1.Summary
Labour Party and Liberal Democrats have defended the bill to tax credit cuts last week. The last Labour government introduced tax credits to help the not well off as a part of their policy. There are two types of tax credits: Working Tax Credit for those in work, and Child Tax Credit for those with children. The bill is the proposal about Working Tax Credit to be cut to £3.850.
However, the House of Lords opposes the bill. According to Cabinet Office minister Matthew Hancock, the bill is a financial matter, so that the House of Lords is not entitled to oppose the bill.
2.Opinion
These days, the gap between the well off and the not well off is increasing in Japan. In my opinion, The social welfare system become more important to help the not well off. Tax credit is a part of political measures to support them. For example, Japanese government has introduced the subsidy for those who have children and free tuition system for public high school students. This is a part of the social welfare system in Japan.
However, the consumption tax has been a burden for the not well off. The tax rate will rise from 8% to 10% in April, 2016. I disagree to the rise. This is because the tax is a regressive taxation unfavorable to them. The tax should be imposed on luxury goods, not necessities of daily lives.