§ Amendment made: No. 13, in page 26, line 12, leave out '165(1)(a)(i) and (b)' and insert '165(1)(a)(i) and (ii)'. —[Dawn Primarolo]
§ Order for Third Reading read.
§ Mr. Deputy Speaker (Mr. Michael Lord)I must remind the House that Madam Speaker has selected the reasoned amendment in the name of the leader of the Liberal Democrat party.
§ Dawn PrimaroloI beg to move, That the Bill be now read the Third time.
I am pleased to open this debate on the Bill. I rise with some trepidation, in that my hon. Friend the Financial Secretary to the Treasury and the hon. Member for Brentwood and Ongar (Mr. Pickles) have managed to refer in their speeches to films, television programmes and to Shakespeare. I wait with bated breath to see what the hon. Gentleman will come up with in this debate.
We have had very interesting—and I think, on the whole, constructive—debates, both on Second Reading and in Committee. It was a wide-ranging discussion, covering a variety of issues of concern and interest to hon. Members. No doubt many of those points will be revisited during this debate.
Since those debates, the Chancellor has delivered his Budget statement, which builds on the foundations that the Bill puts in place. My right hon. Friend announced an increase in the value of the basic tax credit of £2.50 per week, and an increase in child tax credit of £4.70 from October, and another £1.10 from April 2000; a new fast-track gateway to the disabled persons tax credit from October 2000 to help people who become long-term sick or disabled while working to retain their jobs; and a new income support run-on for lone parents moving into work. Payments for lone parents will continue for the first two weeks at the out-of-work rate to help people bridge the difficult period when they first go back to work.
§ Mr. Tim Collins (Westmorland and Lonsdale)In the calculation of the figures that she has just quoted about the difference between being in work and out of work, has the hon. Lady assumed whether people have to drive to work?
§ Dawn PrimaroloThere is no calculation for people receiving benefits anywhere in the tax system in respect of travel to work—however short or far the distance. I am sure that the hon. Gentleman is conversant with how the tax system deals with him as a Member of Parliament, and he will know that that cost is not tax-deductible.
From October 1999, the working families tax credit will provide a minimum income guarantee for families with a full-time earner of £200 per week—up from £190 per week—which is over £10,000 per year. It will mean that no family with children will pay net income tax until their earnings exceed £235 a week, or more than £12,000 a year. On average, the working families tax credit will give families an extra £24 a week, or £1,248 a year, as compared with family credit.
1203 It may be helpful to all present if I describe formally what the Bill does. In doing so, I will be able to explain how the various concerns have been met. There are three major planks to the Bill: the conversion of family credit and disability working allowance to tax credits; the administration of the tax credits by the Inland Revenue; and the payment of the tax credits through the pay packet. Those three planks establish the fundamental policy and objectives of the introduction of the tax credits. As tax credits, within the tax system, administered by the Inland Revenue and paid through the pay packet, they will clearly demonstrate the rewards of work.
As I have already explained in earlier debates, the tax credits build on and replace two existing benefits: family credit and disability working allowance. To achieve that in the most efficient way, the Bill builds on existing social security legislation. It does that by providing that the main features of family credit and disability working allowance will apply to working families tax credit and disabled persons tax credit. The functions and responsibilities affecting the benefits being replaced will be transferred to the Inland Revenue and the Treasury.
Much of the detail of the existing system is in secondary legislation, which has been a point of contention for Opposition Members.
§ Mr. PicklesThis may be a convenient point at which to ask a relatively technical and non-controversial question. The Paymaster General says that the credits have the principal characteristics of the benefits to be replaced. There is concern among disabled groups that no guarantee has yet been given that certain benefits—in particular, prescriptions, dentistry and eye tests—that were previously triggered by disability working allowance will be transferred to the disabled persons tax credit. Will they be passported across?
§ Dawn PrimaroloDiscussions are still taking place about prescriptions, and the matter will need to be followed up. We are aware of the concerns that have been expressed.
There were some regulation-making powers associated with family credit, and we have followed that up in the working families tax credit. The Inland Revenue has published all the major regulations in draft, including those setting out the broad structure of the working families tax credit and how it is made up, with the important addition of the new child care tax credit.
The Inland Revenue has also published the regulations giving the details of payment through the wage packet. The full details of the scheme are available and can be clearly seen. I fully appreciate that some Opposition Members have fundamental disagreements with the principles in the regulations, but the details are there. Indeed, many organisations representing business and payroll managers, and individuals have already provided input and comment to the Inland Revenue as we developed the scheme, and consultation continues. The Inland Revenue also intends shortly to publish revised drafts of the regulations for comment, to give any interested parties who have not yet commented the opportunity to do so.
I have already highlighted the improvements announced by my right hon. Friend the Chancellor last week. Let me remind the House of those improvements 1204 already announced for working families tax credit. The new child care tax credit will give extra help with child care costs. Earlier today, we added new clause 5 to extend the range of child care for which help can be given, which will increase the affordability of child care and help to promote good-quality child care for eight to 14-year-olds, in line with our national child care strategy.
There will be a full disregard of maintenance payments in the calculation of income for working families tax credit. That is a significant contribution to tackling child poverty, as maintenance payments will be able to be used directly for the children. I know that the hon. Member for Northavon (Mr. Webb) welcomed that in Committee.
As we all know, the tax credits will be part of the tax system administered by the Revenue. The staff currently employed by the Benefits Agency dealing with family credit and disability working allowance will transfer to the Inland Revenue, building on their experience and expertise. The hon. Member for Gainsborough (Mr. Leigh), who visited the family credit unit in Preston, commented earlier today on the excellent standards and diligence of the staff. They are the people who will continue to administer the credit.
The Bill provides for those members of staff to become fully integrated into the Inland Revenue, and in particular to be subject to the same strict confidentiality rules that apply in the rest of the organisation. That is an important provision to protect the information.
From April 2000, the tax credits will normally be paid through the pay packet. That is a fundamental part of the tax credits system. I understand that Opposition Members reject that principle, but it is fundamental to the Government's strategy. The Bill contains the regulation-making powers to establish that part of the scheme.
We had numerous discussions in Committee on this part of the scheme, some of which were repeated on Report, and it became very clear that the Opposition did not fully understand it. I would like to take this opportunity to try to allay some of their fears and perhaps—dare I say it?—put right some of their misunderstandings.
Couples will be able to choose which of them receives the tax credit. I have tried to put that delicately so that I will not be accused of anything. It is important to remember that, in the majority of cases, purse to wallet transfers are not even an issue, because of the profile of those who claim family credit and who will form the majority of those who claim the working families tax credit. Some 50 per cent. of current family credit claimants are lone parents in any case, and of the other 50 per cent., 23 per cent. have a female main earner. It is clear that the money will continue to go to them and, in other cases, couples will be able to choose.
Employers will not have to assess working families tax credit awards. Time and again, Opposition Members have talked of the burden on businesses and the need for them to calculate the payments, but I hope that it is now accepted that the Inland Revenue will do that and inform employers how much to pay, when to start payment and when to stop.
Employers will be given only the information they need in order to pay the tax credit to the right person. The Inland Revenue will step in to pay the tax credit when a job comes to an end or there is a breakdown in the arrangement. The first priority—as hon. Members 1205 would expect—is to get the tax credit to the employee on time. The Bill provides powers to ensure that that happens.
During our debates, hon. Members have expressed some concern about fraud and its history in the payment of family credit. We are determined—as the House would expect—to fight fraud in the payment of the working families tax credit and to ensure that it does not develop. That is why we have included in the Bill several provisions that make up a package to deter fraud and encourage compliance. Those substantial measures include information powers to allow the Revenue to obtain the information it needs to verify claims. That power is not available for the payment of family credit, but it will apply to the new credit. Also included are powers to recover overpayments through the tax system directly and penalties to deter non-compliance and fraud. That package will help to secure the system, and will make it clear that applications for tax credits, and the operation of payments through the pay packet, must be carried out honestly, to ensure that the right amount of tax credit goes to the right people. The concerns expressed in reports by the Social Security Committee have been of great assistance to us and we have built on the experience of the family credit unit.
The working families tax credit is targeted at families with children, and on low to moderate earnings, for whom the unemployment and poverty traps are especially severe. We owe it to them to provide a system that genuinely helps them and they can trust. I am sure that given the concern expressed by Opposition Members about fraud, they will support those measures. The Inland Revenue will consult on a code of practice that will describe how it intends to use those powers, so that there are no mistakes by employers.
It is worth also reminding the House that all the penalties in the Bill can be appealed against to an independent tribunal. Appeals about tax credit claims will be heard by new unified appeal tribunals set up under the Social Security Act 1998. That is because those tribunals will have the experience to deal with the type of cases that will come to them. Applicants are likely to be more familiar with that process.
Appeals against a penalty charged in connection with an employer's obligations will be heard by the tax appeal commissioners. That is because employers' obligations in relation to tax credits are very similar to their obligations to operate the pay-as-you-earn scheme and appeals on those penalties are already heard by the tax appeal commissioners. In the long term, as the new tax credits evolve, we intend to pass jurisdiction on appeals on decisions on entitlement or award of tax credits to the tax commissioners so that they will hear all appeals on tax credits.
The Bill is a significant demonstration of the Government's real commitment to supporting families by making sure that work pays and encouraging people to move from welfare into work. That will not be compulsory, but the Bill will ensure that those who want to work will be better off in work and will be supported in their efforts. It shows that we do indeed believe that the value and dignity of work are all important, and that we are prepared to do something about it. Anybody who has had conversations with lone parents will know that 1206 many of them want to work, but find that the barriers of child care or the poverty trap mean that they are no better off in work.
§ Miss McIntoshWill the Minister help me on one point? She accepts that there will be a great administrative burden on businesses, particularly small businesses. Is there any way in which the Government could provide an exemption for very small businesses?
§ Dawn PrimaroloWe had the debate on exemptions for small businesses earlier, and I do not intend to go over it again. We did not accept the idea outlined by the hon. Lady, and my hon. Friend the Financial Secretary made it clear that small businesses that do not collect on the PAYE system or collect NICs would not have to pay the tax credit. It is obvious that businesses that do not collect any money cannot deduct the tax credit in order to pay it to their employees.
When the hon. Lady has read Hansard, I shall be happy to write to her on any further points that she may wish to take up with me. I shall write back as quickly as I can, subject to the thousands of letters that I receive.
Working families tax credit delivers the promise that the Chancellor made to working families and to disabled people in the Budget of 1998. We are improving work incentives still further by increasing support for working families through the Budget measures that the Chancellor announced last week. The benefits, particularly to working parents, of access to a child care tax credit will ensure that many more parents are able to have quality child care and to receive support towards paying for it. I commend the Bill to the House.
