Tory divisions growing

by Daphne Liddle

DISSENT among the Tories over their plans to cut tax credits are growing after the all-party Work and Pensions Committee last week urged the Government to delay the cuts for at least 18 months while their full impact on low-paid families is calculated.

The committee warned Chancellor Osborne: “There is no magic bullet within the tax credit system. One of three things has to give: the impact on poverty, work incentives or the cost.

“We recommend that if, indeed, the effects cannot be satisfactorily mitigated, the Government pause any reforms to tax credits until 2017—18. This would allow a broader discussion of the options in their proper context.”

That committee has a Labour chair but a Tory majority, and Tory MPs are at last beginning to realise that the majority of victims of Osborne’s most savage austerity cuts are not the unemployed or those on sickness benefits but the vast majority of low-income working families — the “hard working families” that the Tories so often eulogise in their propaganda.

The Government claims the majority will benefit from other policies, including increases in the personal income tax allowance, an expansion of free childcare and the introduction of the National Living Wage.

But the committee said that these measures “should not be confused with compensation for tax credits cuts”. It said that “at best” only half of the families set to lose out from the tax credit changes would benefit from an increased personal tax allowance, while “only one third” would benefit from the introduction of the National Living Wage.

“The benefits to those who are helped are generally dwarfed by the cuts, especially in 2016—17,” the report said, adding that “by 2020—21, 78 per cent of families will be on average £1,500 worse off in real terms.”

Former Tory Prime Minister John Major has joined the debate, while delivering the Hinton Lecture last week he said that “fairness” was a key British value.

“Among the many attractive qualities of the British is an enduring belief in fairness.

“As Colonel Rainsborough observed in the Putney Debates over 250 years ago: ‘...the poorest he that is in England has a life to live, as has the greatest he...’ So had he then, and so has he now. The Colonel was a Leveller — I am a Conservative. But upon this we agree. We may never achieve a perfect society, but we can surely create a fairer one,” said Major.

And he continued: “I have never forgotten living in such circumstances. There is no security. No peace of mind. The pain of every day is the fear of what might happen tomorrow. It is terrifying — and it never leaves you.”

More Conservative MPs are calling call for a rethink of the plans. Craig Williams said a delay would give Government “more time to look at the system” as a whole while Stephen McPartland, citing research from the House of Commons library, said it was “unacceptable” that a lone parent with two children working 35 hours a week was set to lose more than £5,000 due to changes to working and child tax credits.

Former Labour Prime Minister Gordon Brown has also condemned the tax credit cuts — he first introduced tax credits to replace other inwork benefits such as Family Income Supplement and Child Benefit. He said the cuts would “plunge another million families into poverty”.

Evidence of how little Cameron understands the effects of the savage cuts he is making has emerged in a war of words between the Prime Minister and Oxfordshire County Council. Cameron had written to the council as MP for an Oxfordshire constituency, complaining about cuts to front line services including elderly day centres, museums and libraries. He called on the authority to make the necessary cuts to “back office services” and by selling property.

Ian Hudspeth, the Tory leader of the council, wrote back explaining that “back-office services” and all saleable property had already gone, adding: “Excluding schools, our total Government grants have fallen from £194 million in 2009/10 to £122 million a year in 2015/16, and are projected to keep falling at a similar rate.

“I cannot accept your description of a drop in funding of £72 million or 37 per cent as a ‘slight fall’.” He also explained that an assertion by Cameron that only £204 million in cuts had been made in the local area was in fact wrong and that £626 million had in fact been cut.