Combined cases (Hansard, 9 May 2001)

§ Mr. Ottaway
The new clause would give any parent with a child under the age of five and who is entitled to the children's tax credit an extra £4 a week or £200 a year. It is no secret that that proposal forms part of the Conservative party's manifesto and we look forward to introducing such a measure in the Finance Bill that will be presented after the election. We moved the new clause because we feel that the Labour party's support for children is inadequate.
167 Earlier today, the Chancellor set out several pledges that he hopes to fulfil in the next Parliament. If he finds himself in that position, we wish him more success than he has had in fulfilling his pledges in this Parliament. One of his pledges was to halve child poverty; I must tell the House that he would make a good start in achieving that objective by accepting our new clause, which would go a long way towards reducing child poverty.
The Conservative party recognises the importance of the family as the basis of a free and ordered society and, in particular, believes that marriage plays an important role as the best environment in which to raise children. In general, children from two-parent families do better at school, have better chances in life and are less likely to end up ensnared in crime. Although the new clause focuses exclusively on the children's tax credit, which can be claimed regardless of someone's marital status, we submit that both matters are interrelated; I shall briefly dwell on that.
A future Conservative Government will reintroduce the married couples allowance, in addition to the children's tax credit, which is the subject of our debate. We will do so because the two allowances go hand-in-hand to promote the welfare of children.

§ Mr. Andrew F. Bennett (Denton and Reddish)
Will the hon. Gentleman tell us how much both those things will cost?

§ Mr. Ottaway
The introduction of the married couples allowance will cost about £1 billion and, as I shall spell out shortly, this particular proposal will cost £300 million. They make up part of the £8 billion worth of tax cuts that we have announced.
In his 1999 Budget, the Chancellor said: we will replace the married couples allowance with a new family tax cut that will increase the amount that goes to help families with children. This children's tax credit will give more—not less—help to families at the time when they need it most—when they have their children and when their children are growing up."—[Official Report, 9 March 1999; Vol. 327, c. 182.]
That is a laudable objective and a clear statement of policy. However, I submit that is an inadequate and failed policy; what the Chancellor promised has not happened. The children's tax credit does not replace the married couples allowance; nearly 5 million people who were entitled to the allowance are excluded from claiming the tax credit. People have to have children to claim children's tax credit, but many married couples do not have children.

§ Dawn Primarolo
Would the hon. Gentleman tell the House the exact conditions under which the Conservative party would reintroduce the married couples allowance? I thought that the allowance would be only for couples with children under 11. The Conservatives are not reintroducing the married couples allowance because, of course, lots of married couples have children over 11.

§ Mr. Ottaway
The Minister makes my point for me; the children's tax credit does not benefit married people, either—[Interruption.] I shall come to the Minister's point. There is no limit to the aspirations of the 168 Conservative party. We have set out our aims and objective for 2003 to 2004. Unlike the Labour party, we generally believe that the concept of marriage is worth supporting and we will use our best endeavours to expand allowances wherever possible.

§ Dawn Primarolo
Does the hon. Gentleman believe in marriage so much that he believes that couples will be committed to it only if we pay them?

§ Mr. Ottaway
We believe in marriage, so the point of the policy is to encourage people to marry.

§ Mr. Mark Hendrick (Preston)
Does the hon. Gentleman accept that the fact that a couple is, or is not, married does not necessarily affect the stability of their relationship? In fact, a married couple could be in an unstable relationship and an unmarried couple could be in a stable relationship. Why the necessity to pay people to get married?

§ Mr. Ottaway
The hon. Gentleman makes an important point, but research shows that children brought up by a married couple are more likely to do better at school and less likely to commit crime, as I said a few minutes ago.
The hon. Gentleman's party believes in family life, and family life is enshrined in marriage, which is why we support it. One should take a hard look at ministerial statements and, indeed, the 1997 Labour manifesto, which states:
We will uphold family life as the most secure means of bringing up our children. Families are the core of our society. We believe that the concept of a married family is better than the concept of an unmarried family; that is the point of our policy.

§ Mr. Hendrick
Clearly, stability is important in any relationship. Is the hon. Gentleman seriously telling us that, given the fact that his party is committed to £16 billion worth of c>uts, it is prepared to pay £1.3 billion to encourage people to get married?

