Clause 3 - Claims
Tax Credits Bill
11:30 am
Mr Howard Flight (Arundel and South Downs, Conservative)
Amendments Nos. 58 and 59 are probing amendments that relate to the issue raised by the first Liberal Democrat amendment, on which the Minister undertook to respond in full at this stage of the Bill's consideration.
We should like clarification of the relationship between the new tax credit regime and the European Union, the position of EU citizens, and whether the Government intend essentially to limit the payment of credits to those who are physically present in the UK. My first question is whether EU nationals resident in the UK—who may pay lower rates of UK income tax than British nationals—will qualify for the tax credits in full. The second question, which is related, is what is the Government's proposed policy on other nationals, especially Commonwealth nationals, who reside and work in the UK. Is an obligation involved? I understand that that is the position under EU law. Are those obligations avoidable? About 725,000 individuals, who are not British nationals, working in the UK will qualify under one or other count for the tax credits. What is the position on reciprocity for any analogous benefits in other EU countries? Given the EU directives on benefits and EU accounting standards, how does the issue interrelate with that of whether we are dealing with a benefit or a tax item? Are the rules different depending on how tax credits are regarded or on whether they are correctly categorised?
I note that clause 38 grants the Government power to regulate in relation to immigration. We are, therefore, potentially covering some of the issues related to that. Amendment No. 60 is related, but different. The Minister will be aware that under the existing benefits regime there are problems with people returning to their families in the Indian sub-continent, for example, for substantial periods of time. In those cases, the amendment would restrict absences abroad on holiday to what any reader of The Sun—or even the Daily Mail—would regard generous: a four week maximum. That amendment is principled but would also probe to discover the Government's proposed policy.