Home > Uncategorized > Osborne’s tax credits cuts will devastate Eastbourne businesses and the Eastbourne economy

Osborne’s tax credits cuts will devastate Eastbourne businesses and the Eastbourne economy

I am reproducing here most of what I wrote recently for the local media on behalf of the Eastbourne People’s Assembly Against Austerity, as the media chose to ignore the main thrust of my argument that the proposed cuts to tax credits would do more than reduce drastically the income of ‘hard-working families’. The cuts would also take more than £8 million per year out of the local economy, drastically affecting many of our local businesses, especially the small, independent businesses that Eastbourne is rightfully so proud of. Given the emphasis placed by most local politicians upon the need for economic growth and increased support for local businesses, then the local media silence about the impact of tax credit cuts upon local businesses is not only unacceptable, but revealing of just how embarassing and sensitive an issue the tax credit cuts are for the political establishment. Even some Conservative MPs have woken up to the political damage to the Tories that the potential economic damage of the cuts for businesses. Here is what I wrote for the local media, slightly edited:

The cuts in tax credits proposed by George Osborne have created a political firestorm as the implications emerge of the impacts of those cuts for the household incomes of millions of families. The consensus of independent analysts is that most households affected by the cuts will see a dramatic drop in their net incomes, a drop that won’t be compensated for in any significant way by the proposed increase in the minimum wage next year. The House of Commons Library estimated that the changes will lead to an average £1,300 cut in the annual income of around 3.2 million families, including 2.7 million families with 5.2 million children in them, if they come into effect as planned in April 2016

Figures released by the House of Commons Library show that the total number of families in Eastbourne receiving tax credits is 6,800, including 12,600 children. Multiply 6,800 families by the £1,300 average loss and you get the staggering figure of £8,840,000! That’s £8.8 million per year taken away not just from local families but from the local economy, as most of that money would have been spent on local goods and services offered by local businesses. Families on low incomes generally save very little and have to spend most of their money locally as they can’t afford to travel out of area much. This is where the gross inequality created by government policies leads to gross unfairness for everybody, local businesses included! Increasing poverty in Eastbourne is not a route to local prosperity, but the exact opposite.

The tax credit cuts will hit single parents hardest, especially as single parents make up 56% of those receiving both working tax credits and child tax credits. The Eastbourne People’s Assembly was contacted by Della Bentham, a single parent and an Eastbourne resident, who told us how the cuts would affect her:

“I will be worse off by £1200 a year once the cuts come into place. I am a single mum with two young children (3 & 6). I could easily claim benefits and not work since my son is below school age but I choose not to as I want to set a good example for them. I cannot hold down a normal job because both my children have a genetic condition and have constant hospital appointments, therefore the only way around it was to work for myself. I don’t want to be reliant on tax credits but while I grow my business and wait for my son to start school I simply can’t. Tax credit top up my low earnings I am not lazy I work more hours a day than most people that are conventionally employed while I try to grow a business which I hope one day will support me without the need for government top ups.

The entire thing angers me as those worst affected will be single mothers who are trying to work and do the right thing and families where one parent works on low incomes. These are people that aren’t sitting there claiming handouts for nothing. We are people that are trying to earn a living but with the cost of living today. It’s just not viable to pay rent and bills and food let alone all the other living expenses on a low or even ‘normal’ wage. The country will be a mess by the time the conservatives have finished with them making ridiculous and ill thought out cuts left right and centre. It almost makes you wonder if you would actually be better off not working, so where is the sense in that?”

71 Tory MPs, including 23 new members of parliament in marginal seats, have more families who are set to lose substantial sums than was the size of their majority last May. Eastbourne’s MP, Caroline Ansell is one of those 71 MPs. She has so far always voted in favour of the tax credit cuts in Parliament despite recently having expressed “serious concern” about the tax credits. Stephen Lloyd has, on behalf of the Liberal Democrats, expressed his opposition to the tax credit cuts, and the Eastbourne People’s Assembly would welcome working with him and his colleagues to help build an effective opposition across all political parties to such brutal and inhumane cuts to local people’s incomes as George Osborne is proposing. I do hope that politicians from whatever background or political party will choose to affiliate with the Eastbourne People’s Assembly if they agree on the basic unfairness, and ultimate unworkablity, of austerity.

The Eastbourne People’s Assembly will campaign against these tax credit cuts, which threaten – like many other austerity cuts – to push even more families and children into poverty, push more of them into dependence upon charities like Eastbourne Foodbank, and create additional pressures upon social services which are themselves experiencing the effects of devastating local government cuts. Eastbourne families reliant upon tax credits can’t wait until a general election to get these tax credit cuts reversed. The cuts are an existential threat to the financial viability of too many of these households. These cuts in tax credits were not in the Conservative manifesto upon which the general election last May was fought, and David Cameron himself promised during the election that there would be no cuts to tax credits.

The Eastbourne People’s Assembly hopes that local politicians and local people from all backgrounds will unite in condemnation of what are clearly punitive cuts in the basic income of many local families, harming children’s life chances and causing extra stress to hard-pressed public services. The tax credit cuts are, in effect, a work penalty, which is ironic and perverse in view of the government’s wish to make work a route out of poverty! Now that the House of Lords has forced the government to think again about the cuts, we all have another chance to make our voices heard on this issue. If anybody wishes to be involved with Eastbourne People’s Assembly campaigns, please contact:eastbourne.peoplesassembly@yahoo.co.uk

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