Working Tax Credits

Debate between Andrew Smith and Jonathan Reynolds

Wednesday 30th November 2011 Westminster Hall

[Jonathan Reynolds]

Absolutely. They stand to lose even more when child care is taken into consideration. There is an internal tension between the Government’s stated ambition on universal credit and these actions. It would be interesting to hear the Minister’s views on how those two aspects interplay.

[Mr Andrew Smith (Oxford East) (Lab)]

I join the chorus of congratulations extended to my hon. Friend. I hope that he gets time to make some points between interventions.

Does my hon. Friend agree that this represents an incredible retreat from, and abandonment of, the historic pledge by the previous Government to eradicate child poverty within a generation? Will this not have the opposite effect, in terms of the welfare to work agenda—perversely forcing some people to go back on to benefit because of all the losses they will suffer, as hon. Members have said?

[Jonathan Reynolds]

Indeed. A family currently on £18,000 a year could lose £4,000, which is a huge loss. It will, as I understand it, push as many as half a million children back below the poverty line.

The Minister may say to me that the simple solution is for claimants to work an additional eight hours. For some people in receipt of working tax credit, the demands of caring, child care or limited health may make it difficult for them to work those additional hours. These changes make no allowance for that.

I was first alerted to the scope of this issue when I was contacted by a resident in my constituency who was hit by a car 11 years ago. He was previously employed as a printer and would routinely work 12-hour shifts a day for his family. He has not been able to work since the accident and needs some degree of care. His wife, as well as caring for her husband and their young daughter, works 17 hours a week in a before and after school club. She cannot increase her hours at the school because the club runs only for those 17 hours a week. With the caring responsibilities for her husband and daughter, she would struggle to find a second job with sufficiently flexible hours. The money they receive though working tax credit makes a real difference. Under the Government’s plan they would lose it.

I acknowledge that, rightly, the Government do not plan to increase the hours of work required by single parents, in recognition of the additional pressures they face. However, they also need to consider the impact that these changes will have on families where one member is disabled, or one member has a caring responsibility, or both. They should urgently consider whether additional exemptions should be applied. Indeed, I put a range of parliamentary questions over the past six months to the Exchequer Secretary, to try to ascertain how many of the 280,000 couples that this will affect have a partner with caring responsibilities or a disability, and to get a more detailed breakdown. However, the Government could not provide much of that information, and what they could provide was extremely limited.

As I have said, the promotion of work is at the heart of the working tax credit scheme. The principle of asking people to take on work to qualify for working tax credits is a positive one. But if the amount of work we require is unrealistic, it will hurt rather than help some of the most vulnerable people in our society.