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Mr. Deputy Speaker (Sir Michael Lord): Order. The hon. Gentleman has made enough of a point.

Miss Begg: It is hypocritical and outrageous of the Conservative party to hold this debate, and some of its allegations are simply wrong. The hon. Member for Havant (Mr. Willetts) dismissed the comments of my hon. Friend the Member for Dumfries (Mr. Brown), who said that his local Inland Revenue office had been excellent in providing interim payments. My hon. Friend is absolutely correct. It is certainly true of the Inland Revenue office in Aberdeen. That has been far more effective in helping to get interim payments into the hands of my constituents than any new scheme for loans through the social fund would be.

Annabelle Ewing: The fact that interim payments have been made in some cases is extremely helpful, but in many cases, including those in which such payments have been made, my constituents and others have incurred out-of-pocket expenses. Does the hon. Lady agree that the Government should confirm unequivocally tonight that they will pay compensation where out-of-pocket expenses have been incurred?

Miss Begg: I am not sure how easy it would be to prove that such expenses had been incurred, which may explain the Government's hesitancy. The important thing is to get the scheme sorted out. I am sure the hon. Lady will agree that it is a good system, putting large amounts of money into the hands of people who need it.

Therein lay part of the reason for the phone calls to my office. People who had been in receipt of the working families tax credit had got used to that level of income, and therefore found it distressing when payments were not made. If it had been a matter of a couple of pounds a week, or even £4 or £5 a week, they would not have been in such dire straits. But the sums in question were £60, £70 and sometimes even more a week. I had a constituent who qualifies for the disabled element of the working tax credit. For her as a single woman, that means £50 difference in her weekly income. Not

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receiving such a large sum created a gap in the income of the families affected. I am glad to say that those families are now getting paid and will continue to get paid. Once the scheme is up and running, it will be much easier to ensure that any new families coming into the system are paid correctly in the first place.

Mr. Gale: A few moments ago, the hon. Lady referred to outrage from Opposition Members, and implied that it was synthetic. She must understand that the pain felt by our constituents was felt by us in representing them. I pay tribute again to the civil servants in the Paymaster General's Office, who tried very hard to sort out some extremely difficult cases. The fact remains that those people were out of pocket for a considerable time and ran up debts as a result. If the Inland Revenue is owed money by any Member of the House, it will charge interest on that. Does the hon. Lady seriously suggest that the people who suffered as a result of the introduction of the tax credit system should not receive compensation from the Inland Revenue?

Miss Begg: I have not disputed the assertion that the introduction of the scheme caused difficulty for our constituents. I was one of the first to raise the matter in the House. However, I found it outrageous that the hon. Member for Havant said that he was not against the principle. He seems to have undergone a Damascene-like conversion and suddenly thinks that tax credits are the best thing since sliced bread. He went on to say that all the problems were the result of policy decisions made by Ministers, whereas in fact the problems have been administrative and logistical. There is nothing wrong with the policy. It is a good one that is putting money into the pockets of families in all our constituencies.

I suggested earlier that if the Conservative Government had tried to introduce as radical an anti-poverty strategy as the tax credits scheme, they too might have encountered difficulties. The more I think about it, the more I realise what a short memory the Opposition have. I remember the problems of the Child Support Agency at the time when I was elected in 1997. The CSA had been established the previous year, and it was not a case of a flood of complaints that tailed off to nothing as the system got sorted out. When I was elected in May 1997, the first thing that hit me was the number of CSA cases that I had to deal with, and that went on week after week. As my constituents realised that they had a new MP and learned my name, the number of complaints went up. It took some time before the parliamentary hotline was set up and helped to solve some of those cases.

I understand that there were also problems when the disability living allowance was introduced. I do not criticise the DLA—it is an excellent allowance which helps disabled people, but the National Audit Office was extremely critical, as was the Social Security Committee, about its introduction. What outrages me is the shortness of some Opposition Members' memories in thinking that it is always possible to introduce such major reforms completely hiccup-free. I wish that that were so and that we did not have problems with the IT systems. I suspect that anybody who could think up an IT system that could deal with such large numbers without such a hiccup would make a great deal of money. Obviously, EDS has not done that, but someone else out there might be in a position to bid.

