Osborne’s tax credits cuts approved amid warnings from opposition

George Osborne’s flagship proposals to cut tax credits have been approved by MPs, amid warnings help must be offered to the poorest working families.

The Government saw off a potential rebellion by 325 votes to 290, majority 35.

Labour attacked the proposals, introduced in the Chancellor’s summer Budget, as “shameful” and warned they would leave millions of households out of pocket.

Frank Field, a Labour former welfare reform minister, also insisted the issue would “rumble” and “catch fire” in the constituencies when the cuts are made.

But Treasury Minister Damian Hinds defended the plans as crucial to the Government’s wider ambition to tackle low pay.

The changes are expected to save £4.4 billion in 2016/17.

In the Budget, Mr Osborne announced plans to cut from £6,420 to £3,850 the earnings level above which tax credits are withdrawn from April 2016, as well as speeding up the rate at which the benefit is lost as pay rises.

Reports before the vote suggested around five Tory MPs were planning to vote against the Government’s proposals, which faced concerted opposition from Labour, the SNP and other smaller parties.

Seema Malhotra, the new shadow chief secretary to the Treasury, condemned the cuts and told the Commons: “These cuts to tax credits hit working families in every constituency and were to be sneaked through the back door.

“This is a political decision made by the Chancellor that is set to see over three million families lose an average of £1,000 a year. It is ideologically driven, it is cynical and it will directly increase levels of poverty in Britain.”

Leading the debate on the statutory instrument, Mr Hinds said: “Reforming tax credits and other benefits forms the first of five pillars of this Government’s approach to supporting working Britain.

“The second is an increase in the personal tax allowance, third the national living wage, fourth major extensions to childcare provision and fifth the overall sound economic management that is delivering growth in the number of jobs, quality of jobs, earnings and living standards.

“They do not all come into play at exactly the same time, I certainly accept that, but over the course of time they do and by 2017/18 eight out of 10 households will be better off.”

Labour’s Mr Field said Mr Osborne has “destroyed his 2020 election strategy”.

He added the Government may not be harmed much by the vote in the Commons, but warned: “This issue will rumble and then it will catch fire in people’s constituencies when the cuts come through.

“And if Mrs Thatcher would bend under pressure from her backbenches when they didn’t like what they were hearing in their constituencies, I’d be very, very surprised if our most political Chancellor didn’t bend like her.”

Eilidh Whiteford, the SNP’s social justice and welfare spokeswoman, said the Government’s plans for tax credits needed more scrutiny, and insisted families will have to make difficult choices about food and heating their home if they lose £100 a month.

The Banff and Buchan MP said of the Government’s overall approach: “It’s not so much robbing Peter to pay Paul as robbing Peter to pay Rupert and Sebastian.”

Conservative Peter Aldous (Waveney) said he would back the motion as ministers were pursuing the right “strategic course” of supporting working families, but expressed “serious concerns” about the impact on them in the short-term.

Conservative Andrew Percy (Brigg and Goole) said he would oppose the motion, adding there is time before the cuts are made next year to make changes to mitigate the impact on the poorest people.

Copyright (c) Press Association Ltd. 2015, All Rights Reserved.