Finance (No. 4) Bill

Debate between Lord Jackson of Peterborough and Harriett Baldwin

Thursday 19th April 2012 Commons Chamber

[Mr Jackson]

I defer to the parliamentary private secretary to the Financial Secretary, my hon. Friend the Member for Reading West (Alok Sharma). [Interruption.] At least he is at the moment.

The hon. Member for Denton and Reddish (Andrew Gwynne) made a very important point about crossing the Rubicon of undermining the universality of child benefit. The same point was made earlier by my hon. Friend the Member for Christchurch. Some time ago, the Child Poverty Action Group said this about child benefit:

“A benefit which goes to virtually all children is of course expensive. But it can also be argued that it is more likely that such a benefit will have ‘substantial and wide-ranging support’, and may be difficult to abolish; provision for the poorest children only, whilst cheaper, is often more precarious.”

Specifically, intergenerational redistribution and the value placed on children are universal values that we are seeking to undermine.

[Harriett Baldwin]

What would my hon. Friend say, though, about the example of two wealthy Americans who have four children born in this country who receive child benefit tax-free from the UK Treasury, but have to pay tax on it to the internal revenue service?

[Mr Jackson]

My hon. Friend makes a valid point and I accept her argument, but we need to look at this proposal within the context of the wider proposals in the Budget. We are rightly reducing the top rate of tax and corporation tax, so for those in the upper 20% income range we have introduced fiscal policies through which we seek to support entrepreneurship and business, supporting those higher-rate earners. We are also proud to be taking a substantial number of poorly paid working people out of tax. My concern is that we are not extending those same tax breaks to the squeezed middle and it is a very important message that we are sending. I accept that the Chancellor has tackled the specific issue of the cliff-edge effect, but he has not done enough to secure my vote in terms of the discrepancy regarding the one taxpayer in a two-person household.