Schedule 3 - Tax credits: consequential amendments
Tax Credits Bill
4:45 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
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.
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.