Tax credit cuts will not be reviewed in Autumn Statement, says David Cameron


Cuts to tax credits will not be reviewed in the Autumn Statement, David Cameron has insisted amid calls from his own party to think again.

The Prime Minister said he felt the package was the right way to reach the ambition of raising wages and cutting taxes to offset big cuts to in-work benefits.

Critics have condemned the plans, claiming the measures will leave millions of working families out of pocket. The Institute for Fiscal Studies has warned it is "arithmetically impossible" for nobody to lose out under the changes.

Former Conservative minister David Willetts urged Mr Cameron and Chancellor George Osborne to look at the plans again as the Tory Party conference got under way in Manchester.

But speaking to BBC One's The Andrew Marr Show, Mr Cameron said the introduction of the national living wage and continued increases to the personal tax allowance would protect the poorest.

He said: "We have had the vote in Parliament on tax credits and I think people respect this argument that the national living wage - a 50p increase next year, so a £20-a-week pay rise, rising to £9 by the end of this Parliament - that is a very significant change that really helps to make work pay rather than a tax credit system that recycles money back to people.

"Obviously I accept we are making changes to tax credits. We are protecting the lowest-paid people with child tax credits and what goes with it but we are moving to an economy where you get paid more and where you pay less in tax, rather than paying more in tax and getting the money back in tax credits. That is a better system.

"As a country, we have had to make difficult decisions in order to get rid of what was the biggest budget deficit almost anywhere in the world. Of course, if you don't tackle excessive welfare and make reductions there you have to either put up people's taxes or cut the NHS or cut education, which I don't want to do."

Asked directly about a further review ahead of next month's Autumn Statement, Mr Cameron said: "No, we think the changes we have put forward are right and they come with higher pay and lower taxes."

Mr Willetts told The Times ahead of the conference: "There is a real risk that it could turn sour as some of those hard-working families that politicians love realise they are heavy losers."

He added: "If the goal is a genuine blue-collar conservatism, it must be a priority for the autumn statement and spending review to ease a policy which could otherwise do the same kind of political damage as Labour's abolition of the 10 per cent income tax band."