Urgent review of Working Tax Credit cuts needed

Southampton’s Labour MPs John Denham and Alan Whitehead are calling on the Government to reconsider its decision to cut Working Tax Credits in April.

Under the Tory-led Government’s plans:

  • Some couples will be better off splitting up than staying together
  • Some couples will be better off giving up work than working
  • It will be difficult for people to find extra hours when jobs are hard to come by.  Every week we hear more news about public sector jobs being cut.

Over 212,000 couples with 470,000 children will be affected nationwide.  In Southampton, 725 households in Southampton’s two constituencies could lose out. Those households include 1,675 children.  If they cannot find extra work, these families will lose their whole Working Tax Credit worth £3,870.

This change will mean many families would be better off claiming benefits than continuing in work.  Couples with children will lose Working Tax Credit worth £3,870 if they stay together, but not if the parents split up.

Labour is using an Opposition Day debate in the House of Commons today to step up the pressure on the Chancellor to come up with a plan for jobs and growth in next month’s Budget and reconsider changes to tax credits and child benefit which will cost families with children up to £4,000 per year.

John Denham, Labour MP for Southampton Itchen said:

“The Tory-led Government can’t do their sums.  They have created a scenario in which hundreds of Southampton families will lose £73 per week, and will in fact be better off if they didn’t work.

“We cannot have a situation where families would be better off if they left their jobs.  George Osborne must think again”

Alan Whitehead, Labour MP for Southampton Test said:

“The Tories don’t understand just how important these tax credit payments can be for families who are working hard to make ends meet.  It makes no economic sense to incentivise working families to quit work because they’ll be better off on benefits.  There is still time for George Osborne to change course, but for those 700 families in our city, time is running out.”

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