Oral Answers to Questions

Kerry McCarthy Excerpts

Monday 24th October 2011 Commons Chamber

[Steve Webb]

In order to give my hon. Friend a sense of scale, let me tell him that we lent a little over £200 million in crisis loans last year, and less than £500,000 was written off as unrecoverable. As I have said, the vast majority of loans are recovered, but I share my hon. Friend’s concern that the money should be lent correctly. Localising parts of the crisis loan system will lead to much closer local scrutiny of the purposes for which the money is being lent.

[Kerry McCarthy (Bristol East) (Lab)]

24. What assessment he has made of the effect on child poverty of benefit changes in (a) 2011-12 and (b) 2012-13.

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

Treasury projections show that modelled tax and benefit reforms announced since Budget 2010 may result in a small reduction in child poverty in 2011-12 and 2012-13. These include above-indexation increases to the child element of child tax credit by £180 in 2011-12 and £110 in 2012-13.

[Kerry McCarthy]

I am slightly puzzled by the Secretary of State’s response. I am sure he is aware of the research published last week by the Institute for Fiscal Studies and the Joseph Rowntree Foundation predicting a huge rise in the number of children living in relative poverty—of perhaps 500,000 more—despite the Government’s introduction of the universal credit. Does he accept that child poverty is predicted to rise under his rule?

[Mr Duncan Smith]

The hon. Lady should not be so surprised given that I responded to the question she asked. The IFS projection deals with the tax and the benefits systems, but there are wider issues; we are addressing the pupil premium and other areas, which we think will also have an effect. The IFS projections are based on the premise that absolutely nothing changes, and I remind the hon. Lady that the last report showed that the previous Government were going to miss their 2010 targets before they left office.