My staff turned down pay rises because they would lose out, Suffolk MP claims

South Suffolk MP James Cartlidge

South Suffolk MP James Cartlidge - Credit: Gregg Brown

A Suffolk MP and former housing entrepreneur has claimed staff would turn down a pay rises because they would lose their tax credits.

James Cartlidge, a new Conservative MP, told the House of Commons his constituents in South Suffolk would support the reform of tax credits because it currently created a “benefits trap” and it was “holding back social mobility”.

“In my experience as a small business owner I was absolutely shocked to find that members of staff would decline pay rises that we offered them because they would lose so much in tax credits in this absurd system,” he told MPs.

Mr Cartlidge founded the property portal, mortgage broker and home show business Share to Buy Ltd in 2004, but resigned as a paid director when he was elected in May.

Welfare secretary Iain Duncan-Smith said that the roll out of Universal Credit, which is replacing most benefits and tax credits with a single benefit, would make it easier for people to find work and take on different hours.

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“At the moment under tax credits you are often penalised for making a decision to move on in the hours because you lose far too much of your earnings. That reform is underway and it will change lives,” Mr Duncan-Smith said.

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