Clause 9 - Maximum rate
Tax Credits Bill
2:30 pm
Professor Steve Webb (Northavon, Liberal Democrat)
Thank you, Mr. Beard. I cannot help noticing that we have already driven out two Chairmen, and I hope that that does not reflect anything about the quality of the debate.
Amendment No. 50 would remove a discrimination against two-parent families compared with one-parent families on the same income level. My argument is that the two-parent family on the same income level as the one-parent family has the added burden of an extra mouth to feed, to put it at its simplest. Most of the social security system, such as income support and housing benefit, recognises that fact through an amount for the second adult—it is not the same as that for the first adult, but perhaps a 60 per cent. addition—but tax credits will not do that, and working families tax credit does not currently do it. My question is, why not?
I guess that there could be two reasons. One might be about poverty, of which there is a far higher incidence among lone parents. However, we are talking about people on the same income. If there are two families, one with one parent and one with two, both on £150 a week, we cannot argue that we should give more to the one-parent than to the two-parent family because the one-parent family is somehow poorer. Their incomes are the same.
The second reason could be an argument of child care, and that the two-parent family has the advantage of ''free'' child care, but that does not really stack up either. First, there is substantial help available in the system with child care costs, and secondly, many lone parents rely on informal child care, for example from grandparents. It is far from universally true that lone parents do not have access to either free or subsidised child care. There are limits to that, but I am not sure that that is a good enough justification for the distinction. Without specifying any particular level—although the Minister will try, I shall not be drawn on specific figures—we want to establish the principle that there might be some allowance for a second adult.
I give one example, of a couple on £150 a week with a two-year-old child. The figure has been given to me that a one-parent family on that income, relative to the official poverty line of 60 per cent. median equivalent income, would be £35 above the poverty line. The two-parent family on the same income would be £20 below it, using equivalent income, which is what the Government tend to use when measuring poverty. The simple question is, as there is an extra mouth to feed, should not the tax credit system recognise it, as the social security system does?