§ The Paymaster General (Dawn Primarolo)
Mr. Deputy Speaker, with your permission, I should like to make a statement about the child and working tax credits that have been introduced this month.
The introduction of the child tax credit is the biggest single change in support for families since the Beveridge reforms of the 1940s, and a more radical change than the introduction of child benefit 25 years ago. Ninety per cent. of families with children are eligible to benefit from the credit.
The new tax credits represent the biggest-ever investment in families; no Government have spent so much on children and families. A single-earner couple working full-time at the national minimum wage, with two children, will receive about £400 a year more from the new tax credits compared with the working families tax credit and the children's tax credit which they replace. Some families are receiving as much as £4,800 a year; more than £90 a week for the maintenance of two children—a doubling of support since 1997. With these new tax credits, some groups are receiving extra child support for the first time, including student nurses and students.
We are integrating the tax and benefits system to produce a fairer system, so the new tax credits are administered by the Inland Revenue and they continue to be paid to families when they move from welfare into work. The child tax credit is being introduced at the same time as the working tax credit, with its more generous help for low-paid workers, including disabled men and women or older people returning to work.
I want to deal with each of the issues about the introduction of child tax credit that MPs have brought to me; but, first, it will perhaps help the House if I update it about the details on the current take-up of the new tax credits. I am pleased to say that the Inland Revenue has received more than 4 million applications. In addition, 1.3 million families on income support and jobseeker's allowance will be transferred automatically from next April to the child tax credit, but they are already benefiting from the increased level of support.
There are many, including some Members, who said that families would simply not apply for the new tax credits and that take-up would be, and remain, low. That is simply wrong. All those families with incomes below £58,000 are entitled to receive a tax credit. More than 5.3 million people have either applied or are receiving it already. As a result, enhanced family support is reaching a far larger number of people than the old system of family credit or the working families tax credit, which it replaces. So far from people failing to claim those new tax credits, millions have claimed, and because we are not complacent, the take-up campaign will continue.
I remind the House that families can still claim and get their tax credits backdated to 6 April. So with more than 4 million claims received in addition to the 1.3 million on income support and jobseeker's allowance, let me remind the House that families were given a choice about how often they receive payments: they could request to be paid either weekly or monthly. In addition to those on income support and jobseeker's allowance, 54 more than 1 million families asked to be paid weekly, and the Inland Revenue is already making regular payments to those families. Most of those families are now in their fourth week of payment.
However, two thirds of families asked to be paid monthly. The first date for monthly payment is today, followed by payments throughout the rest of this week. Indeed, one of the facts that the helpline has consistently had to confirm is that the earliest date for the first monthly payment is 28 April. So today, as planned, we have begun, as we told families, to pay the 2 million due to be paid every four weeks. I can tell the House that our aim is that those families will get their money by Friday of this week.
The Inland Revenue informed families that they should claim their tax credits by 31 January, so that their awards could be set up in good time for the payment of tax credits to start in April. I have to tell the House that nearly 1 million claims have been received since the beginning of March. Those claims are being processed as fast as possible by the Inland Revenue, which is prioritising people who have asked to be paid weekly and those families who claimed working families tax credit.
Some Members have also raised with me instances of families who did not receive their money when they expected it, particularly those who had claimed tax credits before 31 January but had not received their award notice or payment. I apologise for the difficulties experienced by individual families, and I can assure the House that the Revenue is doing all that it can to put things right. The Revenue has now contacted almost all those families, and the vast majority of them are already receiving payment. It is our intention that anyone who has made a complete application and has yet to receive money will do so by the end of this week, and arrangements are in place to make interim payments to people where necessary.
Our first priority has been to ensure that all families receive the money due to them, but it has also been necessary to increase the number of staff to provide advice on the helpline by more than 700. At its peak, the helpline was receiving nearly 2 million calls a day, and it is still receiving 400,000 a day. In addition, the number of staff covering the MPs' helpline has been tripled, and because some claimants are now using the M Ps' helpline number, the Inland Revenue will set up a new, additional direct number for MPs. I will write to every Member individually to inform them of the new number. So 1.3 million income support claimants are receiving their payments—as planned. For weekly claims, we are already paying more than 1 million families—as planned. From today, for monthly claimants, we are making payments to 2 million families—as planned—and we will continue to raise the number of payments as more and more claims are processed over the coming weeks.
In doing so, we are tackling the problem of child poverty that we inherited and ensuring decent family incomes, in and out of work. We are making work pay for a wider range of people, helping them to help themselves out of poverty and to stay out of poverty. We are tackling the barriers to work by enabling people to afford the child care that they need. We are investing an extra £2.7 billion in supporting families with children and those in low-paid work.
55 Because our child tax credit is available to nine out of 10 families with children, in and out of work, on top of child benefit, to the main carer, money no longer depends on the work status of the adult in the household, and the stream of income stays with people when they move into work. In the same way, the working tax credit will reach a wide range of those at risk of being in poverty even though they are in work, as well as continuing to support disabled workers and working families with children.
