Tax Credits (Working Families)

Kate Osamor Excerpts

Tuesday 7th July 2015 Commons Chamber

[Kate Osamor (Edmonton) (Lab/Co-op)]

I congratulate everyone who has made their maiden speeches today. They have been wonderful to witness and to listen to.

This issue is of particular concern to me. Any cut to tax credits by this Government will hit my constituents in Edmonton especially hard. In my constituency, 18,000 children are in families that receive tax credits. Overall, 72% of families in the area receive tax credits, which is 21% higher than the national average. Those families and children will suffer if tax credits are cut.

The Institute for Fiscal Studies has estimated that cutting £5 billion from tax credits means that working families will lose an average of £1,400 a year. That is not political scaremongering, but the finding of an independent and highly respected organisation. In my constituency surgeries, I already meet many people who are in work but are struggling to get by. The people of Edmonton simply cannot afford this further reduction in their income.

The charity End Child Poverty estimates that 42% of children in Edmonton already live in relative poverty, after housing costs are taken into account. We found out only last week that progress in reducing child poverty has stalled since the right hon. Member for Witney (Mr Cameron) came to power. All the evidence suggests that cutting tax credits will push thousands more families below the poverty line, robbing children in my constituency of the opportunities they all deserve.

It should be plain to everybody in the Chamber that cutting tax credits for working families is immoral, but we must also realise that this is a bad approach to bringing down the welfare bill. The main driver of welfare spending during the last Parliament was low pay and the shortage of affordable social housing. Both those problems have got much worse since 2010. The coalition Government’s attack on working families has meant that the number of people paid less than the living wage has gone up 45% since 2009. That is a particular issue in London, where the minimum wage is already £2.65 an hour lower than the living wage.

If the Government were serious about bringing down the welfare bill, they would take urgent action to move us towards a high-wage economy in which people can afford to live on the wages that are paid. It is clear that cutting tax credits will not help to achieve that. Instead of making further attacks on the low paid, the Government should work to make the minimum wage a genuine living wage, and take much stronger action against companies that flout minimum wage laws. However, this Government have no plans to deal with these issues, but seem determined to push ahead with tax credit cuts that will leave more working families in Edmonton and across the UK in poverty.