- Posted by: Valerie Vaz MP
- Category: News
I have voted on three occasions in the last two weeks against the Government’s plans to cut Tax Credits for nearly 5,000 families in Walsall South.
On Tuesday 20 October 2015 I voted for an Opposition Motion calling on the Government not to cut tax credits, which was unfortunately defeated by 317 Noes to 295 Ayes. On Tuesday 27 October 2015, I voted for the Amendment tabled by Her Majesty’s Opposition Labour Party to the Welfare Reform and Work Bill would have prevented the Government’s cuts to Tax Credits from going ahead. The Amendment was defeated by 320 noes to 281 ayes. And on Thursday 29 October 2015 I voted for a Backbench Motion calling on the Government to ensure proper transitional arrangements are in place before any cuts are made to Tax Credits. The Motion was passed by 215 Ayes to 0 Noes.
The changes will hit almost all in-work families in receipt of Tax Credits. There are currently just over 3 million in-work families receiving Tax Credits, of whom 2.7 million have children. These families will be, on average, around £1,300 worse off next year as a result of these changes. Some families on middle-incomes will lose entitlement to Tax Credits altogether. A family with one earner on average earnings and two children will lose over £2,000 in Tax Credits next year from the changes.
Currently Tax Credits reduce once someone is earning more than £6,420. From next year that will fall to £3,850. The cuts amount to a ‘work penalty’ on families on middle and lower incomes. The two key changes are the increase in the taper rate from 41 per cent to 48 per cent and the reductions in the income thresholds in Tax Credits. This means that the amount people receive in Tax Credits will reduce more quickly as their earning rise and fewer people will be eligible to receive Tax Credits.
Approximately 10,400 children in 4,900 families in Walsall South would be affected by the cut. 75% of children in Walsall South live in families receiving Tax Credits.
The Government must cancel the Tax Credit cuts.