Living Standards

Debate between Rachel Reeves and Hugh Bayley

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

I will come to that very point. Hours are being cut at the moment, so many people working part time who will be hit by these changes to working tax credits are working part time because they cannot find full-time work. Numbers from the Office for National Statistics show that the number of people working part time because they cannot find full-time work is at a record high of 1.35 million—a 13% increase on a year ago. It is therefore not the case that families can simply increase their hours to keep their tax credits. They are being penalised, first because of the lack of economic recovery, and secondly because of this Government’s decision to cut working tax credits.

[Hugh Bayley (York Central) (Lab)]

Government Members keep asking what a Labour Government would do. I was a Social Security Minister when the Labour Government put together effective welfare-to-work policies. What is needed to make them effective is a macro-economic policy that creates jobs and allows people in part-time work to increase their hours. Under the Labour Government, the number of jobs in York increased from 40,000 to 57,000, many of them in retailing. It is precisely those people—1,600 in York—who look set to lose family income as a result of this Government’s policy.

[Rachel Reeves]

Like my hon. Friend, many of us will have spoken to constituents in jobs whose hours vary—for instance, those working in retail or call centres, or those working as cleaners. However, at the moment, their hours are varying in one direction: downwards, because employers are cutting hours and cutting staff.

In addition to the changes to working tax credits, next January more than 1.5 million families will lose every single penny of their child benefit. The Government are saying, “Well, we’re only cutting child benefit for rich families.” However, if they talked to working families, they would realise that many families are heavily reliant on a single earner, because there is only one parent or because one parent is staying at home to bring up the kids. Those families are being hard hit by the changes.