VULNERABLE working families across the county are set to suffer after the Government announced £12bn worth of benefit cuts, it was warned yesterday.

Chancellor George Osborne revealed working age benefits would be frozen for four years and the family benefits cap reduced to £20,000-a-year outside London.

From 2017, tax credits and universal credit will be restricted to two children per family.

The Government will introduce a national living wage of £7.20 per hour for those aged 25 and over starting in April 2016, plus free childcare for all parents of up to 30 hours per week from 2017.

But warnings have come from across Oxfordshire that working families in the county could bear the brunt of the changes.

Manager of Oxfordshire Welfare Rights, Suzy Drohan, said the advice centre was preparing for a huge rise in the number of families needing support. She said: “We understand that four times as many people in Oxford are likely to be affected by the benefit cap [than before].

“The cuts will impact on working families and unless wages can keep pace with the cost of living and the additional costs of childcare, a large amount of families are going to find big reductions in income to manage their family life and this will put pressure on being able to pay rent, their utilities, their essentials.

“What people need to realise is that you might not currently be on benefits and your life may be quite wonderful but nobody knows what is around the corner.”

Mother-of-two Safia Baker cares full-time for husband John, 48, who suffers with epilepsy, and receives carers’ allowance.

She also cares for 11-year-old son Usman, who has the rare genetic condition Phenylketonuria, and had to give up work as a personal assistant at Bayards Hill Primary School to care for him full-time.

The 45-year-old, from Barton, said: “I think vulnerable families will be affected. What are they going to survive on?”

Mrs Baker said she thought it was “unfair” child tax credit would be limited to two children after 2017.

She added: “I think if you are working, you should be able to claim for up to a least three children because I think people who are working all need the support.”

Mother-of-three Naomi Taylor said parents wanting to stay at home with their newborn children needed more support.

The 37-year-old, of Witney, said she and husband Martin lost their home six years ago after having triplets and struggling to afford the mortgage.

She said families could be hit hard by the benefits cap.

Mrs Taylor, deputy manager at Witney’s Royal Mail base, said: “When I was a kid £20,000 was a lot but now it’s not. I would not be able to live on that.”

She said before her children started at Witney’s The Batt CofE School, she was paying about £500 a week for childcare.

Mrs Taylor added: “I wanted to stay at home with the children until they were three so child tax credits were helpful to us.

“Kids need their mums and dads at home. The Government keeps stripping them of benefits to get them back to work but kids today, they don’t see mum and dad.”

* Reporting by Annabal Bagdi, Ben Holgate, Gill Oliver and Luke Sproule


Oxford Mail:

  • Concern: Lawyer Mark Emery

Many small firms will struggle to afford the hike in the national living wage, according to employment lawyer Mark Emery.

Mr Emery, a partner at Withy King in Oxford, said the Chancellor’s decision to push up the minimum wage from £6.50 to £7.20 from April next year and £9 from 2020 would be a problem for many traders.

He said: “An awful lot of businesses are going to ask ‘can we afford it?’”

But he said the other side of the coin was that firms would pay less National Insurance for employees and corporate tax will fall from its level of 20 per cent to 19 per cent in 2017 and 18 per cent in 2020.

The Chancellor also announced a new apprenticeship levy but employers who take on trainees will be eligible for a rebate.

Mr Emery added: “That will encourage more big firms to take on apprentices.

“But my concern is the underlying economy, because there is no push or driving force in this Budget.

“Also, there was no mention of infrastructure, such as road and rail, which traders and firms rely so heavily on.”


Changes to inheritance tax could mean more family homes on the property market.

George Osborne said the Government would introduce new rules meaning a couple will be able to pass on up to £1m of the value of their home to their children or grandchildren without paying tax on it, up from the previous £650,000. 

People will also have the option to move to smaller, cheaper homes but keep the allowance based on the value of their previous home.

Carter Jonas estate agent partner Mark Charter said the change could benefit everybody in the city, not just those with homes worth a lot of money.

He said: “The benefit is that it will help recycle houses which will benefit everyone really.

“It is a good step because what the housing market does not need is a lot of people causing a logjam staying in their larger homes.

“That is very important in maintaining market activity and recycling houses.

“The step above affects the step below. This change is the best of both worlds really.

“It has given people a big allowance but allows them the benefit of moving.”


Oxford tax adviser Paul Woodward praised the lowering of the corporation tax from the current 20 per cent rate to 19 per cent in 2017 and 18 per cent by 2020. 

Mr Woodward, senior tax manager at Critchleys, said: “This is easily one of the most competitive rates in the EU, if not the world.”

However, he said that the corporation tax reduction would be offset by “two clawbacks”. The first is the introduction of the minimum national living wage, of £7.20 per hour. The second is the introduction of a 7.5 per cent income tax charge on dividend income from April 2016. He said that many small business owners, both individuals and married couples, chose to run their enterprises as limited companies rather than as sole traders or partnerships, in order to pay themselves via a dividend. 

Dividends do not incur a National Insurance Contribution charge.

However, the new dividend charge would reduce the net tax benefit of dividend payments.

On the other hand, the government is introducing a £5,000 tax-free threshold for dividend payments from April 2016.


Oxford City Council Leader Bob Price said devolution was not applicable to the city. 

The Chancellor said that “devolution within England has only just begun,” calling on local authorities to follow Greater Manchester’s lead and introduce directly-elected mayors in return for more devolution powers.

However, Mr Price said Oxford preferred to follow a more consultative approach, with the council leader elected by the city’s 48 councillors for a four-year term.

“We’ve traditionally taken the view in the city that there is no great value in the mayor model. It puts too much power in the one person.”

