Living Standards

Debate between Fiona Mactaggart and Rachel Reeves

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

This has nothing to do with universal credit. Those changes take effect in about one and a half years. In the meantime, families will be £74 worse off a week because of what the Government are doing, and would be better off on benefits. That is totally inconsistent with what universal credit is supposed to do, which is to ensure that everyone is better off in work. This policy goes in totally the opposite direction.

[Fiona Mactaggart (Slough) (Lab)]

The hon. Member for Bedford (Richard Fuller) mentioned universal credit. That is designed to ensure that work pays in 18 months, but what would my hon. Friend say to my constituents, the parents of 1,700 children in Slough, who currently work between 16 and 24 hours and who will lose £3,800? That is in no way compensated for by the measly £200 resulting from raising the tax threshold.

[Rachel Reeves]

I will come to that very point. Hours are being cut at the moment, so many people working part time who will be hit by these changes to working tax credits are working part time because they cannot find full-time work. Numbers from the Office for National Statistics show that the number of people working part time because they cannot find full-time work is at a record high of 1.35 million—a 13% increase on a year ago. It is therefore not the case that families can simply increase their hours to keep their tax credits. They are being penalised, first because of the lack of economic recovery, and secondly because of this Government’s decision to cut working tax credits.