Draft Child Tax Credit Regulations 2002 and Others

[back to previous text]

Mr. Bercow: The hon. Gentleman is making an important point, and the quality of his oratory is such that the numbers attending the Committee have greatly increased in the last few minutes. I do not want to divert him for long, but I have a question. In the context of the rules on working hours and the scope for overpayment, does he agree that it would be morally wrong, even if not in practice illegal, if overpayment resulting from an employer's errors, however innocent, ended up causing undue and possibly grievous hardship to some of the most vulnerable people in our society—the claimants?

Mr. Webb: It grieves me to say it, but the hon. Gentleman raises an important point. Clearly, when making the claim, the individual is required to declare the number of hours that they are working, but I am not clear on whether the employer is required at any

Column Number: 34

point to validate any of the information about hours, and who keeps a record. As I said, I am concerned not about the people on boring, bog-standard contracts, who work the same number of hours every week, but about people who work part-time or varying hours.

Mr. Mark Hoban (Fareham): Will the hon. Gentleman give way?

Mr. Webb: I will not give way to the hon. Gentleman, for reasons that he can probably guess.

An important issue has been raised, to which I hope the Paymaster General will respond. Another issue is the second adult element, which comes under regulation 11. I welcome that, because in the past we have called for recognition that one-earner couples still have a second mouth to feed. However, will the Paymaster General comment on the rate of payment for the second adult element? Bizarrely, the first adult qualifies for £1,525; under schedule 2, the second adult qualifies for £1,500. Will the Paymaster General explain why the second adult qualifies for 50p a week less, as far as I can see, than the first adult? Inevitably, any rate of benefit or tax credit is slightly arbitrary and is usually what it was the year before, plus a percentage, rather than there being any absolute rationale for it. We are creating something completely new and have never had this ''second adult'' element before.

Mr. Jack: Will the hon. Gentleman give way?

Mr. Webb: I am about to conclude my remarks.

It would be helpful if the Paymaster General explained the thinking behind this entirely new rate, where the figure came from, and how it was set relative to the basic element, from which it differs by 1 or 2 per cent. Was it just rounding?

6.49 pm

Mr. Jack: I shall make the point that I would have made had the hon. Member for Northavon allowed me to intervene. Even in his closing remarks, he touched on the important question of the reason for the rates. It is sad that we receive little explanation of the figures. The basic element, the disability element, the 30-hour element, and so on and so forth are all listed in schedule 2, but there is no explanation in the explanatory notes and the subsequent free-standing explanatory note as to why the figures are considered to be right. How were they calculated? To what did they refer? How did they come about?

It would be helpful to have some answers, as the manner in which much of this legislation on tax credits has been introduced gives the impression that it is borrowed from previous social security legislation. Much of that is buried in the mists of antiquity and goes back to income support, supplementary benefit and before. As the hon. Gentleman said, an assessment to determine the rate of help was forgotten once it was made. So often, many of the rates have been what they were the last time, with a percentage added on. We lose sight of where the calculations came from, and therefore cannot judge whether the rates are right. It would be interesting to know whether the Government started out with a sum of money that they could afford

Column Number: 35

and wanted to spend, or whether the rates were built on previous numbers, and if so, which ones.

Regulation 3—other elements of working tax credit—refers to the 30-hour and 50-plus elements. I am genuinely interested to know why it is 30 hours of work, just as the hon. Gentleman talked of 16 hours and 24 hours. I know where some of those numbers came from, but why are they adjudged to be correct?

Mr. Bercow: I do not recall off the top of my head the precedent for, and therefore the rationale behind, the 24 hours. Members on both sides of the Committee will be familiar with the precedent for 16 hours. There is an important difference and I merely underline the significance of my right hon. Friend's question about the basis for the 30-hour criterion.

