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The winners and losers of April's tax and benefit changes

Bereaved parents with young children get less, while higher-paid earners keep more. 

In April, the month of sunshine and showers, the fiscal winds change. The government's tax hikes or cuts start with the new financial year - and so do the benefit cuts that affect some of Britain's poorest families.

Between April 2016 and April 2017, the Chancellor has changed, and the UK voted for a Brexit likely to have a seismic effect on the economy. But many of the changes arriving this April have been planned well in advance. Many of them come from the Welfare Bill dreamed up in the days of the austerity Chancellor George Osborne, who famously derided those "living a life on benefits".

So who will be the losers of the spring shake-up, and who wins big? 


Workers who are sick

Those claiming the work-related activity component of Employment and Support Allowance, a benefit available for those who are unable to work because of sickness, but are expected find work in future, will lose £30 a week

New ESA claimants from 3 April 2017 receive the same payment as healthy unemployed claimants on Jobseeker's Allowance, or Universal Credit. This is typically up to £73.10 a week. 

However, there are some small improvements for ESA claimants. Those who manage to undertake permitted work and earn between £20-£115.20 a week will no longer be penalised. 

And if ESA claimants are sanctioned - a controversial tactic of punishing claimants who "break the rules" by witholding payments - they will receive 80 per cent of the current rate, rather than the 60 per cent at present. 

Widowed parents with young children

If losing your partner when you have small kids wasn't awful enough, from 6 April 2017 the government is cutting the amount bereaved parents can claim in support. 

Families previously benefited from a lump sum, followed by payments until the youngest child leaves school. 

However, while the government's overhaul will benefit childless widowed partners, who will get a payment for the first time, it now limits payments to 18 months. According to Georgia Elms of the charity Widowed and Young, "many newly widowed parents stand to lose thousands of pounds under the new system".

Low-paid large families

How many children should you have? Two, according to the government, which has stopped child tax credits for any third (or more) child born on or after 6 April 2017 (there is a similar rule for families on Universal Credit). 

Child tax credits are comparatively generous (paying up to £2,780 a year per child), and provide vital support for low-income families. 

There are some exceptions for the third child rule, such as a mother who has been raped - but the mother would have to "prove" this had happened. Given the low prosecution rates for official rape trials, this has caused outcry, with SNP MP Alison Thewliss describing it as a measure that will bring "trauma and humiliation". 

Larger families who claim housing benefit will also see a similar cut-off, with only two children taken into consideration when the payment is calculated. 

Stay-at-home parents

Parents claiming Universal Credit - the new, all-encompassing benefit replacing other payments - must start looking for work when their youngest child is three.

New parents

Low-income couples starting a family after 6 April 2017 will no longer be able to claim the family element in tax credits - worth up to £545 a year. 

Unemployed youngsters

From April 2017, in certain areas, Universal Claimants aged 18-21 will have to apply for training, apprenticeships or do a work placement after six months, or lose their payment. They will also lose automatic eligibility for housing benefit. 


Minimum wage workers

The minimum wage will rise 30p to £7.50 for workers aged 25 or over. For others, here are the new rates:

  •  21 to 24 - £7.05
  • 18 to 20 - £5.60
  • Under 18 - £4.05

However, apprentices must put up with a measly £3.50 an hour.

Higher-paid workers

The personal tax allowance - the amount you can earn before you pay tax - will rise to £11,500 a year. The higher rate tax band has also shifted upwards from £43,000 to £45,000. This means workers earning £43,000 or £44,000 will now pay the basic 20 per cent tax rate on all their income. 

Meanwhile, tax free Individual Savings Accounts (ISA) allowance will go up to £20,000 in 2017-18, from £15,240 in 2016-17. This benefits higher-paid workers the most, because only they are likely to be able to have enough cash spare to max out their savings allowance in the first place.

Julia Rampen is the digital news editor of the New Statesman (previously editor of The Staggers, The New Statesman's online rolling politics blog). She has also been deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines. 

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Our union backed Brexit, but that doesn't mean scrapping freedom of movement

We can only improve the lives of our members, like those planning stike action at McDonalds, through solidarity.

The campaign to defend and extend free movement – highlighted by the launch of the Labour Campaign for Free Movement this month – is being seen in some circles as a back door strategy to re-run the EU referendum. If that was truly the case, then I don't think Unions like mine (the BFAWU) would be involved, especially as we campaigned to leave the EU ourselves.

In stark contrast to the rhetoric used by many sections of the Leave campaign, our argument wasn’t driven by fear and paranoia about migrant workers. A good number of the BFAWU’s membership is made up of workers not just from the EU, but from all corners of the world. They make a positive contribution to the industry that we represent. These people make a far larger and important contribution to our society and our communities than the wealthy Brexiteers, who sought to do nothing other than de-humanise them, cheered along by a rabid, right-wing press. 

Those who are calling for end to freedom of movement fail to realise that it’s people, rather than land and borders that makes the world we live in. Division works only in the interest of those that want to hold power, control, influence and wealth. Unfortunately, despite a rich history in terms of where division leads us, a good chunk of the UK population still falls for it. We believe that those who live and work here or in other countries should have their skills recognised and enjoy the same rights as those born in that country, including the democratic right to vote. 

Workers born outside of the UK contribute more than £328 million to the UK economy every day. Our NHS depends on their labour in order to keep it running; the leisure and hospitality industries depend on them in order to function; the food industry (including farming to a degree) is often propped up by their work.

The real architects of our misery and hardship reside in Westminster. It is they who introduced legislation designed to allow bosses to act with impunity and pay poverty wages. The only way we can really improve our lives is not as some would have you believe, by blaming other poor workers from other countries, it is through standing together in solidarity. By organising and combining that we become stronger as our fabulous members are showing through their decision to ballot for strike action in McDonalds.

Our members in McDonalds are both born in the UK and outside the UK, and where the bosses have separated groups of workers by pitting certain nationalities against each other, the workers organised have stood together and fought to win change for all, even organising themed social events to welcome each other in the face of the bosses ‘attempts to create divisions in the workplace.

Our union has held the long term view that we should have a planned economy with an ability to own and control the means of production. Our members saw the EU as a gravy train, working in the interests of wealthy elites and industrial scale tax avoidance. They felt that leaving the EU would give the UK the best opportunity to renationalise our key industries and begin a programme of manufacturing on a scale that would allow us to be self-sufficient and independent while enjoying solid trading relationships with other countries. Obviously, a key component in terms of facilitating this is continued freedom of movement.

Many of our members come from communities that voted to leave the EU. They are a reflection of real life that the movers and shakers in both the Leave and Remain campaigns took for granted. We weren’t surprised by the outcome of the EU referendum; after decades of politicians heaping blame on the EU for everything from the shape of fruit to personal hardship, what else could we possibly expect? However, we cannot allow migrant labour to remain as a political football to give succour to the prejudices of the uninformed. Given the same rights and freedoms as UK citizens, foreign workers have the ability to ensure that the UK actually makes a success of Brexit, one that benefits the many, rather than the few.

Ian Hodon is President of the Bakers and Allied Food Workers Union and founding signatory of the Labour Campaign for Free Movement.