It is a big undertaking to deliver a reform on this scale. We are determined, however, to pursue the objectives that we have set ourselves on tackling poverty and making work pay, and to make the investment in our country's future that these tax credits represent. The numbers who have claimed belie the persistent criticism that people would not claim, so we are well placed to do that.
§ Mr. Michael Howard (Folkestone and Hythe)
First, may I thank the Paymaster General for her courtesy in allowing me prior sight of her statement and in responding to the call for a statement, which I made in the letter that I sent to the Chancellor more than 10 days ago?
Can the Paymaster General respond to the following three areas of concern? First, on the numbers involved, can she confirm the astonishing claim reported in the press this morning that even now, almost one month after the new system was introduced, 300,000 people have not had their benefits paid despite submitting their application forms by the January deadline? Is not that problem about to get worse? Those who have opted to receive payments on a four-week cycle are now due to receive their money. How many of those families will fail to receive their payments on time?
Secondly, in view of the fact that Ministers have already withdrawn the old structure of financial support, which the new system was meant to replace, does the Paymaster General accept that the onus is on them to make sure that no one is out of pocket? What plans does she have to compensate those families who have lost out? How many families have received the emergency interim payments; what are the criteria for those payments; and what has been done to advise others who may be eligible of the availability of those payments? Will she now respond to the call from the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Havant (Mr. Willetts), for an emergency extension of social fund loans to those in need as a result of this crisis?
Thirdly, what of the advice that claimants are meant to receive? Can the Paymaster General tell the House more about the current state of the so-called telephone helpline and why that effectively collapsed despite costing £53 million to set up? When will it be fully operational again? What would she say to those such as the man who reportedly made more than 2,400 attempts to get through on the helpline, only to be put on hold for a quarter of an hour and told that the form that he needed would take 15 days to arrive? What efforts are being made to contact those who are eligible for help but have not applied for the credits?
56 On take-up, the right hon. Lady gave the numbers of those who have applied. Can she give the number of those families who are eligible who have not applied? Is it not the case that that figure is in the region of 1 million?
Is it any wonder that even before this shambles the Government Chief Whip told The Scotsman that the Chancellor's flagship system of tax credits is not appreciated or understood by the low paid? Is it any wonder that even before this shambles, as recently as last December, the Secretary of State for Trade and Industry said thatthe tax credit system has not had the transforming impact we thought it would have and should have"?These tax credits were the Chancellor's brainchild. He was happy to boast about them at the time, but he has since gone rather quiet on the issue. He said in his Budget just three weeks ago that the system would allow parents to balance work and family life so that they can make "real and effective choices". So how would he answer my constituent, Mr. Bridges, who said:
I am now facing the decision as to which bills to stop paying…to ensure I am able to feed our children",and that
getting help from their helpline is like picking the six winning lottery numbers—nearly impossible"?Another of my constituents says:
I cannot begin"—[Interruption.]Labour Members ought to listen to this—it is their constituents, as well as ours, who are suffering. My constituent says:
I cannot begin to tell you how frustrated I am, and how concerned I am about the state of my finances… How do I feed my children? How do I pay my rent?Are not hundreds of thousands of families as worried as they are? As one claimant told us,
being on a low income I need the money when it is due, which is why I applied five months ago".Is it not the case that this shambles is entirely the Chancellor's responsibility? Is it not the Chancellor who, since October 1999, has introduced five new tax credits for families, scrapped four of them and then introduced two new ones? Is it not the Chancellor who was warned by the then shadow Chief Secretary that the scheme carried the risk of leading to
even greater bureaucracy and complexity in our tax system and of it failing to be able to deliver to the needy when they are particularly in need of support"?—[Official Report, 10 December 2001; Vol. 376, c. 608.]Is it not the Chancellor who should be at the Dispatch Box today, accepting responsibility and apologising to the hundreds of thousands of families who have needlessly been caused distress and dismay because of his incompetence?
Just three weeks ago, the Chancellor decided to call his Budget Red Book "Building a Britain of economic strength and social justice". Has a Red Book title ever been so inappropriate? Independent commentators have been queuing up to say that the Chancellor has got his figures on the economy wrong again. So much for economic strength. Will not the families caught up in this tax credit shambles view his promises on social justice as another sick joke?
57 Ministers said that with this new system there would be one point of claim. Is it not clear that there is in fact one point of blame, and does it not reside in the person of the Chancellor? Once these immediate problems have been resolved—if they are resolved—is there not a need for an urgent inquiry to look both at the administrative problem and at the Chancellor's policy decisions which brought them about?
§ Dawn Primarolo
Let us take this nice and slowly for the right hon. and learned Gentleman. I am greatly encouraged that he and members of his party who said that this would be a disaster and that nobody would claim are now backing off from that allegation. To suggest that the system is a shambles is a travesty. Some 5.7 million families may benefit from the new tax credits; 3.2 million are in payment or about to be in payment. If we add to that the 1.3 million families, included in the 5.7 million, who are on income support and jobseeker's allowance and who have received their extra money, the right hon. and learned Gentleman can see immediately that although he may wish that millions have not applied, that is not the case.
