Belfast Telegraph

Why Tories may rue the day they lied over tax credits

'Nick Clegg betrayed his promise on tuition fees as part of his ticket of admission to the Cabinet way back in 2010'
'Nick Clegg betrayed his promise on tuition fees as part of his ticket of admission to the Cabinet way back in 2010'

By Eamonn McCann

The reason Michelle Dorrell became a national figure last Thursday night is that everyone knew she was telling the truth - not only about the effects of Chancellor George Osborne's proposed tax credit changes on people like herself, but also in relation to the Tories' pre-election pledge that they'd do no such thing.

The pledge - an important factor in Ms Dorrell's decision to vote Tory - had come from David Cameron himself on April 30, just seven days before polling.

Asked on a Question Time election special whether he could "put to bed" suggestions in some of the media that a Tory Government would cut child tax credit or restrict child benefit, he replied: "This report is something I rejected at the time... and I reject it again today... child tax credit we increased by £450."

David Dimbleby: "And it's not going to fall?"

Cameron: "It's not going to fall."

Now it's to fall.

It's this reneging on the commitment that has sent fear rippling through Tory ranks.

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Research commissioned by Labour and published last weekend told that 71 Tory MPs have majorities smaller than the number of families in their constituencies likely to be hit by the changes.

There is more hope than confidence behind backbenchers' reassurances (mainly to them- selves) that the issue will largely have been forgotten by 2020, when they will next face the electorate.

Many Lib Dems comforted themselves with the same thought when Nick Clegg betrayed his promise on tuition fees as part of his ticket of admission to the Cabinet way back in 2010. But the voters were waiting in the long grass ready to pounce when the time came.

Hence the rumbling in Tory ranks at this early stage in the parliament, expressed in the Commons exchanges and in a decision last week by a Tory-led Lords committee to deliver a sharp rebuke to the Government for trying to conceal the impact of the cuts.

Even the bumptious Boris Johnson has been signaling "concern" - although perhaps with more of an eye on a Tory leadership race against George Osborne than on the plight of struggling families.

The conservative commentator Peter Oborne forecast in the Daily Mail that "the ending of tax credits may prove to be the biggest political disaster of the Cameron Government".

Tory uneasiness with Osborne's measures are borne out by the impeccably Establishment Institute of Fiscal Studies (IFC), directly contradicting Treasury estimates of the effect of the tax credit and child benefit changes.

Far from low-paid workers being better off when the new "living wage" is factored in, they will "unequivocally... be made worse off". Contrary to repeated Government claims, the living wage "simply cannot provide full compensation for the majority of losses... that is just arithmetically impossible... the changes overall are regressive, taking much more from poorer households than richer ones".

In the July Budget Osborne promised that the "national living wage" of £7.20 an hour for over-25s will become the compulsory minimum in April next year.

The IFC reckons that this will boost income across the UK by £4bn - compared with the £12bn the Tories intend to take from welfare.

The Tories' real attitude to the low-paid was eloquently expressed last week when 14 cleaners at the Foreign and Commonwealth Office, currently on £7.05 an hour (marginally above the statutory minimum of £6.70), wrote to Minister Philip Hammond asking for a meeting to talk about pay.

The reply came in the form of 14 letters from the FCO's cleaning contractor, Interserve, summoning them to a disciplinary meeting.

Three of the organisers of the letter have now lost their jobs - for reasons unrelated to the letter, Interserve insists. The cleaners say that this is a mighty coincidence, which they find hard to accept.

The more strident opponents of the welfare state make a particular point of child benefit, which the Tories intend in future to pay only in relation to the first two or three children (they haven't decided yet). Why should the rest of us subsidise big families, angry phoners-in demand to know?

But, even in theory, in the abstract, the Tories' promise to make up for benefit cuts by promoting higher wages makes no sense in relation to child benefit: wages cannot take account of family size.

Around 3.3 million working households across the UK - 17% of the total - are dependent on tax credits and/or child benefits. Approximately 120,000 of these are in the north.

Stormont cannot intervene to alleviate these measures.

But the changes will make it harder for many among the 120,000 families to live a decent life in face of the swingeing cuts in other areas which the Stormont parties seem about to agree to pass on.

There's a battle about to begin which the Tories, in spite of their majority, are by no means certain to win.

Belfast Telegraph


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