UK tax credit cuts unfair on poor families
Experts have warned against British government’s plans to cut tax credits and other working-age benefits, saying they will be “extremely unfair” on low-income households.
The Tory government is set to enforce £12bn of welfare cuts. Prime Minister David Cameron insists that tax credits should be replaced by higher wages.
But critics say the move can negatively affect low-income families.
The composition of the cuts “looks set to be extremely unfair on the working-age population,” Mark Littlewood, director general of the Institute of Economic Affairs, was quoted as saying by the Guardian.
“Whilst important for getting cash to relatively poor families, tax credits discourage people from earning more money by creating high effective marginal tax rates, leading to bunching around part-time work hours. They could be reformed in a way which encourages full-time work. But simply salami-slicing the value of tax credits will hit certain households hard without creating this positive dynamic," he reiterated.
Meanwhile, a London-based political commentator believes that Tories have been emboldened following their recent landslide victory in the parliamentary elections and now are determined to enforce “ the impossible level of cuts.”
“They didn’t think they are going to win the majority. They assumed they have to go into coalition or be a minority government, in each case, they couldn’t get cuts of this size through parliament… Now they’ve got to find a way of making this really impossible level of cuts. The people who will suffer are the people at low levels,” Professor Jonathan Rosenhead told Press TV on Tuesday.
British officials are yet to spell out how they plan to save £12bn in the welfare bill, but the measure is highly expected to include cuts onto child tax credits for those in work as well as housing benefit and some disability benefits.
The UK treasury has already confirmed its plans to go ahead with the welfare reductions despite the recent massive anti-austerity rallies.
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