Tax Credits

Rupa Huq Excerpts

Thursday 29th October 2015 Commons Chamber

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

I also add my congratulations to my right hon. Friend the Member for Birkenhead (Frank Field) on securing this debate in a week of such high drama on this subject. I am very encouraged by the things that I have heard from some Members on the Government Benches, and I hope that that is conveyed to their leadership.

Yesterday’s headlines made for confusing reading. The Guardian went for “Osborne ready to change tack on tax credits.” The Express plumped for, “Defiant Osborne says that tax credits will be cut despite defeat in Lords.” It is not the first time that there has been confusion over this issue. Before the election, the Conservative manifesto promised to “work to eliminate child poverty.” Two months later, the Government scrapped existing targets and child poverty measures. That is not just moving the goal posts, but ripping up the pitch.

The Prime Minister said:

“We must eliminate the scourge of poverty.”

That is difficult to reconcile with cuts set to put more than 200,000 working households into poverty. Those cuts are being put into effect to fund an inheritance tax cut that will benefit the 60,000 wealthiest estates, which probably explains why we no longer hear the words, “We are all in this together.” This is all such high drama, and we do not know what the next instalment will be.

[Christina Rees (Neath) (Lab)]

I have been a bit confused as well. The only thing that is clear is that in Neath we have more than 6,000 families on tax credits, and more than 5,000 families with children, and these measures will drive them into poverty.

[Dr Huq]

I think that we have a similar number—6,500 families—in Ealing Central and Acton. It is the children whom we should be thinking about. They are not just columns on a spreadsheet, but real people.

There was great drama at PMQs yesterday. The leader of the Labour party asked the Prime Minister six times about these plans and whether working people would be worse off next year, and six times, the Prime Minister refused to answer. Even The Sun—not the most Labour friendly paper—referred to that exchange. As my hon. Friend the Member for Islington North (Jeremy Corbyn) said:

“This is not a constitutional crisis; it is a crisis for 3 million families”.—[Official Report, 28 October 2015; Vol. 601, c. 339.]

We could go further, even further than this motion. The Chancellor could still perform a full U-turn, which I would welcome, as I did the rapid conversion to feminism in this place yesterday. As my hon. Friend the Member for Hayes and Harlington (John McDonnell) said, if the Chancellor were to make a U-turn, we would welcome it on the Labour Benches. We would not taunt the Government if they were to do that. There is still time.

The Chancellor has a choice before him. He can continue hell-bent on his tax giveaways to big corporations and to the wealthiest in our country, or he could reverse those tax breaks to the few and go for a lower surplus target in 2019-20 while still sticking to his self-imposed charter. He would still be in a position not to hit those 3 million working families with these tax credit cuts. After all, this is a Government who claim to be on the side of working people. The ball is now firmly in the court of the Treasury Ministers.

My hon. Friend the Member for Birmingham, Selly Oak (Steve McCabe) said that, often, the lifting of people out of taxation is used to justify these measures, but such a move is not as progressive as it initially appears to be. It helps dual earner households the most, but only those who earn enough. It makes no difference if the Government start taxing at £6,000 or £11,000, because there is little help for those on £5,000—the lowest paid on the distributional curve.

Studies have shown that the national living wage, which is not an actual living wage, will only affect a small minority of people and it will never help those under the age of 26. My right hon. Friend the Member for Don Valley (Caroline Flint) also pointed out that the childcare element is quite limited. In my own constituency, parents would be hard-pressed to find a nursery that could offer a place, because there is not the commensurate resource to match the policy.

People have been wondering, even before the mess of this week, how they can trust a Prime Minister who blatantly said one thing on TV as recently as 30 April and then quite a different thing just a couple of months later in July. He made a promise of no cuts to a voter on a phone-in programme. That was then followed up by David Dimbleby to check that what he said was clear. By July, that promise had gone. That must be the fastest U-turn in history. In PMQs yesterday, we heard some MPs say that they had claimed tax credits. I do not know whether that is true. Perhaps we can put that down to the theatre of PMQs.

[David Morris]

rose—

[Dr Huq]

I have already given way once, so I will not do so again. Reduced tax credits are being introduced alongside a gamut of other welfare changes, the cumulative effect of which is an assault on the lowest paid in our country.

[Jason McCartney (Colne Valley) (Con)]

Please stick to the motion.

[Dr Huq]

What I am saying is relevant to the motion, because we need some context.

[Madam Deputy Speaker (Mrs Eleanor Laing)]

Order. If the hon. Lady was not speaking to the motion, I would stop her.

[Dr Huq]

We need to look at tax credits in a wider context. There is the four-year benefit freeze, and the reduction in the household benefit cap. New claimants are no longer entitled to the “family element” of tax credits and, controversially, there is the proposal that, after April 2017, families will not be able to claim for their third child. I cannot imagine that happening in any other policy area. Can Members imagine the Government saying that a third child could not go to school? If such a policy had been in place, my sister Connie would never have been educated.

A number of millionaire Tory lords voted on Monday to cut help for Britain’s poorest workers. Lord Lloyd Webber was even flown in from New York for the vote. It did seem as though the Government were throwing the kitchen sink at this whole issue. There is growing awareness of the consequences of such a measure. Etched into the consciousness of those on the Government Front Bench should be the words of that caller who phoned in to that programme before the election, or the words of the woman who cried on “Question Time” the other night. Through old and new media, we have all received hundreds of messages on this point so we await the next instalment, the autumn statement. I hope that kids have been saved the unseasonable tidings of the notices that would have been plopping onto doormats at Christmas.

At the very least, the Government should publish a full impact assessment of their cumulative cuts to tax credits and benefits in the so-called emergency Budget. The Prime Minister said at his own conference that it is not pounds and pence but people that fire him up. Those 6,500 children in Ealing Central and Acton are real people with real lives, not columns on a spreadsheet. Some 70% of the money that the Treasury will save will come from working mums, so I urge the Government to reconsider their proposals and protect those on the lowest incomes.