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Family Tax Credit

Volume 403: debated on Tuesday 8 April 2003

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4.

How many Scots will benefit from the family tax credit. [106716]

The estimated number of families in Scotland expected to benefit from the child tax credit in 2003–04 is 430,000. The number of families in Scotland expected to receive the working tax credit in 2003–04 is 90,000.

Will my right hon. Friend join me in congratulating the staff of the Inland Revenue accounts office in Cumbernauld on working so hard to implement that, and in welcoming the 200 additional jobs in my constituency in that regard? Is she aware that nine out of 10 families in Scotland are eligible for tax credits? What will she do to encourage all of them to claim their entitlement?

I share my hon. Friend's pleasure at the number of jobs created in her constituency and at her constituents' efficiency in processing applications for tax credits. Last weekend, like a number of Members—certainly Labour Members—I was out in my constituency encouraging people to take up the working tax credit and the child tax credit. People were astonished to discover that they would benefit even if they had an income of up to £50,000 a year, and that those with a child under one year old would be eligible for tax credits even if their income was £66,000. That is a significant move forward, not only in terms of taking people out of poverty but in terms of making sure that children throughout Scotland get the best possible start in life and families are given a huge boost to allow them to operate in a way that gives them pleasure as well as sustenance.

Can the Secretary of State confirm that, of a possible 5 million recipients of the new child tax credit, only 3 million have so far responded, so some 135,000 families in Scotland could lose out? I put it to her that a credit or benefit that has an application form 12 pages long with 47 pages of notes is bound to be a deterrent. I ask her to seek to have that simplified with her colleagues.

My right hon. Friend the Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) was very kind to the hon. Gentleman, but I am afraid that we now have to play good cop, bad cop. I must point out to the hon. Gentleman that his party opposed this system of tax credits, but I take the point about the complexity of claiming. None of us likes filling in tax forms—they are always difficult, which is very painful—but hon. Members have a role, and my parliamentary colleagues have been taking up that role in ensuring that people are aware of the tax credit system and that they receive assistance to ensure that they can claim the tax credits. I commend that activity to all hon. Members.

Does my right hon. Friend agree that the method of paying the child tax credit directly to the main carer, who is usually the mother, is indeed a more effective and efficient way to ensure that those resources are best spent in the right direction?

I accept what my hon. Friend says. I was in his constituency yesterday, where a number of people referred to the tax credit system, and I was very encouraged by the extent to which men, in particular, said that they feel that it is right that the money should move from the wallet to the purse because, by and large, the mother is the main carer. Indeed, that fact is replicated throughout the country, where more than two thirds of men acknowledge that the money should go directly to the main carer. That is a real way to move children out of poverty.

Many Members have tried to elicit from the right hon. Lady what percentage of families in Scotland are eligible to claim tax credits. I understand that such figures are not published regionally. What work is she doing with the Treasury and the Office for National Statistics to persuade them to publish regional eligibility figures?

I am surprised at the hon. Lady's question—the figures are actually quite clear. More than 90 per cent. of families with children in Scotland are eligible to claim the tax credits. She is not in a position to be around and about in Scotland, but if she were, she would find that there is considerable take-up and interest, and my hon. Friends are trying to ensure that there is even greater take-up. Of course, that is very different from the position of the Conservative party; it wants to cut public expenditure by 20 per cent., which would lead to a cut in the money available to families as well.

May I give a piece of advice to the Minister? One thing that does not happen—I do not understand why—is using the facilities available to us. Local authorities administer nurseries and primary and secondary schools. Surely a way can be found to use the education system to let people know about their entitlements?

My hon. Friend makes a very good point. Many Members have accessed their own databases to ensure that schools, community groups, the Churches, and so on, are aware of the tax credits, but it would be very useful if all local authorities in Scotland were to take that on board to ensure that everyone knows—I make the point again—that families are entitled to the tax credits even if they have an income of up to £50,000 a year, or £66,000 if there is a child under one in the family.

Will the Secretary of State investigate suggestions north of the border that people who are being passported from income support to the new working tax credit are losing out on free schools meals as a result of a deficiency in some secondary legislation that the Scottish Executive have not yet got round to implementing? Will she make it her business to ensure that that defect is remedied as soon as possible on the grounds that free school meals have a significant budgetary effect on weekly incomes, particularly for low-income families with many children?

The hon. Gentleman makes a very important point, and I will certainly look into the issue as soon as possible and try to ensure that the necessary action is taken.