The Lib-Con government will start cutting spending in 2010-11. This could include cuts to Child Tax Credits and the Child Trust Fund.
The Liberal Democrats have agreed to cut £6 billion in 2010-11 as part of the compromise agreement with the Conservatives. This is likely to include cuts to Child Tax Credits and the Child Trust Fund.
The Guardian reports today that:
“the Lib Dems accepted that spending cuts will start this year as part of an accelerated deficit reduction plan.”
In February, Philip Hammond told Channel 4 News:
“We have been very clear about this. In addition to cuts in child trust funds and child tax credits we will cut the government advertising budget.
“So for 2010, it is absolutely right to add savings from the reduction in the advertising budget to the savings in trust funds and tax credits”.
“We can save £1bn-£1.5bn from those three measures.”
Although the Liberal Democrats were previously opposed to cuts in 2010-11, their manifesto set out that they would make savings by “restricting tax credits” and “ending government payment in Child Trust Funds”. The Conservative party manifesto outlined that the party would “stop paying tax credits to better-off families with incomes over £50,000” and “cut government contributions to Child trust funds for all but the poorest third of families and families with disabled children”.
During the election Labour contended that a Conservative government would, in fact, have to cut child tax credits for those earning over £31,000 in order to make up the numbers.
UPDATE 14.47:
The coalition negotiations agreement confirms that, “The parties agree that reductions can be made to the Child Trust Fund and tax credits for higher earners.”
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