Tax Credits

Debate between Angus Brendan MacNeil and Bob Blackman

Thursday 29th October 2015 Commons Chamber

[Bob Blackman (Harrow East) (Con)]

It is a pleasure to follow that thoughtful contribution from the hon. Member for Arfon (Hywel Williams). I, too, congratulate the right hon. Member for Birkenhead (Frank Field) on securing this debate, and the Backbench Business Committee on its wisdom in granting it—I had the pleasure of chairing that meeting. This is the first opportunity I have had to contribute to a debate on the vexed issue of tax credits.

It is a great shame that the right hon. Member for Birkenhead was unable to convince his party when it was in government of the wisdom of transforming the welfare system in this country, but we are where we are. My big criticism of the previous Labour Government is that instead of reforming the welfare system, every time a new problem arose they set up a new benefit. The system therefore became unwieldy and unworkable. When I was elected in 2010, a series of people came to see me about the hugely complicated financial arrangements they faced, both with working tax credits and child-based tax credits.

[Mr MacNeil]

The hon. Gentleman says that when the previous Labour Government had a problem they increased tax credits. The real problem is low wages. This Government are weakening trade unions and undermining the right to collective bargaining, which is what allows workers to strive for higher wages, and that will not help the situation at all.

[Bob Blackman]

That is not quite what I said. I mentioned the welfare system and said that we had a series of different welfare benefits. Whatever the problem was, the Labour Government set up a new benefit, whether a tax credit or another arrangement. During a period of relatively high employment they failed to deal with the fundamental issue, which, as the hon. Gentleman rightly points out, is low wages.

This debate was billed as the last chance to review what the Government are proposing before it became fact, but events in the other place mean that we are now in a position to make alternative proposals. Contributions this afternoon will therefore be helpful to the Chancellor in deciding what to bring forward in his autumn statement. Clearly, we have to strike a balance. The Conservative party manifesto laid out that we were going to save £12 billion in welfare. The challenge is therefore to come forward with alternative proposals on how welfare savings of £12 billion will be found. Some £4 billion of savings are envisaged from this change.

I start with sympathy for the people affected. When we reduce people’s benefits, they will always complain. When we increase the tax threshold so that they pay less tax, they will be quite happy and will not complain. When their wages are increased, they will not complain. But if we take benefits away, they will squeal. We clearly must look at the effect on individuals in the round. We must have the utmost sympathy for those people who are working full time and have no alternative but to receive tax credits to top up their wages. What can they do? They suffer a loss of income, and that will have an impact on their families. Therefore, the first thing I would like the Chancellor to do is examine the measures so that people in full-time work suffer no impact whatsoever, because this is grossly unfair on them.

Equally, we face a challenge in both the public and private sectors. Over time the Government have quite rightly reduced business taxation to encourage businesses to grow and to locate within the United Kingdom. That has got to be good news, because it has created jobs. However, they have also kept wages artificially low, and that has to change. Therefore, I greatly support the principle of a living wage, but clearly it is far too low at the moment. We need to see it increase dramatically so that work pays, instead of relying on the taxpayer to subsidise work in private industry, which cannot be right. I hope that the Government will look at that, in particular, so that we can encourage businesses to pay their staff more for the work they do. That has to be the right way to demonstrate that work should always pay.

We hear constant criticism from the Labour party about the creation of large numbers of part-time jobs in this country. One of the reasons for that is the fact that a large number of people know that if they take on a part-time job, perhaps working 16 hours a week, they will still have access to a large range of benefits. That is a lifestyle choice.

Housing Benefit

Debate between Angus Brendan MacNeil and Bob Blackman

Tuesday 12th November 2013 Commons Chamber

[Bob Blackman]

I thank the hon. Lady for her rather long intervention, which I thought became more of a speech. We need to be clear that people do have a choice. People can choose to under-occupy, and if they so choose, they should not expect the taxpayer to pick up the cost through housing benefit. There must be a clear incentive for people to move on.

[Mr MacNeil]

Will the hon. Gentleman give way?

[Bob Blackman]

I am not giving way a third time.

The Opposition need to accept the principle of the change, which is that anyone who under-occupies should bear the cost. All afternoon, we have heard a series of heartbreaking stories of people being required to move from properties that they have lived in for a long time. I have every sympathy with people who have been fed the story that they have a home for life, that they can expect to live in it for ever and that the taxpayer will always pick up the cost. The reality is that that is the story that Labour has always sold people.

That illustrates the difference between the parties. Labour would rather have everyone working for a public authority, being dependent on public housing and not being aspirational. We believe in helping people to achieve their aspirations and get to a decent position. We believe in improving the situation in the private sector and enabling people to work and to aspire to being the best that they can be. That is the difference between us. We are the party of the hand-up; Labour is the party of the hand-out.