The Trade Union Congress has suggested that tax and benefit policies announced at the Conservative Party Conference will mean that a couple family with two children and 30 hours who work at the national minimum wage will suffer a net loss of £320.
Prime minister David Cameron said in his speech earlier this week: “With us, if you work 30 hours a week on minimum wage, you will pay no income tax at all. Nothing. Zero. Zilch.”
However, the TUC argued that he left out the combined effect of tax and benefit policies announced at the Conservative conference, that will leave a family in this situation £320 worse off each year.
The trade union body pointed out that most families on a single minimum wage will still need to claim in-work benefits, adding that means-testing will therefore reduce the net gain from the income tax cut to just £60 a year instead of £400.
Frances O’Grady, TUC general secretary, said: “The Conservative plans will make the lowest paid families foot the bill for tax cuts for the rich.
“While a family with the minimum wage hours David Cameron spoke of may not have to pay income tax, they will lose much more from his new cuts to tax credits and from means-tested cuts to the help they get to pay the rent.
“The Conservative’s new proposals are a charter for handouts to the wealthy and punishment for the working poor.”
The industry broadly welcomed Mr Cameron’s income tax changes, although questions were raised about how the Treasury will afford to carry them out.
