Tax Credits Up-rating Regulations 2015

Lord Newby Excerpts

Tuesday 10th February 2015 Grand Committee

Moved by

[Lord Newby]

That the Grand Committee do consider the Tax Credits Up-rating Regulations 2015.

Relevant document: 20th Report from the Joint Committee on Statutory Instruments

[Lord Newby (LD)]

My Lords, with these regulations it will be convenient to consider the two draft guardian’s allowance orders. It is a requirement that I confirm that the provisions contained in the orders and regulations before the Committee today are compatible with the European Convention on Human Rights, and I so confirm.

Before I start, the Committee should note an amendment to the Explanatory Memorandum to the Tax Credits Up-rating Regulations 2015. The rate of CPI to be applied to these regulations is 1.2%, in line with the rate of CPI published by the ONS, rather than the 1.3% that was mistakenly written in the original document. A revised Explanatory Memorandum and accompanying Section 41 report correcting the error was laid before Parliament on Friday 6 February.

The regulations increase the maximum rates of the disability elements of tax credits—that is, the disabled child and severely disabled child elements of child tax credit, and disabled worker and severely disabled worker elements of working tax credit—in line with CPI. This decision was taken to protect those benefits that help with the extra cost of disability. The regulations also increase the earnings threshold for those entitled to child tax credit only, after which payments begin to be tapered away. The orders increase by CPI the rate of guardian’s allowance, which is the payment made to provide support to those who look after a child whose parents are deceased.

Child benefit and other elements of tax credits will be uprated by 1% by the child benefit and tax credits uprating order 2015. This is a separate instrument and these increases are not before the Committee today.

The regulations and orders before the Committee protect the most vulnerable by ensuring that the guardian’s allowance and the elements of working tax credits and child tax credits designed to assist with the extra costs of disability keep pace with the change in prices. This Government have ensured that these elements of financial support paid to low-income and vulnerable households have kept pace with inflation and will continue to do so until the end of this Parliament.

The regulations and orders before the Committee today will uprate the disability elements of tax credits by CPI. The rate of guardian’s allowance will also be uprated by CPI. In line with normal practice, we are applying the rate of CPI from September 2014, which, as I said earlier, was 1.2%. I beg to move.

[Lord Tunnicliffe (Lab)]

My Lords, we do not intend to oppose any three of these orders, and I have no questions.