Low-income families will be worse off every year between now and 2020 thanks to chancellor George Osborne’s ‘con-trick’ Budget, union leaders have claimed.
The boost to minimum wage announced in July will be more than cancelled out by tax credit changes, according to a report by Unison.
Its analysis shows a family with two children where both adults are over 25 and work 35 hours a week on the minimum wage will lose £1,615 a year.
However, they would have been £850 a year better off if no changes were made to tax credits.
A family with one child and one earner under 25 on minimum wage will lose £1,460, while the same family with one earner over 25 will be £1,277 worse off.
Unison general secretary Dave Prentis said: ‘The lowest paid have been led to believe they’ll be better off next April when the minimum wage goes up and they get a pay rise. But as the government gives with one hand, it snatches away with the other.
‘At first glance low-paid workers might look quids in, but on closer inspection the chancellor is really rewarding them with an income cut. Many workers on the minimum wage will lose out as a result of the plans. It is dishonest for ministers to claim that people will be better off. They won’t.
‘Any gain to families from the enhanced minimum wage and a higher personal tax allowance is going straight back to the Treasury through the changes to tax credits.
‘The chancellor’s pay con-trick will create chaos to household finances and plunge more families into poverty.’
