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Tax Credits

Part of Opposition Day — [7th Allotted Day] – in the House of Commons at 2:23 pm on 20th October 2015.

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Photo of Seema Malhotra Seema Malhotra Shadow Chief Secretary to the Treasury 2:23 pm, 20th October 2015

I will give way in a moment.

A family with one earner on the minimum wage will be more than £1,500 worse off next year and almost £7,000 worse off over the Parliament.

The claim that we have heard most is that working families should not be concerned because the minimum wage will see significant increases in the next few years. As the Institute for Fiscal Studies has made abundantly clear, the claim that those increases will close the gap is arithmetically impossible. Paul Johnson, the director of the IFS, summed it up:

“The key fact is that the increase in the minimum wage simply cannot provide full compensation for the majority of losses that will be experienced by tax credit recipients”.

He said:

“Unequivocally, tax credit recipients in work will be made worse off by the measures in the budget on average.”