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Ms Buck: I take it that the hon. Lady was not in the Chamber when I spoke, because I read out the very warm
welcomes that were given to the working families tax credit by organisations such as the National Association of Citizens Advice Bureaux and the Child Poverty Action Group, which are the organisations with the most knowledge and experience of dealing with issues of low pay and poverty.
Miss Kirkbride: All I can say is that, as far as I can recall, when I was sitting in the Select Committee--and I have attended all the sittings at which evidence was given--none of those groups said that the tax credit was a good idea. In fact, on the left of the debate there has been huge concern about purse-versus-wallet issues--a concern which I believe that the hon. Lady rather sympathised with, as I think was mentioned in earlier debates. Of course, coming from the right, there was massive concern among various business organisations as to the impact of the tax credits on the way businesses operate. It was difficult to gainsay any of the points that those business organisations raised, and I feel that, so far in this debate, they have not been gainsaid by Labour Members.
I pay sincere and heartfelt tribute to the hon. Member for Northavon (Mr. Webb), whose critique, revealing what is so terribly wrong with the working families tax credit, was exceptionally accurate and very good. All the running on these issues has been made on the difficulties that have been presented by the introduction of the working families tax credit. However strong our desire to help poor families, we should be aware that this is not the way to do so. Tonight Conservative Members have explained--giving many reasons--why that is the case. We sincerely hope that the Government listen before it is too late.
How did the Government get themselves into this position? Curiously, when they came to power they said that they would cut social security bills. The measure before us is not a cut in the social security bill; it is an increase of £1.5 billion, and rapidly rising.
Mr. Vernon Coaker (Gedling):
Will the hon. Lady give way?
Miss Kirkbride:
Let me finish the point. The Government said that they would cut social security bills; if we use their flawed methods of accounting--if they are good enough for the health service, they are good enough for the social security budget--over the next three years they intend to increase the social security budget by nigh on £40 billion. On that point, I would love to give way to the hon. Gentleman.
Mr. Coaker:
If we reduce tax allowances for poorer people, would that be increased welfare spending? In a sense, a tax credit is like a tax allowance. [Interruption.]
Miss Kirkbride:
I am grateful to my hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) for pointing out the answer to that question. That would be a tax cut. In my view, it would be much better to increase the value of tax allowances. That would help many more people in the ways that Labour Members have said is their intention by introducing the working families tax credit. That would be a much better, much simpler way to proceed. It would avoid all the difficulties
Ms Keeble:
Can the hon. Lady explain how a change in the tax allowance would help people who are just going into work, and how it would deal with a child care tax credit, as the working families tax credit will?
Miss Kirkbride:
I hope the hon. Lady will forgive me for saying that the answer to her question is obvious. She does not need me to answer it. If people going out to work on extremely low wages are not paying tax, that is a considerable benefit to them. Under the system that the Government are reinforcing, people on low wages pay tax, but reclaim it in what used to be called a benefit, and is now called a tax credit.
We all want to help low-paid families. It is in the interest of society, children, families and individuals that more people go out to work to earn their own living. We should encourage that, but the measure is not the way forward.
The Paymaster General is not at her Bench. Like other hon. Members, I listened to her interview this morning. [Interruption.] I would not have been so uncharitable in my remarks, had I not been prompted by my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley). The Paymaster General said--100 times over, it seemed to me in my semi-dormant state--that she wanted to make work pay. Of course, family credit does that.
I criticise the interviewer, Mr. James Naughtie, who does not always point out facts that are glaringly obvious to those on the Conservative Benches. He never pointed out to the Paymaster General that the Government seek to make work pay by introducing the working families tax credit, when the existing system of family credit does precisely that.
That is the difficulty that the Government face. Family credit is designed to top up low wages. We have already heard how it works, that there is a high take-up relative to other benefits, and that there is assumed to be little fraud in the system, although there is some. Labour Members have not made the case for abolishing that and introducing a new system. It is the Government's prerogative to make the system more generous--
Ms Beverley Hughes:
Does the hon. Lady believe that family credit creates sufficient links between work and benefit for it to provide an incentive to work and satisfy some of the objectives that she listed?
Miss Kirkbride:
Labour Members have not explained why more people will want to go out to work if they are claiming a tax credit, rather than a benefit. There is no real evidence to suggest that that is the case. The Institute for Fiscal Studies states that a very small number of people might be enticed back to work as a result--40,000, as against 1.3 million whom the Government expect to claim working families tax credit. It will serve as an incentive to only 40,000 extra people, who will want to go out to work because it will be called a tax credit, rather than a benefit.
Ms Hughes:
I do not know whether the hon. Lady has any experience of claiming benefit, but perhaps she can
Miss Kirkbride:
As my hon. Friend the Member for Bognor Regis and Littlehampton points out, claimants will still be dealing with the Benefits Agency. They will not fill in a tax return, like those who are not eligible to claim the credit. The Benefits Agency will need to check their circumstances to prevent fraudulent claims.
If the hon. Lady suggests otherwise, there will be massive fraud because the benefit will not be properly policed. Those on the Treasury Benches have insisted that the same entry system, the same gateposts and the same guard against fraud will be introduced in the new system as are to be found in the current system. I do not accept that the two are substantially different.
Although many families who claim family credit may be poorer than other families, they are perfectly capable of working out for themselves whether they will be better off. Where the money comes from does not matter to them; they want to know whether they will ultimately be better off, and whether they are certain to be paid. Earlier exchanges have made it clear that they will have no such certainty, because the money will be handed to employers, some of whom may be unscrupulous.
Mr. Bercow:
As the family credit system is clearly working so well, does my hon. Friend not agree that the Government would have been well advised to follow the dictum of Lord Falkland, who said, "That which it is not necessary to change, it is necessary not to change"?
Miss Kirkbride:
Your eloquence bears testimony to the strength of the point that you have raised. Undoubtedly, no case for change has been made--and we are contemplating an enormous change. Labour Members underestimate the flak that will fly when small employers realise what you are asking them to do. You are all living in cloud cuckoo land. When I talk to employers--
Mr. Deputy Speaker (Sir Alan Haselhurst):
Order. Some difficulties are creeping in on both sides of the House. Hon. Members must bear in mind that they are addressing the Chair, and that they should refer to other hon. Members in the third person.
Miss Kirkbride:
I sincerely apologise, Mr. Deputy Speaker. I am afraid that I was a little carried away by the exchanges--perhaps because I am giving way too often, and feeling that I am having a conversation rather than addressing the Chair.
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