Tax credits are useful for self-employed workers, argues the Labour leader at PMQs

The Conservatives’ proposed cuts to tax credits would damage entrepreneurship as many self-employed workers rely on them when they’re starting out, according to Labour leader Jeremy Corbyn.

Speaking at Prime Minister’s Question Time in Westminster, Corbyn criticised Cameron for the planned cuts and made the entrepreneurial case for them to be retained.

Following his format of asking “The People’s Questions’”, Corbyn said: “I have a question from Lizette who says a lot of people are setting up their own businesses, especially in rural areas where job vacancies are limited and pay is often low.

“Tax credits help them until their business becomes established. So cutting tax credits damages her life opportunities and the life opportunities of anyone she might employ.”

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Cameron replied “of course we want to help the self-employed on low incomes”.

“That is why the people on the lowest incomes will continue to receive the child tax credit. But there are other things we’re doing to help the self-employed. We’re cutting income tax, that helps the self-employed. We’re introducing the Employment Allowance to cut the National Insurance budget for the self-employed.”

A reading of the Tax Credit Bill was passed through the House of Commons by 22 votes earlier this week. But Conservative back-bencher Heidi Allen used her maiden speech in Parliament to launch an extraordinary attack on the plan and chancellor George Osborne.

“It is right that people are encouraged to strive for self reliance and to find work that pays for their independence from the state,” she said. “But I worry that our single-minded determination to run a budget surplus is betraying who we are. I know true Conservatives have compassion running through their veins.”

The next reading of the bill will be in the House of Lords on Monday. It is widely predicted that the bill will be defeated and sent back to the lower chamber.

Further reading: HGSBs provide 20% of UK economic growth