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Welfare Reform and Work Bill

Part of the debate – in the House of Commons at 8:03 pm on 20th July 2015.

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Photo of Helen Goodman Helen Goodman Shadow Minister (Work and Pensions) 8:03 pm, 20th July 2015

I used to work for The Children’s Society and it does some excellent work. What I am concerned about tonight is that rather like a child who has broken a toy and hides it under the bed, the Chancellor tried to hide the impact of this Budget by not presenting the distribution tables in the normal and proper way after the Budget. Fortunately, the IFS told us the truth, which is that people at the top are losing 0.2% of their income and people at the bottom are losing 7% of theirs. This is a phenomenally regressive Bill and a very regressive Budget. It will take £10 million out of the local economy every single year in my constituency. As hon. Members have said, one of the worst things about the tax credit cuts is that they affect in-work families, who are struggling in low-paid jobs to do their very best for their children. They are being given what my hon. Friend Chris Leslie has called a “work penalty”. The Bill worsens work incentives. A top-rate taxpayer who earns an extra pound can take home 55p whereas a lone parent on tax credits can take home only 25p.

The Chancellor believes that his rabbit—a rise in the national minimum wage—solves the problem. Of course we all welcome that increase, but it does not solve the problem. It does not compensate by the right amount, it does not compensate enough people and it does not compensate at the right time. Overall, 13 million people are losing from these measures. Some 3 million are losing £1,000 and 2.7 million people will gain from the national minimum wage. The mismatch is shown by chart B3 on page 208 of the report by the independent Office for Budget Responsibility. It says something that surprised me and is very pertinent:

“around half the cash gains”— from the increase in the minimum wage—

“may accrue to the top half of the household income distribution”.

It shows that people at the bottom gain less than £600 and those at the top gain more than £1,000. Furthermore, in evidence to the Treasury Committee last week, it told us that only 14% of people in the bottom decile receive the national minimum wage.

I have concentrated on the issue of children and tax credits, but I have also had many messages from carers, sick and disabled people, and lone parents who are worried that the 30-hour condition is coming in before the extra childcare provision is in place. There are so many serious issues here, and it is a shame that we do not have time to address them.

Recently, Professor Amartya Sen said:

“Democracy should be about preventing mistakes through participatory deliberations, rather than about making heads roll after mistakes have been made.”

He is right. I have been in this House for 10 years, and I have never voted against my party’s Whip. I think that my right hon. Friend the Member for East Ham made a good case for the Front-Bench amendment. I shall vote for the amendment, but there are so many issues in this Bill that are deeply worrying that I cannot avoid going into the No Lobby against it tonight.