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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. 

Photo: Getty
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The rise of the green mayor – Sadiq Khan and the politics of clean energy

At an event at Tate Modern, Sadiq Khan pledged to clean up London's act.

On Thursday night, deep in the bowls of Tate Modern’s turbine hall, London Mayor Sadiq Khan renewed his promise to make the capital a world leader in clean energy and air. Yet his focus was as much on people as power plants – in particular, the need for local authorities to lead where central governments will not.

Khan was there to introduce the screening of a new documentary, From the Ashes, about the demise of the American coal industry. As he noted, Britain continues to battle against the legacy of fossil fuels: “In London today we burn very little coal but we are facing new air pollution challenges brought about for different reasons." 

At a time when the world's leaders are struggling to keep international agreements on climate change afloat, what can mayors do? Khan has pledged to buy only hybrid and zero-emissions buses from next year, and is working towards London becoming a zero carbon city.

Khan has, of course, also gained heroic status for being a bête noire of climate-change-denier-in-chief Donald Trump. On the US president's withdrawal from the Paris Agreement, Khan quipped: “If only he had withdrawn from Twitter.” He had more favourable things to say about the former mayor of New York and climate change activist Michael Bloomberg, who Khan said hailed from “the second greatest city in the world.”

Yet behind his humour was a serious point. Local authorities are having to pick up where both countries' central governments are leaving a void – in improving our air and supporting renewable technology and jobs. Most concerning of all, perhaps, is the way that interest groups representing business are slashing away at the regulations which protect public health, and claiming it as a virtue.

In the UK, documents leaked to Greenpeace’s energy desk show that a government-backed initiative considered proposals for reducing EU rules on fire-safety on the very day of the Grenfell Tower fire. The director of this Red Tape Initiative, Nick Tyrone, told the Guardian that these proposals were rejected. Yet government attempts to water down other EU regulations, such as the energy efficiency directive, still stand.

In America, this blame-game is even more highly charged. Republicans have sworn to replace what they describe as Obama’s “war on coal” with a war on regulation. “I am taking historic steps to lift the restrictions on American energy, to reverse government intrusion, and to cancel job-killing regulations,” Trump announced in March. While he has vowed “to promote clean air and clear water,” he has almost simultaneously signed an order to unravel the Clean Water Rule.

This rhetoric is hurting the very people it claims to protect: miners. From the Ashes shows the many ways that the industry harms wider public health, from water contamination, to air pollution. It also makes a strong case that the American coal industry is in terminal decline, regardless of possibile interventions from government or carbon capture.

Charities like Bloomberg can only do so much to pick up the pieces. The foundation, which helped fund the film, now not only helps support job training programs in coal communities after the Trump administration pulled their funding, but in recent weeks it also promised $15m to UN efforts to tackle climate change – again to help cover Trump's withdrawal from Paris Agreement. “I'm a bit worried about how many cards we're going to have to keep adding to the end of the film”, joked Antha Williams, a Bloomberg representative at the screening, with gallows humour.

Hope also lies with local governments and mayors. The publication of the mayor’s own environment strategy is coming “soon”. Speaking in panel discussion after the film, his deputy mayor for environment and energy, Shirley Rodrigues, described the move to a cleaner future as "an inevitable transition".

Confronting the troubled legacies of our fossil fuel past will not be easy. "We have our own experiences here of our coal mining communities being devastated by the closure of their mines," said Khan. But clean air begins with clean politics; maintaining old ways at the price of health is not one any government must pay. 

'From The Ashes' will premiere on National Geograhpic in the United Kingdom at 9pm on Tuesday, June 27th.

India Bourke is an environment writer and editorial assistant at the New Statesman.

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