Category: Tax Credits

The compliance framework: Concentrix’s ‘reign of terror’ and ever-decreasing tax credits

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A US outsourcing company, Concentrix, which was awarded a £75m contract by Her Majesty’s Revenue and Customs (HMRC) – the department responsible for collecting taxes and paying out certain benefits – has been accused of exercising a “reign of terror” over people who claim tax credits.

The private company was contracted to “reduce fraud and error” in the tax credit system, and to carry out “compliance checks” in a bid to save the government money. More than 500 civil servants have been deployed to help the private company resolve problems it caused by stopping people’s tax credit payments. This includes tax credit awards for the children of both in work and out of work parents, as well as child care payments.

The company has issued an apology for failures that have left many people with no benefit payments for up to two months, leaving them without money for essentials. The US firm has been accused of “incorrectly” withdrawing tax credits. 

Officials from HM Revenue and Customs told a committee of MPs that a breakdown in customer services at Concentrix had resulted in only 10% of calls being answered on some days.

Many thousands of people had their tax credits stopped after Concentrix said they were making “fraudulent claims”. In what can at best be described as Kafkasque taunting, one poor woman was told she was in a relationship with a chain of newsagents, another with the philanthropist and poverty researcher, Joseph Rowntree, (who died in 1925,) according to a BBC report. A teenage single mum receiving tax credits was told she was married to a dead pensioner, after having her child tax credit withdrawn. Another mother was told she was living with the previous tenants of the house that she had lived alone in for two and a half years with her son, after her child tax credit was also withdrawn. 

It’s difficult to conceive that these allegations could possibly have been made in genuine error. Mumsnet, an online forum for parents, has had over a thousand comments from parents who received letters from Concentrix demanding evidence out of the blue that they live alone. This was just on one page of ten on the site about the unreasonable demands for “compliance” that the company has been making of parents.

Many have been forced to print off documents like utility bills which were online, or pay for numerous backdated bank statements, to provide endless evidence of their circumstances. This is a costly process for people who need additional support in the first place, and many had already had their payments ended. The main reason for “compliance checks” has been suspicion of an “undisclosed partner,” challenging the legitimacy of a single claim, based on other data indicating that another adult is living at the address. 

In October 2010, HMRC and the Department for Work and Pensions released a joint error and fraud strategy. As a result, HMRC increased its compliance activity across the tax credits system and introduced the use of data from credit reference agencies to inform compliance decisions. Through this process, single claims were identified where there was an indication that there may be a second adult living with the claimant – an “undisclosed partner”. However, credit reference agency data is notoriously unreliable.

Compliance

The “compliance framework” is a government method of preempting and preventing “non-compliance”, based on data collection and “analysis” by private companies that are hired by the public service sector. Instead of being “reactive” and acting after a “transaction”, the private companies are using “insights” to calculate “high risk” claimants. Ultimately, the aim is to cut costs, “through real-time auditing and prevention of fraud and error, agencies can collect the right amount of taxes to help ensure the right people receive the benefits they deserve.” (My bolding).

And: “Services can be embedded in processing functions to prevent non-compliance.” 

The rationale: “Struggling with increasing demand for services amid widespread economic constraint, human services organizations face a major dilemma—how to minimize costs while improving services and ensuring accurate benefit distribution.

By using analytics, forward-thinking human services organizations are rising above this challenge. They are preventing, detecting and mitigating transactions where there is error, fraud or abuse. And they are using information gleaned from analytics to significantly reduce operating costs and drive business results.” (From: Accenture Intelligent Processing Services).

I’ve discussed elsewhere that the increasing use of a narrative of “objectivity” and emphasis on “analytics”, detachment and quantification, associated with small state ideology and austerity, tends to place some social groups at a psychological distance from administrators, and objectifies them, as if people claiming support because they can’t work, or because their wages are low and exploitative, are a homogenous group of people, bound by characteristics rather than circumstances in a context of political decision-making.

