Budget hits families

5 Jul 2010

“Nastier” than Thatcher: families prepare to bear the brunt of the new budget

The government has been accused of forcing mothers with very young children to go back to work to make ends meet. This is one of many concerns that families will be hard hit by the government’s emergency budget, announced last month.

Chief Executive of the Family and Parenting Institute Dr Katherine Rake said: “Parents might be forgiven for suspecting they are in the front line for cuts.”

As well as being hit by the increase in VAT to 20 per cent, families are likely to be directly affected in the following ways:

Child tax credits to be withdrawn for families earning more than £40,000 a year (rather than £50,000)
Child benefit to be frozen for the next three years
Child Trust Funds abolished
‘Toddler tax credits’ which the Labour government planned to introduce have been axed
Tighter assessment for Disability Living Allowance – could affect families with disabled children

Ann Robinson, Consumer Policy Director at uSwitch.com told the Telegraph: “These cuts will place family finances under even more pressure at a vulnerable time.

“The high cost of living coupled with the costs of running a household means that many parents today need two incomes to just get by. The decisions the government has taken will make it a lot harder for a mother to have the choice of staying at home.”

It had been predicted that middle-class couples with children would bear the brunt of cuts at a time when the government needs to reduce spending dramatically.

The Chancellor George Osborne admitted that the country “sadly” could “no longer afford” many of the generous welfare payments introduced by Labour. Speaking about the freeze to Child Benefit, he said: “This is a tough decision, but I believe it strikes the right balance between keeping intact this popular universal benefit while ensuring that everyone, across the income scale, makes a contribution to helping our country reduce its debts.”

Last week Shadow Work and Pensions Secretary Yvette Cooper described the budget as "nastier" than anything imposed by Margaret Thatcher.”