Finance Bill

The hon. Lady asks me to comment on the position before 1997, before there were tax credits. It is true that the system we inherited was extremely unfair, so we changed it. She is right: tax credits are an indispensable element in the far fairer system that we have now, which improves incentives for work and, in particular, strengthens the position of families on low incomes. The take-up of tax credits among families and households with the lowest incomes is high—far higher than for family income supplement and other mechanisms that were used in the past. In that sense, tax credits have been particularly successful, but we are working to increase take-up further. Over the past few weeks, a series of pilots have been set up in three parts of the country to try out a number of mechanisms for increasing take-up and we are analysing the results. No doubt we shall be able to do more to increase take-up of tax credits, which are an indispensable element of the personal tax and benefit system. I remind the House that all that the clause does is to keep income tax rates unchanged for the current year, at 10 per cent., 22 per cent. and 40 per cent., so I hope that the House will reject the amendments.