THE Budget is unfair to Catholics because of plans to limit to two the number of children eligible for tax credits from April 2017, a North-East Labour MP has suggested.

Bishop Auckland MP Helen Goodman, a shadow work and pensions minister, told MPs "every child matters" during the second day of debate on George Osborne's summer Budget.

The measure was announced by Mr Osborne yesterday as a key part of his plans to slash the tax credit bill for new claimants.

Intervening on Work and Pensions Secretary Iain Duncan Smith, Ms Goodman said: "You always tell the House your politics is based on your faith.

"I wonder if you could you explain to the House why cutting tax credits for large families is a fair thing to do when it will be concentrated - I know you don't want to look at statistics - but it will be concentrated on families where children are living in poverty, on Roman Catholic families, on Catholics from other minorities.

"Don't you understand that every child matters?"

Mr Duncan Smith replied: "I have for some time believed the way tax credits operated distorted the system so there were far too many families not going into work, living in bigger and bigger houses, with larger families subsidised by the state when many others, the vast majority of families in Britain, make decisions about how many children they can have and the houses they can live in.

"Getting that balance back is about getting fairness back into the system. It is not fair to have somebody living eventually in a house they cannot afford to go back to work on so that they do not enter the work zone and their children will grow up with no sense of work as a way out of poverty."