Tax credit cuts would be huge blow for 7,200 Chesterfield youngsters

Chesterfield MP Toby Perkins.
Chesterfield MP Toby Perkins.
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MPs are set to discuss potential cuts to tax credits again today as figures emerge showing thousands would be hit locally.

The cuts would mean an estimated loss of £1,300 a year for over three million families in the country, despite arguments from the government that the loss would be met by rises in minimum wage and income tax allowances.

The Chancellor, George Osbourne, is pushing to put more tax credit cuts through parliament

The Chancellor, George Osbourne, is pushing to put more tax credit cuts through parliament

Here in Derbyshire some 51,200 people who currently receive tax credits may be affected, including over 30,000 families with children.

According to government stats a total of 8,100 families in Chesterfield received tax credits last year and an expected 3,800 will be affected by the cuts, making an estimated 7,200 children worse off.

Read more: More than a quarter of Chesterfield children live in poverty

{http://www.derbyshiretimes.co.uk/news/grassroots/derbyshire-tories-respond-to-tax-credit-criticism-1-7542142|Derbyshire Tories respond to tax credit criticism|Derbyshire Tories respond to tax credit criticism

The average family currently receives £5,962, or £8,532 for those receiving both working tax credits and child tax credits, almost double the proposed threshold for when families start to have their tax credits 'tapered' off.

The House of Lords blocked a bill to cut tax credits on Tuesday, with Labour and Liberal Democrat peers calling for a delay until the government examines the expected impact, and asking for families to be compensated when they do come in.

Chesterfield MP Toby Perkins told the Derbyshire Times: "The government seem to be in denial about the scale of the issue they are creating for working families on low to modest incomes.

"Tax credits are crucial to ensure that work always pays. Already they have made 14 different cuts to tax credits which have seen many Chesterfield families no longer receive support, and now this is the biggest cut of all. I am glad that the House of Lords has insisted that the government do proper research into the scale of the problems they will cause before implementing the cuts, it’s the least working families should be able to expect."

The Labour shadow business minister said he had received a number of letters asking he oppose the plans.

He responded to constituents in writing: "The Tories claimed during the election that the £12 billion worth of welfare cuts would not come from tax credits. The Tories have broken their promise and The Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015 that come into force on the 6th of April 2016, will have a horrendous effect on the incomes of ordinary working people."

Tax credits are a benefit for Britain's worst-paid people, usually to households with less than £20,000 coming in, and higher tax credits go to disabled workers, families with disabled children, multiple children and who need help with childcare costs.

Currently the system pays out a base of up to £2,780 per child for child tax credits, but limits to number of children and a total cap will see this reduced for many families.

Cuts will also come into force as calculations change for how much a family can get. The income threshold for receiving full tax credits could be halved from £6,420 a year to £3,850, and the 'taper rate' which decided how much a family's income affects its benefits, will be raised from 41 per cent to 48 per cent, whihc would mean for every pound over the threshold families lose 48p per pound, among numerous other changes.

They will lower the rate at which Child Tax Credits begin to be taken away, from £16,105 to £12,125 - £8,000 below the average income for a Chesterfield household.

The Children’s Society calculated the number of children in each UK constituency expected to be affected by cuts to in-work Tax Credits.

Sam Royston, Director of Policy and Research at the Society, said: "We urge the Government to rethink its damaging approach to tax credit changes before children are made to pay a heavy price."

Toby Perkins's added: "As things stand the government have no plans to ensure that working families don’t lose out from their tax credit cuts. Instead of tackling low pay, they are attacking the low-paid!"

Are you in worried about the affects of proposed changes may have on your family. Get in touch at comment@derbyshiretimes.co.uk or call 01246 504 614 to tell your story.