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Mr. Menzies Campbell (North-East Fife): The Leader of the House will be aware of the belief of many Members of all parties represented in the House that the finding of negligence made against the two pilots of the Chinook aircraft which crashed on the Mull of Kintyre is unjustified and should not stand. He will also be aware of the publication this week of the House of Lords Select Committee report under the chairmanship of Lord Jauncey, who legitimately has the reputation of being one of Scotland's most eminent judges and of robust intellectual rigour. It is clear from the publication of the report that the Committee charged with the responsibility of examining these matters concluded that the original verdict was unjustified. An error of judgment having occurred and an injustice having arisen as a result, when may we have a debate to discuss these matters in the House?
Mr. Cook: I am aware of the report produced by the House of Lords Select Committee. The right hon. and learned Gentleman will be the first to agree that these are complex matters touching on difficult questions of interpretation and issues. The Minister of State for Defence has received the report and given an undertaking that he will study and respond to it. Over the years respective Governments have said that before revisiting the conclusion they would want new evidence. At present it is not clear that the House of Lords Select Committee has come up with new evidence.
John Cryer (Hornchurch): Could my right hon. Friend find time for a debate on car manufacturing? Later this
month the last car will roll off the assembly line at Ford, Dagenham and for the first time in decades no cars will be made there. Many of the thousands of people who work there, 600 of whom are my constituents, feel that that is a bitter and deep betrayal, particularly after all Ford's past promises of a golden future.
Mr. Cook: I understand the enormous significance of the ending of car production as regards both employment and the culture and history of my hon. Friend's region, although I understand that Dagenham will continue to be a centre of excellence for diesel engine production. I shall take note of what my hon. Friend says about a debate. I am conscious of the fact that there have been several requests for debates on the manufacturing industry.
Mr. Christopher Chope (Christchurch): Why did not the Secretary of State for Transport, Local Government and the Regions ask London Underground to delay its announcement until 7 o'clock so that it would coincide with his statement to the House?
Why does the Leader of the House describe the week after next as a constituency week, when it has previously been described as a half-term?
Mr. Cook: I described it is a constituency week because that is where many of my colleagues intend to spend the week.
On the question of London Underground, I have many responsibilities for which I am happy to answer to the House, but the timetabling of board meetings of London Underground goes beyond my writ.
Points of Order
2 pm
Mr. Eric Forth (Bromley and Chislehurst): On a point of order, Mr. Deputy Speaker. If the Leader of the House were to ask you for the opportunity, would you allow him to correct an impression that he gave—I am sure, inadvertently—a short time ago? I thought that he suggested that the Opposition were responsible for delaying business yesterday, yet during about six hours of debate, the Secretary of State for Education and Skills alone spoke for 43 minutes and the right hon. Member for Holborn and St. Pancras (Mr. Dobson) spoke for 35 minutes. Government Members spoke for a total of three and a half hours, while Opposition Members spoke for only two and a half hours. I say that, Mr. Deputy Speaker, because I do not want either the House or you to be under any misapprehension—nor would I want anyone to accuse the Leader of the House of giving the wrong impression: during yesterday's business, in which, regrettably, we made so little progress on the Education Bill, Government speakers took up much more time in total than Opposition speakers.
Mr. Deputy Speaker (Sir Alan Haselhurst): I think that it suffices that that point is on the record. I had the pleasure of listening to most of those speeches, so I am well aware of the balance.
Clive Efford (Eltham): On a point of order, Mr. Deputy Speaker. It should be pointed out that the majority of Labour Members who spoke from the Back Benches in support of the new clauses could hardly be described as Government members.
Mr. Deputy Speaker: I think that it would be safer for the Chair to let that rest.
Orders of the Day
Tax Credits Bill
As amended in the Standing Committee, considered.
New Clause 1
Recipients of children's tax credit prior to April 2003
'Persons in receipt of children's tax credit immediately prior to April 2003 shall continue to receive tax credit of the same amount after that date in any case where their award of child tax credit under this Act would be of a lesser amount, for as long as they are responsible for one or more children or qualifying young persons.'.—[Mr. Webb.]
Brought up, and read the First time.
2.2 pm
Mr. Steve Webb (Northavon): I beg to move, That the clause be read a Second time.
Mr. Deputy Speaker (Sir Alan Haselhurst): With this it will be convenient to consider the following: New clause 4—Effect of working tax credit on housing or council tax benefits—
- 'No award of working tax credit under this Act shall be taken into account in the determination of any housing or council tax benefit to which a person may be entitled under any other enactment.'.
- 'Before the coming into effect of this Act, the Secretary of State shall lay before Parliament regulations providing for the conditions and qualifications for access to the social fund of persons ceasing to qualify for income support or income based job seekers allowance upon the coming into effect of this Act.'.
- 'Before the coming into effect of this Act, the Secretary of State shall lay before Parliament regulations providing for the conditions and qualifications for access to passported benefits provided by the Secretary of State, devolved administrations and local authorities which prior to the coming into effect of this Act had been afforded by qualifying for working families tax credit, income support or income–based jobseeker's allowance.'.
