As I said earlier, the ombudsman’s report is highly critical of Her Majesty’s Revenue and Customs and the tax credit system. On the positive side, it recognises HMRC’s progress on administration and welcomes the change in policy that I outlined today for recovering overpayment. It makes further recommendations to ensure that the policy is effective. Her Majesty’s Revenue and Customs does not want to reject any recommendations outright. Some require thought about exactly how we respond to them, and I believe that we will be able to respond positively.
I thank the Minister for her answer. I hope that she will respond positively to point 4.4, which asks:
“Does such a system…truly meet the needs of this particular customer group?”
I hope, too, that she will take on board the advice of Citizens Advice that it might be time to look again at introducing fixed awards, which would improve stability. Is not the fundamental problem that people who are trying to budget on a weekly basis cannot cope with the retrospective nature of the changes to their finances? That puts them in such a difficult position that it is beginning to frighten people off from claiming.
Citizens Advice has produced a serious report that looks at the issue carefully, but I do not see any evidence in a fall-off in the numbers of claimants who are receiving their entitlements. I acknowledge that there is a fear and I take that seriously, but tax credits offer a flexible system of support for 6 million families, as I have said, which equates to nearly 20 million people. Up to 700,000 families would receive less support under a fixed system. Although we are considering all such ideas, that is not the way to go. We must improve the delivery and administration of tax credits, which I believe is a better system than a fixed payments system.