Welfare Reform and Work Bill

Ian Blackford Excerpts

Tuesday 27th October 2015 Commons Chamber

[Neil Gray (Airdrie and Shotts) (SNP)]

I rise to speak to the amendments in this group tabled by the Scottish National party. We also support new clause 1, which the shadow Minister moved earlier. Let me pay tribute at this stage to the efforts of my hon. Friends the Members for Ayr, Carrick and Cumnock (Corri Wilson) and for Livingston (Hannah Bardell) who worked so assiduously on the Bill Committee on behalf of the SNP, and to my hon. Friend the Member for Paisley and Renfrewshire South (Mhairi Black) for her work on these matters in the Work and Pensions Committee.

My wife has always suggested to me that it provides context and depth to a speech if it includes a quote early on. On this occasion, and in relation to tax credit cuts, I have a quote that was timeously delivered in the past few days:

“It’s not acceptable. The aim is sound, but we can’t have people suffering on the way… The idea that there’s a cliff edge in April before the uptake in wages comes in is a real practical human problem and the Government needs to look again at it again”.

Who is that quote attributed to? That was said by Ruth Davidson MSP, leader of the Conservative party in Scotland, as she called on this Government to have some movement on the issue by the autumn statement.

After last night’s vote in the other place, it is time for the Government to rethink these outrageous proposals. They have managed to unite a considerable swathe of political and civic society against the plans. In fact, after last night the Chancellor really stands alone in continuing to push for the cuts. If the Chancellor, the Prime Minister and this Government will not listen to Opposition Members, if they will not listen to charitable and third sector organisations, and if they will not listen to anyone else, surely they should listen to the leader of their own party in Scotland.

The SNP is completely opposed to the UK Government’s continued attack on low-income families, and we support Labour’s amendment to repeal the regulations, which will affect 350,000 children in 200,000 families in Scotland. Let me say this loud and clear: the SNP will oppose these ideological, regressive and utterly punitive tax credit cuts with every opportunity open to us today and every day, because we realise the damage they will cause to working family incomes, to levels of poverty across these isles, including child poverty, and to social cohesion in every community in the United Kingdom.

The amendments that my colleagues and I support in this group would bring about the repeal of these tax credit regulations and overturn the proposed cuts. However, should the Government decide to press on with the cuts in the face of hostility across this Chamber, and from Conservatives up the road, they must consider forms of mitigation. They must act to protect vulnerable families with a delay and a fully implemented transitional period, as is covered in our new clause 8, which we will be pushing to a vote. In the light of last night’s vote in the other place, I expect that is already being considered by the Government.

New clause 8 would mean that the measures in the Bill and in the 2015 tax credits regulations relating to the award of tax credits and the relevant entitlement within universal credit would not take effect until the Secretary of State had implemented a scheme for full transitional protection for a minimum of three years for all families and individuals currently receiving tax credits before 5 April 2016, and such transitional protection should be renewable after three years with parliamentary approval.

The transitional arrangements are important, as none are put in place by the Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015. This means that the tax credit cuts will be implemented immediately in April 2016. In fact, tax credit recipients will apparently be getting an unwelcome letter detailing the cuts to their award just weeks before Christmas. This will give working families no time to plan effectively for an average cut of £1,300. For families living wage packet to wage packet, utterly dependent on tax credits to keep them above the breadline, the cut will be devastating and impossible to plan for in such a short time.

Amendments 49, 50 and 52 would ensure that relevant benefits, child benefit and tax credits increased in line with the consumer prices index. Amendment 51 is consequential, while amendments 53 and 54 would ensure that the current child tax credit arrangements remained in place. Amendment 55 would remove changes to the entitlement to the child element of universal credit. These amendments were pushed by my colleagues in Committee. The Government did not accept any of them, but they pledged to come back with more information, which has not yet materialised.

Why on earth have the Government decided to rush the Bill from Committee, which only finished on Thursday, to this final stage today? If they are serious about introducing more detail and explaining the expected mitigation measures, why not flesh that out? The rush suggests that the cuts are purely about making savings and therefore ideologically driven. The changes are fundamentally regressive. They disproportionately target those in low-income households and punish them for the Government’s ideological obsession with austerity—an obsession that is failing socially and economically.

