UPDATE: A number of folk have been looking for the original paper – here is the link
And belated thanks and dues to Hannah Jordan at SCVO for originally circulating it to folks she thought might be interested.
Also, it seems the number might be even higher – according to HMRC last December, it estimated the number of families in Scotland losing out to be 84,900. It’s worse than we thought!
I’ve been sitting on this information for more than a week now, in the hope that someone, somewhere would also come across it. It is taken from a paper that was lodged in the House of Commons publications store (I’m sure it has a suitably fancy name.. answers on a postcard please).
Because it is dynamite. And I really cannot believe that no-one else has seen it (they have) and thought it was newsworthy. Or at least blogworthy.
In the last few weeks, thousands of families all acros Scotland have been receiving missives from HMRC, regretting to inform them (not really, not at all in fact) that their tax credits are no more. For every family it will have come as a shock. But taken together, the scale of the impact of this cash grab from hardworking families (TM Labour/Conservatives/Lib Dems/take your pick) all across Scotland is quite shocking. The table below sets out how many families in each local authority area in Scotland will no longer be in receipt of child tax credits come the start of April.
|Aberdeen City||2200||Edinburgh||4500||Orkney Islands||300|
|Aberdeenshire||3400||Eilean Siar||200||Perth & Kinross||2000|
|Argyll & Bute||1200||Fife||5600||Scottish Borders||1800|
|Dumfries & Galloway||2500||Highland||3600||South Ayrshire||1400|
|East Dunbartonshire||1600||Moray||1700||West Dunbartonshire||1400|
|East Lothian||1500||North Ayrshire||2000||West Lothian||3000|
|East Renfrewshire||1200||North Lanarkshire||6000|
I should point out that several times while compiling this table I went back to check that the figures really are “thousands”, for 200 families in the Western Isles and 400 on Shetland just seems a huge amount, relatively. But in terms of actual numbers, the worst hit local authority areas are North Lanarkshire with 6000 families losing their child tax credits, Fife with 5600, South Lanarkshire with 5200, Glasgow with 5000 and Edinburgh with 4500.
Also of interest is the impact on many rural areas in Scotland. Dumfries and Galloway and East Ayrshire are largely comparable in population terms; usually, in league tables like these the picture will be worse in East Ayrshire because of higher deprivation levels. But Dumfries and Galloway will be hit harder in terms of the income loss to families, partly because it has marginally lower unemployment and therefore more parents in work, but also because areas like these are low wage economies. Lots of people earn just enough to get by – tax credits have helped make incomes stretch further. No more. And what will happen is that young families will leave these areas or not move there in the first place. The same applies to all the peripheral regions of Scotland.
The change applies to any lone parent family earning over £26,000 per year and any two parent family earning over £32,000. Previously, the cut off point was £42,000. At the same time, the amount that can be received for childcare costs is being cut from 80% to 70%, meaning that families have to meet nearly one third of such costs themselves.
Now, people on these kind of sums are not living in poverty but for two parent families in particular, £16,500 each is well below the national average. The ones who will feel it most are still on fairly low incomes. And it’s the impact. Going without several hundred pounds a month – as will be the case for some – just like that, will be tough. Especially in an era of largely frozen pay and rising household costs. This is the Institute of Fiscal Studies’ predictions of middle-range income families being hit the hardest by the Coalition government’s austerity measures.
This is indeed the squeezed middle so one wonders where are all the strident political voices protesting on their behalf? Where is the media? Or do we only care about those lambs about to lose their child benefit on much higher incomes?
The fact is that such decisions have a knock-on effect. For some, it will be to choose not to work – or rather to be forced into deciding that work does not pay. This will be particularly true in many two parent families, and often, it will be the woman who stays at home, creating greater economic dependency and disparity between men and women’s earnings, yet again.
Tax credits have always been somewhat controversial. Hugely bureaucratic, costing significant amounts to administer, some even argue they have contributed to in work poverty, keeping people on low incomes and allowing unscrupulous employers to avoid their responsibilites to ensure that people are paid a decent wage. But they have served an essential purpose for many families, who would be on low incomes anyway. They have brought more money into families for the benefit of children, centred around the fact that there are children who have the right not to grow up in poverty or indeed, in workless households. This will all now change.
The coalition government might argue – and they do – that they don’t like doing this, that this is the necessary consequence of the previous Labour government’s profligacy, that we must all contribute to getting our collective indebtedness down. But you cannot escape the suspicion that they are hurting where they can get away with it. Families like these rarely complain, they just get on with it. And – as we have seen – they are largely ignored. The ones who cope and can be relied upon to cope.
But with the gap between rich and poor getting wider, with obscene banking bonuses still being paid out, with football clubs and megabucks players enabled to avoid their tax liabilities, with discussions swirling over removing the 50p tax rate for the best off, they will be wondering why they – and their children – are the ones having to carry the biggest load.
How many families in Scotland will be affected? The UK government’s own figures suggest 73,300. 73,300 about to lose thousands of pounds of income a year. 73,300 for whom the balance will be tipped from coping just to not. Does nobody care?