Previous SectionIndexHome Page


Miss Begg: It is not just a question of the work that the Government have done in raising children out of poverty. Under the working families tax credit, one category of person—the single person—was left out, so that when in work, they were sometimes not any better off than if they had been on benefit. Does my right hon. Friend—my hon. Friend, rather—accept that the working tax credit closes that gap, so that work will now always pay for everyone?

Mr. Harris: I am grateful to my hon. Friend for referring to me as her right hon. Friend, but I am also

7 Jul 2003 : Column 846

grateful to her for making that entirely accurate point. That is the exact point of this Government's tax credit strategy: to make work pay.

I am disappointed by the Opposition motion because, like the previous motion that we discussed, it is all about process: it is a way to enable the Conservatives to attack the underlying principle without actually saying as much. For example, they attack the policy of targets in the NHS when what they actually want to do, but cannot do, is to attack the NHS itself. On this occasion, what they really want to do is to undermine the whole principle of the tax credit system, but they do not want to do so overtly, so they attack the administrative errors and delays that have occurred since the child tax credit was introduced. That is a dishonest way to approach this policy.

Mr. Mark Prisk (Hertford and Stortford): I should like to correct the record: our concern is more than just process, as the hon. Gentleman describes it. Does he accept that 1 million people not being paid is a question of more than just process?

Mr. Harris: I am more than willing to point out to Ministers that I am of course unhappy with any delays that affect my constituents, but the hon. Gentleman must understand that the debate as presented by Conservative Members does not look like wholehearted support for the tax credit strategy; it looks far more like an attempt to undermine the principle of tax credits and of trying to fight child poverty, which should be—and is—a priority on the Labour Benches.

Mr. Gale: The hon. Gentleman may not know that those of us who are sad enough to have been brought up on "Yesterday in Parliament", rather than on "Listen With Mother", can remember that it was in fact Anthony Barber, a former Tory Minister, who first mooted the possibility of negative income tax, which is in fact what this initiative amounts to. The Conservative Government of the day did not introduce it because the computer did not exist that could handle it. Since then, nothing much seems to have changed.

Mr. Harris: I disagree with the hon. Gentleman—quite a lot has changed, and I should also point out that I never listened to "Listen With Mother"; being of a slightly younger generation, I watched "Watch With Mother". What has changed is the nature of the Conservative party. I see very little support for the progressive tax policy that the hon. Gentleman refers to among today's members of the Conservative party.

I mentioned earlier that I share the concern of my constituents at delays in the payment of their child tax credit. I shall give the example of Mrs. A—I doubt whether she is the wife of Mr. A, the constituent to whom the hon. Member for South Cambridgeshire (Mr. Lansley) referred—who contacted me only two weeks ago. She gave a long explanation of when she applied for the tax credit and what her circumstances were, including that she was a working single mother. I rang the helpline for MPs and I discovered that she was about to be paid—a cheque was literally in the post—more than £1,000, and that she would receive £90 a week thereafter.

7 Jul 2003 : Column 847

It is very rare that, as a Member of this House, one gets the chance to contact a constituent with good news. I did indeed ring my constituent, and it was interesting to note her reaction. She did not say, "Well, that's ridiculous. Why have I had to wait this length of time? The system is a mess." She was extremely happy that I had phoned to tell her the news, and she was delighted that the payment had finally been cleared. I apologised to her on the Government's behalf for the delay and for the inconvenience to which she had been put, and it was only right that I should do so. But as a recipient of this tax credit—she is extremely glad to be a recipient—she has every right to claim the money. It should have been paid much earlier, and I hope that we do get the system sorted out so that no more of my constituents have to suffer such delays.

Every hon. Member must surely recognise that one of the biggest problems that elected politicians must face is the benefits trap. That was especially true in the 1980s and early 1990s, but it continues to a certain extent. Politicians, think-tanks and Governments have tried for many years to figure out a way around that trap and how to make work pay. The combination of the new tax credits and the working families tax credit is the first realistic and serious attempt to find that way. I shall come later to the Conservative record in Government, but there certainly were not many attempts to circumvent the problem between 1979 and 1997.

Paul Farrelly : Before my hon. Friend gets round to the Conservative record, does he agree that they did not seem to give a damn whether people were trapped in benefits so long as they were kept out of the unemployment figures?

Mr. Harris: Whether or not "damn" is parliamentary language, I have no idea, but that is absolutely true. We have to ask about value for money. Is it value for money to spend billions of pounds to prop up the unemployment figures, as the Conservatives did in the dreadful 18 years between 1979 and 1997 when social security spending increased by 90 per cent. in real terms—that is, after inflation? The Conservatives are always telling us that we should search for value for money. Is spending that kind of money on propping up economic failure a good use of money?