The right hon. and learned Gentleman asked a series of questions. With regard to the claims made before 31 January, as I said in my statement, the current position is that those families are receiving payment or are about to receive payment, or there are outstanding inquiries that we are rapidly trying to conclude.
With regard to those families who did not receive the payment when expected, who felt that they would experience difficulties or were already doing so, as I said in my statement, the Inland Revenue will make an interim payment, and those payments are being made. There is no need to resort to the social fund—an interim payment can be made. With regard to compensation, as I have told the House repeatedly, if there are circumstances in which people did not receive the service that they were entitled to expect I shall certainly look very closely at that.
The right hon. and learned Gentleman also asked about the helpline. I have explained to him that 700 extra staff were put on to the helpline to help with the enormous demand, at the height of which there were 2 million calls. Those staff are now in place. We are meeting 2 million claims this week, so calls will start to decline, and are already doing so. If the Inland Revenue received an application from a family by last Friday it will pay the family by next week unless there are outstanding queries to which we are awaiting a reply from the claimant. That does not spell a system in chaos. Millions of families are already receiving payment and millions more are about to receive payment this week. By the end of next week, the remainder who have replied will either receive payment or will have been contacted by the Revenue for further clarification.
§ Mr. Harry Barnes (North-East Derbyshire)
A good scheme is in danger of getting a bad name because of a number of problems that claimants are experiencing. The credits may be coming through soon for a number of people but, nevertheless, there are masses of problems. The MPs need the helpline for exceptional cases—it is something that we are obliged to push and argue for on behalf of scores of people in our 58 constituencies. They may represent only a small percentage of cases but are important in getting this right.
§ Dawn Primarolo
I entirely agree with my hon. Friend that it is important to get this right and ensure that people receive payment when they expect it. Many people rang the helpline asking for confirmation of when the first four-weekly payment would be made. Such payments will be made today and throughout the rest of the week. The MPs' helpline is there to assist Members in any way that Members feel is appropriate. The number of staff working on that helpline has been tripled and, as I have told the House, to assist MPs, an additional helpline will be made available to cope with any queries about payment. However, I stress again that 3.2 million families are already receiving payment or are about to do so, and 1. 3 million families on income support or JSA are already receiving their money, which means that over 4 million families—5 million nearly—are in payment. That is a success story, but it is vital that all those families who want to receive the money get it speedily and, where there are difficulties, an interim payment is made.
§ Matthew Taylor (Truro and St. Austell)
The Minister keeps saying that things are going as planned, yet my constituents could not get through on the phone and are not getting the payments that they need to pay their bills. Contrary to what the right hon. Lady has just said, not 5 million but 4 million are either getting payment or, in her words are "about to receive" it. How many of our constituents have heard those words as they try to pursue the payments that they need to pay their bills?
Is it not a fact that 1 million have not claimed—twice as many as the Government said—or is that now "as planned"? Is it not the case that 1 million at least are not expected to receive payment for some time to come—that is the real admission in today's statement which the Minister glossed over—or was that "as planned"? Although the Department now likes to blame our constituents for not getting their applications in by 31 January, is it not the case that 300,000 people who met the timetable have not got their money? In any case, where in the prominent advertising did it say that people had to get their claims in by 31 January? The advertising material—it was the main warning of what people had to do—did not feature that information with any prominence.
Ministers are now struggling with the problem. Are they at least prioritising? Do they have a system in place to enable them to prioritise those who are most needy and still missing out?
Will the Minister explain why she has failed to give us any figures on the working tax credit? Is it true, as rumoured, that that system has been a total disaster, with almost no take-up? Will the Minister give us the figures? She clearly knows them because she has disaggregated the child credit claim figures.
What lessons will the Minister draw from this fiasco for the pension credit that is now coming down the line? What will the Government do to make that simple? We still have no claim form. We have no idea of the notes that will be involved. We know that Ministers are already banking on 1 million pensioners failing to claim 59 even though they are entitled to do so. That is because they find the forms too difficult to complete or they find it too demeaning to go through the means-tested process. Is it not time that Ministers admitted that the system is too complicated, that pension credit should be abandoned and that pensioners instead should be given decent pension increases, especially elderly pensioners who experience the most difficulty in completing the forms but are in most need of the money?
Does the Minister regret not accepting the proposal that was made by Liberal Democrat Members in Committee that the existing benefit book system should be allowed to continue after 1 April where payments for credits have not been processed, which Ministers said at the time was unnecessary? They were clearly wrong.
§ Dawn Primarolo
I do not regret never taking the advice of the Liberal Democrats. Had I done so in this instance, the 3.2 million people in receipt of or about to be paid their child tax credit or working tax credit would not have the increased payments. The popularity of the scheme is clear. Four million claims have been received and tens of thousands of claims are coming in every day.
