Tax Credits

Oral Answers to Questions — Treasury – in the House of Commons at 10:30 am on 1st March 2007.

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Photo of Sir David Amess Sir David Amess Conservative, Southend West 10:30 am, 1st March 2007

What proportion of appeals against repayments of tax credits have been refused since April 2006; and if he will make a statement.

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

As the hon. Gentleman will have heard me say in my answer to Mr. Holloway, recovery of the tax credit overpayment can be disputed. However, if the process has been settled and the dispute has not been upheld, the money is recovered. The only situation in which the money would not be recovered is when the claimant shows that recovery would cause severe hardship.

Photo of Sir David Amess Sir David Amess Conservative, Southend West

What a shambles of a Government! We all know who is responsible for this particular fiasco: the next Prime Minister. I wonder whether the right hon. Lady has any appreciation of the distress felt by the thousands of constituents who present themselves at our surgeries because they are worried about making the repayments. Will she apologise to the House for that mistake, admit that the system is over-complicated, and simplify it?

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

Perhaps, Mr. Speaker, it is because there are 5,800 families and some 9,400 children benefiting from tax credits in the hon. Gentleman's constituency. In the past six months, he has written to me just five times about the issue of overpayment, so his rhetoric does not match the reality in his constituency, where thousands of families are getting the money that they need, when they need it, and they welcome it. They fear that if his party were in government, it would take that away from them.

Photo of David Laws David Laws Shadow Secretary of State for Work and Pensions

In both of the past two years there have been more than a third of a million disputed tax credit overpayments. In 2005, in 46 per cent. of cases, the claims of overpayment were overturned and written off on appeal, versus 4 per cent. last year. Why is the appeals system getting tougher, when it ought to be getting fairer?

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

The hon. Gentleman draws completely the wrong conclusion, as normal. Perhaps he will understand that the overpayments should not be blamed on the Department, as he seeks to do, or on individual claimants; he should recognise that as we have a responsive system, the claimant has to make sure that the information given is correct. Under the Liberals' proposals for a fixed system that he is peddling around the country, more than 700,000 families who benefit from tax credits would be worse off.