Tax Credits (Working Families)

Debate between Catherine West and David Gauke

Tuesday 7th July 2015 Commons Chamber

[Mr Gauke]

My hon. Friend makes a reasonable point. There was a certain correlation between the previous Government’s generosity and election years.

The Government are bringing in a raft of measures to help working people. We are giving this nation’s children the best start in life. We have increased our spending on childcare and early-years education by £1 billion. We have given 15 hours of free childcare entitlement to all three and four-year-olds, as well as to the poorest 40% of two-year-olds, and we are doubling that for families in which both parents work. We are extending the right to request flexible working to all. Through tax-free childcare we are giving 20% support on childcare costs, up to £10,000 per child. Universal credit will increase the childcare support for low-income families to 85%. Our pupil premium and early-years pupil premium are giving schools, nurseries and childminders additional money to ensure that children from the most disadvantaged backgrounds do not fall behind. Through our childcare business grant scheme we have 4,500 new childminders and over 30,000 new childcare places.

[Catherine West]

Will the Minister give way?

[Mr Gauke]

I will give way for another short intervention.

[Catherine West]

Will the Treasury be doing a proper equalities impact assessment for tomorrow’s statement?

[Mr Gauke]

We will perform the required assessments, as we always do.

The best way to prosperity is still employment. The past five years have seen a jobs miracle—1,000 jobs a day; 2 million in total. For every job lost in the public sector, the private sector has created over five and a half more. I simply do not accept Opposition claims that they have somehow been second-class jobs on part-time or zero-hours contracts. Over the past year 85% of jobs created have been full time and 92% have been high or medium skilled. Unemployment has fallen by 349,000 people over the past year alone. That is 349,000 more people standing on their own two feet, and 349,000 households with greater financial security.

We want to continue our fantastic record on jobs so that we achieve full employment in the UK. We are providing our young adults with a route to employment through a record number of apprenticeships, and we have committed to supporting 3 million new apprenticeships. We will work with our Jobcentre Plus network to provide routes into work experience and apprenticeships for young people leaving education.

When people are in work, we will cut their taxes. We have increased the tax-free personal allowance for 27 million people, from £6,475 to £10,600 this year. That will rise to £12,500 by the end of this Parliament. We will enshrine the concept of a tax-free minimum wage in law. We will also raise the 40p income tax threshold to £50,000, because that should be for high earners, not middle earners. Already, a typical basic-rate taxpayer is paying £905 less income tax than in 2010, and by 2017-18 we will have lifted over 3.7 million people out of income tax altogether.

We have frozen fuel duty since 2011 and council tax since 2010. We have said that over the next five years we will not raise income tax, VAT or national insurance contributions. Our record low inflation is keeping down the cost of household goods. We have increased the national minimum wage by 3.1%—3.3% for 18 to 21-year-olds—thus benefiting over 1 million people. At the same time, wages have increased by 2.7% on the year for the three months to April. That all means more money in people’s pockets, more incentives to work, and a fundamental shift from dependency and towards productivity.

Back in 2010 we were a country living beyond our means and with worrying signs of being addicted to that lifestyle. Whenever that is proved to be unsustainable—something that global markets have a habit of proving—the poorest and the most vulnerable are hit the hardest. That is what we wanted to avoid, and that is why we have strived so hard to turn around Britain’s economy. Despite the best efforts of the Labour party, which opposed every difficult decision we took on the path towards recovery, we have achieved a lot. We have shielded the most vulnerable and those on the lowest incomes and have asked those with the broadest shoulders to bear a heavier burden. We have given greater economic security and a higher standard of living to millions of people in this country. At every opportunity, we have stood up for those who want to work and do the right thing. We have promoted work and helped create the opportunities to work. We have helped people to achieve their goals and secure themselves a brighter future. We have done all this while cutting the deficit and creating the highest growth in any of the major advanced economies. It is a record we are proud of, and one we will continue.