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Tax Credits Up-rating Regulations 2009

I shall speak also to the Guardian’s Allowance Up-rating Order 2009 and the Guardian’s Allowance Up-rating (Northern Ireland) Order 2009. Tax credits, together with child benefit, deliver financial support to the vast majority of families with children in the UK and are vital in our commitment to tackle child poverty. I am pleased to introduce these regulations and orders, which increase certain elements and thresholds of tax credits and raise the guardian’s allowance. In my view, the regulations and orders are compatible with the European Convention on Human Rights. First, I turn to the Tax Credits Up-rating Regulations 2009. Tax credits play a major role in ensuring that work pays and in tackling child poverty. Overall, nearly 6 million families containing nearly 10 million children are benefiting from tax credits. These regulations bring forward the Government’s commitment to increase the child element of the child tax credit by £25 above indexation in April 2010 to April 2009. Added to the existing commitment to uprate the child tax credit, this means that the child element will therefore increase by £75 above indexation to £2,235 from April 2009. Since its introduction in April 2003, this element will have increased by £790, benefiting 7.2 million children. From April 2009, a family with two children, with a single earner working full-time on the minimum wage, will receive around £10 extra in tax credits per week compared to the previous year. Other rates and thresholds are also increased by these regulations. The disabled element of child tax credit and also most of the other WTC elements increase in line with prices. I turn to the guardian’s allowance orders. These will increase in line with prices to £14.10 per week from April 2009. We normally debate these orders in conjunction with the child benefit orders. However, as the Committee will be aware, we debated these increases before Christmas, as the Government brought forward their commitment to increase child benefit to come into effect in January 2009, rather than in April. A family with two children will gain £24 from bringing forward the increase to child benefit. With the increases introduced by these instruments, we will be delivering even more support next year. We remain committed to the Government’s goals on child poverty, and tax credits will remain a key part of this. As a result of all changes to the personal tax and benefit system since 1997, families with children in the poorest fifth of the population will be £4,400 a year better off. I commend these regulations and orders to the Committee.