§ Mr. Ottaway
First, I do not know where the hon. Gentleman got his figure of £16 billion. There will actually be £8 billion worth of tax cuts. Like the Prime Minister, the hon. Gentleman can pluck artificial figures from the air. We have made it quite clear that we are committed to £8 billion worth of public expenditure cuts and, as a result, will be able to deliver £8 billion worth of tax cuts.

§ The Economic Secretary to the Treasury (Miss Melanie Johnson)
Perhaps I can help the hon. Gentleman with the exact source of the £16 billion. A Conservative press notice last July said that the Conservative party believed that the Government were overspending some £600 per head of population which, multiplied up, came to £16 billion. The Government did not produce that figure; the Conservative party itself released it.

§ Mr. Ottaway
The spin machine in Millbank has got to try a bit harder than that. In the long term, we hope to give substantially more than £8 billion worth of tax cuts to the British people; that is where the Economic 169 Secretary got that convoluted concert. Unlike the Prime Minister and the Chancellor, we are precise and accurate about what we intend to do. Before the last election, the Prime Minister said that he had no plans for any tax increases at all but, in this Parliament alone, we have had something like 45 tax increases. When it comes to accuracy, the Economic Secretary had better put her own house in order before she starts criticising our party.
As I said, the children's tax credit does not replace the married couples allowance; nearly 5 million people entitled to the MCA are excluded from claiming the CTC. I must tell the Paymaster General that I am raising that matter because the Chancellor said that the children's tax credit would replace the married couples allowance. Clearly, it does not and, as a result, millions are worse off. In truth, it is another Labour stealth tax.
The children's tax credit did not replace the married couples allowance; it was introduced a year after the MCA lapsed. As a result, everybody had to pay higher taxes—yet another Labour stealth tax. The children's tax credit is not available to higher rate taxpayers, as it tapers out quite quickly once the threshold is reached. That is another stealth tax and another breach of the Chancellor's pledge to eliminate means testing. It is quite remarkable that the Chancellor, who said at his party conference that he was pledged to eliminate means testing from the welfare system, has presided over the biggest increase in means-testing in recent history.
Fourthly, the credit discriminates against one-earner families. It contains a perverse anomaly that we raised during the Committee stage of the Finance Bill last year. A higher rate taxpayer earning £45.000 per annum will have lost all entitlement, yet a family with two earners on £30,000 each, making a household income of £60,000 a year, will get the credit. Thus, a family with £60,000 a year gets it, whereas a family with £45,000 a year does not. In the debate on the Finance Bill last year, the Government said that they would look into the anomaly, recognising the force of the Opposition's arguments, but they have taken no steps whatever to rectify the anomaly.

§ Miss Johnson
Would the hon. Gentleman remove the right to independent taxation, which is the basis of our present tax system and allows a man and a woman in the same household to be taxed independently? He is criticising a much-prized feature of our tax system.

§ Mr. Ottaway
I am not criticising that at all. Independent taxation was introduced by a Conservative Government, and we are proud of it. I was pointing out that the Government had made a pig's ear of the system as a result of their independent taxation. How anybody can design a credit which gives a benefit to the better off but not to the less well off is beyond me. I see that the Parliamentary Private Secretary, the hon. Member for Gravesham (Mr. Pond), is grinning at that proposition. I am happy to give way to him, but I see that he considers it appropriate to walk off, as he does not want to back up the Government's argument.
I come to my fifth point. Because of the Government's incompetence, there is likely to be a low take-up of the credit. The complexity of the forms to claim the children's tax credit is proving to be too great for many people. It is believed that there are about 2 million eligible families who have not applied for it. The figure comes from a 170 written answer from the Treasury in February 2001. If Ministers want to bring the information up to date and tell us how many people are entitled to receive the credit but have not claimed it, I look forward to hearing from them.

§ Miss Johnson
I intended to deal with that later when I replied, but I shall update the figures now for the hon. Gentleman. Some 3.5 million forms have already been returned by people claiming children's tax credit. That represents more than 85 per cent. of the eligible PAYE population. Claims are still coming in and we expect a steady flow throughout the year. People who claim later will not lose out, as their CTC will be backdated to the start of the tax year. We are delighted that the take-up rate is so high. The February figures quoted by the hon. Gentleman predate the start of the financial year and of the new tax credit. That may well account for the discrepancy, but it is a pity that he has come to the House without getting the figures updated.