It becomes easier to disassociate from someone you view “objectively” and to distance yourself from the impact of your calculated and target-led decision-making, constrained within a highly political framework. Such an objectification of a person or group of people serves to de-empathise us, which is a key characteristic requirement of neoliberal ideology, embedded in inhumane “small state” policy and extended via administrative (and outsourced, privatised) practices. It leaves us much less likely to relate to the circumstances, emotions or accept the needs and choices of others. Such interactions become much more open to bureaucratic abuse and political exploitation.

The Institute for Fiscal Studies (IFS) have previously undertaken research into the costs of compliance on individuals, and their report refers to the time, money and psychological costs that are being imposed on applicants for, and recipients of, benefits and tax credits and on others by meeting all the various rigid requirements placed on them by social security and tax credit law and statutory authorities.

However, this study was undertaken before the Conservatives increased conditionality and compliance requirements further, in the radical Welfare Reform Act 2012. The burdens on those needing welfare support have grown substantially since the research was completed. (See: Understanding the Compliance Costs of Benefits and Tax Credits. )

Some of the people affected gave emotional testimonies, as they told the work and pensions select committee that they had been forced to borrow money and go to food banks as a result of the hardship caused by Concentrix’s actions.

The committee was told that of the 45,000 payments stopped, nearly 15,000 had appealed so far and that “90% – 95%” had been successful in overturning the decision.

HMRC officials said they first became concerned of problems at Concentrix in August when they started receiving reports that only 10% of calls were being answered within five minutes – the target was 90%.

Jon Thompson, chief executive of HMRC, said “a collapse in basic customer service” had occurred caused by too few staff being on hand, and that he’d personally taken the decision not to renew Concentrix’s contract. It ends in March next year.

Frank Field, the chair of parliament’s work and pensions committee, has said that a company’s “reign of terror” over tax credit recipients will be drawing to a close, after HMRC decided not to renew its contract.

On Thursday, the work and pensions committee heard from claimants who wrongly had their tax credits stopped and suffered the distress and humiliation of having to borrow money or visit food banks to feed their children.

The committee also heard that, at the height of the crisis, only 1% of the calls being made to Concentrix were actually being answered.

The committee issued a comment on the “extraordinary” evidence it heard, from four single parents who had wrongly had their tax credits stopped, senior staff from Concentrix, including senior Vice President Philip Cassidy, and HMRC, including Chief Executive and Permanent Secretary Jon Thompson.

Claimant humiliation and appalling customer service

The Committee heard about:

  •  The humiliation of claimants who were forced to borrow money from friends and family in order to feed their children as they were left without benefits, to which they were ultimately found to be entitled, for up to seven weeks
  • Appalling customer service which saw claimants calling up to 70 times to get through as just 1% of calls were answered by Concentrix at the height of the crisis. One claimant finally waited 90 minutes to speak to a Concentrix adviser on an 0845 number, at great personal expense
  • Appeal success rates of 73% according to HMRC or 90-95% according to Concentrix; either way a terrible indictment of the original decision-making process
  • Refunds to claimants taking place over a series of months. In one case, a single mother lost housing benefit because a refund of wrongly withdrawn tax credits took her over an income threshold. Others will have taken on debts in the meantime
  • Repeated buck-passing between Concentrix and HMRC, who signed the contract, as to who was responsible
  • HMRC Permanent Secretary Jon Thompson was unable to explain what had gone wrong and why
Committee to seek clarifications from Concentrix and HMRC

The Committee has agreed to write to both Concentrix and HMRC demanding urgent information regarding:

  • How the performance of Concentrix was monitored by HMRC
  • Levels of staffing at Concentrix, in particular during August 2016, and the training provided to staff
  • Steps HMRC will take to compensate claimants, ensure they are not further disadvantaged, and review decisions taken by Concentrix
  • Assurance that Concentrix will not be compensated for HMRC taking much of their responsibilities back in-house

The Committee also plans to issue a report into the scandal.

Chair’s comment

Frank Field MP, Chair of the Work and Pensions Committee, said:

“The Committee was astonished by the extraordinary evidence we heard. From Concentrix we saw a company desperately out of their depth and unable to deliver on the contract awarded to them by HMRC. From senior HMRC officials we saw a palpable disregard for the human implications of this gross failure of public service. From the tax credit claimants we saw dignity in the face of appalling and traumatic experiences.

