Tax Credits

Andrew Percy Excerpts

Tuesday 15th September 2015 Commons Chamber

[Peter Aldous]

I thank the hon. Gentleman for making that point, but I am constrained specifically to the issues we are debating.

It is wrong that the Government are subsidising employers in this way. Moreover, the current system of tapering income thresholds and interconnectivity with other benefits is ridiculously complicated and opaque.

I welcome the Government’s proposals to increase the personal allowance and to introduce the national living wage. It is right that working taxpayers, especially those on low pay, should keep more of the money that they earn as an incentive to work. My concern is that in the short term, over the course of the next two to three years, those who will be hit hardest by these measures are working families, often with children, on low wages. These are the hard-working families—the people doing the right thing—that all political parties say they support and must support.

In my constituency, where the median wage is just under £24,000, many people will be seriously affected by these changes. As of May this year, 4,200 families were receiving working tax credits.

[Andrew Percy (Brigg and Goole) (Con)]

Representing a constituency where the median salary is even lower, at £17,500, I entirely concur with my hon. Friend’s concerns about this measure, and that is why I will not support it. Does he agree, though, that if it goes through, there is time between now and next year to make changes, be they to national insurance, emergency tax codes, or whatever, to mitigate the impact on the poorest?

[Peter Aldous]

I agree with my hon. Friend. I will come to that when I conclude.

Yes, the rise in the tax threshold and the introduction of a national living wage will help, but, as shown in research by the House of Commons Library, they will not on their own make up for what will be significant reductions in income.