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Mr. Hayes: My hon. Friend will have received the same complaints in his Lincolnshire constituency as I have had in my Lincolnshire constituency from married couples who are childless but poor. The problem is exacerbated for elderly or disabled married couples. For those people, there is not simply a gap, but a gulf.
Mr. Leigh: Yes, for people on good incomes there is a gap, but for poorer families there may be a devastating gulf that can put them in real poverty. The other point that we are trying to put across in this debate is that, if one works one's way through the complexity of these proposals, one finds that insufficient account is taken of the costs of children.
The main point that we want to make is that single earner couples are particularly disadvantaged. One partner sacrifices his or her prospects--it is usually her prospects--to stay at home to look after children. Those people will continue to be singularly disadvantaged. The national child care strategy is designed to give parents a genuine choice but, in practice, all the resources will go towards supporting professional child care, and none will be explicitly directed towards carers at home. That is what worries us.
Dawn Primarolo:
This Government have substantially increased child benefit, something that the hon. Gentleman's Government failed to do. We have been responsible for the largest increases since the introduction of the benefit. Moreover, the benefit goes directly to the carer, regardless of his or her employment status.
Mr. Leigh:
Of course I welcome the increase in child benefit--indeed, I would have to declare an interest if I
The Second Deputy Chairman:
Order. The hon. Gentleman must tell the Committee why the date of implementation is important.
Mr. Leigh:
You will be pleased to hear, Mr. Lord, that, having explained the broad philosophy on which my view is based, I am about to deal with the specific question of why the date is important. It is important because the Government have deliberately structured all their proposed changes to ensure that they are introduced--dare I say it--by stealth. [Hon. Members: "No."] It is true. The Government know that the phasing out of the married couples allowance is deeply unpopular, and are trying to convince the nation, and the Committee, that we need not be over-concerned about it because of the increase in child benefit--which will be introduced in 2000--and the introduction of children's tax credit. Children's tax credit, however, will not be introduced until a year after the abolition of the married couples allowance.
I want to know the reason for that gap year. No doubt the Paymaster General will be able to deal with my question very easily. What argument can possibly be adduced to justify a gap that could make things very difficult for couples?
The children's tax credit will disadvantage single- earner couples. The fairness that the Chancellor seeks will not be conferred by a system that withdraws credit from single-earner couples with an income of £38,000. That point, surely, is unanswerable.
The Government face an important task. Those who look at the figures will end up with the unalterable conviction that married couples are being attacked, and that married couples in which one partner stays at home are being attacked particularly viciously. Why are the Government, in order to save a little money--
Mr. Leigh:
I am about to finish my speech, but I will give way to my hon. Friend.
Mr. Flight:
In the case of a married couple with six children, the wife may well stay at home to look after those children. It is not just married couples who are likely to suffer; married couples with large families are likely to suffer, and it is they who need support most.
Mr. Leigh:
I do not know why my hon. Friend gives the example of a married couple with six children, but that is a situation that I know quite intimately. Therefore, I can only agree with my hon. Friend.
Mr. Geraint Davies:
What is a "stealth tax"? Is it a stealth tax to abolish a tax, as we intend to do, or is it a stealth tax to eat away gradually at an allowance, as the Tories did? That was stealth. We are being very open about what we are doing: the allowance is being abolished. Let us get that out of the way, and go straight to the nuts and bolts of the amendment rather than meandering. Let us analyse the amendment, and what its impact would be.
The amendment assumes that the introduction of children's tax credit represents a direct substitution for the married couples allowance. That is a false assumption. I do not know whether it is based on mischief, or has been cobbled together on the basis of misunderstanding and ignorance.
Mr. Davies:
I want to know from the hon. Gentleman whether it was ignorance or mischief.
Mr. Gibb:
It was the hon. Gentleman's Chancellor of the Exchequer who said in his Budget statement that he would replace the married couples allowance with the children's tax credit.
Mr. Davies:
The hon. Gentleman clearly did not listen carefully enough. It seems that it is a mixture of ignorance and mischief. In fact, the children's tax credit is not a direct substitute for the married couples allowance, and was never intended to be. As the Chancellor said himself, this is a broader strategy, in which we abolish the married couples allowance as part of a policy to support families.
As important as the children's tax credit is the working families tax credit, which kicks in in October 1999. It is part of the same strategy. What about that--and what about the fact that child benefit has already risen by £2.50? Any fool can see that those are not simultaneous, equal substitutions. By virtue of the working families tax credit, the children's tax credit starts in October 1999.
Mr. Hayes:
The hon. Gentleman says that those developments are unrelated, but is not the net effect less money for families, including needy families, and more for the Chancellor? Presumably the hon. Gentleman believes in the redistribution of wealth; this, surely, does not represent that in any sense.
Mr. Davies:
Families will receive much more money. In the case of the hon. Gentleman, it is ignorance; in the case of the hon. Member for Bognor Regis and Littlehampton (Mr. Gibb), it is mischief.
As part of our strategy, we are introducing the biggest-ever increase in child benefit. The working families tax credit kicks in in October 1999, and, a year or so later, there will be even more good news for families in the form of the children's tax credit. The hon. Member for Gainsborough (Mr. Leigh), who moved the amendment, asked why we had delayed. That suggests that the amendment was, in fact, prompted by ignorance.
If they think about it, hon. Members will realise that the working families tax credit is quite a complicated system. Do we really want to introduce the children's tax credit at the same time, in view of the practicalities of its administration by the Inland Revenue, and families' ability to understand it enough to claim it? The answer, of course, is no. That is why we are introducing the working families tax credit before the children's tax credit. It makes a great deal of sense.
The amendment implies that a substitution is involved, and accordingly makes assumptions about costs and values. In fact, as has already been said, the children's tax credit is much more valuable than the married couples allowance in the case of married couples with children, and the Government are targeting their resources accordingly. The married couples allowance is worth £197; the children's tax credit will be worth a massive £416. We are giving benefits where they are needed. There have been no substitutions or replacements. Therefore, amendment No. 8 is entirely fallacious.
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