Mid Ulster MLA calls for a ‘living wage’ before Tax Credit cuts

Working Tax Credits are expected to take a hit in Chancellor George Osbourne’s forthcoming budget as part of £12b cuts he plans to make to the welfare system.

Calling for an increase to the minimum wage, the SDLP man said government should ensure more families are paid a “living wage” before such cuts to avoid “more poverty in low income families”.

Mr McGlone said: “The Tory Government’s focus on reducing the cost of the Welfare System is expected to result in cuts to the Tax Credit system in the forthcoming Budget. These ideologically driven cuts will hit low-earning, working families hardest.

“The system of tax credits was designed to do more than simply top-up low wages. It was designed to help low-income families meet the additional costs of bringing up children.

“Cutting in-work support, such as tax credits, without first ensuring a corresponding increase in wages will simply result in those families falling even further short of a decent living standard.

“Recent research by the Joseph Rowntree Foundation shows that even with the support provided through the welfare system, an average low-earning working family has an income £74 per week short of what is generally regarded as required for a decent standard of living.

“Tax credit payments make up 27 per cent of the after-tax income of two working parents in those families. Proposed tax cuts fall far short of making up the difference if tax credits are cut.

“Increasing the minimum wage and ensuring more employers pay a living wage is a way in which government can help lift working people out of poverty.

“Cutting in-work support before there is a rise in take-home pay will only result in more hardship and more poverty in low-income families.”