§ Mr. PicklesThe Minister said that the Bill was built on the foundation laid by the Chancellor's move towards tax credits in the previous two Budgets. I have to agree with her. The Bill increases dependency, spreads income further down the economic scale and ensures that the lower paid will have to pay more.
My hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) has made the good point that people on lower incomes will have to shell out because they happen to own a car. In rural areas, cars are the only practical means that low-paid workers have of getting to work, and they will have to find an extra £183 a year so that they can go to work. The Minister suggested that the point is not relevant, and that that amount cannot be claimed in tax or benefit. In fact, my hon. Friend's point was precisely that: the Government give with one hand and take away with the other.
§ Mr. CollinsThere was a perfect illustration of that point earlier. Does my hon. Friend recall that we are supposed to be grateful because people in rural areas will receive £20 million in rural transport initiatives, but the total taken from rural areas in increased petrol duties will be £1 billion?
§ Mr. PicklesI was not aware of that figure, but I know that my hon. Friend takes a close interest in the matter. Perhaps he will consider this point: there has been much moving around of the standard rates of income tax, but the increase in the fuel escalator, which directly affects 1207 people on low incomes, is worth slightly more than 1p on the standard rate. The Budget was merely about moving taxation around.
I am going to agree with the Paymaster General again.
§ Mr. James Cran (Beverley and Holderness)Hey, wait a minute!
§ Mr. PicklesNo, I must. The measure takes on the main features of family credit and disability working allowance—and makes them worse. It takes all the worst features and adds to them. The hon. Lady gave a pretty clear indication of that when I intervened. I thought that by now the issue would be non-controversial and that we would have had a view about passporting benefits. We are about to send the Bill to another place. Without the passports, people who are receiving family credit will be materially worse off under the new system. Unless their lordships know that, I cannot understand how they can come to a reasonable decision.
The Paymaster General says that the regulations are available—she says that she has produced them. That is true—we have had reams of them on a take it or leave it basis. My hon. Friend the Member for Bognor Regis and Littlehampton (Mr. Gibb) went without sleep two nights running to go through the regulations so that we would be on line with working the issues out. A new clause has been produced today, with no regulations. There is a promise of regulations to come: they will be in another place when the matter is considered there. Here we are, the people's representatives, trying to reach a reasonable decision when the details are in the regulations and the House has not even been shown the courtesy of being given the most cursory glance at those before this most important legislation is read the Third time.
The hon. Lady makes great play of the increase in the child care cost. She says that that will tackle child poverty, yet we have still not had answers to the basic question of how much is in the kitty for child care. When you can consult Hansard tomorrow, Mr. Deputy Speaker, you will notice the repeated attempts to find out exactly how much the child care element will be and the Government's repeated stonewalling, to prevent us from knowing that sum.
We have presented some conclusive arguments and evidence to suggest that, while we agree that the Institute for Fiscal Studies may be a little way out in its suggestion that the cost will be £4 billion, it is not that far out. Probably, the cost will be nearer £3 billion, but even if that estimate is wrong, it will certainly not be less than £2 billion. If that is the case, it will be £2.5 billion more than the Government have allowed for in the Bill. That additional sum of money—the £1.5 billion—will disappear in an escalation of the child care tax element, which will be available further up the income scale. We understand that people earning as much as £37,000 will be entitled to receive that element.
Before the hon. Lady reached her final peroration, we heard her say that payment through the pay system is fundamental—she used slightly sweeter words when we were discussing the matter a few moments ago on Report. That will involve a fundamental shift of resources from women to men. At the moment, the majority of such payments are made to women, but the Bill will result in a substantial shift towards men.
1208 The hon. Member for Northavon (Mr. Webb), said on Second Reading—I am sure that we will have the opportunity of hearing his wise words in a moment—that roughly 300,000 couples receive family credit, where the man is the principal breadwinner.
§ Mr. PicklesUnder WFTC, that will mean that £900 million will be going to men rather than women, which is a fundamental shift.
We know from all the surveys and studies that if the money goes to the woman, there is a greater chance of its being spent on child care than if it goes to the man, because then it will merely be subsumed into family income. Some people might say that we are implying that the money will be spent on cigarettes, alcohol, lottery tickets and the like.
§ Mr. PicklesWe have just heard a most interesting intervention from the duty Whip, and I am sure that you, Mr. Deputy Speaker, heard the hon. Gentleman say, "Good." There is lots of tax paid on those items, after all.
§ Mr. PicklesI do not know what is happening—Whips are supposed to be silent, but they are breaking that silence. My hon. Friend is absolutely right.
Both the Bill and the Chancellor's Budget mean that we shall be paying people working families tax credit so that they can pay tax. Under the Chancellor's system, people will not be spending the money on their families, or on lottery tickets as the Government Whip wants them to, but on paying extra taxes. If the Chancellor really wants to do something to help families on lower incomes, he should simply take them out of tax altogether.
The Paymaster General spoke about fraud and how she would deal with it. It is only reasonable that we should judge the Government on their record; unfortunately, the Government's record on fraud since coming to office is abysmal. Across the board, the Government are winding down their benefit fraud prevention operations. The London organised fraud investigation team was mysteriously shut down in October for six weeks, despite having increased its success rate month on month. During that period, all operations were suspended and evidence pertaining to pending cases was corrupted, thus threatening the successful prosecution of those cases. The team is now to be wound up by the end of this month.
In September 1998, local authority fraud investigation units received internal Department of Social Security memorandum F12/98, which has the effect of making it much harder for local authorities to begin proceedings against fraudsters. It is no longer worth their while to make the attempt. The money lost to fraud being recouped has fallen by up to 60 per cent. in some local authority areas. Last year, the total savings derived from the activities of those local investigation units was £342 million; the savings lost by preventing their activities might be up to £200 million this year.
1209 I could go on with a whole catalogue of examples of the Government failing on fraud. The Paymaster General says that we should trust the Government, because they are going to deal with fraud, but I have to tell her, despite my personal admiration for her, that we cannot trust the Government on fraud, because the Government's fraud has been abysmal.
§ Mr. PicklesI got carried away, and the hon. Gentleman is quite right to pick me up. I am so disgusted by the Government's lack of attention to fraud and to recovering the money that is robbed from taxpayers that I got emotionally carried away. I am grateful to the hon. Gentleman for reminding me of that.
The reason why the Paymaster General suggests that the Liberal Democrats are on our side is that the Bill is such an appalling measure. The Government have simply taken the key elements of the previous Conservative Government's measures, made matters worse, put a spin on them, put them in a different package and then pretended that something has happened.
There can be no excuse for what has happened because we had the benefit of a Select Committee report. Select Committees have been the subject of much comment in the Chamber in recent weeks. I have in front of me the Select Committee report about tax and benefits and implementing tax credits. So far as I can see, it has not been nobbled: it seems to be a good, hard report. If the Government had taken heed of that document, we would not be faced with this mess.
There was a time when the Government could have pulled back. It is clear from the evidence that, until quite late in their deliberations, the Government thought that changes could be made through the tax code. If the Government had chosen that option, I do not think our opposition would be quite so strong. We would still have many problems with the legislation, but I suspect that we could be much more helpful. As soon as it became clear to the Select Committee that there could be no regulation through the tax code, the Government should have abandoned the whole idea. However, they could not abandon the measure because it is a flagship.
Hon. Members will remember that I referred to some concerns about the Bill expressed by the Minister of Agriculture, Fisheries and Food and the Secretary of State for Trade and Industry. An unnamed Minister talked about the Chancellor and his flagship in The Sunday Telegraph, and said:
The trouble is Gordon has got to realise that even flagships have to obey the rules of the sea.It is painful to me to hear the Chancellor referred to so discourteously behind his back, but it is a sentiment which I endorse entirely.From that point on, tax credits became an administrative burden on business and embodied the pursuit of a social agenda through stealth. Thanks to the Chancellor, the low paid will receive extra benefits in their pay packets so that they can pay extra tax. The cost—an extra £1.5 billion—will be felt further up the income scale.
1210 I do not believe that that was the Government's intention. I was not invited to the Labour party gathering at Church house—I did not need to be there as the Prime Minister's comments on that occasion have been well reported. He said:
I have asked the Ministers at the Department of Social Security to look in detail at how we can make far-reaching reforms that will tackle insecurity and poverty as well as reducing social security bills.Yet Treasury and Social Security Ministers are running amok and reneging on the Prime Minister's promise. The child care element will ensure that social security bills rocket. Who will benefit? It is likely that there will be no significant increase in the job market. That is the reported view of both the Bank of England and the Institute for Fiscal Studies—two very respected organisations. Julian McCrae, an analyst with the IFS, has said:in terms of cost per job it does not look very sensible.I am sure that he is right.The Bill is about an increase in dependency by pushing means testing further and by catching people firmly in the means test dependency straitjacket—a full metal jacket, if you like.
Perversely, the proposals' effect on marginal tax rates may create a disincentive to work. According to the Institute for Fiscal Studies, almost 1 million men and women in two-earner couples will find that their financial returns from employment will fall directly as a result of the working families tax credit.
We have dealt at length with stigma. We understand that family credit is popular and virtually stigma-free, and has a high take-up rate. It is viewed by many as an extension of child benefit. As interventions on the Paymaster General have demonstrated, there will be greater knowledge in the workplace about who is claiming tax credits. On Second Reading and in Committee, there seemed to be a misunderstanding of how family credit worked. We were repeatedly assured by Ministers that there would be no difference whatsoever between family credit and working families tax credit concerning confidentiality in the workplace.
As my hon. Friend the Member for Bognor Regis and Littlehampton will recall, we clearly demonstrated that once an employment record has been established, pay-slips are acceptable under family credit, but that will not be the case under working families tax credit. Every six months, employers will be reminded that their employees are beneficiaries of working families tax credit. That will undoubtedly increase stigma.
As we were beginning to realise during earlier consideration of amendments, the proposal will be intrusive. Employers will be placed, without wanting to be, in the same position of patronage as 19th-century mill owners in that they will know exactly what is going on in their employees' families. Employers and senior staff will know how many children there are in those families, who is sleeping with whom, who is about to get divorced, who is getting another job, who is engaged and who is moonlighting. The Chamber should not impose obligations on employers or invade the privacy of our citizens.
