High Income Child Benefit Charge (Report to Parliament)

I beg to move,

That leave be given to bring in a Bill to require the Chancellor of the Exchequer to report to Parliament on the likely effects of increasing in line with inflation the income threshold for the High Income Child Benefit Charge and of determining that threshold by reference to household income instead of individual income.

I thank the House for allowing me to present this ten-minute rule Bill. Given the timescale, I will attempt to be succinct: most Members of the House will have an understanding of why I, the Democratic Unionist party, and others seek to present this Bill today. It is in the interest of fairness, something that is always critical—always key—to everything I do.

The high income child benefit charge is equal to 1% of a family’s child benefit for every £100 of income that is over £50,000 each year. If an individual’s income is over £60,000, the charge will equal the total amount of the child benefit. That is how it is worked out—indeed, that is how it has been worked out since its introduction in January 2013, with not one single change. The fact that the threshold for the charge has remained unchanged for 10 years is incredible, and not usual when it comes to Government thresholds. Even the standard personal allowance for tax has risen by almost a third during the same period. In the interests of fairness, I should note that income tax thresholds have been frozen in cash terms since 2021-22 and it is Government policy that they will remain frozen up to and including 2027-28, but in tandem with the child benefit freeze, that means that working families find themselves even harder pressed to pay the bills.

The question of why we are now faced with an immovable child benefit threshold is difficult to answer when we consider that literally every other rate has fluctuated over that timespan. The cost of the diesel that people need to get to work is up by 30p a litre since 2013—well over 20%—while those who invested in electric cars have seen the price of electricity consumption increase from an average of £577 in 2013 to the current price cap of £2,500. Increases are not limited to those essentials: using the consumer prices index measure of inflation, the tremendous staff of the Library have worked out that average prices in the UK rose by 25.9% from tax year 2013-14 to 2022-23. Let us take a moment to take that in—an increase of 25%. That is substantial, and wages have not increased at the same rate. A family’s wages may well have increased, yet they are worse off because the bills they are paying cost 25% more. That wage increase may in turn preclude a child benefit claim, yet it is clear that, for working families, child benefit is more necessary than ever before.

The question that the Treasury will be working out is this: what would the thresholds be if they were uprated with inflation? As Treasury Ministers are aware, the usual practice is that income tax thresholds are uprated based on the annual inflation rate of CPI in the September prior to the start of the coming tax year: for example, the threshold in tax year 2023-24 is determined by CPI inflation in September 2022. Based on that practice, if the thresholds had been uprated in line with CPI inflation, the lower threshold of £50,000 in 2013-14 would be £62,644 in 2023-24, and the upper threshold of £60,000 in 2013-14 would be £75,173 in 2023-24. That is what the thresholds should be, but they are not—we find ourselves in a substantially different position. That is one of the reasons why I have tabled this ten-minute rule Bill.

As the House knows, the House of Lords has accepted all of the Commons amendments and disagreements to Lords amendments that this House sent to the Lords on Monday evening and, accordingly, there are no more proceedings on the Illegal Migration Bill.

We now come to motion 3 relating to Business of the House (Today). I call the Whip to move the motion in an amended form, leaving out paragraph (2).

Business of the House (Today)

That, at this day’s sitting—

Standing Order No. 41A (Deferred divisions) shall not apply to (a) the Motions in the name of Secretary Thérèse Coffey relating to Environmental Protection and (b) the Motion in the name of Secretary Chloe Smith relating to the Online Safety Bill: Carry-Over (No. 2).—(Steve Double.)

Northern Ireland Troubles (Legacy and Reconciliation) Bill: Programme (No. 3)

That the following provisions shall apply to the Northern Ireland Troubles (Legacy and Reconciliation) Bill for the purpose of supplementing the Orders of 24 May 2022 (Northern Ireland Troubles (Legacy and Reconciliation) Bill: Programme) and 29 June 2022 (Northern Ireland Troubles (Legacy and Reconciliation) Bill: Programme (No. 2)):

Consideration of Lords Amendments

(1) Proceedings on consideration of Lords Amendments shall (so far as not previously concluded) be brought to a conclusion two hours after their commencement.

(2) The Lords Amendments shall be considered in the following order: 20, 44, 1 to 19, 21 to 43, 45 to 118, 120 to 129 and 119.