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Child Benefit Up-rating Order 2010

In moving this Motion, I shall speak also to the Tax Credits Up-rating Regulations 2010, the Guardian’s Allowance Up-rating Order 2010 and the Guardian’s Allowance Up-rating (Northern Ireland) Order 2010. We shall debate the four related regulations and orders together. 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 child benefit and guardian’s allowance. In my view, the regulations and orders are compatible with the European Convention on Human Rights. I turn first to the Tax Credits Up-rating Regulations 2010. Tax credits play a major role in ensuring that work pays and in tackling child poverty. Overall, 6 million families containing 10 million children benefit from tax credits. These regulations increase the child element of the child tax credit by £20 above earnings indexation, which means that the child element will increase to £2,300 from April 2010. Since its introduction in April 2003, that element will have increased by £855, benefitting 7.5 million children. For the first time in half a century, the retail prices index decreased, which means that all rates have increased in real terms. To provide additional support to households during the early stages of this economic recovery, the Government are bringing forward by a year a proportion of the increase expected in April 2011. From April 2010, rates will be increased by 1.5 per cent for those benefits and tax credits normally uprated by RPI. In April 2011, rates will be increased by the remaining amount necessary to make up the difference, locking in the real increase that arises from the fact that prices fell. These regulations therefore increase the disabled element of the child tax credit and most of the other WTC elements by 1.5 per cent. I turn to the Child Benefit Up-rating Order 2010 and the guardian’s allowance orders. Child benefit is payable to around 7.5 million families for 13 million children and young people, providing almost all families in the UK with a worthwhile contribution towards the cost of bringing up their children. These instruments also increase rates by 1.5 per cent. From 12 April 2010, child benefit will be worth £20.30 per week for the first child and £13.40 for each subsequent child. Guardian’s allowance will increase to £14.30 per week. With the increases introduced by these instruments, we will be delivering even more support next year. We remain committed to the Government’s goal on child poverty, of which tax credits will remain a key part. As a result of all the changes to the personal tax and benefits system since 1997, families with children in the poorest fifth of the population will be on average £5,000 a year better off. I commend these regulations and orders to the House.