There is not a missing million. I shall try to explain it again: 5.75 million families are able to benefit and 4 million claims have already been received. We must add to that the 1.3 million who are on income support or JSA. There is not a missing million.
The hon. Gentleman asked specifically about claims that are coming in now, and about prioritisation. I can confirm that as we receive claims we are prioritising those who wish to have their payments made weekly, and trying to get that money to them as quickly as possible. Secondly, we are prioritising those who have previously been on working families tax credit or disabled persons tax credit. As I have said, by next week the Inland Revenue expects to have processed the claims that it had received as of last Friday. Payments will be made to the families unless there are outstanding inquiries relating to the details on the form.
Given the huge take-up, I fail to understand how any reasonable person in the Chamber could say that take-up has not been a success.
§ Mr. Kevan Jones (North Durham)
I welcome my right hon. Friend's statement, but does she recognise that the failures of the system have caused real hardship for many of my constituents, such as Mr. and Mrs. Russ Jones of Sacristow, County Durham, who wrote:We rely on this money on a day to day basis.They say that the income has ceased. The letter continues:
Yesterday was my son's birthday. I had the heart-breaking task to tell him that we were not able to buy him a gift.Will my right hon. Friend explain to Mr. and Mrs. Jones and many other constituents of mine who have contacted my office over the past week, why, as in the Jones's case, even though they made an application eight months ago, processing has not taken place? Why have Mr. and Mrs. Jones had to spend more than seven days trying to get through to the helpline? Will my right hon. Friend apologise to Mr. and Mrs. Jones and others 60 and seriously consider paying compensation to some of the people who have suffered badly because of the failures of the system?
§ Dawn Primarolo
Of course I apologise unreservedly to my hon. Friend and his constituents, and to the other hon. Members who have indicated that similar circumstances have been brought to their notice. I reiterate that the Inland Revenue can and should be making an interim payment in such cases. Of course, as my hon. Friend says, we need to consider this matter urgently. I take note of his point about compensation, and I will come back to him on the specific case.
§ Mr. Kenneth Clarke (Rushcliffe)
First, I thank the Paymaster General for the part that I am sure she played in getting an emergency payment to the constituent whose case I raised during the Budget debate. I hope to discover that that has happened to my other constituents. However, the right hon. Lady has obviously come to the House today in order to carry the can and, whatever else she does, to refuse to give any figure for the hundreds of thousands of people who have already failed to receive payments on which they were relying. She will have to give that figure in due course. I accept as a pretty good guess the figure of 300,000 that appeared in the newspapers this morning.
Was not the scandal totally predictable, and was it not predicted by all those who said that it would take a very long time to turn the Inland Revenue into a department capable of paying out money as well as collecting it, and in particular paying it out weekly, on the day, to millions of people relying on it—as compared with the pace that the Inland Revenue is understandably used to adopting in respect of tax claims and tax payments by wealthier people? Will the Paymaster General give the advice to the Chancellor of the Exchequer which she may already have had the courage to give him from time to time—that he should stop introducing ever more complicated and bureaucratic changes to the tax and benefits system, changing and reinventing them and running far beyond the pace of the right hon. Lady's and the Inland Revenue's ability to deliver those on the ground to people for whom not getting the money is a disaster?
§ Dawn Primarolo
The right hon. and learned Gentleman and I have discussed the matter outside the Chamber. I say again to him that he is wrong when he asserts that the Inland Revenue is not capable of making those payments. Clearly, the 1 million weekly payments that are already being made, for the fourth week in many cases, demonstrate that the Inland Revenue is capable. The 2 million people about to be paid, who requested four-weekly payments, demonstrate that as well. The tax credits system, as is shown by the millions who have applied for it, supports families, is wanted by them and gets money to them when they need it. The Inland Revenue will continue to make sure that it delivers those priorities.
§ Geraint Davies (Croydon, Central)
I welcome the fact that eligibility extends up to £58,000 for the household. Will my right hon. Friend confirm that the 8 per cent. of people who have not claimed tend to be clustered at the higher end of the pay range? She should continue to focus on take-up at the lower levels of pay, where there 61 is much higher eligibility and greater need. When she does the calculations to show the amount of money that is not taken up, as opposed to the number of people who are not taking it up, the picture will be even rosier.
§ Dawn Primarolo
I cannot confirm the analysis that my hon. Friend suggests, but I can tell him that tens of thousands of claims continue to be received by the Inland Revenue, in addition to the 4 million already received. That does not indicate to me or, I think, to any reasonable person that the system is not well known about, well supported and desperately needed by families.
§ Mr. John Redwood (Wokingham)
Will the Paymaster General confirm that her figures, and the Government's figures generally, show clearly that more than a million people who are eligible to claim have not yet claimed and are not sure when they will, and that on her own admission today, another million people have claimed and cannot get the money paid on time? Is that not a disgrace? What does she intend to do about it, and will she say sorry?