§ Mr. Ottaway
What a cheek for the Minister to tell us that hundreds of thousands of people entitled to claim the credit have not done so, and for her to claim that that is an achievement on the Government's part. It is a disgrace that hundreds of thousands of people are entitled to the credit but have not applied. It ill behoves the Minister to take that attitude.

§ Mr. Hendrick
I thank the hon. Gentleman for giving way again. He says that it is a disgrace that hundreds of thousands have not claimed CTC, yet his party criticises the Government for using publicity to the extent that they have.

§ Mr. Ottaway
The reason why so many people have not claimed the credit is that the application forms are complex and hard to understand. That is why a simplified system under a future Conservative Government will be welcomed by all, particularly the hundreds of thousands of people who are entitled to claim but have not done so.

§ Mr. Bennett
I have been listening carefully to the hon. Gentleman, and it is nice to witness his conversion to concern for the under-fives and their families. Can he explain why, for the 18 years of the previous Conservative Government, no attempt was made to use the child benefit provisions to pay different rates to children of different age groups?

§ Mr. Ottaway
We gave the married couples allowance, which was a universal benefit. [Interruption.] We did not eliminate it. It was there—

§ Miss Johnson
rose—

§ Mr. Ottaway
I have not given way to the hon. Lady. I am answering the hon. Member for Denton and Reddish (Mr. Bennett).

§ Mr. Bennett
We are not discussing the married couples allowance. We are dealing with a special benefit for families with children under five. I want to know why the Conservatives did not have that interest between 1979 and the last election. If they were so concerned, why did they not introduce a provision under the child benefit
171 regulations that allowed them to pay a higher rate to particular age groups of children? Why the conversion now? Is it because they are in opposition?

§ Mr. Ottaway
It is because the Conservative party is prepared to look to the future. We do not intend to dwell on the past and drag out old recriminations about why we did not do this or that, or whether amendments were tabled to previous Finance Bills to provide extra benefits for the under-fives—maybe yes, maybe no. We are looking to the future. The new Conservative party is prepared to go forward on proposals such as those contained in the new clause. We recognise that the under-fives are a group of children who need special help. We are targeting the under-fives because we believe that they are most entitled to the benefit.

§ Miss Johnson
Can the hon. Gentleman explain to me and my hon. Friends why child benefit was frozen for a period and was not increased over the term of the previous Government as it has been by this Government, who have put record increases into child benefit? Will the hon. Gentleman confirm that the previous Government cut the value of the married couples allowance?

§ Mr. Ottaway
Yes, I confirm that the previous Government cut the value of the married couples allowance.
Our argument is that the children's tax credit has not been designed as well as it could have been. It should be a simpler and a fairer structure. As it is currently designed, the tax credit is a duplication. As the Minister knows, the 10 per cent. band covers the first £1,500 of taxable income. The CTC merely duplicates the relief that would be available at 10 per cent., which is not available to those who are entitled to CTC. Indeed, when the working families tax credit is taken into account, the children's tax credit is a triplication. The credit does not give parents with younger children the level of support that they need and deserve. A discriminating, inadequate, poorly thought out measure incompetently introduced is not the way to support the nation's children.
The next Conservative Government will increase the children's tax credit for parents with children under the age of five by £200 per annum by 2003–04. We will devote £300 million of our £8 billion capacity for tax cuts to reducing the income tax payable by parents with a child under the age of five. That, coupled with our pledges to restore the married couples allowance, to simplify the system, and to arrest the advance of means-testing with all its complexity, means that only the Conservative party recognises the problems of the family and is prepared to do something about them.

§ Mr. Bennett
If it is so important to help the family, why should families have to wait so long for help?

§ Mr. Ottaway
We have made it clear that we intend to phase the help in over the first three years of the next Parliament. The hon. Gentleman and the Minister know that we have accepted the Government's spending plans and tax plans for the first year of the next Parliament. 172 We will introduce [...]ax cuts and achieve reductions in public expenditure in years two and three. The figure that I mentioned is for 2003–04.

