Oral Answers to Questions

Dawn Butler Excerpts

Tuesday 21st July 2015 Commons Chamber

[Mr Gauke]

We are pressing ahead with various proposals to improve the administration of business rates, but I remind the House that it was the previous Government who brought in measures such as the rebate for retail and the 2% cap, so we have introduced measures to help on business rates and we are introducing measures to improve their administration as well.

[Dawn Butler (Brent Central) (Lab)]

8. What discussions he has had with the Secretary of State for Work and Pensions on the effect of proposed changes to employment support allowance on levels of employment.

[The Chief Secretary to the Treasury (Greg Hands)]

We created 2 million jobs in the previous Parliament, and our objective is to create a further 2 million in this Parliament. A crucial part of that is the welfare reforms that we have introduced to help make work pay, which is consistent with our long-term economic plan.

[Dawn Butler]

Of course we all want to see work pay, but a large section of the community are sometimes unable to work for short periods of time because of illnesses such as sickle cell disease. The Minister seems to have overlooked that group of people.

[Greg Hands]

I thank the hon. Lady for her question. Our welfare reforms are based on the principle of fairness; fair on those who receive the benefits and fair on those who pay the tax. With regard to a specific group, there is clearly a difference between the work-related activity group and the support group, and we are happy to look at those differences. She is clearly not satisfied with what we are doing, but she is also one of the 48 Labour Members who rebelled last night on welfare, so I do not think that she is satisfied with her Front Benchers’ position either.

Tax Credits (Working Families)

Dawn Butler Excerpts

Tuesday 7th July 2015 Commons Chamber

[Ian Blackford]

My hon. Friend is absolutely right. We hear much in this Chamber about productivity, but the reality is that over the past seven years productivity has fallen by 0.7%. Rather than attacking the poor, which is what the Government are doing, their Budget tomorrow should introduce a programme for investment in this country that will lead to a rise in real wages, improve productivity and negate the need for tax credits. Removing tax credits will not fix the problems this country is suffering.

The failure to drive sustainable economic growth means that many people who are in work are in poverty. As a result, many of them rely on tax credits in order to put food on the table to give thousands of young people a decent start in life. There has to be dignity in work, and much has to be done to drive investment in our economy, enhance productivity and see a sustained rise in real wages.

Tax credits are an investment in our people and, as a consequence, the future prosperity of our country. Tax credits have made an important contribution to tackling poverty and inequality. In 2013-14, 90% of tax credit expenditure went to families with an income of less than £20,000. Families with children received an average of £6,900, and families without children an average of £2,200, from tax credits. That represents a very clear contribution to boosting incomes and tackling poverty and inequality. Tax credits help tackle in-work poverty and child poverty.

It is worth noting that about 70% of tax credits go to families where somebody is in work, predominantly supporting low-income working families. Given that a majority of people in poverty are already in work, tax credits are thus a crucial tool to support working people.

The Child Poverty Action Group estimates that the UK Government’s welfare cuts will push an additional 100,000 children in Scotland into poverty by 2020—and that does not take into account the additional £12 billion-worth of cuts that this Government want to push through. Given that 500,000 children benefit from the tax credit system in Scotland, cuts to tax credits would certainly have a further detrimental impact on the wellbeing of children in Scotland and on child poverty figures.

Figures due to be published tomorrow by the Scottish Government show that if the Chancellor cuts child tax credit back to 2003 levels in real terms, as has been reported, the poorest 20% of Scottish families with children will lose an average of nearly 8% of their income. That will have the impact of taking a total of £425 million out of the Scottish economy. How are we to deliver sustainable growth when we take £425 million out of the pockets of the poorest in our society? It beggars belief. We want a caring, compassionate society; that is not what we are getting from this Government.

[Dawn Butler (Brent Central) (Lab)]

Not from those nasty Tories.

[Ian Blackford]

That comment from a sedentary position is correct. We used to talk about the nasty party when Thatcher was in power; it seems to have returned.

SNP Members will reflect on the choices made by the previous Government and this one. Some £375 billion of new money has been created through the quantitative easing programme. We recognise that some of that was necessary, but it created circumstances in which those in the financial markets benefited massively. A 90% increase in the value of the FTSE 100 since 2009, a huge increase in the value of financial assets, and banker’s bonuses that continue to reach eye-watering figures are the impact of this Government’s political choices. They have created the circumstances that have delivered increased value in financial markets; they have not created the circumstances in which wages could rise and the country as a whole could benefit. “All in this together”? You’ve got to be kidding!