High Income Child Benefit Charge

Tulip Siddiq Excerpts

Thursday 2nd February 2023 Westminster Hall

[Tulip Siddiq (Hampstead and Kilburn) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I am covering for my colleague who cannot be here today because of a constituency commitment. I thank the hon. Member for Linlithgow and East Falkirk (Martyn Day) for bringing forward a really important debate today. He spoke compassionately about his constituents, who are clearly struggling, and I applaud him for bringing this matter to the House. He will be pleased to know that Labour always welcomes the opportunity to highlight the significant pressures that families are facing across the United Kingdom, including in my constituency, as the cost of living crisis gets worse.

We have heard how hundreds of thousands more families are being pulled into the high income child benefit charge. The hon. Member for Strangford (Jim Shannon) put it well when he said that a lot of them are not from wealthy families, yet they are still being pulled into that charge. It is sad that hard-working people are having to pay for the chaos caused in recent months, and for 12 years of economic failure.

I want the Minister to explain the fiscal drag of freezing the threshold for the high income child benefit charge. I am sure she will make the case that maintaining the threshold at £50,000 allows the Government to prioritise the majority of families, particularly the poorest households, and that she will talk about difficult choices that have to be made and how taxpayers’ money is best spent. We all agree with that, but the truth is that the current benefits system is not working for anyone, least of all the poorest. A report published by the Joseph Rowntree Foundation last week found that the benefit system is fundamentally “not fit for purpose” and has “trapped” millions of children and families in poverty.

Helping more people into good-quality work must be a priority of social security. Over 1 million people are out of work, despite wanting a job, and yet employers are struggling to fill over 1 million vacancies. I looked at the figures. Employment in the UK is lower now than it was before the pandemic, and the employment rate has had the biggest drop out of the major G7 economies.

A shocking 2.5 million of those who have fallen out of the workforce have done so because of ill health. We know that being out of work is bad for health. The longer someone is out of work for sickness reasons, the more difficult it is for them to return to a job. Unfortunately, it feels like nothing is being done to break that dangerous cycle. We cannot simply write people off. Only 4% of people in the employment and support allowance support group return to work each year. That is a huge waste of the potential of British people, who we know can contribute a lot to the economy.

The hon. Member for Dunfermline and West Fife (Douglas Chapman) wanted to know about Labour’s approach. We would take a very different approach to the benefits system. We would modernise jobcentres, turning them into new hubs that focus on work progression. They would be no longer just a conveyer belt to lower-paid work, but an escalator to well-paid, secure jobs.

I looked at the figures again. Only one in 10 older or disabled people who are out of work are receiving any support to find a job. That is because the Government impose programme after programme on local areas, regardless of their local economic needs. A massive £20 billion is being spent across 49 schemes, administered by nine different Government Departments. Even that statistic sounds so confusing.

The fragmented system is wasting taxpayers’ money and failing to get people into work. In contrast, when some limited local design has been allowed in pockets of the country, such as the inspirational “Working Well” initiative in Greater Manchester, there have been real successes in helping people get back into employment. That is why the Labour party will shift resources and power to the local level and guarantee local innovation in the design and delivery of employment support services.

We also want to address the hindrance to work in the social security system by empowering jobcentres to help to broker flexible working opportunities for those who have caring responsibilities. Crucially, we will reform the Access to Work scheme, for which the waiting list for an assessment has trebled. People now wait months for a decision, and overall the work capability assessment regime leaves too many people trapped in unemployment.

[Graham Stringer (in the Chair)]

Order. This is not a high-pressure debate and there is plenty of time, but the title is the high income child benefit charge. I am willing to relax and let the hon. Lady go a bit off-piste, but I think she is wandering quite a long way off the subject of the debate.

[Tulip Siddiq]

Apologies, Mr Stringer. You will be pleased to hear that I am on the last bit of my speech.

I ask the Minister to respond to the specific concerns raised today, especially in relation to the growing number of people pulled into the high income child benefit charge. I sincerely believe we need a proper plan to lift families out of poverty. We need to get our economy growing, and we need to offer opportunities for people in every part of the UK. I want to hear what the Minister has to say.