Families ‘£580 worse off’ after tax and benefit changes
Ed Miliband has warned that the so-called “squeezed middle” are set to feel the pinch even more thanks to changes in the tax and benefits system.
The Labour leader has accused the coalition of failing to help families as they struggle with the rising cost of living.
Mr Miliband told the Welsh Labour conference in Cardiff the government is “choosing to squeeze the squeezed middle yet again”.
He made his speech after the independent Institute for Fiscal Studies (IFS) calculated that households with children would be £580 worse off after the tax and benefit changes to be implemented for the 2012/13 financial year.
The think-tank says £32.55 of that is the result of changes announced in the 2011 Autumn Statement – including to child tax credit, working tax credit, pension credit and fuel duty.
Pensioner households will be £48.35 better off and working-age childless households will benefit to the tune of £73.34, the IFS said.
Mr Miliband said: “On current forecasts, the average worker will be earning the same in three years’ time as they were ten years ago, but the weekly shop costs more, it costs a lot more to keep the house warm and we have a government that doesn’t believe that its job is to stand up for ordinary people against powerful vested interests.
“What is their answer to the crisis of living standards? Cutting taxes for the banks while they raise taxes on ordinary families, higher VAT, cuts to tax credits.
“As the IFS have confirmed today, this April the Government is hitting an average family with children for £580. Choosing to squeeze the squeezed middle yet again.”
Conservative AM Janet Finch-Saunders said: “It’s a bit rich for the Labour leader to talk of families struggling with tax bills, when it was the Welsh Labour Government who refused to pass on the freeze in council tax.
“Welsh Labour Ministers received almost £40 million from the Conservative-led UK Coalition to freeze council tax in Wales, but decided to spend it on their own pet projects instead of helping hard-pressed families and pensioners.”