Oral Answers to Questions

Debate between Louise Ellman and Chloe Smith

Tuesday 24th April 2012 Commons Chamber

[Mrs Louise Ellman (Liverpool, Riverside) (Lab/Co-op)]

13. How many families in (a) the UK and (b) Liverpool, Riverside constituency receiving child tax credits will be economically disadvantaged by the changes introduced in the Budget.

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

Data limitations mean that we cannot assess impacts at a constituency level, but, taking into account the Budget’s unprecedented £1,100 increase in the personal tax allowance and the other measures that the Treasury can robustly model by household, I note that more than half of households entitled to child tax credits are better off and will gain on average £175 per year in 2013-14. There are less than half as many losers as winners, and their average loss is more than four times smaller, at £40 per year.

[Mrs Ellman]

I thank the Minister for her answer, but more than 825 households in Liverpool, Riverside will lose all their child tax credit or working tax credit. How can it be fair to penalise hard-pressed families when millionaires are gaining £40,000 from the very same Budget?

[Miss Smith]

The top 20% of earners in this country continue to make the biggest contribution to reducing the deficit, as has to be the case. The hon. Lady knows as well as anybody in the House that under the previous Government, spending on tax credits was out of control, with nine out of 10 families being eligible. Six out of 10 families will still be eligible for tax credits after our reforms.