Tax Credits

Clive Efford Excerpts

Tuesday 20th October 2015 Commons Chamber

[Seema Malhotra]

I think that comment represents a misunderstanding about what tax credits are supposed to help with. I hope that the hon. Lady’s Government will be more successful this Parliament in increasing wages—hopefully to a level where people start to come off tax credits—but they do not have a very good record to date. As I said, the number of people earning less than the living wage has risen by more than 45% since 2009.

[Clive Efford (Eltham) (Lab)]

In their interventions so far, Conservative Members have already conceded the argument. They started by saying that low-paid workers were going to be better off, and that Britain needs a pay rise and will get one. They have conceded that argument, but now it is all about choices and how tough it will be to balance the books. They have lost the argument.

[Seema Malhotra]

My hon. Friend is right, and as far as the public are concerned Conservative Members have lost the argument. It is now time for their constituents to ensure that they support the changes that we propose, and that they hold the Government to account at the next election.

The right hon. Member for Haltemprice and Howden (Mr Davis) has described the use of a statutory instrument as an attempt to avoid scrutiny, and on 6 October he said:

“The Government has to balance the books, but the burden shouldn’t be on the poorest…I hope this doesn’t turn out to be our poll tax.”

Even the Bow Group, which perhaps speaks for several Conservative Members who may not be able to speak today, has said:

“Tax Credit cuts could damage Britain’s entrepreneurial economy and the Conservative Party’s claim to be the workers party”.

--- Later in debate ---

[Clive Efford (Eltham) (Lab)]

It is clear from what we have heard that the Government Benches are divided. We have heard from some Conservative Members that tax credits have failed—clearly they see this as unfinished business, so people on tax credits ought to fear there is more to come—but we have heard from others who are concerned about their constituents, and I would urge them not to ignore this opportunity to register their opposition to what their Front-Bench team are asking them to do.

This is about the choices we make and the priorities we have. We could reverse the inheritance or corporation tax cuts to reduce the impact on people on tax credits, or we could cut the nearly £2 billion that people earning more than £1 million will share in tax cuts. They will be £61,000 a year better off. People earning more than £2 million a year will be £250,000 a year better off. Come the next general election, they will have gained £1.25 million in tax cuts, but over the same period, a cleaner earning £13,500 will have lost £6,800, a patient transport driver on £17,800 will have lost more than £8,000, and a medical secretary on £22,200 will have lost £9,400. These people are strivers, they are hard workers, yet the Tory party is cutting their incomes. That is the choice people have made.

[Several hon. Members rose—]

[Clive Efford]

There is no mandate for this. The Tory party was asked before the general election, when it said it would cut £12 billion—

[Several hon. Members rose—]

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. We can only have one Member on their feet at once. We cannot have the whole Chamber trying to get in at once.

[Clive Efford]

I am taking my time, Mr Deputy Speaker.

The Prime Minister and others were asked specifically, “Will you cut tax credits?”, and the answer was no.

[Yasmin Qureshi (Bolton South East) (Lab)]

I agree with everything my hon. Friend is saying. Does he agree that this cut is being imposed because the Conservative party, for ideological reasons, does not like poor or working people, and only wants to help and enrich the rich people?

[Clive Efford]

Absolutely.

If I were to accuse people of lying, Mr Deputy Speaker, you would rightly rule me out of order, but the people out there will have to make up their own minds. When the Justice Secretary went on to Martha Kearney’s programme, he was specifically asked what the Government would do on tax credits, and he said, “No, we’re going to freeze them for two years.” I do not know what the definition of a lie is, but I know that people outside the House will make up their own minds—although we cannot use that language in here.

We know the Conservatives have lost the argument. This started at the autumn statement when the Chancellor said, “Britain deserves a pay increase, and Britain is going to get a pay increase”, but Government Members did not know when they cheered him that he was going to cut tax credits and make people worse off. Even the increase in the national minimum wage—it is not a national living wage, it is a Tory living wage—will be wiped out for those on it by the cut to tax credits.

I say to those who are upset about these proposals: it is not good enough just to have a chat in private with the Chancellor or the Prime Minister. This is where they represent their constituents—here in the House of Commons—and if they do not agree with what their Front-Bench team are telling them to do, they should join us in the Lobby tonight to vote against what the Government are doing to people on tax credits.

--- Later in debate ---

[Greg Hands]

No, I am not giving way. I have just said I was not giving way. [Interruption.] I gave way to the hon. Gentleman as well.

Our reforms to tax credits will account for £4.4 billion in the next financial year. This is the key question for the Opposition, which they have ducked during the last five hours of debate: if they do not want to reform tax credits, where will that money come from? Will they borrow more and saddle our children with still higher debt, or will they cut other services, such as schools or the NHS? I ask the Opposition: what would they do?

[Clive Efford]

Will the Minister give way?

[Greg Hands]

I am not going to give way. I thank my right hon. and learned Friend the Member for Rushcliffe (Mr Clarke), who told us:

“This is the time to do it”.