| Previous Section | Index | Home Page |
Mr. Webb: It is not used very often.
Sir Archy Kirkwood: Indeed, the Inland Revenue does not use that discretion very often, even when it is pointed out. I draw the Secretary of State's attention to the fact that, in evidence to the Select Committee, his predecessor gave us an undertaking to examine the situation relating to data on tax credit overpayments as soon as they became available—they will be soon—to ensure that people are not being landed in severe hardship as a result of that clawback.
Mr. Willetts:
I am grateful to the hon. Gentleman for giving way because I agree with him about tax credits.
22 Feb 2005 : Column 216
There are clear examples of people who know that they have been overpaid tax credits, but who, as a result of receiving cash through overpayment, find themselves taken out of housing benefit. They then find it very difficult to get back on to the benefit. There are people who try to set money aside because they fear money has been overpaid, but that takes them over the capital limits. So, there are several interactions between tax credits and the benefits system. Ministers tend to wash their hands of this and say, "That's a disaster of the Inland Revenue's making," but it affects people's entitlement to welfare benefits and it is causing genuine distress.
Sir Archy Kirkwood: Not for the first time, the hon. Gentleman makes the point more eloquently than me. I concur with all that. It is becoming an increasing problem—it is not going away and it is not a glitch related to the introduction of a given proposal. Indeed, the evidence available to me suggests that the problem is not getting better at all. If anything, it is getting worse.
I have two other quick questions. As my hon. Friend the Member for Northavon said, the migration of income support and income-based jobseeker's allowance cases on to child tax credit is also a considerable concern. There are 900,000 families to transfer. A few moments ago, we said that from our experience the tax credit system is shambolic, so there is a genuine worry about when those people will be transferred. The Government's position, I understand, is that the date still remains uncertain, but it certainly will not be in 2004–05 and we have yet to receive an exact timetable showing when in 2005–06 the transfer will begin. When that transfer begins, the one thing that must be absolutely guaranteed is that there will be no delays or any other administrative problems, because those families are among those with the lowest income in the land. The House would welcome assurances on that.
Finally on tax credits, the Public Accounts Committee got an undertaking from the Inland Revenue that once some of the data started to become clearer, there would be a case for reviewing the tax credits scheme. I hope that the Department is alive to that inquiry and that it will encourage and support it, because I detect in all parts of the House evidence of concern about tax credits and how they have been delivered recently.
I recognise that a huge amount has been done to improve the incomes of many households across the United Kingdom over the last few years, but a lot more work remains to be done. If we do not make sure that we can provide adequate life chances for a whole section of society, we will end up driving people into criminality, as I said earlier, and driving people into the grey economy and not paying taxes. Worse than that, we will disrupt families, producing mental illness and marriage break-up, the consequences of which the taxpayer ends up paying for. It is money well spent to have proper, adequate benefits that are fit for the purpose and set at appropriate levels on which people can live. The Government still have some work to do before they achieve that.
4.15 pm
Andrew Selous (South-West Bedfordshire) (Con):
It is a great pleasure to take part in this thoughtful debate. I must confess a little surprise to see that no Labour Back
22 Feb 2005 : Column 217
Benchers are making speeches in the debate this afternoon. I am in a charitable mood, however, and I will pick up on the Select Committee Chairman's comments that this is becoming such a complex area that it is one in which many Members fear to tread, as they feel that they will not be as knowledgeable as they should be or have all the facts at their fingertips that they feel they should have.
A more important point lies behind that, as the people who take up these benefits—our poorest and most vulnerable constituents—are not well able to navigate the minefield of regulation and rules that surrounds many of these benefits. On a cross-party basis, we should try to simplify much of the social security system so that it is more easily understood. If we do so, we will see higher take-up. Along with simplicity, we need computer systems that are reliable, that work and that get benefit through to recipients in a timely and correct manner. Whether in relation to the Child Support Agency or the tax credit computers, there have been too many instances in which the technology has let down some of our most vulnerable constituents.
I was also interested that the issue of income adequacy was touched on briefly, and I commend the two Members who raised the subject. We need to examine that for people who will be out of the labour force through no fault of their own for long periods. We need to be honest and transparent with our constituents about how we will pay for that, and perhaps identify some parts of current Government expenditure that we want to slim down to make moves in that direction. Collectively, we need to turn our attention to that.