- '(subject to the exception provided in section (Recipients of children's tax credit prior to April 2003))'.
- '(except for regulations made under section (Access to social fund) or section (Access to passported benefits).'.
During our deliberations in the Standing Committee, a certain amount of ping-pong took place between the two sides. We wanted to give the Paymaster General the opportunity to set out her thinking on the rates and structure of the tax credits, but she declined to do so. Lest the hon. Lady be under any misapprehension, new clause 1 is different altogether. It does not relate to new
claimants of the tax credit who start to become entitled—for example, due to the birth of a child—after April 2003; it relates to the rules that will govern the existing recipients of that tax credit.The new clause would mean that people receiving tax credits before April 2003 were not cash losers due to the transition. They would be able to continue with the same cash receipt of tax credit for as long as they still had a dependent child, or a qualifying young person.
Obviously, the Chancellor will have to make decisions about the rates and thresholds of the tax credit in his Budget statement. We are not trying to pre-empt that. The acceptance of the new clause would not prejudge any of those decisions. It is really a statement of the principle that people who currently receive the tax credit should not be cash losers—whatever the Chancellor's decision as to the rates and thresholds.
I shall give the House an example, as otherwise we might assume that—in a rare lapse—the Liberal Democrats were defending the rich while the Conservatives were talking about the social fund. The families that I am talking about are not necessarily filthy rich.
I take the example, which I believe to be a good one, of a couple, both of whom work full-time—one on the typical salary for a nurse, one on the typical salary for a teacher. At present they receive the full child tax credit of £520. It seems almost inconceivable that, assessed on their joint income, they would receive anything other than zero. If a family of that sort received child tax credit, so would Back-Bench Members of Parliament. If, having decided to introduce a taper that withdraws child tax credit from higher earners, we include Back-Bench Members of Parliament among those who receive it, there is not much point in having a taper. Therefore, without going into details on the exact rates and thresholds that the Chancellor will choose, there is bound to be a doubt in the minds of families such as the nurse married to the teacher that they may be about to lose some, or all, of the £520 a year that they currently receive.
More than one or two families are in that position. If the thresholds remain the same, 900,000 families could lose all of their tax credit, and another 500,000 could lose some of it. The purpose of the new clause is to tell them, "You may be reassured. Although you might not get an increase, we offer you our assurance as a House today that, whatever rates and thresholds the Chancellor introduces, you will not be cash losers."
One might ask, why should not those families be cash losers? If a new system is introduced that is less generous to people in those circumstances, why should they not lose? We must remember that the children's tax credit was the successor to the married couples tax allowance, so we had a year when that allowance was abolished and nothing took its place, and we shall have had at least two years of the children's tax credit, now payable at £520 a year. It is reasonable to suppose that families have got used to budgeting on the basis of that income, and £520 is quite a serious sum of money. All that we are asking the House to agree is that such families may continue to receive that amount at that cash level. It would not be inflation-proofed, but they would be protected from a windfall loss of up to £520.
Unless the Chancellor wants to create 1.4 million losers, he will have to spend some money on that issue anyway—perhaps by raising the threshold or changing the taper. We are not prejudging that decision, but we are proposing a relatively cheap solution, as is our wont, because the only group that we are protecting consists of existing recipients, who gradually fade out of the system. An existing recipient with a 16-year-old child and nothing else gets the money for one year, and that is it.
If we were arguing that the Government should be raising the threshold so that new recipients in the same circumstances received the full tax credit, that increased cost would roll on indefinitely in the system. Our proposal is a transitional measure, not one for new claimants, because arguably a new family—the nurse married to the teacher who then has the first baby—has never budgeted on the basis of that sum of money and has never got used to having it, so that family's not having it through a new system is defensible. However, taking the money away from people who have got used to having it is far less defensible. Ours is a very modest proposal, to protect existing recipients and to make a statement of principle that there should be no cash losers, without prejudice to any decision that the Chancellor might take about raising thresholds.
I shall briefly address new clause 4. Here there are interesting parallels between the Tax Credits Bill and the State Pension Credit Bill. In the case of the latter Bill, which is passing through another place, the Government have decided that any gains that are given to people through the credit should not be taken from them by means of tapers on housing benefit and council tax benefit, but the Government have not offered us those assurances in the case of tax credits—quite the contrary.
There is some suggestion that a person who gets tax credits through the Tax Credits Bill will then potentially have some or most of them taken away as a result of the tapers on housing benefit and council tax benefit. Several London Members, who served on the Committee with us, expressed concern that because, in view of high rents, people can be on housing benefit while having relatively high incomes, those people could lose 65p—perhaps 85p—in the pound of the money that the Government want to give them.
If the purpose of the Bill is to reward work, to encourage people to work and to teach that work pays, it is dishonest to give them money through the pay packet so that they get a high take-home pay figure and then allow the local authority to come along and take 85 per cent. of it from them. That seems counter-productive in terms of the Government's objectives. We therefore consider that new clause 4 is helpful to the Government—just as we have been in tabling many of our amendments—by enabling those whom they intend to benefit from the tax credits to keep the money, instead of having to give it to someone else.
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