John McDonnell calls for tax credits U-turn

Shadow Chancellor John McDonnell appearing on the BBC One current affairs programme, The Andrew Marr Show. Picture: PA

Shadow Chancellor John McDonnell appearing on the BBC One current affairs programme, The Andrew Marr Show. Picture: PA

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LABOUR would support the government if it delayed plans to reduce tax credits, shadow chancellor John McDonnell has has said ahead of a crunch vote at Westminster today.

On the eve of the controversial changes coming before the House of Lords, Mr McDonnell said his party would not make “political capital” out of a U-turn by Chancellor George Osborne.

It can’t be a fudge. Not some partial reversal that scores cheap headlines, yet leaves people still worse off or lands another burden on the poorest

John McDonnell

Meanwhile, Education Secretary Nicky Morgan said Mr Osborne was in “listening mode” and hinted he could use his Autumn Statement next month to announce measures to soften the impact of the £4.4 billion a year welfare squeeze.

Scottish Conservative leader Ruth Davidson added her voice to calls for a rethink, prompting SNP MP Pete Wishart to claim the whole of the Scottish political establishment was against the changes.

Peers will today vote on moves to throw out the package, which has been approved by MPs, or block it until ministers find ways to prevent poorer worker families suffering a £1,300 average loss of income from April.

Mr McDonnell has written to Mr Osborne urging him to make changes and promising to co-operate if “real protection” is given to low-income families.

Speaking on the Andrew Marr show yesterday, he said: “It is a real offer to the government, to George Osborne, to see if we can actually make sure people are properly protected and that, at the right time, if there is a way of reducing tax credits, of course we will co-operate with them.”

Referring to criticism directed at him for reversing a decision to back the Chancellor’s fiscal charter, Mr McDonnell said: “I have written to George Osborne today to say ‘I know what a U-turn looks like and how it can damage you but we need a U-turn on this one’.

“So I have said to him ‘Look, if you can change your mind on this, we will not make any political capital out of this’.

“If the Lords do throw this out tomorrow and put it back to the government, I have said to him ‘If you change your mind and bring back a policy in which people are protected – not a political stunt but a real protection – we will not in any way attack you for that. In fact, we will support you.”

He added: “These are people who go to work, look after their kids, do everything asked of them and they are going to lose, on average, about £1,300 a year – 200,000 people could be forced into poverty.”

In his letter, Mr McDonnell wrote: “It can’t be a fudge. Not some partial reversal that scores cheap headlines, yet leaves people still worse off or lands another burden on middle and low earners or the poorest in our society.

“I am appealing to you to put the interests of these three million families ahead of any concerns you may have about losing face and ahead of petty party politics.”

Ms Davidson also warned that the present policy would cause unacceptable “suffering” for poorer families.

Ms Morgan insisted there was no question of the cuts being dropped and urged the House of Lords not to provoke a potential constitutional crisis by striking down a finance measure already backed by MPs.

The “broad package”, including a higher minimum wage and increases in income tax personal allowance, would offset the losses, she said. Asked whether Mr Osborne could meet calls for mitigating measures, she said: “The Chancellor’s track record has very much been about supporting, in Budgets, working families. He very much is always in listening mode.”

Liberal Democrats have tabled a rare “fatal” motion that would force the government to resubmit its policy to parliament, while a Labour amendment instead seeks a fresh consultation and “full transitional protection for a minimum of three years”.

Ministers are urging critics to back a motion by Church of England bishops expressing “regret” at the failure to consider the impact but allowing the cuts to complete their parliamentary passage.

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