Rt. Hon George Osborne MP
Chancellor of the Exchequer
Her Majesty’s Treasury
1 Horse Guards Road
26th October 2015
Dear Mr Osborne,
I am writing to you today on behalf of 6000 Neath constituents who will be affected by your proposal to cut Tax Credits. On the day of the Lords debate on Tax Credits, I urge you to reconsider how you propose to lower the Welfare bill. After spending the past 6 months speaking with my constituents, who work hard to make ends meet, I want you to know that these hard working people totally depend on the support of redistributed wealth through tax credits, a scheme established by the Labour Government of 1997, to top up their wages.
I am appealing to your better nature. You are a father, a family man, a human being. You must see that these cuts will damage the quality of life for working people across the country. Cutting Tax Credits will not cut the welfare bill, will not save money, will not tackle the problem of under employment. I appreciate that the Tax Credits system is used to subsidise low pay, and of course I support a real living wage, but the reality is that this will not be achieved over night.
What would happen if you tried to mitigate the terrible consequences of cutting Tax Credits next April, by implementing the National Living Wage and the rise in personal tax allowance at the same time that you cut tax credits in April 2016?
The following example was quoted by the Resolution Foundation.
- A single earner family on £15,000 per annum will lose £1500 per annum in tax credits next April.
- If the National Living Wage of £9.35 per hour, for over 24 year olds, was introduced next April instead of 2020, the single earner family would lose £620 per annum.
- If the rise in personal tax allowance of £12,500 was introduced next April instead of 2020, the single earner family would lose £320 per annum.
- A loss of £940 as opposed to £1500 per annum.
- However, the cost of fast tracking both National Living Wage and the increase to the personal tax allowance to start in April 2016, would be £9bn, double the projected savings.
Working extra hours would not help this single earner family – if the worker earned an extra £750 per annum, they would take home only £150 because 80p of every extra £1 would be lost in reduced benefits and extra taxes.
Your cuts are not about balancing the books, but are an ideological attack on working people and will achieve only further suffering for hard working people and families.
I am asking you to think again about your plans to cut Tax Credits. If you truly are concerned with supporting working people, you will reconsider these pernicious cuts and the devastating impact they will have on working families.
Christina Rees MP
Member of Parliament for Neath