Guardian's Allowance Up-rating (Northern Ireland) Order 2006

Part of the debate – in the House of Lords at 1:30 pm on 24th March 2006.

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Photo of Lord McKenzie of Luton Lord McKenzie of Luton Government Whip, Government Whip 1:30 pm, 24th March 2006

My Lords, that depends on how people respond to the package. Obviously, those people whose incomes increase beyond £2,500 in a period who will not have that clawed back are potential beneficiaries, but the need to report income earlier and to respond to other elements of the package could have an adverse effect on such individuals. We believe that the overall impact could reduce overpayments from rises in incomes by one-third by 2007–08.

I have tried my best to deal with questions on that matter. I have been consistent with explanations given in another place and to the Public Accounts Committee. As I said in my introduction, these regulations and orders increase certain rates and thresholds and are in line with the Government's commitment to make work pay and tackle child poverty.

Tax credits provide financial support to nearly 20 million people. They play a major role in moving people into work and aid mobility of labour, helping men and women move up the employment ladder, thus achieving the Government's aim of greater employment flexibility. The policies have combined with economic stability, which has helped to increase the number of people in work by 2.4 million. In any single year, three million people change jobs and 200,000 men and women who move into new or better-paid jobs see their family income rise by more than £10,000. The tax credit system has been designed to offer support to people as they move between jobs and as their circumstances change.

Tax credits together with child benefit deliver support to virtually all families with children in the UK. They tackle family poverty, with 700,000 children lifted out of relative poverty since 1998–99 and 1.8 million lifted out of absolute poverty since 1996–97. I commend these regulations and orders to the House.