Draft Child Tax Credit Regulations 2002 and Others

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The Chairman: Order. We are drifting slightly from the point. Hon. Members should stay within the order of the regulation.

Dawn Primarolo: I am certain that there is ample scope within the normal lines of legislation. There are also the requirements to report back, and the House will be fully informed.

Mr. Jack: I urge the Paymaster General to give serious thought to talking to the Leader of the House about having a debate on the report. Parliament receives many reports, most of which they do not discuss. The use of credits is becoming increasingly important in many areas, and it would be useful to have a debate about it.

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Dawn Primarolo: I shall certainly draw the right hon. Gentleman's comments, which will be in Hansard, to my right hon. Friend the Leader of the House. It sounds as if I am practising for business questions.

Mr. Boswell: Will the right hon. Lady give way?

Dawn Primarolo: I shall give way, but I hope that hon. Gentlemen will then allow me to make some progress in responding to their questions.

Mr. Boswell: I am grateful to the Paymaster General for her characteristic courtesy in giving way.

I simply want to reinforce the point made by my right hon. Friend the Member for Fylde. Will the Paymaster General also undertake to have a friendly word with her ministerial colleagues in the Department for Work and Pensions, who have not made a similar concession with regard to an annual report on the pension credit? These matters are all interlinked, and it would help the House immensely to consider annually how all of them work technically and to some extent, dare I say it, economically.

Dawn Primarolo: I note the hon. Gentleman's comment. I shall not put myself out of order by pursuing that discussion any further. As I told the hon. Member for Buckingham, the concept of sunset regulations is interesting, but they are not appropriate to the legislation. A great deal more consideration needs to be given to the issue. None the less, I hope that he is reassured.

The hon. Member for Buckingham commented on the press release and what would be considered further in consultation. He asked how we arrived at the definition of ''responsible for a child''. A person is treated as responsible for any child who is normally living with them, and ''normally living'' will take its everyday meaning. However, we acknowledge that by using that everyday meaning, a child may normally live with more than one family, and it was not the intention to pay more than one family the complete amount of the credit. As we are all aware, families often split up, and a child may live with his or her mother during the week and stay with the father at the weekend. We therefore needed the regulations to make it clear, by some sort of test, who had the main responsibility, and who would therefore be entitled to claim. Again, we will not define ''main responsibility'', as any decision will depend on the particular family arrangements. We will provide guidance on what facts we would consider relevant when reaching a decision. Discussions continue on that with various groups, which shows the difficulties in this area. Clearly, we intend to limit support to one family. That idea is not new: it applies in the current benefits system and in the tax system. That is an excellent example of why continuing discussion and consultation has been necessary.

The hon. Member for Buckingham asked about the transfer of child benefit and its administration to the Inland Revenue. At this stage, the aim is to run the child tax credit and the child benefit system as closely together as possible. We want to have one point of contact for parents to be able to get the support to which they are entitled. That is the prime objective.

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There will be opportunities to streamline the administration for the Government and to make it easier for people to make claims in the first place. The current organisational change is to move things into one place. Savings have not been identified as part of the main aim, because the two systems are distinct.

A question was asked about residence rules and child benefit. The Government have not removed the residence rules for child benefit. People will still need to be in the United Kingdom to qualify for child benefit. However, the changes introduced by the Bill allow us to align the residence rules for child benefit and the child tax credit to ensure that we have a more streamlined system of support. That relates to the point about moving child benefit to the Inland Revenue. There is no change in the rules.

I wonder whether the hon. Member for Northavon would allow me to deal later with the points he raised about the application start date and the transition. I shall conclude with how we move from the current position to the new system and how the timetable might look. He asked about the regulatory impact assessment. Yes, the new regulatory impact assessment for the Act reflects the rates and thresholds included in these regulations. That is why an individual assessment for the regulations was not produced. The hon. Gentleman is right that there was a regulatory impact assessment for the Bill, but it has been updated to reflect what we now know about the rates and thresholds. That is available in the Library. If he has any further questions on the assessment when he has had time to read it, I will be happy to answer them in the usual way, in a letter or through parliamentary questions.

The hon. Gentleman also asked about the extension of the child credit to 16 to 19-year-olds. The children's tax credit, which is the relief, is rolled up into the new child tax credit, which includes all the provisions. The former was payable only up to 16 years old, whereas the latter is payable up to and including the age of 19 if the child is in full-time education. The hon. Gentleman talked about those who would have been outside the tax credit or relief, for want of a better word, but whose income level is such that they would qualify for the new tax credit from April 2003. He described those as ''gainers''; and they will be within the system. We have sought to pull together systems that were not exactly similar.

That point affects all the regulations before us. We considered how well child benefit operated and which rules could be used in a similar way.

Mr. Bercow: What the hon. Lady just said raises the obvious question about the revenue implication of that enhanced Government largesse. I ask the question modestly for each of the next three years.

Dawn Primarolo: The figures are in the Red Book. I am not sure that it is possible to quantify what the cost may be for such a small group of people, or indeed how large that group may be. The cost may also be complicated by the move of people from income support to the child tax credit. I will revisit that point,

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but do not think that I can take the hon. Gentleman any further on this. However, I am happy to consider his point, and will write to the hon. Members for Buckingham and for Northavon.

The hon. Member for Buckingham also asked why we had a 24-hour rule, not a 16-hour rule. I do not want to sound repetitious, but this follows the provision in child benefit. We wanted to make it clear whenever we could that the provision has a different aim to that in the working tax credit. We need to define the 16 to 19-year-olds who have left full-time education, but have registered with the careers service or the Connexions service as available for work or training. We also need to define what that work is for them. I appreciate the point made by the right hon. Member for Fylde and lobbying organisations that it looks like a different rule, but the intention was to take those issues into consideration.

I shall deal with the plain English guide to the regulations when I talk about the transition, as it makes more sense to discuss it then.

I shall conclude by talking about the difficult considerations of young mothers under the age of 16 and why they would not have access or a right to the support. I can tell the right hon. Member for Fylde that a teenage mother under the age of 16 will not be defined as being entitled to claim the tax credits. We do not think that the tax credits are the best way to support those young, vulnerable people, but they should have support. Better means of support are available to them, especially through local authorities, which also provide direct support and assistance to enable them to order their lives and to return, where possible, to education, or to take decisions on the future direction of their lives. This is such a delicate and important issue that we should ensure that such support and assistance are arranged and protected in that way. Frankly, we thought that the wrong messages would be sent about the activities of that age group if those young people were supported by the tax credits. However, I do not for a minute want the Committee to think that we believe that Government policy should not address the issue.

I hope that I have covered many of the other regulations as well.

Mr. Boswell: I am genuinely grateful to the Paymaster General, who has helpfully explained all that to me. I entirely endorse her wish to be sensitive in this most sensitive of areas. Will she at least store in her mind a similar discussion that we had on child benefit in another Committee considering a statutory instrument, when reference was made to pension credits? It became clear, in relation to guardians' allowances, that the local authority could receive child benefit on behalf of the child. Will the Paymaster General assure the Committee that she will attend to the point that if local authorities are incurring these expenses for the child, which are not otherwise defrayable through the payment of tax credit, they should at least be able to recover them through the revenue support grant or otherwise?

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