UK Politics

Labour Party: Report reveals Tories' threat to families

News   •   Feb 08, 2010 11:16 GMT

A new report shows that George Osborne's plans are badly flawed and would mean taking child tax credits away from couples each earning over £16,000 per year

A new report from the Institute for Fiscal Studies (IFS) has shown that families on modest and middle incomes would have to lose out to make Conservative plans add up. Research by the independent think tank was originally cited by George Osborne as confirmation that his plan to cut child tax credits would only mean ending support for families on incomes over £50,000.

However, the IFS’ Green Budget report released this week spells out that in order to reach the £400 million in savings that George Osborne said his  plan would raise  the Tories would actually  need to cut support to modest and middle income couples earning over £16,000 each.

When announced at last year’s Conservative Conference it was claimed that the plan would only hit those earning over £50,000.

In January when George Osborne’s sums were called into question by Treasury data, the Conservatives reaffirmed their plan in a dossier stating; “Our estimates that this policy would save £400m were verified by the independent Institute for Fiscal Studies”.

However those claims have been dealt a blow this week with the IFS claiming the actual saving would be far less.

With tax credits making a real difference to thousands of families, the reality that George Osborne’s plans would mean parents each earning over £16,000 would lose out will come as a shock. The revelation comes after weeks of uncertainty over Tory tax policy which has left families wondering what the real effect of Tory family policies would be.