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Tory minister attacks tax credits

The government's tax credits plan will not help to alleviate poverty and debt worries in the UK, a Conservative shadow minister has suggested.

Terming the subsidies "a real Achilles' heel for Labour", Greg Clark told a seminar that the policy as a whole leads to low-income workers becoming "stuck" in their jobs without the possibility of progressing.

"You get into this undesirable equilibrium where people are in work but need income support - that is not poverty cured, that is poverty disguised," the Guardian reports him as saying.

"Clearly at any particular point it is better to pay tax credits and have people in work, rather than out of work, but in the medium and long term that is a sub-optimal outcome and you need to inquire rigorously as to why people can't earn enough."

As an alternative to Labour's tax credits, Mr Clark suggested that there should be a renewed focus on skills development among low income workers - enabling them to get better-paid jobs and pay off debt.

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