Draft Tax Credits Up-rating Order 2002

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Mr. Flight: What is the period covered by the Rossi index? Previously when we discussed pensions, there was some question on that point. I assume that it is standard, but to when does the 12 months run?

Mr. Webb: I am grateful to the Minister for taking seriously the points that we made, but I seek her reassurance on one point. She indicated that there will be uprating provisions for the tax credits. There will be a floor, although there may be discretionary increases. However, the price indexation of that floor should be the price indexation of the basket of goods that the people on the credits buy. By and large, that represents gross housing costs because the people are not in the housing benefit system. Is the Treasury considering that the right price indexation for the floor may not be the Rossi index?

Dawn Primarolo: I assure the hon. Member for Northavon that we are examining all such issues. He is always charming when trying to tempt me to pre-announce issues that are more a matter for the Chancellor. I confirm that his points form part of our considerations, but I will not talk about conclusions of other debates today. I know that the hon. Gentleman is knowledgeable about these matters and I always listen to him carefully, if only to ensure that if I do not agree with him in the future, I have sound arguments for doing so. To answer the specific point made by the hon. Member for Arundel and South Downs, the 12 months to September 2001 is the period that the Government use to determine indexation rates from the following April. That formula has been used since 1983.

I hope that I have answered all questions. However, as always, I will be as helpful as I can to the Committee if there are further questions.

Question put and agreed to.


    That the Committee has considered the draft Tax Credits Up-rating Order 2002.

Committee rose at sixteen minutes past Ten o'clock.

Column Number: 9

The following Members attended the Committee:

Gale, Mr. Roger (Chairman)
Austin, John
Clarke, Mr. Tony
Dean, Mrs.
Djanogly, Mr.
Flight, Mr.
Gerrard, Mr.
Goodman, Mr.

Column Number: 10

Lucas, Ian
Luff, Mr.
Pond, Mr.
Primarolo, Dawn
Quinn, Lawrie
Sutcliffe, Mr.
Taylor, David
Webb, Mr.

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