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| Tax credit reforms will save £15bn a year, Treasury insists | Tax credit reforms will save £15bn a year, Treasury insists |
| (35 minutes later) | |
| The government has defended its cuts to tax credits, saying reforms made since 2010 will save taxpayers £15bn a year. | The government has defended its cuts to tax credits, saying reforms made since 2010 will save taxpayers £15bn a year. |
| The Treasury released its analysis to the BBC as ministers faced calls to rethink the latest changes, which come into force in April. | The Treasury released its analysis to the BBC as ministers faced calls to rethink the latest changes, which come into force in April. |
| London mayor Boris Johnson is among those to have warned about the need to protect low-paid workers. | London mayor Boris Johnson is among those to have warned about the need to protect low-paid workers. |
| Labour has pledged to reverse the changes and is urging Tories to oppose them in a Commons vote on Tuesday. | Labour has pledged to reverse the changes and is urging Tories to oppose them in a Commons vote on Tuesday. |
| From April, the threshold at which tax credits begin to be withdrawn will fall from £6,420 to £3,850, and people's credit entitlement over this amount will be reduced more steeply. | From April, the threshold at which tax credits begin to be withdrawn will fall from £6,420 to £3,850, and people's credit entitlement over this amount will be reduced more steeply. |
| The government says people's incomes will be protected by other measures, including the new National Living Wage, increased free childcare and a larger personal income tax allowance. | The government says people's incomes will be protected by other measures, including the new National Living Wage, increased free childcare and a larger personal income tax allowance. |
| '200,000 nurses' | '200,000 nurses' |
| Chancellor George Osborne was asked about the reforms at a meeting of Conservative backbench MPs on Monday evening. | Chancellor George Osborne was asked about the reforms at a meeting of Conservative backbench MPs on Monday evening. |
| BBC political correspondent Ben Wright said that, with millions of people due to learn how much money they will lose, in letters received shortly before Christmas, one MP had described the issue an "unexploded bomb". | BBC political correspondent Ben Wright said that, with millions of people due to learn how much money they will lose, in letters received shortly before Christmas, one MP had described the issue an "unexploded bomb". |
| But the Treasury is "holding the line" and "not budging", looking set to "take the political hit" on the reforms, our correspondent added. | But the Treasury is "holding the line" and "not budging", looking set to "take the political hit" on the reforms, our correspondent added. |
| In a challenge to critics of the policy, the department has commissioned analysis on public spending levels that would have occurred without any of the government's changes and challenged Labour to say what it would do differently to reduce borrowing. | In a challenge to critics of the policy, the department has commissioned analysis on public spending levels that would have occurred without any of the government's changes and challenged Labour to say what it would do differently to reduce borrowing. |
| The Treasury study found that spending on tax credits would have risen to £40bn a year by 2016-17. It is now forecast by the Office for Budge Responsibility to be just over £25bn in 2016-17 - around £15bn lower. | The Treasury study found that spending on tax credits would have risen to £40bn a year by 2016-17. It is now forecast by the Office for Budge Responsibility to be just over £25bn in 2016-17 - around £15bn lower. |
| This figure, which includes the £4.5bn due to be saved by the latest changes, was the equivalent of the cost of 200,000 nurses or 325,000 teachers, the Treasury said. | This figure, which includes the £4.5bn due to be saved by the latest changes, was the equivalent of the cost of 200,000 nurses or 325,000 teachers, the Treasury said. |
| Background | Background |
| Tax credits debate: Finding your way | Tax credits debate: Finding your way |
| But shadow Treasury minister Seema Malhotra said the poorest were being hit while the wealthiest were gaining from tax cuts. "This choice is actually about many of these nurses, teachers and teaching assistants, carers, those who are on low incomes," she told BBC Radio 4's Today. | But shadow Treasury minister Seema Malhotra said the poorest were being hit while the wealthiest were gaining from tax cuts. "This choice is actually about many of these nurses, teachers and teaching assistants, carers, those who are on low incomes," she told BBC Radio 4's Today. |
| "It is going to backfire because what George Osborne is doing essentially is choosing between the working poor and the non working poor when what he should be doing, if he is trying to balance the books, is making sure we can grow the economy." | "It is going to backfire because what George Osborne is doing essentially is choosing between the working poor and the non working poor when what he should be doing, if he is trying to balance the books, is making sure we can grow the economy." |
| 'Very vulnerable' | 'Very vulnerable' |
| MPs will debate the issue in the House of Commons at about 12:40 BST, with Labour urging Tory MPs to back its motion calling for a rethink. Cross-bench peer Baroness Meacher is also tabling a motion for next Monday to amend the reforms in the House of Lords. | MPs will debate the issue in the House of Commons at about 12:40 BST, with Labour urging Tory MPs to back its motion calling for a rethink. Cross-bench peer Baroness Meacher is also tabling a motion for next Monday to amend the reforms in the House of Lords. |
| While backing the principle of the changes, several Tory MPs are calling for "transitional" arrangements to be put in place to help those likely to be affected. | While backing the principle of the changes, several Tory MPs are calling for "transitional" arrangements to be put in place to help those likely to be affected. |
| James Cartlidge, MP for Suffolk South, told Radio 5Live some people would be left in a "very vulnerable position". "The worst thing we can do here to try and pretend that some people will not be worse off," he added. "I think that's a mistake". | James Cartlidge, MP for Suffolk South, told Radio 5Live some people would be left in a "very vulnerable position". "The worst thing we can do here to try and pretend that some people will not be worse off," he added. "I think that's a mistake". |
| And Lucy Allan, MP for Telford, has called for a "discretionary hardship fund" to help those on the lowest incomes in receipt of working tax credits who she says could lose out until the new national living wage rises to £9 in 2020. | And Lucy Allan, MP for Telford, has called for a "discretionary hardship fund" to help those on the lowest incomes in receipt of working tax credits who she says could lose out until the new national living wage rises to £9 in 2020. |
| She wrote on her blog that "during the transition period there are working families in Telford who will struggle" and remedial action was needed. | She wrote on her blog that "during the transition period there are working families in Telford who will struggle" and remedial action was needed. |
| The Institute for Fiscal Studies has said those on lower incomes will be more affected by the cutbacks than any welfare change during the last Parliament. | The Institute for Fiscal Studies has said those on lower incomes will be more affected by the cutbacks than any welfare change during the last Parliament. |
| But its director Paul Johnson told Today that, even with the proposed cutbacks, the tax credit system would remain "far more generous" than it was in 1997. | But its director Paul Johnson told Today that, even with the proposed cutbacks, the tax credit system would remain "far more generous" than it was in 1997. |
| "Wherever we end up in 2017...the total level of spending is back to about 2003 levels, not back to a world before tax credits," he said. | "Wherever we end up in 2017...the total level of spending is back to about 2003 levels, not back to a world before tax credits," he said. |
| How will you be affected by cuts to tax credits? Please email haveyoursay@bbc.co.uk with your experiences. | |
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