CHILD TAX ALLOWANCES: STUDENTS (Hansard, 25 July 1977)

§ Mrs. Wise
I beg to move Amendment No. 105, in page 17, line 32, at end insert— '(5) In its application to the year 1977–78 subsection (1) above shall have effect as if in subsection (2) above there were inserted after paragraph (c)(ii) the words "or (iii) is in receipt of such a grant as is mentioned in sub-paragraph (i) above, being a grant under section 2 of the Education Act 1962, section 49(1) or 51(1)(c) of the Education (Scotland) Act 1962 or regulation 7 of the Students Awards Regulations (Northern Ireland) 1975.".' The purpose of the amendment is to extend the provisions of Clause 26 to cover the parents of existing students on discretionary grants from local authorities.
The amendment is necessary to avoid what would otherwise be unfortunate anomalies. It is necessary to cushion the parents of students against the result of the phasing out of child tax allowances and their substitution by child benefit. Although child benefit is greatly to the advantage of the majority of parents, it does not cover young people aged 19 and over who were and are at present covered by child tax allowances.
The phasing out of child tax allowances and their non-substitution by child benefit for young people of 19 and over means parents who had taken on commitments would find that the rules had altered part way through, as it were.
The Government have made a number of attempts to avoid this particular justified complaint. One method has been to alter the parental contribution scale. But that has the unfortunate effect of not helping parents who have an income too low for them to make a parental contribution. Therefore, the Government decided, I think correctly, that the only way out of the impasse was to introduce Clause 26, which keeps child tax allowances frozen, not phased out, for the parents of existing students. The clause was improved in Committee and the time was extended from two to three years 165 to ensure that students on four-year courses would be fully covered.
During Committee I raised the question of students oh discretionary grants. There were encouraging noises from the Government Front Bench. I am hopeful that the Minister of State will be able to tell me that the Government accept my amendment. It is important for the parents of students on discretionary grants that they should accept it. Students on discretionary grants normally receive far less help than those on mandatory grants. Indeed, often only their fees and fares are covered. That is hardly enough to merit being called a grant.
It would be unfortunate if the parents of such students were left out in the cold. The amendment proposes to include such students for the current year only. The reason behind that is that most courses—perhaps all—that attract discretionary grants last for two years. The purpose of covering the parents who have already undertaken commitments on behalf of their sons and daughters will be met by the amendment, even though it covers only the forthcoming tax year.
I commend the amendment to the House. I hope that the encouraging noises that the Government have made will come to fruition. I hope that their kindness in suggesting that I have made out a satisfactory case means that they will accept the amendment.

§ Mr. Patrick Jenkin
The hon. Member for Coventry, South-West (Mrs. Wise) has made out a strong case. It was the case that I made to the House last February, when I said: What about the child over 19 who is on an advanced course but does not have a grant, perhaps because the course qualifies only for a discretionary grant or because his parent does not qualify? Will such a child lose the child tax allowance and receive nothing in return? Has that beer thought of?—[Official Report, 9th February 1977; Vol. 925, c. 1465.] Hardly surprisingly, I got the impression that the Minister of State for Social Security had not thought of that at all.
On Budget day, the Chief Secretary announced a substantial extension of the child tax allowance for three years. Even then the Government left out consideration of the case of a child on a discretionary grant. A number of my hon. Friends and myself have had constituency 166 cases involving families that have fallen fairly between all three legs of the stool. They have fallen down the hole in the middle. They receive no child benefit, no retention of the child tax allowance and no possibility of an increase in the grant.
In relation to my constituent's case, 1 asked whether the situation was intentional or whether it was casus omissus. For the benefit of the Financial Secretary, that means a case that was forgotten. I suspect that it probably was forgotten.
My constituent was under 19 years of age at the turn of the year. He became 19 one month after the child benefit scheme started. He is therefore entitled to child benefit for only one month. He is apparently entitled to nothing after that. I shall be writing to the Treasury yet again to find out whether this case has been given any relief.

§ Mrs. Wise
The right hon. Gentleman's hon. Friends in Committee were also guilty of a casus omissus because they unaccountably omitted to table an amendment which would have taken care of this point. Instead, they left it to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) and me.

§ Mr. Jenkin
Many of us have been badgering the Treasury for months and months about these cases. I think that there is a strong case here, and I hope that the Government will be able to meet it.

§ Mr. Denzil Davies
My hon. Friend the Member for Coventry, South-West (Mrs. Wise) argued strongly in Committee that there was a gap here in respect of those who receive discretionary grants. The problem arises where the grant is below the level of the mandatory grant. This amendment meets that point. It deals with all recipients of discretionary grants. It is difficult to isolate the one group that receives a discretionary grant which is equivalent to the mandatory grant from those who receive small loans. The amendment meets the point, although it is perhaps a little over-generous to that group. It is, however, the best way to deal with a difficult problem, and I am pleased to recommend that the House accept it.