November 25, 2015 Leave a comment
“I’ve had representations that these changes to tax credits should be phased in. I’ve listened to the concerns. I hear and understand them. And because I’ve been able to announce today an improvement in the public finances, the simplest thing to do is not to phase these changes in, but to avoid them altogether. Tax credits are being phased out anyway as we introduce universal credit. What that means is that the tax credit taper rate and thresholds remain unchanged.”
George Osborne Chancellor of the Exchequer
You could describe it as a u-turn, yet I am more inclined to call it a stay of execution. However you look at it, tax credits are going.
On the surface you could see some merit in an argument that says the state should not be in effect assisting companies in their under-paying of staff. However, tax credits make work affordable for many, and the consequence of unaffordable work is welfare. It may be that this is a false saving. Having said that, I suspect that many will continue in unaffordable work.
In the long run the Chancellor has changed nothing. Working families, many of them , will feel the pinch. Some, the few already subject to Universal Credit, may already be eyeing a prospect of reduced circumstances.
This may be a u-turn today, but the destination remains unchanged.