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Roger Casale: Will the hon. Gentleman give way?

Mr. Willetts: No, I want to move to a conclusion as other hon. Members want to speak and I want the Secretary of State, in particular, to talk about his responsibilities.

What is going on? This shambles of a tax credit system has the Inland Revenue, which finds it difficult enough to be a tax-collecting department, suddenly trying to become a benefit office as well. The implications of the shambles go way beyond the Inland Revenue and the child tax credit—although those are serious enough—and spread to the entire structure of the welfare state.

Will the Secretary of State comment on two problems? The first is the problem of unemployed people who are on income support and whom all of us, on both sides of the House, want to see encouraged into work. I shall report for the Secretary of State a conversation that a person on income support had with his new deal adviser recently. He wanted advice about how, under the new tax credit, he could be better off in work than out of work. The new deal adviser said:

"If you were to ask if there was any problem with registering for 'Tax credit', I would have to say no. I could not tell you that if you registered today you would not be able to feed your children in 3 or 4 weeks time. I could not tell you that we can't access the system on computer or phone. I could not advise you to wait until the backlog"—

of hundreds of thousands of cases—

"is dealt with. Should you decide to wait I can't tell you that you will go into an unofficial file in order that we may notify you if and when the situation improves. I also can't show you an internal memo stating that the system has totally collapsed."

The memo was turned towards him.

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In the light of that conversation, that person decided that the safest thing was to remain unemployed on income support. He was being advised by the new deal adviser that the tax credit system was such a mess that the only way to guarantee that he would continue to receive payments was to stay on income support.

I know that that is not what Ministers intended. I fully accept that that was never the purpose of their system, but I hope that they will have the honesty to admit that that is the consequence of the introduction of their policies.

Finally, may I ask the Secretary of State about pensioners and the pension credit regime? We are concerned that the Government are learning the wrong lesson from the child tax credit shambles, as they look to the implementation of the pension credit, which is supposed to start in October this year. They seem, above all to be concerned with minimising applications.

All Members have received a letter that states:

"We will be contacting about 20 per cent. of the pensioner population, selected at random, between April and September 2003...but the main telephone application service and the Pension Credit launch starts in October . . . We have introduced this special arrangement before October so that we have a controlled and measured build up of applications."

In fact, the letters do not even contain an application form. They are not intended to make it easy for people to apply for their benefit; they do not even contain details of the application procedure.

A Department for Work and Pensions spokeswoman was quoted as saying that the Department wants to

"minimise the number of paper applications".

I do not know how many pensioners will apply over the internet—no doubt, some will—but that is not the way that most of them want to apply for the pension credit—[Hon. Members: "Phone."] Before Labour Members shout about the phone, they should be aware of the experience of almost every phoneline introduced by the Government.

On the pension credit form, the answer to the question "How will I be able to apply?" was:

"We will be writing to people aged 60 and over between April 2003 and June 2004."

That end date is nine months after the supposed launch of the new pension credit. The Government have not been publicising the phoneline that pensioners can use. They do not want pensioners to know about it; it does not appear on the posters. The Government have concluded that the best way of ensuring that the pension credit does not have the same problems as the child tax credit is to give it such a low profile that not many pensioners will claim it.

If low profile is what the Govt want, the Secretary of State is the ideal man for the job. Low profile is not good enough, however. We want pensioners to receive the pension credit to which they are entitled. We want families to receive the child tax credit to which they are entitled. Instead, for the past three months, we have seen administrative failure, policy failure and distress for millions of families up and down the country. That is why we are moving the motion.

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7.45 pm

The Secretary of State for Work and Pensions (Mr. Andrew Smith): I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"notes that the introduction of the Child Tax Credit is the biggest single change in support for families since the Beveridge reforms of the 1940s, and a more radical change than the introduction of Child Benefit 25 years ago; notes that the new tax credits represent the biggest ever investment in families with children, with no government ever having spent so much on children and families; welcomes the fact that 90 per cent. of families with children are eligible for the Child Tax Credit; further welcomes the fact that tax credits are now being paid to 4.2 million families; notes that in addition 1.3 million families with children on Income Support and Jobseekers' Allowance are already benefiting from the increased level of support through their benefits; welcomes the fact that 5.5 million families are therefore now benefiting from tax credits, with more and more being paid every week; and believes that these figures belie the persistent criticism that people would not claim, and that those who said that families would not apply for the new tax credits, and that take up would be low, have been proved wrong."

I am pleased to move our amendment and to reject the claims of the Opposition. Their motion talks about low take-up, yet 4.2 million people are already receiving the new tax credits—[Interruption.]—the hon. Member for Havant (Mr. Willetts) is nodding; and 1.3 million people are receiving new rates of benefit. That the Opposition try to brand tax credits a failure when millions of people are gaining from a system that has been going only for a few months shows how ludicrous the hon. Gentleman's claims are.

Even on the arithmetic that the hon. Gentleman set out at the beginning of his speech, take-up is about 84 per cent. He told us about the shared ground on helping poor families and helping people into work and how wonderful the family credit was, but does he know the take-up rate for family credit in its first year of operation? It was 57 per cent. at most. His is a classic case of "Do as we say", not "Do as we did". When the Conservatives had the chance, they got it wrong; family credit take-up was abysmal, so we shall take no lectures from them. Millions of people are already gaining from tax credits.

If people needed any convincing that today's Tory party has something to hide, a policy agenda that they dare not tell the British people, the hon. Gentleman's speech, bereft of any positive policy proposal—as the hon. Member for Northavon (Mr. Webb) pointed out—will have persuaded them. I listened in vain for any idea of what the hon. Member for Havant and his party would do to replace the tax credits that they are so keen to run down. I am surprised by and disappointed in the shadow Secretary of State for Work and Pensions. We all know him to be a man of some intellect—

David Cairns (Greenock and Inverclyde): Two brains.

Mr. Smith: In one of those brains, there must be some thoughts about what the Conservatives would actually do in government.

I think that the hon. Member for Havant is being held back and gagged by the ever more extreme shadow Chancellor, who clearly did not relish conducting this debate himself. There is a sinister reason for that. The truth is that the shadow Chancellor has his eye on the

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£13 billion investment in children through the tax credits as part of his commitment to cut public spending by 20 per cent.

Mr. Cameron: I am not sure whether I regret interrupting the right hon. Gentleman's rant, especially after such a reasonable speech from my hon. Friend the Member for Havant (Mr. Willetts). My question relates to an e-mail that I received from one of my constituents, Mrs. Summers of Chadlington. She asked why the baby element of the child tax credit applies only to one child at a time. Why is not it payable for twins? That seems a reasonable point, given that the cost of bringing up twins is so much greater.

Mr. Smith: It follows the rules for child benefit; they are applicable to the credit and I am sure that the hon. Gentleman wants them properly applied.

I was talking about the shadow Chancellor's designs on the £13 billion. We all know about his plans to cut the new investment that Labour has made in health and education. The last thing that he wants is for the hon. Member for Havant to apply his ingenuity to developing positive policies, and still less that he should tell people about them. The right hon. and learned Gentleman simply wants the hon. Gentleman to get on with undermining and trying to destroy the tax credits, without getting caught up in the arguments about the best way to tackle poverty, turn welfare dependency around and support children and families. The shadow Chancellor may not want to address those arguments, but that makes it all the more important for us to spell out why tax credits are the right approach—[Interruption.] Opposition Members do not want to hear why they are the right approach; they do not want to hear that tax credits are already benefiting more than 4 million people and why it would be so disastrous if the Tory party got the chance to do away with them.

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