What estimate he has made of the likely change in the number of tax credit claimants following the abolition of the 10 per cent. starting band of income tax in the financial year 2008-09; and if he will make a statement.

I refer the hon. Gentleman to the answer I gave to Question 1.

Hon. Members:

He was not here.

Actually, I was here. May I, too, congratulate the Chancellor on his new job, and also on his relatively reasonable response to my hon. Friend the Shadow Chancellor about the shambolic and chaotic situation regarding tax credits? Given that almost half the claims have been mispaid and that of those, nearly 2 million people have received demands to pay back money, which of course they have already spent, does he think it sensible that by abolishing the 10p tax rate, instead of first sorting out the system, more people will become eligible for it and thus sucked into that shambolic and chaotic situation?

There are two points and I think that the Shadow Chancellor touched on the first when he made the perfectly reasonable point that people had been overpaid, the sums can be substantial and if they are on modest incomes that is one of the reasons why it takes longer to get repayments and there is more money outstanding. We have to be sensitive about people's ability to pay. However, on the second point, I do not follow the logic of Mr. Robathan at all. If changes are made to the tax system that relate to people with children, it is important that we use the tax credit system to help them. The changes that the then Chancellor announced earlier this year in the Budget mean that more families with children are being helped, which is something that I want to continue to happen.

The Institute for Fiscal Studies is hardly a cheerleader for our party, but its assessment of the Budget in this regard is broadly very positive indeed. The IFS indicated that of the 10 deciles of income where it had assessed the impact the lowest two had benefited most from the changes. However, will the Chancellor respond to the IFS's one observation of concern, which is that those who lost out due to the changes were disproportionately low-earning, single people, with no dependent children? Will he promote take-up—

Order.

I agree with the point that my hon. Friend made in relation to the IFS, which was extremely complimentary about the budget changes; but of course, I recognise what he said. The former Chancellor increased the threshold for working tax credit. He increased the child tax credit itself, which will help us to take 200,000 children out of poverty. We increased the age allowance, so low-income pensioners over the age of 65 will be no worse off and 580,000 will be removed from tax altogether. As my hon. Friend has said, the IFS showed that the biggest proportion of gainers are those at the lower end of the income distribution, which stands in stark contradiction to what the Liberals are proposing today.