§ Postponed Proceeding on Motion, That the Family Income Supplements (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved, resumed.
§ 9.36 p.m.
§ The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins)
I think that it would be for the convenience of the House if I went back to the start of the sentence in which I was interrupted at 7 o'clock.
This deals with the core of the problem: taking the overall situation for families receiving FIS, together with housing benefits, free school meals and free milk and vitamins, we have got as near as practicable to the break-even point by arrangements that actually give some small gains at the changeover point, in many cases, to lone parent families and larger families in particular.
There are, in fact, only two small groups who could lose, and then only a few pence a week. The first group comprises about 5,000 families receiving rent and rate rebates, who could lose about 3p a week. The other group is a very small number of one-parent families 1593 receiving a rate rebate only, who could lose, at most, 7p a week. This second group is so small that we cannot make a reliable estimate of the number involved. So much for the April proposals.
Mr. Patrick Jerkin (Wanstead and Woodford)
One begins to see how meticulous all this has to be if the Government are to do both of the things to which the Minister referred in the earlier part of his speech. How far is this due to the fact that child benefit is being phased in and that the first stage involves only an extra 30p for the average family? Perhaps I may put the matter more clearly. If child benefit had been done at one blow, with a much bigger reduction in tax and a much bigger child benefit, how far would the same complications have arisen for FIS, rent rebate, school milk, and all the rest?
§ Mr. Deakins
I would be prepared to say that the complications would still have arisen—perhaps not to the same extent—with a larger child benefit for as long as we went on with a means-tested benefit such as FIS. This is the essential point. In an earlier debate the right hon. Gentleman talked about the time when perhaps, we could get over to a full child benefit scheme and, perhaps, even do away with FIS. As a step in the direction of tax credits, this problem would not arise, but in the various steps towards that, we shall have this sort of difficulty.
I come now to the second part of my remarks. As I said earlier, the computation regulations also propose an increase of £2.50 in the basic prescribed amount from 19th July. For the past three years, FIS has been uprated in July, whereas the main social security uprating has been in November. It would be sensible to achieve a common uprating date. We propose to do just that by making the uprating for which these regulations provide an interim one, pending the main uprating in November. However, to protect familities from losing FIS simply because they may have received a pay increase in line with the pay guidelines it is necessary to increase the prescribed amount within a year of the last up-rating.
1594 An essential feature of this year's proposals, therefore, is that the July uprating is designed to preserve the status quo for those receiving FIS at that time. The increase of £2.50 in the basic prescribed amount, from £39 to £41.50, is therefore sufficient to protect any family from losing FIS if it has had a pay rise since last August. This is the effect of Regulation 4 of these computation regulations, and an illustration is given in paragraph 14 of the note.
I turn now to the cost of these proposals. What I think the House will wish to be informed of here, where we are dealing with the lower paid, is the extent of the beneficial change. I believe it will be most helpful if I give three figures. Present expenditure on FIS is £18 million a year. The cost of the April changes to November 1977 will be £2 million, and of the July uprating to November 1977 £1 million.
I have given the costs to November because, as I have explained, the second stage of the FIS uprating will be in November.
As far as numbers of FIS beneficiaries are concerned, our latest estimate of take-up is about three-quarters. On this basis, we estimate that immediately prior to 5th April the number of beneficiaries will be about 80,000, rising to 82,000 between April and 19th July, and thereafter rising to a peak load of about 84,000. These marginal Increases are not part of a deliberate policy of increasing the numbers on a means-tested benefit. That must be clear to the House after all that I have said on the subject. They arise solely as a result of our aim to ensure that no one loses, either because of the introduction of child benefit or because of a pay increase under the pay guidelines.
As in previous years the changeover to new rates will be effected with the minimum inconvenience to beneficiaries. As hon. Members will know from the replies to Questions from my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January and 15th February, order books have been recalled so that the necessary adjustments—for April and July—could be made simultaneously, subject to Parliament approving our proposals. The 1595 Department's staff at Blackpool have done a splendid job in this respect.
I hope that what I have said here and in the note will have been sufficient to convince the House that these are fair and reasonable proposals on which we can all agree. With such a wide range of means-tested benefits to contend with, the inevitable price of fairness is solutions that seem complex at first sight. But from the family's point of view, there is no reason why the changes I have described should not all work quite smoothly.
I turn to the other five regulations. The child benefit consequential regulations, as amended by the child benefit consequential amendment regulations, provide for the changes that are necessary because of the introduction of child benefit and its effects on dependency additions for children, which are payable, under the Social Security Act 1975, as an increase of one of the main national insurance or industrial injuries benefits and for certain orphaned children. Qualification for a dependency addition has until now depended on the beneficiary having a family within the meaning of the Family Allowances Act. In future it will depend on the beneficiary—or his wife, if she is residing with him—being entitled to child benefit. The Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme makes comparable changes required to cater for the very small number of beneficiaries under the scheme who have children.
