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14 October 2015

There’s still time for the government to do the right thing on tax credits

George Osborne must rethink his approach on tax credits, says Owen Smith.

By Owen Smith

Labour is offering the Tories another chance to do the right thing on tax credits. We’ve tabled an amendment to the Welfare Bill that would stop these cuts in their tracks, which will be voted on in Bill Committee a week today (Tuesday 20th).

When the tax credit cuts were voted on first time round, the Treasury hadn’t done its homework, the Tories hadn’t consulted their MPs and the true scale of the cuts was unclear to the public.  One month later and all that’s changed. The Treasury has had its homework done for it by others, the Tories are divided over their impact and the true scale of the cuts has been made bluntly apparent to the three million working families who’ll be hit the hardest.

The Resolution Foundation, the IFS and the House of Commons Library all lay bare the reality of where these cuts will fall. In contrast to Cameron’s implausible rhetoric, they show clearly that the cuts are a penalty on work from the same old anti-worker Tories.  In fact, so heavy will these cuts fall on working families that the Tories are tearing themselves in two over them. Warnings of the new poll tax have been met with the widespread observation that the cuts relegate the Tories’ “workers’ party” claim even further, from lamentable to laughable.

With more light being shone on these cuts than David Cameron had either wanted or anticipated, it’s not surprising the public has reacted so strongly to their impact and to the sheer number of families who’ll be made worse off.  For a start, four in ten of all households will be hit one way or another by his changes to tax credits and benefits. On his specific cut to tax credits, three million in-work families will lose out by over a thousand pound a year – and the rise in the minimum wage does little to make up for it. 

It’s no wonder hundreds of thousands have signed petitions calling on the government to stop these cuts. Angry at how pre-election, unspecific cuts from shy Tory MPs have turned into post-election, targeted cuts from brazen Tory Ministers.  David Cameron should listen to these concerns and realise the debate of a month ago isn’t the debate of today. The facts have become clear and he should change his plans.

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My message for him is simple: these anti-worker tax credit cuts are not a done deal. Your party is split and public opinion is shifting away from you. All the evidence shows poverty will soar and people in work will suffer the most.  We’re giving you a fresh opportunity to stop the cuts to tax credits. For the sake of millions of working families in Britain and their children, take it.