§ Mr. WebbTo ask the Chancellor of the Exchequer (1) if he will estimate the total number of people who will receive the proposed working families tax credit if everyone entitled to the credit were to take up their entitlement; and what would be the cost in 2000–01 of the credit on that basis; [70078]
101W(2) what assumption was made, for the purposes of forecasting the public expenditure consequences of the working families tax credit, about the percentage of those who will be eligible for the new credit who will take up that entitlement. [70077]
§ Dawn Primarolo[holding answer 9 February 1999]: In forecasting the cost of the Working Families Tax Credit (WFTC), it has been assumed that the behavioural response of those households eligible to claim WFTC will be broadly similar to that in Family Credit. This response partly depends on net incomes and differences in the shape of the income distribution of those eligible for Family Credit and WFTC and means that the assumed take-up percentage is slightly higher for WFTC. The assumptions for costing WFTC are consistent with other welfare-to-work measures where the costings and entitlement figures do not take into account any benefit savings from people moving from welfare to work. It is estimated that, if everyone entitled to the WFTC were to take up their entitlement, in 2000–01 there would be about 1.65 million in receipt of the credit, with a total expenditure of about £4.9 billion.