By Ian Dipple Wednesday 09 January 2013 Updated: 10/01 10:30
MORE than 7,000 families in Redditch will see a real-terms cut to their Working Tax Credit from April after MPs voted to limit the rise in certain benefits.
Legislation to cap the increase in working age benefits - such as jobseekers allowance, income support and elements of working tax and child tax credits - at one per cent for the next three years was approved on Tuesday as part of efforts to slash the country's welfare bill. They were due to rise by 2.2 per cent from April.
Rebecca Blake, Labour's Parliamentary spokeswoman for Redditch, attacked MPs for voting for families on the lowest wages to pay for the cost of rising unemployment. She said the average cut to working tax credit would average about £534 by 2015.
"I cannot find anyone who does not agree that welfare spending must be reduced. The question is what is the most effective way to do it," she said.
"Is it to get people off benefits by providing them with work? Or is it to take Working Tax Credits away from those in work who are on low pay? I've been speaking to many families who work, who will receive a real-terms cut to Child Tax Credit, Working Tax Credit and Child Benefit. They tell me that already with both parents working it's hard to make ends meet and some do not know how they will feed and clothe their children.
"Some families in low pay are working out that cuts to Working Tax Credits mean work no longer pays and they would be better off out of work and on benefits. This cannot be right."
She said the Government should use the £3billion tax relief on pensions for the top two per cent of earners to get long-term unemployed into compulsory jobs for six months.
But Redditch MP Karen Lumley said by raising the tax threshold, helping two million people in the West Midlands reduce their tax bill, they were supporting people who were working and doing the right thing.
"This was a decision which no-one comes into politics to make but I walked into the lobbies knowing I was voting on the side of hardworking people of Redditch - like the nurse who came to visit me last week who has been on a year on year pay freeze and who I know would support the principle that benefits should not be increased faster than the average wage of people who work to pay those benefits," she said.
"Benefits have increased by 5.2 per cent this year which is well above take home pay and I think we have duty in these difficult times to take the decision to freeze benefits whilst take home pay is only increasing by one per cent. If we don’t then the incentive the remain on benefits will only increase and that will trap people into poverty, something which Labour are choosing to ignore.
"Labour members have criticised this bill which is rank hypocrisy and shows they are not credible on the economy. They had 13 years to sort out the welfare system and didn’t take any of the difficult decisions needed to create a sustainable system. They let the welfare bill spiral out of control resulting in a legacy of long-term debt our future generations will have to pay off."
Former Redditch MP and Labour minister Jacqui Smith has also warned opposing the cap would allow the Tories to paint the party as caring more about those unwilling to work than those struggling to work.
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