Tax Credits

Imran Hussain Excerpts

Tuesday 20th October 2015 Commons Chamber

[Ian Blackford]

My hon. Friend is absolutely correct. We have seen growing inequality over the course of the last few years, and the Budget will only increase it.

[Imran Hussain (Bradford East) (Lab)]

Will the hon. Gentleman give way?

--- Later in debate ---

[Ian Blackford]

Indeed, and I shall be saying more about that a little later. You do not fix the deficit by taking spending out of the economy. The point is that those hard-working families who receive tax credits tend to spend every penny that they get, injecting money into the local economy, paying tax, and so on.

[Imran Hussain]

The hon. Gentleman has rightly referred to inequality. Does he accept that these cuts will disproportionately affect the BME communities, thus increasing racial inequality?

[Ian Blackford]

That, too, is a very reasonable point. I think that what the Government are doing will pose real dangers to the cohesion of society.

--- Later in debate ---

[Imran Hussain (Bradford East) (Lab)]

Time is short so I will focus on two areas: the effects of the changes to tax credits on my constituency, and the disproportionate effect of those changes on black and minority ethnic communities.

In my constituency these cuts will be devastating. Areas that are already impoverished and where many depend on tax credits will suffer far more than richer areas. Some 15,500 families in Bradford East receive tax credits, and 13,700 of those have children—four times as many as in the Chancellor’s seat. He does not understand the effect that these cuts will have, and he never will.

More than 5,000 families in Bradford East have three or more children. Bradford East already has above average unemployment and high levels of deprivation by any measure, and thousands of children live in families that are to be made significantly worse off. Families will have to make heart-breaking decisions about whether to pay the gas or electricity bill, or whether to buy food. Thousands of children living in families dependent on food banks; thousands of children being forced to live in ever-worsening poverty and despair—that is the reality of these proposals.

In terms of racial discrimination, the effects of the proposals are truly shocking. Government data show that tax credits constitute, on average, 2% of weekly household income for white households. That rises to 6% for black households and a further 10% for households of Pakistani or Bangladeshi heritage. These families are often already in poverty because of poor wages. According to Omar Khan, director of the Runnymede Trust, an independent think-tank focusing on race equality, these cuts

“Will inevitably increase racial inequalities and probably increase rates of child poverty”.

Will the Minister tell me what this will mean for my constituency, with its large Pakistani and Bangladeshi population? What will this mean for the local economy, where poverty and despair will be further fuelled? What will this mean for local businesses, for the local corner shop whose customers are being squeezed harder and harder? I have to ask myself: is it the Government’s intention to create ghettoes in our cities? The cumulative effects of the cuts will not only have a shocking impact on Bradford’s families from all backgrounds; it will have a devastating effect on our local economy. I cannot see what is fair about any of that, I cannot see what is northern powerhouse about any of that, and I certainly cannot see how we are all in it together.