Mr. Andrew Turner (Isle of Wight): It is a pity that the hon. Gentleman, and some of his hon. Friends, use these debates to attribute the worst of motives to people on the other side of the House. We are prepared to attribute the best of motives to those who sit on the Government Front Bench. It would be nice if the hon. Gentleman reciprocated. I remind him that one key objective of the social security reforms introduced in the mid-1980s was to ensure the abolition of what we called the poverty trap. If he regards an increase in social security spending as a failure, what does he call the increase in spending through the tax credit system?

Mr. Harris: I disagree absolutely. If the hon. Gentleman wants to get into a debate about whether the Conservative party—in the past and perhaps not now, although that remains to be seen—was genuinely concerned about child poverty, I have to say that if something looks like a duck, sounds like a duck and

7 Jul 2003 : Column 848

walks like a duck, it probably is a duck. Under the Conservative party, one in three children lived in abject poverty and one in five households had nobody in full-time employment. In 18 years, the Conservatives did not come up with a single policy initiative. The reason, I must suggest, is that they thought poverty a price worth paying for the prosperity that a minority in the country were enjoying.

Before the intervention, I was asking about value for money and whether it was better value to spend billions on propping up unemployment or to use the same money to invest and encourage those on benefits to go into work. I should have hoped that the Conservatives would support that principle, and I should be happy if they prove me wrong to think otherwise.

We do not want the debate to go wider than the Opposition motion, but an anti-poverty strategy can include all sorts of measures. For example, the Conservative party, until a few years ago, opposed the national minimum wage. I find it fascinating to see the Conservatives trying, as we speak, to work out whether they support the tax credit agenda. I hope that the hon. Member for Hertford and Stortford (Mr. Prisk) will say categorically whether they do. He might add to the list of, I think, three policies that the Conservative party has. He could make it four by saying unambiguously whether or not they will support the child tax credit, even though I am sure that they would want to make all sorts of modifications. It is very important, if we are to take the Opposition motion seriously, that we know exactly where they stand on the child tax credit. I am sure that the hon. Member for Havant will be able to elucidate.

Paul Farrelly: Does my hon. Friend agree that it is hard to ascribe the best of motives to the Conservatives, as the hon. Member for Isle of Wight (Mr. Turner) suggests we should, when they opposed the minimum wage, which is a necessary guarantor of a decent income for families?

Mr. Harris: Absolutely. With 5.5 million families claiming and benefiting from the child tax credit, it is outrageous that there is any ambivalence at all about it on the Conservative Benches. Shortly before the last general election, the hon. Member for Havant said that a Conservative Government would scrap the tax credit system. The House needs to know whether that promise still holds.

9.10 pm

Andrew Selous (South-West Bedfordshire): Like many others tonight, I have constituents who have had difficulty in accessing tax credits, but rather than dwelling on that point I want to consider some other aspects of this subject. It is the function of an Opposition to point out what has gone wrong in the implementation of a Government policy, and we have heard about some completely unacceptable situations in relation both to individual claimants and to staff in Inland Revenue offices. In Luton recently, where the main Inland Revenue office that serves my constituency is, there was a queue of about 600 people outside the building, because the staff were so frustrated at being unable to process claims that they had literally given up.

7 Jul 2003 : Column 849

I raise this matter not merely to carp about the Government having got something wrong—we can all recognise that the implementation was not good—but because there is a huge and genuine issue about the implementation of vast new Government schemes involving complex information technology. Sitting on the Work and Pensions Committee, I heard with absolute horror last week about the new computer system for the Child Support Agency, which is going horribly wrong for the second time. Committee members of all parties would have preferred to hear that everything was going well, that the new system was in place and that the reforms could be implemented immediately, but that is very far from the case.

The hon. Member for Northavon (Mr. Webb) spoke about what it will be like when the pension credit is introduced later this year, and he was right to do so, because our experience with tax credits, and now for the second time with the Child Support Agency, has been lamentable. He was absolutely right to mention the computer company EDS, which is a massive contractor to the Government. I believe that the Department for Work and Pensions and the Treasury are among its largest clients worldwide.

There are serious questions to be raised right across Government about the competence of Departments to handle such contracts. For example, do they employ senior members of the IT profession who have been involved on the other side of the fence in providing such contracts, who could spot what was really going on within these large computer firms as they pitch for projects to the Government? I hope that we will learn the lessons and that the Department for Work and Pensions will closely examine the role of EDS in particular.

We have also heard a lot from hon. Members of all parties about the additional costs incurred by our constituents when tax credit payments have not been received on time, but we have not had an adequate response. Several constituents have shown me their bank statements and the additional charges that they have incurred. Some have had to face penalty charges from their mortgage companies as a result of tax credits not being paid on time. Those are highly serious problems, which have put people significantly into debt, and it may take them considerable time to recover.


Next Section

IndexHome Page