The Chancellor today used his Autumn Statement to announce a welcome climb-down over planned cuts to tax credits.
Responding to the Autumn Statement, CARE CEO Nola Leach said:
“This is a victory for families and the many campaigners who raised legitimate concerns about the Chancellor’s tax credit cuts.
“The cuts by themselves would have hit families on modest to low incomes with real financial hardship.
“We are delighted that the cuts are not going to happen but this is also a missed opportunity in that cutting tax credits in tandem with the re-recognition of family responsibility in the tax system would have ensured that families did not lose out and it would have provided a means of addressing our marginal effective tax rates which at 73% are the highest in the world.
“Such high marginal tax rates are hardly in keeping with the Chancellor’s stated ambition to make Britain an aspiration nation.
“Going forward tax credits must be reformed but the reduction of recognition of family responsibility through tax credits in the benefits system must be complemented with the re-recognition of family responsibility in the tax system.
“We hope the Chancellor now looks more closely at advancing tax credit reform in the context of the re-recognition of family responsibility in the tax system.”
Notes to Editors:
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CARE previously raised concerns about the tax credit plans: http://www.care.org.uk/news/latest-news/tax-credit-changes-will-cause-financial-misery-working-families