Five solutions for avoiding cuts to tax credits

While the Tories are still thinking about how to solve their tax credits quandary, the Resolution Foundation has come up with a simple solution: the cuts need to be reversed. In a new report out today, the think tank says any of the proposals for ‘lessening the impact of families during the transition’ (in the words of George Osborne) — such as tax cuts, childcare support, raising the minimum wage, gradually introducing the reforms and new measures to protect existing claimants – are still going to hit low-income families hard and the only way of helping them is to reverse the most punitive elements of cuts.

Instead, the Resolution Foundation suggests five ways to raise the funds so the cuts don’t need to happen. None of them are particularly appealing for the government: 

• Increasing the Personal Allowance in line with inflation: instead of moving it towards £12,500. This would raise £4.9 billion by 2020.