Government cuts

An inner London borough is looking to move homeless tenants to a housing association in Stoke-on-Trent, 160 miles away in the Midlands. Newham Council argues that it can no longer afford to house tenants in private accommodation in the borough because of the effects of the Coalition government’s housing benefit cuts.

The Mayor of Newham said that people from wealthier parts of London were seeking homes in Newham, leading to a shortage of affordable homes for people on its own waiting list. He said the council had written to over 1,000 organisations across the country asking for help.

The Coalition government Housing Minister Grant Shapps accused the council of playing party politics in the run up to local and mayoral elections.

The new rules on working tax credits from the start of the 2012/13 tax year will hit around 212,000 low income families, according to information published by the House of Commons Library. This will reduce their income on average by £2,600 each year.

Up till now, most couples with children have qualified for working tax credit, provided one partner works at least 16 hours each week. But from April 2012 couples will need to work 24 hours between them, with one partner working at least 16.

Two separate analyses have found that women are bearing the brunt of austerity measures introduced by the Coalition government. One analysis, by the House of Commons Library, calculates that nearly 75 per cent of budget savings since 2010 have primarily hit women’s incomes. A second analysis, by the Women’s Budget Group, examines the most recent (2012) Budget.

The Commons Library traces the gender impact of a long list of fiscal measures, starting with the 2010 Budget. The combined impact – by reference to projected government revenues in 2014/15 – is calculated to be £14.9 billion, of which £11.1 billion (74.5 per cent) will fall primarily on women.

The most severe impacts derive from changes to public sector pension arrangements (£6.1 billion), the tapered removal of child benefit from higher-rate taxpayers (£1.6 billion), and the decision to freeze child benefit for three years (£1.3 billion).

The Chancellor’s annual budget statement contained a number of measures, many of which would affect the living standards of those on the lowest incomes. The key announcements contained in the Budget Report 2012 are as follows:

Tax changes

The personal allowance for Income Tax will increase by £1,100 in 2013/14, with some of this increase passed on to higher rate tax payers. The higher personal allowances for those over 65 are to be frozen and then phased out. The top rate of income tax is to be cut to 45p from 2013/14 and some tax loopholes closed. Analysis of the budget (by the IFS and Resolution Foundation – see below) shows that maintaining tax credit levels is more effective at helping those on lowest incomes than raising the tax threshold.

Child Benefit