Tory “lies” on tax credits exposed

Before the election, Labour's claims about Tory plans to cut child tax credits were dubbed "lies". Labour was exonerated yesterday as the truth was revealed.

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.

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