Reaction to tax credits Lords vote

October 27, 2015

In response to the House of Lords votes on tax credits, Imran Hussain, Director of Policy at Child Poverty Action Group, said:

"The Government lost the votes in the Lords tonight but, more fundamentally, it's lost the big argument on its cuts for tax credits.

"We hope ministers take a deep breath and admit that these cuts will pull the rug from under the feet of working families. Ministers should now bring forward new measures to help working families; investing in tax credits not cutting them.

"A Prime Minister who pledges to fight the scourge of poverty and a Government which promises to back working people should never have come within a mile of plans that push more children from working families into poverty and which damage the work incentives of the low paid by leaving them to face higher effective tax rates."

End

Notes to Editors:

(1) The table shows lost income for families in 2016/17 compared with 2015/16 due to proposed changes to tax credit taper and threshold. Calculation based on typical gross earnings from Office of National Statistics Annual Survey of Hours and Earnings 2013 and House of Commons Library Briefing Paper on Tax Credit Changes from April 2016.

(2) The Government is seeking to implement announcements in the July Budget to withdraw tax credit support from families earlier (by reducing the allowance for how much people can earn before tax credits start to be withdrawn) and at a faster rate as the incomes of the low paid rise (by increasing the taper rate). Peers will vote on the Statutory Instrument today.

(3) The proposed changes are on top of other changes to tax credits in the Welfare Reform and Work Bill, currently in Committee, which seek to freeze tax credit levels for four years and to limit the child element of Child Tax Credits and Universal Credit to two children from April 2017.

(4) CPAG is the leading charity campaigning for the abolition of child poverty in the UK and for a better deal for low-income families and children.

(5) CPAG is the host organisation for the Campaign to End Child Poverty coalition, which has members from across civil society including children’s charities, faith groups, unions and other civic sector organisation, united in their campaigning for public and political commitment to ensure the goal of ending child poverty by 2020 is met.