§ Dawn Primarolo
I do not think the right hon. Gentleman could have been listening when I said that 3.2 million people are already being paid, or are about to be paid because they are paid monthly. An additional 1.3 million people are receiving their money because they are on income support or JSA and receive the increased payment. That leaves the claims that have been submitted to the Inland Revenue in the past weeks and months and need to be cleared as quickly as possible. I said in my statement that we had received more than 1 million claims since the beginning of March. I told the House that for those applications that the Inland Revenue had received by last Friday, the families would be paid by next week, unless there are outstanding inquiries about the details on the form that must be clarified to ensure that the families get the right amount. Where there are difficulties, interim payments can he made.
§ Roger Casale (Wimbledon)
I thank my right hon. Friend for her statement and congratulate her on introducing, in the face of such visceral and at times hysterical opposition from the Conservatives, a measure that will bring such substantial financial benefit to people on low incomes, especially those with families. May I press my right hon. Friend on the steps that she is taking to increase take-up among middle-income families with children? I am sure she will agree that that is one of the most attractive aspects of the scheme. Having spoken to families in my constituency, Wimbledon, I know that they fully intend to take up the tax credit, which they see as an entitlement and a right, not as some kind of hand-out. They see it as a mark of having a stake in our society and being included—unlike the old system, under which they were stigmatised by being left out.
§ Dawn Primarolo
I can confirm to my hon. Friend that the Inland Revenue will continue to increase the take-up of the new tax credits beyond the 4 million existing claims. To that end, advertising will continue, to remind those who do not know about the tax credits that if they 62 put in their claim now, it can be backdated to 6 April. So as well as the 4 million claims that we have received, and the 1.3 million people on income support and JSA who are already receiving the payments directly, we will continue to run a take-up campaign to ensure that all those who are eligible submit an application and that it is processed speedily.
§ Mr. Roger Gale (North Thanet)
I start by offering a bouquet not to the Paymaster General, sadly, but to those in her private office who over the Easter period took a great deal of trouble to sort out the cases of two families in my constituency who were nine parts destitute as a result of the introduction of the scheme and the fact that, on the one hand, money had been cut and, on the other hand, money had not been received. What concerns me is that there are scores of families in that position, who have had benefits reduced, while they are waiting for other moneys to come in.
Before Easter I tabled a parliamentary question asking the Paymaster General if she would tell the House when employers could expect to receive all the information that they need to help with the implementation of the scheme. So far, that question has not been answered. Do the employers now have the information that they need to do their bit of the job?
§ Dawn Primarolo
If the hon. Gentleman tabled a question that has not been answered—I thought they all had—I apologise to him. I will ensure that he gets the reply, which I shall give now, as he put the question directly to me. I thank him for his compliments to my private office. That reflects not only on the civil servants in the private office, but on staff throughout the Inland Revenue, who have moved heaven and earth to ensure that where interim payments should have been made, they were made. As I said, I deeply regret the fact that some families faced great difficulties. Those needed to be put right speedily to ensure that they get the service to which they are entitled.
With regard to the payment of the working tax credit, which will eventually be paid through the employer, but currently will be paid directly to the individual concerned, it will follow exactly the same route as the old working families tax credit. Employers asked for a 42-day lead-in time. I will check the number of days, but it is approximately that. The Inland Revenue will pay directly first, in instalments two-weekly to the claimant, and when the employer is able to put the tax credit on to the payroll, it will be paid through the wage packet. All that has been negotiated with employers. The software is in place, but the initial payment comes from the Inland Revenue to give employers time to set up their payrolls. That is exactly the same as working families tax credit and disabled person's tax credit, which worked very well.
§ Mr. Michael Connarty (Falkirk, East)
I commend my right hon. Friend and the Chancellor for introducing the tax credits because they are logical, they make sense and they help families. I urge her not to give an inch to the Conservative prophets of doom and the moaning Minnies on the Liberal Benches and to forgive the previous Conservative Chancellor. He did not get a computer system right during his whole term in office 63 and obviously does not understand that if a computer system is right weekly payments can be made with ease—it is called modern technology.
Will my right hon. Friend take into consideration several cases from my constituency? A parent with a minimal income is still waiting for a weekly payment, although it is now 22 days since it should have been made, meaning that great hardship is occurring. A gentleman, whom I shall not name because he is a reporter for my local newspapers and may be listening for a reply, applied in October. He was phoned by the Inland Revenue in October and answered an outstanding question. He is still to be notified of how much he will receive. He has said that he does not know what he will do with his monthly budget if he does not receive payment by the end of the week. How may he and my other constituent apply for the interim payments that my right hon. Friend mentioned?
§ Dawn Primarolo
I agree with my hon. Friend: Opposition parties opposed both the introduction of the new tax credits and increased payments to families. They were the merchants of doom, proclaiming that take-up would be low. The tax credits are enormously popular and take-up is high. Opposition Members now thrash around and try to create illusionary figures about outstanding payments.
Of course, getting money to the families concerned must take priority over any other process. I am deeply sorry to hear about the difficulties that my hon. Friend's constituents—especially the journalist—experienced getting a reply on the matter. I shall ensure that that will be examined as quickly as possible, as I have done with all hon. Members' points that have been raised with me and my office.
