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Tory MP warns party over planned tax credit cuts

Pressure has mounted on Chancellor George Osborne to give way on plans to cut tax credits for low-paid workers, as a succession of Conservative MPs stood up in Parliament on Tuesday to voice their misgivings.

New Tory MP Heidi Allen used her maiden speech in the House of Commons to warn that the changes go "too hard and too fast", and that it was "real people, working people" who would be affected.

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Treasury says tax credit changes have saved £15 billion

The Government has defended changes to tax credits. Credit: PA

The Treasury has released its own analysis of how much would have been spent on tax credits without changes made since 2010.

It claims that prior to reforms which began in 2010, spending on tax credits would have risen to £40 billion a year in 2016/17, compared with £25 billion, which is now forecast by the Office for Budget Responsibility.

The Treasury released the data ahead of an opposition day debate on Tuesday.

It said the £15 billion difference was equivalent to the cost of 70,000 doctors and 200,000 nurses or around 325,000 teachers.

Chief Secretary to the Treasury Greg Hands said: "That £15 billion that we’ve saved – while at the same time offering working people lower taxes and higher wages, thanks to our new personal allowance of £11,000 from April and the new National Living Wage – is the equivalent to £500 extra in income tax for every taxpayer.

"Labour must now explain where the money is coming from. Their economic policy lurches further from chaos to incredibility."

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