We are covering a wide variety of social security and pension issues this afternoon, and I will inevitably repeat some of the points already made. First, on the pensions side, we understand the Government's arguments about why they felt compelled to introduce the pension credit. A wide consensus now exists among people from many different parts of the political spectrum, however, that that has not been the most sensible way to go. We know that 1.63 million pensioners are not taking up pension credit, which results in many constituents being £25 a week less well-off than they would be otherwise.
We are also aware of the disincentive effect of pension credit. Even the Prime Minister said on 8 February to the Liaison Committee:
I wonder whether he is aware of the fact that nearly half of all pensioners are on means-tested pensions. My hon. Friend the Member for Havant (Mr. Willetts) said that he was a Blairite on some matters relating to pensions. In this case, the Prime Minister is clearly a Conservative. He has recognised what we have been saying for quite some time, so I think we can trade a bit of party-political allegiance in today's debate.
The new deal is still the subject of heated debate between the parties. We have said that we will get rid of both the new deal for young people and the new deal 25-plus. I assume that as rational Members of Parliament we proceed on the basis of evidence when framing policy and deciding what to do. Are Ministers really satisfied
22 Feb 2005 : Column 218
with the new deal for young people, given that only 38 per cent. of young people secure unsubsidised employment at the end of it? The statistic for the new deal 25-plus is even worse: only 12 per cent. of those who embark on it secure unsubsidised employment.
As guardians of the public purse, responsible for helping some of the most vulnerable members of society, we should be looking for value for money and ensuring that we have the most efficient policies and systems possible. The statistics I have given are very poor, and we should be able to do better.
Mr. Kevan Jones (North Durham) (Lab): I agree that those people are the most vulnerable in society, but in my constituency, youth unemployment is down by more than 85 per cent. What will the hon. Gentleman—or the Conservative candidate who will stand against me at the next election—suggest to those young people as an alternative to that dramatic drop in youth unemployment?
Andrew Selous: I will say something about unemployment shortly, and I will deal with the hon. Gentleman's point then; but he has not responded to my point. The question is not, "Do we or do we not help these people?" Of course we need to help them find work. The question is, "Is the new deal the most efficient and effective way of doing that?" On the evidence that I have given, which has not been disputed either by the hon. Gentleman or by Ministers, I do not think it is. I think we should be grown up enough to admit that although parts of the system work well, those two parts are clearly not working well. Organisations in the sector will tell those who consult them that there are more efficient ways of dealing with these matters.
I entirely agree with what was said by my hon. Friend the Member for Havant and the hon. Member for Roxburgh and Berwickshire (Sir Archy Kirkwood). Two Fridays ago, a young lady who came to my constituency surgery told me that having applied for various tax credits and returned to work, she faced such a large repayment of money paid to her that she was close to throwing in the towel and leaving the labour force altogether. She is so cross that she has asked me to refer her case to the parliamentary ombudsman. She is not alone: there are many like her. The Government ought to consider an amnesty for those who, through no fault of their own—I do not think there was any fraudulent intention—have been asked to repay large sums. If the Government are honest, they will say that the computer systems were not fully geared up at the start of the process. There is real anguish and worry among our constituents who are caught up in this.
I also agree with what the hon. Member for Northavon (Mr. Webb) said about the provision of child care by family members. We should not force our constituents to fit in with some predetermined system that we have come up with here. If we really want to provide a natural solution and help people to sort out their child care problems in the way that they prefer—which involves intimate, personal decisions—it must be right and sensible to allow family members to provide care. Surely we cannot be against that, and we should ensure that it happens.
I commend the Government for making changes for future entrants to incapacity benefit. The Government are absolutely right to change the name to the
22 Feb 2005 : Column 219
rehabilitation support allowance. Clearly, the name "incapacity benefit" has the wrong connotations. What the Government are planning to do to get people into work is excellent. However, the numbers keep rising. We must comment on the fact that in August 2004 there were 140,000 more people on incapacity benefit. The latest figure is 2,403,000—that is 140,000 higher than when the Government came to power.
| Next Section | Index | Home Page |