A claimant family may apply for an interim payment to the Inland Revenue inquiry centre. People who are clients of Jobcentre Plus—I doubt that that will apply to a journalist—may apply directly to Jobcentre Plus, which has facilities to make an interim payment if necessary. If my hon. Friend or other hon. Members experience further difficulties, I am sure that they will not hesitate to get back to me.
§ Annabelle Ewing (Perth)
It is a pity that the Paymaster General has not taken the opportunity to recognise that the introduction of the system has been a shambles and that it has left some of the most vulnerable people in our society high and dry. I telephoned the MPs hotline today. I was offered an apology, but that will not pay my constituent's bills that fall due on 1 May. Surely it is evident that a significant number of people have not received the service that they were entitled to expect, so why will the Paymaster General not give an unequivocal guarantee that those people will receive compensation?
§ Dawn Primarolo
Forgive me if I am wrong, but I think that the hon. Lady said that her constituent's payment falls due on 1 May. Today is 28 April, so if her constituent is due to receive a monthly payment, it will be paid this week. [Interruption.] Hon. Members should listen to what I say rather than asking questions regardless. If a claimant has not received a weekly payment that should have been made, he or she will be 64 entitled to an interim payment. I have explained to the hon. Lady, as her constituent's representative, how that can be done. One of the biggest issues about the helpline has been the huge volume of calls, which has frustrated some claimants and prevented them from making contact. We responded by providing 700 new advisers for the helpline and the number of calls is falling. It is a priority to ensure that families such as that of the hon. Lady's constituent receive the money to which they are entitled. She can certainly give me her constituent's details.
§ Mr. George Foulkes (Carrick, Cumnock and Doon Valley)
Does my right hon. Friend agree that it is predominantly Labour Members' constituents who are relying on the extra payments for their basic needs? We have deep concerns about any delays and we have raised them with my right hon. Friend, her colleagues and the Inland Revenue. I thank her for her apology to people who have been badly affected by the arrangement—she has repeated it twice today—and for her announcement of all the improvements and additions. While listening to the shadow Chancellor and the Liberal spokesman, it occurred to me that they had written their speeches without reading about all the improvements. Of course it is a pity that Mr. Bridges, the shadow Chancellor's constituent, has to wait for his money, but at least he will get it. If the shadow Chancellor were Chancellor, he would not receive it. Is it not astonishing, outrageous and incredible that we are hearing such criticism from Opposition Members when we are putting thousands of pounds into people's pockets—
§ Dawn Primarolo
What is important to my right hon. Friend and all hon. Members is that those who have applied for the tax credits and are entitled to receive payments should receive them on time so that they may depend on the money. As I explained, 3.2 million people have been paid or are about to be paid. The other applications that we have received will be dealt with by the end of next week. Interim payments are available for families that experience difficulties that may be due to late payment, which I deeply regret. We shall continue to make such interim payments available when necessary. This is a huge system that is delivering support to families for the first time. If Opposition parties had any say, that support would not have been available in the first place. There were 3 million families in poverty when the Conservative party left government. That does not show that it is interested in the hardships that families face.
§ Alistair Burt (North-East Bedfordshire)
As somebody who has some sympathy for the Minister and finds her position today eerily familiar, may I ask why basic lessons were not learned from past administrative problems? Governments always seem to promise too much too soon and pressures seem to be far beyond what is anticipated, although history shows the pressures that could have been expected. One of my constituents, who applied on 18 December, has still not heard what her award is. She knows that she has an award but found out that when it was made notification was not automatically sent. She has no evidence to show 65 that she is in receipt of the new benefit, which debars her from such things as free prescriptions. If lessons had been learned from the past, surely there would have been a slower approach and the Minister would not be in the position that she is today.
§ Dawn Primarolo
We looked at the lessons of the past. For example, there was only a 50 per cent. take-up of family credit when it started, and we have far exceeded that. I shall not go back through the experience of the Child Support Agency, which I am sure is engrained on the hon. Gentleman's memory.
§ Dawn Primarolo
For ever, as the hon. Gentleman says.
I have tried to explain that a huge number of families are receiving or are about to receive their money. The number of claims received is 4 million and rising. Every hon. Member has said that the priority is to get the money to families when they expect it, and that is our objective.
§ Mr. Paul Tyler (North Cornwall)
Will the Minister assure us that she has listened to the complaints and concerns expressed by Members on both sides of the House—not just today, but for weeks—about the delivery of the new credits and, in particular, the communications system, specifically the shambolic implementation of the hotline for MPs and the helpline for members of the public? As the former Minister, the hon. Member for North-East Bedfordshire (Alistair Burt), said, surely the lessons should have been learned. When something of such complexity is introduced, it is important that members of the public and MPs can get information on it. Otherwise, a logjam builds up, as it has, and the situation gets worse. Will the Treasury give an undertaking that a lesson has been learned and that if a similar credit is introduced in future—perhaps for pensions—a fully manned system will be in place to provide information to the public and MPs?
