Tax Credits Bill — 26 Jan 1999

[Relevant documents: The First Report from the Social Security Committee, Tax and Benefits: Implementation of Tax Credits (HC 29) and the Government Response contained in the Second Special Report from the Social Security Committee (HC 176) .]

Order for Second Reading read.

I beg to move, That the Bill be now read a Second time.

I am delighted to be opening the debate on the Second Reading of the Tax Credits Bill. Families are the bedrock of a stable and healthy society, and in a fast-changing economy--with its uncertainties and vulnerabilities--families, now more than ever, need security of support when bringing up children.

The Government are determined to support families by making sure that work pays and by helping people to move from welfare into work. The working families tax credit and the disabled persons tax credit are central elements of our strategy. It is shameful and a condemnation of the major opposition parties that they are not prepared to be on the side of working families, and that their amendments would prevent the assistance that the Bill will provide. Despite all that they say about supporting families, they really want to maintain a system that could be improved only by the introduction of the working families tax credit, which would especially help those who are in work, but on low incomes.

The working families tax credit will provide £4.5 billion a year and support 1.3 million working families. That is a contribution of £17 a week more in the system and it will help families. The hon. Member for Chingford and Woodford Green (Mr. Duncan Smith) should explain why the previous Conservative Government agreed with support for child care and for families. They apparently agreed with ensuring that the poverty trap was eased and that people should be helped into work. It is just that the mechanisms that the previous Government put in place did not deal with that problem. When the hon. Member for Chingford and Woodford Green rises to the Dispatch Box, perhaps he could answer that question.

Mr. Iain Duncan Smith (Chingford and Woodford Green):

Will the hon. Lady, who has to give the explanations, please explain to the House and to the public why, this morning, she indicated that the child care tax credit section was in the Bill, when it is not? Why is it not in the Bill as it is such a cornerstone of the whole policy.

I beg to move, To leave out from 'That' to the end of the Question, and to add instead thereof:

"this House declines to give a Second Reading to the Tax Credits Bill because it will increase the costs of social security when the Prime Minister has pledged to cut those costs; and it will increase benefit dependency, stigma, fraud and business costs, whilst undermining family structures."

The House divided: Ayes 126, Noes 365.

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