Gordon Brown warns of big 'poverty problem' over tax credit cuts

Gordon Brown Makes Tax Credit Warning

Tax credit cuts will help land the UK with "one of the biggest poverty problems in the western world", former Labour prime minister Gordon Brown has warned in a staunch defence of his welfare reforms.

Mr Brown, who introduced tax credits as Chancellor in 2003, said George Osborne's move to squeeze them to slash £4.4 billion from the welfare bill was "a mistake, root and branch" and must be abandoned.

The Chancellor has promised to respond to defeats on the issue in the House of Lords by announcing measures to mitigate the effects on low-income households in the Autumn Statement in November.

But, writing in the Daily Mirror ahead of a speech on the issue, Mr Brown said only a full U-turn would suffice and told his Tory successor: "Seriously Mr Osborne, don't take it out on the family, and the children."

The cuts, he said, would undermine "everything Britain stands for: hard work, independence of spirit, savings and compassion for children" and worsen "staggering" projections for poverty.

Dismissing ministers' arguments that the losses would be compensated by measures such as a new £9-an-hour national living wage, he said it would need to be £12 an hour to compensate two-child families and £14 for those with three.

"No phasing in, no temporary halt or slower pacing of the implementation of the Osborne tax credit proposals will make a fundamental attack on the working poor and on children much fairer.

"Why? Because the reforms arise from wrong assumptions - that we have a Britain divided between strivers and skivers."

The "Victorian" policy ignored the need to deal with the "lack of good paying jobs in advanced economies such as ours", he said - leaving the "breadwinners on breadcrumbs" to bear the burden.

"Three alternatives are mooted to tax credits: a negative income tax, citizens' income and raising personal tax allowances.

"But each of them are far, far more costly than retaining child tax credits which are better targeted on helping poor children in working families out of poverty," he concluded.

"And so if the current or pending proposals penalise work and penalise families and children - and are against everything Britain stands for - it's not enough to massage them with a few amendments.

"They are a mistake, root and branch, and in the interests of Britain's hard working families and their children the Autumn Statement on November 25 has to see them abandoned once and for all."

A generation of people in their 20s were "the new poor", he said - and were set to suffer from reductions to Child Benefit and tax credits.

"Britain is about to have one of the biggest poverty problems in the western world and it is government-induced poverty stemming from the Conservatives."