Ed Miliband clears up confusion over tax credits

On Tuesday we reported on the fallout coming from an Ed Miliband interview with the Northern Echo that took place last week. The article stated that:

During the interview, Mr Miliband controversially suggested that people in the South should receive higher tax credits than people in the North, to reflect the higher cost of living.

It also quoted Miliband as saying:

We can look at the level of tax credits, so they benefit people in the South who haven’t benefited from the minimum wage.

However Ed’s campaign has been quick to refute this. A campaign spokesman for Miliband Jnr told Uncut that:

This [story] is based on a misunderstanding by the Northern Echo. He did not say he was in favour of regional rates and indeed he isn’t.

According to his campaign, the point Ed was making was that in the south fewer people have benefited from the introduction of the national minimum wage because wages were higher anyway. His spokesman clarified this saying:

He made the point that he favoured looking at the national rate of tax credits to help those who were paid above minimum wage. This would help in every area of the country, but would also help in the south where fewer benefited from the minimum wage.

Ed also tweeted himself this morning from his holiday, in response to Mike Smithson from Political Betting, in an attempt to clear up the confusion. The conversation went like this:

On hol, but saw @MikeSmithsonPB blog. To avoid doubt, NorthernEcho misunderstood me on tax credits. Not in favour of regional rates at all.

This was shortly followed by:

…but I’d like to see higher rates nationally to help those who didn’t benefit from minimum wage, particularly in south where fewer have.

So that should calm down the twitchy northern MPs, and let Ed get back to enjoying his hols.

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2 Responses to “Ed Miliband clears up confusion over tax credits”

  1. The problem, of course, is that this is going to be much more expensive, as there will be increased tax credits for the entirety of the country, rather than just a region. If he’s going to do this, it’ll need to be costed. We can maybe afford to fudge the issue a little bit on resisting cuts. If we’re calling for new programs, we have to be able to say how we’ll pay for them. Otherwise we re-legitimise every economic attack on Labour since the crash.

    I’d also like to see an element of regionality in any case, just to emphasise that Labour considers itself a national party. I wouldn’t say it has to cover the entire south, but in those regions where a relatively high cost of living is combined with a low median wage, some acknowledgement of this in the tax or benefit system, even if only a very partial one, would get the point across and let us draw the right battle lines in the south.

  2. Mavis Bristow says:

    Have we forgotten how tax credits affects all working couples with low income. The current plans on child benefits are based on singles incomes of £40,000+, but it appears to have been accepted that tax credits are to be cancelled on a joint couples income of £30,000-35,000. Tax credits are based on working people paying their own housing costs, council tax, transport costs, all bills, food etc etc and not on benefits, they also have high costs of nurseries and pay for all children they have, this is also cut when a child reaches one, allowing for the fact the wife may only have just returned to work a few months before. Without tax credits, these people are really on the breadline and in danger of losing homes, jobs etc. These people have worked not only to train and stay in a job, but have taken responsibility for themselves when it would be easier to expect the state to provide for them to have a family and not have a partner. These tax credits are not benefits. I also agree that people on £40,000 are not rich either and if tax credits and child benefits are cut at this stage it is not cost effective and does not give people the incentives to work and train hard at their own expense, be a couple and take responsibility for theirselves and their family.

    Why are we paying child benefits to others not living here when we cannot take responsibility for our own children, especially as we are the ones paying the taxes.

    Being in the south does not make us better off as all housing, and council tax costs are higher.

    Please make clear your position on working tax credit as at the moment child benefits for the middle class conservative voters will take over and the lower paid will continue to be penalised without any thought for the consequences.

    Working mothers will find they cannot afford to work or not work? and the jobs will be taken by those given extra money to come off benefits and go back into work, as well as the free training these people are given.

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