Tax Credits

Scott Mann Excerpts

Thursday 29th October 2015 Commons Chamber

[Scott Mann (North Cornwall) (Con)]

I thank the right hon. Member for Birkenhead (Frank Field) for securing the debate. This is the first opportunity that I have had to contribute to the tax credits debate.

The primary aim of this Government is to pay down the deficit, reduce public spending and unshackle the £3,000 that hangs around the neck of every child that is born in the UK. The Prime Minister has lifted thousands of people in my constituency out of income tax altogether, given 30 hours of free childcare and introduced the new living wage. I am proud to associate myself with those measures.

When tax credits were first introduced by Labour, they cost £4 billion a year. This year, I believe, they cost £30 billion, so they clearly need reform.

[Alan Brown (Kilmarnock and Loudoun) (SNP)]

Does the hon. Gentleman understand that working tax credits and tax credits are means-tested welfare benefits, so if the welfare bill has gone up, it is because families’ incomes have not risen significantly? That is the real reason why the bill has increased, so we need to get incomes to rise.

[Scott Mann]

I accept the hon. Gentleman’s point, but we are looking to increase the living wage to ensure that people are better off in work than out of work.

[Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP)]

Surely the Government are tackling the problem the wrong way round. They should have got incomes up before they cut people’s wages. What they are doing is cutting people’s earnings now, and in four years’ time they may introduce what they call a national living wage, which in fact is not a living wage.

[Scott Mann]

I thank the hon. Gentleman for his contribution. I will deal with that as I continue my remarks.

The proposals presented by the Opposition over the past few days would maintain the status quo. They believe that we should not change the £30 billion tax credit bill at all. [Interruption.] I do not accept that. They have offered no credible plan to take this burden off our children. [Interruption.] I was elected on a manifesto to reduce the welfare bill and I hope we will do that. We on the Government Benches know that we have to take the difficult decisions that lie ahead in order to bring about spending reductions. It is all very well for the Leader of the Opposition to ask six questions on tax credits yesterday, but a policy that affects 3 million families cannot be changed on a whim. I welcome the Chancellor’s announcement that he will deal with the matter in the autumn statement.

[Steve McCabe]

Is the hon. Gentleman saying, therefore, that the Prime Minister could not answer because the Government are not committed to protecting families from this problem?

[Scott Mann]

Absolutely not. We are looking seriously at the proposal and we will make some announcements in the autumn statement.

North Cornwall, which I represent, is a modest-waged economy. We benefited from the economic improvements that the country has seen. We have seen rising school provision and many people in my constituency have benefited from the Help to Buy scheme. They are trying to improve their lot in life and trying to do the right thing. As my hon. Friend the Member for Tiverton and Honiton (Neil Parish) said so eloquently, the Government must ensure that we make it better for people to be in work than out of work, but we must support those who work.

[Jeremy Quin (Horsham) (Con)]

I do not want to put my hon. Friend off his stride, but remarks were made from a sedentary position on the Opposition Benches during the earlier part of this speech. In the course of this debate we have had a non-partisan discussion. I thought I heard Opposition Members say that Labour is keen to see changes in tax credits and would move to cut the £30 billion of expenditure. Does my hon. Friend, like me, look forward to hearing such remarks made from the Opposition Front Bench, with an explanation of how the Opposition would cut the bills?

[Scott Mann]

I would indeed welcome that. We have heard nothing from the Opposition to illustrate how they would deal with the £30 billion deficit.

[Kevin Foster]

Does my hon. Friend agree that those comments were surprising because Labour has voted against every welfare change made over the past five years?

[Scott Mann]

Absolutely correct. It is ultimately our responsibility to look at all the financial provision that we make as a Government and ensure that that money is distributed to people who are trying to do the right thing.

[Rob Marris (Wolverhampton South West) (Lab)]

Will the hon. Gentleman give way?

[Scott Mann]

One more time.

[Rob Marris]

I am grateful. Let us be clear. The hon. Gentleman attacks Labour for having a policy that we do not have. That is unacceptable. Our policy is not to continue with £30 billion of tax credits for ever more. As my hon. Friend the Member for Lewisham, Deptford (Vicky Foxcroft) said, we want to change that. It is a question of phasing and whether we cut incomes from tax credits before wages go up. That is the Government’s policy and that is what we oppose.

[Scott Mann]

Forgive me—I thought the two Opposition-day debates were aimed at abolishing the proposal completely.

This Government know they need to make tough decisions, but they need to make them with fairness and compassion. The measures that we are putting in place to manage the transition are to be welcomed, and the national living wage, the free child care arrangements, and the social rent reductions of 1% a year that are being implemented for those who live in social rented homes will help some people to manage the transition. However, it is evident that some people will fall between the cracks. People with older children aged between eight and 14, for example, who do not necessarily have child care provision that they can allocate, single parents who currently earn more than the living wage, and those in private accommodation who do not benefit from the rent reductions will be affected.

There are many better economists in the House than I. It is not a subject that I profess to be particularly good at, but I would like to offer some financial solutions. How about going after VW, which seems to owe a huge amount of money to our Government from the vehicle excise duty that it has not paid? We should use some of that money. How about abolishing national insurance for anyone who is under the income tax threshold? We could also give tax breaks to grandparents or provide a transferable allowance for that 30 hours of free childcare. Many working families use grandparents to provide care. I see no reason why we could not change the childcare arrangements to take account of that. We could consolidate tax credits for new claimants, which would reduce the welfare bill.

I welcome the opportunity to get on the record in this debate, and I welcome this moment of pause that has been presented to us by the other place. I am here today to stand up for the thousands of working people in North Cornwall and I urge the Chancellor to assist them in their efforts to work and to earn.