Tax Credits Bill

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Dawn Primarolo: No, I agree. One husband is quite enough.

A polygamous marriage is recognised as valid by the courts if it was contracted in a country that permits

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polygamy and the parties to the marriage were subject to the law of that country at the time when they were married. This is a principle of international law and was written into the UK statute book in 1995—thank goodness—by the Private International Law (Miscellaneous Provisions) Act. Polygamy is recognised for the purposes of income support, jobseeker's allowance, working families tax credit and disabled person's tax credit and follows the precedent that has been set.

I was informed that, if the provision was not included in the Bill, the UK would risk being in breach of the European convention on human rights, in which case, my right hon. Friend the Chancellor would have been unable to sign the compatibility statement.

I have probably said enough to assure the Committee that this is a necessary provision. It is extremely rare and is a sensitive issue. I hope that the hon. Gentleman will agree to allow us to move on, although I am sure that he could ask the Library to do some interesting research for him on this aspect of UK law.

Mr. Webb: I cannot resist pointing out to the hon. Member for Mid-Worcestershire (Mr. Luff) that his noble Friends in another place considering the State Pension Credit Bill have moved an amendment relating to polyandry, and that he may have been guilty of glossing over the issue of many husbands. The clause covers only many wives—polygamy—whereas polyandry relates to many husbands. It is clearly a matter of some concern to the hon. Gentleman's party.

Mr. Luff: I am in all kinds of dilemmas, because I am now being accused of sexism. I imagined that the term ''polygamous marriage'' referred to husbands and wives, but I am in some difficulty now.

The Chairman: Order. I think that I can help the hon. Gentleman. The clause refers to polygamy, so it would be preferable to stay on that subject.

Mr. Luff: That is true. You are entirely right, Mr. Beard, and I think that the hon. Member for Northavon also makes an important point that the Government should reflect on before the Bill is considered on Report. Let the record show that the Minister indicated dissent.

On the basis that any member of the Committee who votes that the clause stand part of the Bill does not endorse polygamy or polyandry, I would not wish to force the Paymaster General to say any more and I am grateful to her for her remarks.

Question put and agreed to.

Clause 39 ordered to stand part of the Bill.

Clauses 40 to 43 ordered to stand part of the Bill.

Schedule 3

Tax credits: consequential amendments

Mr. Webb: I beg to move amendment No. 76, in page 46, line 4, at end insert—

    '28A In sections 150 and 152 of the Social Security Administration Act 1992, replace at all places where they appear references to the ''Secretary of State'' with ''Secretary of State or

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    Treasury'', and in section 150(1) of the same Act after sub-paragraph (k) but before the words ''in order to determine'' insert a sub-paragraph (l)—

    ''(l) arising under the Tax Credits Act 2002 (or regulations made thereunder),''.'.

The Chairman: With this we may take new clause 6—Review and alteration of rates of tax credits—

    'Section 150 of the Social Security Administration Act 1992 shall apply with like effect to tax credits and paragraph 28A of Schedule 3 to this Act shall amend the said section 150 accordingly.'.

Mr. Webb: Returning to sobriety, this relatively straightforward amendment and new clause would insert in the Bill provision for annual uprating, presumably in line with prices at least, of the various thresholds that will apply to tax credits legislation.

Clearly the Paymaster General could legitimately point out that since the Government came to office they have done far more than price index many of the elements of sport for children. That is laudable and to be applauded. However, we are legislating not merely for benign Ministers such as the hon. Lady but for subsequent elected despots, whom we might face across the Chamber or indeed form a Government with. [Laughter.] The issue is whether the Government want to place on record their intention to index all aspects of the tax credit regime.

There is a serious point to be made here. One assumes that in the normal run tax credits will probably be uprated in general, but there are detailed nooks and crannies in these systems that often do not get uprated. In the social security system, one thinks of capital limits, which sometimes remain the same year on year. Although an individual decision not to uprate does not matter a great deal, the cumulative effect can sometimes be quite serious.