We know that the measure will impose on businesses set-up costs of £43 million a year, and recurring costs of £103 million a year. There are many reasons to oppose the Bill. Money will be frittered away further up the 1211 income scale. People on higher incomes will be pulled down into dependency. People will be stigmatised. There will be an enormous increase in the opportunity to commit fraud. The right hon. Member for Birkenhead (Mr. Field) said that the measure will offer a huge bonus to dishonesty. It will strengthen employers' hand over working people. It will draw employers into a web of dishonesty and corruption and reward those who pay low wages.
For all those reasons, we shall oppose the Third Reading. It is such a bad Bill that we shall support the reasoned amendment in the name of Liberal Democrat Members. We want to send a clear message to another place—which does not have the crowd of Back Benchers who will vote through any measure introduced by this Government—that this is a dangerous Bill which will cause problems for the liberty of our citizens and impose burdens on our businesses. It will require intense scrutiny and amendment, and we hope that it will not return from another place too soon.
§ Mrs. Louise Ellman (Liverpool, Riverside)The Bill must be supported because it is a significant step towards alleviating poverty by giving help to working families on low incomes in a way that removes stigma. The first and foremost thing to note about the Bill is that it will assist more people. In fact, 400,000 additional families in need with children will be assisted by it.
The Bill is part of an important package of help which increases child benefit by record amounts and to record levels, and which introduces a national minimum wage. Taken together, that package means that there is now, or there will be, a guarantee of a minimum income to working families of at least £200 a week, and no family earning less than £235 a week will have to pay tax. The package is a significant move away from the disgrace of families working for low pay being required to pay tax.
Child care tax credit is an important part of the Bill. It delivers real and significant benefits of up to £100 a week for the first child and up to £150 for two children, and more than that. These elements put together—significant cash support for families with low income and significant assistance with child care—mean that the Bill will be delivering real and significant help to those who need it most. Indeed, it has been calculated that the average family receiving support through these measures will be about £17 a week better off. That is real assistance which will make a real difference.
According to the Library, it is estimated that there will be an increase in take-up by families of about 27 per cent., and for disabled people an increase of between 10 and 15 per cent. That is extremely important in terms of increased benefits for those already receiving them at a lower level, and important for those who are not receiving benefit now but who will be able to receive their credits through the new system.
The method of payment is also important and part of the new move by the Government to recognise support for those in need as a matter of right and to try to remove stigma as far as it is possible to do so. That is what lies behind the policy direction in favour of tax credits rather than benefit.
The suggestion that there should be tax credits comes from the report on tax and benefit systems by the tax and benefits task force, which was chaired by Martin Taylor 1212 and which considered these matters in depth. The decision to go ahead with tax credits in this instance stemmed from that report.
It is important that work be rewarded, that it be seen to pay and that it does pay. The linking of credit with work, particularly work that is lower paid, is extremely important. It is important, too, that the minimum wage is part of the package. I note that the Conservatives opposed the minimum wage as much as they oppose the tax credit system.
I have listened this evening, and before in Committee, to the views expressed by Opposition Members. I say to the Conservatives that I rather think that they protest too much. I feel that they shed crocodile tears when they express their concerns about how the scheme will be implemented and how they think it will make things worse, along with their concerns for business. That is rather hard to swallow from the Conservative party, which when in government cut the standard of living of those who needed help most and rewarded most those who needed help least.
Conservatives tell us that they have decided to repent of their past. Perhaps their statements now, and even those before their public pronouncements of repentance in Committee, are part of their effort to reconstruct the past and become new people and a new party. I doubt very much whether they will be successful in that effort.
The Conservatives should remember the Lawson Budget of 1988—the famous tax-cutting Budget—as a result of which 50 per cent. of the tax cuts went to the richest 10 per cent. of the population, and compare it with what has happened in the first three Budgets of the Labour Government. The main beneficiaries have been the bottom 5 per cent. of the population—a significant difference which, perhaps, marks out the two Governments.
The Liberal Democrats seem to have got caught up in their own cleverness. It was not long ago that the attempt to unify tax and benefit was a Liberal Democrat policy. It was seen as the way forward, by removing stigma from giving support to those who needed it. However, as soon as there is a proposal to move forward on tax credits, the Liberal Democrats, so anxious to find something wrong with almost everything that the Government do, align themselves with the Conservative party to vote against it. Not only are the Liberal Democrats not to be trusted; they cannot see where they are heading.
The Bill is greatly to be welcomed. It is part of a significant package of support for those who need it most, especially working families on low pay. It rewards work for low pay and provides support in a way that is stigma-free, will increase up-take and brings benefit in the form of credits that translate into cash. It provides support for child care in a way that will change people's lives for the better.
I hope that the Bill is the first in a series of measures that will be introduced in future years to show the Government's concern for those who are struggling, often against the odds, to earn their living and to build a good life for their family. We must support the families who struggle day by day in work to make life better for themselves and their children.
1213 It is to the shame of the Conservatives that they oppose the Bill, just as they opposed the minimum wage. I wonder whether they also oppose the increase in child benefit, as it is so contrary to what they did when they were in office—but I notice that they are rather silent.
The Bill is part of the change of tone and the change in reality that the Government will bring about through help for those who need it most, support for those in work, support for families and support for children.
§ Mr. WebbI beg to move,
That this House, whilst welcoming additional money for lower paid workers and for disabled people, declines to give a Third Reading to the Tax Credits Bill because it considers the proposed Working Families' Tax Credit to represent a highly inefficient way of spending public money; believes that the Government has provided no evidence that paying the credit through the paypacket will bring benefits commensurate with the £100 million annual cost which will be imposed on businesses; believes that payment through the paypacket will adversely affect recipients at times of family or job change and will increase the scope for fraud; believes that the Bill represents a missed opportunity to tackle the particular incentive problems faced by low-paid homebuyers; and believes that the proposed childcare tax credit is poorly targeted.I shall begin by responding to some of the points made by the hon. Member for Liverpool, Riverside (Mrs. Ellman). She said that in the past the Liberal Democrats and predecessor parties had supported tax credit schemes. Indeed we have, and if we were offered one, we might well support it.However, the Government's proposal, far from being a tax credit, is not even integrated into the PAYE tax code. It is simply social security as a line on a pay slip. It is in no sense integration of the income tax and social security systems. It is not a genuine tax credit scheme at all. The Government are famous for using labels that bear no relation to reality. That is why we oppose the Bill.
The hon. Lady opposed the Lawson Budget of 1988. She seemed to object to a 40p top rate of income tax and a 25p standard rate of income tax. Are we to infer that she will vote against the Chancellor next year, when he cuts the standard rate to 22p? Are we to infer that she has had a private audience with him, in which she told him that 40 per cent. is too low and that she wants it raised to 60 per cent., as it was before the 1988 Budget? I think not. The hon. Lady makes a cheap point about 1988, but has no desire to return to it.
§ Mrs. EllmanI am surprised that the hon. Gentleman thinks that it was a cheap point to emphasise that Conservative Budgets gave most to those who were already the best-off.
§ Mr. WebbI think that the hon. Lady was saying that there is something wrong with giving large tax cuts to those on the highest incomes, which is what the 1988 Budget did, but she has no proposals to reverse those measures.
I had hoped that the reasoned amendment would get me off the hook with my colleagues, but I have had some complaints. They have asked, "Why do we have to keep voting with the Tories all the time?" I said, "You don't have to worry. At 10 o'clock I am sure that we will be 1214 able to sort that out for you." I was rather taken aback, therefore, when the hon. Member for Brentwood and Ongar (Mr. Pickles) said that we will renew that close companionship at 10 o'clock. None the less, it is very welcome.
We covered some specific areas on Report, but in this more general discussion of the Bill I want to raise no fewer than half a dozen issues that remain outstanding following our deliberations and on which the Bill falls down. First, and most important, are the Bill's effects on children. All the rhetoric assumes that the Bill is good for children, but it will take money away from mothers and give it to fathers.
The Government keep assuring us that, somehow, that does not matter, but they have blown the gaff, for two reasons. First, I knew that if I tabled a question to the Treasury, I would receive a holding answer and then a further, rather evasive answer about a month later. Instead, I tabled a question to the Department of Social Security, which tends to answer questions. I am sure that it will get into trouble for that and will soon change things.
I asked why there is a presumption that child benefit will be paid to mothers rather than to fathers. The answer was that
where couples live at the same address a wife has priority over a husband".—[Official Report, 12 March 1999; Vol. 327, c. 392.]Why does the Department of Social Security presume that, in a couple, the wife should have priority over the husband? Because it knows that money is more likely to get through to the child if it goes to the mother. If that Department thinks that it is better for money to go to mothers rather than to fathers, why does not the Treasury think that? There is some disagreement, I feel—but it gets worse.Secondly, I was browsing through the Red Book, as one does. After browsing for some while and reaching page 68, I came across a rather astonishing diagnosis of where the Government are heading in the medium term with their tax credit strategy. They are moving from the rather messy system that they propose, involving child tax credits, child care tax credits, child benefit and the working families tax credit—no fewer than four different mechanisms for supporting low-paid families—to what they describe as a single, seamless system. That system is called—wait for it—an integrated child credit—but it gets worse.
The Red Book states:
Such an integrated child credit, for those in and out of work, could be paid to the main carer, complemented by an employment tax credit paid through the wage packet to working households, with or without children.In other words, the Government's big vision for the future is a world in which all the support for children goes not through the wage packet, but to the "main carer", which is as it should be. However, if that is where they are heading, and if that is desirable and for the benefit of children, why do we have to go through the messy business of taking the money from the mothers—and, hence, from the children—before giving it back to them?The Government have revealed their long-term strategy—I have a lot of sympathy with it, because the logic is that children should get the benefit of the money—but if that is where they are heading, why do not we move directly to such a system? Why do we have 1215 to take the money from the children in the first place? The prejudicing of children—the purse to wallet issue—causes grave concern.
The hon. Member for Brentwood and Ongar saved me a few moments by repeating my argument about the £900 million that currently goes to those couples in which the man is the principal breadwinner. A large chunk of that money will go to men rather than to women. The Child Poverty Action Group has been cited as a defender of the tax credit, but it does not like the requirement for money to go to fathers. It has recognised that the Government will steamroller the measure through, but it has said that there should be three safeguards.
First, both partners should be notified of the award. If only one partner claims it, both partners should have been told what is going on so that the mother at least has some opportunity to see the money. Secondly, the application form should be explicit about the implications of the choice—a person who has not signed the form will not get the cash. Thirdly, there should be clear rules for arbitrating disputes; I am still not convinced that we have them.
Given that the new Labour Government have more than 100 women Members of Parliament, it is bizarre that they should introduce a policy that will take money from women and give it to men, which will prejudice children. I find that astonishing.