Mr. Jack: I asked that question, and my hon. Friend underscores the importance of my observation, because the standard working week was about 40 hours when much of the legislation from which the tax credits take their numbers was enacted. The working week has decreased considerably to 37.5, or even to 35, hours. The social security legislation hours are now a higher proportion of what might be deemed to be a normal working week. I ask in the spirit of informing the Committee whether anyone has examined the numbers to see whether they achieve the policy objectives of recognising that help should be given to people who do less than a full week's work.

Regulation 4 states:

    ''The work which the person undertakes is expected to continue for at least 4 weeks after the making of the claim''.

I had a lot to do with the fishing industry when I was a Minister in the old Ministry of Agriculture, Fisheries and Food, and I am intrigued to find out how a fisherman would be expected to know for how long his work would continue. The hon. Member for Northavon referred to regulation 7, which deals with seasonal work, and I shall come on to that. How will the term ''expectation'' be interpreted when someone who has uncertain prospects in their work makes an application? For example, deep-sea fishermen who set off for what is deemed to be a long voyage might run into unexpected weather conditions and/or a lack of fish, meaning that the voyage must be curtailed. As hon. Members will appreciate, that has a profound influence on their expectations of work and the amount of money that they could expect to earn, both of which will affect their application.

Regulation 7 builds on that point. I was pleased to see that cyclical employment, especially for those who work in schools, has been recognised. I refer back again to my knowledge of the fishing industry, in which some people are employed without a contract and are known as share fisherman. There are two types of share fishermen: those who have a share in the boat and who as private business people would not be expected to be involved, and those who have a share in the catch. How will the tax credits deal with share fishermen who have uncertain unemployment without a contract and uncertain earnings because of fishing prospects and market returns?

Column Number: 36

Mr. Mark Prisk (Hertford and Stortford): My right hon. Friend rightly referred to the fishing industry. In my constituency, an increasing number of people in the creative industries and information technology are involved in not only regular but irregular cycles of employment. Does he agree that the regulation fails to recognise that?

Mr. Jack: I am grateful to my hon. Friend, because that could refer to anyone in the acting profession, including out-of-work actors.

Mr. Hoban: Resting.

Mr. Jack: Yes, resting actors. I notice that regulation 7 refers to holiday periods. I apologise to the Minister if these seem to be minority issues, but I assure her from previous experience—I was quizzed on the point many years ago in dealing with social security legislation and it has stuck in my mind—that they are relevant. The operation of share fishermen in fishing communities is crucial.

Another matter caught my eye in regulation 4, which says that help is ruled out for someone who has a sports award. Will the Minister clarify what a sports award means in that context? If it means a national, publicly funded award, her earlier point on double counting would be a perfectly good explanation, but would someone be ruled out if they were given an award by a football club but then required help because of their family obligations? Why have sports people been picked on in what appears to be—perhaps through my ignorance—unfair treatment?

Regulation 9 deals with disability. It makes strenuous efforts to cover as many variations on the theme of disability, both mental and physical, and the application of the tax credit. I am pleased about that, but the disability element touches on tests with reference to medical treatment. There are some medical conditions that cannot be treated with drugs. A person with a mental condition may be advised what he should do as part of his personal strategy to deal with his condition, but there may not be a pill or a potion that can help it. I should be interested to know whether such highly specialised circumstances can be taken into account. Under the regulation, 16 hours has been determined to be the dividing line and limit. In the case of assisting disabled people back to work, I wonder whether that represents too high a threshold.

Will the Minister clarify regulation 14? I hope that it means what it says, because it is something for which I have long campaigned, which is child care provisions that will cater for those workers who work antisocial hours. For example, care home assistants and nurses who work at night find it extremely difficult to obtain child care provision, because usual day care nurseries do not open in the middle of the night. I hope that the element that enables some form of accredited organisation also covers an accredited individual, so that an accredited person who provides child care supervision as opposed to the more nursery-orientated environment may be helped under the child care provisions. I am referring to a person who needs a secure baby-sitting service rather than a more advanced form of child care. For a night worker, that form of child care is as relevant as the usual, more

Column Number: 37

traditional, nursery-based day care. I hope that the Minister can satisfy me on that point.

7.2 pm

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 16 July 2002