Households will be £974 a year worse off by next year’s general election under the tax and benefit changes since 2010, Labour said last night.
It seized on figures from the Institute for Fiscal Studies (IFS) which take account of all tax and benefit changes affecting households, including increases in the personal tax allowance, the rise in VAT and cuts to tax credits and child benefit. A family with children where both parents are working will be on average £2,073 a year worse off, and where only one parent is working they will be on average £3,720 a year worse off.
Labour released the analysis as David Cameron used a four-day regional tour to trumpet the £10,000 personal allowance that takes effect on Sunday. He said yesterday that another 255,000 people will be taken out of the tax net, bring the total to over three million since 2010, and 26 million people will receive a tax cut.
Labour’s new figures are on top of the impact of wages falling behind inflation, which the party says has left working people an average of £1,600 a year worse off since 2010.