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Session 2001- 02
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Delegated Legislation Committee Debates

Draft Child Tax Credit Regulations 2002 and Others

Seventh Standing Committee
on Delegated Legislation

Tuesday 16 July 2002

[Mrs. Irene Adams in the Chair]

Draft Child Tax Credit Regulations 2002

Mr. Michael Jack (Fylde): On a point of order, Mrs. Adams. For the sake of clarity, I noticed that in addition to the documents that I had thought were to be discussed in the Committee a new one has appeared entitled, ''Commons Amendment in lieu of a Lords Amendment.'' Will you be so kind as to tell me to what the document relates and how we shall deal with it?

The Chairman: We are not discussing that document. The Clerk put it out to be helpful because the Tax Credits Act 2002 is not printed yet. When it has been printed, we shall let you know.

4.30 pm

The Paymaster General (Dawn Primarolo): I beg to move,

    That the Committee has considered the draft Child Tax Credit Regulations 2002.

I am pleased to introduce the regulations. We shall consider four sets of regulations this afternoon, the first set covering the entitlement rules for the child tax credit, which was introduced by section 8 of the Tax Credits Act 2002. The regulations also set out the maximum rates of the child tax credit family element and individual element as provided for by section 9 of that Act.

The child tax credit will be available to families that have the main responsibility for one or more children, whether the adults in that family are in work or not. It will replace the existing systems of support contained in the children's tax credit, the working families tax credit, the disabled person's tax credit, and the child elements in income support and income-based jobseeker's allowance to provide a single continuous stream of income-based support that will sit alongside universal child benefit.

The child tax credit is paid to any family responsible for a child or qualifying young person. Each of these terms is defined by these regulations. Regulation 3 sets out the circumstances when a person will be regarded as being responsible for one or more child or qualifying young person and when they cannot be treated as being responsible for them. Regulations 4 and 5 define what is meant by a child or a young person respectively. Child tax credit will be available for a child up to 1 September following their 16th birthday. Beyond that date, support will continue up to their 19th birthday, provided that the young person continues in full-time, non-advanced education.

Regulation 8 defines when a child qualifies for the higher disability elements within child tax credit. Regulation 6 allows entitlement to child tax credit to continue for a period of eight weeks after the death of a child or young person, to avoid adding administrative hassle when families will already be

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experiencing difficulties in tragic circumstances. Finally, regulation 7 sets out the rates of the child tax credit.

The proposed regulations were warmly welcomed during the consultation process, which I assured both the House and the Standing Committee considering the Tax Credits Bill that we would undertake. I commend them to the Committee.

4.35 pm

Mr. John Bercow (Buckingham): I welcome you to the Chair, Mrs. Adams, and we look forward to the combination of firmness and humour with which you will doubtless chair our proceedings.

I am glad of the opportunity separately to debate each of the proposed statutory instruments—although they have a great deal in common, there are points of difference. I apologise in advance to the Committee for the fact that I am suffering from a heavy cold and sore throat. I expect no sympathy, but the consequence is that I shall probably be unable to debate the issues and develop the arguments in the modest detail that I might otherwise have done. I know that that will come as a severe blow to those who would like to hear a dilation on the issues. I shall bear up stoically and with fortitude, but might manage only a relatively brief offering.

We debate this statutory instrument in the context of the Government's four-year track record on tax credits, which is of no little interest. In that period—the Paymaster General will be familiar with the detail and the chronology—the Government have abolished family credit, introduced the working families tax credit, the disabled person's tax credit and a child care tax credit, abolished the married couple's allowance, introduced the employment credit, the children's tax credit and the baby tax credit, abolished the working families tax credit, the disabled person's tax credit, the children's tax credit, and the baby tax credit, introduced a child tax credit, abolished the employment credit and introduced a working tax credit.

Whether that process was designed to mystify and befuddle hon. Members in the Committee or the House, I know not. I have a naturally suspicious mind, but I am doing my best to overcome that ingrained prejudice. It might be that there are good reasons and there is a coherent philosophy behind the regular about-turns, introductions, abolitions and subsequent replacements that we have witnessed. I have not thus far been able to fathom what that justification or coherent philosophy is.

I would like to pose to the Paymaster General, who is a considerable authority on the matter, a series of rather prosaic questions. I hope that she will be patient with me as I develop my argument. I should share a secret with the Committee. Sadly, as I am relaying it in a Committee Room of the House of Commons, the likelihood is that it will remain a secret and not be reported elsewhere. The Paymaster General has been both helpful and kind to me in the past couple of weeks. I am not inclined to forget helpfulness or kindness; I always take it to heart and it has an impact. Therefore the last thing that I want to do is

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deliberately to irritate her. However, I cannot rule out the possibility that the effect of my exertions might be accidentally to do so.

Let us move on at a respectable, if not racy, pace. Regulation 2 focuses on interpretation and contains a reference to ''advanced education''. Does that term have a formal and recognised meaning outwith the regulations, or is it something devised by the Government? Does the concept of ''advanced education'' have meaning in the world of education? If so, is that the basis on which the Government chose it? Far be it from me to position myself to the left of the Paymaster General, which would be inaccurate and not the most career-enhancing move that I could make, but I am a little worried that the term ''advanced education'' has a connotation of elitism that causes me to be taken aback, even by the standards of this relatively unideological Government. Will the Paymaster General tell me exactly what it means?

