Tax credits blow 1,475 Hull couples could lose £4,000 a year

1,475 Hull couples with children in part-time work could lose around £4,000 a year from April, due to the Coalition Government's changes to tax credit rules.

Hull North Labour MP Diana Johnson is urging the Conservative-led Government to reconsider a little-noticed change to tax credit rules, which means that thousands of families lose all of their working tax credits unless they can significantly increase their working hours.

The change means that 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. If they cannot do this, they will lose all their working tax credit of £3,870 per year.

Government figures revealed in Parliamentary answers to Labour's Shadow Treasury Minister Cathy Jamieson MP show 1,475 Hull households and 212,000 households across the country losing out. Those Hull households include 2,175 children.

A recent survey by the Chartered Institute for Personnel and Development found that one in five organisations have cut back on the number of hours that people work as a result of the economic downturn - with just 6% increasing them.

Hull North MP Diana Johnson said: "This is a deeply unfair change from a Lib Dem-backed Government increasingly out of touch with parents feeling the squeeze and struggling to juggle work and family life.

"Raising taxes and cutting spending too far and too fast has seen unemployment rise and the economy go into reverse. Many employers are cutting people's hours and jobs are being lost in Hull. In this climate, very few people in part-time work will be able to increase their hours by up to 50% needed to avoid this loss.

"For a couple with children losing around £4,000 a year, or £75 a week, from this change it could mean that going out to work would no longer pay.

"It tells you everything you need to know about David Cameron, George Osborne and Nick Clegg that while the banks are getting a tax cut this year, the Coalition is making life tougher for parents in the squeezed middle who are working hard and trying to do the right thing. As with last year's VAT hike, these tax credit losses are up front but any promised tax changes that might benefit working families a bit are always further off in the future.

"This tax credits bombshell is now just weeks away. For 1,475 Hull families with 2,175 children it means that they could be better off on benefits. That makes no economic sense. The Government urgently needs to think again."