The second issue is that of passported benefits, which the hon. Member for Brentwood and Ongar mentioned. This matter gets more bizarre by the minute. The Government have clearly not thought it through. At present, family credit and disability working allowance recipients are "passported" various benefits—low income benefits, social fund grants, and so forth.
We tried to find out from the Government what their plans are on this issue, so I rather foolishly tabled a question to the Treasury. On 16 February, I asked the Chancellor of the Exchequer to which passported benefits recipients of working families tax credit and disabled person's tax credit would be entitled. A few days later, I received the answer, "Wait a bit; we'll let you know." Two days ago, I finally received an answer. This is a classic example of Sir Humphrey-ese at work. It said:
The Government are committed to ensuring that Working Families Tax Credit … recipients who need it continue to receive the help provided by passported benefits".—[Official Report, 16 February 1999; Vol. 327, c.517.]Thus it will be those who need it who get it. Who are they? We do not know. The Paymaster General could not tell us, and when the hon. Member for Brentwood and Ongar intervened to say that disabled people were particularly concerned about health benefits, she said that the Government did not know who would get the tax credit.The Government have not decided—they are in discussion. When will they make up their minds? How long does it take them to decide those matters? They are embarrassed because in Committee I pointed out that if they passported everybody who was on family credit through to the working families tax credit, higher rate taxpayers would get social fund grants. That is absurd. The Government realise that it is absurd, but they have not thought of a way out of it. No doubt the benefit will cease to be automatic and there will be some sort of claims procedure which will wreck the take-up of those benefits. The whole business is a complete mess.
1216 The third substantive problem is the reform's failure to link in with the other bits of the tax and benefits system. The hon. Member for Riverside picked us up on not supporting a tax credit scheme. We have pressed for an integrated scheme, bringing all the taxes and benefits together, but this reform is piecemeal, which is why we object to it. Eventually, the working families tax credit will be part of a streamlined system, and that may well be welcomed, but, as we heard on Report, at the moment there is no integration with housing benefit and the Budget has added yet more complexity, with the new child care tax credit.
If the Government had not been in such a hurry—the hallmark of this Bill is that it is hurried legislation—we could have had "the big vision". Why must we have bad interim policy? Why could not the Government have sat down and said, "It will take us another year to think this through, but we shall then go straight to a system that has uniform child support for those in and out of work, and in-work tax credits for adults"? Why do we have to go through bad legislation to get to a possibly better system?
The fourth issue is the disabled persons tax credit. I was going to call this the dog that did not bark, but if I may mix my metaphors, I shall call it the dog's breakfast that did not bark. The disabled persons tax credit is a laudable aim—helping disabled people who want to, to get back into work. How many extra people will be helped? The Government are fond of saying that a million disabled people want to get back to work, so how many extra people will the disabled person's tax credit help—500,000 or 100,000? No—6,000. That is pathetic.
I have a lot of respect for the Financial Secretary, but in Committee, she said:
We anticipate that 6,000 more people will be able to take up the credit—a not inconsiderable figure."—[Official Report, Standing Committee D, 11 February 1999; c. 188.]Dare I venture to suggest that it is a very inconsiderable figure?May I explain to the House how that happened? The Government were obsessed with family credit—with working families without disabilities—and they thought that the tax credit idea would be a good wheeze. Then they suddenly noticed a funny little bit of the system called disability working allowance, which has been a complete flop. I used to be a social researcher and some of my colleagues researched disability working allowance. At that stage, so few people were claiming the benefit that they interviewed everyone who received it. That is how small scale and ineffective it has been. Even now, only some 16,000 people receive it.
Essentially, disabled persons tax credit is an afterthought. It was not discussed in Committee because nobody really cares about it. It is a waste of time. Until the Government have a serious strategy for helping the million disabled people whom they say want to work, little gestures like this will be largely irrelevant.
The fifth issue, which has been discussed briefly, is fraud. The right hon. Member for Birkenhead (Mr. Field) made some telling points about that on Second Reading which I shall not repeat. The Government should design fraud out of the tax and benefits system. They should not design it in. They should not let money go through employer systems. We have heard that good employers—small firms—will be penalised by an administrative burden, but that bad employers will have a blank cheque for fraud.
1217 The final point in the litany involves married and cohabiting couples. It is not an issue that we have talked about much. The charity CARE—Christian Action, Research and Education—has written to hon. Members to raise one specific concern. I should be grateful if the Minister responded to the point when summing up. CARE has pointed out that a lone-parent family and a two-parent family on the same income and with the same child care costs receive the same amount of money, but that a two-parent family have an extra mouth to feed. There are additional costs.
The disabled persons tax credit recognises that. It has an additional credit for a second adult, but the working families tax credit does not. Why do the Government think that, of two families on exactly the same income and with the same costs, the one with an additional adult to feed has no need for additional working families tax credit? What is the rationale behind that?
I have a confession to make. Before we decided some weeks ago which way to vote on the whole Bill, the Liberal Democrats had a debate; I know that Labour Members may find that a strange concept. We had a difference of opinion and we had to reason it through. Some of my hon. Friends said, "We are vaguely in favour of such measures, so let us vote in favour." I said, "The measure is not what it seems. It is labelled a tax credit, but it is not." Payment through the pay packet, which is almost the only thing in the Bill, is the fundamental flaw and will do more damage than good.
During the many happy hours that we spent in Committee and in the House this afternoon, I have become more and more convinced that we did the right thing. So much of the good in the Bill, or at least so much of the good in the working families tax credit, which is all in regulations, could have been achieved by reforming family credit. For lower tapers, use family credit. For higher credits, use family credit. To reform child care subsidies, use family credit. What is the one thing that the Bill does?—payment of credits through the pay packet, which, as we have heard, causes many problems.
The low paid need additional help and support. Our reasoned amendment welcomes that, but the Bill is riddled with holes. It is the sign of a Bill which has been put together in a hurry. Bills that are put together in a hurry Governments repent of at their leisure.
§ Miss McIntosh1 put on record my opposition to a bad Bill, which should be opposed. It is bad for families and for business and it could prove open to fraud.
I regret the tendency in the Bill and in other measures that the Government are seeking to put through to put details in secondary legislation, rather than primary legislation. That is a negative tendency. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) referred to the specific burden on agriculture that will arise from the proposals. I regret that his plea for special consideration to be given to that industry appears to have fallen on deaf ears.
I regret, too, that the Government have rejected the proposed exemption for smaller firms. The administrative burden of paying credit and claiming funds in advance 1218 will be great. The Government recognise that and claim to be business friendly, but they have rejected the possibility of an exemption from administering the credit for very small firms.
The Government fail to realise that the working families tax credit on its own will be very bad for business, but the cumulative effect of the tax credit, the minimum wage and the working time directive will be especially bad for all British businesses. The burdens of all three will hit small businesses particularly hard.
In my constituency, the fact that those eligible for tax credits have to travel particularly long distances will be compounded by the hike in petrol and diesel prices. I refer to the remarks by my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) in an intervention. Constituencies such as Vale of York and Westmorland and Lonsdale are deeply rural, with sparsely populated areas for the most part. In many of those areas, there is virtually no public transport. How are my constituents supposed to welcome the tax credit, when most of the benefit will be soaked up by the fuel increase?
Yet again the Government seem incapable of considering how to deliver policies in rural areas. If I have touched a chord with the Financial Secretary, perhaps she will deal with that point, if no other.
I want to talk about fraud, and to associate myself particularly with the Liberal amendment. I congratulate the hon. Member for Northavon (Mr. Webb) on an eloquent, well-thought-out and well-researched speech. On the question of fraud, Ministers must balance the options: they must decide whether to place the emphasis on prompt payment or on rigorous checking of eligibility. Regrettably, the Paymaster General has failed to put my mind at rest, and to allay my fear that the potential for fraud will be greater under the working families tax credit than under family credit.
The proposed arrangement for payment of tax credits is highly complex, whereas the arrangement for family credit is relatively simple. As has been said, the question of passporting of various credits and benefits has not yet been clarified, which is particularly regrettable given that we are now on Third Reading. All that complexity will increase the likelihood of fraud in the administration of tax credits.
I still feel the concern that I expressed on Second Reading about the potential for breaches of confidentiality between employer and employee. The Bill could jeopardise previously good employer-employee relations. In numerous briefings to us, employees of large, medium-sized and small firms have expressed their opinions forcefully. Employers would prefer not to become too involved in employees' personal situations, as we have heard. Payments of tax credits through pay packets will reveal to employers exactly who on their payroll is receiving such credits. Previously, that information remained confidential.
For those and many other reasons, I oppose the Bill, and I hope that the House will reject it.
§ Mr. CollinsIt is a tribute to the Paymaster General that I overheard her saying earlier that she is a fan of "Star Trek". She must recognise, however, that the Bill is in no way logical, Captain.
1219 My hon. Friends have explained the problem clearly, but it is important for us to understand exactly why the Government are introducing the changes. The reason is simple. The Government must fulfil a difficult pledge—to try to reduce the nation's welfare bill. The Bill will enable them to shift a chunk of social security spending from the Department of Social Security's budget to other measures, such as tax changes. As the hon. Member for Northavon (Mr. Webb) said, that does not mean that the money is suddenly a tax credit; it will still be social security expenditure, but it will not be social security expenditure honestly admitted and honestly declared.
The Bill also enables the Government to claim that they are making progress with their delivery of the Prime Minister's pledge not to increase taxes. They will try to say that this social security expenditure is a negative tax change, that it is therefore a tax reduction, and that they can offset it against all the tax increases that they have announced in successive Budgets. They will then be able to say that they have delivered on their pledge not to increase the overall tax burden. That is not a pledge on which they will deliver, even with these funny figures, but I must say that I admire their cheek in trying.
The Government made another key economic pledge: they promised faithfully that they would not seek to impose additional burdens on business. We were told that that was central to the new Labour project, that the Government had recognised the value of enterprise, and that they were now the pro-business party—the party in which British entrepreneurs of all sizes could place absolute confidence. But what is the one clear effect of the Bill? It will transfer a £100 million administrative burden on to British business. That is the Government's figure. It is their own assessment of the cost. However—on the basis of most of the Government's own assessments of the likely implications of their policies on British business—that figure is likely not to be accurate but to be a gross underestimate.
What do we know about the Bill? Ministers tell us that the staff—the current family credit unit—who will be working on the tax credit are extremely hard-working and dedicated. I agree with them on that. I have no doubt that those who are currently working on family credit and will seek to implement the working families tax credit are extremely hard-working officials, and that they will seek to accomplish their task in the best way possible. However, let us remember the time scale in which they are being asked to operate. As the Paymaster General said in her speech, the new system is to be fully up and running in April 2000.
