Do not cut child tax credits.
This will hit the poorest hard in the short term with no guarantees that the lost benefits will be made up. Vulnerable families will have to work longer hours to maintain their current levels of income or loose out.
Why is this important?
The government is considering reducing tax credits for millions of working families as part of its £12bn welfare cuts.
Changes would cut entitlements for about 3.7 million low-income families by about £1,400 a year, the IFS said, and has calculated that for the poorest families it would mean a reduction of £845 per child per year.
Mr Osborne's political allies are saying the move will increase 'incentives to work' and Senior Tory sources are trying to suggest that tax credits have allowed big companies to get away with paying employees lower wages.
During the general election, Prime Minister David Cameron promised he would not be cutting many benefits - including the state pension, pensioner benefits, and child benefit. It appears this didn't include child tax credits!
On a recent appearance on BBC Two's Newsnight, David Skelton, director of the Conservative pressure group Renewal, stated that he agreed the tax credit bill could be lowered.
"you have a lot of employers who are basically getting subsidy from the state for low paid work and we'd like to see a shift towards those employers who can afford to pay the living wage to pay the living wage." Mr Skelton said.
The conservatives believe that this move will encourage workers to work more hours if they can, or if they are working part time at the moment. And also get to see a higher minimum wage over time as well.
What is apparent is that this will hit the poorest hard in the short term with no guarantees that the lost benefits will be made up. Vulnerable families will have to work longer hours to maintain their current levels of income or loose out.
We propose that these cuts do not go ahead.
Stephen Timms, Labour's acting work and pensions secretary, said plans to cut £12bn from social security would hit "working families and children hard".
"It's clear that David Cameron and George Osborne's plan will make working families less secure," he said.
These cuts are an idea that is among many being considered now as the Tories wrestle with how to deliver their pledge to cut £12bn from Britain's £220bn budget for benefits and tax credits. We need to act now to show how many of us would be disappointed in such a decision.
