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Mr. Pickles: Does my hon. Friend agree that the principal difference between family credit and working families tax credit is that the employer is informed just once that an employee has claimed family credit and thereafter has no idea what the position is? Under working families tax credit, the position will be continually assessed. The amendments would allow single-parent claimants to retain some privacy.

Miss Kirkbride: My hon. Friend is right. The fact that he and I sat through the Committee's discussions on this point means that we are in unison on it. The employer will be aware of a claim for working families tax credit and, given the nature of these things, it is likely that other employees will be made aware of it. The employer will have to be aware of the situation continually, in a way that he or she is not with family credit.

The arguments about stigma are not as one-directional as Treasury Ministers believe. There is a strong argument that stigma will operate in a more profound way as a result of paying the benefit--that is what working families tax credit will always be, whatever language we use--via working families tax credit, rather than family credit.

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There is also a question of fairness. If couples want to choose how the benefit is paid, that should not become a form of discrimination against single parents, whose options--by definition--are more limited in terms of their ability to operate their lives, their business and their finances. The measure is open to couples for reasons concerning wallet-versus-purse issues--an option that the Government do not like having to offer. Some Labour Back Benchers might have been upset had the wallet-versus-purse issues not been addressed by creating the opportunity for choice.

Dawn Primarolo: I am following the hon. Lady's argument closely. She appears to accept that there is not a transfer from purse to wallet, and that the Bill has dealt with the issue. Does she therefore disagree with her Front-Bench colleagues?

Miss Kirkbride: The short answer to that is no.

Another worry is that people may fear that they are less likely to get jobs or to be offered employment if they are likely to be beneficiaries of working families tax credit. Most employers will be capable of working out who among those applying for a job are likely to be recipients of family credit or working families tax credit. There are circumstances where, because of the administrative burden, some employers might prefer to take someone on who is less likely to become a recipient of working families tax credit.

If there is a choice of potential employees, that will become a form of discrimination against single parents, who do not have the option of taking up the benefit in the form of family credit paid by the Post Office, and are forced to take it as working families tax credit, paid via the employer. It would be difficult to prove a case of discrimination in circumstances where there had been, to all intents and purposes, a perfectly reasonable selection of candidates, but where those who were not likely to be recipients of working families tax credit--or who had the option of not being a recipient--were actually taken on.

We must remember that not all employers are model employers. There will be some who find it difficult to operate the scheme--they may wilfully find it difficult to operate. Some may even see fit to run off with the money that the Treasury gives them as a float to pay the working families tax credit.

Vulnerable people who are eligible for top-up on their wages, and who used to be able to rely on payments from the Post Office every week, will be completely reliant on their employer, so when there is uncertainty about the employer's probity or competence there could be a disincentive to work, through the fear of being left with nothing at the end of the week.

The Government are keen to get single parents out to work, and giving them the option of saying that they want their family credit to be paid as it has always been paid, so that they can rely on its being there when they need it and they will not be left vulnerable at the end of the week or month, would be a great service to them. It would keep them in the driving seat and leave open all the options available to them, by contrast with the rather patronising view of the Government, which forces them to go in one direction.

Mr. Webb: It is a pleasure to follow the hon. Member for Bromsgrove (Miss Kirkbride), who made an important

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contribution to our scrutiny of this matter in the Social Security Committee, and the distinguished hon. Member for Havant (Mr. Willetts). Our paths have crossed in the sheltered world of academia, and I look forward to their crossing many more times. His first contribution in his new role showed clearly why he has such an enviable reputation.

The Minister has propounded a strange doctrine: that it is in lone parents' interest to be denied a choice, presumably because they might make the wrong choice and choose to have their money paid direct to them rather than being mediated through the employer. It is almost impossible to imagine any model of human behaviour in which that is true, other than when the individual concerned is stupid. Only in that case should the Government step in and insist that one option be taken rather than another.

I am sure that, in a different setting, the Minister would tell us that lone parents are far from stupid, that their role is often challenging and demanding as they juggle work and family responsibilities, and that many of them make a superb job of it. That being so, why cannot those able people be trusted to make the simple choice about how to get their money?

