Clause 63

Part of Finance Bill – in a Public Bill Committee at 9:30 am on 24 May 2007.

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Photo of John Healey John Healey The Financial Secretary to the Treasury 9:30, 24 May 2007

The hon. Gentleman has answered his own question. It is part of the comprehensive spending review preparations. He cannot expect me to share that with the Committee, even if I was in a position to do so.

The hon. Gentleman also asked about the interaction with some of the other allowances that are rightly paid to our armed forces. The new allowance will be paid separately from the other allowances, such  as the longer separation allowance. In relation to tax credits, he is right; from this year onwards the tax credit regulations have been amended to disregard the allowance as income for tax credit purposes. Prior to that, any operational allowance paid to the armed forces in these circumstances will not reduce the entitlement to tax credits because, as he knows as well as anyone, part of our reforms to the tax credits allow a disregard of income rises up to £25,000.

The hon. Gentleman did not ask me about it but, as he mentioned the interaction with other allowances, he might be interested to know that regulations have been introduced that mean that no national insurance contributions are paid on the operational allowances. Finally, the hon. Gentleman asked how many people are benefiting from the allowance, and the answer is about 12,000.