The aim in all this has been to replace existing provisions by broadly comparable provisions, but inevitably, there have been some structural changes. With 29 years' experience of operating the family allowances rules for dependency additions behind us, we have taken the opportunity, offered by the change to child benefit as the basis on which dependency additions will in future be paid, to evolve a set of rules which should allow simpler and easier administration. The regulations may, at first sight, look somewhat complex and forbidding. In part this is due to the need for drafting them in certain ways, but mostly it is due to the need to provide a comprehensive code for all foreseeable eventualities, including circumstances which may affect only a few individuals, or—it may be—even none at the present time.
1596 There are at present no regulations dealing specifically with dependents, and a number of sets of regulations have had to be amended. We have therefore also taken the opportunity, after making certain paving amendments in the Industrial Injuries Benefit (Amendment) Regulations, to consolidate the main dependency provisions of the national insurance and industrial injuries schemes, brought up-to-date by the consequential regulations, into one set of Dependency Regulations. These introduce no additional changes.
§ 9.45 p.m.
§ Mrs. Lynda Chalker (Wallasey)
I welcome the draft regulations and the opportunity to discuss the amendments consequential upon the Child Benefit Act 1975. When I started to read the range of consequential amendments, I wondered whether I was in the right job. It would take hours to pull together the details of the regulations. There are no fewer than 22 separate provisions in the Child Benefit Consequential Regulations, and only slightly fewer—16—in the Dependency Regulations. The others are all interrelated.
I welcome the fact that the Minister hoped that with these regulations we shall have achieved a simpler set of rules for judging the interrelationship of benefits now that the Child Benefit Scheme is to come into operation at long last this April. When these regulations have settled down and we know how the autumn upratings are likely to go, perhaps a comprehensive document can be produced to pull matters together and make it easily understood.
Many people—not only Members of Parliament like myself—find it difficult to pull together the different ways in which the calculations of benefits affect one another.
§ Mr. Deakins
These are complex regulations. Like the hon. Lady, I got a shock when I read them for the first time—and, I must admit, the only time. I have some very good background notes on the details of the two major sets of regulations, and I should be very happy to place copies in the Library and to provide the hon. Lady with a copy. I do not think that they need to be given wider circulation, but if it would assist her or other hon. Members I shall make 1597 them available. There is nothing secret about them.
§ Mrs. Chalker
I am grateful to the Under-Secretary for that offer, which I gladly accept. In view of our discussions before 7 o'clock, and since these explanations are not secret, I suggest that they might be sent to the CPAG and the one-parent family groups if that would help them to understand the exact effects.
However, we may have to ask the Minister to produce a simplified version, not just so that the various pressure groups can understand what is going on and can avoid wasting the time of Ministers, nor just so that hon. Members can understand them, but so that people who are entitled to these benefits can understand what is available. This is still a very hazy area for beneficiaries.
Another group who have been bothered by the introduction of child benefit, some of whom are beneficiaries under the family income supplement, are the widows, often represented by the National Association of Widows. Two of the groups whom we mentioned before the break should also receive this information.
The Minister has moved the adoption of the regulations and I do not need to move their annulment in this case, but I want to contrast the situation now with that of 10 months ago. When we debated the FIS uprating last year, my hon. Friend the Member for Rushcliffe (Mr. Clarke) said that it was difficult to find out what was happening and that we had been questioning but getting no information. He said:It has been difficult to get any information from the Government in recent weeks about their policy intentions on family poverty and family support."—[Official Report, 20th May 1976; Vol. 911, c. 1885.]The situation is very different now. We have had a mass of Parliamentary Questions on FIS and child benefit and how they will work together with passport and other means-tested benefits. We had discussions, even in Questions to the Chancellor of the Exchequer today, on the interrelationship between child tax allowance and child benefit. The fact is that some people have been sent erroneous codings because it is not clear how the tax allowance and the child benefit will work together.
1598 Everyone is aware that things are happening, but people are not aware of the exact effect that these things will have on them. The Opposition believe that there should be a proper system of family support in this country. When we discussed the FIS uprating last year, we were doing so in the dark. That discussion occurred on 20th May. Five days later we had the bombshell of the part scheme of child benefit rather than the full scheme.
We have seen something else happening. We have seen the number of people dependent on benefits actually growing in the last few years, and the fact is that we still have to place reliance on the FIS scheme, as shown in a parliamentary answer given to me on 17th May:The Family Income Supplement scheme will continue after the introduction of child benefits."—[Official Report, 17th May 1976; Vol. 911, c. 422.]We find an increasing dependency on FIS among low income families.
