As the debate rages on over wages and benefits, Nick Lakin speaks to Lancaster and Morecambe’s MPs and local and charitable organisations about growing concerns over the cost of living
This week, Lancaster Quakers will get to work on spearheading a national campaign to raise awareness about the need for a “living wage”.
The religious movement group says that the Living Wage – £7.85 an hour – as set out by the Living Wage Foundation is the correct amount for the cost of living outside London, rather than the government’s announced £7.20 an hour from next April.
On Monday, the government’s proposal to cut Working Tax Credits in April 2016 was defeated in the House of Lords.
Peers voted to delay the £4.4bn cuts and compensate losers in full.
Chancellor George Osborne said he would listen to concerns and announce any amendments in next month’s Autumn Statement but insisted he would press on with changes.
Campaigners say the cuts will make millions of families on average £1,300 a year worse off, but the government says other measures will help offset the reductions and help the country back to a “lower welfare, lower tax and higher wage” economy.
Mo Kelly, from Lancaster Quakers, said: “As more and more low paid workers and families face the harsh and stark reality of continuing government policy to increase welfare cuts – the urgency to raise awareness and to speak out for the payment of the living wage is even greater now than a year ago.
“At national Quakers’ request, Lancaster Quakers have launched a Quaker Living Wage Campaign and produced a support pack offering information and action which can be taken to promote The Living Wage.”
The Children’s Society estimates that 6,300 children in 3,400 families living in the Lancaster and Fleetwood constituency would be affected by the Tax Credits cuts.
Lancaster and Fleetwood Labour MP Cat Smith said: “The cut to Tax Credits, which will hit thousands of local families, is an attack on those families who go out to work but receive low pay.
“The Chancellor has put the burden on low earning working families whilst the tax breaks have gone to millionaires.
“The so-called “Living Wage” is not planned to come in until 2020, but with tax credits being snatched away this April it means years of pain for 3,400 local families, who face an average loss of £1,300 a year.
“Put simply, politics is about making choices and this government has chosen to punish the children of low waged working families.”
But David Morris, Conservative MP for Morecambe and Lunesdale, said the Children’s Society figures were not accurate, and that there was no formal data of the numbers the policy would affect in each constituency.
He could not provide a figure for how many families would be affected in Morecambe and Lunesdale.
But he said that ultimately the changes to Tax Credits were to move the country from a “high welfare, high tax, low wage economy to a lower welfare, lower tax and higher wage one”.
He said: “The current bill for tax credits is unsustainable and is currently at £30bn.
“This is up from £4bn when it was introduced.
“Instead of helping people out of low pay, Tax Credits have been subsidising lower wages in a way that was never intended, even by the Labour government who introduced them.
“There is a lot of misinformation about this issue, the figure of an average loss per household of £1,300 a year is incorrect.
“This figure doesn’t take into account other policies being introduced which help household income such as raising the personal tax allowance to £12,500, the impact of the National Living Wage which sees some getting a £1,000 increase next year, nor the offer of 30 hours free childcare to parents which is worth £5,000.
“It also gives no indication of the wider ripple effect the raising of the minimum wage will have on increasing pay across all pay scales.
“All of this coupled with highest employment since records began, suggests that this policy change will mean more people will be in gainful employment and won’t need to rely on the state”.
However, North Lancashire Citizens’ Advice Bureau says that according to research by the Social Market Foundation, next year a single parent who has two young children and works 20 hours at minimum wage will have nearly £75 a month less in their purse than now.
And a couple with two children, where one person works full time earning just over £8 per hour will see a drop in their take home income of over £140 per month.
Chief officer Austin Staunton said: “If the current proposals go ahead in just over six months time most Tax Credit claimants will see sizeable drops in their Tax Credit awards.
“Whilst other changes in Tax Credits come in April 2017 or only affect new claimants or those who have new babies, this one affects all working claimants including those with existing claims.
“At last count there were over three million working families claiming Tax Credits.
“We get huge amounts of enquiries about Tax Credits with over 67,000 people visiting our web pages every month.
“With many people already having squeezed their spending, a drop in income like this is going to present some really difficult choices.
“We already have frontline advisors asking how they can possibly help a client in this situation.
“For a couple with two children £140 is pretty close to how much they might spend on their gas, electricity and water bills each month.
“Unfortunately these changes in Tax Credits are likely to add to a trend of rising household debt which is made up of debt on essential bills rather than consumer credit.”
Lancaster Quakers say they are “delighted” that companies including Nationwide Building Society, Lidl, Morrisons, RBS, Barclays and HSBC Banks, and OXFAM had already adopted the Living Wage of £7.85 an hour.
Their information pack contains information gathered by Lancaster Quakers and can be found at www.lancsquaker.org.uk/livingwagecampaign.php.
Next week, November 1 - 7, is Living Wage Week, where Quakers aim to raise the profile of adopting the Living Wage.