I know that hon. Members, like the rest of the nation, are excited about the on-rush of the millennium. Nevertheless, it is only one day since the House had a statement on the implications of the millennium bug for all of British business and all of British public service. The bug is likely to kick in at the end of December 1999.
One does not have to be a master of mental arithmetic of such great dimensions—a day or so ago, one could have shown the Secretary of State for Education a thing or two on the "Today" programme—to work out that April 2000 is only three months after 31 December 1999. Yet that is precisely the time scale in which Ministers propose to move a huge, complicated system from one part of the civil service to another.
1220 Is the system being moved from a part of the civil service in which there is a reputation for brilliance in computer management? No. The NIRS2 computer is not working very well.
§ Mr. PicklesIs my hon. Friend aware that, in the Standing Committee considering the Welfare Reform and Pensions Bill, the Minister of State, Department of Social Security was asked if he could give a cast-iron guarantee that the computer system would be sufficient to cope with stakeholder pensions—which are being introduced in a similar time frame—and refused to give such an undertaking?
§ Mr. CollinsI am shocked by that news, although—given what the Government have been up to—I am not surprised by it.
Today, another matter has caused me shock, surprise and not a little disappointment. Hon. Members have been told that the Bill is flagship legislation of which the Government are hugely proud and the Chancellor is the father. One might therefore have thought that the Bill would cause Labour Members to break down the doors of the Chamber in their eagerness to participate in our debates on it. For most of Third Reading, however, only two or three Labour Back Benchers have been in the Chamber—although I am delighted to see that that number has now rocketed to five.
For much of the debate, more Conservative Back Benchers, and even more Liberal Democrat Back Benchers, have been in the Chamber than Labour Back Benchers. There are 418 Labour Members—at least on the payroll. The Fees Office is paying 418 Labour Members of Parliament, but where have they all been during our consideration of this flagship Bill? We heard one speech by a Labour Back Bencher, and a handful of Labour Members wandered into the Chamber.
Could it be that Labour Members are embarrassed by the Bill? If so, they have many reasons to be embarrassed by it. It is a bad Bill which will impose burdens on business, although Ministers say that they do not want to do that. It will betray the interests of low-paid employees by flagrantly violating any possible interpretation of confidentiality. It will also break successive Labour pledges not to increase the tax burden, and to reduce genuine welfare bills. The Government are really only in the business of performing the odd accountancy fiddle.
I am sure that, at 10 o'clock, my hon. Friends—having listened carefully to the debate, and participated in it in much greater numbers than Labour Back Benchers, who call the Bill flagship legislation—will, with one heart and one mind, vote against the Bill.
§ Mr. GibbThe Bill is an act of wanton vandalism that even the Klingons would be proud of, if I have to continue the wretched television analogy. The Government have replaced family credit, which is a highly successful benefit with a high take-up rate of 72 per cent., rising to 85 per cent. by expenditure and 91 per cent. for lone parents—a relatively simple benefit, as my hon. Friend the Member for Vale of York (Miss McIntosh) has said, which is paid promptly and usually to the mother—with the more complex working families tax credit. The disability working allowance is being replaced by the disabled persons tax credit.
1221 The Government call it a tax credit, but it is nothing of the kind. It is simply a benefit paid through the payroll. Huge burdens will be imposed on businesses, which, from next April, will have to administer the benefit, as my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins) has just said. It will cost business £103 million a year to run. It will increase the stigma for those claiming it, who will find that their work colleagues suddenly become aware of the fact that they are claiming a state benefit—a fact which most proud people wish to keep confidential. We believe that such matters should be confidential. Designing a system that is likely to undermine that principle is heartless, uncaring and, I believe, an example of new Labour dogma stamping on the feelings of people who are struggling hard to make ends meet.
The benefit is hugely costly. The Government's figures show that it will cost £1.5 billion a year. The Bank of England calculates that it will generate no more than 40,000 jobs, at a cost of £35,000 per job. The Institute for Fiscal Studies has calculated that, rather than the Government estimate of £200 million, the child care element will cost £4 billion as people are given a cash incentive by the Government to move their children from informal child care arrangements to formal, paid child care.
In Committee and on Report, no statements were forthcoming from Ministers to reassure hon. Members and those outside the House that the forecast higher public expenditure would not be necessary. Today, the Government have added a new clause to the Bill providing for yet another type of paid child care for those aged eight to 14, making it more likely still that informal arrangements will be replaced by paid arrangements.
The scope for fraud is colossal. That was the principal concern of the right hon. Member for Birkenhead (Mr. Field), who has said that the whole venture was fraught with great dangers and offered huge bonuses for dishonesty. He would have been a welcome member of the Standing Committee, had the tight grip of the Government Whips Office allowed him to be. Labour members of the Social Security Committee would also have been welcome, but none was appointed. Perhaps they were too busy drafting and redrafting their reports.
The Bill spawns reams of regulations with which business will have to deal. Without the regulations and the glossy document from the Revenue, one would not even be able to work out the structure of the benefit from reading the Bill.
The Government seem determined that as many people as possible should have the benefit paid through the pay packet, despite the associated problems of stigma. That is why they failed to support any of our amendments that would have given people a choice of how to receive the payment. As an inevitable consequence of that determination, there will be a huge shift of benefit payments from purse to wallet. As the Minister knows, there are currently 300,000 couples in which the man is the principal breadwinner, receiving a total of £900 million in family credit. Most of that money will shift from purse to wallet. That is an important concern. 1222 As the Joseph Rowntree Trust has concluded, money paid to the spouse with care is more likely to be spent on children.
It is odd that a Government elected on a pledge to reduce social security spending should introduce a Bill that will add £1.5 billion to social security spending on the Government's figures—£5.5 billion on the IFS figures. Hiding those numbers in an obscure line in the Red Book does not change the fact that it is a spending increase.
It is odd that a Government who pledged to reduce dependency should propose a Bill that will enable 400,000 more families, who were previously regarded as too wealthy to qualify, to claim benefits. The hon. Member for Liverpool, Riverside (Mrs. Ellman) trumpets that figure, but it is odd that a Government who pledged to reduce benefit dependency and social security spending should extend the availability of benefit up the income scale to families on £38,000.
At the lower end of the income scale, there is real concern that benefits that used to flow automatically to families who qualified for family credit—such as free prescription charges, eye tests, dental work and social fund grants—may not continue to do so when those families qualify for working families tax credit and disabled persons tax credit. Astonishingly, the Paymaster General still cannot give an answer on that. To extend benefit up the income scale, the Government are cutting benefits at the bottom of that scale.
The Government talk about wanting to improve productivity. If they read the McKinsey report on UK productivity—instead of commissioning more reports—they would realise that the biggest cause of the difference between our productivity rate and that of the United States is that, in the US, small businesses are exempt from the majority of the most burdensome regulation. Yet this Government keep piling it on. The regulatory impact assessment calculates that the Bill will cost business £103 million each and every year—and that will be an underestimate of the real cost.
The Bill will do nothing to achieve any of the objectives set by the Government. It will increase the stigma of claiming in-work benefits, rather than reduce it. It will—on the basis of the experience in Canada—increase the likelihood of fraud, not reduce it. It will increase dependency, not reduce it. It will increase social security spending, not reduce it. It will result in less money being spent on children, not more money. It will increase the burdens on business and thus hinder employment opportunities, not create them.
Through the Bill, the Government will replace a successful in-work benefit, family credit, with one that they insist, for dogmatic, ill-thought-through and misguided reasons, should be paid through the payroll. That will cause discomfort and embarrassment for many thousands of lone parents and working couples on low incomes, struggling to bring up a family in difficult circumstances. It is a bad and uncaring Bill, which I urge the House to oppose.
§ Mrs. RocheThis has been an enjoyable and lively debate. Such was the good feeling in Committee that even during the speeches of the hon. Member for Bognor Regis 1223 and Littlehampton (Mr. Gibb), I never thought, "Beam me up, Scotty." I thank Members from both sides of the House for their contributions tonight.
The working families tax credit and the disabled persons tax credit are key elements of the Government's strategy to make work pay and to help people move from welfare to work. The present system is failing hundreds of thousand of families. Moving into a job from unemployment can often leave people little better off, and people cannot improve their income by working more because of absurd high marginal tax rates.
The system fails to recognise properly the in-work costs of child care. Under the Conservative Government, there was a growing division between working and nonworking families. The Government think that one of the best ways of tackling poverty is to help people into jobs, and that is why we are reforming the tax and benefits system. By making work pay and by helping people move from welfare to work, we are starting to tackle the legacy of failure that we were left by the Conservative party, as was pointed out, in an excellent speech, by my hon. Friend the Member for Liverpool, Riverside (Mrs. Ellman).
As a tax credit—rather than as family credit paid by the Inland Revenue—the measure will demonstrate clearly, through the pay packet, the rewards of work. It will remove the stigma associated with claiming benefit.
We do not simply talk about welfare reform as the previous Government did: we are actually delivering. From what he said, the hon. Member for Brentwood and Ongar (Mr. Pickles) and I might have been in two different places when my right hon. Friend the Chancellor delivered the Budget last week. More than 20 million households will gain. On average, families with children will be £740 a year better off; and 700,000 children will be lifted out of poverty.
§ Mrs. RocheI will not give way as I have very limited time, but I am delighted to welcome the hon. Gentleman to the Chamber. It is very kind of him to join us.
The hon. Members for Brentwood and Ongar, for Westmorland and Lonsdale (Mr. Collins) and for Northavon (Mr. Webb) spoke about the transfer from purse to wallet. That will not happen. Couples will be able to choose which partner receives the credit. It is important to remember that, in the majority of cases, purse to wallet transfers are not even an issue.
Fraud has rightly been mentioned. It is the reason for our introducing new powers for the Inland Revenue to get the information that it needs to verify claims and to recover overpayments through the tax system, as well as directly, and new penalties to deter non-compliance and fraud.
My hon. Friend the Member for Riverside rightly drew attention to the Liberal Democrat U-turn on tax credits. That ought not to come as a surprise to anyone, because in Committee the hon. Member for Northavon, very honestly, said:
I have an alarming tendency to believe the last person I heard. That is probably why I am in the party I am".—[Official Report, Standing Committee D, 9 February 1999; c. 113.]It should also come as no surprise that the Tories are supporting the Liberal Democrats tonight, in a Lib-Tory pact.1224 The hon. Member for Vale of York (Miss McIntosh) spoke about regulation. We will take absolutely no lessons from the Conservative party. Before the general election, they removed 3,000 regulations from business; but they introduced 10,000 new ones.
