- The Guardian,
- Saturday November 11 2000
The government intends to boost the value of the new Children's Tax Credit that is scheduled to start from April next year. Around five million families will benefit from an increase in the new tax credit from £8.50 to £10 a week.
The tax credit, which replaces the Married Couple's Allowance, is payable to any parent who has a child under 16 living with them. Basic rate taxpayers will get the full £520 a year, but higher earners' credit is reduced on a sliding scale.
If the Chancellor delivers on his pre-Budget proposal, from next April a married couple bringing up three children on a combined income of £20,000 will get £520 in Children's Tax Credit but lose £300 with the abolition of the Married Couple's Allowance. However, they will continue to receive child benefit.
The move to the child tax credit is, however, only a transitional step to a new integrated child credit planned for 2003. This will bring together the means-tested income support rates for children, the new children's tax credit and the element of the in-work benefit for children in the working families tax credit.
In a separate measure, out-of-work single parents and long-term jobless adults will be the main beneficiaries of the next stage of the government's welfare-to-work programme. From next April £23m has been earmarked to encourage 150,000 lone parents, who at present do not claim income support, back into work, over three years.
More than 66,000 of the lone parents on the New Deal scheme have already moved into permanent jobs. The pre-Budget report this week pointed out that only half of lone parents here work - compared with 70% in the US and 80% in France.
The Chancellor also announced a "more intensive approach" to finding work for the 25 to 49-year-olds who have been without a job for 18 months. The New Deal for that age group starts next April and those covered by it face loss of benefit if they refuse to participate.
They will be expected to agree to an initial four-month coaching period, having their problems sorted through regular contact with a personal adviser.
This will be followed by a "compulsory, intensive activity period" - lasting from 13 to 26 weeks - covering basic employability training, support to become self-employed, "access to a wage subsidy" for those moving into employment.
The pre-Budget report also proposed a separate £9m job-transition package, spread over three years. The idea is to reduce the adverse impact of large-scale redundancies by assisting fresh jobless people to move into new jobs and help employing organisations to overcome skill shortages.
The service, to start next year, will operate in areas that face factory closures and cuts and which are dependent on a sole industry or where unemployment is already high.
For details on Children's Tax Credit, call the government's helpline on 0845 300 1036. Lone parents wanting to take advantage of the new deal should contact their local job centre.
The Pre-Budget speech in full
Part 1: the economy
Part 2: the fiscal stance
Part 3: families and pensioners
Related stories
8 November 2000: Pensioners call at No 10 - Guardian
8 November 2000, explained: the pre-budget report
8 November 2000, analysis: My friends the truckers - Leanda de Lisle
Related special report: welfare reform
Related special report: New Labour in power
Related special report: the petrol war
Useful links
Campaign - People's Fuel Lobby
Key player - the Road Haulage Association
Key player - Freight Taxes.com
Key player - National pensioners convention
Budgets and pre-budgets since 1994 - HM Treasury
