Tax Credits
In a debate on the Treasury Committee's report on Tax Credits, Brooks Newmark condemns the extent of wrong payments in the tax credits system.
Mr. Brooks Newmark (Braintree) (Con): Notwithstanding the hon. Gentleman's laudable attempt to help the Minister along, may I ask him whether he agrees with the assessment of the hon. Member for Newcastle upon Tyne, Central (Jim Cousins), who said at yesterday's Sub-Committee sitting, in the presence of all of us here, that
"under or overpayments of tax credits is a shocking, devastating damage to the whole welfare reform policy"
and that
"these administrative deficiencies have a major impact on the Government's welfare reform policies."?
Mr. Todd: My hon. Friend is much more a user of hyperbole than I. In parliamentary terms, I am at the boring end of the scale; I always have been and I accept it. I tend to consider issues in pragmatic and problem solving terms, so I do not entirely share those sentiments. The situation is recoverable.
Mr. Newmark: I want to be clear. The hon. Gentleman is saying, then, that it is satisfactory that three of five people who receive tax credits-97 per cent. of people who earn less than £10,000 receive them-are either being paid too much or too little. Is the hon. Gentleman saying that that is not unsatisfactory?
Mr. Todd: I know that I did not say that. I wish that we had the tools to do deeper analysis; a little bit of that would almost certainly show that a significant proportion of those who are underpaid and overpaid handle that circumstance perfectly competently and that it is part of their normal lives. For example, if someone gets a pay increase during the year, that is a laudable thing, their circumstances change and they cope with it. They deal with the underpayment or overpayment and anticipated it happening. We are talking about a smaller community of people, who genuinely cannot cope with that situation. I do not think that the problem is on the scale that the hon. Gentleman identifies and the one that my hon. Friend the Member for Newcastle upon Tyne, Central (Jim Cousins) talked about in those terms yesterday.
Mr. Newmark: The HMRC says so.
Mr. Todd: Indeed it does, but as I said, it cites a figure that does not identify the harm that that figure causes.
