UK Politics

Labour Party divided over future welfare cuts

Harriet Harman

There is disagreement within the Labour Party over whether to support some of the welfare cuts unveiled in George Osborne's Budget speech.

Acting leader Harriet Harman faced a backlash at a meeting of Labour MPs on Monday for urging the party to abstain on the Welfare Reform Bill, warning against "blanket opposition" to reform.

It came amid a row over her stance on future limits on child tax credits.

Labour's position will be discussed by the shadow cabinet on Tuesday.

Ms Harman has stressed that any future decisions would be for the next leader.

'Absolutely right'

The party has said it will oppose the main Finance Bill, which enacts Budget measures including faster reductions to the amount of tax credits workers receive, sickness benefits and student grants.

However, there is disagreement over other measures to be dealt with in the separate Welfare Bill - such as restricting tax credits in future to two children.

BBC political correspondent Iain Watson said Ms Harman warned at the meeting that Labour cannot afford to campaign against the public when it comes to welfare cuts.

The interim leader said on Sunday that the party should not oppose the changes to future tax credits being proposed by the government.

But leadership hopefuls Yvette Cooper, Andy Burnham and Jeremy Corbyn criticised the policy change during a hustings debate on Monday.

The only other leadership contender, Liz Kendall, said Ms Harman was "absolutely right".

Speaking in the leadership hustings hosted by the BBC's Victoria Derbyshire programme, Ms Kendall said: "Many parents who aren't on tax credits have to make difficult decisions about how many children they can afford."

If Labour persists with "the same arguments we have done over the last five years" its election defeat will be repeated, she added.

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Media captionLiz Kendall: "If we're going to oppose something, we have to set out how we would fund it, otherwise people won't trust us"
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Media captionJeremy Corbyn: "The Budget last week was brutal and anti-young, and anti the poorest in Britain"
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Media captionYvette Cooper: "We've had some employers who have been exploiting immigration to undercut wages and jobs"
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Media captionAndy Burnham: "The values of the comprehensive education system should be as intrinsic to us as the values of the NHS"

But Mr Burnham said: "You don't allow a change that is going to take money off people in work who are trying to do the right thing."

Ms Cooper said reducing tax credits would affect people's incentives to work. "I think we can be credible and also say we are going to oppose the things that the Tories are doing which are going to hit work and hit people's incentives to work," she said.

Mr Corbyn said he would oppose George Osborne's Budget, which he called "brutal and anti-young and anti the poorest in Britain".

Ahead of the meeting of Labour MPs on Monday night, Ms Harman defended her position and sought to defuse the row over the scale of her party's support for welfare cuts.

She said the party could not "oppose everything" but stressed future decisions would be for the next leader.

"We've got the Budget coming forward next week and a number of bills that the government is bringing forward, whilst I'm interim leader I have to decide how we're going to respond to those.

"But there will be further decisions in the Autumn and that will be for the new leadership," she said.

BBC assistant political editor Norman Smith said the issue may come to a head next week after the SNP announced it would seek to force a Commons vote opposing the cuts to child tax credits.

'Blanket opposition'

The row over child tax credits was sparked on Sunday when Ms Harman said Labour's big defeats in the last two elections meant it could not adopt "blanket opposition".

She said the party must listen to the views of those who had put off having "bigger families" for financial reasons, as well as those getting state support.

The acting leader said Labour would not oppose the government's plan to reduce the overall household benefit cap - to £23,000 a year in London and £20,000 outside - and it would also back the third child limit on future tax credits claims.

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Media captionHarriet Harman: "We didn't get elected again... this wasn't a blip"

She said Labour would oppose the reduction in the tax credit threshold to £3,850 a year and the faster withdrawal of it, saying it would leave families an average of £1,000 a year worse off.

But she said the temptation to oppose everything in the Budget was not a luxury open to Labour since, at this moment, it was seen as being a party of opposition - not a government in waiting.

Labour MP Frank Field, who chairs the work and pensions committee, backed Ms Harman, telling the BBC's Daily Politics the stance taken by Labour leadership candidates was "dismal".

He drew a distinction between the two children change, which will only apply to new claimants, and reforms that would apply to those already in the system - an area where he said the Tories were "vulnerable".

But Labour MP Diane Abbott she told BBC Radio 4's Today programme: "I don't believe the Labour Party can support welfare measures that will force tens of thousands of children into poverty."

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