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Protect the families who are victims of toddler tax

WE have had the pasty tax and the granny tax.

Now stand by for the "toddler tax". There has been a lot of noise recently from charities like Save the Children and the Child Poverty Action Group about the way the Coalition's welfare cuts are falling disproportionately on poorer families.

Today, using the Government's own figures, the Labour Party sets out to demonstrate that one particular group of households will find itself in the eye of the storm. They are working parents with one child and another on the way. There is no estimate of how many find themselves in this plight but Labour reckons that they stand to lose an average of around £1700 over the coming two years.

This group has been hit four times over. Firstly, they are losing some or all of their tax credits. That is because the credits themselves have been cut and eligibility for them has been restricted to couples in which one partner is working at least 16 hours a week. (If both work 15 hours, they will get nothing).

Secondly, Statutory Maternity Pay has been capped at a below inflation 1%, which amounts to another cut. Meanwhile, Health in Pregnancy Grants have been axed altogether, while Child Benefit is frozen for three years.

This makes a mockery of Coalition rhetoric about "skivers and strivers" because the net effect is to disincentivise mothers from returning to work, especially in areas where childcare costs are prohibitive. (Recently Glasgow was identified as one area where the cost of childcare was keeping parents out of paid employment.)

Ministers are quick to point out that many thousands of low income households are being taken out of income tax altogether by the raising of the threshold to close to £10,000. However, their own figures appear to show that thousands of low income families, especially those in the one-child-plus-one on-the-way bracket, are losing thousands, even after the income tax changes are taken into account. That is because such families paid little tax in the first place.

Politically, this looks terrible, particularly at a time when millionaires are seeing their tax bills fall. Britain is already one of the most unequal countries in the developed world and things can only get worse.

A disadvantage of the situation in Scotland, where the constitutional question so dominates political dialogue, is that the public hears little about areas where Labour and the SNP are in broad agreement.

We need politicians to come together to make the case for those families who are bearing the brunt of the Government's policies.

Contextual targeting label: 
Families

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