Tax Credits

Brendan O'Hara Excerpts

Thursday 29th October 2015 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

It is not normally my business to welcome Conservative contributions in the House, but I have to acknowledge and welcome the contributions from the hon. Members for Stevenage (Stephen McPartland), for Aberconwy (Guto Bebb) and for Tiverton and Honiton (Neil Parish). It goes without saying that SNP Members agreed with almost everything they said. They were brave and very welcome contributions—perhaps more welcome on the Opposition Benches than the Treasury Bench. That will probably be the only time I welcome Conservative contributions in this Parliament.

I am sorry that the SNP amendment was not selected, but I am still grateful to have this further opportunity to set out the SNP’s opposition to the cuts. I will devote a large part of my speech to addressing the proposals put forward by the right hon. Member for Birkenhead (Frank Field). We have much to agree on. His proposals are marginally better than the Chancellor’s, but they do not protect all low-income households from the Chancellor’s ideological wrecking ball that he is taking to social security. I am glad the right hon. Member for Birkenhead said he was proposing his measures speculatively. I hope that we will see greater consistency from the official Opposition in challenging the Tory tax credit cuts. I think that we can do much better.

We formed a strong and united opposition on Tuesday because we spoke with one voice against these cuts. Since Monday, however, we have had three different positions from the Labour party on tax credits. First, there was a push for a delay in the other place on Monday night, with opposition to scrapping the cuts outright. Secondly, to the credit of Labour Members, they joined the SNP in completely opposing the changes on Tuesday. Today we are presented with a watered-down opposition, which would still remove a significant amount of money from low-income households.

[Brendan O'Hara (Argyll and Bute) (SNP)]

Does my hon. Friend agree that, in 2015, making families rely on an unelected Chamber to protect their tax credits from this Government is a ridiculous position to be in? Does he further agree that the interests of Scotland’s low-paid would be far better served if all welfare were devolved to the Scottish Parliament immediately?

[Neil Gray]

It goes without saying that I agree with and welcome my hon. Friend’s intervention.

Under the plan of the right hon. Member for Birkenhead, every household earning more than £13,100 would continue to lose out—and in a more brutal fashion than under the Chancellor’s plan. The House of Commons Library briefing highlights that under the right hon. Gentleman’s plan, a full-time single-earner household with two children and an income of £16,000 would still lose out by £700 annually. The level at which tax credits would be removed thereafter is 65p in the pound. We are still going to see the budget balanced on the backs of low-income households.

--- Later in debate ---

[Richard Arkless (Dumfries and Galloway) (SNP)]

I welcome the Chancellor’s announcement that he made on Tuesday to bring measures forward to mitigate the changes to tax credits. I suppose the question on all our lips is how far his inclination to mitigate will stretch—will he mitigate for some or all? My message to the Chancellor is very clear: changes must be offset in full; tax credits should be tapered so that people do not lose out; the changes should be phased in; and the so-called package of changes must increase incomes at the same rate as tax credits are tapered off.

It is easy to admit that I have some sympathy with the principle. I think every sensible Member would agree that work should pay—of course it should. I would much prefer it if the cost of subsidising poor wages were borne by business. In an ideal world, the Government would not need to prop up wages, but we do not live in that ideal world at the present moment. The economy is not in that position. The Government had intended to put the cart firmly before the horse.

As a cynic, I do not believe that the Chancellor’s statement had compassion at its heart. For me, it was driven by fear—fear of losing power in the phoney constitutional war now started with the other place.

[Brendan O'Hara]

I agree with my hon. Friend that the second Chamber has forced the Chancellor’s hand, but does he agree with me that its intervention does not legitimise the constitutional absurdity of an unelected, unaccountable and ever-growing legislature at the end of the corridor?