I do not think that we should allow the evening to pass without a few words about this problem and the fact that the number of low-paid families is growing and not diminishing. On 8th February this year the Secretary of State for Social Services said that 60,000 families were subject to a 75 per cent. marginal rate of taxation with an increase of pay of only £1, at December 1974. By December 1975 this number had risen to 90,000. I accept that the sampling error involved in calculating this from the Family Expenditure Survey is large, but from other statistical information we can see that the trend is upwards. More families actually need FIS because of the influence of low tax thresholds, and dependency on FIS and means-tested benefits is bringing more families into the poverty trap.
I cannot read the crystal ball of the Chancellor of the Exchequer. But there is no doubt that we have a strategically worsening situation. In the last three years the lot of low-paid families has worsened, and it is time that the Chancellor sought out his friends in the DHSS and released the burden put around their necks in trying to cope with the problem that is worrying Members on all sides of the House.
This year we are having a different debate. The Government have tried exceedingly hard to ensure that no one ends up worse off than before. But it 1599 is a big problem because FIS is a benefit with a 50 per cent. taper. Other means-tested benefits offer dependency on FIS, such as free school meals through the passport, or rent and rate rebates which may come separately or not.
With a low level of tax threshold and with increases in rents and subsequent decreases in rebates, many people, even if they earn only a pound or two more, are well below the FIS entitlement level and find themselves worse off for working a little longer in trying to obtain a little more money. That situation cannot continue. It arises because of the basic failure of the Government to bring together a cohesive family income policy.
We all know that the Government's only scheme this Session was an emasculated Child Benefit Scheme. They jeered at the Family Income Supplement Scheme in 1970–71, but only a year ago they cheered when they discovered that that was the only way out of their difficulties.
In all our debates and discussions, we have arrived at the stage when there is no clear Government policy in respect of family income support. Many of us are surprised at that, and we hope to see a change, with the help of the Chancellor of the Exchequer backing those in the Labour Party who want to see a proper system of family support.
Even sadder is the fact that the Government have had to abandon the tax credit scheme that we left when we came out of Government early in 1974. It is all very well to throw out the baby with the bathwater in a change of Government, but it is not wise to refuse to examine at matter which the poverty lobby in general, and many eminent economists and sociologists, felt would be the answer to the problem posed by low-earning families. That was one of the saddest happenings in the story when the right hon. Member for Blackburn (Mrs. Castle) was Secretary of State for Social Services.
On top of all this we have seen the continuing failure of the Government to curb inflation, which has made the situation much worse. Despite my hostility to the Government for failing to bring forward a proper family support system, we welcome the FIS regulations but voice a strong note of caution. The fact is that there can be only a further stopgap. We 1600 cannot go on raising family income supplement, changing tax thresholds and making more and more families dependent on means-tested benefits. The Minister has said so, yet there is now no way out of it, unless the family policy is thought through. That is what we wait to see from the Government.
The Conservatives' instruction of FIS for low-paid families was—we admitted it and we still do—a stopgap, but we were working towards our tax credit proposals and were seeking to bring them into operation gradually—I emphasised that the process was to be gradual—a first part to the child credit scheme, and then a fuller scheme. We thought that in the middle or late 1970 we would see the end of the FIS and would have moved to a full Child Benefits Scheme, not just to the present half-hearted situation.
The Minister will know that there is considerable pressure in the country to implement the Labour Government's first intention—namely that child tax allowances, which often go to the husband and straight into his pocket, should become the income of the wife for the children.
It was interesting to see the results of a survey conducted by a women's magazine. It was probably not carried out with absolute accuracy, but at least it gives us a guide to thinking among its readers. It revealed some disquieting facts. It concluded that one in five of the wives questioned about their housekeeping situation had been given no increase in housekeeping money, even though in the year in question prices had risen by 26 per cent. Of the poorest wives trying to keep house on £10 a week or less, one-third had had no increase at all. However, 58 per cent. of the husbands who had not given their wives any extra money, even though they were the sole providers of housekeeping money, had had a pay rise during the previous year. It was that situation—of the men who had the pay rises but did not pass some of it on to their wives—that child benefit sought to avoid.
At present it is not avoiding that situation because it means an effective 30p or 62½p in the hands of the housewife and does not make a scrap of difference when one considers the size of increases in household prices, particularly children's clothing prices, with which families are trying to cope.
1601 Having voiced our caution over the extension of FIS, because of its widening of the poverty trap, we should make sure that we carry on the review, which has been going on already, into the way in which FIS works. I gather from the public expenditure estimates for last year that some 60,000 families were expected to receive FIS. According to the figures released at the end of 1975, about 67,500 families were receiving FIS, of whom 32,300 were one-parent families.
One of the things with which we have to cope is the increase in one-parent families. In 1971, 32 per cent. of the recipients of FIS were one-parent families. By 1974 the proportion had risen to 50 per cent. I do not have the figures for 1975 or 1976, and I should be glad to know from the Minister what they are. I know, however, that the number of one-parent families is increasing at a very fast rate and that those on low incomes will have a much greater dependency on FIS.
