Had we voted on the new clause tonight, I would have voted for it. I encourage the Government to be much more ambitious in the review that they are undertaking. The new clause
is about how we maintain greater tax equity between households with two earners and those with one earner, whichever sex those earners may be.
When the Government abolished child benefit for higher rate taxpayers, they did an injustice to the tax system. May I briefly recall why? The background to this, which you will remember, Madam Deputy Speaker, is that we used to have family allowances and child tax allowances. The tax allowance and the benefit were merged into the single payment of child benefit. Child benefit then had two functions: it was a cash payment to mothers but it also maintained tax equity between people further up the income scale who have children and those further up the tax scale who do not have children. By abolishing child benefit for higher-rate taxpayers, the Government forewent the one instrument at their disposal to maintain tax equity for higher-rate taxpayers between those who have no children and those who do have children.
Might I make a plea to the Minister? When the Government undertake the review about the workings of this measure, will they extend it and rectify the injustice whereby in abolishing child benefit for higher-rate taxpayers they abolished the tax-free income for higher-rate taxpayers if they had children and therefore put them on the same level as people who do not have children? We never had that in the tax system before; we have had it in the past couple of years.