Living Standards

Debate between Rachel Reeves and Lord Field of Birkenhead

Monday 5th March 2012 Commons Chamber

[Rachel Reeves]

I entirely agree with my hon. Friend, who makes the point about her constituents. All hon. Members will have heard at our surgeries from people who are beginning to realise that in just a few weeks’ time, they will lose all their working tax credit, despite the fact that they are working and doing the right thing.

[Mr Frank Field (Birkenhead) (Lab)]

Will my hon. Friend put it to those on the Treasury Bench that when child benefit came in, it replaced family allowances and child tax allowances, and therefore played a crucial part, because whatever level of income people with children were on, we in some way maintained equity with tax-free income? The Government are abolishing that for the sake of higher rate taxpayers. How can they maintain that the tax burden is being shared between single and childless people, and those with children, if they abolish child benefit?

[Rachel Reeves]

My right hon. Friend is entirely right. This country will be one of the few that does not support families with children across the income distribution. Having children is expensive, and it is right that when people bring up a family, and when they retire, the state is there to provide that bit of extra support when they need it. The Government’s changes go entirely in the wrong direction.

That is a shocking illustration of the Government’s failure to come to grips with the crisis that our country faces—the crisis that is putting families under strain is the crisis in jobs, incomes and living standards. The cost-of-living crisis does not hit the headlines like a banking crisis or a currency crisis perhaps because it is a crisis from which those with the loudest voices can too easily insulate themselves. For the vast majority of people, however, trying to keep going and keep their heads above water is one of the toughest challenges that they have ever faced. Every day is a battle in a long war of attrition.