UK Government plans to cut in-work tax credits could push as many as 49.1% of Scottish families below the breadline, a leading charity has warned.
Barnardo’s Scotland is urging the UK Government to halt plans to cut tax credits for millions of working families, expected to be announced by Chancellor George Osborne in Wednesday’s budget.
The charity warns that some hard-working families could lose in-work tax credits entirely, as part of the UK Government’s promise to cut £12bn from the welfare budget.
Barnardo’s Scotland has calculated that nearly half of all families in Scotland could be affected by the policy. They argue that tax credits help low-income families afford the cost of food and clothe their children.
A campaign has been launched by the charity to halt plans to change tax credits. The UK government should instead “focus on tackling the low wages and high living costs that drive hardship amongst families”. They are urging Scottish families to email their MPs.
Around 55% of children living in severe hardship come from working households and 39% live in households where at least one adult is in full-time employment.
Figures also show that more than half of children in nine local authorities in Scotland live in families in receipt of tax credits. 45% of children in Scotland are reliant on the in-work benefit.
Head of Policy for Barnardo’s Scotland, Mark Ballard, said: “The UK Government has promised to improve support for working families so that parents do not have to choose between feeding their families and heating their homes.
“Unfortunately, the reality is increasing numbers of working parents are struggling to stay above the breadline, and any proposed cuts to the benefits they rely on will only make things worse.
“Low paid parents with dependent children rely on tax credits to make up the difference between what they earn and what they need to get by.”
The Child Poverty Commission has expressed fears that more than seven million children across the UK will be hit by the proposed cut to tax credits.
45% of all working families across the UK could see their income slashed, with 72% of these earning less than £20,000 a year.
New figures published by the Office for National Statistics (ONS) reveal that three in ten people remain in poverty after moving into work, highlighting how moving into employment is no longer a guaranteed escape route from life below the breadline.
Of all people in work, 8% between the ages of 18 to 64 are living in poverty, according to the findings. One adult households are the least likely to leave poverty when starting work.
SNP work and pensions spokesperson Dr Eilidh Whiteford said: “The evidence against George Osborne’s expected cuts to support for working families is stacking up.
“Barnardo’s Scotland has estimated that nearly half of Scotland’s families stand to lose out on vital income helping to keep them above the breadline.
“In addition, the ONS figures today show that families entering employment are already finding it is not a guaranteed route out of poverty – any moves to cut support will see the number of people facing in-work poverty climb.
“It’s not too late for George Osborne to call a halt to these wrong-headed cuts. Supporting people into work is such a vital element of tackling unemployment.
“At a time when employment in Scotland is rising in a challenging economic environment, cutting tax credits or work allowances is a deeply damaging move.”
Work and Pensions Secretary Iain Duncan Smith has recently announced the Government’s intention to scrap the Child Poverty Act and redefine the way child poverty is measured. Scrapping the legislation means that the Government is no longer tied to an earlier commitment to ‘eradicate child poverty by 2020’.
The move has been widely condemned by charities and organisations working with low-income families.
Alison Garnham, Chief Executive of the Child Poverty Action Group Alison, slammed the UK Government for “turning its back on poor children”.
“Only a year ago, the Secretary of State claimed the child poverty targets would be met but last week’s child poverty statistics showed that absolute child poverty has risen by half a million since 2010 and that progress on relative poverty has stalled.”
Peter Grigg, Director of External Affairs at The Children’s Society, branded the move “a national disgrace”.
“Today the Government has decided to break its promise to end child poverty by 2020”, he said.
“Scrapping the Child Poverty Act and replacing it with inadequate measures based on worklessness and low educational attainment will do nothing to help the millions of children who are suffering in real poverty now.
“Critically, the Government is failing the two million children who are living in low-income working families. By ignoring the reality that most children in poverty are living in working households, the Government will fail to develop effective plans to help these children and turn its back on its own commitment to end child poverty by 2020.
“Income is at the heart of child poverty. Ignoring it will only mean more ineffective policies that continue to fail. This will condemn increasing numbers of children to live below the breadline which is a national disgrace.”