The SNP stood on a manifesto that was fundamentally anti-austerity but which also plotted a more responsible path to reducing the deficit. We have argued for a 0.5% increase in departmental spending per year for this Parliament, which would have released £140 billion to invest in capital projects to boost growth and narrow income inequalities. Our plan would also have resulted in a budget deficit of just 2% by the end of the Parliament, and it was backed by an International Monetary Fund report in June that highlighted how reducing income inequality not only reduced poverty but boosted growth. By extension, the policy of cutting tax credits and thereby increasing income inequality will drive more of our citizens into poverty and harm growth and therefore harm the Government’s apparent aim of reducing the deficit. So, as well as being socially destructive, this policy is—to extend the IMF’s thinking—economically incompetent.

[Ian Blackford (Ross, Skye and Lochaber) (SNP)]

Does my hon. Friend agree that the SNP has come up with a responsible approach to delivering sustainable growth that will drive up wages and employment, by contrast with what the Government have done over the past five years and what we see going forward? The Bank of England, with its £375 billion of quantitative easing, has had to bail them out with monetary policy because, quite simply, they have not delivered on fiscal policy.

[Neil Gray]

I welcome my hon. Friend’s contribution. As we are talking about affordability and sustainability, let me say that the Government think it feasible to press ahead with apparently £167 billion of Trident nuclear weapons, which is shocking and deplorable, while seeing fit to find £4.4 billion of cuts in tax credits. They are taking an ideological wrecking ball to our social security system in the name of a budget surplus by scandalously waging a war on low-income households.

--- Later in debate ---

[Oliver Dowden]

This is precisely the point that I would like to get on to. Despite the increased expenditure on tax credits, we continue to see these dreadful statistics on poverty, and that is because this is a flawed model that is based on taxing people on the minimum wage who can barely afford to pay tax, recycling that revenue through the welfare system and using it to top up low pay. That is not a sensible way to proceed.

[Ian Blackford]

rose—

[Oliver Dowden]

I will give way once more, but I am aware of Madam Deputy Speaker’s injunction.

[Ian Blackford]

We understand, from survey after survey, that millions of people in this country are going to be worse off as a result of these measures. What is the hon. Gentleman going to say to his constituents who come to him after next April having lost on average £1,300 of their income?

[Oliver Dowden]

I would say to those people that this Government have a clear and coherent plan for helping people on the lowest incomes that consists of three elements. The first is to increase the amount of money people can earn without paying any tax; by the end of this Parliament that will be increased to £12,500. That is lifting people working 35 hours a week on the minimum wage out of tax entirely. Secondly, we are introducing a national living wage which by the end of this Parliament will increase wages to £9 an hour. Thirdly, we are introducing a number of other measures such as free childcare which will help those in most need of it. That is a far better model—to move from a low-wage economy with high tax and high welfare to a higher wage, lower welfare and lower tax model.

--- Later in debate ---

[Graham Evans]

This is a very important debate. In the last Parliament I had the privilege of sitting on the Work and Pensions Committee, and it is a pleasure to follow the hon. Member for Blaydon (Mr Anderson). I am sorry to hear about how his family have been affected by Duchenne muscular dystrophy. A member of my family suffered with that condition and died aged 21 after many years of suffering. It is a dreadful disease, but this Government’s reforms are not about inflicting anything on people with diseases such as Duchenne muscular dystrophy.

Reforming welfare is crucial to achieving a sustainable welfare system that is fair to the most vulnerable in society and also to the hard-working taxpayers who pay for it. Without sound public finances, there can be no economic security for working families, and the country cannot pay for the hospitals and schools that we rely on. Those who suffer most when Governments run unsustainable deficits are not the richest, but the very poorest.

[Ian Blackford]

We have heard much from Government Members about sustainable welfare spending, but how would they define it? Is not the heart of the problem the fact that through the things they are doing, the Government are pushing many children into poverty and redefining poverty? Is it not the case that when we change the definition, we change the truth?

[Graham Evans]

I think I am grateful for the hon. Gentleman’s intervention. This is about choices and what we spend our money on. There is no such thing as a magic money tree, and if Scottish nationalists are not happy with these measures, perhaps they will inform the Scottish people how much they will pay in tax—we never hear that from the SNP. If they do not agree with welfare reform, they should tell the House and the people of Scotland how much they will put up taxes.

The Bill continues on from the Welfare Reform Act 2012, restoring the ethos that it always pays to work to the heart of the British welfare system. The 2012 Act set in place a benefit cap.