Budget Resolutions and Economic Situation

Carolyn Harris Excerpts

Tuesday 14th July 2015 Commons Chamber

[Carolyn Harris (Swansea East) (Lab)]

Over the past few days there has been a great deal of debate and analysis of the Budget. Some who would not necessarily be expected to do so have praised proposals to increase the minimum wage and to increase the personal allowance. However, it is extremely important that we do not lose sight of the fact that, despite those measures, as the Institute for Fiscal Studies confirmed, the Budget is regressive. Contrary to the Chancellor’s rhetoric, it is those with the least broad shoulders who must carry the burden of reducing the deficit.

Cuts to tax credits will have a significantly detrimental impact on families on very low incomes. Neither the increase in the minimum wage nor the increase in the personal allowance will make up for these losses. The changes mean that working parents eligible for child tax credit will lose more support more quickly than previously, from the moment they move into work or their salary starts to increase. Many parents will be worse off when the full impact of the Budget is taken into account. Barnardo’s has calculated that a single parent with two children working full-time on the minimum wage will lose £1,200 a year from April 2016, even when the increase in the minimum wage is accounted for.

It gets worse: from April 2017 some of the very poorest families—those with more than two children—will face further reductions in income. They will not be able to get financial assistance through tax credits or universal credit to account for the costs of having a third child, or any child beyond that. We are talking about a significant amount of money for families on very low incomes—about £2,700 a year, or £53 per child per week. New claimants of universal credit will also be affected by this change. A family who already have three or more children and are currently earning above the earnings threshold but lose their job or find themselves unable to work due to ill health will, after April 2017, be able to claim support for only two of their children. As a result, there is no escaping the fact that, from April 2017, families with more than two children will be more likely to live in poverty. Children with more than one sibling are already 40% more likely to be in poverty than their peers.

To illustrate that point, let me give just one example from a Barnardo’s children’s centre. Sarah is a working mother of three whose husband, John, looks after the children, one of whom is not yet of school age. John asked the centre for some nappies. When a project worker visited their home, she noticed that the only food in the cupboard was biscuits and crisps. Sarah and John said that their finances had become unmanageable after their house was deemed too big for their family and they were hit by the bedroom tax. That pushed them over the edge. Now the parents are skipping meals so that the children can eat, and they are too proud to ask for help.

Cutting tax credits will hit some of the poorest and most vulnerable the hardest. The Government keep telling us that it is about making work pay and incentivising those on out-of-work benefits to move back into work. We know that more than six in 10 children are currently living in poverty, with at least one parent in work. It is absolutely absurd that in 2015, and in the fifth largest economy in the world, parents are having to decide who can eat and whether they can afford to put the heating on.

I will finish with two questions for the Government. First, how do they intend to monitor the impact of the cuts to tax credits, and of the Budget as a whole, on child poverty? Secondly, given that they have said that the income measure of child poverty is to be scrapped, to ensure transparency and fairness in relation to measures announced in the Budget and in legislation such as the Welfare Reform and Work Bill, how will they continue to monitor levels of child poverty?

Tax Credits (Working Families)

Carolyn Harris Excerpts

Tuesday 7th July 2015 Commons Chamber

[Carolyn Harris (Swansea East) (Lab)]

This debate is an important opportunity for Members to express concern and show their support for families on tax credits. Tax credits give families in constituencies right across the UK the choice between eating and heating their homes. Unfortunately, the Government’s vision of a society in which work pays is skewed by the reality that many working families are living on the breadline. Parents on low wages are dependent on tax credits to raise their income to a level where they can “get by”—not live the high life, but possibly stop having to use food banks.

In my constituency of Swansea East, 13,000 children benefit from tax credits. The independent Institute for Fiscal Studies has suggested that any cut to tax credits will push a further 300,000 children into poverty in the United Kingdom. Tax credits provide the vital top-up funds that make a difference for families and allow them a basic standard of living—a basic right, but not something that Conservative Members are comfortable talking about.

A shocking indictment of that catastrophic austerity plan is that the people who face the daily hurdles of feeding their kids and keeping them safe and warm are feeling threatened that their safety net is about to be pulled out from under them. The child poverty targets for 2020 will be missed, the number of households below average income shows that no real progress has been made for two years running in tackling child poverty, and charities tell us that child poverty is increasing alarmingly, yet Conservatives think their policies are working. Ahead of tomorrow’s Budget, I say one thing to the Chancellor: he should think before he speaks. He is putting children’s lives at risk. Bear that in mind.

European Union (Finance) Bill

Carolyn Harris Excerpts

Tuesday 23rd June 2015 Commons Chamber

[Mr Gauke]

That is a very good point. However, you would not wish me to be detained too long, Mr Streeter, by the fact that various candidates for the leadership of the Labour party appear to be recognising that too much money was spent before the crash, and that not all of it was spent in an efficient manner.

[Carolyn Harris (Swansea East) (Lab)]

rose—

[Mr Gauke]

I give way to the hon. Lady, who may share that view.

[Carolyn Harris]

Does the Minister believe that enough is being done to ensure the transparency of budget decisions that are made at EU level?

[Mr Gauke]

The hon. Lady has asked a good question. In the context of the review that the Commission is undertaking and the focus on a budget for results, transparency is certainly important. The Government’s record is clear: we want more transparency in relation to all expenditure, whether at UK or EU level, and I think that more can be done in that regard.

The hon. Member for Worsley made an important point about administrative expenditure. As part of the MFF deal, EU staff salaries were frozen in 2013-14, and EU institutions committed themselves to a 5% headcount reduction by 2017 and an increase in statutory pension age to 66 for officials who started work in or after 2014. I would be the first to accept that those reforms do not go far enough, but, working with like-minded member states, the Government will continue to press the EU institutions to show maximum restraint when it comes to administrative expenditure.