Tories facing backlash over tax credit cut

Dewsbury MP Paula Sherriff.
Dewsbury MP Paula Sherriff.

A controversial move to cut tax credits for thousands of poor families could be watered down after a backlash in parliament.

Proposed tax credit cuts will affect 13,000 children in Dewsbury and Mirfield and leave low-income workers £1,300-a-year worse off.

Tory MPs won a vote in the House of Commons on the move but the House of Lords defeated it and demanded changes.

Chancellor George Osborne then said he would lessen the impact on families - but still vowed to press ahead with billions of pounds in cuts to welfare benefits.

Speaking in parliament, Dewsbury MP Paula Sherriff, who is a former health worker, said: “Many of the people I worked alongside in the NHS relied on tax credits to make work pay, and now find themselves caught in a pincer between the government’s pay cuts and the work penalty.

“There are more than thirteen thousand children in my constituency who are in families supported by tax credits. That is over two thirds of all families with children in Dewsbury and Mirfield.

“Literally thousands of the people I represent, now fearful for their future.”

Nationally, up to three million families could be worse off as a result of tax credit cuts.

More details are expected in Mr Osborne’s autumn budget statement at the end of November. He faced a grilling on the measures at Treasury questions on Tuesday, and told MPs: “We will continue to reform tax credits and save the money needed so that Britain lives within its means, while at the same time lessening the impact on families during the transition.

“We are as determined as ever to have a low tax, low welfare, high wage economy that Britain needs and the British people want to see.”

Tax credits were brought in by the last Labour government and were designed to top up the earnings of low paid families.

Current plans by the Conservative government would reduce the income threshold for receiving Working Tax Credits and Child Tax Credit from April.

It is estimated that a low-earning single parent would be £1,000 a year worse off.

A low-earning couple with two children would lose £850 a year, but a middle-earning couple with no children could be £350 better off.

The Conservatives claim the measures are fair and that most claimants would end up being better off and other changes to pay and taxation are introduced.

But they have been accused of unfairly cutting the incomes of the poorest families and removing incentives for people to work.