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Clean Politics > Published by Will Straw, June 23rd 2010 at 10:38 am

Tory “lies” on tax credits exposed

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Before the general election, the Labour party’s claims about Tory plans to cut child tax credits were dubbed “lies”. Labour was exonerated yesterday as the truth was revealed.

At his party conference speech last year, George Osborne said:

“we can no longer justify paying means tested tax credits to families with incomes over £50,000.”

Since then, the Conservative party has been consistent in claiming that “No families with a combined household income of £40,000 or less will be affected by our [tax credit] policy.”

George Osborne tried the trick again by claiming in his speech, “we will reduce payments to families earning over £40,000 next year and then align the thresholds for the child and family element.” But Table A2 in the Budget could not be clearer. By 2012-13, no family with one child over the age of one and income over £30,000 will get a penny in tax credits.

Earlier this year, a party election broadcast by the Labour party highlighted Conservative plans to “stop Child Tax Credit payments to hundreds of thousands of families on middle and modest incomes”. This followed a Labour briefing on February 3rd which claimed that:

“The independent Institute for Fiscal Studies has said that the Conservatives would need to take tax credits away from households with incomes of £31,000 to raise the money that the Conservatives have promised.”

A week later, then shadow work and pension secretary Theresa May, wrote an article on the Conservative party’s Blue Blog titled “Labour lies on child tax credits“:

Tax credits are designed to help families on low incomes, but we are now paying them to families earning over £50,000. We don’t think that is affordable anymore, so we have said that under a Conservative Government these families would stop receiving tax credits. No families with a combined household income of £40,000 or less will be affected by our policy.”

Who’s lying now, Theresa?

UPDATE 24/6:

It’s just worth being clear that this article – as per the note to the table above – refers only to those ineligible for baby, childcare, or disability tax credits.

  • http://twitter.com/derekbunce/status/16838386762 Derek Bunce

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/snookcocker/status/16838431611 Dave Edwards

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/wdjstraw/status/16838452116 Will Straw

    Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/houseoftwits/status/16838457200 House Of Twits

    RT @leftfootfwd Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/marksporter/status/16838464039 Mark Porter

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/ciphergoth/status/16838501290 Paul Crowley

    When Labour said the Tories would make these child tax credit cuts, the Tories branded them liars http://j.mp/cRimkr

  • http://twitter.com/sohopolitico/status/16838589235 Soho Politico

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/sohopolitico/status/16838599405 Soho Politico

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/torydoc/status/16838736252 Zahid Raja

    “@leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2” <= I'm *sorry* if we're not giving the rich benefits. #LabourLost

  • http://tangentreal.blogspot.com/ jdennis_99

    And why, exactly, should people earning more than £30,000 be receiving benefits? Call me a bluff old traditionalist, but I thought the point of the benefits system was to help those in need. How is someone earning more than £30,000 a year in need?

    I agree that they should have been honest about it, but there’s nothing actually wrong with the policy itself.

  • http://twitter.com/drkmj/status/16838967665 DrKMJ

    Tory "lies" on tax credits exposed http://bit.ly/c1HEC2 via @leftfootfwd

  • http://twitter.com/niaccurshi/status/16838974299 Lee Griffin

    RT @leftfootfwd Tory "lies" on tax credits exposed http://bit.ly/c1HEC2 <- I can stomach a lie when mixed with giving low earners more money

  • http://twitter.com/adambienkov/status/16839110908 Adam Bienkov

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/yorkierosie/status/16839117117 yorkierosie

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/adrianhollister/status/16839262809 Adrian Hollister

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/rooftopjaxx/status/16839398762 Rooftop Jaxx

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • Anna

    Shouldn’t the article take into account the plan to increase the tax threshold – so won’t people earning upwards of £25K benefit from that more than they do from tax credits?

  • http://twitter.com/collapsibubble/status/16839497610 J Rob

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/psbook/status/16839943397 Political Scrapbook

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/westernshores/status/16840051348 Pen

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/9xzulug/status/16840068641 winston k moss

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/joshuawishon/status/16840324582 Joshua Wishon

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://notthenewpolitics.blogspot.com/ David Wickes

    Crikey – storm in a teacup time. So the thrust of the ‘lie’ is the difference between £30k and £40k as a family income? Well, that’s obviously a big difference to the families affected, but in terms of policy it’s a continuation of the same idea – not a U-turn, more a further deepening of the cuts already proposed. Which we already knew, or at least expected.