§ Dawn Primarolo
The helpline has been in existence since last August and has functioned well all that time. As I explained, at its peak, 2 million calls a day were made to the call centre. In response, we assigned 700 more staff to deal with the calls. I assure the hon. Gentleman that not only do I listen carefully to what Members of Parliament say about their experiences, but I give specific consideration to what families tell us about their experiences. That is why I continue to set the priority that payment must be delivered on time, that interim payments must be available if that cannot be done, and that the claims that were received by 31 January are processed through the system. We aim to ensure that all claims received by last Friday will be completed by next week. It is an important system that provides support to families. As the most radical reform since the introduction of the Beveridge reforms, I am briefed on it daily and take note of what needs to be done to ensure success.
§ Mr. Patrick McLoughlin (West Derbyshire)
Given the fact that, as the system has been so well introduced, we are all exaggerating the problems, will the Minister 66 respond directly to a couple of complaints that I have received, which must, it seems, be unusual? One lady agreed her award but was not told how much it would be. She moved house during the process and, because the system could not match her details, failed security checks and will not receive anything for some time. Another lady has been told that because she applied online the forms will take a lot longer to process and her claim will take longer to sort out. Another lady has been told that her records have been "partially captured". Perhaps that has something to do with recent events, but I do not know what it means, and neither does my office. As so few cases are going wrong according to the Minister, would she mind if I gave those people the number of her private office for them to use as their helpline?
§ Dawn Primarolo
I am sure that the hon. Gentleman and the rest of the House will celebrate the fact that 3.2 million people are receiving or are about to receive payment, in addition to the 1.3 million. Online applications should not take longer and should be processed at the same speed as other applications. Hon. Members have implored me to prioritise payment to those who are paid weekly and those who received the working families tax credit or the disabled person's tax credit, and that is what is happening. We are also clearing the claims that we have received, which as of last Friday stood at some 4 million.
It is not the case that claimants will be unable to access passporting benefits because their exemption covers them until 31 July or that claimants will not receive information from the Inland Revenue. All hon. Members will accept that the information that is received on the applications needs to be correct, verified and cross-checked with the system. That has to proceed, as it always has, and we will do it as quickly as possible.
§ Mr. Christopher Chope (Christchurch)
Are not people who pay their tax late or send in their tax return late fined? Is it not typical of the Government that when they have an obligation to pay a tax credit, they refuse to offer compensation? Will the Minister compensate my constituent who spent five days on the telephone trying to get through to the helpline? As she failed to do so, she went to the tax office in Bournemouth, where she had to queue before eventually being given a giro for £540. She had to take the day off work and leave her four children at home to be looked after by someone else. That tax office has now told her that the £540 giro will not be reclaimed or set against other income that she receives. Is that the bribe to compensate people, or will the £540 have to be repaid if she gets a payment through the bank?
§ Dawn Primarolo
Interim payments are made in circumstances in which families have not received the payment on the date that they requested or, in some cases, if they have elected to change from four-weekly payments to weekly. The interim payment is made to ensure that a family does not experience any difficulties. That has always been the policy. It has been clearly explained throughout and I did that again today.
On the fines for non-payment of tax, the hon. Gentleman knows that people who submit self-assessment forms pay their tax later than those who are 67 part of the pay-as-you-earn system. They are given a date on which to pay the tax, which is a considerable time after anyone else. Those penalties were introduced by a Government of whom he was a member.
§ Mr. James Paice (South-East Cambridgeshire)
Is it not astonishing that although the Minister has kept so closely in touch with everything that has gone on, she does not seem to appreciate the anger and distress that we have all encountered on doorstep after doorstep and in letter, e-mail and phone call over the past three weeks? Does she not understand that countless people got their applications in before 31 January but have heard nothing? They do not know whether they will get any money, let alone whether it might arrive this week. It is all very well for her to talk about an interim award, but if people cannot get through on the helpline there is no way in which they can either know about it or apply for it. There are probably 1 million people who are wondering whether they will get any money and when it will arrive. She has said nothing to enlighten them.
§ Dawn Primarolo
I hope that when the hon. Gentleman is on the doorstep talking to constituents he will explain that he opposed the introduction of tax credits and that had his party had its way they would not be getting the money in the first place. I hope that he and his party explain that to the millions who are receiving or are about to receive payments.
I have explained how the interim payments can be accessed. That information has been made available and will continue to be available so that we support those families who are experiencing genuine hardship if their tax credit has not arrived on time or if their application has been received and we are in the process of dealing with it. It is vital that families get the money to which they are entitled on time. As I said, 3.2 million people—more than under any other system—are receiving or are about to receive that money. Some 1.3 million on income support and JSA received the increased payments. That money, which goes into families' pockets, would have been denied them by Opposition Members.
