Labour Demands Inquiry Into Tax Credits Cuts

Harriet Harman has written to the Prime Minister to insist that the Government's cuts to tax credits should be scrutinised by a select committee inquiry.

The interim Labour leader said the legislation is being "sneaked through the backdoor" with the "scantest possible parliamentary scrutiny."

Ms Harman accused the Prime Minister of pushing through measures that were not the Conservative manifesto and reminds David Cameron: "On 30 April 2015, in response to a question on whether you would cut Child Tax Credit, you said: 'No I don’t want to do that'."

Her letter challenges the Chancellor's claims that the cuts will be compensated by a rise in the national minimum wage and she told Sky News: "I think we will succeed in making sure this is properly scrutinised and all the evidence about how people will be worse off will come out."

In his Budget earlier this month, the Chancellor announced changes to the thresholds for the receipt of working tax credits which would reduce the amount many workers receive.

It has emerged however that these changes are not part of the primary legislation in the Welfare Bill, but are planned to be implemented after a much simpler and swifter legislation called a "statutory instrument".

In her letter to the PM, Ms Harman says: "It appears that you are proposing to implement your cuts to tax credits with the scantest possible parliamentary scrutiny, through a Statutory Instrument which will not be debated by the whole House of Commons.

"It will only be considered by a committee of no more than 15 MPs and is likely to be concluded in no more than 45 minutes. It will not be possible to amend it."

Harman adds: "Parliament needs to be able to scrutinise this measure which was not in your manifesto, and is substantial and highly controversial.

"These cuts to tax credits hit working families in every constituency, and must not be sneaked through the back door without the chance for MPs to have their say."

The tax credit changes are part of George Osborne's drive to save £12bn by cutting welfare.

In his budget the Chancellor revealed that families with more than two children will not receive tax credits or housing benefit on their third or subsequent children and that the level at which a household's tax credits are withdrawn for every extra pounds earned will be reduced from £6,420 to £3,850.

The Chancellor has argued that his plans to introduce a higher national minimum wage would compensate for this.

The "living wage" paid to workers aged 25 and above is targeted to reach £9 an hour by 2020.

However, the Institute for Fiscal Studies (IFS) said the government's claim was "arithmetically impossible" calculating that 13 million families would lose an average £260 a year from the benefit changes.

The Treasury has confirmed to Sky News that the tapering and new thresholds for tax credits are not part of "primary legislation" and therefore not subject to the same scrutiny through parliament.

In her letter, Ms Harman proposes that this legislation should be examined by the Treasury Select Committee and the Work and Pensions Committee.

Ms Harman told Sky News: "What they're doing is they think 'we've got elected, even though this wasn't in the manifesto, we can just shove it through. That is not the way they should be doing government and we are determined we'll oppose them.

"I think there should be a Select Committee Inquiry first, where the Government will have to bring forward their evidence to justify why they don't think three million people will be worse off."