Miliband Pledges Labour Will Protect U.K. Family Tax Credits

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Labour Party leader Ed Miliband promised to raise tax credits in line with inflation every year if he wins the U.K. general election on May 7, as he accuses the Tories of planning to cut family budgets.

Miliband, flanked by finance spokesman Ed Balls and pensions spokeswoman Rachel Reeves, on Wednesday presented analysis arguing Conservative plans to cut welfare spending by 12 billion pounds ($7.8 billion) will mean a 3.8 billion-pound cut to tax credits. In a speech in London, he accused Prime Minister David Cameron of hiding the fact his austerity plans will hit working families hardest.

“A country succeeds by putting working people first,” Miliband said. Such a cut would “devastate the finances of Britain’s families.”

Both Labour and Prime Minister David Cameron’s Conservatives have hardened their parties’ ideological stances as the campaign enters its final nine days. Miliband reiterated his criticism Tory policies only favor the wealthiest. The Tories have consistently argued a Labour government would wreck the economic recovery, while Cameron pledged on Wednesday to enshrine their promise not to raise some taxes into law.

“Their desperate last minute gimmick merely highlights what they have left out; no protection for family benefits,” Miliband said. “They can’t find any way of making the sums add up.”

Worse Off

The analysis presented by Labour, carried out by the House of Commons Library, suggests families with one child will lose tax credits when their incomes reach 23,000 pounds a year, leaving them more than 1,600 pounds a year worse off. Those with two children will lose the credits when they earn 29,000 pounds, at a cost of 2,000 pounds, Miliband will say.

“Unless you have a plan for growth to support the living standards of working people you can’t get the deficit down,” Balls said in answer to questions. “Asking people with the broader shoulders to pay some more is right.”

Asked about whether he supported Right to Buy -- a reference to Cameron’s pledge to extend council tenants’ right to purchase their homes at a discount to those living in housing association properties -- Miliband said he did “in principle.”

Miliband added the Conservative plan will cost 4 billion pounds and they have “no clue” how to fund it. It will result in “a reduction in the housing stock and less building taking place,” he said.

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