HC Deb 05 November 1998 vol 318 cc1001-2
6. Mr. Malcolm Savidge (Aberdeen, North)

What plans he has to help working families on low incomes. [56863]

The Chancellor of the Exchequer (Mr. Gordon Brown)

From April, as a result of abolishing the entry fee to national insurance, all employees will receive a tax cut of more than £1 a week. The working families tax credit will be introduced, guaranteeing a minimum income of at least £190 a week for working families. That will back up the national minimum wage, which will be introduced next April, helping 1.9 million employees.

Mr. Savidge

My right hon. Friend's reply will be widely welcomed, not least in Scotland where 1 million people—one in five of the population—receive less than half the national average income. Does he agree that those people will find new hope in the measures that he outlined and be disgusted that the Tories, who created so much misery and inequality, still oppose those policies, including the working families tax credit?

Mr. Brown

I am grateful to my hon. Friend for reminding us of the challenge of tackling in-work poverty. The national minimum wage will help to do that. It is unfortunate that a policy that was supported by the Sir Winston Churchill and many Conservatives right up to the 1980s cannot be supported by the existing Conservative—[Interruption.] It is strange; the Conservatives are now attacking Sir Winston Churchill. I know that they have lost touch with the country. It is hardly surprising that Lady Thatcher has written an article in Saga Magazine saying that they have not got a chance of winning the next general election.

Our policies are the minimum wage and the working families tax credit, which cuts the numbers of people who are affected by the marginal tax rate at above 70 per cent. In addition, we are raising child benefit for the first child by the biggest-ever amount. That is another measure that is dealing with the problems of poverty. It is a pity that we cannot have all-party support in those matters.

Mrs. Jacqui Lait (Beckenham)

Will the right hon. Gentleman assure me that no individual in a family receiving working families tax credit will pay tax on child benefit?

Mr. Brown

The hon. Lady knows perfectly well that we announced in the Budget a review of that matter. We shall report by the time of the next Budget. As for child benefit, we have made our position clear. Child benefit is paid to every mother. Yesterday, we had some problems with the Conservative party over the policy on pensions. I hope that the Conservatives will be able to say that they support our measures to raise child benefit.

Mr. Peter L. Pike (Burnley)

Is it not a fact that the package that my right hon. Friend just referred to, with the national minimum wage and all the other things taken together, is the fairest and best policy initiative that any Government have given to low-paid people this century? The package is welcomed in areas such as mine, where many people have been in poverty and on low pay for many years.

Mr. Brown

I applaud my hon. Friend for being a champion of action on those matters over the many years that he has been in the House of Commons representing his constituents. He is right to say that people will ask the Conservative party whether it would take away from 2 million people a national minimum wage and whether it intends to oppose the working families tax credit. If so, more than 1 million people would have a tax rise under a future Conservative Government. What do the Conservatives intend to do about child benefit, which we support raising? We still have not had answers from the Conservative party.