Tax Credits Bill — Housing costs — 17 Mar 1999

As amended in the Standing Committee, considered .

(a) the appropriate maximum working families' tax credit for the purposes of section 128(5) of the Social Security Contributions and Benefits Act 1992 or section 127(5) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992; or

(b) the appropriate maximum disabled person's tax credit for the purposes of section 129(8) of the Social Security Contributions and Benefits Act 1992 or section 128(8) of the Social Security Contributions and Benefits (Northern Ireland) Act 1992.

(2) A scheme so made shall--

(a) provide that a person shall not fall within the new category unless he is approved by an accredited organisation in accordance with such criteria as may be determined by or under the scheme;

(b) authorise the making of grants or loans to, andthe charging of reasonable fees by, accredited organisations; and

(c) include such other provisions as the Secretary of State considers necessary or expedient.

(3) In subsection (2) above "accredited", in relation to an organisation, means accredited by the Secretary of State in accordance with such criteria as may be determined by or under the scheme.

(4) Regulations under this section--

(a) may make different provision for different cases or circumstances or for different areas;

(b) may make such incidental, supplemental, consequential and transitional provision as appears to the Secretary of State to be necessary or expedient; and

(c) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.-- [Dawn Primarolo.]

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

I am delighted to be able to move the new clause, which will extend the range of eligible child care for the child care tax credit. There was much discussion in Committee about the eligibility of child care and it is the subject of the other new clauses grouped with new clause 5.

The current rules on eligible child care focus almost entirely on child care for the under-eights, but we have raised the children's age limit to help with child care costs for children up to 14 years, in line with the national child care strategy, and to 16 years for disabled children.

There is little in the current rules to cater for child care for the older age group, whose needs are different from those of younger children. That older group need breakfast clubs, after-school clubs and holiday clubs. Such child care is increasingly available, but the clubs are no longer limited to those run by schools or on their premises, which is what the current rules envisage. They can be organised by commercial organisations or voluntary groups, by voluntary management committees of parents and teachers, or independently from any school. The diversity of the ways in which child care is provided for those older children means that there is currently no common feature that would distinguish the appropriate good-quality providers from the inappropriate ones.

The clause enables us to create such a category of good-quality providers. That category can then be used in the tax credit rules as a definition of eligible child care. The clause is the joint work of the Inland Revenue, which administers the tax credits, and the Department for Education and Employment, which is responsible for the regulation of child care in England; it was drawn up in consultation with the Scottish Office, the Welsh Office and the Northern Ireland Office, which are responsible for child care in their areas.

The clause enables the Secretary of State to set up a two-tier approval scheme. The Secretary of State would accredit appropriate organisations to administer an approval system for child care providers. The details of the scheme would be contained in regulations made by the Secretary of State, as would the criteria for organisations to become accredited so that they can be approved providers.

Subsection (1) sets out the general principle, purpose and limits of the clause. It enables the Secretary of State to make regulations for a scheme to establish a new category of child care provider, the costs of which would be taken into account in calculating the maximum working families tax credit and disabled persons tax credit.

Mrs. Jacqui Lait (Beckenham):

I am grateful to the hon. Lady and to the Government for taking up one of

Question put and agreed to.

Clause read a Second time, and added to the Bill.

Brought up, and read the First time.

I beg to move, That the clause be read a Second time.

The previous new clause was hailed as a victory for the hon. Member for Beckenham (Mrs. Lait). I believe that this one is about to be hailed as a victory for the hon. Member for Northavon. When I opened The Guardian on Monday morning, I saw the headline "Housing benefit to become a tax credit". That is the subject of the new clause, which says that an amount for housing costs should be

Question put, That the clause be read a Second time:--

The House divided: Ayes 39, Noes 303.

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