Tax credits could be scrapped in Tory reforms

Tax credits may be cut as part of a long-term reform of benefits, if the Conservatives come to power, reported The Times.

Tory work and pensions minister Theresa May, attacked tax credits in principle, rather than the way they are implemented in a speech on welfare to Policy Exchange – the right-of-centre think-tank.

May raised the idea of radical reform in the “longer term” but did not spell out what she meant in practice. However, she slammed the philosophy behind the benefits.

“Tax credits do not help people get better jobs; in fact they can create poverty traps that actually disincentivise people from working more hours or finding better-paid jobs,” she said.

“Solving poverty is also about aspiration and skills rather than giving people extra financial help. And solving it is about tackling educational failure, antisocial behaviour, debt problems and addiction, and of course it’s about work.”

Policy Exchange is researching evidence that tax credits make only a minimal impact on people’s pay because they are offset by a reduction in other benefits.

A Conservative spokesman later made clear that there were no immediate plans to abolish tax credits, saying they were still regarded as a “good thing”.

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