Tax Credits

Debate between Bill Esterson and Seema Malhotra

Tuesday 15th September 2015 Commons Chamber

[Seema Malhotra]

The hon. Gentleman continues to miss the point. We cannot remove tax credits in that way without ensuring first that there is an increase in wages for families so that they can support themselves and not see an increase in household debt.

[Bill Esterson (Sefton Central) (Lab)]

On that point, the Institute for Fiscal Studies figures that were given to the Treasury Committee show that the average gain is only £200 for the 8.4 million working age households who are estimated to lose £750 through this measure. Does that not show that the Conservatives’ claim of being the party of working people is a complete fraud?

[Seema Malhotra]

My hon. Friend has made his point incredibly well. I now wish to make some progress.

The IFS has also shown that those on the lowest incomes are being hit the hardest by the Government’s tax and benefits changes. It is also of great concern that many tax credit claimants will not be aware of the cuts and will suffer additional hardship from April without any time to adjust their budgets. Cuts in families’ income will have wider economic impacts. For example, the changes will hit local businesses, and less will be spent in our local shops.

It is staggering that the Budget document did not include a distributional analysis of the impact of the Chancellor’s spending decisions. It is no wonder that people believe that that was deliberate and part of the intent to hide the impact of these changes. That pattern has continued today.