Osborne risks wrath of the mummies

Working mothers face a real-terms cut in benefits as a result of George Osborne's autumn statement, prompting Labour to attack the chancellor's 'mummy tax'.

Like a raft of other working-age benefits, maternity allowance will increase by one per cent for the next three years – well below the rate of inflation.

Labour said the real-terms cut effectively represented a £180 "mummy tax on working women".

"It's bad for the whole family," shadow women's minister Yvette Cooper said.

"Evidence shows women on low income are less likely to take their full maternity leave because they can't afford to stay off work.

"David Cameron and George Osborne haven't a clue about the pressures facing new mums worried about returning to work and making ends meet. Time and again they are making new mums in low paid work pay for their economic failure."

Yesterday George Osborne said the slowed benefit upratings, which will have to be legislated on in the new year to take effect, were targeted at the work-shy.

"Fairness is about being fair to the person who leaves home every morning to go out to work and sees their neighbour still asleep, living a life on benefits," he told MPs.

Around 232,000 households claim statutory maternity pay each year. Those on the minimum wage will lose around £54 over the 33-week period. In real-terms this represents a cut of £180.

"We have to deal with a record deficit," the prime minister's spokesperson said when asked about the 'mummy tax' this morning.

"That means difficult decisions to reduce benefits, cut public spending by government departments and increase taxes. We've sought to do that in a fair way – that means everyone needs to make a contribution."

Analysis from the Institute for Fiscal Studies think-tank suggested the autumn statement was hitting couples without children and home-owning couples with children most of all. Single people without children are set to gain significantly when the changes take effect.