HC Deb 29 March 2001 vol 365 cc1093-5
3. Mr. Desmond Browne (Kilmarnock and Loudoun)

How many families are entitled to the children's tax credit. [154598]

The Chancellor of the Exchequer (Mr. Gordon Brown)

Some 800,000 people have responded to our recent advertising campaign. An additional 500,000 have already claimed, making 3.4 million employees—and, with the self-employed, 4.4 million—already expected to benefit. To make sure that all eligible families can benefit as soon as possible, I shall write to MPs on both sides of the House enclosing material that they can send to organisations that serve parents in their constituencies, such as local schools, parent-teacher associations, child care providers and local charities.

The Government are adding to the bounty pack given to 750,000 mothers each year information about applying for the children's tax credit. In total, we shall be investing £2.3 billion a year in the children's tax credit by 2003. As a result of increases over this Parliament, the Government will be spending an extra £1.1 billion a year on child benefit in this coming year.

Mr. Browne

I welcome the initiative that my right hon. Friend is taking to disseminate information about the children's tax credit. It occurs to me that, if the pack that he mentioned is to be used with credibility by Conservative Members, it might need to include a statement as to why they now support a policy that they previously described as a gimmick. Will my right hon. Friend ensure that the pack contains explicit material to show that ordinary working families will be substantially better off as a result of this tax credit? Will he also confirm that no child benefit book will go out from now on unless it contains a page that spells out the eligibility for children's tax credit?

Mr. Brown

Every available source of information will be used to get the message across that the children's tax credit is up and running from the beginning of April. Many people will receive the credit in their pay packet at the end of April. This additional rate—the £8.50 rising to £10—will be made available in the May pay packet. I will take on board the suggestions that my hon. Friend made about the information that should be provided in the pack. He is absolutely right to say that the Conservatives called the children's tax credit a gimmick. They are completely wrong.

Mr. Edward Leigh (Gainsborough)

Has the Chancellor had a chance to view the work of the Childcare Commission, which is chaired by the right hon. Member for Camberwell and Peckham (Ms Harman) and on which I had the honour to serve? Will the Chancellor address his attention to one particular problem? A family where both parents earn £30,000 a year is entitled to children's tax credit. However, there is no such entitlement for a family where the mother, say wants to stay at home to look after the children and the father earns £45,000 a year. Surely that is unfair. We should not dictate through the tax system how people run their lives. There should be an equitable decision between partners as to how they run their lives in their own way.

Mr. Brown

That is exactly why we are integrating the children's benefits into the new integrated child credit in 2003, when the issue that the hon. Gentleman raised will be dealt with. I applaud the work of the Childcare Commission and the hon. Gentleman's service on it. However, he should look at why the problem has arisen. It is a function of the independent taxation introduced by the previous Government, and of the way in which it was introduced. The problem will be dealt with in 2003. Until then, nearly 5 million families will benefit from the children's tax credit, and I hope that his party will stop calling it a gimmick and start recognising that it is vital to improving the standard of living of millions of families.

Mrs. Louise Ellman (Liverpool, Riverside)

How many of the 600,000 families eligible for children's tax credit in the north-west does my right hon. Friend think will receive it? Is he satisfied about the progress of his general policy, which combines measures to make work pay with investing in local economies? Will he give us a progress report on his efforts to secure regional investment funds, in the discussions that he is having in Europe?

Mr. Brown

Every family with children in my hon. Friend's constituency will receive child benefit. Almost every family that is eligible will receive the children's tax credit, and those who have not yet applied can still do so. That is why the information packs are going out. On the general question about the standard of living among families, the key to that is to create employment opportunities in my hon. Friend's constituency and region that were denied for so long. I think that she will agree that the north-west is benefiting from the increase in employment and will benefit from the Budget measures that target public expenditure and tax assistance to regenerate some of the high unemployment areas of this country. There should be consensus on the need for helping family prosperity in the way that we propose and on the need for increased work, including the new deal. It is unfortunate that the Conservatives want to abolish the new deal and the working families tax credit.