Victoria Atkins MP said:
“We must live within our means as a country. To do that, the Government has needed to find at least £12 billion of welfare savings. Identifying such savings was never going to be easy and the changes to Tax Credits is one of a number of ways in which the Government will achieve this.
Tax Credits were introduced to help people live on low wages – in other words, helping to subsidise low wages. The system has grown far beyond what was intended and what is affordable.
The Government believes that it is better for wages to be increased, rather than relying on Tax Credits to make up the difference. That is why the changes to Tax Credits comes alongside the introduction of a new National Living Wage. This will be set at £7.20 in April 2016, with plans to raise it to at least £9 per hour by 2020, which will be a direct pay rise to over 2 million people worth up to £5,000. This is in addition to the continued policy of raising the threshold at which people start paying tax, so that the lowest paid keep more of their money.
These changes will return Tax Credit spending to the level it was in 2007-2008 in real terms. I do recognise, however, that these changes may be felt keenly by some of my constituents. Anyone who has specific concerns about this should please contact me at [email protected]. “