Welfare Reform Bill

Lord Boswell of Aynho Excerpts

Monday 14th November 2011 Grand Committee

[Lord Sassoon]

It is important that we are reminded of that. This change to the withdrawal rate was one of a significant number of changes that the Treasury and my right honourable friend the Chancellor had to make to start to get the books back into balance—the start of a five-year process to get us back into balance. That is where the change comes from, and it is part of a wider reform thrust, which is the subject of a lot of the wider debate in this Committee. It was part of the overall approach to dealing with the deficit in a fair and targeted way. The noble Lord asks about the distributional impact. Of course, with the June 2010 Budget it was the first time that the Government put into the documents a complete distributional impact of the tax changes. It would be wrong to pick out the distributional impact of an individual measure like this. For the first time the Budget document gave the overall distributional impact, of which this withdrawal is just one element. It should be considered alongside other changes in personal allowance, which will boost work incentives. Again, it would be wrong to take this in isolation but it is important to remember that this was part of a complex construct.

[Lord Boswell of Aynho]

My Lords, will my noble friend reflect, in conjunction with our noble friend his colleague, that in a sense—I have enjoyed watching the passing scene on this matter—he has been rescued by the fact that the concept of income tax is a tax from year to year and has a defined period in which adjustments can be made? But I understand that under the universal credit, the payment period will be somewhat different and the ability to use that kind of argument, if there were a miscalculation of the taper rate in the future, would not be available? That is perhaps the moral that Ministers and officials will need to take into account in avoiding any slip-ups in the future.

[Baroness Hollis of Heigham]

My Lords, in the wording in proposed new subsection (2), all that comes close is in the regulations referring to capital being deemed to be income and income being deemed to be capital. Here we have something that has to be treated as being done is though it would have been done had it not been for the fact that it was not done. As a basis of legislation in future, I wonder whether the Minister would welcome such an approach from the Opposition.