Businesses, tax credit promises, and Syria: factchecking Prime Minister's Questions

Published: 28th Oct 2015

"I am pleased to say that we are now sixth in the world rankings for the best place to set up and to run a business."—David Cameron

The UK is ranked 6th in the world for the overall 'ease of doing business', one place ahead of  the United States. This comes from the World Bank's 'Doing Business' report, which measures the extent to which government regulations help and hinder small and medium businesses.

In the sub-topic 'starting a business', the UK is ranked 17th—its best ranking was for 'protecting minority investors' where the UK was ranked joint 4th.

The report said that the best performers "are not those with little regulation but those with good rules".

The report cautions that it covers only a limited number of regulatory constraints and is partly constrained by the data available in the least developed economies.

"He did commit himself to cuts of £12 billion in the welfare budget, but repeatedly refused to say whether tax credits would be part of that. In fact, he said that they would not be."—Jeremy Corbyn

The Prime Minister did seem to rule out cuts to tax credits before the election, but the government has since suggested he may have meant to refer to child benefit. He said today that what he had promised was that "the basic level of child tax credits would stay the same" at £2,780 per child. Either way, it's clear a lot of listeners would have got the wrong idea based on what was actually said.

Among the exchanges on the BBC Question Time leaders special was the following:

Audience member: Will you put to bed rumours that you plan to cut child tax credit and restrict child benefit to two children?

David Cameron [DC]: No I don't want to do that—this report that was out today is something I rejected at the time as Prime Minister and I reject it again today

[Later] David Dimbleby [DD]: You said you didn't want to put to bed rumours that you were going to cut child tax credits—you meant you did want to put to bed the rumours?

DC: Yes—we have increased child tax credits.

And later:

DD: "Clearly there are some people who are worried that you have a plan to cut child credit and tax credits. Are you saying absolutely as a guarantee, it will never happen?"

DC: "First of all, child tax credit, we increased by £450.."

DD: "And it's not going to fall?"

DC: "It's not going to fall. Child benefit, to me, is one of the most important benefits there is. It goes directly to the family, normally to the mother, £20 for the first child, £14 for the second. It is the key part of families' budgets in this country. That's not what we need to change."

The amount of tax credit someone gets for their first and second child will stay the same, as the Prime Minister says. Although that means they will likely lose some of their value over the next four years due to inflation.

But from April 2017 families won't be able to get support for additional children they have after this date and new claimants won't get the "family element" part of the credit. And at the moment some families have their credits withdrawn once they get beyond a certain income threshold— that threshold is to be reduced, which will reduce the amount some people can claim.

More detail is available in our factcheck.

"When I became Prime Minister, nine out of 10 families were getting tax credits, including Members of Parliament. That is how crazy the system we inherited was. We reduced that to six out of 10 families during the last Parliament, although we were of course opposed by Labour and the SNP. Our proposals will now take that down to five out of 10 families."—David Cameron

We're waiting for the Treasury to confirm the evidence behind Mr Cameron's comment about MPs claiming tax credits.

It confirmed to us the Prime Minister meant the proportion of families with children who were eligible for tax credits, rather than necessarily receiving them—which is the context in which these statistics have appeared before.

The available statistics back up the claim. About 6.9 million families with children were eligible for child and working tax credits in 2010/11, out of about 7.8 million families with dependent children—or nine in 10 such families. Only about seven in 10 actually did claim. This fell to about six in 10 families with children eligible in 2012/13—4.7 million families out of a total of about 7.9 million families.

The Impact Assessment for the reforms set out in the Summer Budget reported this figure would fall to five in 10 families with children.

"When we became the Government £1 in every £4 spent by the Government was borrowed money. We had one of the biggest budget deficits anywhere in the world."—David Cameron

The 2010 Spending Review says that the government borrowed £1 for every £4 it spent in 2009/10.

The UK had the 14th biggest deficit in the world in 2009, and the 15th biggest deficit in 2010, according to data from the International Monetary Fund. This data only looks at borrowing by local and central government; it doesn't include public corporations (which are controlled by the government), the Office for National Statistics told us. So it's measured differently to the Public Sector Net Borrowing figures normally referred to in the UK context.

"My right honourable friend has demonstrated considerable leadership in ensuring that Britain is the second largest donor of bilateral aid in Syria."—Stephen Phillips MP

This claim is correct according to the United Nations.

It gives details for "total funding (appeal and non-appeal) to the Syria crisis" over the past four years. At over $1.5 billion, the UK has contributed more than any other individual country bar the United States, which has put in $4.3 billion.

It's slightly less than the $1.6 billion put in by the European Commission, which gets money from the UK through the EU budget.

Isn't it nice to have the whole picture?

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