Millennial Intelligencer: Controversial Tax Credit Cut Divides British Parliament And Society

Conservative MP’s in the British House of Commons have come under fire in recent days following a controversial measure which would cut tax credits for many middle and lower income British citizens.

Earlier this month the House of Commons passed a controversial measure proposed by the Chancellor of the Exchequer; (equivalent to Treasury Secretary) George Osbourne, that would cut an estimated £4.5 billion in tax credits to lower income British citizens.

In a major political defeat, the traditionally ceremonial House of Lords blocked the government supported tax cuts in what has been dubbed by some Conservatives as a “Constitutional Crisis.”

Peers in the upper house voted by a majority of 17 to back the opposition Labour Party’s calls for the government to provide full redress to tax credit claimants who would be affected when their entitlements are reduced; as well as, a delay in implementation of the tax credit cuts until the government has effectively assessed the full financial impact of the measure.

The tax credits were introduced by the previous Labour Government as a way to encourage work and give aid to low income British workers and families with children.

According to the Institute for Fiscal Studies, the average tax credit family-single earner family with children- would lose an estimated £1,000 annually as a result of the cuts.

Prime Minister Cameron defended the cuts during last Wednesday’s Prime Minister’s Questions, stating that any cuts not made to tax credits would have to be made to the police or the NHS.  The Prime Minister also stated his belief that the average family families will still be better off by 2017, as a result of the introduction of the National Living Wage.

In an interview with the BBC, Chancellor Osborne agreed to listen to people’s concerns and announce any modifications to the plan in November. The Chancellor maintained his belief; however, that reforms to the tax credit system were necessary to strengthen the British economy and provide economic security to families in the long run.

“If we have uncontrolled welfare bills, uncontrolled tax credit bills and the like, there will be no security for working families,” Osborne said.

The cuts were supported by David Cameron and a majority of Conservatives in the House of Commons; however, a number of Conservatives publicly challenged the measure.

Welsh Conservative Leader, Andrew Davies, stated that he supported the idea behind the reform but said he could not support the timing of the cuts insisting that the cuts should be phased in over a period of time. The majority of Scottish MP’s also raised concerns over the measure including the leader of the Scottish National Party who called the measure, “A daft idea”.

Chancellor Osbourne is expected to announce a modified version to the measure sometime in November. In an interview with the BBC, Chancellor Osborne agreed to listen to people’s  concerns but maintained his belief that reforms to the welfare system were necessary to strengthen the British economy and provide economic security to families in the long run.

“If we have uncontrolled welfare bills, uncontrolled tax credit bills and the like, there will be no security for working families,” Osborne said.

 

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Cover Photo Credit: DFID – UK Department for International Development/ Flick (CC By 2.0)

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About the Author
Kyle Jones is a columnist with Rise News. He is a senior honors student at the University of Alabama, studying Political Science and Spanish with a focus on Public Policy Studies.

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