We have heard from the Minister the actual number of recipients. In July it will be about 82,000, and perhaps by November it will settle at about 84,000. That is quite an increase on the public expenditure figures, which in the coming year reveal that only about 70,000 families are expected to be recipients of FIS. Obviously the public expenditure estimates and the actual costs in the financial year 1977–78 must be adjusted because of these new figures.
But if we are to see a worsening situation in terms of the number of families supported by one person and an increased dependency on this benefit, we must, as the Minister rightly said, keep in mind the whole question of the level of FIS for as long as it remains. What we really have to cope with is the Government's failure to produce a system of taxation and benefit together—in other words, a tax credit system.
If the Minister did one good thing tonight, it would be to tell us that someone in the Government is actually looking at the movement of taxation and benefits through a simplified scheme. Tax credits are the only way we can get out of the situation in which the standard of living not only of low-income families but of many other families and retired people is going down and down. The longer the Government delay having a 1602 good look at what can be done, the harsher we shall make it for families, particularly families with children and single parents, who are trying to cope.
I want to go on to the actual improvements contained in the draft regulations. They seem to be fairly limited in the way in which FIS and child benefit work together. We find that the FIS entitlement of a one-child, two parent family earning £30 a week is £4.50. After the introduction of the Child Benefit Scheme they will be 30p a week better off because of the £1 benefit for the first child, the benefit for the second child being cancelled out by loss of the former family allowance. Then they lose the child tax allowance to a value of 70p. From July, because of the adjustments in FIS, there will be an extra 75p a week for such a family, as far as I can judge.
Looking through a number of different family circumstances, I have become very depressed. I have found that, because they do not pay tax, a two-parent, one-child family with earnings of only £22 a week will be no better off after the July upratings. That is my conclusion on the calculations I carried out before the Minister's document came before us, and I do not think that it alters them. It will be receiving the same amount of family income supplement and simply an adjustment of 30p for child benefit in July. They will be £9.30 a week better off instead of £9 a week better off. A basic worry that we shall face over and over again is that up to certain levels of income without adjustments, where tax is not paid, they will be dependent on the ceiling of FIS, which must continue.
The Minister explained that the prescribed amounts would be changed from July and that there would be further changes in November. Does he envisage a change in the maximum amount of benefit in November? That is the only thing that can save the low-earning family with children, who at present will gain no real benefit, other than the 30p, from the child benefit in April, accompanied by the uprating of FIS in July. We should be turning more attention to the very poorest families when we consider some of those upratings. Going through different sizes of family earning slightly different amounts, we find it easy to see that the increase in FIS resulting from 1603 these regulations, plus the increase in child benefit, is minimal compared with the increased expenditure that these families, like all families, face in a time of continuing high inflation.
Therefore, although we welcome the small help that can be given by the Government, we are in no way satisfied with the Government proposals for family support. We understand the difficulty in reducing dependence on means-tested benefits. I was relieved to read a letter of 9th March from the Minister for Social Security to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), in which he said:We fully accept the proposal that the improvement of universal benefits should reduce dependence on means-tested benefits.We all agree, but the Government are in charge and they are not really doing anything about it. In fact, things are getting worse. Although we understand their problem, it is up to them to act. There is little that any Opposition can do to make them act, except what we hope to do before too long.
The other aspect of the work that we are considering tonight is the whole question whether the benefits that accompany FIS will still be received in full. There has been a whole series of questions and answers on this. I should like to quote an answer given to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January concerning the outcome of all the passport benefits in the light of the introduction of child benefits in April. The Minister for Social Security said:Existing discretionary powers will be used to protect from net income loss all families receiving free welfare milk and vitamins by direct claim on grounds of low income."—[Official Report, 28th January 1977; Vol. 924, c. 790.]I hops that it is correct to say that that is still the situation. I question it, because we have continually had answers that say that some people might be a little worse off, that some people might lose out just a little—a very small number—but we have on record contradictory statements about the way in which some of the benefits come forward and what will be received.
In an answer to me on 14th March, the Minister for Social Security said that the arrangements for means-tested benefits 1604 not obtained through a passport are necessary rather different from those through supplementary benefit, where none of the child benefit is disregarded. He hoped that a common objective would be that people should break even in receipt of benefits, and make minimal gains and exceptionally minimal losses. We, too, hope that it will be a case of exceptionally minimal losses, but I have to tell the Minster that information is already coming in from various local authorities indicating that school meals are going to be a grave problem.
The regulations that we were promised in another parliamentary answer on 4th March, dealing with revisions in school meals, are urgent. I am aware that they are the responsibility of the Department of Education and Science. We seem to be having less co-operation by the Department of Education and Science with the Department of Health and Social Security than we would wish. That applied to an earlier measure, as it does now.
