Family Allowances (Hansard, 3 November 1969)

§ 24. Mr. Oakes
asked the Secretary of State for Social Services if he will seek to amend the family allowance regulations so that young persons serving in the Voluntary Service Overseas Scheme are treated as receiving full-time education or as low-earning apprentices.

§ Mr. Ennals
Family allowances are a benefit for dependent children. Young people working for Voluntary Service Overseas or other bodies in the British Volunteer Programme would not normally qualify. The circumstances of the young lady whose case my hon. Friend recently raised with me are rather unusual and steps are being taken to arrange for a formal decision to be given on her mother's family allowances entitlement.

§ Mr. Oakes
Yes. But is my hon. Friend aware that if a young person is in full-time education or is in a low-earning apprenticeship, he is qualified to come within the family allowance regulations, whereas a young person doing this valuable voluntary service overseas falls between two stools?

§ Mr. Ennals
This is true. The family allowance is intended for dependent children, and this includes those who are either apprentices or in full-time education. The circumstances concerning voluntary service overseas are different. In the vast majority of cases those taking part in voluntary service overseas are serving overseas, where family allowances are not available. But, as I have said, I will look into the case to which my hon. Friend referred.

§ 36. Mr. Rose
asked the Secretary of State for Social Services whether, in view of the confusion surrounding means-tested benefits, especially among low-paid workers, he will take further action to increase family allowances.

§ Mr. Ennals
We have at present no plans to increase family allowances.

§ Mr. Rose
Would not my hon. Friend agree that a combination of increased allowances and claw-back under income tax is the best, most selective way of helping those most in need? Will lie keep this under constant review, and bear in mind the great difficulty that many people have in dealing with the problem of supplementary benefits?

§ Mr. Ennals
I entirely share my hon. Friend's view. I think that the decision nol: only to increase family allowances—and there was the increase last year of 10s.—but also to do so by claw-back, and therefore to ensure that it went to those who need it, was a considerable step forward, which I notice the Leader of the Opposition, in an article in the Sunday Times, seemed not to realise had happened.

§ Mr. Fortescue
Has the Minister given any consideration to the possibility of abolishing family allowances and replacing them with a negative income tax system?

§ Mr. Ennals
This subject has been under review, but the arguments against are very powerful, and I can tell the hon. Gentleman that there is no such intention.

§ Mr. Barnes
Does my hon. Friend agree that as the Chancellor is not prepared to extend the claw-back to the whole family allowance, and that as there is widespread, if ill-informed, prejudice against family allowances, there is a case for starting a study of the way family allowances should go in the future, along the lines mentioned by the hon. Member for Liverpool, Garston (Mr. Fortescue)?

§ Mr. Ennals
As I told the hon. Gentleman, this is a subject at which we have been looking from the point of view of negative income tax, but I think that the family allowance approach is the most effective means that we have of directly bringing help to those families with a considerable number of children where there is a small income. On the claw-back technique, I do not believe that there is now as much misunderstanding as there was. I think that on the whole families have come to accept the advantage of the decision that we took last year.