The hon. Member for Bognor Regis and Littlehampton spoke, rightly, about the American example, but he failed to say that in the United States there is a minimum wage, which is good not only for the employer but for employees and everyone else, as it increases productivity and gives everyone a stake.
The Bill is a major reform of the tax and benefit system. It will deliver real benefits to those families who most need help, with a minimum income guarantee and proper child care support. [Interruption.] I notice that Liberal Democrats are sneering, just as the hon. Member for Northavon sneered at the tax credit for those with a disability. We are determined to deliver for people with a disability.
The Bill is an excellent piece of legislation and I commend it to the House.
§ Question put, That the amendment be made:—
§ The House divided: Ayes 164, Noes 295.
1227| Division No. 116] | [9.59 pm | |
| AYES | ||
| Allan, Richard | Evans, Nigel | |
| Ancram, Rt Hon Michael | Faber, David | |
| Arbuthnot, Rt Hon James | Fabricant, Michael | |
| Ashdown, Rt Hon Paddy | Fallon, Michael | |
| Atkinson, David (Bour'mth E) | Fearn, Ronnie | |
| Baker, Norman | Forth, Rt Hon Eric | |
| Ballard, Jackie | Foster, Don (Bath) | |
| Beggs, Roy | Fowler, Rt Hon Sir Norman | |
| Bercow, John | Fox, Dr Liam | |
| Beresford, Sir Paul | Fraser, Christopher | |
| Body, Sir Richard | Garnier, Edward | |
| Boswell, Tim | George, Andrew (St Ives) | |
| Bottomley, Rt Hon Mrs Virginia | Gibb, Nick | |
| Brake, Tom | Gill, Christopher | |
| Breed, Colin | Gorman, Mrs Teresa | |
| Brooke, Rt Hon Peter | Gorrie, Donald | |
| Browning, Mrs Angela | Gray, James | |
| Bruce, Ian (S Dorset) | Greenway, John | |
| Burnett, John | Grieve, Dominic | |
| Burns, Simon | Hague, Rt Hon William | |
| Burstow, Paul | Hamilton, Rt Hon Sir Archie | |
| Butterfill, John | Hammond, Philip | |
| Cash, William | Hancock, Mike | |
| Chapman, Sir Sydney (Chipping Barnet) | Harris, Dr Evan | |
| Harvey, Nick | ||
| Chidgey, David | Hayes, John | |
| Chope, Christopher | Heald, Oliver | |
| Clappison, James | Heathcoat—Amory, Rt Hon David | |
| Clark, Rt Hon Alan (Kensington) | Horam, John | |
| Clark, Dr Michael (Rayteigh) | Howard, Rt Hon Michael | |
| Clifton—Brown, Geoffrey | Howarth, Gerald (Aldershot) | |
| Collins, Tim | Hughes, Simon (Southwark N) | |
| Colvin, Michael | Hunter, Andrew | |
| Cormack, Sir Patrick | Jack, Rt Hon Michael | |
| Cotter, Brian | Jackson, Robert (Wantage) | |
| Cran, James | Jenkin, Bernard | |
| Curry, Rt Hon David | Johnson Smith, Rt Hon Sir Geoffrey | |
| Davis, Rt Hon David (Haltemprice & Howden) | ||
| Kennedy, Charles (Ross Skye) | ||
| Day, Stephen | Key, Robert | |
| Donaldson, Jeffrey | Kirkbride, Miss Julie | |
| Dorrell, Rt Hon Stephen | Kirkwood, Archy | |
| Duncan, Alan | Laing, Mrs Eleanor | |
| Duncan Smith, Iain | Lait, Mrs Jacqui |
| Lansley, Andrew | St Aubyn, Nick |
| Leigh, Edward | Sanders, Adrian |
| Letwin, Oliver | Sayeed, Jonathan |
| Lewis, Dr Julian (New Forest E) | Shephard, Rt Hon Mrs Gillian |
| Lidington, David | Smith, Sir Robert (W Ab'dns) |
| Lilley, Rt Hon Peter | Smyth, Rev Martin (Belfast S) |
| Livsey, Richard | Soames, Nicholas |
| Lloyd, Rt Hon Sir Peter (Fareham) | Spelman, Mrs Caroline |
| Loughton, Tim | Spicer, Sir Michael |
| Luff, Peter | Steen, Anthony |
| Lyell, Rt Hon Sir Nicholas | Streeter, Gary |
| McIntosh, Miss Anne | Swayne, Desmond |
| Maclean, Rt Hon David | Syms, Robert |
| McLoughlin, Patrick | Tapsell, Sir Peter |
| Madel, Sir David | Taylor, Ian (Esher & Walton) |
| Malins, Humfrey | Taylor, Rt Hon John D (Strangford) |
| Maples, John | Taylor, John M (Solihull) |
| Maude, Rt Hon Francis | Taylor, Matthew (Truro) |
| Mawhinney, Rt Hon Sir Brian | Taylor, Sir Teddy |
| May, Mrs Theresa | Thompson, William |
| Michie, Mrs Ray (Argyll & Bute) | Tonge, Dr Jenny |
| Moore, Michael | Tredinnick, David |
| Moss, Malcolm | Trend, Michael |
| Nicholls, Patrick | Tyler, Paul |
| Norman, Archie | Tyrie, Andrew |
| Oaten, Mark | Wallace, James |
| Öpik, Lembit | Wardle, Charles |
| Page, Richard | Waterson, Nigel |
| Paice, James | webb, Steve |
| Paterson, Owen | Whittingdale, John |
| Pickles, Eric | Wilkinson, John |
| Prior, David | Willetts, David |
| Randall, John | Winterton, Mrs Ann (Congleton) |
| Redwood, Rt Hon John | Winterton, Nicholas (Macclesfield) |
| Rendel, David | Woodward, Shaun |
| Robathan, Andrew | Yeo, Tim |
| Robertson, Laurence (Tewk'b'ry) | Young, Rt Hon Sir George |
| Roe, Mrs Marion (Broxbourne) | |
| Rowe, Andrew (Faversham) | Tellers for the Ayes: |
| Ruffley, David | Mr. Paul Keetch and Mr. Phil Willis. |
| Russell, Bob (Colchester) | |
| NOES | |
| Abbott, Ms Diane | Bradshaw, Ben |
| Adams, Mrs Irene (Paisley N) | Brinton, Mrs Helen |
| Ainger, Nick | Brown, Rt Hon Nick (Newcastle E) |
| Ainsworth, Robert (Cov'try NE) | Brown, Russell (Dumfries) |
| Allen, Graham | Browne, Desmond |
| Armstrong, Ms Hilary | Buck, Ms Karen |
| Ashton, Joe | Burgon, Colin |
| Atherton, Ms Candy | Butler, Mrs Christine |
| Atkins, Charlotte | Caborn, Richard |
| Austin, John | Campbell, Alan (Tynemouth) |
| Banks, Tony | Campbell, Mrs Anne (C'bridge) |
| Barnes, Harry | Campbell, Ronnie (Blyth V) |
| Barron, Kevin | Canavan, Dennis |
| Battle, John | Caplin, Ivor |
| Bayley, Hugh | Casale, Roger |
| Beard, Nigel | Caton, Martin |
| Beckett, Rt Hon Mrs Margaret | Chapman, Ben (Wirral S) |
| Begg, Miss Anne | Chaytor, David |
| Bell, Stuart (Middlesbrough) | Chisholm, Malcolm |
| Benn, Rt Hon Tony | Clapham, Michael |
| Bennett, Andrew F | Clark, Rt Hon Dr David (S Shields) |
| Benton, Joe | Clark, Dr Lynda (Edinburgh Pentlands) |
| Bermingham, Gerald | |
| Berry, Roger | Clark, Paul (Gillingham) |
| Best, Harold | Clarke, Charles (Norwich S) |
| Blackman, Liz | Clarke, Rt Hon Tom (Coatbridge) |
| Blears, Ms Hazel | Clarke, Tony (Northampton S) |
| Blizzard, Bob | Clelland, David |
| Blunkett, Rt Hon David | Clwyd, Ann |
| Borrow, David | Coaker, Vernon |
| Bradley, Keith (Withington) | Coffey, Ms Ann |
| Bradley, Peter (The Wrekin) | Coleman, Iain |
| Connarty, Michael | Jackson, Helen (Hillsborough) |
| Cook, Frank (Stockton N) | Jamieson, David |
| Corbett, Robin | Jenkins, Brian |
| Corbyn, Jeremy | Johnson, Alan (Hull W & Hessle) |
| Corston, Ms Jean | Johnson, Miss Melanie (Welwyn Hatfield) |
| Cousins, Jim | |
| Cox, Tom | Jones, Helen (Warrington N) |
| Cranston, Ross | Jones, Ms Jenny(Wolverh'ton SW) |
| Crausby, David | |
| Cryer, Mrs Ann (Keighley) | Jones, Jon Owen (Cardiff C) |
| Cummings, John | Jones, Dr Lynne (Selly Oak) |
| Cunliffe, Lawrence | Jones, Martyn (Clwyd S) |
| Cunningham, Jim (Cov'try S) | Keeble, Ms Sally |
| Dalyell, Tam | Keen, Alan (Feltham & Heston) |
| Darling, Rt Hon Alistair | Keen, Ann (Brentford & Isleworth) |
| Darvill, Keith | Kelly, Ms Ruth |
| Davies, Rt Hon Denzil (Llanelli) | Kemp, Fraser |
| Davis, Terry (B'ham Hodge H) | Kennedy, Jane (Wavertree) |
| Dawson, Hilton | Kidney, David |
| Dean, Mrs Janet | Kilfoyle, Peter |
| Denham, John | King, Andy (Rugby & Kenilworth) |
| Dismore, Andrew | King, Ms Oona (Bethnal Green) |
| Dobbin, Jim | Kingham, Ms Tess |
| Donohoe, Brian H | Ladyman, Dr Stephen |
| Doran, Frank | Lawrence, Ms Jackie |
| Dowd, Jim | Laxton, Bob |
| Eagle, Angela (Wallasey) | Leslie, Christopher |
