In the last parliament the Tories cut Tax Credits by freezing them, and by increasing the taper rate for Tax Credits – that is, the rate at which Tax Credits are taken away as your income rises. A third of their cuts to welfare came from Tax Credits.
Mick Lerry said: “Today Cameron says that the Tories will not raise income tax, national insurance and VAT. So how are they going to pay for such a policy, the answer is simple, the Tories plan to double the pace of cuts next year by cutting £3.8bn from the Tax Credits working families rely on”.
The next Labour Government will protect family budgets by increasing Tax Credits at least in line with inflation every year because we know that Britain succeeds when working families succeed.
“Tax credits help to make work pay for millions of families. That’s why it’s so wrong that the Tories chose to cut them while giving millionaires a tax break. Before the last election Labour warned that the Tories would cut Tax Credits for families earning just £30,000. The Tories said this was a lie, but then did exactly as Labour warned after the election”, says Mick.
Tories planning another raid on Tax Credits
Analysis of Tory spending plans shows that David Cameron and George Osborne are planning another raid on the Tax Credits of millions of working families.
Their plans will mean cutting Tax Credits by £3.8bn a year, meaning families on as little as £23,000 losing out.
Mick said: “Labour will put working families first by raising Tax Credits at least in line with inflation in every Budget. Together with an £8 minimum wage and 25 hours of free childcare for working parents, Labour’s better plan will make work pay”.
“The choice at next week’s election is clear. Labour’s better plan which will put working families first or a Tory hit to family budgets which working people cannot afford”, says Mick.
Labour will make fairer choices
The Tories have said they will cut £12bn from welfare in 2017/18.To achieve their £12bn target would mean a raid of £3.8 billion on tax credits. Analysis from the House of Commons Library shows that if the Tories take the same approach to cutting Tax Credits in the next five years as they have in the last five years:
• Families with one child will lose Tax Credits when their incomes hit £23,000 a year, leaving them over £1,600 a year worse off.
• Families with two children will lose Tax Credits when their incomes hit £29,000, leaving them over £2,000 worse off.
• Families earning £12,000 or more will lose at least £550 a year.
“Labour will make fairer choices. We will raise the top rate of tax to 50p, and introduce a mansion tax on homes worth over £2m. We know how important Tax Credits are to family budgets and we will ensure they rise in line with inflation. Because we do not have the Tories’ extreme plans we have no need to take away Child Benefit from families on average incomes”, says Mick.
Cllr Mick Lerry – Leader of the Labour Group on Sedgemoor District Council
Labour Parliamentary Candidate for Bridgwater and West Somerset Constituency