Robert Brown welcomes Tory u-turn over tax credits – but slams Tories over wage discrimination against young people

Councillor Robert Brown, Liberal Democrat Scottish Parliament candidate for Rutherglen and lead candidate for Glasgow Region, has welcomed the u-turn by the Conservative Government in the Autumn Statement over the cut to tax credits for working families. The Chancellor of the Exchequer was forced into his u-turn after massive protest across the country and a defeat in the House of Lords for his proposals.

However, Mr Brown slammed the lack of progress on support for under 25 workers who are set to lose up to £11,000 compared to older colleagues by 2020 under the Government’s flawed minimum wage proposals.

Robert Brown said:

“I am very glad at the key part played in this reversal on the tax credit cut by the Liberal Democrats. The tax credit cut would have hit thousands of local families so the Chancellor’s enforced change of heart is an early Christmas present for many working families.

The Tory policy on cutting tax credits was always a nonsense. The idea of cutting income for people already on low incomes who are in employment went against any idea of common sense. However it is also a useful warning of just how nasty the Conservatives in government can be when they have a majority in the House of Commons.

However the situation for younger workers remains dire because they are excluded from the new “Living Wage” proposals which only apply to people over 25.

I strongly support the hike in the minimum wage but it is highly unsatisfactory that it discriminates against people under 25 doing the same job as older employees and often with family responsibilities of their own. It is estimated that more than 39,000 people aged 16 – 24 were employed in minimum wage jobs in Scotland in 2014.

The Tories are hurting young people who are starting out in their careers. George Osborne’s claims about supporting employment will ring hollow for the thousands of young people in Scotland set to miss out on any pay increase next year.”

 

Appendix:

The table below shows the calculations of these figures.

We assume a 45p per year increase in the over 25 rate (the new national living wage) which is the average rise needed to hit the £9 per hour by 2020 announced by the Chancellor.

We assume a 1.57% rise in the under 25 rate (the NMW) which is based on the average increases seen in that between 2011 and 2015.

Difference in Minimum Wages - Over 25s compared to under 25s

Hourly rate

 

 

 

 

 

 

 

2016

2017

2018

2019

2020

Total increase

Over 25

£            7.20

 £            7.65

 £            8.10

 £            8.55

 £            9.00

 £                 1.80

Under 25

 £            6.70

 £            6.86

 £            7.03

 £            7.21

 £            7.38

 £                 0.68

Difference

£            0.50

 £            0.79

 £            1.07

 £            1.34

 £            1.62

 £                 5.31

 

 

 

 

 

 

 

40 Hour Week

 

 

 

 

 

 

 

2016

2017

2018

2019

2020

Total increase

Over 25

£        288.00

 £        306.00

 £        324.00

 £        342.00

 £        360.00

 £              72.00

Under 25

 £        268.00

 £        274.59

 £        281.34

 £        288.26

 £        295.35

 £              27.35

Difference

£          20.00

 £          31.41

 £          42.66

 £          53.74

 £          64.65

 £            212.46

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per Year

 

 

 

 

 

 

 

2016

2017

2018

2019

2020

Total increase

Over 25

£  14,976.00

 £  15,912.00

 £  16,848.00

 £  17,784.00

 £  18,720.00

 £        3,744.00

Under 25

 £  13,936.00

 £  14,278.68

 £  14,629.79

 £  14,989.53

 £  15,358.11

 £        1,422.11

Difference

£    1,040.00

 £    1,633.32

 £    2,218.21

 £    2,794.47

 £    3,361.89

 £      11,047.8

Liberal Democrat analysis of Low Pay Commission data showed 25,577 people aged 16 - 20  and 13,440 people aged 21 – 24 were employed in minimum wage jobs in Scotland in 2014. 

1. Increases to Over 25 rate based on annual increase of 45p - the average necessary to hit £9 by 2020    

2. Increase to Under 25 rate based on average increase of 1.57% - the mean annual increase in the current minimum wage between 2011 and 2015

3. Total Increase/ Difference equals the cumulative difference in each year to 2020  - i.e. total difference

Liberal Democrat analysis of Low Pay Commission data showed 25,577 people aged 16 - 20  and 13,440 people aged 21 – 24 were employed in minimum wage jobs in Scotland in 2014. 


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