§ Dawn Primarolo
Did I hear the hon. Gentleman correctly? Did he confirm that if by some disaster his party were elected at the general election it would be committed to spending cuts and tax cuts, and it would expect the electorat[...] to believe that everything would remain the same?

§ Mr. Ottaway
The Paymaster General makes it seem like I have revealed some secret. We have made it perfectly clear in countless press conferences that by 2003–04 we will have reduced public expenditure by £8 billion on the figure announced in the Red Book and in the comprehensive spending review last November. That is well-documented. It is our policy, and the hon. Lady knows what public expenditure we are committed to maintaining and where our adjustments will be made.

§ Mr. Hendrick
The Conservative party is willing to pay £1.6 billion to entice people into getting married. If those people decided to divorce, would it be willing to claw back all the benefits they received when they were married to prove that it was not a marriage of convenience?

§ Mr. Ottaway
I am not quite sure what point the hon. Gentleman is making. If people were to divorce, they would not be entitled to the married couples allowance, because they would no longer be married.

§ Mr. Hendrick
The Conservatives would spend £1.6 billion of taxpayers' money to give people an incentive to get married. If they decided to get divorced a few years later, would the Conservative party claw back that extra benefit to prove that it was not a marriage of convenience?

§ Mr. Ottaway
The hon. Gentleman is getting his figures in a twist. We are not proposing to spend £1.6 billion on the married couples allowance: the figure is £1 billion. I am a[...]raid that the hon. Gentleman's point about clawing back the benefit is lost on me. Perhaps he would write to me about it, and I will give him an answer.

§ Dr. William McCrea (South Antrim)
Is not it strange to talk about £1.6 billion or £1 billion to encourage people to get married? Labour Members seem to be sneering at the basic morality of marriage. Why should we sneer about the fact that people get married?

§ Mr. Ottaway
The hon. Gentleman is on to something. For the past 20 minutes, there has been nothing but criticism and sneering at the concept of marriage. I should like mildly to correct the hon. Gentleman on one point. Our proposal is not a reward for marriage: it is a recognition of marriage. The Conservative party believes in marriage, whereas it is becoming manifestly clear that the hon. Member for Preston (Mr. Hendrick) does not.

§ Mr. Hendrick
Will the hon. Gentleman give way?

§ Mr. Ottaway
This is a guillotined debate, and I have given way three or four times, so 1 shall not give way again.
173 Families have suffered a systematic increase in taxation over the past four years. How does it help our children if their parents are taxed up to the hilt? If people smoke, drink, drive a car, have a pension or are married, they have been subjected to 45 increases in taxation during this Parliament. Such regressive taxes hit those on lowest incomes hardest—the people in Labour's heartlands. The average family pays more than £600 a year more tax under Labour. The Conservative party will reverse the trend. We will take 1 million pensioners out of taxation. We will make income from savings tax free for millions. That is the way to help our children.
The Conservative party is in tune with the British public. We will reduce taxation and will liberate the nation's creativity.

§ Mr. Edward Davey
There may be a germ of a good idea in this new clause. The serious, wider policy debate is about the best way of providing support for families and children, whether couples are married or unmarried. The Government are gradually moving towards a coherent approach, and they may get there by hook or by crook. At the moment, the system is highly complicated, with child benefit, child care tax credit, working families tax credit and children's tax credits. Previously, we had the married couples allowance, which was available whether couples were married or not.
This is a complex area, and the Finance Bill adds to that complexity by introducing the babies tax credit, which is available to families with children under the age of 1. Having created some of that complexity to meet their laudable objective of reducing child poverty, the Government are now trying to tidy things up. The Chancellor is working towards an integrated children's credit. As the Government move towards a more rational, streamlined approach to ensure that families have the resources they need to tackle child poverty, the question is whether it is a good idea to include families with children under the age of 5 in the proposals for an integrated children's credit.

§ Mr. Bennett
Do the Liberal Democrats think that it is a good idea? My impression from listening to the arguments about child benefit was that, although one could identify loss of earnings as a problem for families with very small children, after the first year small children do not cost families anything like as much as young teenagers.

