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Mr. Brazier: Will the Paymaster General explain the difference between those people and people who are only a year or two from retirement? What possible changes does she think that people coming up to retirement can make to their retirement provision at that late stage?
Dawn Primarolo: First, I remind the hon. Gentleman that the overall Budget package provided £1 billion to pensioners through the minimum income guarantee, the £100 heating allowance and by ensuring that we keep the married couples allowance for those who are already retired. Moreover, as the hon. Member for Kingston and Surbiton said--I hope that I am not embarrassing him by drawing too much on his speech--an earlier clause of the Bill provides protection in terms of indexation and allowances.
I know that the hon. Member for Canterbury (Mr. Brazier) feels strongly about the issues surrounding marriage, which we shall discuss when we debate amendment No. 8, but it is cruel for Conservative Members to frighten those who are already retired by making it sound as though something is being taken from them when it is not.
I believe that, when the hon. Gentleman reads the record, he will realise that it is bizarre for the Conservative party to table an amendment that accepts abolition of the married couples allowance for under-65s
but provides that the couple may claim it when they reach the age of 65. The hon. Gentleman spoke about signals sent from the Committee. If the amendment were passed, the signals that it would send would create misunderstandings on an unimaginable scale.
Despite the hon. Gentleman's very strong views on marriage--which I respect, although I disagree with them--when the Conservative party was in government, he voted year on year for a policy that reduced the importance of the married couples allowance and the contribution that it made.
I remind the Committee that the married couples allowance has its origins in 1918, when men received an allowance because their wives did not work, in recognition of the extra costs in such cases. Seventy per cent. of married women now work. As my right hon. Friend the Chancellor has pointed out, since then, a chaotic system has developed, in which a two-earner family with children is better off than a one-earner family with children. That cannot be right, even on the basis of what the hon. Member for Canterbury believes.
Mr. Flight:
Will the hon. Lady give way?
Dawn Primarolo:
I am happy to give way to the hon. Gentleman, because I want to deal with his point about whether men over 65 will now marry younger women in order to claim both allowances. I do not know what his life is like, but I have not come across any constituents who have those bizarre determinations.
Mr. Flight:
The Paymaster General said that we had the bizarre position--of which she implied that she disapproved--where a two-earner couple enjoyed a much better tax position than did a couple with a single earner. If that is the case, why on earth have the Government framed the new child tax credits in such a way as to be extremely harsh on the single-earner couple and generous to the double-earner couple, who can still qualify for those credits although their combined income may be nearly twice that of a single earner couple?
Dawn Primarolo:
When we debate those clauses, I shall be happy to explain to the hon. Gentleman why his proposition is incorrect. However, if he studies the Bill--especially clause 28--he will find that, in the extremely unlikely event that a man over 65, entitled to claim the married couples allowance, is married to a younger woman with children, who is therefore entitled to receive the children's tax credit, the Bill requires them to choose which one of the allowances they receive.
One point that came up repeatedly needs answering now. Conservative Members argued that there was a entitlement gap--that we took away the married couples allowance and that no one benefited as a result. I remind them again that, from October, the working families tax credit payments will be increased to compensate particularly the low-paid, especially families that are under pressure because their budgets are so low; that the child premium in income support has been increased this year, also specifically targeted on helping those families in most difficulty, with low budgets; and that the child benefit increases--those announced for this April and the additional one for next April--will help families with children, especially families under pressure.
Abolishing the under-65s allowance for married couples means that we must have a new way of defining the basic married couples allowance so that we can use it for those who are over 65. Clause 28 provides for that minimum level and guarantees that there will be no effect on anyone's tax liability who is now in receipt of the allowance.
It would be a great error if the Opposition insisted on putting into our legislation an amendment that rewarded marriage from the age of 65 onwards but did not address the real stresses and strains in families with children and how families are forced apart because of the poverty that they experience.
When the hon. Member for Buckingham (Mr. Bercow) reads the record of our proceedings, he will realise that the confusion that he was so agitated about, believing that it existed on the Labour Benches, arose from Conservative Members. It was the hon. Member for Arundel and South Downs who suggested that men over 65 would make new arrangements in their life so as to have two allowances. Other Conservative Members suggested that our proposal is a tax on pensioners, when it is not.
I look forward to the next amendments and the next debate, when we can discuss--
Mr. Clifton-Brown:
Will the Minister answer my question?
Dawn Primarolo:
--in detail the children's tax credit and why the married couples allowance should be abolished. I urge the Committee to reject the amendments.
Mr. Clifton-Brown:
Will the Minister give way?
Dawn Primarolo:
The point that the hon. Gentleman wishes to raise is one for the next debate. I shall be happy to deal with it then.
Mr. Gibb
: The debate has highlighted one of the worst stealth tax increases in the Finance Bill. The abolition of the married couples allowance will cost about 10 million married couples an extra £197 a year in income tax. When that is combined with the reduction in its value to 10 per cent. in the Government's previous Budget, the cost will be an extra £285 a year in income tax. That is from a Government who covenanted solemnly with the British people that they had no plans to raise taxes, particularly income tax. The measure that we are discussing is a straightforward hike that will affect 10 million couples.
The sleight of hand is worse. In his Budget speech, the Chancellor of the Exchequer implied that pensioners would be protected from these measures. [Interruption.] I will quote the right hon. Gentleman. He said:
Labour Members should read what Age Concern has said. It states:
Mr. Gibb:
I shall finish this point first. Age Concern states:
"Today's pensioner couples will retain the married couple's allowance."--[Official Report, 9 March 1999; Vol. 327, c. 183.]
The hon. Lady the Paymaster General quoted "would" and skipped over the word "Today's", implying that the measure would apply to all pensioners. The key word is today, as the hon. Lady said. Tomorrow's pensioners will not retain the married couples allowance despite having made their financial arrangements on the basis that the allowance would remain. Throughout all the reductions in the value of the married couples allowance under the Conservative Government and under the present Government until now, its value had always been retained for pensioners. That is no longer the position. Its value has not been retained for new pensioners. [Interruption.]
"We are already receiving complaints"--
Dawn Primarolo:
Will the hon. Gentleman give way?
"We are already receiving complaints from people who will reach 65 just after that date."
That is 5 April 2000. Age Concern continues:
"From April 2000 there will be the anomalous situation whereby people will miss out on an allowance currently worth some £500, simply because their birthday is just after the specified date."
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