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The hon. Gentleman obviously has not read the words of the Child Poverty Action Groupif he wants to trade organisationswhich says that the way that the tax credit system operates has created, rather than prevented, hardship. I know that the hon. Members for Doncaster, North (Edward Miliband) and for Normanton (Ed Balls) are fiercely keen to defend their reputation and that, to an extent, their reputation depends on the success of tax credit policywe will see how that fares over the next couple of yearsbut they
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should own up to the mistakes. The very fact that they do not own up to them shows how out of touch many Labour Ministers and those who advise them have become with the problems that their tax credit system has created. The person who is more disconnected from that reality than anyone else is the Chancellor of the Exchequer himself: the man who has put tax credits at the heart of his empire.
We understand that the Chancellor is in Brussels today, but he must be as disappointed as we are that he has missed yet another chance to defend his policy to the House, for he invented tax creditsno one else. He made them complicated and intrusiveno one else. He presided over his own Department's errors and incompetenceno one else. Yet when it comes to admitting his mistakes, it is anyone else but the Chancellor. When it comes to explaining how the Government are sorting our his fiasco, it is anyone else but the Chancellor. Above all, when it comes to apologising to the thousands of families who are suffering hardship as result of his chaotic administration of tax credits, it is anyone else but the Chancellor.
Rob Marris (Wolverhampton, South-West) (Lab): The hon. Gentleman mentioned figures of 50,000 or 150,000 complaints. My understanding of tax credits is that they have helpedor changed the income of, to put it in more neutral terms for his purposes6 million families. With a back-of-an-envelope calculation, that suggests an administrative problem of about 3 per cent. on his figures. The Government admit in their amendment to the Opposition motion that there are administrative problems. All hon. Members admit that there are administrative problems. First, will he say what percentage of administrative problems he thinks is acceptable for any Department? Secondly, to change the focus, will he say whether he supports tax credits, because he is arguing that they are putting families into poverty, yet his own motion does not pursue the logic of that and suggest that they should be abolished?
Mr. Osborne: Thank you, Mr. Speaker. Perhaps the hon. Gentleman will catch your eye later, so that he can explain that the error rate is not 3 per cent. He should consider his own constituency. Of the 8,200 tax credit awards there, 1,100 were unpaid and 2,600 were overpaid. That is very considerably more than 3 per cent. Indeed, in total the overpaid and underpaid awards come to almost half the entire tax credit awards in the country. We are not talking about small amounts of administrative error.
We have finally managed to bring Browne to the Dispatch Box, but with respect to the Chief Secretary, we have got the wrong Mr. Browne. The Prime Minister has said sorry and the Paymaster General has said sorry, but we have not heard a word from the architect of tax credits himself. Indeed, the last time that the Chancellor answered any questions on tax credits in Parliament was more than a year ago, and he has had plenty of opportunities to do so.
Mr. Austin: I should like to ask the hon. Gentleman three simple questions. Does he accept that child poverty trebled when the Conservative party was in power? Does he accept that it has been cut by 1 million under this Government? Will he tell uswith a straight answer, yes or nowhether he supports the Government's objective of halving child poverty by the end of the decade?
Mr. Osborne: The hon. Gentleman has obviously not listened to the earlier exchanges. Of course any party that believes in a civilised and compassionate society wants to reduce child poverty. The point of the debate is that many tens of thousands of families have been plunged into child poverty as a result of the tax credit system fiasco. If he has not yet become aware of that in the couple of months that he has been a Member of Parliament, I suggest that he hold more constituency surgeries and he will discover what is going on in his constituency.
Mr. Patrick McLoughlin (West Derbyshire) (Con): Will my hon. Friend tell us later how much the implementation of the tax credit system has cost the country? Bearing in mind that it is fundamental to a lot of people, how much will all the complaints and the wrong awards cost the nation? How much of the money that we want to go to people who need it is thus not arriving there?
Mr. Osborne: My right hon. Friend does not have to wait for the rest of my speech because I am happy to tell him now that the cost of the administration of tax credits has increased tenfold to more than £400 million. More than 3,000 people are now employed just on the helpline. We are all, as taxpayers, paying for the mess that the Chancellor has created.
How did we get into this mess? We all know that the introduction of tax credits in 2003 was shambolic. No one who was an MP at the time is likely to forget that. Hundreds of thousands of families were left without the financial support on which they relied. At the height of the crisis, there were 1.7 million attempts in a single day to contact the Revenue helpline[Interruption.] The hon. Member for Normanton is muttering. I suspect that he had a special phone line in the Treasury when he was working there, but none of the 1.7 million people who were trying to contact the Revenue got hold of his numberperhaps they would have shouted all sorts of abuse at him if they had.
It took four months before the system was stabilised. Thanks to the work of the Public Accounts Committee, we now know that the testing period for the new information technology system was cut significantly before it went live. We do not know who ordered it to be cut, so perhaps the Chief Secretary to the Treasury can tell us today. We also still have not seen the Government's gateway review, which said that the IT system was going to work well, so will the Chief Secretary publish that without further excuse?
Since the initial fiasco, we have had one software problem after another. Some 500,000 families received duplicate payments and 82,000 households had to find the cash to repay the Revenue for its own mistakes. In the past financial year, 60,000 people who told the Revenue that their income had changed found that their
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partners' income was reduced to zero as a result. They were then overpaid tax credits that were clawed back from them. The Revenue might think that the mistakes have been rectified, but families are still living with their consequences, as the reports that we are examining today make clear.
Mr. Lindsay Hoyle (Chorley) (Lab): The hon. Gentleman is generous in giving way. Of course we have heard about mistakes and many complaints have been made. Any MP who holds surgeries will know the number of people who come to them with problems, but allowing for that, everyone in the Chamber will recognise that child poverty must be something that we put into history. Will the hon. Gentleman make it clear whether the Conservatives would, if elected, scrap tax credits? His answer to that question would address a lot of the issues today.
Mr. Osborne: With the greatest respect to the hon. Gentleman, I shall get to the future of the tax credit system later in my speech, so I shall happily take an intervention then. Again he talks about isolated cases, but of the more than 11,000 people in his constituency who receive tax credits, half were made an incorrect award. He cannot seriously be happy with that as the Member for Chorley.
Mr. Hoyle: Never once have I stated that I am happy when judgments are wrongfar from it. I am the first to complain to the Minister and to take up issues on behalf of my constituents. I hope that other hon. Members also do that. We do not need any lectures from the hon. Gentleman.
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