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Workers' Fears Of Taking Brunt Of Welfare Cuts

There are growing concerns that welfare cuts totalling £12bn could hit people on low wages especially hard, as the summer Budget is revealed this week.

The Government has already indicated that it intends to slash welfare budgets, stating that it would end a culture of "welfare dependency" and focus instead on encouraging people to work.

But predictions that the cuts will fall on in-work benefits like working tax credits, child tax credits and housing benefit, have raised questions about how welfare can be reduced, substantially reducing incomes, without an increase to the minimum wage.

In Glasgow, where almost half of those who live in poverty are in working households , many are expecting to be affected.

Supermarket delivery driver Mark Payne says he and his family would struggle to survive if the £7,000 he receives in tax credits no longer topped up his salary. He works a 35-hour week delivering groceries, earning £13,000 a year.

"If they cut tax credits again, to be honest I don't have a clue what I'm going to do. I don't have enough to live on properly as it is, which means I don't heat the house, you buy cheaper food. I'll always feed and clothe my kids as well as I can, but something will have to give if they cut it again."

"[The Budget] has constantly been on my mind," Mr Payne added. "I knew it was on the cards. They are just going to cut, cut, cut…I don't know what they're going to cut. I've got nothing to left to give."

The focus on cutting in-work benefits has placed renewed emphasis on the root causes of benefit dependency and the size of the welfare bill.

There are some estimates that whilst £8bn on benefits goes to the unemployed, an estimated £76bn goes to people who are working.

That has led to calls to tackle practices by companies whose low pay is effectively subsidised by the benefits which keep workers afloat.

The leader of the Conservatives in Scotland, Ruth Davidson, says it was hard for small businesses to meet the cost of paying higher wages.

"You've got to make sure that it's something that fits for all. The last thing you want to see is that small businesses can't expand.

"I understand that there have been lurid headlines and that is frightening for some people, but this is about making sure that people are less reliant on welfare, and more independent because they have more income of their own means.

"So that's increasing wages above inflation, taking less away in taxation and making sure people have a higher standard of living."

But one small business owner in Glasgow who does pay all staff the Living Wage, said that requiring companies to pay more would help break dependency on benefits, as well as addressing low productivity, which places the UK well below other developed nations.

"People should expect that if they do a 40-hour work and are productive within their job, they should have the basic things in life," said Philip Kilpatrick, one of the owners of Redmond's Bar in Glasgow's East End.

"We believe that makes a better member of staff and a more productive member of staff, and it's best for us.

"It's very hard to ask a business, to increase their wage bill substantially without either regulating it or actually giving them some help to do it. But if we regulate it, then it's just something that has to be done."