[Richard Arkless]

Members will not be surprised to learn that I agree completely with my hon. Friend’s statement. The fact that the other place has seen sense on one particular issue does not legitimise the mess, in my view, that the other place represents. The Chancellor’s statement the other day was predicated as much on the fact that the other place was an unelected Chamber that had stuck its nose into financial matters as on anything else. If anything, that corroborates our view that the other place should go.

Our urge to change these proposals comes from compassion: from putting ourselves back in the shoes in which many of us walked not so long ago; from figuring out what ordinary people in our constituencies would lose; and from finding that completely and utterly unacceptable. We were elected to this place to protect vulnerable people, not to punish them.

I was going to use this time to talk about some of my constituents in detail, and to explain precisely how the tax credit changes could destroy their lives. I was going to tell the House about Katy and her son Olly, and I will tell the House a little bit about them. They will lose more than £100 a month from a budget that is already impossibly tight. That could mean that Katy and Olly may no longer be able to go on mountain bike trips at weekends. Katy tells me that she will move from fresh to frozen food. Katy has no support network for Olly. She has no choice but to work part time. Her sister Nikki recently passed away, and when Olly is not at school, she must be available to be with him. She already works all the hours that are available to her. She has absolutely nowhere to go with this.

I was going to tell the House about Jenny, who is a self-employed child minder. Her partner is also self-employed. They will lose about £130 a month. Jenny worries that her customers who are receiving tax credits will no longer be able to use her service. She told me that she literally lies awake at night wondering what this place is going to do to destroy her life.

I was going to tell the House more about Jenny and Katy, and about some others, but then I realised that those stories would only have an impact if they were listened to by Conservative Members who displayed some compassion. It is true that most of the speeches that we have heard today have moved into the realms of compassion, and I welcome that, but it is the compassion of the 300 Conservative Members who are not present that really concerns me.

Instead of considering how the cuts will affect Katy and Jenny, perhaps Conservative Members should consider how the cuts will affect them, as Members of Parliament. What have they to fear? One of the first changes that they may notice—and all us of may notice them in our constituencies—is that our high streets start to struggle even more than they are now. High streets are already struggling in my constituency, and the removal of £4.4 billion from people’s pockets—these are not internet bargain hunters; they are people who shop in our high streets—will compound an already precarious situation. If we remove the disposable income from the very people who shop in our high streets, the failure of small businesses will inevitably follow. We must prepare for more charity shops.

Members may begin to notice that the police in their local areas are busier than they used to be, and they may wonder why the number of instances of crime has increased. It will be because desperate people—young people with no hope; people who have been disfranchised from their communities and the Government—often turn to crime. If we can mitigate these changes in full, it may well be cost-effective.

Over the course of the next Parliament, Members may notice that the performance of their local schools is beginning to drop. They may see those schools falling down the league tables, and they may wonder why that is happening. It will be happening because hungry children do not learn well. Katy is beginning to worry about Olly’s education because of the proposed cuts.

Inevitably, the food budget will be the first thing that struggling families will cut, and that will have an immediate impact on the educational achievements of children in all our constituencies. How many Conservative Members—how many absent Conservative Members—enjoy dining out? Quite a few, I suspect. It is nice to have a range of different restaurants to choose from. Well, they should enjoy those restaurants while they can, because they, too, will be under threat.

The hospitality industry, in which I was brought up—in a rural area—depends entirely on a thriving local economy to sustain it. Many of the people whom we welcome to Dumfries and Galloway when they go there on holiday are people from the rest of the United Kingdom who cannot afford to go abroad: people who are receiving tax credits. The holiday will be one of the first culls from the annual budget.

Do I need to continue? Make no mistake: these tax credit cuts will have an impact on the absent Tory MPs as well. If the Government cannot mitigate the cuts in full, they will be responsible for the demise of all our communities. Those in Tory constituencies will not thank them, and I doubt that they will re-elect them. I look forward to hearing how the Government will mitigate, in full, the wide and far-reaching effects of these unnecessary and wholly ideological cuts.