HC Deb 09 March 2000 vol 345 cc1182-3
9. Mr. Desmond Browne (Kilmarnock and Loudoun)

How many claims for working families tax credit have been received from Scotland since its introduction. [112221]

The Paymaster General (Dawn Primarolo)

The number of claims for working families tax credit received from Scotland is not readily available, but it is estimated that 67,000 families in Scotland had been awarded it by the end of January 2000.

Mr. Browne

That means that 67,000 families in Scotland are better off by an average of £1,250 a year than they were last year.

As my hon. Friend will know from Government statistics, my constituents are among the lowest paid in the country, with an average wage of £71 a week. That statistic and others suggest that many families in my constituency who qualify for working families tax credit do not claim it. Will my hon. Friend undertake a second phase of publicity before the new credits are introduced in April, so that those families can obtain the information that they need—information that would make a difference to their lives, and help them to lift themselves and their children out of poverty?

Dawn Primarolo

I am sure the House is shocked to learn that £71 a week is the average wage in my hon. Friend's constituency. That demonstrates the importance of the Government's policies on the national minimum wage and working families tax credit, and our reforms of national insurance, to low-paid workers who want to raise their incomes.

We naturally want to ensure maximum take-up of working families tax credit. As my hon. Friend probably knows, about 60,000 children have already benefited from the Budget measures, but I will look carefully at the rate of take-up, and will consider what my hon. Friend has said about the need for further publicity to ensure that all who are entitled to working families tax credit receive it.

Mr. John Bercow (Buckingham)

Why does the Paymaster General not accept the verdict of Filip de Kam, a tax expert from the Organisation for Economic Co-operation and Development, who argues that the Government are breaching international accounting conventions by describing working families tax credit as a tax cut when in fact it constitutes a hike in public expenditure? Is the hon. Lady proud of the fact that more than 50 per cent. of the cost of compliance with the WFTC—which is a recurring cost—is to be borne by small businesses, including small businesses in Scotland that have already been savaged by this Government, which employ fewer than 100 people?

Dawn Primarolo

First, the hon. Gentleman is wrong to assert that the Government are breaching OECD rules. Secondly, he is entirely wrong in what he says about the benefits involved. This is the man who opposed the introduction of the minimum wage and said that it would be a disaster; what would he know about helping low-income families? Thirdly, as the Government have made clear, the burdens on small business have been reduced by the many changes that we have made to assist it, and by what we have done to support the few small businesses that may have an employee in receipt of working families tax credit.

We should keep this in proportion. For the smallest businesses, the maximum burden amounts to six minutes a week, and is far outweighed by the benefits in terms of recruitment and a stable and satisfied work force.