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LABOUR went on the attack yesterday, accusing George Osborne of chasing headlines and an ideological assault on working families after he announced the slashing of tax credits in Wednesday’s Budget.
The Chancellor had boasted that his Budget would provide a “new contract” for the people of Britain.
But during a Commons debate yesterday, shadow chancellor Chris Leslie said that working families on low incomes, “trying their hardest to do the right thing,” would be hardest hit.
He cited the Office for Budget Responsibility (OBR) claim that tax increases would be twice as big as any tax cuts over the course of this Parliament, adding that it was a Budget entirely concerned with “chasing headlines” to support the Chancellor’s “well-known ambitions.”
Mr Leslie suggested that as many as 500,000 families would lose tax credits under Mr Osborne’s plans, adding that the Budget “exposed” the Chancellor’s “skewed priorities” and failed to build a more productive economy.
He also poured scorn on Mr Osborne’s previous boast of wishing to create a “northern powerhouse,” saying it had become a power cut.
“You have a Chancellor with the gall to boast of a northern powerhouse while simultaneously pulling the plug from the electrification of major commuter railway lines,” Mr Leslie said.
“They are undercutting and not supporting a productive economy.”
Work and Pensions Secretary Iain Duncan Smith, responding for the government, praised the Chancellor and claimed that the most “groundbreaking” measure he had introduced was enshrining the idea that “if you work hard you should be rewarded.”
Labour MP for Bishop Auckland Helen Goodman asked Mr Duncan Smith if he believed plans to limit to two the number of children eligible for tax credits from April 2017, were fair.
The measure was announced by Mr Osborne yesterday as a key part of his plans to slash the tax credit bill for new claimants.
In particular, Ms Goodman said, the measure would disproportionately impact on “families where children are living in poverty, on Roman Catholic families, on Catholics from other minorities.”
The Work and Pensions Secretary responded by saying he believed tax credits had “distorted the system,” with “far too many families” not going to work when others not on tax credits had to make decisions about “how many children they should have and the houses they should live in.”
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