The Financial Secretary to the Treasury today refused to reveal details of measures that might compensate families who will miss out due to the Chancellor’s tax credit cuts. Appearing on BBC’s Daily Politics show today, David Gauke MP was asked directly by host Andrew Neil if the Government had any plans to soften the blow of tax credit cuts in the upcoming Autumn Statement. Mr Gauke replied by stressing the importance of proceeding with the tax credit cuts and did not reveal any information on compensating measures. He also admitted some families would miss out due to the cuts.
During the July Budget, the Chancellor announced drastic cuts to tax credits which the Government argue will save £4.4 billion. Since then, the plans have been criticised by a range of MPs from across the House and from charities and campaigners including CARE. The Prime Minister came under pressure on the issue during today’s PMQ’s.
If the Government proceed, analysis by CARE’s fiscal policy consultants calculates that 6 in 10 families will be affected. A one earner family with two children on £25,000 a year, for example, will lose £49 per week leaving them with only £460 per week, which is not enough to cover the cost of basic living.
CARE is calling on the Government to re-think their approach. You can read a report by our fiscal policy consultants on the tax credit cuts right here.
The charity’s CEO Nola Leach said: “It is not fair the burden of deficit reduction should fall on hard working families.
“From April 2016, unless the Chancellor rethinks his tax credit reforms, 3 million working families are facing financial hardship as a result of tax credit cuts and this is unacceptable.
“We already have a tax system where income tax takes no account of family responsibilities so at the very least, if tax credits are going to be phased out, tax reliefs should be phased in for families.”