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Child Benefit Up-rating Order 2010

My Lords, like the noble Baroness, Lady Noakes, we broadly support these orders and regulations, but again, like her, we have one or two questions and comments. First, we need to recognise that the tax credits system has never worked properly. More than a third of all tax credits payments have been wrong since the system was introduced. The Government have overpaid on average 1.5 million families every year and in that time more than £16 billion has been overpaid or lost due to fraud and error. Even though most of the mistakes are made by the Government, they have dragged more than 50,000 families through the courts to draw back the money. More than half a million families, or about 1 in 10 receiving tax credits, are earning more than £40,000 a year. Does the Minister think that that is a sensible use of public money, with as desperate a deficit as we have now? Those families should not be stuck in the revolving door of complex means-tested benefits, having to claim back the taxes that they have paid. Instead, they should be paying less tax in the first place. The noble Baroness, Lady Noakes, also talked about the Government failing on their child poverty target. That is right, but it is a relative target. The bulk of the reason why the Government have been failing on their child poverty target is the rapid increase, over the past few years, in inequality in income and particularly wealth. How is it possible to complain about the Government missing their child poverty target while being in favour of tax breaks at the very top? For example, did the Minister notice that inheritance tax was the tax that dared not speak its name in David Cameron’s 40-minute speech at the Conservative Party conference? There was no reference to it at all. Can the Minister confirm that, under the Conservative proposals, the 3,000 wealthiest estates would get a tax break of about £250,000 each—far more than the owners of family homes, for whom this is intended? As always, the tax breaks are biggest at the top, which can only make the achievement of the child poverty target much more difficult. I will not go through the retail prices index statistics as the noble Baroness did except to say that I am sure that the Minister will regard the past few months—as do I and almost all informed professionals, whether those who work in the City or economists—as a short-term spike in inflation. Certainly, it is nonsense to project up annualised rates from two or three months. Short-term inflation is painful, but we must be realistic. We are not at the moment in a situation where the economy has serious inflationary pressures. If anything, the risks are more on the other side. Can the Minister tell us more—this has been something on which I have pressed him and his predecessors—about the change in the cost of living over the past year and how he sees it developing over the next year for different income groups? In particular, how has it affected people in the lower-income bands? Does he have any statistics for the relative change in the cost of living between households without children and households with children, which is clearly of particular relevance for these benefits and for these instruments?