Draft Child Tax Credit Regulations 2002 and Others

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Dawn Primarolo: I am following the hon. Gentleman's remarks but I am not clear that I can help him on an intervention, because he is asking me to describe the consultation process that took place and the discussions, which were continuous and involved all of the lobby. We discussed with the lobby the main principles in the regulations before drafting. We then drafted the regulations, showed them to the lobby and asked for comment. Those are the draft regulations that we are considering this afternoon. I hope that that helps the hon. Gentleman. I am not sure whether that was what he was asking.

Mr. Bercow: I am not quite sure that it was, but perhaps I have not fully appreciated the significance of the two sentences to which I am referring:

    ''Other points in response to the consultation exercise are set out in the attached paper. The Government will continue discussions on the detail of the system as the regulations to support the Bill are drawn up.''

Alternatively, it is possible that I have over-interpreted the two sentences. Perhaps the Paymaster General is simply saying that the Government will show the draft regulations to interested parties and will listen to their feedback. I had imagined that what was being said in the press release was that some points had been confirmed, while others were still in the air and that members of the public would be given more information in due course. If I have misunderstood, I am happy to be corrected.

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Dawn Primarolo: I shall try again. When the press release was issued, it described the state of affairs at that point. There had already been a huge amount of consultation while the Bill was developed. As is the nature of Bills, regulatory powers are needed and secondary legislation is required so that they can be altered without recourse to primary legislation. At that point, we had already consulted on the content of the Bill, which was moving to another place. However, we were still prepared to look at a number of issues. In addition, the draft regulations had to address some of the issues that had been identified by the consultation process as needing to be clarified. We engaged in further consultation, and the regulations are the result of that consultation.

Mr. Bercow: I hope that I am not degenerating into an unexpected and excessive feebleness, but on first hearing, my suspicion has been overcome and I am satisfied—I might regret that, but I hope that I will not.

Dawn Primarolo: He will not.

Mr. Bercow: The Paymaster General assures me from a sedentary position that I will not have cause to regret it and I am grateful for that.

Mr. Jack: My hon. Friend is pursuing a sensible, almost forensic, line of questioning about some of the detail and is moving into analysis of the practicalities of the implementation of the regulations. Does he agree that it would be helpful if he could, in his entreaties to the Paymaster General, secure agreement from her that the Government will regularly review the regulations once they have been enacted—as we have to assume that they will be—to rub off any rough edges that remain in the light of his questioning?

Mr. Bercow: As an experienced denizen of the House, my right hon. Friend will know that he has subjected me to what I can only describe as parliamentary titillation. He has encouraged me along a course that I do not require much encouragement to follow. It is not all that well known, but my right hon. Friend will know of my enthusiasm for the affirmative procedure when considering statutory instruments and of my partisan trumpeting of the arguments for sunset regulation. The Committee will be aware of the prevalence—I use the word advisedly—of sunset regulation in large parts of the United States. There is an argument for the automatic lapse or expiry of regulations, perhaps three or five years after their enactment, on the basis that if the regulations are necessary and indispensable, the Government of the day will return to Parliament and ask for them to be renewed.

My right hon. Friend, typically, makes the point in an understated way, simply suggesting that the Government come back from time to time and review the regulations. That is an extremely sensible way to put it. One could go a stage further—he has not done so—and call for the sunset procedure to be adopted for the regulations. I am grateful to my right hon. Friend for emboldening me in my modest quest to do my job of parliamentary scrutiny.

Mr. Steve Webb (Northavon): The hon. Gentleman is soldiering on manfully, but I shall try to save him

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straining his throat unduly going down unnecessary avenues. General concerns about sunset regulations do not, in my view, apply to regulations that set tax credit and benefit rates that have to be revisited every year to reflect inflation, which makes such matters inappropriate.

Mr. Bercow: It is with trepidation that I venture to disagree with the hon. Gentleman. If my hon. Friend the Member for Havant (Mr. Willetts) has two brains and, as often suggested, my right hon. Friend the Member for West Dorset (Mr. Letwin) has five brains, the hon. Gentleman, even on a bad day, is at the lower end of the scale, and on a good day he is probably at the higher end of the scale. He is one of those people who is extraordinarily clever, yet self-effacing in the best British tradition. He does not like to tell everyone how clever he is, but most of us know it, so I am loathe to disagree with him.

