Tax Credits

Alan Brown Excerpts

Thursday 29th October 2015 Commons Chamber

[Scott Mann (North Cornwall) (Con)]

I thank the right hon. Member for Birkenhead (Frank Field) for securing the debate. This is the first opportunity that I have had to contribute to the tax credits debate.

The primary aim of this Government is to pay down the deficit, reduce public spending and unshackle the £3,000 that hangs around the neck of every child that is born in the UK. The Prime Minister has lifted thousands of people in my constituency out of income tax altogether, given 30 hours of free childcare and introduced the new living wage. I am proud to associate myself with those measures.

When tax credits were first introduced by Labour, they cost £4 billion a year. This year, I believe, they cost £30 billion, so they clearly need reform.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Gentleman understand that working tax credits and tax credits are means-tested welfare benefits, so if the welfare bill has gone up, it is because families’ incomes have not risen significantly? That is the real reason why the bill has increased, so we need to get incomes to rise.

[Scott Mann]

I accept the hon. Gentleman’s point, but we are looking to increase the living wage to ensure that people are better off in work than out of work.

--- Later in debate ---

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

I welcome this debate and, for the most part, I welcome its tone, particularly that of the earlier speeches of Conservative Members. I hope that their speeches are a sign of a mood swing across the whole of the Government Benches, although I must say that recent contributions have been in stark contrast. If I may, I will outline some of the previous actions of the House and the contributions of Members during the past week. The focus of the House has had me scratching my head, as I am sure has been the case with my constituents.

Last Thursday morning, the hon. Member for Corby (Tom Pursglove) said his constituents had suggested setting up a public fund for them to make donations towards the restoration of this House. I find that incredible. I know that if I took that suggestion to my constituents, the only way I would raise money would be by getting them to donate to a swear box when I asked them such a question. On the same day, the Leader of the House showed his usual vision by suggesting there was no need to reform the House of Lords. That afternoon, we had the debate on English votes for English laws. Much of that debate was predicated on the fact that, as many Conservative Members said, EVEL is the No. 1 issue for their constituents. Again, I find that difficult to believe, because there is absolutely no doubt that the No. 1 issue for my constituents is tax credits.

As I was trying to relax over the weekend, I heard that the bill for Trident has gone up to £167 billion. Apparently, the figure of £167 billion still does not make the Government flinch. It is a 67% increase, but they do not flinch. At that point, they still looked hell-bent on taking forward the tax credits proposals. Monday night was a lost opportunity to kill the tax credit changes stone dead, but at least the other place flexed some muscle and caused the Government to think again. Obviously, plenty of suggestions have been made about how to take that forward.

I should add that the previous tone of some of the debates on tax credits has been really unhelpful. I welcome the speech by the hon. Member for Aberconwy (Guto Bebb), who condemned his fellow friends for suggesting that one solution for making up the income lost in tax credits was to take two jobs and just work longer hours. That is not practical, and it is actually one way for someone to work themselves into an early grave.

I have already said this, but I want to put it on the record again. Let me be clear that this is the No. 1 issue for my constituents. I am pleased that the SNP has been very consistent in arguing against the cuts in tax credits. In my constituency, an estimated 3,800 working families are currently in line to be affected by the tax credit proposals unless they are amended. In previous debates, we have heard the mantra about having a high-wage, low-tax, low-welfare system, but that has clearly been blown out of the water by independent analysis.

I again welcome the fact that many Conservative Members have acknowledged that and have called for action to make sure we protect those on the lowest wages. However, we should not forget the people who are not working, but are looking to get into work. They are in line to lose £2,000 a year. It is impossible to lose that money and sustain a family. We must remember that a lot of people move in and out of work. They will not only lose money when they are in work, but if they are out of work and need support—if they are on a zero-hours contract or are unfortunate enough to lose their job—they will find that the support mechanism has been cut drastically.

What should we do? Some good suggestions were made earlier. The first thing that we need is a proper living wage. We need to bring the living wage in line with when the cuts are made to tax credits, so that we can balance cuts in welfare and ensure people’s incomes are protected. I suggest that the Chancellor could provide greater support for small and medium-sized enterprises to enable them to take on new employees and help more people into work. I have mentioned the cost of Trident, which we could easily scrap. Even though we welcome the decision that it made the other day, we are still calling for the other place to be scrapped.

It is perfectly obvious that there should be a cut in tax avoidance and evasion. The other night, the SNP put forward a proposal to close the Mayfair loophole. Unfortunately, the Government would not agree, but that should be revisited. We should scrap the proposed right to buy in relation to social housing, and the obscene subsidies that might go to people who opt to buy under the Government’s plans. There is no way that the taxpayer should pay up to £100,000 for somebody to purchase a home in London.

It would have been helpful if the UK Government had allowed the Scottish Government to have better borrowing powers so that we could use them to invest in infrastructure and capital spend, which would create jobs. The UK Government should be building more houses in Scotland. We are already showing the way in building more social housing, which creates jobs and a better standard of living. Building energy-efficient homes means that families pay less for heating, which makes their lives easier because they no longer have to make the difficult choice between heating and eating.

The SNP has suggested other measures, including the reintroduction of the 50p tax rate. We should not raise the upper threshold so quickly. We could have a bank levy and a mansion tax, and go for the complete abolition of non-dom status. The Government do not have to aim to get a large surplus so quickly; they could easily slow down their measures and adopt a more balanced approach.

Overall, we should not be hurting those low-paid workers with families who could lose on average £1,300 a year. There is also the cringeable policy of exempting families who can show that their third child is the result of rape. That has not been mentioned today and I note that Conservative Members have chosen not to intervene on me. It is an obscene policy that nobody can justify or explain.

I ask the Minister to speak to the Chancellor and revisit the whole package, because it will save only £4.6 billion. We need a proper strategic overview, which might get us to a long-term recovery plan based on action, not just the words of those on the Government Benches.