Tax credits in 'firing line' under Tories says Miliband

Labour would raise tax credits at least in line with inflation every year until 2020 to "protect family budgets".

Speaking in London, Ed Miliband said tax credits were "in the firing line" under a Conservative government, suggesting they had a "secret plan" to cut welfare, including child benefits.

Labour said the Tories' plans envisaged £58bn worth of cuts and other savings.

The Tories dismissed the figures, saying they were based on false assumptions about their spending plans.

Households on average will be around £900 better off in 2015 than they were in 2010, the Conservatives said.

Policy guide: Where the parties stand

With just over a week until polling day on 7 May, both parties are focusing on the economy - with David Cameron due to say he would pass a law to stop a future government raising income tax, VAT or national insurance before 2020.

Mr Miliband set out a new commitment to raise tax credits - introduced by the last Labour government in 1999 as a way of topping up the income of working parents on low pay - at least in line with inflation every year, attacking Conservative policy in the process.

"Another five years of Tory government will mean a plan to double the pace of cuts next year, a plan that puts your family budget, your NHS and our country's future at risk," he said.

'Worse off'

The Conservatives have said they want to find a further £12bn in savings to the welfare bill, which they argue is achievable given that £21bn has been saved in the past five years.

Former Conservative cabinet minister William Hague told BBC2's the Daily Politics: "We've already said what we will do on tax credits for the next two years, which is to freeze working-age benefits."

He added that child benefit was "included in that freeze".

But Labour says the Tories have given no details of what would be cut and that it would be "impossible" to reach the £12bn figure without cutting tax credits for working families.

Mr Miliband said: "Do you believe what you've heard from the Tories in the last five weeks, or do you believe what you've seen and what your family has felt in the last five years? Because examine the Tory record and you realise the reality of their plan.

"Working families cannot afford another five years of David Cameron and another Conservative government."

The opposition has published analysis by the House of Commons library suggesting that £3.8bn could be cut from the tax credits bill by 2020, leaving families earning £12,000 or more at least £550 a year.

'Work hard'

Families with one child, it suggests, will lose tax credits when their incomes hit £23,000 a year, leaving them over £1,600 a year worse off while families with two children will lose tax credits when their incomes hit £29,000, leaving them over £2,000 worse off.

Labour also claim the Conservative plan to include child benefits within the new consolidated Universal Credit in future, saying this will cost more than 4.3 million families a £1,100 a year.

But the Conservatives said the figures were misleading as they did not take account of its plan to raise a further £5bn from anti-tax avoidance measures as part of its deficit-reduction plan, as well its commitment to shield the most vulnerable, including pensioners and those with disabilities, from the welfare cuts.

The Institute for Fiscal Studies has estimated that the government will spend £29.9bn on child and working tax credits in 2015-6, accounting for 13.6% of total expenditure on benefits.

The think tank has said neither the Conservatives nor Labour have provided "anything like full details" on plans to cut the deficit and have also questioned the commitments of other parties.