Draft Child Tax Credit Regulations 2002 and Others

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Mr. Bercow: My right hon. Friend mentions case C. He will be aware of sub-paragraph (e), which refers to a custodial sentence

    ''for a term or period of more than four months''.{**w8**}

The provision amounts to a category of the criminal code or the threshold beyond which certain offences will trigger a sentence greater than three months. I could be mistaken: I am furrowing my brow to try to recall my brief tenure in the shadow Home Office team. Can my right hon. Friend advise me; it looks as if the Minister is offering reassurance?

Mr. Jack: I am advised by my hon. Friend and I should perhaps have examined those words more assiduously. I am grateful to him; he may well have answered my query.

Will the Minister clarify a mystery for me? The Library kindly prepared a note to explain to me, a novice in this subject, what the regulations are about. It drew my attention to the position of a young person who has his or her own child, but does not receive the child tax credit. Such a young person seems disentitled to any help by the mechanism. Before I land myself in too deep water by my misunderstanding, will the Minister clarify the position of a lone parent under the age of 18—

Mr. Bercow: Sixteen.

Mr. Jack: I was looking at this from the point of view of 18, not 16. I may have misunderstood the Library note, and, if so, I would put my hand up to admit that.

Finally, it would be helpful in the context of both these and other regulations if the Minister told us how the numbers of the rates of the credit, to which the hon. Member for Northavon referred briefly, have been selected. I am always intrigued to find out why a

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particular number has been chosen. They often relate to other measures in other parts of either the tax or social security system, which are not immediately apparent to novices in the tax credit world like me.

5.20 pm

Dawn Primarolo: I shall answer in turn the questions that have been raised by Opposition Members.

I shall turn first to the questions of the hon. Member for Buckingham. I hope that his sore throat heals, although not before the end of this sitting, and that he feels better soon. It is very warm in the Committee Room, which cannot be helping him. No doubt, we could arrange for the heating to be turned up. [Laughter.] I jest, of course.

The hon. Gentleman asked about the definition of education in regulation 2. Our definition for education and training is as close as possible to the provisions used in child benefit legislation. In designing the child tax credit, we examined the child benefit laws to see whether they were suitable and whether we should duplicate them. The only differences from the child benefit laws occur when the child tax credit improves the situation. For example, there are differences in the period in which the child tax credit will be paid under the tragic circumstances of the death of a child, and we also extended the child benefit regulations in such a case. As for child benefit legislation, education is defined as that below advanced level, which is up to but not including degree level. That definition is used elsewhere in legislation. We could have just cross-referenced to other legislation when we used its definitions or provisions, but we thought that it was better, as the tax credits start, to bring them together in one place.

The hon. Gentleman's next question related to payment, and he rightly settled on the issue of expectation of payment—when someone had an expectation to be paid but was not. That may be when an employer fails to pay the employee for reasons that could include bankruptcy. The employee would have every reason to believe that he or she was going to be paid and was contracted on that basis, but there was a failure in the relationship with the employer.

The right hon. Member for Fylde then asked about what happens if the child is in care. The arrangements made in this section are designed to prevent duplication of support, so the rules allow a family to retain support for any child for whom they are caring, whether it is their own child or one placed with them for fostering by the local authority. That goes further than the current system of income-based support for families, which excludes families from support if the child in their care is fostered. What we sought to do—I suspect that the right hon. Gentleman hoped that we would do so—was to recognise the importance of foster caring and the fact that foster carers have as much responsibility for a child as a parent or any other person who may cares for that child. Obviously, we also need to ensure that there is no duplication of

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payment for that support, and that is provided for in the proposal.

The hon. Member for Buckingham asked about education or registration with the careers service, to which regulation 5(3) refers. Paragraph (3)(b) refers to the Department for Employment and Learning because the measure also covers Northern Ireland. We have taken the rule from the child benefit provision for the age range. It is no less generous, although, as the hon. Gentleman pointed out, there is a difference in detail. It takes on board the development of the Connexions service, which was created in England, for those looking for work and training.

The right hon. Member for Fylde and the hon. Member for Buckingham raised the matter of detention custody. The purpose of the provision is to make it clear when a family will be treated as no longer responsible for a child or young person who has been convicted of an offence and given a custodial sentence. The child tax credit will continue to be paid unless the child or young person has been sentenced to detention for a period of four months or longer. That is more generous than the current income support and jobseeker's allowance, under which support ends immediately a child or young person is taken into custody, even if that is prior to sentencing. It is also more generous than the working families tax credit or the disabled person's tax credit, which cease when a custodial sentence has been given. The aim is to ensure that support is extended to enable families to maintain contact with the child whom they are responsible for and to enable that child to be integrated into the community, if that is the decision that is taken. It recognises the extra costs that may be imposed on families, which may be an issue in deciding whether they can maintain that contact.

Mr. Tim Boswell (Daventry): I am most grateful to the Minister for giving way, not least because, as she knows, I had another commitment which meant that I was late arriving in the Committee. At what point could the benefit be withdrawn from the child in the circumstances that she mentioned? For example, there may have been a collusive family crime in which either parent had also been involved. Could a sanction be imposed against the parents in respect of child benefit if they had committed a criminal offence?

Dawn Primarolo: We are talking about the child tax credit regulations in the new tax credit legislation, in which there are no sanction provisions. If a parent were given a custodial sentence, the family unit could choose to reapply under the arrangements for a reassessment of their entitlement, because they may be entitled to more.

I shall now deal with the point made by the hon. Member for Buckingham about sunset regulations. I agree with the hon. Member for Northavon that the regulations will be under constant surveillance and review, and opportunities may arise annually to vary any of the regulations attached to the Bill. Sunset clauses are an interesting concept, but they are not appropriate for this type of legislation. When the House considered Lords amendments to the Tax Credits Bill, amendments were passed that would

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require an annual report to be made to Parliament on the progress of tax credits. The details of what the report should cover were specified. That will ensure constant review and scrutiny by Parliament, irrespective of whether the information is available to Ministers. That retains the flexibility in the light of experience that the hon. Member for Buckingham asserts is necessary, as well as accountability to Parliament.

Mr. Bercow: I do not want, especially in my tender and frail condition, to become over-excited, but I can tell the Minister that I am encouraged. In preparing for this afternoon's Committee, I noticed that an amendment proposing an annual report had been suggested, but I was not aware that it had been agreed. I am most encouraged to hear that it was. For my benefit, can the Minister tell me who were the authors?

Dawn Primarolo: The Government, in the true, rounded sense of ministerial responsibility. In fairness, I should say that an amendment was moved in the other place. The Government were not initially attracted by the proposition, but subsequently decided that we would respond to it, though some provisions were removed. The difference between the Government amendment and the previous amendment carried in the other place was that the Government extended the reporting required for prosecutions and fraud to include penalties. One other addition was made, but forgive me, as I cannot recall what it was. The removed provision was about the cost to employers of running the compliance regime vis-à-vis the working tax credit. We had a long debate on the Floor of the House and I responded fully to it. I shall not try your patience, Mrs. Adams, by going through it all again. The Government amendment provides for fuller reporting. The Clerk helpfully circulated that information to remind members of the Committee for today's proceedings.

Mr. Bercow: That brief description of the respects in which the Government's successful amendment differed from the original one in the other place was helpful. Without that explanation, I might have supposed that the Government amendment was introduced simply for Ministers to claim authorship and benefit from the political royalties flowing from it. In the light of what the Minister said, it is obvious that that would have been an inaccurate and unworthy thought.

 
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