The press release issued by HM Treasury on 5 April 2001.

Chancellor launches campaign to encourage others to apply

New leaflets produced for every MP to distribute to local schools

Chancellor Gordon Brown is launching a campaign to encourage families who have yet to claim the Children’s Tax Credit to apply for the Government’s family tax cut, which comes into effect tomorrow (Friday) with the beginning of the new tax year.

Around 4 million families on PAYE are estimated to be eligible. The latest figures show that 3.4 million forms have already been returned, but the Government is launching a campaign – supported by voluntary organisations – to encourage the remainder to complete their application forms.

As part of the new campaign, the Chancellor has:

Written to all 659 MPs and provided copies of a Government leaflet (attached) which he is urging them to distribute to local schools and via community organisations encouraging parents to apply

Made sure publicity material about the Children’s Tax Credit will be available in hospitals via the ?Bounty Packs? provided to new mothers, and through information distributed to GPs

Ensured the Government’s special hotline – 0845 300 1036 – will be opened specially from 7.00 am until midnight this Friday. The hotline will also be available during the weekend and all of next week.

Mr Brown said:

“Our Family Tax Cut is introduced tomorrow. 3.4 million families have already returned their forms. That’s a major success, but there are others who could still benefit.

It means a tax cut of up to £10-a-week for 5 million families and it means that around 9 out of 10 taxpaying households with children now qualify for a tax cut.

4 million out of the 5 million who get the Children’s Tax Credit will receive the maximum amount of £520 a year on top of their Child Benefit. But all 5 million will receive additional money.

Main earners with income of £41,000 a year or less will benefit from the new Family Tax Cut. For a family on £30,000 a year, the Children’s Tax Credit is the equivalent of over 2 pence off the basic rate of tax.

For a family on average earnings of £25,000, it’s the equivalent of over 2½p. And for a family on £15,000, it’s equivalent to 6p off the basic rate.

As a result of our personal tax and benefit reforms, by October families with children will be on average £1,000 a year better off. Our Children’s Tax Credit is a key part of a better system of financial support for families.

£15.50 a week – £800 a year – for the first child in every family.

between £15.50 and £25.50 a week – up to £1,320 pounds a year – for 5 million families receiving the new Children’s Tax Credit.

over £50.00 a week – £2,600 a year – for the poorest families.

People who applied by the end of February should get the Children’s Tax Credit in their April pay packet.

But I want all eligible families to claim it and to receive it. That’s why I am launching today’s campaign and asking every Member of Parliament from every political party to publicise the Children’s Tax Credit in the communities they represent. We have made new publicity material available to MPs and I am urging them to distribute it via schools and community organisations in the areas they represent.

Between 1979 and 1997, total child support for a family on average earnings with two children actually fell by 6 per cent as the previous government froze Child Benefit. At the same time the direct tax burden on a family with two children on average earnings rose from 19 per cent to 21 per cent.

The result was that by 1996, families with children were 30 per cent worse off than families without children. For a family on average earnings, the direct tax burden will fall next year to its lowest level since 1972.

Child Benefit for the first child was only £11.05 a week when we came to power and had been frozen in successive years. As a result of all our changes, Child Benefit will in April be £15.50 a week – a 40 per cent cash rise and a 25 per cent real terms rise.

Our new system acknowledges the costs of bringing up children and the tax and benefit system reflects those costs better. Every family with children should have more support. Family prosperity will be improved and child poverty reduced.”

Mary MacLeod, Chief Executive of the National Family and Parenting Institute, said the Children’s Tax Credit would benefit families:

“Financial support is vital for families with growing children if society is to thrive. Parents can face real hardships in trying to provide for their children, especially in the early years, and this recognition of their special needs is very welcome.”

Mary Marsh, Director of the NSPCC, said:

“This is an important step to recognising the financial needs of families with children. It will help all working parents get the income necessary to ensure the health and wellbeing of their children.”