Tax Credits (Working Families)

Geraint Davies Excerpts

Tuesday 7th July 2015 Commons Chamber

[Mr Gauke]

Let me put this as simply as possible. The debt is essentially the accumulation of deficit and for the past five years every measure that the Government took to reduce the deficit was opposed by Labour. Indeed, Labour’s economic argument—its whole case—was that we were going too far, too fast in reducing the deficit and that we should have a looser fiscal policy. A looser fiscal policy means borrowing more. If we borrow more, the debt will rise more quickly. The hon. Lady cannot have it both ways. She can argue that we should have been prepared to borrow more and to allow the debt to rise because that was a price worth paying, but she cannot then turn around and say, “We want the debt to be lower, even though our policies called for higher debt.”

[Geraint Davies (Swansea West) (Lab/Co-op)]

The Minister is construing tax credits as a welfare cost, but will he not accept that if someone is starting a small business and can afford to pay someone £10,000 to run a café, or whatever it is, but the person who is being employed needs £15,000, those tax credits would have helped generate a business with a much greater turnover than just the incomes of the individual employees? Tax credits are an instrument for generating new small businesses, not simply an act of charity from the Tories.

[Mr Gauke]

Cutting corporation tax rates for small businesses, introducing the employment allowance, helping under-21s and apprentices whose employers no longer have to face national insurance contributions, reducing the regulatory burden, restoring the economy to health and ultimately improving access to finance is what helps small businesses, and that is a record that we are proud of.