Finance (No. 4) Bill

Edward Leigh Excerpts

Thursday 19th April 2012 Commons Chamber

[Mr Chope]

The hon. Lady is absolutely right: that is another of the behavioural consequences, the full implications of which are not yet apparent.

One has to ask why we are going down this road. The justification for it—the avowed policy objective—is this:

“In order to address the fiscal deficit, the Government believes that it is right to ask those on higher incomes to contribute more.”

The Government’s proposal, however, asks those on higher incomes with families and children to contribute more, while those on higher incomes without children are not asked to contribute more. I do not see how that can be fair.

In case anyone thinks this is an issue discussed only among academics, let me say that it certainly goes very close to the heart of many of my constituents. I shall quote briefly from a letter that I received since the Budget from a constituent living in Christchurch. He starts off:

“I am writing to express my utter disgust and outrage at your party’s stance on child allowance announced in the budget last week.”

He explains that he and his wife choose to work hard, believing that they have a responsibility

“to look after ourselves and to help to generate wealth for the wider community”

by contributing their utmost to industry. He says that he has an income of £60,000 and that his wife earns £12,000, providing a combined income of £72,000. As he puts it:

“under your disgusting new Tax rules we will lose the child benefit for our two children. However, in a household with two working parents earning £40,000 each, combined income of significantly more…that family gets to keep their benefit.”

[Mr Edward Leigh (Gainsborough) (Con)]

rose—

[Mr Chope]

Before I give way to my hon. Friend, let me read the last paragraph:

“I ask for your commitment to continue your fight against this latest most disgusting taxation scheme on child allowance and rally your fellow back benchers against the current disgraceful and unethical budget.”

[Mr Leigh]

That voter in Christchurch—probably a Tory voter—sums up one of the problems. Why are the Government advancing a proposal that is laser-guided to attack the core Conservative vote—families that earn between £50,000 and £100,000? What sort of politics is that?

[Mr Chope]

I hope that, unlike in previous debates—yesterday in the context of an amendment I tabled to clause 1, and on Second Reading—the Minister will have time to respond to the powerful point that my hon. Friend makes.

--- Later in debate ---

[Mr Gauke]

I will take interventions, but I am sure that Members realise that they are eating into time to answer questions asked during the debate.

[Mr Leigh]

Unfortunately, we are introducing more and more complexity. For example, the new charge must be paid by the higher earner, who might not be claiming child benefit when the lower earner is claiming, even though the lower earner is not legally obliged to inform the higher earner whether he or she is claiming child benefit. This is an absurdity, making our tax system even more complex.

[Mr Gauke]

I recognise that not everyone wants to address the matter and that there are those who do not want to change the position whereby people earning £20,000 or £25,000 a year are paying taxes to fund child benefit for substantially wealthier families, and I realise that arguments are made to defend that. But if we are to do something about it, we have a choice. Do we do this through a tax credit system, which means putting everybody through that system, and doing it on a household basis, or do we try to find an alternative way of doing it that reduces the administrative demands? I do not deny that there is complexity in this method, but relatively, we believe that this is the simpler way of doing it.