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Clause 11 - Changes to child tax credit

Part of Welfare Reform and Work Bill – in a Public Bill Committee at 9:25 am on 13th October 2015.

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Photo of Damian Hinds Damian Hinds The Exchequer Secretary 9:25 am, 13th October 2015

The OECD has done a survey based on percentage of spend to GDP. The hon. Lady has not asked this question but let me clarify further: it takes together family benefits, cash benefits, tax breaks and childcare. Of course, the mix is different in different countries. Nordic countries tend to spend more on direct childcare and Anglophone countries tend to spend less on that but put more into tax breaks. Our country has tended to spend a little bit more on cash benefits and on childcare.

As I said, child tax credits are there to provide support to low-income families to help them with the cost of raising children, but the system has grown unsustainably—a family with three children that earns up to almost £40,000 could still be eligible for some support. The previous Labour Government let public spending on tax credits rocket out of control so that, in 2010, nine out of 10 families with children were eligible for tax credits. That was not targeted support for low-income families.