DURING the General Election campaign David Cameron promised that he wouldn’t cut tax credits yet next year but thousands of people in Warrington will find themselves much worse off.

The average loss, according to the independent Institute for Fiscal Studies (IFS), is £1,000 a year. That is the difference between getting by and getting into debt for many families.

In Warrington North these measures will have an impact on the 6,100 families with children claiming tax credit.

Of those, 4,400 are working families with the number of children in working families receiving tax credit totalling 7,900.

How has this happened?

‘The increase in the national minimum wage will account for 13 per cent of the cuts to tax credits and other benefits and it won’t apply to self-employed or those under 25.’ The Government is lowering the level at which working tax credits are withdrawn, from £6,420 to £3,850.

At the same time it is increasing the rate at which credits are withdrawn from 41 per cent to 48 per cent and lowering the level at which child tax credits are being taken away.

The IFS has also confirmed that it is 'arithmetically impossible' for the Government’s national minimum wage to make up for these losses. The increase in the national minimum wage will account for just 13 per cent of the cuts to tax credits and other benefits (about £150 per year) and, of course, it won’t apply to those who self-employed or under 25.

Tax credits in their current form were introduced in 2003 with the aims of 'tackling poverty' and making 'making work pay'.

There is substantial evidence that they have been successful in both those aims and little evidence that they have played any part in depressing wages.

What This means is that people doing the right thing and going out to work for low wages will be penalised.

Once income tax and National Insurance are taken into account, they will take home only 20p for every pound earned over the income tax allowance.

That 80 per cent tax rate is twice that paid by a millionaire.

That’s not encouraging work and supporting people who do the right thing. It’s a work penalty inflicted on the poorest.