HC Deb 12 December 2001 vol 376 cc820-2
3. Dr. Hywel Francis (Aberavon)

How many households in Wales have benefited from the working families tax credit; and if he will make a statement. [20038]

The Parliamentary Under-Secretary of State for Wales(Mr. Don Touhig)

The Inland Revenue estimates that 76,000 families were receiving working families tax credit on 31 May 2001.

Dr. Francis

In my constituency, 1,300 families benefit from the tax credit. Does my hon. Friend agree that it is a vital part of the Government's anti-child-poverty agenda? Does he also agree that the work of the Children's Society in Wales is also part of that agenda?

Mr. Touhig

Indeed I do. The Government are committed to making work pay by improving incentives to help people move from benefit into work. I know that there was a debate in Westminster Hall about the Children's Society this morning, and I share some of the worries expressed by many Members about its decision to pull out of Wales.

It is important to recognise the value of schemes such as the working families tax credit in moving people from benefit into work. According to the labour force survey results published today, Wales has accounted for well over half the job growth in the United Kingdom in the last quarter, and 14,000 more people are in work now than in the last quarter. Working families tax credit and similar measures are turning out to be a very good story for the people of Wales.

Hywel Williams (Caernarfon)

Is the Minister aware that there is a serious lack of appropriate child care, particularly in very rural areas such as Caernarfon, despite the generous provision in the working families tax credit for child care? When he next meets his colleagues in the National Assembly for Wales, will he press for development of child care in very rural areas by means of the national child care strategy?

Mr. Touhig

I understand the point that the hon. Gentleman makes. A total of 2,200 families benefit from the working families tax credit in his constituency. Throughout Wales, 38,000 lone parents have been helped into work. There is an element of the child care strategy attached to the working families tax credit, but I am aware from my constituency surgeries of the problems that he outlines. I shall raise that with colleagues in the Assembly when I next meet them.

Mrs. Betty Williams (Conwy)

Seventeen hundred hard-working families in my constituency have also benefited from the working families tax credit. Does my hon. Friend agree that working tax credits will build on the enormous success of the working families tax credit and get more people into work?

Mr. Touhig

I do. Like many hon. Members, I suspect, when knocking on doors during the recent general election, I found lots of people who did not have children and could not benefit from the working families tax credit but who felt that they needed some help and support, too. The Government are committed to that. That is why we will have the working tax credit and child tax credit in place from 2003.

Mr. Greg Knight (East Yorkshire)

On behalf of Conservative Members, may I offer our condolences to Labour Members on the sad loss of Ray Powell? I knew him better than most in my party, in that we worked together for many years through the usual channels. We disagreed often but he was usually fun to work with and always kept his word. He will be sorely missed in all parts of the House.

Is not the most alarming thing about the working families tax credit the fact that it is costing employers approximately £100 million a year to pay it through the wage packet? How much of that burden is falling on employers based in Wales? Does the Minister accept that the scheme ignores the needs of those in training? How does he intend to deal with that?

Mr. Touhig

I sincerely thank the right hon. Gentleman for his comments about Ray Powell. I am sure that many hon. Members on both sides of the House have many stories to tell of their associations and work with Ray. He will be sadly missed, and is a great loss to the House and to his constituents.

The right hon. Gentleman must recognise that his party was totally opposed to the working families tax credit, just as it was opposed to the introduction of the national minimum wage, the working tax credit and the child tax credit. We are putting those measures in place in order to make work pay. It is no good moving people from poverty in benefit to poverty in work. The working families tax credit and the other tax credits, coupled with the national minimum wage, mean that today a person working 35 hours a week in Wales will have a minimum income of £225. That is a good news story.