We have no doubt that many people similarly affected have been unable to come forward. I welcome HMRC’s swift action on the Concentrix contract, but that does not excuse them for ever having allowed this to happen.”

You can listen to the work and pensions committee meeting about the Concentrix and tax credits controversy here: https://goo.gl/q0mGiR

 

See also:

The government’s tax credit Claimant Compliance Manual

Tax credits: undisclosed partner interventions – Child Poverty Action Group


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UN to question the Conservatives about the two-child restriction on tax credits

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The government’s decision to limit child tax credits to two children only per family, unless a further child is the result of rape, has been referred to a United Nations human rights panel. 

The government has made an exception to the tax credit limit for children conceived through rape – though what policies will be put in place to process this exemption have yet to be specified.

A formal complaint by the Scottish National Party MP Alison Thewliss to the UN will be examined by its official committee on the rights of the child, before hearings on the impact of the Conservative’s welfare “reforms” next week. A UK government delegation will have to explain how the “reforms” conform to the UN obligations on child poverty. 

The UN has asked the UK government to provide evidence on whether ministers had carried out an impact assessment into how the welfare cuts including the implementation of the benefits cap “and other benefits cuts” would affect children.

In a letter to Alison Thewliss, the UN said it had also asked for information on “the measures being taken to mitigate negative impact of this reform on the enjoyment of the rights of children, particularly those in vulnerable situations”.

The UN committee is expected to deliver its final recommendations to the UK government in early June.

Alison Thewliss.
                                                                   Alison Thewliss.

Thewliss, who held a meeting with the welfare reform minister Lord Freud earlier this week, described the rape clause as “medieval”. She said it “stigmatises mother and child, and risks discriminating against those who may for religious or traditional reasons have larger families.”

Eugenics by stealth

Last year I wrote about the government plans to restrict child tax credit payments to two children in families, with the stated intention of directing behavioural change, so that poor families wouldn’t have more children that they “can afford.” This assumes, of course that family situations remain static, and that people don’t experience downward mobility because of job market insecurity, accident or ill health. The Conservatives had announced plans to cut welfare payments for larger families at that time. Whilst this might not go quite as far as imposing limits on the birth of children for poor people, it does effectively amount to a two-child policy.

A two-child policy is defined as a government-imposed limit of two children allowed per family or the payment of government subsidies only to the first two children. 

The restriction in support for children of larger families significantly impacts on the autonomy of families, and their freedom to make decisions about their family life. Benefit rules purposefully aimed at reducing family size rarely come without repercussions.

It’s worth remembering that David Cameron ruled out cuts to tax credits before the election when asked during interviews. Tax credit rates weren’t actually cut in the recent Budget – although they were frozen and so will likely lose some of their value over the next four years because of inflation.

Some elements were scrapped, and of course some entitlements were restricted. But either way a pre-election promise not to cut child tax credits sits very uneasily with what was announced in the budget.

Iain Duncan Smith said last year that limiting child benefit to the first two children in a family is “well worth considering” and “could save a significant amount of money.” The idea was being examined by the Conservatives, despite previously being vetoed by Downing Street because of fears that it could alienate parents. Asked about the idea on the BBC’s Sunday Politics programme, Duncan Smith said:

“I think it’s well worth looking at,” he said. “It’s something if we decide to do it we’ll announce out. But it does save significant money and also it helps behavioural change.”

Firstly, this is a clear indication of the Tories’ underpinning eugenicist designs – exercising control over the reproduction of the poor, albeit by stealth. It also reflects the underpinning belief that poverty somehow arises because of faulty individual choices, rather than faulty political decision-making and ideologically driven socioeconomic policies.

Such policies are not only very regressive, they are offensive, undermining human dignity by treating children as a commodity – something that people can be incentivised to do without.

Moreover, a policy aimed at restricting support available for families where parents are either unemployed or in low paid work is effectively a class-contingent policy.

