Tax Credits Bill
10:30 am
Mr Howard Flight (Arundel and South Downs, Conservative)
Welcome to the Chair, Mr. Hood. I am sure that our debates will be effective. I assure the Paymaster General that we have no intention to filibuster, but we feel quite genuinely that eight sittings will be wholly inadequate for such a major Bill. I question the Government's wisdom in introducing it at a stage at which obviously they have not made up their mind about expenditure and what they want.
The Minister may know that the Institute of Fiscal Studies considers that the consultation process was a scandal; some original papers that contained illustrative figures have since disappeared, and the consultation document did not cover all the issues. We are about to discuss a framework Bill in which the Government may make regulations in respect of many key areas—a phrase that we have come not to love. Such a process is not democratic, given the changes that will be made under the Bill.
The Minister may be aware that a Select Committee considered tax credits under the Heath Government and issued an important minority report. When the Labour party won the 1974 election, Chancellor Healey said that the Government believed that there were serious drawbacks to the tax credit scheme described in the minority report. The drawbacks highlighted were that there was insufficient flexibility, particularly for those most in need, and that the majority of the expenditure would benefit those who were not in poverty. Costs were too great when measured against benefits, particularly for those most in need, and there was concern, even then, about the increasing scope for fraud. It was suggested that the Select Committee should stop ill-considered and ill-worked-out solutions of tax reform before the then Government were rushed on to the legislative conveyor belt.
Today, we are to be rushed on to an inadequate legislative conveyor belt even though many major issues are still unresolved, particularly that of what expenditure and benefits are intended. We oppose the programming motion because it does not allow us to do a proper job of critiquing the Bill. We shall do our best to ensure that the most important clauses are dealt with, particularly those late in the Bill that deal with fraud.
Perhaps the most important issue, which was raised by the right hon. Member for Birkenhead (Mr. Field), is that the Bill threatens to open up enormous new scope for fraud just after the Government have set in motion measures to reduce social security fraud. Those measures are being torn up under the Bill. We shall endeavour to discuss those passages, although that may mean sacrificing others. It is a great pity not to allow sufficient time to discuss important new measures, particularly as the consultation process has
been inadequate, as evinced by the comments of many charities, other bodies, lawyers and specialists.