Ahead of the Autumn Statement on Wednesday, all eyes are on the Chancellor's plans for tax credits. His welcome promise to listen to the concerns raised when the Lords debated the matter, and commitment to protect people in 'transition,' means families up and down the country are waiting anxiously for more detail.
Gingerbread's analysis of the Summer Budget , when the cuts were first outlined, found working single parents will be the hardest hit household type. Indeed, single parents face an overnight tax credits drop of £700 in April 2016, while some 1.3million families stand to lose as much as £1,300 a year by 2020.
As one parent who recently blogged on our website said:
'If the cuts go ahead, I won't be able to maintain my current outgoings. If I have the car re-possessed, I won't be able to get to work so I'll lose my job, end up back on income support with the council paying my rent. Or possibly homeless again.'
That parent's story isn't unique. With record numbers of single parents working, many are struggling to make ends meet; 20 per cent of single parents working full-time, and 32% of those working part time are raising their children in poverty. And the fact that a staggering 63 per cent of children living in poverty are in working households (http://www.cpag.org.uk/content/stop-work-poverty) shows how vital tax credits are for low income families.
In our written evidence to the Work and Pensions Select Committee's investigation into the proposed cuts, we emphasised that it was vital that the government made it pay to work. The plans as they stand mean many single parents struggling to balance working with raising a family on their own are disincentivised from finding a job or trying to earn more money, as they find any extra cash they bring home lost through tax credits being withdrawn.
We're also concerned that despite reviewing his plans, the Chancellor remains committed to finding other welfare savings, with reductions to housing benefit rumoured to be on the agenda. This would be tantamount to shifting the goalposts and producing the same result: hitting working single parent households hard.
Last week, IPPR research revealed that cuts to housing benefit will leave claimants £570-a-year worse off. 1.2m single parents receive housing benefit, 41% of whom are in work. So cutting housing benefit to preserve tax credits risks robbing Peter to pay Paul; or in the case of single parents, where 92% are single mothers, robbing Rachel to pay Rebecca might be more apt.
Ultimately, the poorest should be protected, and most cuts to the welfare budget will fail to do that. Gingerbread has argued that there are alternative ways in which the Chancellor could reduce public spending, for example using some of the funds earmarked to support a rise in the Personal Tax Allowance - which will benefit largely middle earners - to soften cuts to tax credits.
Encouragingly though, public opinion - and politicians keenly aware of it - seems to have turned against cuts that so clearly hurts those in work on low incomes. On Wednesday we'll be watching to see if the Chancellor follows suit.
Gingerbread will be looking closely at the detail of the Autumn Statement and posting a response on its website shortly after the Chancellor finishes at the dispatch box.Suggest a correction