The regulations that we are discussing and the Child Benefit Scheme are to begin operation in April. When are we to get regulations from the Department of Education and Science that will deal with the amount of child benefit to be disregarded in assessing eligibility for free school meals for families in receipt of FIS? If it is not done quickly the increase in school meal costs and other difficulties that local authorities are facing will complicate the matter still further.
It would be easy to continue commenting about the whole way in which the system of family support is not working, despite the many and different efforts. I do not think that one can ever blame one Minister, but one can blame one Administration for this system, which is getting not better but worse. When I looked at the complexity of these regulations—a complexity that the Minister has clarified a little tonight, and that he says he will clarify further—it seemed to me that they had been designed for lawyers by lawyers and not for hon. Members.
But what concerns me is that when one regulation is made on 1st March about child benefit consequential needs, it is followed up only six days later by another to sort out the situation that exists 1605 in the Social Security Attendance Allowance (No. 2) Regulations 1975 (SI 1975/598). I looked at it and thought "This must cover what has happened this week." Then I realised "No, we are to have another soon", because this week, after a battle lasting three years, we had good sense accepted in another place and announced by the Under-Secretary of State responsible for the disabled, in that we are to allow payment of attendance allowance for severely handicapped children who are being fostered.
We welcome that, but it means our having yet another piece of paper and another set of regulations to deal with attendance allowances. Therefore, I hope that that will be the last one affecting the situation and that the change in the 1975 regulations on attendance allowances will work together with what we already have in these regulations on child benefits. If it does not, there will be yet another set of regulations to come at the end. I hope that we can do it once and for all in the final set that will come.
On Statutory Instrument No. 380, dealing with other diseases, we feel it quite right that all these things should be brought together and that an adequate child benefit will go to the mother. Therefore, there can be no dispute between the Opposition and the Government on this score.
On the dependency regulations, we should make clear that these do not affect overseas dependants. I say that because there is a great deal of concern in the House from Back Benchers on both sides and among others outside the House about how the eventual outcome of the Chancellor's decision on overseas dependants will be enacted in the change from child tax allowances concerning those who will be ineligible for child benefit. I realise that this must come through a Finance Bill, but it is worth saying that these dependency regulations have nothing to do with that. That question has already been asked of me in the House and it is right that it should be on the record.
We have other indications from the final two sets of regulations out of the six on how we shall compute and bring into operation the different time periods before we reach a stage where all upratings 1606 will happen at the same time, from November to November. All these things, taken together, perhaps means a clarification of the system under which we try to work.
There are, of course, still problems. I do not know whether the Minister can tell us tonight how many of the one-child families who will be eligible for child benefit for the first time have so far applied. On the 8th of this month, 2.2 million out of 2.8 million had actually applied. There were still 600,000 one-child families who had not put in their claims, less than one month before the enactment of the child benefit.
I hope that the number of people who have applied has gone up dramatically. I have done my best throughout the country to tell one-child families to put in their claims over the past few weeks, and I hope that the efforts of other hon. Members and publicity in the Press have also helped.
I hope that the Minister can also clarify a matter on which there is misunderstanding. As I understand the Bill, and from discussions that have taken place, it appears that child benefit cannot be claimed in retrospect. I believe that this is a provision of the earlier principal Act with which we are dealing.
Will the Minister confirm whether it will be possible to claim child benefit in retrospect if—through what one feels is a failure of publicity and the absolute chaos of the CH(1)T, CH(1)TA, CH(1) TB, P3(CB) income tax leaflets of last autumn—the muddle which ensued was the result of Government or lack of Government administration. Will the Government take responsibility for that, even if there are 200,000 late claims from one-child families? Will the Government entertain the possibility of paying those families back to the date of 6th April?
If that is not possible, there should be enormous hue and cry in the remaining days before the date of entitlement to child benefit. This is not a clear or satisfactory situation. I have already asked for clear and precise leaflets. Above all, we need guidance for the staff who have to deal with these questions from day to day on the interaction of our benefits system on family support. I have as much sympathy for the staff as 1607 I do for the parents who are struggling to work out how much they are entitled to.
We hope that after the Budget next Tuesday, when the Chancellor has had an opportunity to lift the tax thresholds substantially, there will be proposals for family support to do a great deal more to help the young people whose income is so low that they have to go to the State for additional help. We do not believe that any real progress can come until taxation and benefits are not only discussed together but are enacted together through our system—and that means tax credits.
We have to work towards a reduction in means-tested benefits. I see no sign 1608 of it coming. The saddest thing is when children ask why, when they have had free school meals, they subsequently cannot have them, and why they get them again some months later. This is all the result of not having the right family support system.
We have put many Questions to the Government over many months and we are grateful for the answers we have received. We still await, however, the answers to many problems. If the Government mean what they say about family support, they must not just go on saying it but must actually bring in the only system that will alleviate family poverty—a tax credit system.
