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9.32 pm
Miss McIntosh: I put on record my opposition to a bad Bill, which should be opposed. It is bad for families and for business and it could prove open to fraud.
I regret the tendency in the Bill and in other measures that the Government are seeking to put through to put details in secondary legislation, rather than primary legislation. That is a negative tendency. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) referred to the specific burden on agriculture that will arise from the proposals. I regret that his plea for special consideration to be given to that industry appears to have fallen on deaf ears.
I regret, too, that the Government have rejected the proposed exemption for smaller firms. The administrative burden of paying credit and claiming funds in advance
will be great. The Government recognise that and claim to be business friendly, but they have rejected the possibility of an exemption from administering the credit for very small firms.
The Government fail to realise that the working families tax credit on its own will be very bad for business, but the cumulative effect of the tax credit, the minimum wage and the working time directive will be especially bad for all British businesses. The burdens of all three will hit small businesses particularly hard.
In my constituency, the fact that those eligible for tax credits have to travel particularly long distances will be compounded by the hike in petrol and diesel prices. I refer to the remarks by my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) in an intervention. Constituencies such as Vale of York and Westmorland and Lonsdale are deeply rural, with sparsely populated areas for the most part. In many of those areas, there is virtually no public transport. How are my constituents supposed to welcome the tax credit, when most of the benefit will be soaked up by the fuel increase?
Yet again the Government seem incapable of considering how to deliver policies in rural areas. If I have touched a chord with the Financial Secretary, perhaps she will deal with that point, if no other.
I want to talk about fraud, and to associate myself particularly with the Liberal amendment. I congratulate the hon. Member for Northavon (Mr. Webb) on an eloquent, well-thought-out and well-researched speech. On the question of fraud, Ministers must balance the options: they must decide whether to place the emphasis on prompt payment or on rigorous checking of eligibility. Regrettably, the Paymaster General has failed to put my mind at rest, and to allay my fear that the potential for fraud will be greater under the working families tax credit than under family credit.
The proposed arrangement for payment of tax credits is highly complex, whereas the arrangement for family credit is relatively simple. As has been said, the question of passporting of various credits and benefits has not yet been clarified, which is particularly regrettable given that we are now on Third Reading. All that complexity will increase the likelihood of fraud in the administration of tax credits.
I still feel the concern that I expressed on Second Reading about the potential for breaches of confidentiality between employer and employee. The Bill could jeopardise previously good employer-employee relations. In numerous briefings to us, employees of large, medium-sized and small firms have expressed their opinions forcefully. Employers would prefer not to become too involved in employees' personal situations, as we have heard. Payments of tax credits through pay packets will reveal to employers exactly who on their payroll is receiving such credits. Previously, that information remained confidential.
Mr. Collins:
It is a tribute to the Paymaster General that I overheard her saying earlier that she is a fan of "Star Trek". She must recognise, however, that the Bill is in no way logical, Captain.
My hon. Friends have explained the problem clearly, but it is important for us to understand exactly why the Government are introducing the changes. The reason is simple. The Government must fulfil a difficult pledge--to try to reduce the nation's welfare bill. The Bill will enable them to shift a chunk of social security spending from the Department of Social Security's budget to other measures, such as tax changes. As the hon. Member for Northavon (Mr. Webb) said, that does not mean that the money is suddenly a tax credit; it will still be social security expenditure, but it will not be social security expenditure honestly admitted and honestly declared.
The Bill also enables the Government to claim that they are making progress with their delivery of the Prime Minister's pledge not to increase taxes. They will try to say that this social security expenditure is a negative tax change, that it is therefore a tax reduction, and that they can offset it against all the tax increases that they have announced in successive Budgets. They will then be able to say that they have delivered on their pledge not to increase the overall tax burden. That is not a pledge on which they will deliver, even with these funny figures, but I must say that I admire their cheek in trying.
The Government made another key economic pledge: they promised faithfully that they would not seek to impose additional burdens on business. We were told that that was central to the new Labour project, that the Government had recognised the value of enterprise, and that they were now the pro-business party--the party in which British entrepreneurs of all sizes could place absolute confidence. But what is the one clear effect of the Bill? It will transfer a £100 million administrative burden on to British business. That is the Government's figure. It is their own assessment of the cost. However--on the basis of most of the Government's own assessments of the likely implications of their policies on British business--that figure is likely not to be accurate but to be a gross underestimate.
What do we know about the Bill? Ministers tell us that the staff--the current family credit unit--who will be working on the tax credit are extremely hard-working and dedicated. I agree with them on that. I have no doubt that those who are currently working on family credit and will seek to implement the working families tax credit are extremely hard-working officials, and that they will seek to accomplish their task in the best way possible. However, let us remember the time scale in which they are being asked to operate. As the Paymaster General said in her speech, the new system is to be fully up and running in April 2000.
I know that hon. Members, like the rest of the nation, are excited about the on-rush of the millennium. Nevertheless, it is only one day since the House had a statement on the implications of the millennium bug for all of British business and all of British public service. The bug is likely to kick in at the end of December 1999.
One does not have to be a master of mental arithmetic of such great dimensions--a day or so ago, one could have shown the Secretary of State for Education a thing or two on the "Today" programme--to work out that April 2000 is only three months after 31 December 1999. Yet that is precisely the time scale in which Ministers propose to move a huge, complicated system from one part of the civil service to another.
Is the system being moved from a part of the civil service in which there is a reputation for brilliance in computer management? No. The NIRS2 computer is not working very well.
Mr. Pickles:
Is my hon. Friend aware that, in the Standing Committee considering the Welfare Reform and Pensions Bill, the Minister of State, Department of Social Security was asked if he could give a cast-iron guarantee that the computer system would be sufficient to cope with stakeholder pensions--which are being introduced in a similar time frame--and refused to give such an undertaking?
Mr. Collins:
I am shocked by that news, although--given what the Government have been up to--I am not surprised by it.
Today, another matter has caused me shock, surprise and not a little disappointment. Hon. Members have been told that the Bill is flagship legislation of which the Government are hugely proud and the Chancellor is the father. One might therefore have thought that the Bill would cause Labour Members to break down the doors of the Chamber in their eagerness to participate in our debates on it. For most of Third Reading, however, only two or three Labour Back Benchers have been in the Chamber--although I am delighted to see that that number has now rocketed to five.
For much of the debate, more Conservative Back Benchers, and even more Liberal Democrat Back Benchers, have been in the Chamber than Labour Back Benchers. There are 418 Labour Members--at least on the payroll. The Fees Office is paying 418 Labour Members of Parliament, but where have they all been during our consideration of this flagship Bill? We heard one speech by a Labour Back Bencher, and a handful of Labour Members wandered into the Chamber.
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