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Tax Credits

Volume 406: debated on Thursday 12 June 2003

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5.

What estimate he has made of the impact of the new tax credits on low-income families in Warrington, North; and if he will make a statement. [118661]

Six million families are expected to benefit from the new tax credits, including 250,000 low-income working families without children.

Seven hundred and fifty thousand families in northwest England are expected to receive the child tax credit, and 210,000 families in the region are expected to receive the working tax credit, including some who are also expected to receive the child tax credit.

I am grateful to my right hon. Friend for that reply. Does she agree that, despite some of the difficulties of implementation, the new system of tax credits will provide a major boost to the incomes of many families in constituencies such as mine? However, the problems that my office is picking up result mainly from people filling in the forms wrongly or from changes in circumstances that they have notified since completing the original form. Will my right hon. Friend look into the application process for tax credits and, if possible, simplify it, and will she also consider how we can deal more quickly with changes in circumstances, so that families are not left in the lurch?

My hon. Friend is right about the benefits to families from the new tax credits; millions and millions of families have applied.

On moving to the new system, we required information to establish the claim and looked for clear ways to show simple things on the application form—name, address, national insurance number, work details, pay and number of children and their age. It was important to get all those details into the system.

Next year, the renewal of claims for those already in the system will be much simpler and the forms will be much shorter. Despite the fact that the new tax credit forms are half the size of those for the working families tax credit—its predecessor—and notwithstanding the extensive testing that we did on the original form, I agree that it would be wise to consider whether further improvements could be made.

Many people in Warrington, North—indeed, in the whole north-west—would be interested in the Paymaster General's answer. On 28 April, she promised the House that

"anyone who has made a complete application and has yet to receive money will do so by the end of this week".—[Official Report, 28 April 2003; Vol. 404, c. 54.]
Obviously that would include people from Warrington, North. That week ended on 2 May, yet, one month later on 4 June, the Government's own figures showed that, in fact, 750,000 eligible claimants across the country had yet to be paid. Why did the Paymaster General break her promise? Given what this shambles has cost people in bank charges and interest payments, will she now apologise to the many families affected and compensate all those who are out of pocket?

I appreciate that figures are challenging for the hon. Gentleman, but, to return the statement that I made on 28 April and the number of claims that we had received by that date, I told the House that those claims would be either processed into payment or claimants would be contacted where issues were still outstanding. Every day, because of the popularity of this policy, thousands of forms arrive, and the position that I stated on 28 April remains the case. It is important to check applications with outstanding queries, because I am sure the House would not wish us to pay public money to those who may not be entitled to it, but every claim received by that date is in payment or the claimant has been contacted by the Revenue to ensure that the claim is correct.