Tax credit cuts will hit struggling families and remove incentive to work - Carmichael

Northern Isles MP, Alistair Carmichael, has attacked the Government for their well disguised plans to substantially reduce tax credits for working families – up to £1,700 a year for average households in social housing.


Speaking in the House of Commons, Mr Carmichael said:

“It is worth reflecting, however, that the reason why there is not more public outrage about the proposed changes is a reflection of the sheer complexity of our tax and benefit system.
“There was a lot in the Minister’s speech with which I could agree quite easily. When he spoke about the importance of raising the personal tax allowance, the very welcome increases to the minimum wage and the importance of providing better childcare provision, those are all things with which I could have no difficulty. The difficulty I have with the regulations is that at a stroke they negate the benefits the Minister outlined. It ought surely to be a matter of common consensus in all parts of the House that the best route out of poverty is through work, but what the Government are doing today is giving with one hand and taking away with the other.

“The average household in social housing could lose up to £1,700 a year under the changes. That means for every extra £1 earned, they will lose up to 93p in benefits. That is why the Government are not true to their stated intent to encourage people off welfare and into work by bringing forward changes of this sort.

“The hon. Member for Waveney made a characteristically thoughtful contribution, and one of the most significant. He said the Government’s proposals were strategically correct. He might well be right about that, but what he said thereafter in the rest of his contribution indicated they were tactically inept. I address myself to him and other Government Members who share his concerns, because they are part of the most powerful group in the House: Government Back Benchers. The Government have a majority of 12, so it needs only six of them to vote with us to take this down and make them think again. I say to him, because I know he is a genuine man, that if he has not had his assurances and compensations before the vote, he will not get them after it.”

Commenting afterwards, Mr Carmichael said:

“I opposed cuts of this sort when I was a minister in government and so I have no problem opposing them in opposition. They will affect those who need them most – working families on low incomes. Not a day passes without us hearing that the Conservatives are on the side of ‘hardworking people’, yet these cuts will hit those very people they claim to stick up for. I welcome plans to introduce a new £9 national living wage, however, it means nothing when you penalise workers on low income who rely on the additional support in the tax system. You are in effect giving with one hand, and taking with the other.

“Instead of supporting the single mother or hard-pressed families through work the Government are removing a lifeline source of income. It is a bad policy and I am disappointed that only two Conservative backbenchers were brave enough to take a stand.”


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