In the context of interpretation, there is a reference to ''remunerative work''. The Paymaster General will be aware that towards the end of page 3 of the regulations, the term is defined as

    ''work which is . . . done for payment or in expectation of payment''.

I am being pedantic, but it is our job to be so rather than agreeing to provisions if we do not know their meaning. I am fully prepared to admit that I am not sure of the significance of the distinction between doing something

    ''for payment or in expectation of payment''.

I imagine that the Paymaster General is sure of it, however, and even if she is not I expect that she will speedily be advised. If she could help me, I would be grateful.

Regulation 3 deals with

    ''Circumstances in which a person is or is not responsible for a child or qualifying young person''.

In rule 4, under regulation 3, we are told of a situation in which

    ''A child or qualifying young person shall be treated as not being the responsibility of any person during any period in which any of the following Cases applies''.

Case A, by which I admit that I am somewhat flummoxed, is a case in which

    ''The child or qualifying young person is provided with, or placed in, accommodation under Part III of the Children Act 1989 . . . and the cost of that child's or qualifying young person's accommodation or maintenance is borne wholly or partly . . . out of local authority funds''.

What is the basis for that? I am sure that there is good reason for it, but I would like to know what it is.

Then there is a reference to case C, in which the child or qualifying young person is subject to a ''custodial sentence''. I do not suggest that that is not an entirely bona fide case for which there is no rationale and which has no legitimate place in the regulations, but I would appreciate the Paymaster General's explanation of it.

I know that you will be following closely the sequence of events, Mrs. Adams. Regulation 5 is about the

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    ''Maximum age and prescribed conditions for a qualifying young person''.

Paragraph (2) tells us that

    ''A person who is not a child, but has not attained the age of nineteen years, is a qualifying young person for any period during which the following conditions are satisfied with regard to him.''

I presume that ''him'' is used to refer interchangeably to men and women. We are told in the list of conditions that the individual

    ''is either . . . receiving full-time education, not being . . . advanced education, or . . . education received by that person by virtue of his employment or of any office held by him'',

or that he or she is

    ''under the age of eighteen years and . . . has ceased to receive full-time education''


    ''is registered for work or training with the Careers Service, Connexions Service or the Department for Employment and Learning'',

whatever that may be, and

    ''has not fallen within the preceding terms of this sub-paragraph for a consecutive period of twenty weeks''.

As I think that hon. Members will be aware, the plot is truly thickening. I am not clear as to what that means. The Minister knows, because she dealt with the Bill at earlier stages, that I have not been as closely attendant on it as some of my right hon. and hon. Friends. If I remember rightly, my hon. Friends the Members for Arundel and South Downs (Mr. Flight) and for Hertsmere (Mr. Clappison) were closely involved in it and my hon. Friend the Member for Daventry (Mr. Boswell) has taken no little interest in it. It is a Bill of importance. The regulations that the Government are introducing to give effect to its provisions are important. I am mildly perplexed by paragraph 3(b)(iii) of regulation 5 of the instrument, but it is only a matter of minutes or possibly slightly longer before I am released from my state of nescience.

That concludes my initial inquiries, but there might well be a couple of other matters to which I should like to refer. In that context, I want to refer to and acknowledge the significance to my modest inquiries of the Treasury press release of 29 November 2001, which I am now giving some deserved publicity, albeit some months after its release. That press release, which is deeply relevant to our deliberations, related to the details announced of the new tax credits and quoted eloquently and at reasonable length, the Paymaster General herself. She will probably welcome my referring to it, because it is extremely well crafted and detailed.

In the press release, the Minister talks about the tax credits providing

    ''a simpler and more streamlined system.''

It would be going a bit far for me to read out the extremely eloquent and partisan support for the Bill embodied in the release. I will not do so, and I am not sure that it is all that relevant, but I am concerned about this statutory instrument, as doubtless my right hon. Friend the Member for Fylde (Mr. Jack) might be about others. Page 2 of the release refers to points in the consultation exercise that will be subject to

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    ''continued discussions . . . as the regulations to support the Bill are drawn up.''

The Minister will not be at all surprised to hear that I want to know what has been the upshot of those continued discussions, specifically in relation to this statutory instrument.

The Minister's press release very helpfully says:

    ''In the light of the responses to the consultation exercise of the summer''—

the summer of 2001—

    ''a number of issues about the design of the new tax credits have been confirmed.''

She talks about payment to the main carer, and says that

    ''the principle of in-work support will be extended''

and that the tax credits will create a

    ''single seamless system of support for families with children''.

She goes on to say,

    ''the Child Tax Credit will support children up to the September following their 16th birthday. It will also support the families of young people up to the age of 19 who are in full-time education; couples with children will be allowed to sum their hours together to qualify for the 30-hour credit;''


    ''there will be no capital limits''.

There are a number of other points. I have given a pretty good airing to the points in the consultation exercise that were confirmed, but there were presumably some that were not. If the Minister wants to intervene now, it would be a gross discourtesy for me to decline her.


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