§ 10.22 p.m.
§ Mr. Tony Newton (Braintree)
I rise to support my hon. Friend the Member for Wallasey (Mrs. Chalker), and in doing so I should like formally to move the Prayer which is—
§ Mr. Speaker
Order. The hon. Gentleman cannot move the Prayer at this stage. We are already discussing a motion which has been moved. He will have the opportunity to move the Prayer at a later stage.
§ Mr. Newton
Thank you for your guidance, Mr. Speaker. Perhaps I may simply indicate at this stage that I shall be referring to one of the Prayers with a view to moving it later. One of my hon. Friends had indicated to me that he wanted me to refer to it, and that I propose to do.
I should like to support some of the remarks of my hon. Friend the Member for Wallasey and some of the points that were raised before the debate was interrupted at 7 o'clock by the Mersey ferry conservationists, concerning the provision of sufficient information about precisely what the regulations mean and about precisely what is the situation on family income supplement and other aspects of the Child Benefit Scheme.
Until last evening I had not realised that the Prayers were to be discussed tonight. The Vote Office, apparently, had not realised it either. It took the Vote Office some moments to get me the regulations, and I can understand this since it did not know that they were to be debated. When I saw the regulations I was, frankly, appalled. Hon. Members can see this vast wodge of bumf which is littered around me on the Bench and which clearly no sane man would try to understand or could understand in the time between 10 o'clock one evening and 3 or 4 o'clock next afternoon.
We are faced with an almost unbelievable situation. I do not intend to parade myself before the House as having read every word of the regulations or to pretend to understand everything they contain. I understand that the Minister has read them all, but only once. That is not sufficient to enable him to grasp every fine point in them.
§ Mr. Deakins
The hon. Gentleman is right. One could not possibly hope to 1610 grasp these detailed regulations merely by reading them once. As a Minister I have the inestimable advantage of having civil servants who are expert in these matters and who provide explanatory notes which go into great detail. I can ask questions at meetings. Having read the regulations once, I do not need to refer to them again.
§ Mr. Newton
Although I have been a Member of the House for only just over three years, I am under no illusion about the advantages of having the backing of the Civil Service in finding one's way through such matters. I do not accuse the Minister of not having done his homework of or failing to understand what he is doing. All of us who have had anything to do with him, either on the Social Security (Miscellaneous Provisions) Bill or on any other matter, have formed the highest respect for his ability to master his brief and the technicalities of the subject.
For us ordinary mortals, it is something of a problem to be confronted with a considerable collection of regulations at relatively short notice. It underlines the point made about the need to try to get some coherent information made more widely available. Such information should be made available not only to Members of Parliament but to that large body of people outside who become involved in advising others on such matters as social security benefits.
With the increasing complexity of our system, there are many people who are asked for advice by those who wish to claim benefits and who do not understand the system. In the interest of the smooth working of the system, and in the interest of keeping down the work load upon Members of Parliament and Departments, we should explain what we are doing and what the regulations mean to the intelligent laymen who provide advice, formal and informal, throughout the country.
I note that the background paper which the Minister has courteously circulated to those of us whom he knew to be interested in the subject—and which he has said he will try to make available 1611 in the Library if not more widely available—specifically says at paragraph 2:Paragraphs 6 to 13 spell out in detail the effect of the FIS, child benefit and child tax allowances changes in April on FIS awards which are then current, with a series of tables providing 'ready reckoners' which could be used, for example, by Members of Parliament who wished to look up the position of an individual constituent.That is an admirable aim. I pay tribute to the Minister for having done such a thing.
If ready reckoners are to be provided, they must be put into the hands of those who are likely to use them and thus be permanent references. They must not be left in the Library of the House. They must be readily available to those who are likely to need them. It is not only Members of Parliament who are called upon for advice on these subjects.
In his earlier remarks the Minister referred to other explanatory notes which were available to him. I hope he will take up the suggestion that these should be made more widely available. There is an enormous amount of confusion and there is inadequate information about child benefit as a result of the process that has been gone through in the past year or so. That makes it important that there should be one relatively simple descriptive document that is both up-to-date and widely available, so that ordinary people involved in the system will have the chance of understanding it. At the moment, I do not think that they do.
Yesterday evening I picked up from the Library its useful background paper on child benefit. It began by saying:This paper attempts to summarise the changes there have been in the child benefit scheme".I like that. In the ordinary course of events the House of Commons Library, whose staff are highly competent and do an extremely good job, would never have used the phrase "attempts to summarise". They would not usually say that they were attempting to summarise the changes but would say that they had summarised them. The matter is now so mind-boggling in its complexity that no one can be sure that he has got it all right.
