§ Mr. KirkwoodTo ask the Chancellor of the Exchequer if he will estimate the rates of child benefit for the first and subsequent children from April 2002 required to ensure that if a higher rate taxpayer in receipt of child benefit paid tax on it at(a) the higher rate or (b) the standard rate, the net cash amount of benefit received remained at the level already announced from April 2002; and if he will estimate (i) the gross annual programme cost of increasing child benefit to those levels and (ii) the net cost to the Exchequer of raising child benefit to those levels (1) with no taxation and (2) with higher rate taxpayer recipients paying tax on the benefit at the higher rate, taking into account the consequential effects on working families tax credit, income support payments and other means-tested benefits. [22058]
§ Mr. Andrew SmithChild benefit will be £15.75 per week for the first child and £10.55 per week for subsequent children from April 2002. If it were taxable at the basic rate, in order for a taxpayer to receive the same net benefit it would have to be increased to £20.20 per week for the first child and £13.55 per week for subsequent children. If it were taxable at the higher rate, the corresponding figures would be £26.25 per week for the first child and £17.60 per week for subsequent children.
The gross programme cost of increasing child benefit to £20.20 per week for the first child and £13.55 per week for subsequent children would be £2.5 billion in 2002. The gross programme cost of increasing child benefit to £26.25 per week for the first child and £17.60 per week for subsequent children would be £6 billion in 2002. The net cost to the Exchequer of these increases would depend on how they were treated in income-related benefits and working families tax credit.