Tax Credits

Kate Osamor Excerpts

Thursday 29th October 2015 Commons Chamber

[Kate Osamor (Edmonton) (Lab/Co-op)]

I thank my right hon. Friend the Member for Birkenhead (Frank Field) for securing this important debate. When I voiced my opposition to the cuts to tax credits back in July, I spoke of how they would hit the poorest the hardest. I spoke of how in my constituency 72% of people receive tax credits and over 42% of children live in relative poverty, so Members can well imagine how worried I am for those constituents, who I am sure are watching now.

The latest analysis from the Resolution Foundation projects that over 200,000 more children will be in poverty by 2016 if these unbelievable, wrong and—I cannot even get the words out, because I am very upset about this. This is going to affect the people I represent. The Government have done nothing to assess the impact of the cuts on children. Indeed, the changing definition of child poverty in the Welfare Reform and Work Bill totally fails to capture the true extent of child poverty. To be clear, two thirds of children in poverty live in households where women and men go to work. The situation for Edmonton, which is ranked as the constituency with the sixth highest level of child poverty, is critical.

The impact of tax credit cuts will be felt not only by the poorest constituencies, such as mine, but by constituencies across the country. The Institute for Fiscal Studies has shown that nearly 3.2 million working families on benefits or tax credits stand to gain, on average, only £200 a year from the so-called national living wage, whereas they stand to lose over £750 a year as a result of tax credit cuts. Also, the personal tax allowance does nothing to help the low-paid—those earning less than £10,000.

The value of free childcare to tax credit recipients is very limited. The measure has not been thought out. I have discussed it with the National Association of Head Teachers, whose members are worried about the intake and whether they will be able to expand to take on more children. This needs to be thought out as well.

To paint the reforms as a valid replacement rather than a necessary accompaniment to tax credits is quite untrue. The Government have broken their election promise. They are betraying the very people they claim to represent. I call on the Government to reverse the cuts to tax credits. The evidence is against them—we have heard it from Members in all parts of the House. It is plain that the changes will not work. They will not work because so many people will be living in poverty. I am sure that that is not what this Government are here to do, and if it is, they need to think again.

We need to think about our constituents and the surgeries we all sit in. I say to Government Members: listen hard to those who come to tell you how worried they are—how they do not know how they are going to survive, or how they are going to look after their children. We saw on “Question Time” a woman in tears, crying as she said she had voted for you and you let her down. It is time to stand with the people you claim to represent. Let me put it straight: if you push ahead with these plans—these disgraceful plans—you will only show those people who want to go out to work that it does not pay to go out to work. You need to look and think deeply about the decision to take these cuts forwards.