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Mr. Tom Harris (Glasgow, Cathcart): Does the hon. Gentleman see any contradiction in the fact that he is calling for an extension to the deadline, while his party has, at best, an ambiguous approach as to whether it will support tax credits in its next election manifesto?
Mr. Lansley: I do not subscribe to the hon. Gentleman's premise. As the hon. Member for Northavon made clear, the legislation passed through this House without a contrary vote on our part. We are all in favour of the application of the tax credits system.
My point—here I speak entirely for myself—is that if it is to be moved it into the tax system, it should acquire the characteristics of the tax system. That is exactly the kind of question that arises in relation to independent taxation. A benefit has been moved into the tax system, with the consequence that, for a large number of families with two earners, what was previously independent taxation has been given away in pursuit of the structure of tax credits. In the past, children's tax allowances likewise depended upon the calculation of both parents' income, and we moved away from that in order to secure independent taxation. What is important is the structure by which objectives are delivered. I have no difficulty with the objective of trying to follow through the logic of the tax credits system in the way proposed.
Dawn Primarolo: The hon. Gentleman touches on an important point, and I am listening carefully to his remarks. He is now contradicting himself, however, and I want to bring him back to the purpose of the tax credits system. It was not created as a system to move social security benefits into the tax system: rather, it is a completely new framework that takes the best that both systems offer so as to integrate into the tax system the best way to support families.
Mr. Lansley: The Paymaster General knows that I am keen to support families. Perhaps I should declare an interest, although I will not benefit from the structure that we are discussing. I have always favoured supporting families with children through the tax system. If we have found the best way of doing that, all well and good, but I have always favoured universal support through the tax system for those who are responsible for raising children. Child tax allowances had the advantage of not depending on means-testing. If my hon. Friends on the Front Bench and I were pursuing policy issues in the debate, we would discuss the extent to which the credit should be available either as a universal benefit—child benefit—or a tax allowance, which is not means-tested apart from being part of a normal tax return. The Government have chosen something in the middle. However, we are here to debate not the policy—the motion is not about that; the hon. Member for Glasgow, Cathcart (Mr. Harris) lured me down that path—but the way in which the system works. My hon. Friend the Member for Havant led the debate in that direction.
I want to consider the case of a constituent, to whom I shall refer as Mr. A to protect his privacy and that of his partner. If the Paymaster General wishes to pursue the matter, I can give the name and details later. I wrote to the chairman of the board of the Inland Revenue on 11 June about the subject, and the Paymaster General can find out about that later if I give her further details. I have not yet received a reply but I am happy to raise the case as a point of principle; I do not expect the Paymaster General to give a substantive response this evening.
The hon. Member for Northavon commented in detail on the way in which awards are made in the first place. Mr. A and his partner supplied information to support their claim. On 16 April, they received an award from the Inland Revenue. They were told that, in relation to the information that they had given—they had two qualifying children and an annual income of
£22,316—they would receive a child tax credit of £3,436.74 and a working tax credit of £3,649.02. On 17 April, the first two payments of £139 arrived in their accounts. They thought that that was prompt. A further payment of £51 arrived a fortnight later and they were a little less sanguine about that. They did not know what would happen next because the figure did not appear to fit the pattern of payments that had been disclosed to them in relation to Mr. A's employers. Then everything went quiet.At the end of May, after what they described as hundreds of attempts to get through to the helpline, they succeeded. They spoke to a helpful person who said that he would check the figures and send out a revised award because, in his view and on the information that he was given, the figures were clearly wrong. My constituents raised the matter with me and when I contacted the helpline, I was told that their award was £701.50. Hon. Members can imagine their dismay. If they had known more about the system, they would have realised that the original figure was untenable. It was clearly based on the assumption that Mr. A's partner had no income. She had an income, which had been disclosed and included in the figure that was cited in the original award letter to Mr. A. However, the computer did not take account of Mr. A's partner's income.
That example encapsulates some of the issues that hon. Members have raised in the debate. My constituents relied, perhaps unwisely, on large payments that they were anticipating on the basis of the award that they had received. They now find that they will not receive those payments.
More as a point of principle than in relation to that particular case, I want to know what will happen and what will be the structure for dealing with those people who have relied on information from the Inland Revenue. They have not received a large sum of money that will be clawed back, but they have incurred costs and in repaying them they will incur additional bank costs as they try to recover their position. They may have incurred debts on the basis of what they anticipated to be the case.
I do not want to delay the House any longer. I have raised the point of principle as I see it and a particular practicality on behalf of my constituents. The Secretary of State talked about administrative inconveniences and the like, while the hon. Member for Aberdeen, South (Miss Begg) talked about administrative hiccups. In practice, as Members of Parliament we all know that things have been worse than that. My hon. Friend the Member for Havant set that out clearly.
The point is that there are things that the Government could do today to remedy the situation and there are issues that they must resolve now, which will help some of our constituents who are in difficulties. If the Paymaster General can tell us how she will help to resolve those issues, I will be interested to hear it.
8.56 pm
Mr. Tom Harris (Glasgow, Cathcart): I am grateful for the opportunity to take part in the debate because the fight against poverty—the need to fight against it—was for me, as well as for many people of my generation, one of the primary motives for joining the Labour party 20 years ago. I am sure that that is the case for many of my colleagues.
When I found myself in the pleasant situation of becoming a father 11 and a half years ago, I suddenly realised that the fight against child poverty was probably the most important factor within a general fight against poverty. I am sure that other Members found that to be the case when they became parents and I feel very strongly about it, as do Members on both sides of the House.
Annabelle Ewing: The hon. Gentleman mentions the important issue of child poverty. Is he satisfied with his party's record over the past six years? We have had a Labour Government, but still one child in three in Scotland are brought up in poverty.
Mr. Harris: I am delighted that the hon. Lady has mentioned that. During the 2001 general election, there was some controversy, which she will remember, about the Government's claims for the number of children who had been lifted out of poverty. Opponents also made claims about that number. Last year, the Institute for Fiscal Studies pointed out that even if the lower estimate of 750,000 children lifted out of poverty as a direct result of Government policies is accurate—I am prepared to believe the Government's view that the figure is significantly more, but let us give our detractors the benefit of the doubt—that is a record high for any Government.
People have previously been lifted out of poverty simply because of economic growth, but that has never happened on such a scale as a direct result of anti-poverty policies. [Interruption.] The hon. Member for Perth (Annabelle Ewing) asked me a direct question, so I will give her a direct answer: I am extremely proud not only that this Government have done so much for poorer families, while she and some of her colleagues simply snipe from the sidelines, but that we have established an ambitious target for abolishing child poverty.
To the Opposition, that target is simply a hostage to fortune, as many Government targets seem to be. To me, it is not a hostage to fortune, but a constant reminder that we as elected politicians have a responsibility to deliver for the people we represent. If we still have some way to go 20 years on from the target being set or if we have not quite made it, I will still be proud of the fact that we made a bold statement and set a bold ambition to reduce and remove one of the most terrible blights on our society. The Labour party is the only party ever to have made that commitment.
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