Labour is committed to reversing tax credit cuts in full, John McDonnell says

Shadow chief secretary Seema Malhotra had previously appeared to equivocate on reversing the cuts

Jon Stone
Sunday 18 October 2015 12:57 BST
The shadow chancellor confirmed the party would reverse the cuts
The shadow chancellor confirmed the party would reverse the cuts (Getty Images)

Labour is commited to reversing the Conservatives’ planned cuts to tax credits in full, the shadow chancellor has confirmed.

John McDonnell made a statement on Twitter after two shadow cabinet ministers appeared to equivocate over whether the party would reverse the Tory policy if it came to power.

"We are calling on Osborne to reverse his decision to cut tax credits. If he doesn't reverse these cuts, we're making it clear that we will," he tweeted.

When asked on Sunday morning television about reversing the cuts, Seema Malhotra, shadow chief secretary to the treasury, and Diane Abbott, shadow international development secretary, would confirm only that Labour was opposing the cuts from going ahead now.

But Ms Malhotra put a statement out after her appearance on the Andrew Marr Show clarifying the party's position at the same time as Mr McDonnell issued his tweet.

"On Tuesday we are calling for Osborne to reverse his decision to cut tax credits next April. The Tories have the chance to do the right thing. If they don't reverse these cuts, we will be making it clear on Tuesday that we will," she said.

"Once again the Tories want to make this debate about the Labour Party rather than their constituents they should be standing up for."

Left: Diane Abbott, Right: Seema Malhotra
Left: Diane Abbott, Right: Seema Malhotra (BBC)

Labour sources close to Ms Malhotra said her original statement on television had been misinterpreted in reports.

It is not clear whether the incident was a bungling communications failure, a frontbench discipline issue, or an immediate U-turn by the party.

The stumbling response from the ministers could also be a sign that Mr McDonnell has warned shadow cabinet ministers against making unilateral spending commitments before has has decided on the party's overall spending envelope for the next election.

Labour has branded the cuts as a "work penalty" and will lead a debate on Tuesday about whether the tax credit cuts should go ahead or not, which it says it can win with the help of Tory rebels.

The debate comes as research suggests that 71 Conservative MPs are vulnerable to losing their seats in parliament to a backlash against the cuts.

The Government is planning to slash the payments to low-income working families, leaving 3.2m households worse off by an average of £1,300 a year from next April.

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 Government claims that a concurrent rise in the minimum wage will soften the impact of the cuts, but the Institute for Fiscal Studies has found that the policy will come “nowhere near” to compensating for the impact of tax credit cuts.

A study by the Resolution Foundation think-tank found that 200,000 children would slide into poverty immediately after the tax credit cuts go ahead.

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