RECIPROCAL AGREEMENTS WITH COUNTRIES OUTSIDE THE UNITED KINGDOM (Hansard, 7 July 1975)

§ Mr. Kenneth Clarke
I beg to move Amendment No. 14, in page 9, line 13, leave out Clause 15.
265 I am glad to hear noises which suggest that the Deputy Chief Whip and other unlikely attenders of our debates agree with my amendment.
This is intended as a paving amendment for a brief debate on a clause which was not considered in Committee, and which, upon reflection, it seems to us should be simplified and explained.
This amendment concerns the reciprocal agreements between this country and foreign countries on child benefit payments. These powers to allow the Government to enter into such reciprocal agreements are in principle unobjectionable.
I should like the Government to make clear the future position of these reciprocal agreements. First, with what countries are there reciprocal agreements on family allowances? The list is somewhat inconsistent. The most suprising countries do not have agreements, whereas others do. Will the Minister state which countries, for which agreements exist, provide benefits equivalent to family allowances to British nationals resident in those countries?
The Child Benefit Bill will extend the benefit paid in the United Kingdom. Will the present family allowances agreements be extended automatically to include child benefit, so that nationals of those countries with which we have agreements will receive the new and extended child benefit as long as they are in this country? If not, is the reason that the provision in this country is so generous that it is inappropriate to carry on with the family allowances agreements? Will the Government renegotiate these agreements to correct the fact that in future the United Kingdom will be giving more generous treatment to children? If the Government renegotiate the agreements or say that all present family allowances agreements will be extended to cover child benefit, what will be the position of the British taxpayer?
Clause 15(2)(c) gives the Government power to make the necessary financial adjustments. I assume that the adjustments will involve an increase in public expenditure to enable the Government to pay child benefit to the nationals of those countries with which we have reciprocal agreements. It is possible to say what increased expenditure will flow from 266 extending the present agreements to include child benefit? If substantial expenditure is involved, we may have to look at that more closely.

§ Mr. Meacher
The hon. Gentleman asked three brief questions on Clause 15 which I shall seek to answer. The first concerned the countries with which Britain has a reciprocal agreement—that is, outside the EEC—on family allowances. They are as follows: Australia, Austria, Canada, Finland, New Zealand, Norway, Spain, Sweden, Switzerland and Yugoslavia. The hon, Gentleman is right to point out that there are many important countries, including the United States, with which there is not at present a reciprocal agreement.
The power in Clause 15 would be used to adapt these agreements to cover child benefit when the FAM scheme ceases or to enter into new agreements relating to child benefit.
The hon. Gentleman's second question was whether the nationals of those countries with which we have reciprocal agreements in respect of family allowances will get the child benefit if they are resident in the United Kingdom. My understanding is that that is so. It would form part of the renegotiated reciprocal agreement in respect of the introduction of child benefit.

§ Mr. Kenneth Clarke
The Minister answered one of my questions ambiguously. At I gave him no notice, he may need assistance. He said that the powers in the Bill enabled the Government to adapt the present agreements or to enter into new ones. That is precisely the question I asked him. Do the Government intend to adapt the agreements—which simple means substituting child benefit for family allowances, so extending the scope of the agreements—or to approach all the countries asking for a quid pro quo before continuing the agreement? I ask the Minister which course the Government intend to take.

§ Mr. Meacher
The hon. Gentleman is perspicacious even at this hour. He is right in pointing out that the powers enable the Government to adopt either course. The course they adopt will depend on the reciprocal agreements which exist for British nationals resident in those countries. There is the option to do either, according 267 to whichever is appropriate. I hope that I am not being ambiguous but making clear that the Government are keeping their options open.

§ Mr. Kenneth Clarke
I realise the Minister's difficulty, but he has again begged the question. We want to know the circumstances which will cause the Government to seek to renegotiate. What is the difference between the type of agreement which will be adapted and the type that will be renegotiated? Perhaps now that I have given the hon. Gentleman an opportunity to seek advice he will make the position clear.

§ Mr. Meacher
The advice confirms what I have already said. If the hon. Gentleman presses me on which criteria we might use on a specific case, I will write to him.
The third matter raised by the hon. Gentleman concerned Clause 15(2)(c): for making any necessary financial adjustments He asked whether that provision was likely to involve any significant extra burden on public expenditure. All I can tell him is that changes will be made which may in some cases involve certain necessary financial adjustment. That must depend on the reciprocal benefits available to British nationals resident in the other countries. If the hon. Gentleman asks me how much financial expenditure might be involved, I cannot possibly give him an accurate answer. Again, if he wishes to press me on that point I will certainly see that we send him the information in the precise form he wishes as soon as it is available to the Department.

§ Mr. Kenneth Clarke
I should like to press the hon. Gentleman, but only to the extent of asking him to carry out his undertaking to write to me, as he has so courteously offered. I accept that I have not given notice of these questions, but they are fairly obvious questions that leap to the mind if one is considering agreements of this kind.
Nothing that the Under-Secretary has said has alarmed me, but nothing that he has said has enlightened me very much. I think that he has been doing his best to help the House, however, and, 268 on that understanding, I beg to ask leave to withdraw the amendment.