Although we would be grateful for an assurance from the Paymaster General that the Government's intention is benign, it would be nice to tie their hands to some extent by including such a provision in the Bill. It would require them to uprate not only the headline parts of the system—we assume that they would fear the consequences of not doing that—but the obscure parts that no one really notices, but which could impact on individual claimants. The effect of failing to uprate various parts of the benefits system is often similar.

As I understand it, the Bill does not make such provision, and we therefore hope that the Paymaster General will accept the new clause.

4.45 pm

Dawn Primarolo: As the hon. Gentleman is concerned mainly with the principle behind his amendment, I hope that he will not object if I avoid discussing its technicalities. That said, those technicalities—let alone what I am about to say—are sufficient to prevent its inclusion in the Bill, so we will have to vote against it. As he said, the amendment is chiefly concerned with the legislation's mechanisms and the principle of uprating, so perhaps I should stick with that point.

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We would need to look carefully before leaping in the direction in which the hon. Gentleman suggests. The Bill is designed to strike a careful balance between transparency and flexibility. Some hon. Members suggested that it is little more than a framework, but that accusation is not justified. In constructing the Bill, we have been careful to make clear the intended shape of the credits. The elements that we intend to create are set out in clauses 8 to 12, and I hope that hon. Members agree that I have been forthcoming about the Government's intentions during our deliberations.

At the same time, it is important that the Bill allow scope for the credits' structure to develop as our understanding of the needs of families and of working households develops, and as patterns of work and family life change. If we include an uprating provision in the Bill, the risk is that we might inadvertently cause the credits' structure to ossify, when in fact we want more latitude. Ossification could indeed occur if there were a presupposition that, once introduced, elements must always persist, even if they become redundant over time. In that sense, uprating would lock us in.

The hon. Gentleman will probably say, ''Let's have a little uprating, which can always be adjusted.'' Of course, the process of setting the new tax credit rates will be highly transparent, even without a provision such as section 150 of the Social Security Administration Act 1992. As hon. Members will be only too well aware, the rates and thresholds are the subject of the Chancellor's Budget statement, and I am sure that they will not escape the enormous scrutiny to which the Budget process is already subject.

Having said that, I am happy to acknowledge that the hon. Gentleman's arguments in favour of an uprating provision are not without force. I should like the opportunity further to reflect on the points that he has made before deciding whether it would be appropriate for the Government to introduce such an amendment. As this is such an important issue, I hope that he will forgive me for asking for a little more time, and I hope, too, that I have been generous enough to tempt him to withdraw his amendment and to allow me to consider the matter further.

Mr. Webb: I always find the hon. Lady tempting in the extreme.

The Paymaster General has given me quite a heartening response, which goes some of the way towards addressing my concerns about parts of the system not being indexed. I am concerned, however, that were no Government amendment along these lines introduced, there would in effect be a licence to cut parts. She is essentially saying that things might change and that the Government might decide that they have different priorities and therefore want to cut parts. If there were no intention ever to cut anything, having their hands tied over uprating would not be a problem, because it was always going to happen. If the Paymaster General introduced no amendment at a subsequent stage, that would suggest that the Government had in mind keeping open the option to cut parts of the system. Obviously, they do not have that intention at present as the system is new, but claimants might be slightly concerned were no such amendment introduced.

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I mention some precedents. One is the Social Security Administration Act mentioned in the amendment. It is far from unprecedented to include in legislation that parts of the income maintenance system shall be indexed annually. Governments do not say that they do not guarantee to index pensions every year because that would tie their hands. They have statutory duties to index things. It seems slightly odd for them to argue that they do not want a statutory indexing provision because it would tie their hands. The Government do such things in very similar circumstances.

Another precedent, perhaps closer to the tax system, is what is known as the Rooker-Wise-Lawson amendment, which requires statutory indexation of personal tax allowances unless the relevant Bill overrides it. The assumption is that it is a positive, high-profile action not to index, rather than something that just goes through on the nod because there is no requirement to index. I had thought that I would seek to press the amendment until, at the end of her remarks, the Paymaster General said that she has some sympathy with where the amendment is coming from. Heartened by that, and looking forward to what she comes up with, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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