Tax credits

I'm extremely concerned about these deeply regressive cuts to tax credits, which will effectively introduce a work penalty into the tax credit system and could see three million low and middle income households lose around £1,000 a year and 500,000 families lose their tax credits entirely.

I know from the letters and e-mails I have received that many constituents share my concern about these changes. A wide range of charities and children's organisations have also emphasised the impact these changes to tax credits could have on many working households and on the number of children growing up in poverty.

It is of course important to make sensible savings in social security spending and we all want to see a higher wage economy where people are less reliant on tax credits to get by.

However, it is now clear - as the independent Institute of Fiscal Studies (IFS) has said - that the overall changes in the Budget to the minimum wage and tax credits will leave working people worse off. For example, a couple on the minimum wage who work full time and have two children will gain £1,500 from the change to the minimum wage but lose over £2,200 next year from the changes to tax credits. It is also concerning that this 'work penalty' will increase work disincentives and that as a result of the higher tax credit taper rate, some people will only take home 7p for every additional pound they earn.

The Government tried to pass these changes with minimum scrutiny, and it was only thanks to the work of fellow Labour MPs that Parliament had the opportunity to debate and vote on these measures.

I voted against these cuts to tax credits in the House of Commons on 15th September & 20 October  and I also voted against the Government's Budget in July. I will continue to strongly oppose any attempt to implement these damaging cuts.

It is extremely disappointing, therefore, that the Government has pushed these changes through in the face of concerted opposition from inside and outside Parliament.

I can assure you that I will continue to press the Government on this extremely important matter and highlight the impact these changes could have on low and middle income households in our constituency and across the country.


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Catherine West MP

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