Left Foot Forward revealed that there was a £350m blackhole in the Conservative's tax credit plan. Couples earning £16,000 would lose out to bring in the £400m
Three weeks ago, Left Foot Forward revealed that there was a £350 million blackhole in the Conservative’s tax credit plan. A parliamentary answer laid today outlines that to recoup the full £400 million earmarked by George Osborne would mean couples earning as little as £16,000 each would lose out.
A Parliamentary Question by Andrew Gwynne MP asked the Treasury to “estimate the level of second income threshold for tax withdrawal required to reduce annual expenditure on tax credits by £400 million.” Finance Secretary Stephen Timms, replying on behalf of the Chancellor, said:
“To reduce total annual Tax Credit expenditure by £400 million, it is estimated that the second income threshold would need to be reduced to around £31,000.”
In his conference speech, George Osborne said:
“And I can also tell you today, we can no longer justify paying means tested tax credits to families with incomes over £50,000.”
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“For the Tories to recoup £400 million from tax credits as they’ve pledged, Osborne had claimed he would only remove tax credits from those earning over £50,000. But figures released to Parliament today show that to raise the £400 million Osborne’s credibility depends on, a couple earning as little as £16,000 each would be hit by his tax plans.”