And in other news – Commons vote for tax credit cuts

Yesterday the House of Commons voted to approve plans to raise the threshold at which tax credits are withdrawn by a majority of 35.  Writing in Left Foot Forward last week, James Bloodworth explained what this impact of this move would be and why it will not be offset by a planned increase in the minimum wage.

Among households with someone in paid work, those eligible for benefits and tax credits will lose an average of £750 per year because of the changes to tax and benefits announced by the chancellor for this parliament.

And the losses will not be offset by the planned increase in the minimum wage for those aged 25 and over – described by the chancellor as a ‘National Living Wage’ (NLW).

Looking at the extent to which the new NLW will compensate for losses caused by the tax and benefit changes, according to the IFS the average gain from the new NLW for the 8.4 million working-age households who are eligible for benefits and tax credits will be around £200 per year. Factoring in losses from tax benefit changes, this would leave these households worse off by on average £550 a year.

Isabel Hardman describes how Labour incompetence increased the Tories’ margin of victory:

Why didn’t Labour manage to get its act together? It has a new leader and its whips are just getting to work. I understand the Labour whips sent a panicked text message in the middle of this afternoon asking their MPs if they were on the estate. But this was a bit too late, and not enough of their MPs turned out to help.

In the end, it seems only two Tories voted against the measure – David Davis, who seems to be on a turbo-boosted troublemaking mission at present, and Stephen McPartland – with others having been ‘reassured’, or choosing to abstain – as Andrew Percy did.

Whether one blames Corbyn for causing distracting headlines, or the media for allowing themselves to be distracted, it’s important not to overlook polices such as tax credit cuts which will have such an impact on so many.