IFS SAYS MINIMUM WAGE WILL NOT COMPENSATE FOR LOSS OF TAX CREDITS

Scottish National Party spokesperson for Social Justice and Welfare Dr Eilidh Whiteford MP has slammed the UK Government’s budget for failing millions of low and middle income families.

The Tory government budget includes cuts to Tax Credits, which the Institute of Fiscal Studies has said will not be compensated by the government’s so-called ‘Living wage.’

Speaking in the House of Commons this afternoon, Dr Eilidh Whiteford MP said:

“In work poverty is the scandal of our time- and it’s a scandal that was ignored by yesterday’s Tory budget.

“In Scotland tax credits are overwhelmingly paid to working people. And in Scotland 95% of tax credits are paid to families with children. So we should make no mistake about where the cuts are being targeted.

“We can’t kid ourselves that re-branding the Minimum Wage as a Living Wage will actually make it a living wage. There is already a living wage – calculated by the Living Wage Foundation, already used by employers in the public, private and third sectors, including the Scottish Government. It’s already £7.85 an hour outside London, and it’s due to go up again in November. The UK government proposal of £7.20 an hour is not a living wage, and it won’t off-set the cuts in tax credits as the IFS has confirmed.

“At the moment, a family with two parents and two children, with both parents working full-time on minimum wage and paying an average rent, will be a family below the breadline. The changes announced yesterday won’t actually change that very much – they will still be struggling to keep their heads above water, and their children will still be growing up disadvantaged.

“George Osborne has repeatedly said the best route out of poverty is work, but for millions of low paid workers, poverty will persist no matter how hard they work, or for how many hours.”