Children's Tax Credit

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 25th January 2001.

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Photo of Betty Williams Betty Williams Labour, Conwy 12:00 am, 25th January 2001

How many families will be entitled to the children's tax credit. [145799]

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

It is estimated that about 5 million families will benefit from the introduction of the new children's tax credit.

Photo of Betty Williams Betty Williams Labour, Conwy

I thank my hon. Friend for that reply. Is it correct that up to 250,000 families in Wales will be eligible for a £10 a week tax cut when the children's tax credit comes into effect in April? Is she further aware that 1,600 families in my constituency of Conwy are eligible for the working families tax credit, which is worth, on average, an extra £30 a week? Will she, therefore, explain for the benefit of Conservative Members what would happen to the living standards of those hard-working families if those tax credits were scrapped?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I do not think my hon. Friend will be surprised to hear that I agree with her comments.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I did not. The children's tax credit will benefit in particular lower and middle-income families, who desperately need that money to help with support for their children.

Given your previous ruling, Mr. Speaker, I will refrain from answering on behalf of the Opposition, but it is plain to everyone that, if they were ever in a position to abolish the children's and the working families tax credits, and again to freeze child benefit, which was their policy in government, families with children would be considerably worse off—some of them by as much as £50 a week.

Photo of Graham Brady Graham Brady Shadow Spokesperson (Work and Pensions)

When the Paymaster General and the Chancellor and his friends were popping champagne corks at their celebratory party last night, did it occur to the hon. Lady that the Government's policy will mean that 5 million married couples will no longer qualify for tax credits? They will be worse off under this Government. Is it not wrong for the Government to discriminate against married couples with children while they claim to be helping them?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I am sure that the hon. Gentleman is aware that the Government also introduced the 10p starting rate and cut the basic rate of tax, which benefited the very taxpayers whom he now identifies. He will, I am sure, accept that the growth of the number of children living in poverty under his Government was a national scandal; that it is the responsibility of this Government to lift those children out of poverty; and that families need the most help when they have children and when those children are small. The hon. Gentleman should turn his mind to his alternatives: would he choose to force more children into poverty or to support this Government's policy?

Photo of Gillian Merron Gillian Merron Labour, Lincoln

Can my hon. Friend confirm that the children's tax credit is just one of a number of measures designed to lift children out of poverty? Can she also confirm the importance of continuing to fund initiatives by this Government such as the £2 million Birchwood sure start scheme in my constituency, designed to give under-fours the very best start in life? That scheme is clearly very much at risk from the Conservative party, which is pledged to cuts worth millions of pounds across each constituency, including my own.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I agree with my hon. Friend. The contribution of sure start to families, and particularly to ensuring that their children have the very best start in life, is something that I think the whole House would want to support. We want to ensure that children are not being born into poverty, growing up in poverty and suffering from poverty all their adult life. The changes that this Government have made, both with the children's tax credit and the introduction of the working families tax credit, and with the rise in child benefit, mean that many families will be up to £50 better off, compared with their experience of poverty under the previous Government.