Owen Smith’s Pontypridd Observer Column 09/12/2015

At his Autumn Statement, after weeks of pressure from all quarters, George Osborne announced he was scrapping his planned cuts to tax credits. Those cuts would have seen 5,000 working families in Pontypridd lose an average of £1,300 a year, so I was among the first to welcome this Tory U-turn.

Unfortunately, however, this is not the full and fair reversal that Labour has demanded, and the announcement has quickly unravelled. As ever with these Tories, wherever there’s a silver lining, there’s also a large cloud full of heavy rain.

The small print to George Osborne’s Autumn Statement showed that he is still taking £10 billion from working families over the course of this parliament from those currently on Universal Credit and from those who are set to move onto the Tories’ new benefit over the next five years.

The independent Institute of Financial Services research backs this up, They have shown that George Osborne has not reversed his welfare cuts, he has just delayed them, and 2.6 million families will still be on average £1,600 worse off by 2020 from these cuts.

In fact, a single mother of two children working full time on the Minimum Wage on Universal Credit will lose £2,400 in April due to the Chancellor’s cuts.

And that same person will be a full £3,000 a year worse off than if they were on tax credits, creating a perverse postcode lottery where how much in-work support you receive could depend on where you live.

As Universal Credit hasn’t been fully rolled out across Pontypridd yet, workers here who receive tax credits won’t now face immediate cash losses come April.

However, that isn’t the end of it and it’s absolutely essential that in-work support is protected as Universal Credit makes it way here and as people are transferred onto it from receiving tax credits.

It can’t be right that working families across the UK face losses of thousands of pounds a year when the Tories are cutting inheritance tax for millionaires. This is a political choice by George Osborne and I will oppose it outright.

In my role as Labour’s Shadow Secretary of State for Work and Pensions, I will be leading the charge against Tory cuts to Universal Credit and ensuring the incomes of low-paid workers are protected when they are transferred over from tax credits.

Rest assured that Labour will stand against this new attempt from the Tories to reduce the income of working families and we will fight the proposed cuts to Universal Credit at every turn.



Owen Smith MP Welsh Labour MP for Pontypridd
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