    Sorry, not going to get annoyed enough over this one, even if I finish my sentence in italics.

  • http://twitter.com/nextleft/status/16841019078 Sunder Katwala

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/nextleft/status/16842438269 Sunder Katwala
  • http://twitter.com/smartstuff99/status/16843534912 Andy Smart

    Post the evidence before Alex starts: http://bit.ly/cRimkr

  • http://newsroomnews.com/2010/06/live-westminster-reacts-to-emergency-budget/ Newsroom News» Blog Archive » LIVE: Westminster reacts to emergency budget

    [...] Will Straw at Left Foot Forward says the budget document has exposed Tory “lies” about their tax credit [...]

  • http://twitter.com/devbelly/status/16843685577 Michael Devlin

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://news.homes4people.org/2010/06/23/live-westminster-reacts-to-emergency-budget/ News » Blog Archive » LIVE: Westminster reacts to emergency budget

    [...] Will Straw at Left Foot Forward says the budget document has exposed Tory “lies” about their tax credit [...]

  • http://www.englandinfonewspaper.com/live-westminster-reacts-to-emergency-budget-18 LIVE: Westminster reacts to emergency budget | England News

    [...] Will Straw at Left Foot Forward says the budget document has exposed Tory “lies” about their tax credit [...]

  • http://twitter.com/paulsimpson1976/status/16845930012 paulsimpson1976

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://www.englandinfonewspaper.com/cameron-defends-osbornes-budget-to-protect-the-poor-2 Cameron defends Osborne’s budget ‘to protect the poor’ | England News

    [...] Will Straw at Left Foot Forward says the budget document has exposed Tory “lies” about their tax credit [...]

  • Jacquie Martin

    j dennis_99: Tax credits are not benefits. They are a payment designed to encourage work and to make work pay. The aim is to stop/reduce the dependency on benefits.

    On the bald face of it £30,000 might seem a lot of money but that doesn’t reflect individual circumstances. Deductions have not been taken into account. Nor living costs. For a couple working, there will be extra work associated costs such as travel, work clothes etc. Childcare will figure in most families’ outgoings and will be greater for a single parent household who doesn’t have extra cover. This increases dramatically if a child has SEN. And children are themselves expensive.

    Reducing the incentive to work, espcially as GO made specific reference to lone parents being expected to look for work when their youngest child is aged 5, is not a good policy.

    Obviously there are alternatives: increase the minimum wage, introduce a mandatory living wage, close the pay gap, force employers to allow parents to work any hours they want, provide universal free childcare. Not policies I expect to be introduced any time soon.

    David Wickes: lies should be exposed, not least of all because it tells us something about character and what we can expect. The fact that the Tories lie, either together or when they’re in a coalition, is not a suprise. It is not so much a storm in a teacup as the thin end of the wedge.

    Anna: the tax allowance is not relevant to the table. It’s showing income and tax credits. It’s not attempting to show net income. Most working people will benefit from the increased allowances, but families will lose that if they go above the tax credit threshold – it will cancel it out, if not wholly, then in part. They will still be worse off than they would have been if the Tories hadn’t lied.

    Will: David Cameron, George Osborne, Nick Clegg, Teresa May all signed up to Gingerbread’s campaign to stop discimination of single parents by use of labels and language. GO specifically said in his speech that ‘lone parents’ would be expected to look for work when their youngest child reached 5. Not all parents. Not the absent parents. Just the lone parent. The implication being that ‘lone parents’ (who might be widowed, divorced, DV survivor) wouldn’t want to work, look for work volunarily and so are ‘benefit scroungers.’ More pre-election lies and hypocrisy.

