Women and the Cost of Living

Debate between Stephen Metcalfe and Sheila Gilmore

Tuesday 19th November 2013 Commons Chamber

[Sheila Gilmore]

The hon. Lady has told the House that the path onwards involves more raising of tax thresholds, regardless of who will or will not benefit from that. A further rise in tax thresholds, however, will do absolutely nothing for many who already earn below that level, particularly women who are part-time workers. How will that further generosity—which, as I have said, benefits more those whose earnings are in the upper brackets—be paid for? On the basis of the past three and a half years, presumably it will be paid for by yet more cuts to benefits and services that help a lot of women.

[Stephen Metcalfe]

Will the hon. Lady give way?

[Sheila Gilmore]

I will not give way again.

In future—assuming, of course, that universal credit ever materialises, which is far from certain at the moment—low-paid people will benefit even less as the tax threshold increases. Universal credit will be calculated on net, rather than gross earnings. Therefore, if a taxpayer who claims universal credit receives a tax cut of £100, they will automatically lose £65 of benefits. The lowest paid taxpayers are going to suffer more, and a solution would be to commit to increase the amount someone can earn before universal credit payments are reduced every time tax thresholds go up. Those who advocate the solution for low-paid workers have told us time and again that the reason for raising tax thresholds is not to benefit everyone but to benefit low-paid workers. However, it will not benefit those workers to anything like that extent—indeed, for many of them probably not at all.

We are constantly being told that we have to make tough choices—the hon. Member for South Basildon and East Thurrock (Stephen Metcalfe), who wanted to intervene, has constantly risen to speak about the need to deal with the deficit. Choices are being made in the way the Government are proceeding, including the choice to give those generous tax cuts and wanting to continue to do so, but that does not sound like a terribly tough choice for some people to make.

There are other uses for the money if it is available. We could give a tax break to businesses that agree to pay the living wage, which would benefit women in particular. We could increase help with child care costs now. Child care tax credits were cut from 80% to 70% by the coalition. I know the Government say that they will restore that for recipients of universal credit when—if—it comes in, and the new child care tax relief starts in 2015. Why not now, however, especially with universal credit receding somewhere over the horizon? Further to that, the Social Mobility and Child Poverty Commission suggests that the Government should reallocate the 2013 Budget funding for child care tax relief from higher rate tax payers to those on universal credit. That would be over and above existing plans—this is a recent report from the commission—to help those who want to work and need help with child care.

Gingerbread, which will obviously advocate on behalf of families with one parent, 90% of whom are women, has made proposals for improving universal credit that would make work pay and encourage the progression through employment that is desired by us all. The old 16-hour rule that Government parties tend to dismiss was to ensure that going back to work really improved people’s situation, rather than the mini-jobs that, frankly, leave people poor.

Gingerbread has suggested that we increase the amount a claimant can earn before universal credit starts to be withdrawn, and reduce the rate at which benefits are reduced—the taper rate. Those proposals cost money, but if money is available—clearly it is for those who advocate another increase in the basic tax threshold—I urge the Government to consider measures such as those advocated by Gingerbread genuinely to help the lowest earners improve their position.

One point I completely refute is the suggestion that if we say that life under this Government is hard for many women, we are calling women victims. Far from being victims, women are struggling to bring up their children despite the difficulties that they face. It is completely wrong to suggest that we are therefore painting them as victims—far from it.