Playing the tax credit game
Source: The Daily Telegraph
Away from the pomp and ceremony surrounding Chinese President Xi’s state visit, something very ordinary is going on in the background; a Conservative backbench revolt. Unusually not involving Europe, Conservative MPs are ramping up the pressure on the Chancellor over proposed cuts to in-work tax credits. Up until now George Osborne has been determined to press ahead with plans to cut the earnings level at which tax credits start to be withdrawn, from £6,400 to £3,800. The Tories have consistently argued that a majority of families will be better off if all tax changes and the new national living wage are taken into account. However many still see the tax credit changes as coming "too hard and too fast".
To add more spice to the issue, the Government has rejected an attempt by the House of Lords to kill off the proposed cuts, warning peers that they will trigger a constitutional crisis if they press ahead with plans to defy ministers on a financial matter. By telling peers that they risk a renewed push to weaken the powers of the Lords if they refuse to back down, the Government has brought House of Lords reform back to the table.
As for the Chinese state visit, the issue to watch today is whether Chinese state nuclear companies - China General Nuclear Corporation and China National Nuclear Corporation – confirm they will take a stake in the EDF-led project to build the UK’s first nuclear reactor project in a generation at Hinkley Point. This development has sparked mixed reactions politically, and is triggering a debate about how Britain approaches Asia’s largest rising power.