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Over a million children in London could be hit by tax credit cuts

  • 1,069,800 London children live in families who could see their tax credits cut in real terms
  • 68% of London families receiving tax credits are in work
  • High cost of living could force low paid out of London if their tax credits top ups are axed

Over a million London children could be affected by Government plans for a real terms cut to tax credits, Labour’s London Assembly Economy Spokesperson Fiona Twycross AM has warned. The four year freeze on child tax credits forms part of Government plans to cut £12bn from the welfare budget. In total, the cuts could hit the incomes of 550,400 families in receipt of tax credits in the capital, the vast majority of whom are in work. Dr Twycross said it was clear the Chancellor is “intentionally targeting the poorest in our community.”

Government plans to cut the welfare budget will mean working people will see a reduction in the amount they can earn before they lose tax credits, whilst many working-age benefits, including tax credits, will be frozen for four years.  Recent research from Barnardo’s found that more than 7.5 million (50 per cent of) children in Britain currently live in families that rely on tax credits, with many of these families ‘in-work’. The latest data from HMRC showed that in London the 550,400 families in receipt of tax credits include 1,069,800 children who could be left to suffer if their parents’ income is slashed. Of the 550,400 families 68% are recognised by the Government as being ‘in-work’, resorting to tax credits to top up low wages.

Dr Twycross said the Government’s move could see some families, already grappling with the higher cost of living in London, forced out of the capital.

Labour’s London Assembly Economic Spokesperson Fiona Twycross AM said:

“This is the strongest sign yet that the Chancellor is intentionally targeting the poorest in our community, particularly those already struggling on low wages. The vast cost of living difference in London means that for many families, losing their tax credits could easily tip the balance and force them out of the capital.

Of course we have to balance the books but making people on low wages even poorer is both narrow-minded and cruel. The Government should focus on tackling the causes of poverty, such as London’s rocketinghousing costs, not removing support for those who are already struggling to make ends meet.”

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