Cameron’s conference pledges will make 30 hour-week minimum wage family £320 worse off, says TUC

Analysis published by the TUC today (Thursday) of the tax and benefit policies announced at the Conservative Party Conference reveals that a couple family with two children and 30 hours work at the national minimum wage will suffer a net loss of £320.

In David Cameron’s conference speech yesterday he said: “With us, if you work 30 hours a week on minimum wage, you will pay no income tax at all. Nothing. Zero. Zilch.”

However, he left out any mention that the combined effect of tax and benefit policies announced at the Conservative conference will leave a family in this situation £320 worse off each year.

Most families on a single minimum wage will still need to claim in-work benefits. Means-testing will therefore reduce the net gain from the income tax cut to just £60 a year instead of £400.

TUC General Secretary Frances O’Grady said: “The Conservative plans will make the lowest paid families foot the bill for tax cuts for the rich.

“While a family with the minimum wage hours David Cameron spoke of may not have to pay income tax, they will lose much more from his new cuts to tax credits and from means-tested cuts to the help they get to pay the rent. The amount of council tax they have to pay will go up too.

“The Conservative’s new proposals are a charter for handouts to the wealthy and punishment for the working poor.”

NOTES TO EDITORS:

Impact of tax and in-work benefit changes announced at Conservative conference on a couple family with two children and 30 hours work at minimum wage

- The calculations above are based on a couple with two children living in a band D property with rent of £200 per week in Witney. They have a single income from earnings based on 30 hours work per week at the current national minimum wage of £6.50 per hour. They are in receipt of the following in-work benefits (all amounts are annual): tax credits (£9,264.20), council tax support (£597.94), Housing Benefit (£7,333.82), child benefit (£1,770.60).

- Benefit losses as a consequence of the net earnings gain from the increase to the personal tax allowance are calculated on the basis of the housing benefit taper (65 per cent) and the council tax support taper that is applied by West Oxfordshire District Council (20 per cent).

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

- On Saturday 18 October the TUC is organising Britain Needs a Pay Rise – a national march and rally in London to call for an economic recovery that delivers for everyone, and for fair wages to help end the living standards squeeze. For more information on the campaign go to www.tuc.org.uk/economic-issues/britain-needs-pay-rise

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