Economists see tax credit cuts in UK catastrophic
Economists blame the British government policies for taking the country downward financially and pushing more and more people into the dire state of poverty.
“The rise in poverty is about to get even worse. Among the fundamental reasons of the existing state is a technological shift which is smashing out well-paid secured middle class jobs and replacing them by temporary part time and zero-hour contract jobs”, Rodney Shakespeare, a London-based economic told Press TV.
Shakespeare’s comments were in relation to the latest study that shows around one million people in working families in the British capital are now living in poverty.
According to the study released by the New Policy Institute and funded by the Trust for London charity, some 1.2 million Londoners, more than a quarter of its population, live in poverty. The figure shows a 70-percent rise in a decade.
The research found that London has witnessed an increase in the number of low-pay jobs for the fifth consecutive year, with about one fifth of those occupations failing to pay the London Living Wage, currently at £9.15 ($14.11) an hour.
At the same time, the number of people living in destitution in other parts of England has registered a 20-percent rise only.
“The underlying structure is getting worse. On top of that there is the rich-poor division increasing so that more works are shifting outwards say it’s not going into the income of middle class and poor. That is happening on a very broad scale and is also linked with the great increase in debt”, Shakespeare said.
Recent figures predict that the number of poor households in Britain will reach about two million by 2020.
Prime Minister David Cameron has once again defended the proposed cuts to tax credits and warned the House of Lords not to challenge them. He said that cutting tax and welfare while raising pay was the "right approach". But analysts say if the conservative government goes ahead with this cut back it will lead them to a disastrous finish in the next elections.
“If the government goes ahead with its policy, this would be a seminal moment just like Liberal Democrats who promised to get get rid of student fees. Although that seen a relatively small promise on electoral scene but led them to lose the public faith and got beaten up, smashed in the last elections”, Shakespeare concluded.
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