Oral Answers to Questions

John McDonnell Excerpts

Tuesday 1st December 2015 Commons Chamber

[Mr Osborne]

I am, of course, always happy to listen to representations from my hon. Friend and others, but we have put a substantial sum of taxpayers’ money into compensating the people who lost out through Equitable Life. We have also ensured, through our payment system, that those payments have been made. That is why the scheme is coming to a close.

[John McDonnell (Hayes and Harlington) (Lab)]

The Chancellor bowed to Labour pressure last week and made a U-turn on tax credits. Although tax credits will not be cut in the new year, as planned, the cuts to universal credit are going ahead in full, so he has not reversed his cuts to family incomes, but just delayed them. I am sure that he has looked at the impact of the changes in detail, so will he tell the House how much a single parent with one child who works part time on the so-called national living wage will lose as a result of his planned changes to universal credit?

[Mr Osborne]

First, let me say that I did not feel a huge amount of Labour pressure last week, but I am happy to see the hon. Gentleman at the Dispatch Box. With universal credit, we are introducing a fundamental improvement to our benefits system. Anyone on tax credits, including in the case that he refers to, who is moved on to universal credit by the Department for Work and Pensions from next year will have their cash awards protected.

[John McDonnell]

Let me explain to the Chancellor exactly what a single parent with one child who works part time on the national living wage will lose. They will lose an average of £2,800 a year as a result of the cuts to universal credit. This was not an autumn statement that supported families, but one that punished them because 2.6 million families will still be worse off by £1,600 on average.

Let me offer the Chancellor another way out. If he reversed the tax giveaways to the wealthy that he announced in his summer Budget, he could reverse fully these cuts to family incomes, while still achieving his fiscal mandate. Will he now address the threat to these families?

[Mr Osborne]

Universal credit is a new benefit where it will always pay to work and it will always pay to expand the number of hours that are worked. It will get rid of a complex series of benefits. That will help working families. Let me make this point, since the gang of four on the other side of the House are chuntering away. The hon. Member for Leeds East (Richard Burgon), who is a shadow Treasury Minister, has not bothered to turn up today because he is marching on the Labour party’s headquarters on a Stop the War march. The truth is that until the shadow Treasury team get their act together in this Chamber, their cases will not be listened to seriously.