| Edwards, Huw | Levitt, Tom |
| Efford, Clive | Lewis, Terry (Worsley) |
| Ellman, Mrs Louise | Linton, Martin |
| Ennis, Jeff | Livingstone, Ken |
| Etherington, Bill | Lloyd, Tony (Manchester C) |
| Ewing, Mrs Margaret | Lock, David |
| Fisher, Mark | Love, Andrew |
| Fitzpatrick, Jim | McAllion, John |
| Fitzsimons, Lorna | McAvoy, Thomas |
| Flint, Caroline | McCabe, Steve |
| Flynn, Paul | McCafferty, Ms Chris |
| Follett, Barbara | McDonagh, Siobhain |
| Foster, Rt Hon Derek | Macdonald, Calum |
| Foster, Michael Jabez (Hastings) | McDonnell, John |
| Foster, Michael J (Worcester) | McFall, John |
| Foulkes, George | McGuire, Mrs Anne |
| Fyfe, Maria | McIsaac, Shona |
| Galloway, George | McNamara, Kevin |
| Gerrard, Neil | McNulty, Tony |
| Gibson, Dr Ian | Mactaggart, Fiona |
| Gilroy, Mrs Linda | McWalter, Tony |
| Goggins, Paul | Mahon, Mrs Alice |
| Golding, Mrs Llin | Mallaber, Judy |
| Griffiths, Jane (Reading E) | Marsden, Gordon (Blackpool S) |
| Griffiths, Nigel (Edinburgh S) | Marsden, Paul (Shrewsbury) |
| Griffiths, Win (Bridgend) | Marshall, David (Shettleston) |
| Grocott, Bruce | Marshall, Jim (Leicester S) |
| Grogan, John | Martlew, Eric |
| Hall, Patrick (Bedford) | Maxton, John |
| Hanson, David | Meacher, Rt Hon Michael |
| Harman, Rt Hon Ms Harriet | Meale, Alan |
| Healey, John | Merron, Gillian |
| Henderson, Ivan (Harwich) | Michie, Bill (Shef'ld Heeley) |
| Hepburn, Stephen | Moonie, Dr Lewis |
| Heppell, John | Moran, Ms Margaret |
| Hewitt, Ms Patricia | Morgan, Alasdair (Galloway) |
| Hill, Keith | Morgan, Ms Julie (Cardiff N) |
| Hoey, Kate | Motley, Elliot |
| Home Robertson, John | Morris, Ms Estelle (B'ham Yardley) |
| Hoon, Geoffrey | Mountford, Kali |
| Hope, Phil | Mullin, Chris |
| Hopkins, Kelvin | Murphy, Denis (Wansbeck) |
| Howarth, George (Knowsley N) | Murphy, Jim (Eastwood) |
| Hoyle, Lindsay | Murphy, Rt Hon Paul (Torfaen) |
| Humble, Mrs Joan | Naysmith, Dr Doug |
| Hurst, Alan | Norn's, Dan |
| Hutton, John | O'Brien, Bill (Normanton) |
| Iddon, Dr Brian | O'Brien, Mike (N Warks) |
| Jackson, Ms Glenda (Hampstead) | O'Hara, Eddie |
| Olner, Bill | Starkey, Dr Phyllis |
| O'Neill, Martin | Steinberg, Gerry |
| Organ, Mrs Diana | Stevenson, George |
| Palmer, Dr Nick | Stewart, David (Inverness E) |
| Pearson, Ian | Stewart, Ian (Eccles) |
| Pickthall, Colin | Stinchcombe, Paul |
| Pike, Peter L | Stoate, Dr Howard |
| Plaskitt, James | Stott, Roger |
| Pollard, Kerry | Stringer, Graham |
| Pond, Chris | Stuart, Ms Gisela |
| Pope, Greg | Sutcliffe, Gerry |
| Powell, Sir Raymond | Taylor, Rt Hon Mrs Ann(Dewsbury) |
| Prentice, Ms Bridget (Lewisham E) | |
| Prentice, Gordon (Pendle) | Temple—Morris, Peter |
| Primarolo, Dawn | Thomas, Gareth (Clwyd W) |
| Prosser, Gwyn | Thomas, Gareth R (Harrow W) |
| Purchase, Ken | Todd, Mark |
| Quin, Rt Hon Ms Joyce | Touhig, Don |
| Rapson, Syd | Trickett, Jon |
| Raynsford, Nick | Turner, Dennis (Wolverh'ton SE) |
| Reid, Rt Hon Dr John (Hamilton N) | Turner, Dr Desmond (Kemptown) |
| Roche, Mrs Barbara | Turner, Dr George (NW Norfolk) |
| Rooney, Terry | Twigg, Derek (Halton) |
| Ross, Ernie (Dundee W) | Twigg, Stephen (Enfield) |
| Roy, Frank | Vaz, Keith |
| Ruane, Chris | Vis, Dr Rudi |
| Ruddock, Joan | Walley, Ms Joan |
| Russell, Ms Christine (Chester) | Ward, Ms Claire |
| Savidge, Malcolm | Wareing, Robert N |
| Sawford, Phil | Watts, David |
| Sheerman, Barry | White, Brian |
| Sheldon, Rt Hon Robert | Wicks, Malcolm |
| Simpson, Alan (Nottingham S) | Williams, Alan W (E Carmarthen) |
| Singh, Marsha | Winnick, David |
| Skinner, Dennis | Winterton, Ms Rosie (Doncaster C) |
| Smith, Rt Hon Andrew (Oxford E) | Wood, Mike |
| Smith, Angela (Basildon) | Worthington, Tony |
| Smith, Miss Geraldine (Morecambe & Lunesdale) | Wright, Anthony D (Gt Yarmouth) |
| Wright, Dr Tony (Cannock) | |
| Smith, Jacqui (Redditch) | Wyatt, Derek |
| Smith, Llew (Blaenau Gwent) | |
| Soley, Clive | Tellers for the Noes: |
| Southworth, Ms Helen | Mr. Kevin Hughes and Mr. Clive Betts. |
| Squire, Ms Rachel |
§ Question accordingly negatived.
§ Main Question put forthwith, pursuant to Standing Order No. 62 (Amendment on Second or Third Reading);—
§ The House divided: Ayes 297, Noes 161.
1230| Division No.117] | [10.13 pm |
| AYES | |
| Abbott, Ms Diane | Bennett, Andrew F |
| Adams, Mrs Irene (Paisley N) | Benton, Joe |
| Ainger, Nick | Bermingham, Gerald |
| Ainsworth, Robert (Cov'try NE) | Berry, Roger |
| Allen, Graham | Best, Harold |
| Armstrong, Ms Hilary | Blackman, Liz |
| Ashton, Joe | Blears, Ms Hazel |
| Atherton, Ms Candy | Blizzard, Bob |
| Atkins, Charlotte | Blunkett, Rt Hon David |
| Austin, John | Borrow, David |
| Banks, Tony | Bradley, Keith (Withington) |
| Barnes, Harry | Bradley, Peter (The Wrekin) |
| Barron, Kevin | Bradshaw, Ben |
| Battle, John | Brinton, Mrs Helen |
| Bayley, Hugh | Brown, Rt Hon Nick (Newcastle E) |
| Beard, Nigel | Brown, Russell (Dumfries) |
| Beckett, Rt Hon Mrs Margaret | Browne, Desmond |
| Begg, Miss Anne | Buck, Ms Karen |
| Bell, Stuart (Middlesbrough) | Burgon, Colin |
| Benn, Rt Hon Tony | Butler, Mrs Christine |
| Caborn, Richard | Griffiths, Jane (Reading E) |
| Campbell, Alan (Tynemouth) | Griffiths, Nigel (Edinburgh S) |
| Campbell, Mrs Anne (C'bridge) | Griffiths, Win (Bridgend) |
| Campbell, Ronnie (Blyth V) | Grocott, Bruce |
| Canavan, Dennis | Grogan, John |
| Caplin, Ivor | Hall, Patrick (Bedford) |
| Casale, Roger | Hanson, David |
| Caton, Martin | Harman, Rt Hon Ms Harriet |
| Chapman, Ben (Wirral S) | Healey, John |
| Chaytor, David | Henderson, Ivan (Harwich) |
| Chisholm, Malcolm | Hepburn, Stephen |
| Clapham, Michael | Heppell, John |
| Clark, Rt Hon Dr David (S Shields) | Hewitt, Ms Patricia |
| Clark, Dr Lynda (Edinburgh Pentlands) | Hill, Keith |
| Hoey, Kate | |
| Clark, Paul (Gillingham) | Home Robertson, John |
| Clarke, Charles (Norwich S) | Hoon, Geoffrey |
| Clarke, Rt Hon Tom (Coatbridge) | Hope, Phil |
| Clarke, Tony (Northampton S) | Hopkins, Kelvin |
| Clelland, David | Howarth, George (Knowsley N) |
| Clwyd, Ann | Hoyle, Lindsay |
| Coaker, Vernon | Humble, Mrs Joan |
| Coffey, Ms Ann | Hurst, Alan |
| Coleman, Iain | Hutton, John |
| Connarty, Michael | Iddon, Dr Brian |
| Cook, Frank (Stockton N) | Jackson, Ms Glenda (Hampstead) |
| Corbett, Robin | Jackson, Helen (Hilbborough) |
| Corbyn, Jeremy | Jamieson, David |
| Corston, Ms Jean | Jenkins, Brian |
| Cousins, Jim | Johnson, Alan (Hull W & Hessle) |
| Cox, Tom | Johnson, Miss Melanie(Welwyn Hatfield) |
| Cranston, Ross | |
| Crausby, David | Jones, Helen (Warrington N) |
| Cryer, Mrs Ann (Keighley) | Jones, Ms Jenny (Wolverh'ton SW) |
| Cummings, John | |
| Cunliffe, Lawrence | Jones, Jon Owen (Cardiff C) |
| Cunningham, Rt Hon Dr Jack(Copeland) | Jones, Dr Lynne (Selly Oak) |
| Jones, Martyn (Clwyd S) | |
| Cunningham, Jim (Cov'try S) | Keeble, Ms Sally |
| Dalyell, Tam | Keen, Alan (Feltham & Heston) |
| Darling, Rt Hon Alistair | Keen, Ann (Brentford & Isleworth) |
| Darvill, Keith | Kelly, Ms Ruth |
| Davies, Rt Hon Denzil (Llanelli) | Kemp, Fraser |
| Davis, Terry (B'ham Hodge H) | Kennedy, Jane (Wavertree) |
| Dawson, Hilton | Kidney, David |
| Dean, Mrs Janet | Kilfoyle, Peter |
| Denham, John | King, Andy (Rugby & Kenilworth) |
| Dismore, Andrew | King, Ms Oona (Bethnal Green) |