The tax child credit policy of restricting support to two children seems to be premised on the assumption that it’s the same “faulty” families claiming benefits year in and year out. However, extensive research indicates that people move in and out of poverty – indicating that the causes of poverty are structural rather than arising because of individual psychological or cognitive deficits.

The Joseph Rowntree Foundation published a study that debunked  the notion of a “culture of worklessness” in 2012.  I’ve argued with others more recently that there are methodological weaknesses underlying the Conservative’s regressive positivist/behaviourist theories, especially a failure to scientifically test the permanence or otherwise of an underclass status, and a failure to distinguish between the impact of “personal inadequacy” and socioeconomic misfortune.

Limiting financial support to two children may also have consequences regarding the number of abortions. Abortion should never be an outcome of reductive state policy. By limiting choices available to people already in situations of limited choice – either an increase of poverty for existing children or an abortion, then women may feel they have no choice but to opt for the latter. That is not a free choice, because the state is inflicting a punishment by withdrawing support for those choosing to have more than two children, which will have negative repercussions for all family members.

Many households now consist of step-parents, forming reconstituted or blended families. The welfare system recognises this as assessment of household income rather than people’s marital status is used to inform benefit decisions. The imposition of a two-child policy has implications for the future of such types of reconstituted family arrangements.

If one or both adults have two children already, how can it be decided which two children would be eligible for child tax credits?  It’s unfair and cruel to punish families and children by withholding support just because those children have been born or because of when they were born. Or because of the circumstances of their birth.

And how will residency be decided in the event of parental separation or divorce – by financial considerations rather than the best interests of the child? That flies in the face of our legal framework which is founded on the principle of paramountcy of the needs of the child. I have a background in social work, and I know from experience that it’s often the case that children are not better off residing with the wealthier parent, nor do they always wish to.

Restriction on welfare support for children will directly or indirectly restrict women’s autonomy over their reproduction. It allows the wealthiest minority to continue having babies as they wish, whilst aiming to curtail the poor by disincentivisingbreeding” of the “underclass.” It also imposes a particular model of family life on the rest of the population. Ultimately, this will distort the structure and composition of the population, and it openly discriminates against the children of large families.

Article 25 of the Universal Declaration of Human Rights, of which the UK is a signatory, reads:

  1. Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.
  2.  Motherhood and childhood are entitled to special care and assistance. All children, whether born in or out of wedlock, shall enjoy the same social protection.

The United Nation’s Convention on the Rights of the Child (UNCRC) applies to all children and young people aged 17 and under. The convention is separated into 54 articles: most give children social, economic, cultural or civil and political rights, while others set out how governments must publicise or implement the convention.

The UK ratified the Convention on the Rights of the Child (UNCRC) on 16 December 1991. That means the State Party (England, Scotland, Wales and Northern Ireland) now has to make sure that every child benefits from all of the rights in the treaty. The treaty means that every child in the UK has been entitled to over 40 specific rights. These include:

Article 6

1. States Parties recognize that every child has the inherent right to life.

2. States Parties shall ensure to the maximum extent possible the survival and development of the child.

Article 26

1. States Parties shall recognize for every child the right to benefit from social security, including social insurance, and shall take the necessary measures to achieve the full realization of this right in accordance with their national law.

There are other relevant Convention Articles here, which the Conservative’s two-child policy also potentially compromises or violates.

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The Strathclyde Review clarifies the Conservatives’ authoritarianism

 

“The Government appear to consider that any defeat of an Statutory Instrument by the Lords is a breach of convention. We disagree.” Lord Norton of Louth (Conservative)

“The conduct of Parliament is a matter for Parliament, not the Executive. The Executive is accountable to Parliament, not the other way round.” Lord Forsyth of Drumlean (Conservative)

“The assertion is that this House had acted in defiance of the Government’s “electoral mandate”. But the Conservative Party never told voters that it intended to make massive cuts to in-work benefits, and it won a House of Commons majority of only 12 seats on the votes of just 24% of the total electorate, so the claim that the Lords defied an electoral mandate is tosh.” Lord Howarth of Newport (Labour). Source: Hansard.

