Tax Credits: Impact of Cuts

Baroness Wheatcroft Excerpts

Monday 14th September 2015 Lords Chamber

[Lord Ashton of Hyde]

My Lords, the trouble with this subject is that we could sit swapping statistics all day long. The evidence for children in poverty is clear that work is the best way for families to stay out of poverty. Children in workless families are nearly three times as likely to be in poverty. So we are increasing pay and raising the personal allowance so that families keep more of what they earn. Work and education are what matters, so we are extending free entitlement to childcare to 30 hours for working parents of three and four year-olds.

[Baroness Wheatcroft (Con)]

My Lords, research by the Centre for Policy Studies showed that, by 2012, more than half the families in this country were net takers from, rather than contributors to, the state. Would my noble friend agree that that situation is both unhealthy and unsustainable, and that changes in tax credits are just a step towards redressing the balance?

[Lord Ashton of Hyde]

My Lords, this is a strategic change in how we deal with welfare in this country. It is worth bearing in mind the problem: we produce 4% of the world’s GDP and 7% of the welfare payments, and nine out of 10 families were on tax credits. I completely agree with my noble friend that we want to increase people’s pay and lower the amount of tax they pay so that all families benefit in this country.