Defeat in the Lords but Osborne says cuts will happen albeit with concessions
Tory ministers are vowing to steamroller through swingeing cuts to tax credits despite being defeated twice in the House of Lords last night.
Chancellor George Osborne conceded concessions to the proposals would have to be made but vowed to press on with the changes.
He said “transitional” help would be afforded to those worst affected.
Full details of this tax credit relief will be announced at the end of November in the chancellor's Autumn Statement, announced Chris Grayling, leader of the House of Commons.
George Osborne has got to think again - John McDonnell
A raft of charities heaped pressure on the Tories prior to last night’s debate with many saying the cuts would hit the poorest families hardest.
Single parent charity Gingerbread said working single parent families will be the group hardest hit by the plans, losing on average £1,300 a year.
Chief executive Fiona Weir said: “A staggering 1.3 million single parents will be worse off as a result of the budget. Single parents are hit harder than other families with low paid single parents hit worst of all.”
Shadow chancellor John McDonnell said the policy was “unacceptable” to the public as well as Osborne’s fellow Tories, many of whom are openly revolting against the cuts.
“George Osborne has got to think again," he said.
“He has been defeated twice in the House of Lords but there are a large number of Conservative MPs as well who have been telling him very, very clearly he has got to think again on this one.”
How will tax credit cuts affect you?
Tax credits are a series of benefits introduced by the last Labour government to help low-paid families. There are two types: Working Tax Credit (WTC) for those in work, and Child Tax Credit (CTC) for those with children.
Under the government's original proposals, the income threshold for Working Tax Credits - £6,420 - will be cut to £3,850 a year from April.
Therefore once someone earns £3,850 they will see their payments reduced. The income threshold for those only claiming CTCs will be cut from £16,105 to £12,125.
The rate at which these payments are cut will increase. At present for every £1 claimants earn above the threshold they lose 41p.
This is known as the taper rate. But from April, the taper rate will accelerate to 48p.
