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Low-income Families

Oral Answers to Questions — Treasury – in the House of Commons at 2:30 pm on 13th July 2010.

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Photo of Tom Clarke Tom Clarke Labour, Coatbridge, Chryston and Bellshill 2:30 pm, 13th July 2010

What assessment he has made of the effect on low-income families of the implementation of the proposals in the June 2010 Budget.

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Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

The right hon. Gentleman will be aware that the Budget was really about achieving two things: reducing the fiscal deficit and protecting the most vulnerable in our society. I am sure that he will welcome the fact that, as we heard earlier, we have reduced the personal allowance on income tax, which means that nearly 900,000 people have been relieved from paying income tax altogether. That has also benefited 23 million people working in Britain who will benefit by up to £170 a year. Additionally, he will recognise that we have taken steps to increase the child tax credit by £150 next year and £60 the following year, which will benefit some 7,200 households in his constituency. As a result of that, levels of child poverty after the Budget will remain unaffected.

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Photo of Tom Clarke Tom Clarke Labour, Coatbridge, Chryston and Bellshill

Let us get back to reality. In view of the increase in VAT, the slashing of benefits and the changes proposed for the disability living allowance, does the Chancellor have any proposals that will mean that the poorest and most vulnerable in our society are not treated disproportionately?

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Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

The right hon. Gentleman is right to raise the issue of poverty, but to pick him up on disability living allowance, just 5% of those on DLA have been receiving it for less than five years. We should be trying to tackle the root causes of poverty, rather than putting people in a poverty trap. I am sure that he would welcome, as I do, the fact that Mr Field will be leading a review into poverty, to ensure that we can do just that: tackle the root causes of poverty, rather than persist with just the symptoms.

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Photo of Stephen Metcalfe Stephen Metcalfe Conservative, South Basildon and East Thurrock

Will my hon. Friend comment on what she believes the effect on low-income families would be if we failed to deal with the £23,000 per person debt that we were left with by the former Government?

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Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

I think that most people on the minimum wage would be shocked to hear that the amount of income tax that they pay every year is less than what the average taxpayer pays in debt interest. The best thing that we can do to help not just people on lower incomes, but all people, whether in or out of work, is to get our economy back on track. That means tackling the fiscal deficit, starting to bear down on waste in public services and also reforming public services, so that the money that we spend-money that taxpayers have provided to Government to provide public services-is spent effectively on delivering high-quality public services that they can use.

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Photo of David Hanson David Hanson Shadow Minister (Home Affairs)

The choices that this Government have made on VAT increases, on cuts in child tax credit, on reducing maternity grant and on other public service cuts will hit the poorest people in the community the hardest. Will the Minister now publish in full the distribution analysis for the Budget, so that we can see the impact that it will have on the poorest in society, and see the difference that a Labour Government have made in comparison with this Conservative Government?

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Photo of Justine Greening Justine Greening The Economic Secretary to the Treasury

The right hon. Gentleman clearly has not read the Red Book. I think that pages 66 and 67 show the distribution analysis in cash terms and as a percentage of income. We do not need to take any lectures from members of a Government who widened the gap between rich and poor.

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