04/04/2014 07:34 BST | Updated 04/04/2014 07:59 BST

Britons '£974 Worse Off' Under George Osborne, Warns Labour

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Britain's Chancellor of the Exchequer George Osborne (R) and shadow chancellor Ed Balls attend the State Opening of Parliament, in the House of Lords at the Palace of Westminster in London May 8, 2013. British Prime Minister David Cameron pledged a fresh clampdown on immigration in the Queen's Speech on Wednesday, seeking to bolster his right-wing credentials and counter the rise of the UK Independence Party (UKIP).The speech, written by coalition ministers and read out by Queen Elizabeth II i

Families will be almost £1,000 a year worse off as a result of chancellor George Osborne's tax and benefit changes, Labour has claimed as it escalated its attack on the Government's "cost-of-living crisis".

The party has calculated that, by the time of the general election in May 2015, households will be on average £974 a year worse off due to measures introduced by the coalition. Meanwhile, Tory MPs are urging the chancellor to cut the top rate of tax further to 40p.

Labour said families with children would be particular hard hit, losing an average of £2,073 a year if both parents are working and £3,720 a year if only one parent is in work.

Labour said its calculations were based on figures published by the Institute for Fiscal Studies and an analysis carried out by the House of Commons Library.

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They were said to take into account all tax and benefit changes affecting households between 2010 and April 2015, including increases to the income tax personal allowance, as well as the rise in VAT and cuts to tax credits and child benefit.

Shadow chancellor Ed Balls said they came on top of what Labour calculates is an average £1,600 fall in annual real wages since the Coalition took office in 2010.

The publication of the figures is a clear signal that Labour has no intention of letting up its campaigning on the "cost-of-living crisis" - despite warnings from some in the party that they need to broaden their attack on the Conservatives.

Balls said: "David Cameron is trying to tell working people they are better off, but he's not fooling anybody. The Tories are giving with one hand but taking away much more with the other.

"So whatever out-of-touch claims David Cameron and George Osborne try to make, these independent figures are clear: hard-working people are worse off under the Tories.

"Yet while millions have seen their taxes go up, millionaires have been given a huge tax cut by this Government. The top 1% of earners have been given a £3 billion tax cut - worth an average of £100,000 for those earning over £1 million."

A Treasury source dismissed the Labour analysis, saying: "The figures actually show the poorest households gain from the tax and benefit changes. It is the richest who pay the most. To use an average figure is disingenuous which is probably why Labour didn't release the full facts."