Majority of households 'better off'
The Government has hit back at claims that families are facing a financial squeeze as a result of Chancellor George Osborne's tax and benefits changes, insisting the overwhelming majority of households would be better off.
The Treasury released figures which, it said, showed that the bottom 80% of households in terms of income would, on average, gain from the changes which come into effect today.
The financial education charity Credit Action has previously calculated that households were set to lose an average of £200 a year, but while the Treasury acknowledged that average impact across the population was a "marginal loss", it said the figures were "heavily skewed" by the losses at the top of the income range.
It said that the top 10% of households would suffer the most as they do not gain from the increase in personal allowances and would pay the most increased national insurance contributions.
Labour meanwhile issued their own figures which, they said, showed that the changes, combined with January's VAT rise, could leave some families more than £1,700 a year worse off.
Shadow chancellor Ed Balls said that what he called "Black Wednesday" would hit women with children hardest of all.
According to the Treasury figures, a dual-earner couple with one child and a combined income of £25,000 will be £12 a week better off, a dual-earner couple with two children on £60,000 will gain £5 a week, and a lone parent with one child on £12,500 will gain £10 a week. In contrast, a single-earner couple with no children on £170,000 will lose out to the tune of £35 a week.
However Labour published figures compiled by the independent House of Commons Library which, it said, showed that a couple with three children, with each parent earning £26,000, would lose more than £1,700 a year if the VAT rise is taken into account.
Mr Balls said: "Today will be a Black Wednesday for millions of families across Britain. David Cameron promised to lead the most family-friendly government ever and George Osborne said we're all in this together," he said. "So why are their changes to tax and benefits coming into force today hitting women harder than men and taking so much support from children, with families on low and middle incomes being hit the hardest of all?"
However Treasury Minister Justine Greening said that the Government had taken action to ensure that the burden of tackling the deficit would be borne by those best able to shoulder it