§ Mr. Davey
I am grateful for that intervention, because I was just about to explain my party's position on this issue and the thinking behind it. We have some sympathy with the idea of rewarding families with children under the age of 5. That could be achieved through a premium on child benefit or through the mechanism in the new clause. The hon. Gentleman is right that children cost more in their first year. The Government were right to acknowledge that, although we believe that they could have gone about it differently—for example, through a maternity grant. Many of the costs in the first year are up-front and not spread through the year, as the proposal for a babies tax credit suggests.
We understand that argument, but I suggest to the hon. Gentleman that there are not just costs but benefits in ensuring that a family has more money in those early years. It would give parents a real choice between staying at home to look after their children or going to work.
174> The Government have continually tried to give the impression that they want new mothers to go back to work as soon as possible: that has been part of the rhetoric and, indeed, part of the Government's tax and benefits strategy. I fear that they may have gone too far in advocating an early return to work for new mothers, and it is in that context that I see the germ of a good idea in new clause 2.
It may well be—and I believe some sociological studies suggest—that it is beneficial to young children for their parents to have more contact with them in their earlier years, before they go off to nursery school, playschool or primary school. There is a serious policy question to be asked: should the tax and benefits system make it easier for parents to remain at home during those first five years?
I hope that, in response to today's debate and as they proceed with the debate on integrated children's credit over the next year or two—I say that assuming that Labour will be returned to office—the Government will consider the issue in some depth. The commissioning of research, and a wider public debate, may be required to establish whether it makes sense—in terms of effects on the labour market, and in terms of effects on the welfare of families and children—to ensure that the money that we are putting aside is targeted at the early years.
In many ways, the whole debate is about where resources should be targeted. One of the aims of the children's tax credit was to augment the funds going to families, without augmenting only a universal benefit—child benefit. The Government considered taxing child benefit, as the Conservatives had done before them, but for various reasons they decided against it, and ended up with the children's tax credit. Again, they were trying to find the best way of targeting resources more effectively.
The new clause raises the important question of whether we should target resources at children during those early years. I think that there is a strong argument for doing so, but 1 should like the Government to commission further research, and I think that we should engage in a wider public debate. Only when we see the results of research will we know the facts. Perhaps we should target even more resources at families with children under five than the new clause suggests; perhaps we should be much more ambitious. That might be the quickest, most tax-efficient and most expenditure-efficient way of meeting the Chancellor's objective of halving child poverty in 10 years.
As I have said, there is a serious issue behind new clause 2. I hope that, rather than taking the partisan, political point-scoring route down which the hon. Member for Croydon, South (Mr. Ottaway) seemed to be tempting Ministers, the Government will address themselves to what I consider to be the really serious policy issue.

§ Miss Melanie Johnson
Let me begin by responding to the closing remarks of the hon. Member for Kingston and Surbiton (Mr. Davey). I think it useful for our policies to be based on evidence; indeed, work continues in the Treasury in an attempt to ensure that they reflect the real needs of society, in terms of child poverty, as much as is possible at any one time.
The hon. Member for Croydon, South (Mr. Ottaway) did not take into account the Government's introduction of a number of measures reflecting the extra costs incurred by the parent of a child under five. One way of
175 structuring such measures is to take account of the cost of children over lifetime— which has been done, in that there is £5 more child benefit for the first child, throughout its lifetime, than there is for second and subsequent children.

§ Mr. Ottaway
Does the Minister think that she is doing enough? Does she not think that more could be done for the under-fives?

§ Miss Johnson
I intend to deal with that in much more detail. Let me say initially, however, that we have reduced the number of children in poverty by 1.2 million during the life of the current Parliament. That includes many children under five, as it includes many over five, and it represents a substantial improvement.
The increase in maternity pay from £60.20 to £100, the extension of paid maternity leave from 18 to 26 weeks and the introduction of two weeks' paternity leave in 2003 will help the parents of under-fives. As the ex-parent, as it were, of three under-fives, including twins, I speak with personal experience of the substantial needs of those with young children in the house, in terms of both income and time.

§ Mr. Davey
The Minister—who, I am sure, is not an ex-parent—mentioned maternity and paternity leave. Have the Government considered parental leave? Some countries give parents leave that they can take later in their children's lives, which is often limited to the first five years. That provides greater flexibility: it can be used, for example, when a child is ill.

