Clause 5 - Period of awards
Tax Credits Bill
6:00 pm
Mr Paul Boateng (Financial Secretary, HM Treasury; Brent South, Labour)
I shall respond first to the hon. Member for Hertsmere. I have had the pleasure of sitting opposite him, listening and responding to him in a number of incarnations—all of them welcome in my case, although I do not know about him—and I know that he lives in a state of perpetual unease. In some circumstances, that might be a healthy, albeit rather uncomfortable, state of affairs in which to find oneself. I do not mean to be complacent, but I believe that in this respect his unease is not justified.
Of course we must be vigilant; vigilance is certainly justified. We are making a major change, and I hope that I have acknowledged the scale of it. That is one reason why we are ensuring that NACAB, the Institute for Fiscal Studies and others who have expressed a view about these matters are involved as we prepare the regulations and draw up the detail of the system. It is right that they should be involved and also that we
should be able to reflect, as hon. Members have, our constituency experience. However, we must consider how the system proposed in the Bill builds on what already exists.
The hon. Member for Hertsmere said that in relation to the working families tax credit we initially chose the six-month period. We did, and we are moving on from that. We did not believe that that was the last word. This is a process of reform. The burden on claimants to report changes is a real one and is not to be sneezed at. The hon. Members for Teignbridge and for Northavon as well as some Conservative Members have referred to it.
We must remember, however, that the principle is not new. Both income support and JSA claimants need to respond, and are required to respond, to changes in their circumstances and to report those changes. However, this is new territory for tax credits, which encompass a wider population. It is therefore important to make sure—and we will make sure—that the responsive nature of the credit does not mean that we end up imposing excessive requirements to report changes.
We plan to consider the area carefully. We shall introduce detailed proposals in the form of draft regulations in due course, and there will be an opportunity to discuss them then. There will also be an opportunity for us to hear and incorporate the concerns of bodies like NACAB, which have day-to-day responsibility for providing advice and information to claimants. We shall need to address the risk of concealing changes, to which the hon. Member for Hertsmere referred, by monitoring those changes closely, as in income support or JSA, or by introducing fixed awards.
Our aim is to strike a balance between continuity and flexibility. It is a challenge, but we shall work out the details of the framework in a way that strikes the balance between preventing abuse and not deterring take-up—because that, too, is important. That point has been forcefully brought home to me and to my hon. Friend the Paymaster General by hon. Members of all parties who are concerned with poverty reduction—not least my hon. Friends—and I assure the Committee that we have it very much in mind.
With those assurances and having listened carefully to the contributions of those on the Liberal Democrat and Conservative Benches, I hope that hon. Members will not press their amendments.