Tory tax credit proposals- 14,000 Southampton families set to lose out
February 10th 2010
Labour MP Alan Whitehead today demanded that local Tories candidates come clean with people in Southampton about their plans to slash financial help for local families.
Alan Whitehead MP said:
“The Tories’ cuts to Child Tax Credits would hit families in Southampton and across the country hard.
“After trying to pull the wool over people’s eyes for months, it has now emerged that to make their plans for immediate public spending cuts add up, the Tories would need to axe Child Tax Credits for families earning as little as £31,000 per year.
“The Tories seem incapable of levelling with local people about which families will have their Child Tax Credits removed. In Southampton alone, over 14,000 young families struggling to make ends meet could see a direct drop in their income if the Tories carried out these cuts.
“That’s why I am calling on the three local Tory candidates in Southampton to come clean and admit which local families will fall victim to the Tory Child Tax Credit cull. It’s the least that they can do.”
Labour yesterday stepped up their campaign against the Tory plans with the launch of a targeted online advert campaign on the influential Mumsnet website. The advert warns families that they will “get less than they bargained for” if the Tory plans to cut Child Tax Credits are introduced.
In a letter to Tory Shadow Chancellor George Osborne last week, Labour Cabinet Minister Liam Byrne said:
“If you take £400 million out of child tax credits in 2010, then 1.3 million middle class families on household incomes as low as £31,000 will lose their child tax credit.
“That is not backing Britain's great middle class. It is giving them a kick in the teeth.”
More information
- “At its 2009 party conference, the Conservative Party proposed to start the withdrawal of the family element of the child tax credit at an annual family income of £40,000, rather than the current threshold of £50,000. An early estimate of the savings from this reform was produced by researchers at IFS and cited by the Conservative Party, and this was that the change could save £0.4 billion a year. However, the government has estimated that the threshold would have to be cut by more – to £31,000 a year – in order to save £0.4 billion. It is likely that the estimate from the government is more accurate, because the IFS estimate assumed full take-up of the child tax credit. Without access to HMRC’s data, it is not possible for us to say precisely how much money would be raised by the Conservative Party’s proposal having allowed for incomplete take-up, but it can be stated confidently that it would be less than £0.4 billion (because that would require lowering the threshold to £31,000), but more than £45 million (which is what would be raised if the threshold at £50,000 were replaced by a cliff-edge, as this is the total amount to which families with incomes exceeding £50,000 are entitled).” Institute for Fiscal Studies, The IFS Green Budget, 3 February 2010, p. 168
- Labour’s new advert warning of the Tory threat to the Child Tax Credit will run on the Mumsnet website – www.mumsnet.com
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