We need a Budget for jobs and to stop a bombshell for the squeezed middle – Politics Home article

With our economy stalled, unemployment soaring, and £158 billion extra borrowing to pay for this economic failure, the case for a change of course and a real plan for jobs and growth in next month’s Budget is growing by the day.

But as well as a plan for jobs and growth to get our economy moving and so help get the deficit down, there are different choices the government should be making in these tough times to help families in the squeezed middle.

Far from being all in this together, David Cameron and George Osborne have chosen to give the banks a tax cut this year while their Budget measures are hitting women harder than men and pushing up child poverty. And families with children will lose an average of £580 per year from policies coming into effect this April alone.

So next month’s Budget needs to pass two tests – on jobs and growth to boost our economy and put in place the long-term reforms we need; and on fairness so that families on low and middle incomes do not bear the heaviest burden.

On Monday Labour will use an Opposition Day debate in the House of Commons to repeat our demand a plan for jobs and growth in next month’s Budget. And we will call on the Chancellor to think again on changes to tax credits and child benefit which will cost families with children up to £4,000 per year.

First, their changes to eligibility for working tax credits are set to clobber hundreds of thousands of parents in part-time work by up to £74 per week. From April couples with children earning less than around £17,700 will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.

This change will penalise parents who are working and trying to do the right thing, but cannot increase their working hours at a time when the economy is flatlining and unemployment rising.

This unfair and damaging change could and should be cancelled using the hundreds of millions of pounds the government itself has said could be raised by closing a stamp duty tax avoidance loophole on properties worth over £1 million.

Second, David Cameron and George Osborne need to urgently review their planned changes to child benefit which are unfair, unworkable and ill thought through. It cannot be right that a two-earner family each earning £42,000, a total of £84,000, would keep all their child benefit, but a single-earner family on £43,000 would lose it all at a stroke.

Labour supports the principle of universal child benefit, but if the government is determined to make changes it would be better to do so in a fair and workable way. They should put implementation of their child benefit cuts on hold and conduct an urgent review to report before the changes come into effect next January.

Both these changes were rashly announced back in October 2010, but Ministers have clearly not thought through the consequences. Thousands of parents on low and middle incomes face losing a huge proportion of their income overnight. And far from making work pay, many parents could find they are better off on benefit. This makes no economic sense at all.

It’s not too late for David Cameron and George Osborne to change course. They should take action on jobs and growth in the Budget and put a stop to these two bombshells for thousands of parents on low and middle incomes. If they fail to act, they cannot say they weren’t warned.

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Posted March 4th, 2012 by Ed's team