Women To Be Hit Hardest By Tax-Credit And Benefits Freeze – Study

This article was written by Nicholas Watt, chief political correspondent, for The Guardian on Saturday 20th December 2014

Women will overwhelmingly bear the brunt of a freeze in tax credits and benefits that will be introduced by George Osborne if the Tories win the general election next year, according to an analysis by the House of Commons library.

The shadow chancellor, Ed Balls, accused the Tories of planning to “hit millions of families on modest incomes” after the figures showed 80% of the estimated savings in tax credits would come from women. Women would provide 75% of the savings in benefits.

Labour commissioned the analysis after the chancellor announced in his speech to the Conservative party conference in September that he would save £3bn a year by freezing working age benefits. The freeze, which Balls describes as a cut in real terms, would hit 10m households.

The analysis has taken Osborne’s forecast that the freeze will produce an annual saving of £3.2bn by 2017-18. It says that £2.4bn (75%) of the savings will be provided by women and £800m by men (25%). It says that women are on course to receive 80% of tax credits by 2017-18 which means they will overwhelmingly be affected by the freeze.

Balls said:

“These new figures show how, once again, women will bear the brunt of David Cameron and George Osborne’s choices. This follows four years of budgets which have taken six times more from women than men – even though women earn less than men.

“Of course we need to make savings to get the deficit down. But the Tories have chosen to hit millions of working families on modest incomes again, while keeping their huge tax cut for millionaires.”

Labour has regularly pointed out that cuts or freezes to working-age benefits penalise women and amount to a strivers’ tax on low-paid workers. The large numbers of women in part-time work and the pressures of childcare mean that they rely more on tax credits, making them more vulnerable to cuts and freezes.

The attack by Labour on the impact of the freeze shows that Balls believes he is on strong ground to promote his own narrative on deficit reduction in the runup to the election: that the deficit must be tackled but in a way that does not hit the working poor and imposes a greater burden on richer voters.

Labour has pledged to ensure that the deficit falls year on year in the next parliament, though it has not set a date, as Osborne has, for the structural budget deficit to be eliminated. The party has also pledged to ensure that the wealthy make a greater contribution by restoring the 50p higher rate of income tax.

Balls said:

Working people are already worse off under this government. If the Tories win next year, 3 million working people face being made worse off because their tax credits will be cut again. This strivers’ tax will cost a one-earner family with two children earning £25,000 almost £500 a year.

“While the Tories target working people, our tough but balanced approach will start by reversing the £3bn-a-year Tory tax cut for the top 1% of earners.”

Osborne’s freeze, which will hit the poorest third of the population, will mean working families lose up to £490 a year in child benefit and tax credits. The average amount lost will be £300 per household.

In setting out the freeze at the Tory conference, Osborne said:

“The fairest way to reduce welfare bills is to make sure that benefits are not rising faster than the wages of the taxpayers who are paying for them … we will provide a welfare system that is fair to those who need it, and fair to those who pay for it too.”

Pensioner and disability benefits will be excluded.

> More austerity (for some) whoever wins seems to be the message from the Big 3 parties. It’s just a matter of choosing who you get fucked over by…

Source –  Welfare Weekly, 20 Dec 2014




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