| Dobbin, Jim | Kingham, Ms Tess |
| Donohoe, Brian H | Ladyman, Dr Stephen |
| Doran, Frank | Lawrence, Ms Jackie |
| Dowd, Jim | Laxton, Bob |
| Eagle, Angela (Wallasey) | Leslie, Christopher |
| Edwards, Huw | Levitt, Tom |
| Efford, Clive | Lewis, Terry (Worsley) |
| Ellman, Mrs Louise | Linton, Martin |
| Ennis, Jeff | Livingstone, Ken |
| Etherington, Bill | Lloyd, Tony (Manchester C) |
| Ewing, Mrs Margaret | Lock, David |
| Fisher, Mark | Love, Andrew |
| Fitzpatrick, Jim | McAllion, John |
| Fitzsimons, Lorna | McAvoy, Thomas |
| Flint, Caroline | McCabe, Steve |
| Flynn, Paul | McCafferty, Ms Chris |
| Follett, Barbara | McDonagh, Siobhain |
| Foster, Rt Hon Derek | Macdonald, Calum |
| Foster, Michael Jabez (Hastings) | McDonnell, John |
| Foster, Michael J (Worcester) | McFall, John |
| Foulkes, George | McGuire, Mrs Anne |
| Fyfe, Maria | McIsaac, Shona |
| Galloway, George | McNamara, Kevin |
| Gerrard, Neil | McNulty, Tony |
| Gibson, Dr Ian | MacShane, Denis |
| Gilroy, Mrs Linda | Mactaggart, Fiona |
| Goggins, Paul | McWalter, Tony |
| Golding, Mrs Llin | Mahon, Mrs Alice |
| Mallaber, Judy | Sheerman, Barry |
| Marsden, Gordon (Blackpool S) | Sheldon, Rt Hon Robert |
| Marsden, Paul (Shrewsbury) | Simpson, Alan (Nottingham S) |
| Marshall, David (Shettleston) | Singh, Marsha |
| Marshall, Jim (Leicester S) | Skinner, Dennis |
| Martlew, Eric | Smith, Rt Hon Andrew (Oxford E) |
| Maxton, John | Smith, Angela (Basildon) |
| Meacher, Rt Hon Michael | Smith, Miss Geraldine (Morecambe & Lunesdale) |
| Meale, Alan | |
| Merron, Gillian | Smith, Jacqui (Redditch) |
| Michie, Bill (Shef'ld Heeley) | Smith, Llew (Blaenau Gwent) |
| Moonie, Dr Lewis | Soley, Clive |
| Moran, Ms Margaret | Southworth, Ms Helen |
| Morgan, Alasdair (Galloway) | Squire, Ms Rachel |
| Morgan, Ms Julie (Cardiff N) | Starkey, Dr Phyllis |
| Morley, Elliot | Steinberg, Gerry |
| Morris, Ms Estelle (B'ham Yardley) | Stevenson, George |
| Mountford, Kali | Stewart, David (Inverness E) |
| Mullin, Chris | Stewart, Ian (Eccles) |
| Murphy, Denis (Wansbeck) | Stinchcombe, Paul |
| Murphy, Jim (Eastwood) | Stoate, Dr Howard |
| Murphy, Rt Hon Paul (Torfaen) | Stott, Roger |
| Naysmith, Dr Doug | Stringer, Graham |
| Norris, Dan | Stuart, Ms Gisela |
| O'Brien, Bill (Normanton) | Sutcliffe, Gerry |
| O'Brien, Mike (N Warks) | Taylor, Rt Hon Mrs Ann(Dewsbury) |
| O'Hara, Eddie | |
| Olner, Bill | Temple—Morris, Peter |
| O'Neill, Martin | Thomas, Gareth (Clwyd W) |
| Organ, Mrs Diana | Thomas, Gareth R (Harrow W) |
| Palmer, Dr Nick | Todd, Mark |
| Pearson, Ian | Touhig, Don |
| Pickthall, Colin | Trickett, Jon |
| Pike, Peter L | Turner, Dennis (Wolverh'ton SE) |
| Plaskitt, James | Turner, Dr Desmond (Kemptown) |
| Pollard, kerry | Turner, Dr George (Norfolk) |
| Pond, Chris | Twigg, Derek (Halton) |
| Pond, Chris | Twigg, Stephen (Enfield) |
| Pope, Greg | Vaz, Keith |
| Powell, Sir Raymond | Vis, Dr Rudi |
| Prentice, Ms Bridget (Lewisham E) | Walley, Ms Joan |
| Prentice, Gordon (Pendle) | Ward, Ms Claire |
| Primarolo, Dawn | Wareing, Robert N |
| Prosser, Gwyn | Watts, David |
| Purchase, Ken | White, Brian |
| Quin, Rt Hon Ms Joyce | Wicks, Malcolm |
| Rapson, Syd | Williams, Alan W (E Carmarthen) |
| Raynsford, Nick | Winnick, David |
| Reid, Rt Hon Dr John (Hamilton N) | Winterton, Ms Rosie (Doncaster C) |
| Roche, Mrs Barbara | Wood, Mike |
| Rooney, Terry | Worthington, Tony |
| Ross, Ernie (Dundee W) | Wright, Anthony D (Gt Yarmouth) |
| Roy, Frank | Wright, Dr Tony (Cannock) |
| Ruane, Chris | Wyatt, Derek |
| Ruddock, Joan | |
| Russell, Ms Christine (Chester) | Tellers for the Ayes: |
| Savidge, Malcolm | Mr. Kevin Hughes and Mr. Clive Betts. |
| Sawford, Phil | |
| NOES | |
| Allan, Richard | Breed, Colin |
| Ancram, Rt Hon Michael | Brooke, Rt Hon Peter |
| Arbuthnot, Rt Hon James | Browning, Mrs Angela |
| Atkinson, David (Bour'mth E) | Bruce, Ian (S Dorset) |
| Baker, Norman | Burnett, John |
| Ballard, Jackie | Burns, Simon |
| Beggs, Roy | Burstow, Paul |
| Bercow, John | Butterfill, John |
| Beresford, Sir Paul | Cash, William |
| Body, Sir Richard | Chapman, Sir Sydney (Chipping Barnet) |
| Boswell, Tim | |
| Bottomley, Rt Hon Mrs Virginia | Chidgey, David |
| Brake, Tom | Chope, Christopher |
| Clappison, James | Lyell, Rt Hon Sir Nicholas |
| Clark, Rt Hon Alan (Kensington) | McIntosh, Miss Anne |
| Clark, Dr Michael (Rayleigh) | Maclean, Rt Hon David |
| Clifton—Brown, Geoffrey | McLoughlin, Patrick |
| Collins, Tim | Malins, Humfrey |
| Colvin, Michael | Maples, John |
| Cormack, Sir Patrick | Maude, Rt Hon Francis |
| Cotter, Brian | Mawhinney, Rt Hon Sir Brian |
| Cran, James | May, Mrs Theresa |
| Curry, Rt Hon David | Michie, Mrs Ray (Argyll & Bute) |
| Davis, Rt Hon David (Haltemprice & Howden) | Moore, Michael |
| Moss, Malcolm | |
| Day, Stephen | Nicholls, Patrick |
| Donaldson, Jeffrey | Norman, Archie |
| Dorrell, Rt Hon Stephen | Oaten, Mark |
| Duncan, Alan | Öpik, Lembit |
| Duncan Smith, Iain | Page, Richard |
| Evans, Nigel | Paice, James |
| Faber, David | Paterson, Owen |
| Fabricant, Michael | Pickles, Eric |
| Fallon, Michael | Prior, David |
| Feam, Ronnie | Randall, John |
| Forth, Rt Hon Eric | Redwood, Rt Hon John |
| Foster, Don (Bath) | Rendel, David |
| Fox, Dr Liam | Robathan, Andrew |
| Fraser, Christopher | Robertson, Laurence (Tewk'b'ry) |
| Garnier Edward | Rowe, Andrew (Faversham) |
| Gibb, Nick | Ruffley, David |
| Gill, Christopher | Russell, Bob (Colchester) |
| Gorman, Mrs Teresa | St Aubyn, Nick |
| Gorrie, Donald | Sanders, Adrian |
| Gray, James | Sayeed, Jonathan |
| Greenway, John | Shepherd, Richard |
| Grieve, Dominic | Smith, Sir Robert (W Ab'd'ns) |
| Hague, Rt Hon William | Smyth, Rev Martin (Belfast S) |
| Hamilton, Rt Hon Sir Archie | Soames, Nicholas |
| Hammond, Philip | Spicer, Sir Michael |
| Hancock, Mike | Steen, Anthony |
| Harris, Dr Evan | Streeter, Gary |
| Harvey, Nick | Swayne, Desmond |
| Hayes, John | Syms, Robert |
| Heald, Oliver | Tapsell, Sir Peter |
| Heathcoat—Amory, Rt Hon David | Taylor, Ian (Esher & Walton) |
| Horam, John | Taylor, John M (Solihull) |
| Howard, Rt Hon Michael | Taylor, Matthew (Truro) |
| Howarth, Gerald (Aldershot) | Taylor, Sir Teddy |
| Hughes, Simon (Southwark N) | Thompson, William |
| Hunter, Andrew | Tonge, Dr Jenny |
| Jack, Rt Hon Michael | Tredinnick, David |
| Jackson, Robert (Wantage) | Trend, Michael |
| Jenkin, Bernard | Tyler, Paul |
| Johnson Smith, Rt Hon Sir Geoffrey | Tyrie, Andrew |
| Wallace, James | |
| Keetch, Paul | Wardle, Charles |
| Kennedy, Charles (Ross Skye) | Waterson, Nigel |
| Key, Robert | Webb, Steve |
| Kirkbride, Miss Julie | Whitney, Sir Raymond |
| Kirkwood, Archy | Whittingdale, John |
| Laing, Mrs Eleanor | Wilkinson, John |
| Lait, Mrs Jacqui | Willetts, David |
| Lansley, Andrew | Willis, Phil |
| Leigh, Edward | Winterton, Mrs Ann (Congleton) |
| Letwin, Oliver | Winterton, Nicholas (Macclesfield) |
| Lewis, Dr Julian (New Forest E) | Woodward, Shaun |
| Lidington, David | Yeo, Tim |
| Lilley, Rt Hon Peter | Young, Rt Hon Sir George |
| Livsey, Richard | |
| Lloyd, Rt Hon Sir Peter (Fareham) | Tellers for the Noes: |
| Loughton, Tim | Mrs. Caroline Spelman and Sir David Madel. |
| Luff, Peter |
§ Question accordingly agreed to.
§ Bill read the Third time, and passed.