§ Miss Johnson
The idea has been suggested in a number of quarters, and is being discussed. Consultation is taking place. As I said at the outset, we are keen to give the best possible support to families with children in general, but to those with children under five in particular.
The Opposition seem to want to increase children's tax credit by £200. Lest, by any quirk of fate, the Opposition might be in charge of a Finance Bill after a general election—unlikely as that may seem now—I should point out that, as drafted, the new clause would reduce it by £20. As the sum in question is 10 per cent. of an allowance, the figure should be £2,000.
The Government will, in fact, increase children's tax credit by a further £520 in the year of the child's birth, and will do so from 2002 rather than 2003—which is what I understand the hon. Gentleman to propose, assuming that he is thinking in terms of £ 200 rather than £20. What we are already doing is far better than what the Opposition suggest. It is more, it is earlier, and it focuses resources on the time when parents are most in need.

§ Mr. Ottaway
The Minister is right: we intend the amount to be increased by £200. We have taken into account the increases in the pipeline, and this is over and above those increases.

§ Miss Johnson
Is it over and above the introduction of babies credit?

§ Mr. Ottaway
Yes.

§ Miss Johnson
That is interesting. I thank the hon. Gentleman. I will come to the £16 billion later.
176 The hon. Member for Kingston and Surbiton has urged other courses on me, but I cannot resist returning to some of the slightly wider political issues, on which we have been much tempted by the hon. Member for Croydon, South. First, I turn t the married couples allowance, on which he spent considerable time.
The so-called reintroduction of the married couples allowance is probably a complete misnomer. For the Conservatives to say that the new clause would reintroduce the married couples allowance involves considerable spin. It would do nothing of the sort. It is a proposal for married couples to transfer their personal allowance between themselves. It does not benefit many married couples, or indeed many families with children. Eight out of 10 married couples would gain absolutely nothing from the proposal; eight out of 10 families with children would gain nothing from it. For example, single parents and married couples who were both in work would gain nothing, despite the fact that the hon. Gentleman claimed lie supported marriage and that the proposal was partly about that. Married couples with secondary school-aged children would gain nothing from it because of the cut-off at the age 11. I do not know what Conservative party policy is on helping children and families out of poverty where the children are aged over 11, because the new clause does not address their needs.
This Government have been committed to helping families with children and have introduced the working families tax credit and the children's tax credit, and those policies will lift 1.2 million children out of poverty.

§ Mr. Bennett
Does my hon. Friend accept that Conservative Members have never explained why they did nothing about this matter throughout all their years in government? The House debated the cost of children in 1976, when Baroness Castle introduced the child benefit legislation. The then Conservative Opposition said that they would like to do more for children in families, yet they did nothing for 18 years.

§ Miss Johnson
I am grateful for my hon. Friend's recollection of a time when I was not an hon. Member, but I do remember that nothing was done. In proposing the new clause, the Lon. Member for Croydon, South did nothing to answer questions that my hon. Friend, I and other Labour Members put to him about why these issues, by which he apparently sets so much store now, were not addressed over those 18 years, when there was ample opportunity to do so.

§ Mr. Flight
May I make two points? First, the proposal for married couples is additional to existing provision, so it is not a debate about taking something back, or whether to have A or B. Secondly, it is specifically targeted at married couples with children under 11, partly to offset some of the bias against mothers, or fathers for that matter, who wish to stay at home to look after children. In particular, it is designed to give mothers a little more flexibility. We can debate what was done in the past, but the Minister is wrong to seek to cast the proposal in a negative light. She may disagree with it, but it is specifically tailored to meet the needs of a group of people who wish to stay at home a little longer to look after their children while they are younger.

§ Miss Johnson
Yes, but that is exactly why I said that calling it a reintroduction of the married couples 177 allowance was a very spun description. The hon. Gentleman accepts that it is a targeted measure and that it does not help many who are married, or, indeed, many who have children. As I said, eight out of 10 married couples and eight out of 10 families with children will gain nothing. [Interruption.] The hon. Member for Croydon, South is burbling some further remark from a sedentary position. I did not catch exactly what it was and he may want to intervene again, but may I remind him that it is this Government who have increased child benefit to £15.50 a week for the first child and £10.35 a week for subsequent children? That is a 26 per cent. real-terms increase over the life of this Parliament.
People will have to judge for themselves—they are getting the opportunity not only to make that judgment, but to act upon it—whether our record of increasing child benefit by record amounts stands up against the record of the Conservative Government, who promised tax cuts and hiked tax up, who promised to help people but put 3 million on the dole and who froze child benefit; they did not increase child benefit in line even with inflation at various periods. I am proud to stand in support of what the Government have done. Our record speaks for itself.