§ Mr. David Tredinnick (Bosworth)
Despite the Paymaster General's determined defence this afternoon. is it not clear that she has completely underestimated the scale of the task in hand? We have already heard about the chaos of the telephone system. What does she have to say about the fact that the Department ignored its own staff's worries about the failings of the computer system? Is she not aware that the back-payment system does not help those who spend the money that they receive straight away and need immediately to keep their families alive? Is it not a fact that tax credits give entitlements to other benefits such as free prescriptions? To make their claims, people need their tax award notification. What does she have to say to all those people who have not been able to claim their free prescriptions? What has that done to their health?
§ Dawn Primarolo
I shall try again. On passported benefits, there are interim arrangements for families who had an exemption certificate under the old 68 arrangements. If they had a tax credit exemption certificate under the previous arrangements, it will have been extended and the claimant can use it until 31 July 2003, even if their circumstances have changed. If the claimant has lost the certificate, they can still sign for one.
With regard to the missing applications, the hon. Gentleman has clearly not been listening. Some 4 million people have applied and 3.2 million are receiving payment or are about to do so. On top of those 3.2 million people, 1.3 million are on income support or JSA and are receiving the money to which they are entitled. That is not a system that is failing to deliver. Where families have not received, for whatever reason, the payments to which they are entitled or that they should have received, the Inland Revenue will make them an interim award. I have explained to the House how that can be done.
§ Mr. David Heath (Somerton and Frome)
Does the right hon. Lady accept that when people are living hand to mouth and have not received the payments that they deserve, their difficulties will not stop when the payments are made, whether as an interim or final payment? In the interim, the bills will have continued to come in and there will have been missed payments on gas, electricity and council tax. The banks will be putting in their £20 charges for unintentional overdrafts. First, will she do something about that by approaching the various authorities to ask them to be sensitive to the problems that people face? Secondly, will she ensure that everyone subject to delayed payment has in their hand a letter from her explaining the circumstances that have created the situation in which they find themselves, through no fault of their own?
§ Dawn Primarolo
No family will lose money. The payment from 6 April will stand. The interim payments are there to ensure that support is available to families who have experienced difficulties. There was a period in which the working families tax credit ran on before the new tax credit started. Each family was asked to state whether they wanted to be paid weekly or four weekly. That money is now available to them. I find it incredible that the hon. Gentleman's party—I hope that he is making this clear to his constituents while pressing his claims about special cases that need to be dealt with accurately—does not support the new tax credits.
§ Miss Julie Kirkbride (Bromsgrove)
The Paymaster General keeps parroting statistics, but does she realise how insulting that is to the many hundreds of thousands of families throughout the country who are at their wits' end because they simply do not know whether they will continue to receive the benefit on which they have come to rely? I have been contacted by many families in my constituency who have cancelled their standing orders because they do not know whether they will have the money to pay for them in the bank by the end of the month, as they have been unable to contact the Inland Revenue to find out about their award.
May I press the Paymaster General on the questions that have been asked about compensation? For example, a lady in my constituency who has been claiming the working families tax credit does not know whether she will receive any money under the children's 69 tax credit by the end of the month in just a few days' time. Can she be given compensation for the distress that has been caused and for the severe administrative chaos involved in her having to cancel standing orders because she did not know whether she would receive the money to which she is entitled?
§ Dawn Primarolo
I hope that the hon. Lady is explaining to her constituents why she opposed the introduction of the extra money and why, if she had had her way, people would be talking not about late payments, but about no payments whatever. Of course, it is important that families receive the money to which they are entitled. The payment week of the 2 million families who asked for four-weekly payments—two thirds of those who applied—starts this week, today, and they will receive that money. Where there has been extreme hardship, the circumstances will of course need to be looked at and a decision made about the appropriate and best response to the families who did not receive the service that they were entitled to expect.
§ Mr. John Bercow (Buckingham)
Instead of the Paymaster General seeking to defend the indefensible and scapegoat applicants for ministerial ineptitude, it would have been so much better if her right hon. Friend the Chancellor had come to the House to give a gracious apology for this fiasco. Given that the Government legislated in the previous Parliament to allow the charging of interest in cases of late payment of commercial debt, and as hundreds and thousands, if not millions, of those who have suffered in this fiasco risk plunging into the red through no fault of their own, why cannot she today make good her pledge to the hon. Member for Somerton and Frome (Mr. Heath) that no one will lose money by guaranteeing that everyone who has not been paid so far will receive a payment with interest on top?
§ Dawn Primarolo
I have made clear the position with regard to payment, interim payments and the question of ensuring delivery on the appropriate date. I have also explained to the House the response to the families who are in particular need and require urgent support through the interim payment. In all friendship, I say to the hon. Gentleman that I did not see him complain when his party plunged 3 million children into poverty or when millions were unemployed and suffered as a result. This Government have introduced a reform that pays money directly to families and supports them whether they are in work or out of it and supports them in moving from unemployment into employment. We are spending more money than any other Government on supporting families and children. With regard to families who have experienced difficulties, I have said that I apologise for that and I shall ensure, as will the Inland Revenue, that interim payments are made where appropriate.