Steve McCabe MP slams Tax Credit Cuts which will hit more than half of families in Birmingham Selly Oak

Steve has spoken out against George Osborne’s planned cuts to Working and Child Tax Credits, slamming the cuts as short sighted and hitting the poorest the hardest.


Before the Election in May 2015 David Cameron promised there would be no cuts to child tax credits, but in the Chancellor’s Summer Budget in July he announced cuts to Working and Child Tax Credits which will hit working families on low incomes.


In Birmingham Selly Oak constituency 61% of families are in receipt of Tax Credits and 66% of children are in families that rely on tax credits to top up their income.


Families will be an average of £1300 worse off each year and there is no transitional period to help protect families who rely on Tax Credits. The increase in the minimum wage will do little to soften the blow meaning families will be significantly worse off.


An analysis by the House of Commons Library has revealed that some working families will now face an effective 97% tax rate on each extra £1 they earn, losing 32p in income tax and national insurance payments, 17p from entitlements to other benefits  and 48p in tax credit entitlements – leaving them with just 3p in the pound.


The Labour Party has tabled a motion for debate in the House of Commons on Tuesday 20 October to call for the Chancellor to reverse its decision to cut tax credits.


Steve McCabe MP said:

“The Chancellors so called Living Wage is a joke and will not in any way make up the shortfall from his cuts to Tax Credits. We should be making work pay and not penalising families who go out to work. Yes we do need to tackle low wages but the way to do it is not to punish the poorest who are trying to do the best by their families. This is Robin Hood in reverse from Osborne.


“These cuts to tax credits are totally short-sighted and even the Chancellor’s own MPs are telling him to go back to the drawing board.”

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