The hon. Gentleman is right about the requirement for the uprating order and so on; of course, the amounts of money to be paid are subject to an annual decision and a scrutiny of sorts. I am not sure, however, that his argument applies to other aspects of the regulations. The Opposition are not concerned only with the sums of money to be paid, but with questions of equity, scope and criteria. It is not just a matter of the money, and I hope that the hon. Gentleman, who has a sense of community spirit, will be aware that we are not motivated exclusively by materialist concerns.

Mr. Jack: Does my hon. Friend agree that in any new complex legislation, the real world often throws up questions that were not initially addressed, however careful the drafting or the explanatory memorandums that might be put to a Committee in pursuit of its ultimately approving the legislation? Therefore, there is merit in the idea of revisiting the definitional aspects of the law, to ensure that it works properly.

Mr. Bercow: My right hon. Friend is absolutely right. Even in my short time in the House, I have observed many occasions on which questions that should have occurred to right hon. and hon. Members have not done so. As a result, legislation has passed some or all its stages without the detailed and forensic scrutiny that those who pay our salaries are entitled to expect. Many a time and oft, I have been guilty of asking far too few questions—and my questioning was often far too soft. I am doing my best to improve, but I realise that it is a serious flaw and I share that admission with the Committee. I am told that I started to speak relatively late in life—for many months I did not speak at all—and that when I did I asked rather a lot of questions, which caused no little irritation. Having established the precedent, I have never found a good reason in the ensuing 38 years for abandoning it. I am grateful to my right hon. Friend for raising that point.

I shall move on at a reasonable pace to another point on page 2 of the Minister's seminal press release on the subject of the tax credits. It refers to the Bill providing for the transfer of responsibility for child benefit and guardian's allowance to the Revenue. It stated that the transfer announced by the Prime Minister in June 2001 will bring Government

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support for children ''within a single Department.'' I am sure that we can all see the argument behind that. My question is simple: what savings are expected to be realised from that decision? I understand that that might not be the main motivation behind the change; it could be simply a question of organisational simplicity or logistical convenience. However, it is not inconceivable that some savings might result. I should be delighted with that, as we are always looking for savings, and I shall champion those that are made. If that is so, perhaps the Minister will guide me on that.

The Minister might have something useful to say about the removal of the requirement for the child and the claimant to have been in the United Kingdom for at least 182 days before qualifying for child benefit.

I am suffering and considerably weakened in my current condition and therefore not able to develop my arguments in great detail. I should like to preserve a modicum of energy for the three other statutory instruments that we have to consider, so I shall content myself with my limited offering. I am grateful for the Committee's tolerance and courtesy.

5 pm

Mr. Webb: I am not sure whether I can follow the style or content of the speech of the hon. Member for Buckingham (Mr. Bercow), but I should like to discuss two issues that apply to all four regulations—we might as well get them over and done with now—and two that are specific to the child tax credit regulation.

My first general point is about regulation 1, which details the citation, commencement and effect and enables claims for the child tax credit to be made on 1 August 2002. Neither the Minister nor the hon. Gentleman commented on that, which I found extraordinary. Although I appreciate that there might be some phasing issues in trying to get people on board before the new measure is fully introduced, it had not occurred to me that people could be claiming tax credit in a fortnight.

Will the Minister explain what is happening in the phasing process? As far as I understand it, although the credit is not introduced until April 2003, as noted in paragraph (c), someone will be able to claim it from the middle of this summer and awards may be made from January 2003. The Minister did not speak about phasing or how the Government would avoid a logjam of claims on 6 April 2003. That applies to both the Child Tax Credit Regulations 2002 and Working Tax Credit (Entitlement and Maximum Rate) Regulations 2002.

My second general point, which I do not want to labour, is that during discussions on the Tax Credits Bill, we debated the regulatory impact of the rates that appear in the regulations. The Minister, in her coy and charming manner, declined to give us a taster of how much the rates would be, even though a regulatory impact assessment must be based on assumptions of them. The assessment depends on a case load, and the rates, thresholds and tapers determine the maximum potential case load. Considering all the regulations, will the Minister tell us to what extent the initial assumptions have been changed by the exact figures in

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the regulations? The explanatory memorandum for each regulation says:

    ''A regulatory impact assessment in respect of the Act has been prepared'',

not one in respect of each of the regulations. The implication is that it was done before we knew the rates. If the Minister is going to say that the Government already knew the rates when the regulatory impact assessment was prepared, and that the regulations are publishing what was assumed then, that is fair enough.

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