Chancellor grilled by 1922 committee over tax credits cuts

New research from Labour Party reveals scale of tax credits cuts hitting working families – 71 Tory MPs at direct risk of losing their seats over the issue New analysis released today shows that the Tories damaging tax credit cuts are hitting thousands of working families across the country.

It follows increasing concern among Conservative MPs about the impact of the cuts on working families.

“Furthermore, hundreds of thousands of self-employed workers who depend on tax credits do not stand to benefit from the increase in the minimum wage that Ministers say will off-set the tax credit cuts”.

The independent Institute for Fiscal Studies calls that idea “arithmetically impossible” and has concluded that 13 million families will lose an average of £240 a year, while three million more will lose around £1,000 a year.

London Mayor and Tory MP Mr Johnson earlier paved the way for a partial Tory U-turn, demanding the Treasury “minimise the impact” so the cuts don’t “bear down unfairly on the working poor”. I am sure they are working on it now, and, believe me, we are all talking about it, and this is something under very intensive review and consultation at the moment.

Mr Osborne is due to address Conservative MPs later, with a Commons debate about tax credits triggered by Labour taking place on Tuesday.

A rare “fatal” motion is expected to be tabled by peers opposed to the measures this week, with a potential crunch vote next Monday. “I’m sure the Chancellor can do that”, he told the BBC.

“Do they want to support working families in their constituency or do they want to support these unfair cuts?” she said.

The Chancellor has gone on the offensive over his plans to cut tax credits, claiming it would cost tax payers £40bn by next year without the proposed changes.

It came as Baroness Meacher, a cross-bench peer, vowed to try to kill the plans in the House of Lords with a rarely “fatal motion” which could be backed by cross-bench bishops.

Labour sources suggested such a motion would be nearly certain to result in a Government defeat as there is no Tory majority in the Upper House.

TUC general secretary Frances O’Grady said: “More and more Conservatives are coming out against the Chancellor’s tax credits cuts”.

The spokeswoman added: ‘The Prime Minister is focused on the Government delivering on the measures in this area, because they are an important part of how we move to a higher-wage, lower-tax economy.

“I have no doubt people are looking at it very, very hard right now that as we reform the tax credits system we do so in such a way not to bear down too unfairly on the hardworking people in London and elsewhere”.

The Government has said people won’t lose out in the long term because of the rise in the living wage, which will rise to £9 an hour by the end of the Parliament in 2020.

As for child tax credits, from April 2017 parents will no longer receive additional payments when they have a third child or any subsequent children.

“If tax credit cuts are to go ahead, they need to be implemented at a slower pace, in line with the introduction of the National Living Wage and the raising of the tax threshold”.

Bow Group chair Ben Harris-Quinney said: “It is unclear why a policy that will disproportionately harm workers is being supported by the Conservative Party at a time when the party is keen to claim the title of the workers’ party”. The Guardian points out that the government has so far refused to publish a full impact assessment of the changes and this has led to accusations it is trying to hide the true impact of the reforms. A few members of his own party are unhappy with the reforms, while Labour will vote against the changes this week.