He added that Oxford’s boundaries, which largely track the outer ring roads and Grenoble Road to the south, were “too small an area” to be applicable to the Conservative Government’s devolution plans.

Mr Price said the city council was working with the other councils in Oxfordshire to work out the best structure to plan collaboratively for transport, skills and economic development.


Oxford Mail:

  • Unfair: Annie Sloan

Plans to extend Sunday trading hours were slammed as a “complete and utter disaster” by Annie Sloan, who runs an interiors shop in Cowley Road.

Artist and author Ms Sloan, whose chalk-based paints are stocked by more than 450 independents around the country, said the policy, confirmed in the Budget, would put many small traders out of business.

She said: “It’s a terrible idea.

“It’s fine for Tesco and the DIY giants. It won’t matter if they open more hours as they have endless staff.

“But it will pile on more strain on to small shops who have only one or two employees.

“Opening on Sunday for many is difficult anyway but longer hours will be impossible.”

Ms Sloan, who opened her first shop in Oxford 15 years ago, was disappointed there was no help from the Chancellor for small traders struggling to pay business rates.

She added: “My fear is we’ll end up with nothing but big chain stores in our high streets and online.

“There’s no parking in town anymore and rates are ridiculously high so no wonder small shops are finding it harder.
“This government doesn’t understand that small businesses are vital because we’re what makes the high street so colourful.”


Nothing that helps manufacturers or exporters, was company boss Antony David’s verdict on the Budget.

Mr David runs Begbroke-based Solid State Logic, which exports digital sound-mixing consoles around the world.

He said: “I would have liked to have seen more encouragement for schools and universities to promote science, technology, engineering and maths subjects, because there’s a big skills shortage here in

Oxfordshire and all around the UK but there was nothing about that in the Budget.

“There was nothing about research and development either which was surprising.”

Mr David, whose firm is owned by rock star Peter Gabriel, was disappointed the Chancellor did not talk about boosting export in business.

He added: “As an exporter, we didn’t hear anything from him about support for small and medium firms trading overseas.

“We keep hearing how we must improve our export business to boost the economy but there was nothing to help.

“There was also nothing about the environment, in fact there seems to be less support now for wind and solar farms.

“I would describe this Budget as a missed opportunity.”


Unlike many other benefits which have been affected by the budget there are no major changes to state pensions.

They are currently ring-fenced and Chancellor George Osborne did announce plans to change that.

But Old Marston pensioner Bill Jupp, who lives with his wife Barbara, said the Government should have increased the amount it pays to the elderly.

The basic state pension is £115.95 a week.

Former car industry worker Mr Jupp, 84, said: “I am not happy with the budget at all.

“If I did not own my own house and I had to pay our rent I would be in poverty street. It is a nothing pension.

“I am not alone, this is the same for people all over the country. It is amazing that there is not a hue and cry in the country. 

“People do not fight for the state pension. It is the bedrock of pensions.

“The best thing in the world is being able to pay tax and those who do not are those who suffer.”


Oxford Mail:

  • Struggle: Sarah Steel is worried about the impact of the increase in free childcare

Parents will be delighted the Chancellor doubled the amount of free childcare for working families.

Three and four-year-olds already receive 15 hours of free nursery time but Mr Osborne has increased it to 30 hours from September 2017.

But Sarah Steel, who runs six nurseries across Oxfordshire and Gloucestershire, warned nursery providers like her own firm, The Old Station Nursery, will struggle to cope with the new system.

According to the Pre-School Learning Alliance, the existing scheme fails to cover the cost of the child’s nursery place, leaving a shortfall of £900 per child per year. 

Ms Steel, who employs 90 staff, said this, combined with  the national living wage rising from £6.50 an hour to £7.20 from April 2017 and £9 an hour from 2020, is worrying.

She said: “The average nursery is losing money so I cannot put up the salaries of my staff unless the funding increases. The Government has ignored our grumbles for years but we cannot put up wages without going out of business.

“We will either have to pass on the cost to parents in higher fees or the local authority will have to increase funding.”


The amount people will be able to earn without paying tax is to be increased by £400 by the next financial year.

Chancellor George Osborne said the tax free allowance would rise from £10,600 to £11,000 

He pledged that this will eventually rise to £12,500.

It means from the 2016-17 financial year someone earning £18,000 a year would only pay tax on £7,000 of their salary.

Cook Freda Bird from Greater Leys said she felt that the allowance should be higher.

The 45-year-old, who has four grown-up children, said: “It is good news but it is a shame it was not a lot more to help people on lower incomes.

“The cost of living has gone up but wages have not.

“I would like to see the minimum tax free allowance be at about £13,000.

“It is more money to put aside for when I get older.

“At the moment we are able to put away the bare minimum.”


Oxford accountant Iain Ferrie thinks the raising of the tax-free personal allowance from £10,000 to £11,000 in April 2016 is good news for all workers. 

The associate director of private client tax at Shaw Gibbs in Summertown said: “The personal allowance has to benefit everybody.”

The Chancellor indicated the personal allowance would rise to £12,500 by the end of Parliament.

Mr Ferrie said the raising of threshold for the 40 per cent income tax rate from £42,385 currently to £43,000 would take 130,000 taxpayers out of the higher rate, which was “higher than what I expected”.  He said: “I guess if you’re a 40 per cent taxpayer you have got to be pleased.”

He also welcomed the introduction of a £175,000 allowance for the inheritance tax, in regards to a family property passed on to children or grandchildren. This will complement the existing £325,000 allowance on an estate per individual, enabling an individual to pass on £500,000 without incurring an inheritance tax, or £1m for a couple. 

He said: “Summertown property is ridiculous in terms of property prices, so the inheritance tax [initiative] is good for clients in this area.”