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Treasury slammed after apparent U-turn on child tax credits denied

25 November 2015

After a day of U-turns, it seems that the 'two-child policy' will not be overturned

George Osborne's plans to cancel his planned cuts to tax credits will not include changes to child tax credit, despite the indications he gave in his statement to MPs today.

As part of his Autumn Statement and Spending Review, the Chancellor announced to the House of Commons that he will be abandoning his plans to save £4.4 billion by reducing tax credits.

Mr Osborne's speech was widely interpreted as a confirmation that the changes to child tax credit would also be scrapped - but within minutes of the apparent U-turn, Treasury officials were telling the press that only working tax credits would be affected.

The original plans announced in the budget, which are still set to take effect, would see tax credits limited to the oldest two children in any family from April 2017, with parents who have more than two children denied any tax credits for those further children.

“Two-child policy”

At the time, the proposed cuts were labelled a ‘two-child’ policy by some for fear of the impact they could have on pregnant mothers in economic hardship.

Mr Osborne has seen a sustained backlash against the tax credit changes in recent weeks from both Conservative and Labour MPs. The changes were voted down by the House of Lords in October despite warnings it broke a century-old tradition of not voting against financial measures already passed by the Commons.

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