PMQs: Clegg blasts “confused, bureaucratic and cruel” tax credits

5.27.00pm GMT Wed 10th Dec 2008

Liberal Democrat leader, Nick Clegg MP, called upon the Government at Prime Minister’s Questions to simplify the tax credit system by offering fixed payments to low-income families

He said the over-complicated system meant 10 times as many families were being dragged to court to pay back incorrectly claimed tax credits, adding to recession woes.

Read the full exchange below: 

Mr. Nick Clegg (Sheffield, Hallam) (LD): I would like to add my own expressions of sympathy and condolence to the family and friends of Lance Corporal David Wilson, who tragically lost his life in Iraq.

Recently, a single mother with small children came to see me in Sheffield. She had with her a bundle of letters from the Government demanding her tax credits back. The letters were almost entirely incomprehensible, except for the bit that said that she was going to be dragged to court to pay back money to the Government that she did not have-she was terrified. Does the Prime Minister think that is the kind of help that people need in a recession?

The Prime Minister: Tax credits have increased, and they have helped more children out of poverty than any other policy that we have had. Of course, if the right hon. Gentleman wishes to bring details of the individual case to my attention, I shall look at it. But I think he should recognise that tax credits have taken more children out of poverty than any other single measure.

Mr. Clegg: The Prime Minister is deluding himself. I know that he thinks he is Atlas carrying the world on his shoulders, but the fact is that I have figures to show that he is now dragging 35 low-income families a day to court-that is 10 times as many as last year. The tax credits system that he created is confused, bureaucratic and cruel. When will he move to a system of fixed payments, so that people do not have to live in fear of the money that they get today being taken away by him tomorrow?

The Prime Minister: If there was a system of purely fixed payments, we could not adjust the help that is necessary either when people become unemployed or when their family income falls substantially. The whole point of having a flexible system is to enable us to respond to the changes in people's circumstances. Of course, I shall look at the individual case that the right hon. Gentleman has brought before the House, but I think he has got to recognise that 6 million families in this country receive child tax credits, that they benefit from them-in some cases, by £70 for the first child-and that that has done much to take people out of poverty, and will continue to do so. If he is seriously interested in attacking child poverty, he should be supporting tax credits, not opposing them.