Tax Credits — 12 Jul 2005 at 18:49

This division occurred at the end of a Conservative opposition day debate on the Tax Credits schemes. The motion proposed by the Conservative front bench was:

That this House commends the Parliamentary Ombudsman and the Citizens Advice Bureau on their reports on Tax Credits; notes with concern their conclusions that many thousands of low income families are suffering financial hardship as a result of the serious problems with the administration of tax credits; further notes the huge cost to the taxpayer of these problems; calls on the Government to implement as soon as possible all the Ombudsman's recommendations to improve the tax credit administration; in particular calls on the Government to adopt the Ombudsman's recommendation to set up a statutory test for recovery of excess payments of tax credits consistent with the test that is currently applied to social security benefits, with the right of appeal to an independent tribunal and calls on HM Revenue and Customs to suspend all recovery of tax credit overpayments until this reform has been completed; and calls on the Chancellor of the Exchequer to explain the Government's failure to provide low income families with the service they deserve; and requests that he conduct a fundamental review of the structure and administration of tax credits, as recommended by the Ombudsman.

The Government front bench moved an amendment to replace the text of the motion so that it would read:

That this House supports the Government's strategy to make work pay and provide financial support to families through tax credits; welcomes the fact that over 6 million families and 10.5 million children are benefiting from tax credits, with first year take-up of around 80 per cent., compared to just 57 per cent. for the Family Credit system inherited by the Government; recognises that far more families than ever before are benefiting from help with childcare costs; notes that tax credits are central to the Government's goal of abolishing child poverty; further notes that tax credits have helped ensure there are 1.5 million fewer children in poverty and have helped 275,000 lone parents into work; recognises the need to balance the demands for a simple system with the need for a system that responds to people's changing circumstances, giving most help to families when they need it most; acknowledges the IT and administrative problems that accompanied the early stages of implementation; and welcomes the measures announced by the Government for improving the administration of the system.

The question put before the House was whether the original wording should be retained. Therefore those voting Aye were indicating their support for the original motion and their disagreement to the amendment. Those voting No were opposing the original wording although not necessarily agreeing with the amendment.

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