The Minister said that the point was to drive home the message about making work pay. That goes back to people being stupid, because if they want to they can have their family credit paid direct into their bank account, just as they can have their salary paid direct, and every month they will get a bank statement showing two elements that will not appear if they do not work: the pay and the tax credit. Unless they are as thick as two short planks they will notice that both appear when they work, and neither when they do not.

Forcing the two elements to appear as one figure on the bank statement does not in any sense demonstrate that work pays. Indeed, given that people may not scrutinise their pay slip as well as they scrutinise their bank statement, the presence of two separate entries on the bank statement might spell it out more clearly that the credit is a benefit of working.

The Minister gave two reasons why the argument for choice for lone parents should fall. She said that there was no issue of confidentiality involved in payment through the pay packet. We are dealing with lone parents, many of whom do not remain lone parents. Some of them, to use the jargon, re-partner; they do not necessarily marry, but become part of a new partnership. The new partner's income would have a bearing on the lone parent's family credit entitlement, so the employer would get a letter from the Inland Revenue saying that the amount payable had changed. The employer would know that the lone parent's income had not changed and the employer would also know--because they had not paid any maternity pay--that she had not had a child; so the employer would know that the she had experienced some other change, such as re-partnering.

What business is that of the employer? If family credit was being paid, the employer would not know, and if the lone parent could opt to have the tax credit paid direct, the employer would not know. It is only because payment has to be made in this doctrinaire way that employers will be aware of any change.

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5.45 pm

The Minister also said that an employer could not work out from the amount of tax credit payable what the family circumstances of the lone parent were. The Minister will correct me if I am wrong, but I understand that in about a third of tax credit cases the maximum credit is paid. The Minister also mentioned tapers, but they would be irrelevant. She also mentioned child care costs, but she cannot have it both ways. Most of the time she tells us that the child care tax credit will not cost a fortune because not many people will take it up, but if lots of people do take it up, the cost will be much greater than the Government have budgeted for.

Dawn Primarolo: The hon. Gentleman is being unusually imprecise in his argument. I have every sympathy with lone parents and I was a lone parent myself for some time so I do not need the hon. Gentleman to instruct me on that issue. He knows that work incentives are at the heart of the Bill and are its purpose. It is thus entirely appropriate that the Government should ensure that that policy is delivered.

On the issue of choice, lone parents are capable of seeing exactly what their income is on their wage slip as easily as on their bank statement.

Mr. Webb: We should let those last words hang in the air for a moment. In other words, lone parents do not need to have the tax credit paid to them through their pay packets to demonstrate to them the benefits of working. In a fulsome intervention--which I hope presages a response to the debate, instead of nodding it through--the Minister said that she was a lone parent. I put a rhetorical question to her: when she was a lone parent, would she have needed the state to force her to take the tax credit through the pay packet to demonstrate to her the benefits of work? I put it to the House that she would not. As an intelligent woman, she would not have needed that, so why does she insist in forcing it on other lone parents?

My final point concerns discrimination by employers and whether lone parents, with no choice about how the tax credit is paid, might find themselves discriminated against as tax credit recipients. The Minister said that the majority of employers are good employers, and I am sure that that is true, but that does not mean that the Government will not create problems for lone parents who work for the minority of poor employers.

If a lone parent works for a poor employer or applies for a job with one, why should she not be able to exercise the choice? My noble Friend Lord Goodhart put that point well in the other place:

That resonates with an earlier debate, and so does the reference to the kitchen table--for the Conservatives.

The Minister pointed out that a provision had to be built into the Bill to prevent discrimination, so the Government must believe that it is a real threat. Why should lone parents be subject to it? It is pure sophistry to argue that married couples will not exercise a choice between the pay packet and direct payment. It is clear that that is exactly what they will do when they decide who is to get the money. Lone parents should not be denied that choice.

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They are intelligent people and should be able to make intelligent choices about what is in their own interests. I support the Lords in their amendment.

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