  • http://twitter.com/sunny_hundal/status/16849688991 sunny hundal

    Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/heitzman/status/16849852239 Heitzman

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/humphreycushion/status/16849894716 Humphrey Cushion

    By 2012-13,no family with one child over age of one,income over £30,000 will get a penny in tax credits: http://bit.ly/aL80NQ (@leftfootfwd)

  • http://twitter.com/politic_animal/status/16849989610 Political Animal

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/kebirch/status/16850022837 karen birch

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/cllriangilbert/status/16850059169 Ian Gilbert

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/hanlemic/status/16850430543 Michael Hanley

    RT @humphreycushion: By 2012-13,no family with one child over age of one,income over £30,000 will get a penny in tax credits: http://bit.ly/aL80NQ (@leftfootfwd)

  • http://twitter.com/politic_animal/status/16850567748 Political Animal

    RT @humphreycushion By 2012-13, no family with 1 child over age of 1,income over £30k will get a penny in tax credits: http://bit.ly/aL80NQ

  • http://twitter.com/thehooleys/status/16850671161 thehooleys
  • http://twitter.com/tommilleruk/status/16850816278 Tom Miller

    RT @wdjstraw: Remember this on tax credits? RT @SamuelCoates Lies: http://j.mp/ciVBA6 << Who's lying now, Sam? http://bit.ly/c1HEC2

  • http://twitter.com/chrisplol/status/16851033003 Chris Paul

    RT @humphreycushion: By 2012-13,no family with one child over age of one,income over £30,000 will get a penny in tax credits: http://bit.ly/aL80NQ (@leftfootfwd)

  • http://twitter.com/alisonstarr/status/16851241597 Alison Starr

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://twitter.com/rosannablabla/status/16851248370 Rosanna

    RT @politic_animal: RT @humphreycushion By 2012-13, no family with 1 child over age of 1,income over £30k will get a penny in tax credits: http://bit.ly/aL80NQ

  • http://twitter.com/prettypolymath/status/16852420026 Prettypolymath

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • http://twitter.com/ladyofthecoffee/status/16855134835 Coffee Lady

    RT @sunny_hundal: Oh look, the Tories lied about tax credits too. What a surprise: http://bit.ly/c1HEC2 (by @leftfootfwd)

  • http://www.byrnetofferings.co.uk Thomas Byrne

    Have LFF worked out how this coalition thing works yet?

  • http://twitter.com/lescromps/status/16864274730 Les Crompton

    RT @leftfootfwd: Tory "lies" on tax credits exposed http://bit.ly/c1HEC2

  • James Taylor

    @Jacquie Martin – ‘thin end of the wedge’ arguments (like ‘slippery slope’ arguments) are just lazy and irrelevant to the debate in question. whether this appears to confirm your preconceived prejudices is neither here nor there.

    Also, how can you dismiss Anna’s argument on the grounds that the table is ‘not attempting to show net income’? Surely that’s the whole point at issue – you can’t possibly discuss whether someone is worse off or better off without reference to their net income.

    I’m with David on this – this is just an extension of an existing plan, it’s hardly a policy U-turn. Banging on about ‘Tory lies’ in this instance just seems partisan and puerile – and distracts attention away from some of the more important issues on which we ought to be holding this government to account (in a grown-up way)

  • Natalie

    The tables indicate that we can expect future adjustments but a big change is the increase in the withdrawal rate from 37%to 41% (the rate at which tax credits are withdrawn as income increases). The tables only show scenarios without the childcare element of working tax credit (ie support to help pay for childcare costs). If you apply the new increased withdrawal rate there are dramatic cuts for working families with childcare costs now rather than in a couple of years.

  • http://tangentreal.blogspot.com/ jdennis_99

    @ Jacquie Martin:

    Tax credits are payments from the State to citizens. They are benefits. Don’t kid yourself. And child tax credit in particular is not based on your employment status – it is paid to recipients of Child Benefit, regardless of whether or not they are working.

    The lowest-paid in society are taxed, and then have to apply to have SOME of that tax given back to them in the form of tax credits. It would be far simpler to simply not tax them in the first place.

    As far as deductions being taken into account, it should be noted that people’s basic living costs are roughly the same. Anything beyond your normal utility bills, food, clothing, and compulsory insurance is not a living cost, it is a lifestyle choice. And I personally do not believe that the State should be in the business of subsidising people’s lifestyles. I live reasonably comfortably on a wage of £18,000. I have two children, who I look after 3-4 days a week. The only benefit I receive is working tax credit, which refunds part of my income tax and national insurance. Now if I can cope with no net help from the State, it is perfectly reasonable for people on nearly £10,000 a year more to cope as well.

  • http://twitter.com/blogsoftheworld/status/17134789454 blogs of the world

    Before the election, Labour's claims about Tory plans to cut child tax credits were dubbed… http://reduce.li/y8gizt #lies