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I worry about the tone of debates such as this, which can undermine the good work that has been done in respect of the new tax credit. There are questions about take-up, but I do not think that it has been particularly bad. Unlike the hon. Member for Havant, I did not sit back and wait for the complaints to come to my office. I made sure that every parent in my constituency was well informed about the tax credit. I suspect that that is why I received more phone calls than many other MPs and did so more quickly; people had my phone number at the bottom of the letter that told them about the tax credit. Many hon. Members actively sought to ensure that the tax credit was promoted. I suspect that, as a result, take-up is higher in their constituencies than in those of the many Opposition Members who preferred to sit on the sidelines and complain rather than do something proactive that would have helped their constituents.

I share the views of the hon. Member for Northavon, as I believe that the system is right and that it is good, but that we need to ensure that it is delivering the money that is necessary for everyone. It is the right thing and I am proud that my Government have embarked on such a major anti-poverty strategy that has taken so many children out of poverty and will continue to do so in years to come. This one measure has probably taken more children out of poverty than any other measure introduced by any other Government. That is something to be proud of and we should not be nit-picking about it. The Government will have my wholehearted support in the vote.

8.42 pm

Mr. Andrew Lansley (South Cambridgeshire): Unlike many speakers so far, I am not habituated to discussion of social security matters and tax credits in particular. I come to the debate mainly because of one issue of principle that I find surprising, which has been raised by my hon. Friend the Member for Havant (Mr. Willetts) and the hon. Member for Northavon (Mr. Webb), and an issue of practicalities relating to one of my constituents that has again been raised by other hon. Members.

The issue of principle is the fact that, as my hon. Friend the Member for South-West Bedfordshire (Andrew Selous) pointed out, we meet today at the point at which applications for the tax credit will no longer be eligible for backdating for the whole year. Instead, a moving three-month window will be available. As the hon. Member for Northavon rightly said, that is a consequence of the transfer into the tax system of a benefit rule, and I find it very surprising.

My hon. Friend the Member for Havant and the hon. Member for Northavon made an important point in asking about that limit. I do not understand why it is necessary that that particular limit should be placed on claims. As my hon. Friend said, and as has been pointed out during the debate, on the face of it, 700,000 potential claimants have not made a claim. On the basis of the Government's figures, there are 7.2 million families with children, 6.5 million are reckoned to be eligible, 4.5 million have applied and 1.3 million will be migrated from income support and jobseeker's allowance. Thus,

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there are 700,000 potential claimants, so the question is: what will happen to those people as the three-month window moves on and their claims come in? What proportion will not have made the protective claims that people are advised to make? With the best will in the world, despite the £12 million that the Government spent on advertising and the efforts of Members of Parliament and others to encourage people to think about the potential of available family tax credits, it is clear that about 700,000 people have not made that claim.

The Government should recognise the difficulties that have arisen. Some of the administrative difficulties that are spoken of have not been overcome with the passage of time: they have had a deterrent effect on those who might otherwise have made claims, but felt—Conservative Members may be more prone to express it in these terms—that it was just another case of the Government putting a whole load of bureaucracy and administration in the way of people's ability to secure benefits.

What will be the situation of people who did not make claims, and why is it necessary for the three-month cut-off to be applied? If the tax credits system is genuinely part of the tax system, as we are told that it is, the year's income is the relevant consideration in relation to the application for credit, and particular circumstances should not necessarily be relevant. In that sense, it is not like the old family credit, which, like the benefits system, was geared towards particular circumstances at one time, as distinct from the financial year income of the family as a whole.

I want to join other hon. Members in pressing the Paymaster General not to attempt the rather curious argument that was advanced by the Secretary of State, and which had little basis. Anybody making a claim for family tax credit has to supply information relating to a change in circumstances during the year in any case. Only those who have made a protective claim and do not think that they have a chance of anything other than a nil award would have any reason not to make additional information available. People have to make additional information available in order to be able to update and carry forward their claim. I cannot see why the Government do not accede to the argument, which has been strongly put, that far from closing the door on applications and claims at midnight tonight, they should, as the Chairman of the Select Committee on Work and Pensions suggested, open the door to claims to the end of the year. The logic of the system is that it should be open right through to the point at which one makes a tax return for the 2003–04 financial year, since the claim relates to that income. That time scale is also logical for applicants who are self-employed.


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