Liberal Democrats to Declare War on Inequality

4.11.00pm BST (GMT +0100) Mon 30th Jul 2007

Liberal Democrat research shows a shocking picture of tax credits being overpaid, and now being clawed back by government, causing untold problems for families. This comes as Liberal Democrats nationally reveal plans to tackle poverty and help people back into work and off benefits. In Oxfordshire over £12m has been overpaid to thousands of families and they are now being expected to pay it back.

Cllr Jean Fooks, shadow cabinet member for children, young people and families said, "The recent Unicef report on children in the UK compared to other developed countries made depressing reading. It is shameful that after 10 years of a Labour government supposedly committed to reducing inequality, it has actually got worse." Recent research by the Rowntree Trust shows that children who grow up in poverty at present are likely to remain poor and far less likely than their better-off peers to do well at school or to succeed in later life.

Liberal Democrats have drawn up exciting proposals to turn this situation around. At their autumn conference they will be debating a new policy which will dramatically improve the life chances of all children, especially those with more difficulties than their peers. The current excessively complicated and unfair tax and credit system needs drastic overhauling. Liberal Democrat proposals would invest in early years support, increase Child Benefit by £5 per family per week, taking higher earners out of tax credits altogether so that those who most need it get extra support. £1.5bn would be invested in improving the education of the most disadvantaged, by doubling the deprivation-related funding for schools and giving more support to families where needed.

The proposed Lib Dem tax credit reforms would save hundreds of millions of pounds every year by simplifying the system to reduce the overpayments in the first place, freeing up funding for increasing Child Benefit and investing in education. Jean added, "These proposals are a breath of fresh air and tackle the root causes of poverty, poor education and poorly paid employment opportunities. It is nothing short of scandalous that in 21st century Britain some of our least well-off citizens are paying an effective tax rate of over 60%. The indiscriminate clawing back of overpaid benefits must stop."