The hon. Member for Worcester (Mr Walker) has perpetuated some of the myths about some of the last Government’s policies. For example, he suggested that it would be better to put money into early intervention—presumably, that would involve paying things such as tax credits. Of course, it was not an either/or.
Anyone looking at the setting up of Sure Start and all the reports that were done on the importance of early intervention would see that we did not think, as is sometimes suggested, that the only solution to deprivation, child poverty and so on was simply to put money in. Money is part of the issue, but we certainly did not see things in terms of either/or. All the people up and down the country who have seen reductions in Sure Start services, for example, see that now it is not only not either/or—in many cases, it is neither/nor.
It is all very well for the Government to say, “We’re leaving you your own money so that is fine,” but the bottom line is that people have less money in their pockets. What has been suggested is a give-away in income tax is more than balanced, for many low-paid workers, by the reduction in tax credits and other provision. What matters to those people is how much they have to spend. Saying, “Oh, it’s wonderful that you’re getting to keep your own money” is no use. They cannot necessarily buy the things that they need.
The situation with child care is similar. The hon. Member for Worcester was right to say that the Government measure on that is not coming in right now; moreover, many people have already seen a cut in help. Child care tax credits were cut by the Government for many low-paid working families, so it has already happened.
The tax credits system was particularly beneficial for single parents, over 350,000 of whom went into employment as a direct result. There are serious concerns about universal credit as the answer to all this, particularly for single parents. Gingerbread and other organisations representing single parents have pointed out that their position could be worse under universal credit.
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Not only that, but there are changes to the restrictions and conditions put on to single parents when they go back into work. Under the previous Government, they had real flexibility and an understanding that the kind of work they could do had to tie in with their family and caring responsibilities. Those flexibilities are going to be swept aside under universal credit. The regulations now contain only one from a whole group of flexibilities. For that group in particular, and possibly for others, this system, far from being better, may well be worse.
In other respects, strangely, the Government are not so keen on people keeping their own money. Some changes have actually punished people for saving and being careful. One of those was the restriction on the receipt of employment and support allowance to a year. That means that at the end of that year, people who have savings, or have an early retirement pension because they retired sick, or have a partner in work but often only part-time work, no longer receive the benefit, so
suddenly their income is reduced by as much as £91 a week. The argument we were given was that people should use up their own savings first before the state helps them.
Under universal credit, somebody in employment who has capital over the level of £6,000 will begin to have any benefit they get reduced as a result, and if they have more than £16,000, they will lose it altogether. People who may have been saving for their retirement or saving with a view to being able to buy a house, will find that they have to use that money up, because that is what the Government are saying. Not all these policies are even coherent. Let us look properly at the effects of tax rates on all income groups, because it would be very helpful to everyone if we did so.