Harriet Harman

Labour Member of Parliament for Camberwell & Peckham

Southwark News Column: Government Cuts to Tax Credits

Tax credits which help families make ends meet are set to be cut by the new Conservative Government.  They announced this in their Budget last month.  We agree that the deficit needs to be brought down but this is absolutely the wrong way to do it and Labour is against it.

 

Tax credits go to families on low incomes - most of them in work but on low pay.  The Labour government brought them in to tackle in-work poverty, where even though people are working, they don't earn enough to live on.   And Tax Credits "make work pay" by topping-up low pay so that people are better off in work than on benefits.

 

In Camberwell and Peckham alone 64% of families get Tax Credits.  Even with the National Minimum Wage those families need the tax credits to make ends meet.  The Government is going to put the Minimum Wage up - and that's a good thing.   But the cuts in the Tax Credits are much bigger than the increase in the Minimum Wage and so around the country 3 million families will be, on average, £1,000 a year worse off.

 

Of course it's right that employers should increase pay.  But it's wrong for the Government to cut Tax Credits before that happens.

 

The Conservatives said before the election that they would cut £12billion from the welfare bill.  But they always ducked questions about cutting Tax Credits, inferring that they would be safe.  They said they would not "balance the books on the backs of the poor".  Yet that is exactly what cutting Tax Credits would do. So they have no democratic mandate to do it.

 

And they plan to do it in an underhand and undemocratic way.  Even though this is a £3.6 billion cut which will effect around 3 million people they plan to sneak it through without proper scrutiny by the House of Commons.  They plan to cut tax credits in a Committee with no more than 15 MPs in a meeting in a room upstairs in the House of Commons lasting no more than 45 minutes.  I’ve written to the Prime Minister saying:

*That it was not in their Manifesto

*That it is a big measure involving 3 million families and £3.6billion

*That it is highly controversial - they say that families will not be worse off because of the increase in the Minimum Wage but we, and the Institute for Fiscal Studies dispute that, and so it should first be scrutinised by the all-party Select Committee for the Department of Work and Pensions and if the Government then intend to go ahead with it they should put it in a Bill that will be scrutinised by the whole House of Commons and the House of Lords before it becomes law.

 

It is shameful that the Government is planning to sneak this controversial and harsh measure through without proper scrutiny at the same time as they are cutting tax for millionaires.  We are determined to campaign against this and make it our task, as Opposition, to seek to prevent them.

 

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