Impact of Tory tax credit cuts to be investigated in 'urgent' inquiry by MP committee

The MPs will speak to economists in an evidence session in Parliament on Monday

Jon Stone
Wednesday 21 October 2015 11:14 BST
The Work and Pensions Committee
The Work and Pensions Committee (Crown Copyright)

A cross-party committee of MPs will hold an urgent meeting to analyse the effects of the Government’s tax credit cuts, it has said.

The influential House of Commons Work and Pensions Committee will take evidence from economists and researchers next Monday on the impact of the planned cuts.

The committee wants to establish the impact of the cuts in relation to the proposed increase in the minimum wage, the winner sand losers from the policy, and whether the Government has looked properly at all of its options.

The group is chaired by independent-minded Labour MP Frank Field and is made up of four Labour MPs, six Conservative MPs and an SNP MP.

Under its previous chairmanship the committee has not shied away from criticising the Government benefit reforms and their delivery.

It has previously called for changes to both disability benefits and benefit sanctions.

MPs will hear from the Institute for Fiscal Studies and Resolution Foundation, who research groups that have looked at the cuts in detail.

The IFS’s analysis found that a planned increase in the National Living Wage would come “nowhere near” compensating families who lose out from the tax credit cuts.

Independent-minded Labour MP Frank Field chairs the committee (PA)

The Resolution Foundation, which looked at the poverty impact of the cuts, found 200,000 children would slide into poverty immediately after the tax credit cuts go ahead in 2016.

Hundreds of thousands of further children would fall into poverty by 2020, they said.

If the cross-party committee finds the evidence plausible it could put its name to the list those calling for the Government to re-think the policy.

George Osborne said earlier this month that people on low incomes would suffer if their tax credit cuts did not go ahead.

“Working people of this country want economic security, the worst possible thing you can do for those families is bust the public finances, have some welfare system this country can’t afford,” the told BBC Radio 4’s Today programme.

“That includes a tax credit bill that’s gone up from the £1bn when it was introduced to the £30bn today.”

David Cameron has also ruled out a U-turn on the policy.

Public opposition to the policy appears to be hardening, with a ComRes poll for the Independent On Sunday suggesting that 43 per cent disagree that the cuts are needed – compared to 34 per cent who do.

Mr Cameron effectively ruled out cutting the benefit before the election, telling a voters’ question time event that he “rejected” proposals to cut tax credits and did not want to do so.

The cuts are part of £12bn welfare cuts that the Conservatives say they will make to hit their deficit targets.

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