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New Clause 2
Children's tax credit: children under five years of age
'(1) After section 257AA(2) of the Taxes Act 1988 (which specifies the amount by reference to which the children's tax credit is calculated) insert--
"(2AA) for a year of assessment during the whole or part of which is qualifying child under five years of age (or more than one) is resident with the claimant, subsection (2) above has effect as if the amount specified there were increased by £200."
(2) After subsection (3) of that section (reduction of amount where claimant has income within the higher rate band) insert:
"(3AA) Where subsection (2AA) above applies, the reference in subsection (3) above to the amount specified in subsection (2) above is to the higher amount applicable by virtue of subsection (2AA) above.".
(3) After subsection (4) of that section (meaning of "qualifying child") insert:
"(4AA) In this section 'qualifying child under five years of age', in relation to a year of assessment, means a qualifying child less than five years of age at the beginning of that tax year.".
(4) In section 257C(1) and (3) of the Taxes Act 1988 (indexation) for "257AA(2)" substitute "257AA(2) and (2A) and (2AA)".
(5) Schedule 13B to the Taxes Act 1988 (children's tax credit: Provisions applicable where child lives with more than one adult in a year of assessment) is amended in accordance with Schedule 11A to this Act.
(6) Subsections (1) to (3) and (5) above have effect for the year 2003-04 and subsequent years of assessment.
(7) Subsection (4) above has effect for the purposes of the application of section 257AA of the Taxes Act 1988 for the year 2004-05 and subsequent years of assessment.'.--[Mr. Ottaway.]
Brought up, and read the First time.
Mr. Richard Ottaway (Croydon, South): I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker (Mr. Michael Lord): With this it will be convenient to discuss new schedule 1--'Children's Tax Credit: Children under five years of age: supplementary--
1. Schedule 13B to the Taxes Act 1988 (children's tax credit: provisions applicable where child lives with more than one adult in a year of assessment) is amended as follows.
2. After paragraph 3(2) (provisions applicable where neither partner has income above the basic rate limit entitlement where both partners claim in respect of a relevant child) insert--
"(2AA) If a relevant child is a qualifying child under five years of age the reference in sub-paragraph (2)(b) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.".
3.--(1) Paragraph 6 (provisions applicable in case of child living with more than one adult) is amended as follows.
(2) After sub-paragraph (4) (apportionment of entitlement) insert--
"(4AA) If the child is a qualifying child under five years of age the reference in sub-paragraph (4) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section".
(3) After sub-paragraph (7) (claim by person with more than one allotted proportion) insert--
"(7A) Where sub-paragraph (7) above applies in relation to a person, and any child in respect of which a proportion has been, or could have been, allotted to that person is a qualifying child under five years of age the reference in that sub-paragraph to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section".
4. In paragraph 7 (provisions applicable where child lives with more than one couple or with one or more couples and one or more other adults), after sub-paragraph (2) insert--
"(3) Where paragraph 6(4A) or (7A) above applies, the reference in sub-paragraph (2) above to the amount mentioned in section 257AA(2) is to the higher amount applicable by virtue of subsection (2A) of that section.".'.
Mr. Ottaway: The new clause would give any parent with a child under the age of five and who is entitled to the children's tax credit an extra £4 a week or £200 a year. It is no secret that that proposal forms part of the Conservative party's manifesto and we look forward to introducing such a measure in the Finance Bill that will be presented after the election. We moved the new clause because we feel that the Labour party's support for children is inadequate.
Earlier today, the Chancellor set out several pledges that he hopes to fulfil in the next Parliament. If he finds himself in that position, we wish him more success than he has had in fulfilling his pledges in this Parliament. One of his pledges was to halve child poverty; I must tell the House that he would make a good start in achieving that objective by accepting our new clause, which would go a long way towards reducing child poverty.
The Conservative party recognises the importance of the family as the basis of a free and ordered society and, in particular, believes that marriage plays an important role as the best environment in which to raise children. In general, children from two-parent families do better at school, have better chances in life and are less likely to end up ensnared in crime. Although the new clause focuses exclusively on the children's tax credit, which can be claimed regardless of someone's marital status, we submit that both matters are interrelated; I shall briefly dwell on that.
A future Conservative Government will reintroduce the married couples allowance, in addition to the children's tax credit, which is the subject of our debate. We will do so because the two allowances go hand-in-hand to promote the welfare of children.
Mr. Andrew F. Bennett (Denton and Reddish): Will the hon. Gentleman tell us how much both those things will cost?
Mr. Ottaway: The introduction of the married couples allowance will cost about £1 billion and, as I shall spell out shortly, this particular proposal will cost £300 million. They make up part of the £8 billion worth of tax cuts that we have announced.
In his 1999 Budget, the Chancellor said:
- "we will replace the married couples allowance with a new family tax cut that will increase the amount that goes to help families with children. This children's tax credit will give more--not less--help to families at the time when they need it most--when they have their children and when their children are growing up."--[Official Report, 9 March 1999; Vol. 327, c. 182.]
Dawn Primarolo: Would the hon. Gentleman tell the House the exact conditions under which the Conservative party would reintroduce the married couples allowance? I thought that the allowance would be only for couples with children under 11. The Conservatives are not reintroducing the married couples allowance because, of course, lots of married couples have children over 11.
Mr. Ottaway: The Minister makes my point for me; the children's tax credit does not benefit married people, either--[Interruption.] I shall come to the Minister's point. There is no limit to the aspirations of the
Conservative party. We have set out our aims and objective for 2003 to 2004. Unlike the Labour party, we generally believe that the concept of marriage is worth supporting and we will use our best endeavours to expand allowances wherever possible.
Dawn Primarolo: Does the hon. Gentleman believe in marriage so much that he believes that couples will be committed to it only if we pay them?
Mr. Ottaway: We believe in marriage, so the point of the policy is to encourage people to marry.
Mr. Mark Hendrick (Preston): Does the hon. Gentleman accept that the fact that a couple is, or is not, married does not necessarily affect the stability of their relationship? In fact, a married couple could be in an unstable relationship and an unmarried couple could be in a stable relationship. Why the necessity to pay people to get married?
Mr. Ottaway: The hon. Gentleman makes an important point, but research shows that children brought up by a married couple are more likely to do better at school and less likely to commit crime, as I said a few minutes ago.
The hon. Gentleman's party believes in family life, and family life is enshrined in marriage, which is why we support it. One should take a hard look at ministerial statements and, indeed, the 1997 Labour manifesto, which states:
- "We will uphold family life as the most secure means of bringing up our children. Families are the core of our society."
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