Yorkshire cost of tax credit cuts

GEORGE OSBORNE’s proposed cuts to tax credits will hit Yorkshire harder than wealthier parts of the country, it is claimed today.

TUC figures show the impact of planned tax credit cuts in Yorkshire

Families in line for a tax credit cut in Yorkshire would lose £1,440 a year. according to the TUC.

Only Northern Ireland families would lose more and the figure is far higher than the £1,110 cut set to be lost by London families where the average wage is much higher.

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The TUC figures suggest 95 per cent of working Yorkshire families receiving tax credits will be worse off and together will lose £470 million.

The Chancellor has defended the cuts to tax credits arguing the system has ballooned out of control and reductions are needed as part of wider plans to balance the Government’s books.

The Government has also stressed that the cuts are part of a wider package of measures which will see the introduction of a a new national living wage to drive up incomes.

But critics, including some Conservative MPs, have argued the tax credit cuts will hit family incomes before the national living wage and increases in the personal tax allowance take effect.

TUC regional secretary Bill Adams said: “This research makes clear that as well as making families suffer, the tax credit cuts will make regional inequalities worse.

“Households in Yorkshire and the Humber will lose more than £300, on average, than claimants in London.

“Instead of cuts that target the UK’s lowest-paid communities, the government should channel more support towards them.

“The Prime Minister and the Chancellor seem to be the last people in Britain who still think the tax credit cuts are a good idea. They don’t seem to understand that people in work deserve a decent income. These cuts should be ditched altogether.”

Ministers have signalled that the announcement of the results of review of Government spending next week will include measures to mitigate the impact of the tax credit cuts.

The Chancellor has been battling with Work and Pensions Secretary Iain Duncan Smith over a plan to raid the universal credit budget to ease the pain of tax credits cuts.

Yesterday it appeared a deal had been reached as the Department of Work and Pensions was listed among seven Government departments to have agreed their spending plans with the Treasury.

The others in the latest batch to have signed up are the Department of Energy and Climate Change, HM Revenue and Customs, the Cabinet Office, the Scotland Office and Office of the Advocate General, the Wales Office and the Northern Ireland Office.

Treasury, environment, transport and communities had already reached agreement on their spending plans.

The Home Office is a notable outstanding department where Home Secretary Theresa May is under intense pressure over expected cuts to police numbers.

The latest departments to settle will face average cuts in day-to-day spending of 21 per cent over the spending review period - the equivalent of six per cent a year - resulting in savings worth more than £2.5 billion by 2019-20.

The Government has promised to cut spending so it is running a surplus by the end of the current parliament in 2020.