---

Living Standards

This debate is an example of how the Government's thirst for cuts—any cuts—has blinded them to the basic foolishness of the policies that they are pursuing. Even when their cuts are demonstrably ineffective, counter-productive and unfair, they plough ahead with them because they cannot countenance any alternative. The hon. Member for Bedford (Richard Fuller) has just said that it would be unfair to pass on the deficit to future generations, but the Government are, by their own admission, borrowing £158 billion more because of their failure to get growth into our economy. The question is not whether or not we have a deficit; it is about the best way to pay it off. Anyone who understands anything about this Government will recognise that deficit reduction is their primary priority. However, their proposed changes to working tax credit will not move them one penny piece closer to that objective. There are 335 Chesterfield families, and 635 children, who will lose up to £4,000. There are 1,305 people in my constituency alone—working families who are trying to play by the rules and do their bit—who are having the rug pulled out from under their feet. Yet this policy, which will have a huge impact on working families across Britain, will be defunct by 2013, when universal credit comes in. It will therefore not move the Government any nearer to their target of eradicating the deficit by 2016, or 2017—whatever the moving goalpost is. More working people will be forced to give up work and to rely on benefit, which is the polar opposite of what the Minister wants to achieve. These changes will lead to parents being £728 a year better off out of work than staying in work without the tax credits. Why would a Government who support marriage and the family introduce harsh fiscal measures that are likely to put more pressure on those families who stay together? The Union of Shop, Distributive and Allied Workers has stated that 78% of its 410,000 members working in retail cannot get extra hours at work. The Government's policy of cutting child benefit for higher rate taxpayers is entirely chaotic, as has been exposed by several Members. If two members of the same family earn £42,000 each, that family will keep its child benefit, but a single parent on £43,000 will lose theirs. About 170,000 families could increase their net income if an individual in the family managed to lower their pre-tax income to just below the higher rate tax threshold. The policy creates a perverse disincentive to success, and it is wholly anti-aspirational. It is unbelievable that a Conservative Government should introduce such a policy. In the few moments that I have left, I should also like to make the case for the principle of universality in the system. Beveridge's principle for the welfare state was that it should be a contributory system. Of course, some will receive more than others, based on their need. That is absolutely right, but the idea that we are all entitled to basic support such as child benefit, the state pension and the winter fuel allowance is a good one. At a time of ever-increasing resentment from those who pay taxes towards those who get benefits, stoked up by the Government and some of their friends in the right-wing media, we should all be fighting hard to protect the universal principle. The Chancellor recognises that people on £43,000 a year earn more than the average, and he therefore thinks that people will perceive them to be loaded. Let me tell him that someone on that income with three children and living in a four-bedroom house is not loaded. They have to watch what they spend. They worry about the cost of fuel and about their energy bills. They see prices going up while their income stagnates. The Chancellor is making a huge mistake if he does not recognise that. We are debating the policies of a Government whose policies have failed to get growth back into the economy and who are bringing forward illogical proposals that will make the situation worse.