MPs debated the tax credit cuts in the House of Commons Tuesday, with new Tory MP Heidi Allen drawing attention for accusing government of “betray[ing] Tory values”.
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She broke down in tears on BBC One’s Question Time after claiming that the party had “betrayed” her over the cuts.
Chief Whip Michael Gove insisted during the election campaign that “we’re going to freeze them (tax credits) for two years, we are not going to cut them”.
He accused David Cameron of a cynical “volte-face” after he had implied there would not be cuts to tax credits in the run up to the General Election.
The Chancellor was c hallenged by Tory MPs about the £4.4 billion cuts as he came under mounting pressure to make changes to the controversial policy.
Despite various Conservative pleas for Chancellor George Osborne to soften his approach to tax credits, MPs voted 317 to 295 against a Labour motion asking the Government to abandon the plan, due to be introduced next April.
The government will save about £5bn from the tax credit bill by cutting the level at which working tax credits begin to be taken away, increasing the rate at which payouts are reduced and tightening eligibility criteria for child tax credits.
More than three million families – 2.7 million of them with children – stand to lose on average £1,300 in the first year alone, research from think-tank the Resolution Foundation has found.
Mr Osborne has refused to hand over specific analysis of the impact that changes will have to the Treasury Select Committee, telling MPs he has published “vastly more” information than had been provided in the past.
New research from Labour reveals scale of tax credits cuts hitting working families, with 71 Tory MPs across the country said to be at “direct risk” of losing their seats over the issue.
Mr Osborne today defended the looming raid, less than 24 hours after David Cameron boasted of his “delight” at the pocket-picking plan.
“The House of Commons has passed this measure twice, it now sits in the House of Lords and the question for the House of Lords is, is it going to respect the 1911 settlement that says the House of Lords must not second-guess the House of Commons on financial matters?”
The Institute for Fiscal Studies (IFS) echoed the comments made in the briefing paper, saying the cuts would hit people in work rather than those out of work.
Baroness Boothroyd, the former Commons speaker, warned that peers would continue to scrutinise legislation “as closely as ever despite his evident disregard for the efficient workings of our bicameral Parliament”.
Tory former Chancellor Lord Lawson earlier joined calls for Mr Osborne to “tweak” the cuts to protect poorer households. Those with a third child or more will not receive the tax relief, and this is set to save the Government £4.5bn a year.
From April, the threshold at which tax credits begin to be withdrawn will fall from £6,420 to £3,850, and people’s credit entitlement over this amount will be reduced more steeply.
Are the changes a necessary step to tackle the budget deficit or an unwarranted attack on the working poor?
And he dismissed as “nonsense” the Government’s claim that the lost money would be made up through cuts in income tax – or by employers paying higher wages.
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The cuts are already tapered but a few welfare experts, including the Labour chairman of the work and pensions committee, Frank Field, have suggested ways the lowest-paid could be cushioned.
