Field urges impact assessment of tax credit cuts

2 Nov 15

Work and pensions committee chair Frank Field has written to chancellor George Osborne to urge him to publish a five-year impact assessment of the government’s proposed tax credit changes, which were vetoed by the House of Lords last week.

Field said the Lords’ decision not to back the changes demonstrated the high level of cross-party concern. The Lords vote followed a unanimous vote in the House of Commons calling on ministers to publish more detailed impact statement.

However, Field said there was still no clear picture of what the net effect of the reforms, which will cut the level of earnings at which tax credits would be withdrawn from £6,420 to £3,850, would have.

The Treasury should therefore publish a distributional analysis for every year from 2016/17 to 2020/21 by income decile of the 3.2 million affected families, both in cash terms and as a percentage of income.

This should also show to what extent other changes, such as the introduction of a national living wage and a higher tax personal allowance, would offset the cuts to tax credit entitlements.

“It is impossible for members of parliament to represent the interests of their constituents without this information, and we call on the government to provide the true picture urgently,” Field concluded.

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