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Mr. Andrew Lansley (South Cambridgeshire): It is a pity that the Secretary of State only took about 90 seconds to move from the Government's figures to discuss Opposition policy, but he referred again to more than 4 million tax credit payments being made. On 28 April, the Paymaster General told the House that there were more than 4 million applications, and the Government are now telling us that there are 4.2 million claims in payment. Will the Secretary of State therefore guide us through the relationship between those figures? More than two months ago, we were told that there were more than 4 million applications, but how many applications have now been made and how many are applications are awaiting a decision and not yet in payment?
Mr. Smith: There are 4.5 million applications, of which 4.2 million are in payment, as we have already said. The hon. Gentleman accuses me of moving from the figures, but I shall come to the figures later; he has not heard the last of the success that the figures demonstrate.
As we all know, the new tax credits represent the biggest change in social support since Beveridge. They help people to move from welfare to work, bridging the gap between support for those who are not working and help for those who are. For the first time, they recognise
in the tax system the extra cost of bringing up children, and they improve work incentives for second earners who work part-time at typical entry wages.I listened to the hon. Member for Havant telling us his story about the new deal adviser and the tax credits. Does it not occur to him and his right hon. and hon. Friends that, if the Conservatives had won the last general election, there would be no new deal, no new deal adviser and no tax credits for them to talk about?
Tax credits are inclusive because they support people with children, whether or not they are in work, and people in work, whether or not they have children. They are more generous to working families on modest incomes. They give more flexibility over child care, enabling parents to change their arrangements to suit their needs and ensuring that those on maternity or paternity leave continue to receive the working tax credit. They represent a decisive break from a past in which there was one system of support for the poor and those out of work that was easily stigmatised, and another system of support for the better off, so the tax credits tackle stigma. Those are decisive advantages.
I heard nothing in the speech of the hon. Member for Havant to suggest that the Conservative party wants to do anything other than turn back the clock, making it harder to move from welfare to work, as it was when the Conservatives were in government, giving inadequate recognition to the cost of bringing up children, entrenching social division, denying parents choice, limiting child care options and stigmatising the poor. It is clear that they have learned nothing and would return the country to the high unemployment, welfare dependency and deepening poverty that was the hallmark of the Conservative years.
Mr. Webb: A moment ago, the Secretary of State rightly pointed out that what is distinctive about the new tax credits is that, for the first time, they include people without children in in-work support, but we have heard no separate figures for childless people, who might be expected to have low take-up because they have never been in the system before. Will he tell us how many childless people are receiving the new tax credits? If he cannot do so off the top of his head, will he us assure that the Paymaster General will give us the precise figure for childless people when responding to the debate?
Mr. Smith: I am sure that my right hon. Friend will give the precise figure, but what I can say—the hon. Gentleman is right to draw attention to that aspect of the tax credits—is that the gain for those on low pay can be as high as £50 a week. Whatever differences exist in the Chamber on the principle of tax credits and the resources that go into them, I hope that every hon. Member will join in campaigning not to run them down and discourage people from applying for them, but to claim their entitlement.
The motion and the debate show us that Conservative Members' real complaint is not the practical problems of introducing the new credit, but that we are introducing a progressive system. The whole aim of their campaign and today's debate is not to make the new tax credit work better, but to undermine them and the help that they provide to millions of people. If that were not their aim, they would go out and campaign
for take-up, or they would come to the House with an alternative policy and tell us how they would tackle poverty, welfare dependency and the cost of bringing up children. They have done neither. We have heard no such case. Instead, they try to misrepresent the difficulties that there have been in implementation as a failure of the whole approach. Those claims are just as wrong as the predictions that they made when they said that families would not apply for the new tax credits. They said that take-up would be low.
Mr. Roger Gale (North Thanet): The House has been subjected to a few minutes of bluster of which Alastair Campbell would be proud. Let us now face the facts: there are decent, honest civil servants in the Paymaster General's office, for whom I personally have a high regard, who have cringed with embarrassment and then sent motor cycle couriers around the country with money, trying to bail out our constituents who have been left destitute and run up debts. Will the Secretary of State just answer one simple question—yes or no? Is he satisfied with the operation of his Department's national computer?
Mr. Smith: I am not certain what my Department's national computer has got to do with the debate. The hon. Gentleman makes a fair point about civil servants' integrity and commitment. People throughout the country are committed to making a success of tax credits, as are the Government, and the Conservative party should be supporting that campaign and take-up effort, not using every pretext to run it down, make ludicrous predictions about what will happen and brand the whole thing a failure. Let us look at the facts: 4.5 million claims have been made already and tens of thousands more are coming in every week—and 4.2 million claims are already in payment, as we have said.
Ann McKechin (Glasgow, Maryhill): Does my right hon. Friend agree that not only are childless workers now benefiting for the first time, but that the benefit is very valuable for disabled workers? One of my constituents, who is disabled and works part-time, will gain an additional £3,500 per annum as a result of the new tax credit system, so I am sure that hon. Members will agree that this Government, unlike the Conservative party, are making a real difference to disabled people in this country.
Mr. Smith: My hon. Friend makes a very good point indeed. The extra help that the tax credits provide is of enormous value; it is helping our whole drive on welfare to work for people with disabilities and others.
Geraint Davies (Croydon, Central): Does my right hon. Friend accept that, at 90 per cent., take-up is very high indeed, compared with the previous means-tested take-up, which was nearer 50 per cent.? Does he also agree that, given that the benefits apply to those with incomes of about £58,000 a year, it is very likely—the facts bear this out—that the people who are not taking up the benefits are those who earn more than £50,000? So there has been a terrific success in targeting and delivering money to families and paying benefits through people's pay, rather than through the old, stigmatised Tory system that did not work.
Mr. Smith: My hon. Friend makes a very good point. Not only is the take-up higher than was the case with the
measures taken by the Conservative party, but the benefits are very much more generous and they are transforming living standards and opportunities for people throughout the country. Millions of people have benefited in the first few months of the scheme. There have been practical failings in implementation, for which the Government have apologised, but the overall picture is one not of tax credits failing, but of tax credits succeeding.As I have said, we acknowledge that there were problems in implementation, delays in payment, difficulties using the helpline and slow running of the IT system, and the Government and the Inland Revenue have apologised for the effect that that has had on the families affected. We have taken early action, putting in place a system of interim payments, and we have taken other steps to improve the system. The hon. Member for Havant advocated the social fund. I cannot understand why the system of interim payments that the Inland Revenue has operated does not commend itself to him as obviously more simple.
Mr. Willetts: It is not working.
Mr. Smith: The hon. Gentleman says that, but 200,000 people have benefited from interim payments, paid within 24 hours of their asking for them.
Sir Archy Kirkwood (Roxburgh and Berwickshire): The Secretary of State has captured in his last few sentences the fact that however well the policy was addressed and passed through the House, the administrative difficulties have been greater than anticipated. For that reason, if for no other, the hon. Member for Havant (Mr. Willetts) was on a strong point when he asked the Government to reconsider the window for backdating. A three-month period in normal circumstances is perfectly reasonable. Having regard to the difficulties with the administration of tax credits, will the right hon. Gentleman, working with the Inland Revenue, allow at least until the end of this calendar year to get people sorted out and to get the administration sorted out before the three-month travelling window of backdating kicks in?
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