Thousands of Neath families with children will lose an average of £511 a year because of changes to tax, benefits and tax credits introduced on 6th April. Neath MP Peter Hain has criticised the government for making cuts to those on the lowest income whilst at the same time giving tax breaks to the richest one percent.
The new figures from the Institute for Fiscal Studies follows last month’s Budget and is on top of tax rises already introduced, including last year’s VAT rise which is costing a family with children an average of £450 per year.
New government figures obtained by Labour also show that up to 1485 families in the Neath constituency are set to lose their Child Tax Credit or Working Tax Credit. In Neath 1300 families on modest and middle incomes will lose all of their Child Tax Credit – worth around £545 per year and up to 185 working couples earning less than around £17,000 per year will lose all of their Working Tax Credit – worth up to £3,870 per year – if they cannot increase their working hours.
Mr Hain said, “It is the same old Tories, out of touch with the difficulties facing ordinary people struggling to make ends meet. Why is it that thousands of families and pensioners pay more so millionaires can pay less? Cameron’s economic policies are not working and they are squeezing the budgets of hard working Neath families to get the figures to add up.”
Figures also uncovered by Labour reveal that, following the changes to working tax credit, a couple with two children on the minimum wage will be better off quitting their jobs if they cannot work at least 19 hours per week.
The IFS figures also show that government policies mean pensioners will be an average of £315 a year worse off from April 2014 once cuts to their allowances announced in last month’s Budget – what has been dubbed the ‘granny tax’ – have kicked in.
Thousands of elderly Neath residents will struggle with heating this winter as cuts are made to the Winter Fuel Allowance. Neath MP Peter Hain has been contact by constituents who have had their 2011 payment and found that it is substantially less than last year.
“Pensioners have been lied to. They were told that their Winter Fuel payments would not be touched but are finding themselves anywhere between £50 and £100 short from last year.” Said Mr Hain, “With the cost of living going up and the rising cost of fuel, pensioners are struggling to make ends meet and are faced with the impossible decision of choosing to heat their homes or eat.”
Last winter 12,870 households in the Neath constituency are set to receive Winter Fuel Allowance with 2,580 people over the age of eighty receiving the higher £400 payment.
“Despite a pre-election promise to safeguard the payments the Tory led government are trying to get away with it on a technicality by cutting the extra ‘top-up’ payments but it still doesn’t take away from the fact that with rising price pensioners are receiving less help.”
Mr Hain also criticised the Government for not doing enough to reduce energy bills. Energy prices are up twenty percent this year whilst energy companies continue to see their profits soar.
“When in opposition this government talked the talk but are not walking the walk in power instead telling consumers to shop around for lower tariffs. The Government’s message of ‘check, switch, insulate, save’ is galling and an insult to pensioner who have seen their Winter Fuel payments cut and to families working hard as prices rocket.”
Neath MP Peter Hain has backed the Fair Pensions for All campaign protesting against the savage cuts to public service pensions by the Coalition Government. Meeting with fellow MPs and Union General Secretaries, including Mark Serwotka of the PCS, Mr Hain was delighted to show his support against the proposed cuts to public sector pensions.
“The danger here is that the short term gains that this Government is obsessed with will be offset in the longer term,” said the Neath MP “What we may see is that many public sector workers will opt out if they end up paying through the nose for a much smaller pension. This coupled with the collapse of private sector pensions over the last two decades means that millions more people will be dependent upon pension credit to top up their state pension, resulting in a much larger burden on the taxpayer and much bigger public finance deficit in the long run. It makes no sense to a Government obsessed above all with reducing the deficit regardless of the consequences. ”
“Currently the median payment in retirement for public service pensions equates to £5,600 per annum or just £100 per week – for women it can be as low as £2,600. The claim that these pensions are ‘gold-plated’, as some elements in the Government and media suggest, is unreasonable when you consider that the pension of an average private sector worker in a defined benefit scheme amounts to £5,860 per year.
Mr Hain said “This is an example of the Tory led Government’s attempts to spin and distort the reality of pensions in this country. Their cuts to public pensions and services will create increasing desperation.”
“Private sector pensions have declined dramatically over the last decade, from when almost a half of the workforce was on a workplace pension, to a situation where now there is only a third. The taxpayer will then lose out as they will have to endure the resultant costs due to an increase of means tested benefits, greater health and social care costs, and the inevitable increase in pensioner poverty.”
MP Peter Hain has attacked the Government for “endangering local communities” with “reckless” policies. Since May last year there have been cuts to cuts to tax credits, Winter Fuel, disability living allowance compounded by an increase in the VAT rate.
There are also concerns over the next generation of youngsters as university tuition fees have trebled and plans you get youngsters back into work have been scrapped. The Future Jobs Fund which provided youngsters with the skills find employment and created ninety-six more jobs in Neath Port Talbot was scrapped as part of the Governments efficiency savings.
Mr Hain said, “David Cameron is making life harder for ordinary people with reckless and dangerous cuts squeezing the living standards of hard working families.
“The future for youngsters is worrying, we were told the £9000 annual fee was only to be applied in ‘exceptional circumstances’ but has now become the norm. Whilst the scrapping of the Future Jobs Fund which was helping to reduce the numbers of youth unemployed, without it youth unemployment is stagnating
“The Tories are making reckless choices but it’s our communities that are paying the price and it’s too high a price.”
Welfare changes will see thousands moved off incapacity benefits with few job opportunities for them, research claims. Peter Hain MP has raised concerns over the impact it will have on Neath constituents on incapacity benefits claiming it would lead to ‘hard times with few employment opportunities’.
The report “Tackling Worklessness In Wales” by Professor Steve Fothergill and Christina Beatty suggests changes to the welfare system will see 60,000 people in Wales moved off incapacity benefits with half of those with no job to go to.
Neath Port Talbot has the third highest rate of Working Age Benefit Claimants in Wales with 21.9% of the working age population in the authority claiming benefits. Only Merthyr Tydfil and Blaenau Gwent have a higher rate in Wales. In the Neath constituency there are over six thousand claiming incapacity benefits with over five thousand one hundred of those claiming for over a year.
Mr Hain said, “This is a very worrying report highlighting the problems of getting people back into work. Last month’s figures showed there were eleven people chasing every vacancy in Neath – that is the reality facing the unemployed. Getting people off benefits is one thing but if there are no jobs for them to go into then they are facing a very unsure financial future.”
The report suggests that in Wales changes to the Welfare system would result in “widespread financial hardship rather than a reduction in worklessness” and the private sector “has a mountain to climb to deliver new jobs on the scale that is needed.”