In trying to summarise the changes and doing it very well—the Library staff have produced 14 pages of closely-typed 1612 script with photocopies of 12 to 15 answers to Parliamentary Questions which have come out in dribs and drabs weekly and monthly, each one amending the previous reply or giving another little piece of information that must be read in conjunction with previous statements. This background paper is the only comprehensive document now available which describes the situation. It would take any hon. Member some time to digest all this and to form a full, coherent view of what is now proposed for the Child Benefit Scheme and associated changes.
The ordinary member of the public would need a full-time research assistant to learn what he is entitled to. That is ridiculous. It is difficult not only for the ordinary member of the public. I saw some old and close friends at the weekend. The wife is an Oxford graduate, the daughter of a former Labour MP. Her husband is a civil servant another Oxford graduate. Both are well paid. Their joint income is so high that they disclaimed the old family allowances, but they have found it impossible to discover either by themselves or through the post office in Highgate—the great home of Socialist intellectuals—
§ Mr. Patrick Jenkin
My hon. Friend have gravely insulted me and my neighbours. Highgate is a hotbed of Conservatism.
§ Mr. Newton
I apologise. I forgot that my right hon. Friend also lives in Highgate, and it is only a few roads away from him that the people about whom I am speaking live. They are, perhaps, more to the left than my right hon. Friend.
My friends have had the greatest difficulty in working out their entitlement. Perhaps the Minister will comment on this—although I do not pretend that my friends are in other than a minority group. Their income is high, and their tax position is such that it is best for them to have disclaimed family allowances, otherwise they would be worse off. That means that they have no family allowance book. This couple have three children and, therefore, they should have two books.
Hon. Members can imagine the difficulty of their going into the average post office—in all this confusion and without 1613 the Post Office Staff having the foggiest notion of what is going on—and saying that one has three children but no family allowance books because one does not claim, and asking for child benefit. The post office clerk will then ask for the books in order that child benefit may be given. One will have to say again that one has no books.
I read to my friends, with amusement, some extracts from last week's debate on child benefits. They nearly had hysterics at some of the statements that were made by the Minister of State. They found the post office staff totally blank on this matter; they did not have a clue and were unable to give any sensible guidance. Post Office employees have been put in an impossible situation.
This is illustrative of the muddle and confusion that has arisen and of the need—this is a serious and desperate matter—for a coherent and relatively understandable piece of literary advice to be distributed throughout the country so that people who are being subjected to these difficult and complicated changes may have a chance of understanding what is happening.
I wish to reinforce what my hon. Friend the Member for Wallasey said about the complexities relating to school meals. My hon. Friend referred to a Written Answer in reply to the hon. Member for Sowerby (Mr. Madden), and I should like to read it to put on the record the sort of problem to which we are referring. The hon. Gentleman asked the Secretary of State for Education and Science to elucidate her statement of 28th January—in fact, it was a statement of the Minister for Social Security—with regard tothe treatment of child benefit for the purposes of calculating entitlement to free school meals; and, in particular, what will be the appropriate part of child benefit to be disregarded.The Under-Secretary replied:From April until the next revision of the remission scales, the amount of child benefit which will be disregarded in assessing eligibility for free school meals for families not in receipt of supplementary benefit or family income supplement will be the amount by which parental income exceeds the income which would have been received if child benefit had not been paid and family allowances or child interim benefit had been paid. My right hon. Friend the Secretary of State for Education 1614 and Science and my right hon. and learned Friend the Secretary of State for Wales will shortly be laying before the House the necessary regulations to bring this into effect. My Department will be issuing guidance to local education authorities as soon as possible about the appropriate amounts to be disregarded, but I am not yet able to announce the details."—[Official Report, 4th March 1977; Vol. 927, cc. 328–329.]That was a month before the scheme was due to come into effect. I have not checked it, but my hon. Friend the Member for Wallasey has told us that we have not yet seen the regulations. Presumably, no appropriate guidance has yet been issued to local authorities.
We are now less than a fortnight away from the date on which the scheme is due to come into effect and less than three or four weeks from the start of the next school term. Yet we have no regulations, no guidance to local authorities—virtually nothing about this important aspect of a scheme that is important to large numbers of the least-well-off people in our community.
§ Mr. Patrick Jenkin
Is my hon. Friend also aware that we have heard nothing from anyone about grants for students, which is astonishing since the new term will start quite soon?
§ The Minister for Social Security (Mr. Stanley Orme)
Wait and see.
§ Mr. Newton
I am grateful to my right hon. Friend. I had said all I wanted to say on school meals, and my next note reads simply "Students".
I do not wish to stray from the subject of the regulations, but the whole history of the Government's treatment of students and their parents in the past three or four months has been a scandal. Students and parents have been mucked about in the Social Security (Miscellaneous Provisions) Bill, which we completed earlier this evening, and they have been left in a vacuum over the changeover to the Child Benefit Scheme. According to answers from Treasury Ministers today, that vacuum shows no signs of being filled.
