Families facing 'hit of 5p in £1'

Families are facing a tax and benefit hit next month equivalent to an income tax rise of up to 5p in the pound, Labour has claimed.

Research by the House of Commons Library suggested couples with children and a household income of between 44,000 and 52,000 would lose at least 1,300 over the next year.

Labour leader Ed Miliband accused the coalition government of deepening what he calls the "cost of living crisis" for ordinary families. The calculations, requested by Labour backbencher Fiona O'Donnell, take into consideration changes to income tax, national insurance, tax credits, VAT and fuel duty.

They show that a 44,000-a-year single-earner household with two children will be 1,434 worse off across 2011/12 compared with 2010/11.

A dual-earner household on a combined 47,000-a-year, with two children, will lose 1,304. And a household with three children where the parents earn a combined 52,000-a-year will lose 1,886. Labour said the total losses were equivalent to between 4p and 5p. Mr Miliband said: "David Cameron is making the cost of living crisis worse by hitting ordinary families (and] selling middle and low-income earners down the river."