As it receives a mauling in the House of Lords, will tax credit cuts be this government’s poll tax?

Protect tax credits: A demonstrator from 38 Degrees stands outside the Houses of Parliament (Source: Getty)

Tim Farron, leader of the Liberal Democrats, says Yes

The Conservative Party’s cuts to tax credits are as misguided as their attempts to bring in the poll tax. This is effectively a tax rise targeted towards millions of the lowest paid people in our country. And remember, these people are doing the right thing – they go out to work and tax credits help them get by on lower wages.

Conservatives say their cuts to tax credits will be made up with other changes they are making. This is simply not true.

The independent Institute for Fiscal Studies calculates that some will lose £1,300 a year as a result of the chancellor’s latest Budget. In coalition government, we worked with the Conservatives to reduce the welfare bill but ensured that work would always pay.

These changes don’t do that. It’s not fair and sends completely the wrong message. As with the poll tax, the Conservatives must listen to criticism – from people in all parties, including their own – and recognise they have got this wrong.

Dr Madsen Pirie, founder and president of the Adam Smith Institute, says No

Tax credit cuts are not a new poll tax because everyone, even governments, learn from their mistakes. Fierce opposition from all sides of the political spectrum will have alerted and alarmed the government.

It will lead it to modify this policy, to delay it, adding measures to ameliorate its baneful consequences. Tax credits help those in work, motivating people to get into work.

They make work more attractive than welfare. MPs are rightly alarmed that working people, the ones the Tories want to make their own, will be told just before Christmas that they might lose perhaps £1,300 of their income.

The poll tax bills delivered a similar shock. The chancellor could soften the blow by raising the National Insurance threshold to the minimum wage level, as he is doing for income tax, lessening the unpleasantness for the low-paid.

He will do something like that because this is a politically savvy government, one that looks at how its policies affect people. It will not press on regardless.

Related articles