Low-pay bosses 'get tax subsidy'

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The Independent Online
There are now twice as many low-paid breadwinners claiming family credit to support their children than there were five years ago, according to a Labour Party analysis of official figures.

During that period, there was a pounds 21 increase in average weekly payments - pounds 15 more than the amount needed to keep pace with inflation.

The figures reveal the increasing extent to which taxpayers are forced to subsidise some employers who are maximising profits by minimising wages, according to Ian McCartney, Labour's employment spokesman.

Family credit has cost pounds 6.3bn over the past six years, or pounds 250 for every one of Britain's 25m taxpayers, Mr McCartney was told in a parliamentary answer by the Department of Social Security.

Mr McCartney said the bill had rocketed by 244 per cent in five years and was set to increase to more than pounds 2bn a year. He pointed out that it came on top of the estimated pounds 500m paid out in other benefits, including help with housing and council tax payments as a consequence of low pay.

Mr McCartney said the figures demonstrated the need for a national minimum wage which Labour was committed to introduce.

"It is typical of the Tories that they oppose a national minimum wage to stop the exploitation of low-paid workers and the taxpayer by some cowboy employers, while defending the fat-cat utility bosses who earn more in one hour that thousands of people earn in six months."

Average weekly family credit payments rose from pounds 30 in 1990-91 to pounds 51 in 1995-96 - an increase of almost 70 per cent. Over the same period, inflation increased by 19.5 per cent, Mr McCartney pointed out.

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