§ Mr. Ottaway
I presume that the Minister is advancing an argument against the new clause She has to say why she does not believe that more can be done for families, and why £200 a year, or £4 a week, would not help children, rather than going on about the past.

§ Miss Johnson
I have already said why I believe that it is better to take the action that we are taking through the various measures that we have introduced. which support families, and why increasing support for children in their first year of life, which we have just introduced, is a valuable support.

§ Mr. Hendrick
Given that the hon. Member for Croydon, South (Mr. Ottaway) has accepted that no such comparable measures were introduced in 18 years of Conservative government and that we should look forward to "a new Conservative Government", will my hon. Friend be willing to invite him to intervene in order for him to apologise for that omission over 18 years?

§ Miss Johnson
I am grateful to my hon. Friend for his suggestion. I would be happy to take him up on it, but I appreciate, as he will, that the hon. Member for Croydon, South is well aware of the invitation that has just been extended to him and is not leaping to his feet. I think that we will all draw our own conclusions from that.
The introduction of a new children's tax credit at £10 per week from April is worth £520 a year—more than twice the value of the married couples allowance that it replaces. From next April, the children's tax credit will be raised to £20 a week in the year of a child's birth, which will in effect double the allowance in the first year of a child's life.
I was much amused by the remarks of the hon. Member for Croydon, South on the form that is required. It is easy to allege that forms are complicated, but that was an absolute load of nonsense. The form was thoroughly tested with the help of 1,000 volunteer taxpayers—indeed, I am told that the forms that the Inland Revenue has received have been completed to a very high standardand— 178 and it asks for the most basic information, such as the name, the date of birth of the child and the partner's national insurance number. It does not ask claimants to detail their income or to provide complicated details.
7.30 pm
Many people have completed the forms quite satisfactorily. As I said, 3.5 million claims have been made, encompassing 85 per cent. of the eligible PAYE population. The hon. Member for Croydon, South probably does not want me to remind him of the fact that, despite years of work in trying to improve take-up, family credit had a much lower take-up rate than the children's tax credit has had.
The Government would like take-up to be even higher. As my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said when commenting on publicity, the Government will do everything that we can to ensure that those who, for one reason or another, are not aware of the credit or have not yet claimed it do so. We are working on that, and the forms are continuing to come in.

§ Mr. Ottaway
The Minister makes it sound as though complaints about the form's complexity are being made only by the Opposition. I was quoting the Association of Chartered Certified Accountants, which presumably knows what it is talking about. It said that the application form is very complex. For those not used to filling in tax forms, the task may prove to be too arduous and some will lose out on an allowance altogether.

§ Miss Johnson
I am completely mystified by that statement, but I am sure that we could quite quickly find the hon. Gentleman a copy of the form. The details required could not be simpler or more basic, and it is unlikely that, in supplying them, taxpayers would have to do other than perhaps look up their national insurance number if they did not know it.

§ Mr. Flight
The Minister made a similar point when I spoke about this issue in a previous debate. I think that the form that is being referred to—I remember receiving one myself—is the one sent out a year earlier to determine whether people would qualify for the credit. That form went to the heart of the problem about how much each partner earned and whether they would be ineligible for the credit because one partner was earning too much. It was extremely difficult to complete, and if one did not complete it correctly one did not receive the instant form. Half a million people, including several of my constituents, never got round to submitting their claim promptly in April because they had not completed the previous pre-qualification form.

