MPs vote for £4.4bn tax credit cuts

MPs passed the measures, which will see the earnings level above which tax credits are withdrawn cut from £6,420 to £3,850 from April 2016, by 325 votes to 290, a majority of 35.

Speaking in parliament in the debate before the vote, Labour's shadow chief secretary to the treasury Seema Malhotra said the plans will “attack families in which people are working hard to do the right thing”.

“These measures will hit families with children the hardest and impact on child poverty at a time when the government are also abandoning their commitment to eradicate child poverty by 2020, and effectively abolishing the child poverty watchdog,” she said.

“The Social Mobility and Child Poverty Commission’s remit will now just be social mobility. Tax credits have played an enormous role in tackling child poverty.”

Labour MP for Birkenhead Frank Field, who conducted an independent review on poverty and life chances, said the measures disproportionately affect the poor.

"The figures speak for themselves. We are talking about people at the bottom of the income pile," he said.

"Just one headline figure tells us that well over three million of the lowest paid workers in this country will lose in the region of £1,300 a year."

He said the issue will "rumble and catch fire" in constituencies when the cuts come through.

Conservative Treasury minister Damian Hinds said: “The context to these changes is that, despite making great progress towards balancing the budget, we still ran a deficit of 4.9 per cent last year and are expected to have the second-highest deficit in the G7 in 2015.

“We need to eliminate the deficit and start cutting the national debt in order to build up our resilience to global economic shocks.”

Conservative MP for Wyre Forest Mark Garnier also defended the proposals.

“This measure will affect families, but it is worth bearing in mind the fact that there are mitigating factors that will make a difference for those families,” he said.

“We have heard about the tax threshold increases, and it is also worth bearing it in mind that many of those families are also small and micro-business owners who have benefited from reliefs on business taxes and small business rate relief.

“The economy is also a lot better, with very low inflation rates at the moment.”

Matthew Reed, chief executive of The Children’s Society, described the decision to vote through the changes as a “direct attack on working families”.

“The government’s cut to vital tax credits will affect only working families and will hit millions of children as their families lose more than £1,000 a year.

“Tax credits are vital for low-income working families struggling to make ends meet so they can give their children the basics. In a single stroke, the government has both reduced vital financial support for families and undermined the financial incentives families have to move into work or earn more.”

“If the government is serious about being the champion of hard-working families as it claims to be, it must make sure that work always pays — not push children deeper into poverty.”