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Jeremy Corbyn attacks Government on tax credits

Published 14/10/2015

Labour leader Jeremy Corbyn again asked questions from the public at Prime Minister's Questions
Labour leader Jeremy Corbyn again asked questions from the public at Prime Minister's Questions

The Government is "taking away the opportunities and limiting the life chances of hundreds of thousands of children", Jeremy Corbyn has claimed on his second outing at Prime Minister's Questions.

The Labour leader again asked questions from the public at the box office Commons session but unlike at his first appearance, he followed up answers given by David Cameron.

Mr Corbyn highlighted the case of a woman called Kelly, a single mother with a disabled child, who he said would be left £1,800 a year worse off by cuts to tax credits in April.

The Prime Minister urged Mr Corbyn to look at the whole package of reforms, which he said included higher pay, lower taxes, cuts to council house rent and more free childcare.

But Mr Corbyn said Government policy was hitting poor families, adding: "Should you not be aware of that in the decisions you make?"

Outlining his case, the Labour leader said 2,000 people had emailed him in the last three days about tax credits.

He said: "Kelly writes 'I'm a single mum to a disabled child. I work 40.5 hours each week in a job I trained for. I get paid £7.20 per hour, so in April the Prime Minister is not putting my wage up but he will be taking tax credits off me'."

Mr Corbyn challenged: "Can you tell us how much worse off Kelly will be next year?"

Mr Cameron replied: "What we are doing is bringing in the national living wage, which will be a £20-a-week pay rise for people next year. Obviously Kelly will benefit as that national living wage rises to £9."

Amid heckling from the Labour benches, Mr Cameron questioned "what happened to the new approach?"

He continued: "Also in April next year, we raise to £11,000 the amount of money you can earn before you start paying taxes and also Kelly, if she has children, will be benefiting from the 30 hours of childcare we are bringing in.

"In addition to that, there's also the point that if Kelly - and I don't know all her circumstances - if she is a council house or housing association tenant, we are cutting her rent.

"All those things are important, as is the increase in employment and increase in wages taking place today."

Mr Corbyn joked: "You're doing your best and I admire that."

He continued: "The reality is people in work often do rely on tax credits to make ends meet. Your party and yourself have put forward a budget which cuts tax credits, gives tax breaks to the very wealthiest in our society, so inequality is getting worse not better.

"Should you not think for a moment about the choices you are making and the reality it is for the very poorest people in our society?"

Mr Cameron replied: "Let me tell you why it is necessary. Between 1998 and 2010, the bill for tax credits went from £6 billion to £30 billion and yet at the same time in-work poverty went up by 20%.

"The system of taking money away from people and giving it back to them in tax credits wasn't working. We say it is better to let people earn more and then take less from them in taxes."

Mr Cameron said the figures quoted on inequality were "simply wrong", adding: "There are 800,000 fewer people in relative poverty than 2010. There are 300,000 fewer children in relative poverty since 2010.

"And if you want to know why, it is because we took difficult decisions to get our deficit down, get our economy growing and deliver the strongest growth anywhere in the Western world."

Mr Corbyn told the Prime Minister, "in case you're not aware of it", how his correspondent would be worse off, adding: "Another three million families will also be worse off.

"After housing costs, 500,000 children are now in poverty compared with five years ago in 2010 and, on top of that, your new tax credit policy will put another 200,000 children into poverty."

Mr Cameron hit back: "The fact is since I became Prime Minister there are 480,000 fewer children in households where nobody works.

"There are two million more people in work. There are almost a million more women in work. There are a quarter of a million more young people in work.

"The best route out of poverty is to help people get a job - that's why even though the unemployment figures came out today, and we see 140,000 more people in work, you still haven't welcomed the fall in unemployment that took place today."

Turning to the wider economy and a crunch Commons vote later on the Charter for Budget Responsibility, the Prime Minister continued: "The point you need to focus on is this: All these people benefit from a growing economy where wages are rising, where inflation is falling and where we are getting rid of our deficit to create economic stability - it's that stability we will be voting on in the lobbies tonight."

Mr Cameron said this week's rows within Labour about the charter - which demands a surplus by the end of the Parliament - had resulted in the party believing in "borrowing forever".

Mr Corbyn said: "The reality is three million low and middle income families are going to be worse off as a result of the tax credit changes. If you want to change your mind on tax credits, you are very welcome to do that."

The Labour leader said his party would stage an opposition day debate on the subject next week.

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