Welfare Benefits Up-rating Bill

Kate Green Excerpts

Monday 21st January 2013 Commons Chamber

[Stephen Timms]

Absolutely right—the policies of the previous Government have continued to have beneficial impacts, but as soon as this Government change the policy the numbers will rocket back up again. According to the IFS, child poverty will rise by 400,000 by 2015 and by 800,000 by 2020. On top of that, there will be an additional rise of 200,000 as a result of the Bill. That is what the Government’s policies are doing.

[Kate Green (Stretford and Urmston) (Lab)]

Of course, that is the figure the Government have been prepared to acknowledge in relation to relative income poverty, but they have said nothing about the impact on absolute poverty, material deprivation or persistent poverty—all measures they are signed up to in the Child Poverty Act 2010. Does my right hon. Friend agree with me that they should publish the impact on those measures of poverty as well?

[Stephen Timms]

Absolutely. That is what they have done in previous Budgets and autumn statements; in this one there was silence. I agree with my hon. Friend that the Government should absolutely return to the practice they adopted after the election.

Like the Minister in the 1980s, anybody who cares about poverty and who is looking at what is set to happen to the most vulnerable in the next few years, will be appalled. Child poverty will be growing remorselessly once again—back to the policies of the 1980s and back to their consequences, too. There is enormous public concern about the effects of clause 1 and the Bill as a whole. My hon. Friend the Member for Ayr, Carrick and Cumnock (Sandra Osborne) referred to the coalition of organisations in Scotland who have written about their concern. The Child Poverty Action Group has said:

“The Bill is a cause of great concern.”

Barnardo’s has stated:

“This policy will punish children the most by trapping them in poverty and impacting on their lives, leading to poor health, poor qualifications and unemployment.”

Citizens Advice said:

“It is imperative, particularly whilst increases to earnings from work are restricted, that support for low earners received through the welfare system is not disconnected from inflationary measures to the cost of living.”

The Children’s Society said:

“Groups which are meant to be protected (such as households with somebody with a disability) are more likely to be affected than households without protection.”

In an open letter this morning, the chief executives of Catholic charities in Liverpool, Manchester and London warned of the threat the Bill

“poses to the fundamental well-being of disabled, unemployed and low paid people, as well as their families who are already buckling under the weight of recent changes to the welfare system.”

--- Later in debate ---

[Ian Mearns]

I live in the heart of my constituency, among the people whom I represent, and, oddly enough, the people whom I represent do not feel massively better off as a result of the Government’s changes. VAT, for instance, has a dramatically greater impact on those at the lower end of the income spectrum.

[Kate Green]

Is not one reason why very low-paid people do not gain in any way from an increase in the tax threshold the fact that if they are working part-time on the minimum wage, they will be below the tax threshold in the first place?

[Ian Mearns]

The position in my constituency is exemplified by the fact that household income probably hovers just above £20,000 per annum. That is household income, not personal income.

--- Later in debate ---

[Kate Green]

The problem with using the tax threshold as a means of not taking money away with one hand and giving it back with the other is that it gives to people who do not need as well as to people who do. By contrast, tax credits targeted at lower-income households give to people who need, and the tax credit is tapered away rather than kept at the same level as people rise up the income spectrum.

[Mr Redwood]

What a miserable world the hon. Lady lives in. People on £30,000 and £40,000 need more money as well as people on £10,000 and £20,000, and I am here to try to ensure that they get more money. I do not believe that the Government should take all their money; they should be allowed to keep more of it so that they have more to spend, which would create more jobs. I thought that was part of the Opposition’s argument—or it would be, were we having a different debate. They will not use that argument today, because we are debating benefits.

My right hon. and hon. Friends on the Front Bench are trying to deal with part of the problem by taking people out of tax altogether and cutting the amount of tax that those at the lower end of the income scale have to pay. That is a very good thing to be doing. They are also about to launch their universal credit in trial systems. The whole purpose of universal credit, as described, is to make it more worth while to work and to deal with the fact that if benefit is taken away too quickly, people face a high rate of tax combined with benefit withdrawal, which is a big disincentive to going to work. It might even get in the way of their going to work, as they might not have enough money for the bus fare, the clothes they need and all the rest of the things one needs when setting oneself back up in a job. That is very important.