§ Miss Johnson
As I said, 85 per cent. of the eligible PAYE population have satisfactorily sent in their forms, we have had a very high response rate, and the forms are still coming in. The hon. Gentleman may be referring to another form, but the fact is that anyone claiming the children's tax credit has only to supply some very basic information. The tax office will take that information, assess the tax credit and make it available to claimants as a tax cut in their pay packet.
The hon. Member for Croydon, South made the remarkable allegation that the Government have shown a lack of support in addressing the issue of child poverty.
179 I simply remind him that the previous Conservative Government not only cut the married couples allowance, but froze child benefit and increased taxes.
The hon. Member for Croydon, South also talked about the £8 billion worth of "adjustments", which seems to be more Conservative spin for cuts, that a future Conservative Government would make to our spending plans. We do not accept the £8 billion figure simply because we are working from the figures given by the right hon. Member for Kensington and Chelsea (Mr. Portillo) in a press notice that he issued last summer. The notice described a cuts guarantee of £16 billion, which would entail a £25 million public expenditure reduction for every constituency in the country, massively hitting schools, hospitals and other services.

§ Mr. Edward Davey
I am intervening to try to be helpful to the Minister. The mass unemployment of the 1980s over which the then Conservative Government presided caused the greatest damage to the fight against child poverty. If the Government have achieved only one thing by adopting the Liberal Democrats' policy of an independent central bank, thus ensuring stable economic growth, it has been to reduce unemployment by 1 million. That has constituted the Government's most effective attack on child poverty. I therefore congratulate them on being sensible enough to adopt Liberal Democrat policies.

§ Mr. Deputy Speaker
Order. Before the Minister responds to that, I point out that there is a grave danger of this debate developing into a general economics debate. Will the Minister and all other hon. Members please focus on new clause 2?

§ Miss Johnson
I shall certainly do my best to do that, Mr. Deputy Speaker.
I believe that the hon. Member for Kingston and Surbiton has made a valuable point about the Government's contribution in getting people into work and making work pay. Both of those achievements have made very valuable contributions. I am puzzled by Liberal Democrat Members' lack of support for the new deal, which has certainly played a crucial role in cutting unemployment and addressing the issue of child poverty.
I should like finally to outline the Government's record on those issues. Families with children will be on average £1,000 a year better off from all the measures introduced in this Parliament. A family with two children now faces the lowest tax burden since 1972. A single-earner family on average earnings of £25,000 a year with two young children will be £520 a year better off, and a single-earner family on half average earnings of £12,700 a year with two young children will be £3,000 a year better off. A family on income support with two young children will be £1,670 a year better off.
We have addressed the issue of child poverty in all those ways. We have also, as I said, focused some of those resources specifically on under-fives. We must not forget what we have done to address the issue, including introducing the working families tax credit — which, on average, compared with the previous family credit system, is worth £35 a week more. By such measures, we have succeeded in lifting 1.2 million children out of poverty.
180 The policies being advocated by the hon. Member for Croydon, South are set within the context of an absence of a fiscal framework and fiscal rules. He does not answer the question of where the spending cuts that are necessary to fund tax cuts will fall or address the issue of continuing economic stability. We are able to support families and children because of economic stability and the fact that we have so many more people in work and have cut unemployment to its lowest levels for many years.
I therefore urge the House to reject new clause 2.

§ Mr. Ottaway
In her final remarks, the Minister said that new clause 2 was set outside any framework and any rules, but it is set within the context of the Government's own framework and rules. As I said at the beginning of the debate, the new clause is part of an £8 billion tax reduction package. There has been much childish merriment among Labour Members about the nature of that £8 billion, but I make it clear that the Government's plans as outlined in the Red Book are to increase public expenditure by £72 billion by 2003–04. A future Conservative Government would increase spending by £64 billion by 2003–04, thereby creating the £8 billion difference.
To prevent the Minister from continually repeating the mistaken figure of £16 billion over the next four weeks, after the debate I shall give her the precise figures supporting the £8 billion figure. That is what we stand on, and that is what we intend to do. There is no need for her to repeat the figure of £16 billion again, because that figure is wrong.
The most important thing that has happened today is that the Minister has singularly failed to say why this proposal, designed to help the children most in need of assistance, the under- fives, should not be accepted. She says that she stands on her record, and that the Government are doing what they can to help that group of children. That is complacent, inadequate and unacceptable. If we were not working to a timetable motion I would seek to divide the House. but time is short and there are other new clauses to be debated. I therefore beg to ask leave to withdraw the motion.
Motion and clause, by leave, withdrawn.