Thursday 5 April 2012

End of the line for the tax credit gravy train

There's been a predictable outcry today about the tax credit changes which come into force tomorrow but the question Calton wants to ask is how on earth we got into the situation where we were paying child tax credit to 90% of families, including some with a household income of more than £40,000, in the first place? Of course those who are now losing the benefit are going to scream but they shouldn't have had it to begin with. It was part of a big tax giveaway by Gordon Brown designed to keep the country voting Labour and it failed. The great British public are not that stupid. Is it really so unfair to ask that a couple with children work at least 24 hours a week between them in order to qualify for working tax credit? A single parent has to work at least 16 hours a week to qualify and someone without children has to work at least 30 hours. The tax credit gravy train is running out and about time too. It is a fundamentally flawed system, with all or nothing cutoffs, which has grown like topsy and now urgently needs to be replaced. Increasing the personal tax allowance is a good start.

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