A Bicameral Parliament is one in which two assemblies share legislative power. The main purpose of the House of Lords is to act as a deliberative assembly, providing expert scrutiny to ensure democratic checks on the power of the Lower House, and where necessary, to provide a counterbalance for excessively partisan legislation that makes no concession to the accommodation and representation of minority views. The House of Lords provides an essential additional layer of democratic process which helps to prevent the so-called “tyranny of the majority” and divisive, potentially damaging partisan changes to public life.

There is always a need to ensure additional checks and balances against incumbent governments and for extending opportunities to review and improve the quality of legislation. There is always a need to broaden the political participation of particular groups in society and to explore ways by which under-represented groups may be identified and included in political processes.

A review by Lord Strathclyde, commissioned by a rancorous and retaliatory David Cameron following the delay and subsequently effective defeat of government tax credit legislation in the House of Lords, recommends curtailing the powers of Upper House. 

Strathclyde proposes that the House of Commons is given the final say over secondary legislation (in particular, Statutory Instruments), which is frequently being used for political manoeuvring to edit the details of Acts, and ensure rules, regulations and even changes to legal definitions are made by ministerial order, rather than by the rather more open and democratic process of primary legislation: it’s being used as a way of bypassing Parliamentary scrutiny. 

In fairness, on page 6 of the report, Lord Strathclyde says:

“I believe it would be appropriate for the Government to take steps to ensure that Bills contain an appropriate level of detail and that too much is not left for implementation by statutory instrument.”

The problem is that Statutory Instruments (SI) are being over-used and are under-scrutinised in the Commons. SIs have become a major form of law-making activity in the UK. In 2015, the UK Parliament passed 34 Acts, whilst 1,999 Statutory Instruments were made. (In fact, 2015 has been a relatively light year for SIs: in 2013 and 2014, 3,292 and 3,486 SIs were made.)

The Government ensure they have a majority on any SI committee and MPs are chosen by Whips. The Hansard Society estimate that SIs currently account for as much as 80 per cent of the Government legislation that impacts citizens. However, they are given substantially less Parliamentary time than Bills, enabling Government to push through their legislative programme with very little scrutiny, exacerbating a lack of democratic transparency and accountability of the Executive (the Government).

The report details 3 possible options:

  • option 1 would remove the House of Lords from the Statutory Instrument procedure altogether – to take Statutory Instruments through the House of Commons only
  • option 2 would seek to retain the present role of the House of Lords but clarify the restrictions on how its powers should be exercised, by codifying them passing a resolution
  • option 3 is a compromise option would create a new procedure in primary legislation. The new procedure would allow the House of Lords to ask the House of Commons to think again when a disagreement exists but gives the final say to the elected House of Commons

Strathclyde has recommended option 3. However that would have a profound impact on our constitutional democracy.

The Hansard Society said that:

“Most criticism of the system is concerned with the negative resolution procedure where the initiative lies with the Opposition to table appropriate annulment motions in the form of Early Day Motions (known as “prayers”). Given that the Government controls almost all the available parliamentary time in the Commons, unless the Opposition can persuade the Government to provide time, either on the floor of the House or in Standing Committee, the SI will not be debated.

The time limit (of an hour and an half) imposed on debates should be removed.”

The Society also recommend far more robust pre-legislative scrutiny mechanisms.

Lord Craig of Radley (Cross-Bencher) points out that:

“Since 2010, 34 Acts have been passed by Parliament with Henry VIII powers. Before us at present there are five Bills with Henry VIII powers. In case your Lordships are not familiar with Henry VIII powers, I should like to read from Clause 68 of the Scotland Bill, which states: “The Secretary of State may by regulations make … such consequential provision in connection with any provision of Part 1, 3, 4, 5 or 6, or … such transitional or saving provision in connection with the coming into force of any provision of Part 1, 3, 4, 5 or 6 … Regulations under this section may amend, repeal, revoke or otherwise modify any of the following (whenever passed or made)” — and so it goes on. In other words, if your Lordships think that you have passed a Bill, you have not — because the Secretary of State can amend it by statutory instrument.”

