Cut tax credits, says Labour's Frank Field

Posted On: 
3rd July 2015

The newly elected Labour chairman of the work and pensions committee has endorsed the Government's plans to cut tax credits and promote the living wage in next week's Budget.

Frank Field agreed with George Osborne that work should begin on cutting the £30bn tax credit bill.

However he said cuts should be introduced gradually as employers will not be able to increase wages in line with the amount people stand to lose in lower tax credits.

Mr Field proposed any new tax credits claimants be rejected, and those receiving them should gradually stop before 2020.

Mr Osborne is expected to cut tax credits in the budget, to help cut £12bn from the welfare bill.

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“We should realise as politicians that we have responsibility for creating a new army of dependency: employers. Instead of saying I’m going to make the savings [on tax credits] this year, I would make them by the end of the parliament. So they are phased in. But you can start by making the savings immediately for new claimants," Mr Field said.

He proposed the Low Pay Commission be replaced with a fair wage commission that will aim to force sectors to adopt the living wage of £7.85, or £9.15 in London, as opposed to the minimum wage of £6.50.