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Dawn Primarolo: I need to correct the hon. Gentleman. There is not a cupboard in Bootle, or anywhere else for that matter, with tax forms, filed in boxes or any other way. They have been processed; his story is incorrect.
Mr. Webb: I am grateful for that reassurance. Everyone will get their tax demands on time after all. I have succeeded in gaining another Liberal Democrat victory.
The hon. Member for Witney (Mr. Cameron) raised the small issue of twins. The Government could do some good on that without spending serious money. I am grateful that the Paymaster General indicated that some progress might have been made on that front. If twins are born, the child credit system means that the family receives one lot of child credit, because it is an amount per family, unless they are on a very low income, in which case there is an extra amount. However, the lump sum cost of twins is, potentially, double. For example, a family needs two prams; it is not possible to have a hand-me-down pram. I gather the cost of extending the family rate of the child tax credit to twins is £5 million—the Secretary of State confirms that by a hand gesture, and I do not think that he gestured £2 million. That would be a small thing to do. My hon. Friend the Member for Guildford (Sue Doughty) is campaigning for that and I hope that the Government do something about it.
The nub of the issue is what is the right thing to do about tax credits. I draw a distinction between the tax credit strategies for people of working age and of pension age. The Conservatives and the Liberal Democrats take the view that for people of pension age there is an alternative to targeting poor people, using age rather than income as a proxy. However, there does not seem to be an obvious alternative for people of working age. The only difference between people who are poor with kids and people who are rich with kids is that the former are poor. Using income to target support is probably the only thing we can do.
There are simple ways and complicated ways to do that and aspects of the system could be streamlined, but we must support giving extra help to lower wage families with children. That is why we did not vote against the Tax Credits Bill and we do not oppose the principle of tax credits. When I asked the hon. Member for Havant about his policy, he said that it was about undoing
administrative problems. He mentioned social fund loans, which is one part of the motion that causes me a problem. We really have to get that sorted out. I should like the Inland Revenue to devote all its energy to sorting out the outstanding cases. By the time a new system is properly implemented, we could have dealt with the problem.The hon. Gentleman said that the policy included extending the deadline, which is, of course, right, but that does not change the fundamentals of the scheme, save to compensate people when it has gone wrong, which is also right. Bizarrely, hon. Members do not differ on the fundamentals. Whenever I have pressed the hon. Gentleman, who is always a good sport and responds in debate, it is clear that we are talking about a difference of degree, not a difference of principle, however he may want to dress it up. He did not vote against the Tax Credits Bill either.
Roger Casale: The hon. Gentleman is right to emphasise that hon. Members on both sides of the House want to improve the administration of tax credits for our constituents, but in the weekend magazine of the Financial Times on 12 May 2001, the hon. Member for Havant (Mr. Willetts) said:
- "But most of all I want an end to the ludicrous tax credit system Gordon Brown has introduced, which was a failed idea from the 1970s."
Mr. Webb: I am intrigued by that quote. I will not leap to the defence of the hon. Member for Havant. We look forward with great interest to the Conservative party manifesto on that subject.
The key issue is where we go from here. Clearly, the system has been a shambles. The Department must take on board the serious point that the image of telephone-based claiming has suffered a huge dent.
John Barrett (Edinburgh, West): Does my hon. Friend agree that being advised on the telephone that a good time to call for advice is when "EastEnders" is on is not something that the general public should expect from a Department?
Mr. Webb: I am sure my hon. Friend is right. It may have been good advice, but it is not the sort of advice that we would expect.
It is a serious point. The image of telephone-based claiming has suffered a huge dent and the public will not trust the Government on it. The fact that that is to be the centrepiece of the pension credit strategy is worrying. I hope that the Secretary of State for Work and Pensions offers us better assurances that the telephone infrastructure for that credit will be quantitatively and qualitatively better.
Where do we go from here? Surely we need a period of stability. The Paymaster General and the Inland Revenue have apparently blamed the victims, criticising people for failing to claim before the January deadline—I am not sure how well publicised that deadline was—something that has changed its name half a dozen times
in the last four years. It is hardly surprising if people cannot keep up with all the changes. That is why we need stability, with no major overhauls, no name changes and no complete rewrites. Let us give the system a chance to settle down and give people a chance to get familiar with it. Stepping aside from the point scoring about administration, which has been a shambles, I suggest that if we are to deliver a better system, the moral of the story now must be, "Leave it alone."8.29 pm
Miss Anne Begg (Aberdeen, South): Over the past few months I have been very critical of the administrative introduction of tax credits. I first raised the matter on 14 April at Work and Pensions questions, following many phone calls to my office by constituents whose money had not been paid into the bank at the end of the previous week, when they had expected it. I also took part in a Westminster Hall debate secured by the hon. Member for Caernarfon (Hywel Williams), and I was critical of the administrative problems that were being experienced. I have to ask the Conservative party, however, why it is having this debate now, just when things are getting better and the system is on the mend. Where were the Conservatives in the early days when there were serious problems with the introduction of tax credits, that the Treasury has been at pains to sort out?
Andrew Selous: The reason for the debate, and its focus, is the deadline for claims, which has been referred to several times. If the Government would simply extend the time within which people can claim tax credits, many of the problems would be solved, so the timing of the debate is relevant.
Miss Begg: I am busy looking at the motion before the House, and I can see no reference to that. In fact, according to the motion, the solution would be for
- "the Government to set up a system of emergency Social Fund loans to people who are still waiting for the correct tax credit payment."
This is an excellent measure. Tax credits were the right policy decision. Money is going into the pockets of families who desperately need it, and we should not be deflected from the system's importance to many of our constituents by the fact that it had a number of administrative hiccups in its early days.
I would like to know whether a Conservative Government would ever have undertaken such a huge anti-poverty strategy. In one fell swoop, this Government have tried to bring all families with children into a system that would give them a great deal of money. Perhaps even the Conservatives would have found that, logistically, it is difficult to introduce such a system, and hiccups are inevitable. I do not deny that there were hiccups—I know how many phone calls my
office received. I have to say, however, that, rather than continuing or even slowing to a trickle, those phone calls have now dried up. After my last speech on this subject in the House, I wrote to all the constituents who had contacted me and asked them to get back in touch if they were still having problems, and none did.
Paul Farrelly (Newcastle-under-Lyme): My hon. Friend and the House may be interested to hear that despite all the sound and fury on the subject, I have been contacted by only eight constituents who have experienced delays in their payments, and all those problems were fairly easy to sort out.
My hon. Friend will know that for years and years there has been much comment on the common sense in integrating the tax and benefits systems, and I note that the Conservative party has not said that it would reverse that move. On the point about encouraging people into work, my hon. Friend will be as mystified as I am by the Opposition's comments. I well remember their policy on incapacity benefit—
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