This week is the Budget, an important time in the political calendar where the Chancellor is likely to make key decisions on Government spending, borrowing, and taxes for the next financial year.
For Labour, the Budget needs to pass two tests- on jobs and growth to boost our economy and put in place the long-term reforms we need; and on fairness so that families on low and middle incomes do not bear the heaviest burden.
I have had many letters from local residents over the last few weeks who have raised real concerns about the proposed cuts to Child Benefit, cuts to Working Families Tax Credits, and cost in the price of fuel. Squeezing family incomes at the current time when the economy is still in a very precarious state will have the very opposite effect to the spirit of optimism for the economy that we need to see and to keep alive.
Under current Government proposals for a change to Child Benefit, a two-earner family each earning £42,000, a total of £84,000, would keep all their benefit, but a single-earner family on £43,000 would lose it all at a stroke. Ed Miliband has already called on David Cameron and George Osborne to urgently review this planned change.
One of my constituents, a mother with a 17 month old child and another baby due in September, has contacted me with her personal concern over this issue. Like many mothers, she would like to temporarily stop working to look after her two young children after the birth of their second child. The cost of child care is so high it would barely be covered by the cost of her working wage.
Her partner is therefore looking to increase his wage to compensate for the loss of her earnings, and in doing so his income is likely to exceed the £42,475 threshold. By doing this the family will lose their child benefit at a time when they will need it the most- at a cost of nearly £2,000 a year.
The Government also plan to make changes to the eligibility for Working Families Tax Credits, which will affect parents in part-time work by up to £74 per week. From April, couples with children earning less than around £17,700 will need to increase the number of hours they work from a minimum of 16 to 24 hours per week or they will lose all their working tax credit of £3,870 per year.
In Feltham and Heston there are an estimated 855 households with 1820 children set to be affected by this cut. Also in Feltham and Heston there are approximately 6 people unemployed for every Jobcentre Plus vacancy and I am very concerned, as are many local people, about difficulties in finding the extra hours needed to be eligible for tax credits.
With our economy stalled and unemployment rising, we need to do better and not make life harder for so many families. That is why I am hoping the Chancellor rethinks his planned changes to Child and Working Tax Credits. I have recently written to Mr Osborne and asked him to do this, and also to help support families by reducing the strain on motorists and households by temporarily reducing VAT by 2.5%. This would reduce the cost of fuel by around 3p per litre of petrol (around £1.35 for an average tank of fuel).
I am proud of the work Hounslow Council, local businesses and local agencies are doing to tackle unemployment, and in particular address youth unemployment, which is growing at a faster rate here than across the country. We are seeing excellent local apprenticeships develop and real partnership between our schools, colleges, and local industry.
It is vital for the future of our community to keep employment opportunities for all high on our national political and local agendas, and I hope that the Budget this week is able to provide the support that our local families and businesses so desperately need.
