PMQ’s highlights Cameron’s Unavoidable Tax Credit Issue

Kevin Craig

Founder and CEO

PLMR MD Kevin Craig on the Prime Minister's lack of an answer to the tax credit question

Today’s session of Prime Minister’s Questions prompts many questions worthy of longer comment on another day, including why is it that Jeremy Corbyn (who I spent time with at Labour Party Conference and liked a lot) cannot manage to look smart on television? Why do Labour MPs not try to pretend to make a fist of it and be more supportive and loyal – even if just for the cameras? Since when has the hitherto aggressive Romford MP Andrew Rosindell become such an amiable, unifying force in the call for more school places? Who is writing David Cameron’s jokes (which are generally quite good)? When will Jeremy Corbyn start to impose himself more at PMQs beyond the “I have a letter from” device and why on earth was Jeremy Corbyn not told to stay on tax credits for the whole session given what I write below?

Today’s PMQs had one stand out feature. The Prime Minister does not currently have an answer on the tax credit question. His position is contradictory to all that he sought to project in his centrist party conference speech a few weeks back . He is hugely adept at answering a question in the House of Commons by throwing back at the questioner good points which support his political strategy. However he did not deal at any point today with the specific allegation being levied at him by MPs of all parties – namely that the tax credit changes that the PM is bringing in will leave a lot of people worse off. We have heard many specific cases. We have seen a Conservative voter on Question Time break down into tears (and be shockingly vilified by some on the Left for having been so stupid or selfish to vote Conservative). If you watch every second of PMQ’s today (and you should) you will not hear the Prime Minister say that the tax credits “will not leave anyone worse off”. You will not see him specifically deal with the point that these reforms have losers. You will not see him articulate specifics that show that there is nothing to worry about with these reforms. There is too much chaff and not enough detail. And it will unravel.

You will see today a Prime Minister articulate that he wants to make work pay. You will see him say that he wishes to usher in a country where there are lower taxes, higher wages and where welfare reform is implemented to make work pay. All well and good. But as of today, the PM cannot address SPECIFICALLY the case made by many, including last night by new Conservative MP Heidi Allen MP. This is not an issue on which just the Left are uneasy. The PM will need to address the “desire for movement on tax credits” sought by party grandees such as Sir Edward Leigh MP.

The big political questions can always be distilled into how we would talk about them down the pub, or in a café, or at work. Wherever. On tax credits, the problem is thus. From April, 2015 the level at which tax credits start to be withdrawn will be reduced – from £6,420 to £3,850 – and the amount of tax credit people are entitled to over this amount will be reduced at an even greater rate. People will have less money in their pocket. Across Britain, millions of voters will learn how much money they are set to lose when Government writes to them in December. The PM and the Government’s position hangs on assertions that incomes will be increased or protected by other reforms – that it will “all be fine in the end”. These measures include, says the PM, the National Living Wage, increased childcare (without charge) and bigger personal income tax allowances. But down the pub or the café when you ask – “will people actually lose out and by how much?” the answers are currently “yes” and “a lot”.

The PM needs better answers – including specifics – and not rhetoric or hyperbole – to the charge that these tax credit reforms “betray Tory values”. And if for no other reason than political strategy to help boost flagging ratings (never mind the self-evident fairness of all this) if there has not been an answer in a week’s time, Jeremy Corbyn should ask about no other issue at PMQs.

Around Westminster I feel change is afoot on this policy. Call it refinement. Call it a U-turn. Call it what you want. But you can almost smell the change. Many inside Government acknowledge that part of the Government’s agenda “will hurt some people”. Tax credit reform feels like it risks causing more hurt than the PM or his Party can handle. We shall see.

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