Baroness Smith of Basildon (Labour) said she would like to thank Lord Strathclyde for his report, and:

“For the extraordinary speed with which it has been produced and the vigour with which he has sought to defend the Government’s exceptionally weak rationale for undertaking it.”

She also said:

“Lord Strathclyde asks for responsible Opposition. We provide that but seek responsible Government.”

Baroness Andrews (Labour) said:

“We have had to refer back to this House secondary legislation which contains substantial policy changes with substantial impacts — for example, the draft hunting regulations, immigration changes, and universal credit. In this Session alone, 32 SIs have had to be corrected by government after serious flaws were identified and 16 have had to be withdrawn completely.

If we add to that ministerial failure to provide impact statements, or Explanatory Memoranda which do the opposite of what they are supposed to do, a picture emerges of a Government who not only deliberately exploit secondary legislation and reduce parliamentary scrutiny in the process but are resentful of proper scrutiny. If we were to lose our exceptional power to reject SIs, Parliament would lose a legitimate brake on government excess. However, it would also reduce the credibility of the scrutiny process as a whole and open the gate to greater abuse. What is needed, which the noble Baroness, Lady Hayman, anticipated, is a wholesale review of secondary legislation to remind Ministers of their public duty to be open and transparent about policy and legislation, to be accountable, and to respect—in fact, invite—the role of scrutiny.

We should not see this as a stand-alone report; rather, it should be seen alongside other legislation and proposals—for example, the lobbying Bill in the previous Parliament that restricted the ability of charities and other groups to campaign for their causes; new limits on freedom of information; and the Trade Union Bill, debated this week, which will strip the Labour Party of its funding, quite contrary to the balanced proposals from the Committee on Standards in Public Life. We have seen reports of Ministers being told to make increased use of statutory instruments to drive through legislation without proper scrutiny; and now we have the proposal to remove this House’s power to veto the same secondary legislation that the Government favour. It is hard not to see this as an authoritarian Executive waging war on the institutions that hold them to account. The Government are seeking to stifle debate, shut down opposition and block proper scrutiny. They are a Government who fear opposition and loathe challenge.”

Lord McNally (Liberal Democrat) said:

“I may want to see this House reformed, but I have no wish to see it become Mr Cameron’s poodle, and a neutered poodle at that.”

I suspect this is a Government that would prefer a world of neutered poodles.

disempowerment
Conservative Paternalism


A full transcript of this important debate can be found here

You can also watch the excellent contributions here.

Cuts under Universal Credit are discriminatory and may be illegal

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The Labour Party released details of research last month, showing how new claimant families will get lower in-work benefit entitlements when tax credits are replaced by the Universal Credit benefit system.

Owen Smith, the shadow Work and Pensions secretary, said research commissioned from the House of Commons library shows that next year, thousands of working families will be at least £2,500 a year worse off as a result of the government’s cuts to Universal Credit.

Mr Smith MP, responding to Iain Duncan Smith’s recent claim on the Andrew Marr show that “nobody loses a penny” from cuts to Universal Credit, said:

Iain Duncan Smith is completely wrong to say nobody loses a penny from his cuts to in-work support.

 Cutting Universal Credit raises £100m for the government next year and that money has to come from somewhere.

What the Tories aren’t telling us is that the £100m – and a further £9.5 billion over the next five years – comes from the pockets of low- and middle-income families.

That means those currently on Universal Credit face losses of up to £2,400 come April.

Just like tax credit cuts, working families will be worse off next year and just like those cuts, Labour will fight them at every turn.

Earlier this month, analysis from the independent Office for Budget Responsibility, (OBR) suggested the changes to universal credit announced in the July budget would save the Chancellor close to £3bn by 2019-20.

The Labour Party is taking advice from lawyers about the legality of the benefit cuts under universal credit. Owen Smith, the shadow work and pensions secretary, said it is discriminatory that a single mother working full-time on the minimum wage could be almost £3,000 worse off under universal credit than a mother in precisely the same circumstances on tax credits.

The challenge raises the possibility that the new welfare system could be challenged in court.

