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Tax Credits

Volume 447: debated on Thursday 15 June 2006

20. What criteria he used in deciding on his response to the request from the Institute for Fiscal Studies for information on the cost of the £25,000 income disregard for tax credits. (77562)

In responding to the freedom of information request from the Institute for Fiscal Studies and in the subsequent review of the decision, officials at Her Majesty’s Revenue and Customs followed the criteria set out in the Freedom of Information Act 2000.

The Paymaster General knows exactly what the likely cost of the increased disregard will be, but in rejecting the freedom of information request she said that officials had to balance the public interest in disclosing the information with the public interest in withholding it. What is the public interest in preventing MPs from knowing the cost of her policy? Is it not a shameful situation for the Chancellor of the Exchequer to be afraid of scrutiny of his flagship policy?

On the first question that the hon. Gentleman posed, the information has been made available to the House. On the specific point of the Freedom of Information Act 2000, Her Majesty’s Revenue and Customs is a non-ministerial department. It is for officials to follow the criteria set out in the Act, and that is precisely what they did.

The Paymaster General will be aware that the Treasury Committee’s report, published recently, criticised the lack of understanding of the cost of the new package, including the disregard, as well as a failure to understand the roles of IT, fraud and official error. The report also stated that the Committee was not convinced that the Paymaster General fully realised

“the extent to which HMRC needs to re-focus its administrative structures for tax credits around the needs of claimants.”

Since that report was published, has the penny finally dropped?

The Treasury Committee said:

“We commend HMRC for the positive step it has taken towards improving the way it deals with complex cases, by setting up a specialist team for the express purpose”.

The Committee also commended HMRC for the moves it has made to improve its work.

The report said that

“we welcome the fact that the Government is seeking to improve the operation of the tax credits regime by introducing a package of reforms.”

The Treasury Committee’s report commented in detail and commended the department on the administrative changes it is making. The press release by the Committee also acknowledged that tax credits are the right policy.