Poor Families Likely To Be Hit Unfairly By £12bn Welfare Cuts

David Cameron’s plans to focus £12bn of welfare cuts on slashing tax credits and other working-age benefits look set to be “extremely unfair” on the families who will lose money, the right-leaning Institute of Economic Affairs thinktank has said. The IEA supported the need for making savings in the welfare budget a spokesman said but the composition of the cuts “looks set to be extremely unfair on the working-age population”. He added: “Whilst important for getting cash to relatively poor families, tax credits discourage people from earning more money by creating high effective marginal tax rates, leading to bunching around part-time work hours. They could be reformed in a way which encourages full-time work. But simply salami-slicing the value of tax credits will hit certain households hard without creating this positive dynamic.” Read more on the Guardian website.