Although the Chancellor abandoned plans to cut tax credits affecting millions of working families, in his Autumn Statement, it was due to  pressure from the opposition, because the cuts were rejected by the House of Lords and a number of uneasy Tory backbenchers also raised concerns about the negative impact the cuts would have on working families.

Labour MPs have highlighted that claimants will be substantially worse of claiming Universal Credit, the  in-work benefit payments are much lower.

In his autumn statement speech, the Chancellor said: “The simplest thing to do is not to phase these changes in but to avoid them altogether.” But he added: “Tax credits are being phased out anyway as we introduce universal credit.”

The OBR’s analysis show that by 2021 the changes to Universal Credit will save the Treasury almost as much each year as the controversial tax credits policy would have done.

Mr Smith said:

Those lucky enough to stay on tax credits will be massively better off than those on universal credit … That disparity cannot be fair, it cannot be right and it may not even be legal, and we are seeking advice as to the legality of that move.

Mr Smith also confirmed that a Labour government would reverse cuts to benefits happening under Universal Credit. He said:

We will press for the same reversal for the victims of the universal credit heist that will hit precisely the same Tory and Labour constituents just before the next election.

He made the comments in a debate about the welfare cap, after the government sought approval for a motion that said the breach of Osborne’s own fiscal rules were justified because of the reversal of tax credit cuts.

Junior Work and Pensions minister, Shailesh Vara, has confirmed that on current forecasts the cap will not be met for three years.

Universal Credit is to be rolled out gradually, with about 500,000 people on the new benefit by next April. The government has insisted they will be compensated for lower payments through a special scheme called the flexible support fund.

However, Owen Smith said the only money on offer was a £69m grant for job centre managers to help people who are close to getting into work with costs such as bus fares and new clothing.

He said:

Even if it were permissible to use that money, it is in no way going to make up for the £100m shortfall next year, the £1.2bn shortfall the year after, and certainly not the £3bn shortfall in 2020. It is completely impossible and I fear it is also misleading to the public.

Mr Smith also queried the Chancellor’s absence from the House of Commons during the debate, saying he had “carelessly, ignominiously fallen into his own welfare trap” and “slipped on his own smirk”.

He said:

But inexplicably, he’s not here to account for it. Last spring he was quite definite that he should be. He said: ‘The charter makes clear what will happen if the welfare cap is breached. The chancellor must come to parliament, account for the failure of public expenditure control’”.

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Tory MP Slams ‘Completely Unacceptable’ Child Tax Credit Cuts After He Researches Impact

imagesA timely reminder of the warnings about Osborne’s cuts from the spending review last autumn.

Conservative MP for Stevenage, Stephen McPartland, has conscientiously boycotted a meeting with a treasury minister David Gaulke, after he discovered that tax credits will be cut, despite assurances to the contrary from the Government.

McPartland did some research, he asked the House of Commons Library for statistical information and found that it calls into question the prime minister’s promise that child tax credits were “not going to fall”.

McPartland, who is one of the two Conservatives that voted against tax credit cuts in September, says that information from the Commons Library reveals that 830,000 families would see their child tax credit support cut in 2015/16 because of measures proposed in the summer budget.

He said the current policy is: “Completely unacceptable and destroys the government’s final defence that planned cuts do not apply to child tax credits.” 

He said: “I am grateful to the House of Commons Library for providing me with these statistics, which sadly prove that many working families will see their Child Tax Credits cut. In fact, the example below clearly demonstrates that the family will currently receive 87% of their maximum Child Tax Credit award. However, this will be cut to 51% in April, when the planned changes take effect, which is unacceptable.”

He told the Telegraph: “I am boycotting the meeting and the media are not invited, as he [Mr Gauke] does not want to talk about the cuts to child tax credits I have uncovered.

“I just think it’s inappropriate that a Treasury minister is coming to Stevenage to talk about giving money away in tax credits to businesses when as a member of the same government I’m trying to stop the disastrous impact of the tax credit changes are going to have.”

Shadow chief secretary to the Treasury, Seema Malhotra, responded: “It is simply astounding that David Cameron and George Osborne’s failure to address concerns around their proposed tax credit cuts means one of their own MPs has had to protest in this way.”

