8,800 families in Merton Borough will lose out under Conservative plans to cut tax credits, with the average working family losing £750 a year.
Figures produced by the House of Commons Library show over three million low-income working families currently in receipt of tax credits will see their entitlement reduced, as part of the Government’s proposals.
Despite claims from the Conservatives that those affected will benefit from plans to increase the minimum wage, the independent Institute for Fiscal Studies has said Tory figures don’t stack up.
IFS analysis shows a £750 average loss will only be offset by £200 as a result of the new minimum wage.
Liberal Democrats have opposed the move in the House of Lords and said it undermines the work of the last Coalition Government, to make sure it always pays more to be in work than on benefits.
Simon McGrath, Chair of Merton Liberal Democrat said:
“The changes to tax credits will hammer low income families in Merton. The move completely undermines any claim the Tories have of being on the side of working families.
“What makes this even worse is that 14,300 children in our area will now be forced to live in poorer households, reducing their life chances and making it harder for their parents to make ends meet.
“Study after study have shown that the Conservative’s claim to be supporting low income families through a minimum wage increase nowhere near make up for these cuts. It’s time for them to come clean and be honest with those doing the right thing and going out to work.
“Tax Credits shouldn’t be used to subsidise poor pay, but removing them when its impact is on the lowest paid workers is a travesty. I am pleased that Lib Dems have been opposing this measure. We worked hard in Coalition to ensure that work would always pay more than choosing to remain on benefits. It is a disgrace the Conservatives are now undermining this principle.”