MP slams ‘cruel’ Tax Credits

Graham Allen MP for Nottingham North
Graham Allen MP for Nottingham North

Bulwell MP Graham Allen has slammed a ‘cruel’ Government move to slash Tax Credits that, he says, will hit working families in his constituency.

Worried constituents have contacted the MP’s office amid fears they could could lose an average of £1,000 a year.

On Tuesday MPs voted to cut spending on Tax Credits in the face of opposition from Labour and the SNP.

Mr Allen said: “The Conservative’s plan to replace welfare with higher wages is a con. The higher wages will not cover the cuts to Tax Credits which will cause more hardship for my constituents. These changes are damaging and dangerous.

“People in my patch are already struggling on low pay and under austerity measures, this will only make their situations worse.

“The Institute for Fiscal Studies (IFS) has warned the increase in minimum wage can’t provide full compensation for majority of losses of Tax Credit recipients. It’s arithmetically impossible and Nottingham’s working class estates are proof of this.

“Low paying employers receive the biggest welfare payments of all by Tax Credits topping up poverty pay received by many employees, removing that will mean employers will have to either increase pay or sack more working people.

“So instead of supporting those in productive work we will all have to pay more out to keep people on the dole.”

Over 11,000 or 75 per cent of families in Nottingham North claim Tax Credits of one sort or another - of whom roughly half are working families.

Plans to lower the earnings level above which Tax Credits are withdrawn from £6,420 to £3,850 and speed up the rate at which the benefit is lost as pay rises, were passed by 35 votes.

Ministers say the move, estimated to save £4.4bn, is part of wider plans to raise pay and incentivise work.

They said the tax credit system had, for too long, been used to subsidise low pay and the changes would bring total expenditure on tax credits back down to more sustainable levels seen in 2007-8.

Treasury minister Damian Hinds said eight out of ten households would be better off by 2018-9 as a result of measures announced in the Budget to introduce a national living wage from next April, to further increase the personal tax allowance to £12,500 and to extend childcare subsidies.