Gordon Brown – who was the designer of tax credits when he was Chancellor – spoke at a meeting with the Child Poverty Action Group in central London today. He said that the tax-credit cuts are “totally counter to British Values” and warned child poverty would hit a 50-year high if the reforms are not abandoned in full.

He pointed out that the cuts will undermine the work ethic that the Tories value so much, and act as a disincentive for people with families wanting to work. He also said that the cuts will mean that there is “less compassion for children in our country which is surely one of the most important features of a civilised society.”

He concluded that the tax credits cuts “anti-work, anti-family, anti-children, anti-fairness, anti-women, and in my opinion anti-British”. 

Related

Osborne’s Tax Credit Cuts Nothing Less Than An Omnishambles

This post was written for Welfare Weekly, which is a socially responsible and ethical news provider, specialising in social welfare related news and opinion.

Corbyn’s best PMQs reveals Prime Minister evades accountability regarding impact of tax credit cuts

Prime ministers questions today

Today, David Cameron strategically evaded a question about his government’s controversial tax credit cuts six times today. The Labour leader, Jeremy Corbyn, had a Jeremy Paxman moment when he repeatedly asked whether people would be left worse off by the cuts after the Treasury revises the proposals.But despite pressing the question, Cameron has yet to respond to it rationally and directly.

Corbyn also challenged Cameron regarding the persistent denial before the election from the Conservatives – including from Cameron, Michael Gove, and the chief whip, that they intended to cut tax credits

The Treasury was forced re-examine the plans after the House of Lords voted down the government’s tax credit cuts twice, tabling amendments to delay the plans until the governmernt took on board new evidence about the negative impacts of the cuts, and until there was better compensation for workers who could lose an average of £1,300 a year.

In a blustering non-response to the Labour leader’s question, Cameron complained that the tax credit plans were defeated by Labour and other opposition peers in a “new alliance of the unelected and unelectable”.

Corbyn responded to an increasingly furious Prime Minister with: “This is not a constitutional crisis. This is a crisis for 3 million people.” 

Corbyn again asked:  “Can he confirm they will not make anyone worse off?”
Cameron responded with:  “He will have to be patient… we will set out our proposals in the Autumn Statement.”

Corbyn said: “People are “very concerned”… “Is he going to cut tax credits or not?”

Cameron said that: “£12 billion welfare cuts were promised in the Tory manifesto. …  I’m happy to have a debate as to how we cut welfare”… “because of what happened in the other place.

“We need to reform welfare.”

The Labour leader cited the case of “Karen” who was concerned about the cuts and said “people are very worried about what’s going to happen to them”.
He said: “Following the events in the Lords on Monday evening, and the rather belated acceptance from the prime minister of the result there, can you now guarantee to the house and the wider country that nobody will be worse off next year as a result of cuts to working tax credits?”

However, the prime minister simply refused to elaborate how the government would reduce the impact of the cuts.

Cameron said : “What I can guarantee is we remain committed to the vision of a high-pay, low-tax, lower welfare economy. We believe the way to ensure everyone is better off is keep growing our economy, keep inflation low, keep cutting people’s taxes and introduce the national living wage.

As for our changes, the chancellor will set them out in the autumn statement.”

Corbyn continued to press Cameron for an answer several times. Cameron admitted that “every penny we do not save” from welfare would have to be found elsewhere,” indicating that the government clearly regards lifeline benefits to poor families as the Treasury’s “disposable income“, and no matter what those political decisions to cut the deficit on the backs of those with the least will cost people in terms of income and living standards, whether in work or not, this government intends to continue with swingeing austerity cuts that target the poorest.

It’s clear that the Prime Minister doesn’t have a response for either Jeremy Corbyn or for all of those hard-working people who are set to lose income and see a drop in their living standards because of the tax credit cuts – many of whom may have voted Conservative at the last election, reassured before the election that their welfare support was safe.

A senior Labour spokesperson said the party regarded Cameron’s House of Lords review “as a smokescreen to cover up the real problem of tax credits”.

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