Welfare Reform and Work Bill (Seventh sitting)

Jess Phillips Excerpts

Tuesday 13th October 2015 Public Bill Committees

[Damian Hinds]

I think I will have to move on a little.

Last year the Government spent almost £30 billion on tax credits—more than three and a half times what we spent on military personnel. That level of spending on tax credits is unfair on those who foot the bill, who are, of course, other taxpayers. That is why the Government took steps in the summer Budget to put tax credit spending on a more—[Interruption.] Does the hon. Member for Birmingham, Yardley want to intervene?

[Jess Phillips (Birmingham, Yardley) (Lab)]

Yes, I do; I just want to point out that people who are on tax credits are in work. They are taxpayers, and they are therefore paying that bill. The Minister should not pitch two sets of people against each other. He should recognise that people who get tax credits work.

[Damian Hinds]

I do not know whether the hon. Lady deliberately did not hear me say that. I did say that people who pay the tax credit uplift are other taxpayers. That is true. That is not pitching one person against another, it is just a statement of the reality, a statement of how the system works. That is why the Government took steps—[Interruption.] Does the hon. Lady want to intervene again? She keeps on speaking.

[Jess Phillips]

I am more than happy to do so. The Minister is being extremely divisive. What he actually said was that the person footing the bill was basically someone else. The Government are basically trying to make some people feel that they are being robbed for the sake of the poor. When I lived on tax credits, I worked probably about a 14-hour day. I will not have it said of people such as me and my hon. Friends that we were beholden to someone else. We were taxpayers.

[Damian Hinds]

I do not recall referring to the hon. Lady’s specific case or the case of anybody else on the Opposition Benches. Nor did I say that anybody should feel bad for supporting others, but there is a case for balance. It is just a statement of fact that, in any tax and benefits system, benefits paid to one group or person have to be paid for by others, and we have to make sure that that system is fair.

As the hon. Lady will recall, we had a great reforming Budget with a set of measures to move us from a low-wage, high-tax, high-welfare society to a lower-tax, higher-wage, less welfare-reliant society, including measures such as the national living wage, with which we seek permanently to reform the structure of the economy and the way the system works.

--- Later in debate ---

[Damian Hinds]

I am going to press on for the moment. The average number of children in families in the UK in 2012 was 1.7. The Government therefore think it is fair and proportionate to limit support through tax credits and universal credit to the payments for two children. To give families time to prepare, the change will not come into effect until April 2017. In child tax credit, the change will affect families who have a third or subsequent child born on or after 6 April 2017 only. In universal credit, the change applies to any third or subsequent children born, or joining the household, on or after 6 April 2017 and to families making a completely new claim to universal credit after that date.

[Jess Phillips]

I want some clarity on whether the measure relates to children born after that date or a new claim for a child after that date. What if my children were born in 2005 and 2010 and I do not currently need tax credits—who knows what the future will hold?—but need to claim them later? What if I need to go back on to tax credits after having a third child? Would my children count because they were born before or is it the claim that counts?

[Damian Hinds]

I believe we will have an opportunity at a subsequent stage to debate that point in detail in relation to a subsequent amendment, but I do not want to keep the hon. Lady waiting. To be clear in simple terms, the tax credit system is for new births after April 2017; universal credit is for new births and for new claims. Of course, universal credit is replacing the tax credit system. When we talk about new claims, that is with a gap of six months. It may apply to someone who has never been in that system before or in the predecessor tax credit system, or who has been out of both systems for a period of six months.

--- Later in debate ---

Major changes are proposed for families with disabled children—families that find it difficult enough to cope as it is. They do an extraordinary job as parents and, frankly, not just as parents but for the sake of society, for all of us. These children are all our children, and the additional work that those parents put in and the additional support that they provide should be acknowledged and properly supported. The Opposition will not accept any attacks on the income that is necessary for those parents just to make ends make, so that George Osborne—[Hon. Members: “The Chancellor”]—so that the Chancellor can continue to slash taxes such as inheritance tax.

[Jess Phillips]

Has my hon. Friend read the piece in this morning’s Guardian about kinship carers also being badly affected? Specifically, some people are now not being able to take on the care of disabled children who for a number of reasons cannot be looked after by their parents, because of the changes to their financial assistance.

[Emily Thornberry]

Yes, indeed. From speaking to people who have spent many years devoted to this sector and who have tried to make our safety net as good as it possibly can be in difficult times, the attacks are coming from so many different angles, at so many different levels and so fast, that for many of us it is very difficult to know where to start. The changes are fundamental and very frightening. We know that what will happen in two or three years’ time will become manifest, and it will become increasingly obvious that the poor have got much poorer and that people have got much more desperate. That will affect children, and those born now will be disproportionately affected.

I hope that at that point, the Government will finally realise that, because I do not think that many of those on the Government Benches are heartless, but they have not thought this through. The difficulty is that their policy is based entirely on rhetoric. That is clear from some of the lines in their manifesto that are now appearing in proposed legislation. Look at the Childcare Bill, which says very little more than what was in the manifesto. The difficulty is that if you do not make policy on the basis of evidence but on the basis of rhetoric—what sounds right and what you think will work well with your focus groups—that will not work when it comes to ruling the country.

This is yet another ill-thought-out cut and change to the most vulnerable and most hard-working families, to the families in the most difficulty. Imagine spending time bringing up a child with disabilities and the continued worry of that. Those families have enough worry in terms of their child’s welfare without worrying about why the Government are taking away yet more funding and making life that much more difficult.