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Government sees off rebellion to win vote on working tax credit cuts Government sees off rebellion to win vote on working tax credit cuts
(about 1 hour later)
The government has comfortably won a Commons vote on a controversial proposal to cut working tax credits. George Osborne managed to see off a Tory rebellion against his planned cuts to tax credits by reassuring a series of backbenchers and ministers that he would address their concerns about the impact on low-paid workers.
MPs approved the cuts by 325 votes to 290, a majority of 35. While the government was expected to win the vote, the victory was bigger than anticipated given that the Democratic Unionist party had pledged to vote with the Scottish National party and Labour against the plans. There had also been speculation that five Conservative MPs would vote against the government, which has a working majority of 16. But in the event, only two did so: David Davisand Stephen McPartland. A warning by the former Labour welfare minister Frank Field that the chancellor’s reforms would “catch fire” failed to sway the potential rebels.
Labour attacked the proposals, introduced in the chancellor’s summer budget, as “shameful” and warned they would leave millions of households out of pocket. The government plans to lower the level of earnings above which tax credits are withdrawn, from £6,420 to £3,850, after April 2016. It also intends to speed up the rate at which the benefit is lost as pay rises. The cuts to tax credits, which will see the earnings level above which they are withdrawn cut from £6,420 to £3,850 from next April, were approved by 325 votes to 290. David Davis, the former shadow home secretary, and Stephen McPartland, were the only Tory MPs to vote against the government alongside Labour, the SNP and the Democratic Unionists.
Frank Field, a Labour former welfare reform minister, said the issue would rumble and “catch fire” in constituencies when the cuts were made. The Labour leader, Jeremy Corbyn, had earlier told the TUC conference he would oppose the cuts to tax credits – and called Tory ministers “poverty deniers” – but the measure was passed by a majority of 35.
But the Treasury minister Damian Hinds said the plans were crucial to the government’s wider ambition to tackle low pay. The changes were expected to save £4.4bn in 2016/17 Related: Jeremy Corbyn: Conservatives are poverty deniers
In a speech at the Trades Union Congress in Brighton earlier, new Labour leader, Jeremy Corbyn, made it clear that his party would oppose the government’s welfare plans and sought to draw a clear distinction between Labour and the Conservatives. The Tory rebels said Osborne had made clear in meetings he held at Westminster on Monday and in the hours leading to the vote that he could not row back on the changes, which will save him £4.4bn in 2016-17 – a large chunk of his planned £12bn in welfare cuts. But they said he had listened to their concerns and had indicated that he would seek to reduce the impact on low paid workers in future budgets.
“They call us deficit deniers; they spend billions cutting taxes for the richest families and for the most profitable businesses. What they are is poverty deniers. One Tory MP, who decided not to rebel after meeting the chancellor, said: “I went in to see the chancellor expecting to have the thumb screws applied. But instead he listened and said he would work hard to address our concerns about low-paid workers.”
“They are ignoring the growing queues at food banks, they are ignoring the housing crisis, they are cutting tax credits … Let’s be clear: austerity is actually a political choice that this government is taking and they are imposing it on the most vulnerable and poorest in society.” It is understood that the chancellor did not promise any new measures. He instead pointed out that he is committed to raising the tax free personal allowance to £11,000 next year as “a down payment on our goal of reaching £12,500”.
Osborne also said that his “national living wage”, which will be set at £7.20 an hour from next April to rise to £9 by 2020, would give 2.7 million people a pay rise. It would also have a “ripple effect” for 6 million by delivering knock-on pay rises up the income scale.
The chancellor also said his plans would mean that five out of 10 families would still benefit from tax credits, down from one in six under the coalition. The figure stood at nine in 10 under Labour.
Peter Aldous, the Tory MP for Waveney, praised the government but voiced deep concerns. He told MPs: “I do have serious concerns about the impact on working families in the short term over the next two to three years, and I urge the government to address these issues in the coming months before the measures come into effect next April.”
Frank Field told MPs: “In one single move [the chancellor] has destroyed his 2020 election strategy because we heard the very powerful speeches the chancellor made saying the Conservative party was in favour of those individuals who got up in the morning, who did grotty jobs for very low pay and they passed the windows of their neighbours whose curtains were still drawn, who were on benefits.
“Those individuals who still rise to the work motive in this country, which is so important for both economic and human advance, will know as they pass those windows with the curtains drawn they do so on average with £1,300 a year less in their pocket.”