Tax Credits Cuts campaign on Saturday.

She said: “David Cameron, George Osborne and the rest of the Tory MPs who voted for these pernicious cuts to the incomes of millions of hard-working families throughout out the UK should be ashamed of themselves.

“Over the next weeks and months Labour will be taking its campaign to stop to Stop the Tax Credit Cuts to high streets and homes across the UK. If George Osborne doesn’t back down we will make sure that the millions of those low and middle income families know exactly who is to blame for the savage cuts that will hit them next April.”

In George Osborne’s July Budget, he announced changes to the tax credit taper and threshold, which will see £4.4 billion cut to the income of 3.2 million low to middle income families across the country.

In an exclusive Survation poll for HuffPost UK, more than a quarter of voters said they would personally be affected by cuts to working tax credits specifically, with 20% of Tory voters affected either a lot or a little.

george osborne

George Osborne announced changed to tax credits in his July Budget

A total of 27% of voters added that they would be less likely to vote Conservative at the next election because of the tax credit cuts policy. Only 14% said that they would be more likely to vote Tory thanks to the tax credit cuts plan.

The highest level of discontent came from so-called 'C2' social groups of skilled manual workers, with 31% saying tax credit cuts made them less likely to back the Tories in 2020.

Boris Johnson has welcomed a proposal from Labour's Frank Field to ease the impact of the tax credits cuts, which are due to be detailed before Christmas in letters from the HM Revenue and Customs.

Only two Tories rebelled and one abstained on the tax credit vote last month, but a larger group voted reluctantly for the measure.

On Friday, Mr Field wrote to the Chancellor to ask for a new earnings threshold to protect workers hit hardest.

He said: "Just before Christmas 3.2 million low paid workers will receive a letter from the Chancellor telling them he intends to cut their wage packets on average by £1,350 a year.

"Tory MPs will then be under siege from their constituents. My letter to the Chancellor offers him a way out by protecting the lowest earners and their children. He must seize this opportunity or face the prospect of his 2020 election strategy going up in flames.’

Some Tory MPs worry that the cuts undermine the party's message on helping those in work, but Treasury sources told The HuffPost UK that the savings were essential.

Households hit by the loss of tax credits will be compensated by the national living wage and by thousands of pounds in new childcare support, the Treasury says.

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