Tax Credits (Income Thresholds and Determination of Rates) (Amendment) Regulations 2015

Baroness Symons of Vernham Dean Excerpts

Monday 26th October 2015 Lords Chamber

[Lord Lawson of Blaby]

With respect to the noble Baroness, the constitution is more important than nitpicking. This is a budgetary matter.

[Baroness Symons of Vernham Dean (Lab)]

Does the noble Lord, Lord Lawson, think that the Clerk of the Parliaments was nitpicking when he told my noble friend that statutory instruments were not covered by financial privilege? That was said unequivocally by the Clerk of the Parliaments.

[Lord Lawson of Blaby]

The point is that this is a budgetary matter and budgetary matters are the prerogative of the elected House. That is the most important constitutional principle. This was designed to reduce the budget deficit, which everybody on all sides agrees has to be eliminated, by something like £4.5 billion. It is quite clear that this is the Chancellor of the Exchequer’s measure, in effect, whosever name may be on the statutory instrument. That is the constitutional position. I said I would be brief, so I will not elaborate, but that is clear.

On the other hand, I also said I am torn, because I believe that there are aspects of this measure which need to be reconsidered and, indeed, changed. The right honourable George Osborne, the Chancellor of the Exchequer, made it clear that he was going to get a lot of his savings, probably the greater part, from the welfare budget, and tax credit, which has ballooned enormously in recent years, is a large part of the welfare budget. I think that is absolutely fair, but the question is the particular incidence of this package in the regulations. What concerns me is not that there are high implicit marginal rates of tax—which are transient, incidentally. That is the case with all means-tested benefits and it is absurd to say that means-tested benefits can never be reduced. Nevertheless the tax credits system—the in-work benefits—rise surprisingly high up the income scale, but here the great harm, or a great deal of the harm, is at the lowest end. That is what needs to be looked at again; that is what concerns me. It is perfectly possible to tweak it to take more from the upper end of the tax credit scale and less from the lower end.

I heard my noble friend the Leader of the House say that the Chancellor would listen to this debate. I would have been surprised if she had said that the Chancellor would not listen to this debate. Of course he will listen to this debate, but it is not just listening that is required. Change is required. I very much hope that my noble friend Lord Howe, when he winds up, will indicate that there will be change, though he cannot indicate what, but I must say that my present intention is to support the amendment in the name of the right reverend Prelate the Bishop of Portsmouth.

--- Later in debate ---

[Earl Howe]

There is a clear difference in the wording—that is unarguable—but the effect is exactly the same. That is the point I am making.

[Baroness Symons of Vernham Dean]

I beg the noble Earl’s pardon. I have the greatest respect for him, but in her speech my noble friend Lady Hollis said explicitly that she had drafted her amendment with the help of the Clerk of the Parliaments, and the Clerk of the Parliaments said that it is not a fatal amendment. Is the noble Earl challenging that?

[Earl Howe]

I cannot gainsay the Clerk of the Parliaments; heaven forbid if I did that. Perhaps what was meant was that the wording of the amendment in the name of the noble Baroness, Lady Hollis, is not of a kind that one associates with a fatal amendment. Nevertheless—