‘Coalition hell bent on picking on hard working families’ Says Steve McCabe MP

Steve McCabe has condemned the Government for voting to place a 1% cap on annual rises in working-age benefits from 2013, which will leave 7 million working families worse off.

 

In the past working-age benefits and tax credits have been up-rated each April in line with the Consumer Price Index (CPI). The Government plans instead to up-rate the majority of these benefits by 1% for the next three years. This exposes those on modest incomes to ‘inflation risk’, if the current forecasts of inflation are accurate this will mean a cumulative 4% real cut in the benefits affected.

 

The Institute for Fiscal Studies has reported that the plans to increase benefits by less than inflation will make 7 million families, half of Britain’s working population, worse off by an average of £165 per year.

 

The cap will not only affect out of work benefits, such as Job Seekers Allowance, but also statutory maternity pay, child benefit and tax credits.

 

Steve McCabe said:

“This Government are playing politics with people’s lives, trying to divide people into scroungers and strivers.

 

“In my constituency, Birmingham Selly Oak, over 6,000 working families will receive a cut in tax credits which will be very difficult to manage on top of the cuts in Child Benefit and the ever increasing cost of living. This real terms cut in benefits will affect 7 million working families across the country.

 

“The Government are trying to pit those in work against those who are not, to disguise the fact that this cap will affect more people in work than out. Further reducing peoples’ spending power will only have a negative impact on the economy and drive the lowest paid into further poverty.”

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