Tax Credits

Debate between Lord Ashton of Hyde and Baroness Lister of Burtersett

Wednesday 4th November 2015 Lords Chamber

[Baroness Lister of Burtersett]

To ask Her Majesty’s Government what is their assessment of the impact of the proposed reductions in tax credits on the number of children in working families living in poverty.

[Lord Ashton of Hyde (Con)]

My Lords, the Government are committed to moving from a high-welfare, high- tax, low-wage economy to a lower-welfare, lower-tax, higher-wage society. As the Chancellor has made clear, the Government will set out in the Autumn Statement how we plan to achieve the same goal of reforming tax credits and saving the money we need to save to secure our economy while, at the same time, giving help in the transition, including to families with children.

[Baroness Lister of Burtersett (Lab)]

When the leader of the Opposition asked the Prime Minister a question about this matter this morning, he made reference to increases in the minimum wage and personal tax allowance, due next year. Does the Minister accept that those measures will do little to prevent the 200,000 increase in child poverty figures, forecast by the Resolution Foundation, if the tax credit cuts go ahead? They cannot target support on children and will not, in any case, be of benefit to many of those affected by the cuts.

[Lord Ashton of Hyde]

My Lords, we believe that work is the best way to help children. There is evidence to support the fact that children in workless households do worse than those in working ones. In addition, we are helping families with children. We are doubling free childcare and, under universal credit, we will support the increase to cover up to 85% of childcare costs where all parents are in work, regardless of the number of hours worked. The early years pupil premium provides £50 million in extra funding. We are currently providing free school meals for all infant school pupils in the first three years and we are introducing tax-free childcare from 2017.