I understand that there is no question of the changes in relation to students' grants coming into effect before the start of the next academic year in September. 1615 This will be to the disadvantage of parents, who will be losing part of their tax allowances when the Child Benefit Scheme starts in a fortnight's time. What about the five or six months in between? We are told that we must wait and see, but these are families that are often in great financial difficulty.
Some parents who are assessed for parental contributions often find that it is so hard to pay that they do not, and cannot, pay them at all. We are talking not about people who are rolling in money but about people who are under serious financial pressure, struggling to pay for part of their children's education. A fortnight before they are due to lose a substantial chunk of tax allowance and gain nothing in return, they have no knowledge of what is to happen or whether and how they are to receive compensation. If I went on too long on that subject I should be ruled out of order, but it is another aspect of the chaos and confusion that underlies the subject matter tonight.
Later I shall seek to annul Statutory Instrument No. 417 because, as much as anything else we have before us, it demonstrates the mess that we are in. We have a fat, 24-page document, the Social Security (Child Benefit (Consequential)) Amendment Regulations 1977, which was laid before the House on 11th March. That was before anyone had even had a chance to read the first regulations. The ink had not dried on the original before we had an amendment to it.
§ Mr. Newton
That does not mean that it is not a valid argument. It illustrates the chaos and confusion into which the Department, Ministers and hon. Members have been put because of the handling of the matter. Of course things get left out of regulations, but that puts the tin lid on the confused way in which this social reform has been put into effect.
§ 10.43 p.m.
§ Sir George Young (Ealing, Acton)
I pay tribute to my hon. Friend the Member for Wallasey (Mrs. Chalker) who, without the aid of a battery of civil servants, not only understood the regulations but saw what was wrong with them. When the Child Benefit Bill was going through the 1616 House, I commented on how much would be left to regulations and how little was in the Bill. The mass of regulations in which we are now swimming shows that not enough attention was paid to such important subjects as the impact on dependants overseas and the impact on students. Now we have to pick up the pieces.
We pressed the Government for a statement on their strategy for family support so that we would know where we were going. We have never had that statement. I welcome the explanatory note that the Minister sent to hon. Members who were interested. It is a pity that I received it only today, because it is complicated.
§ Mr. Deakins
Bearing in mind what happened in Committee a couple of months ago, I checked to ensure that the explanatory memorandum was sent out on Tuesday night so that hon. Members would definitely have it in their postboxes by Wednesday.
§ Sir G. Young
I accept what the Minister says, but I did not receive mine until this morning. My colleagues may have received their's yesterday, but even that does not provide adequate time in which to absorb such a complicated document.
I can count with difficulty up to 278 and it takes some time to go through some of the tables at the back. The Minister said that hon. Members can use the tables as a ready reckoner, but does he believe that the majority of hon. Members will understand the tables sufficiently to enable them to interpret them on behalf of constituents? My view is that without a substantial amount of preparatory work and some background knowledge, the majority of Members of Parliament would not be able to make much use of the tables as ready reckoners in dealing with constituents in their surgeries.
I pick out Column 6 of Table 5, concerning reduction in child tax allowance. What comes out of that table is that those families in receipt of FIS are also in the tax bracket. That shows some illogicality in the two systems—that people benefiting from an increase in FIS of some 75p are having their child tax allowance reduced by 70p. The interaction between the tax system and the social security 1617 system is failing us if one has a table showing, on the one hand, people on low incomes getting FIS and, on the other hand, being subjected to a tax burden at the same time.
The whole jargon of some of the tables, with "CHIB", "FAM", "FIS" and "clawback", shows just how complicated the whole subject is getting. If there was some light at the end of the tunnel, one would be prepared to go along with this flood of regulations. This evening we have not got more light; we have got more tunnel. Each time there is an uprating, each time there is a new benefit, each time the disregards are altered and each time there is a new tax allowance, it seems that we shall have to amend the interactions of a whole lot of interrelated benefits.
If the Minister could say that this was a step towards a logical and effective system of family support, one could go along with it. But he can give no such assurance. He cannot say that the next time something is uprated we shall not have to go through the same sort of exercise in trying to understand it as we are tonight.
The difficulty arises from the interaction of child benefit and FIS, child benefit being a non-means-tested benefit and FIS being means-tested. Opposition Members saw child benefit as the first step in a new system of family support which would replace FIS. We saw FIS as being redundant once we had moved to a tax credit system. However, it is clear from these regulations that there is no such intention on the part of the Government and that they see some permanent relationship between the two. It is the absence of a goal, that infinitely depresses me.
If one considers the amount of knowledge needed by someone at the bottom end of the income scale to understand the regulations and compares it with the amount of knowledge needed at the other end, one can appreciate that income tax, surtax, capital gains tax and so on are infinitely easier to understand than these benefits at the other end. People on higher incomes have the benefit of accountants and tax advisers to get through the complexities. Those on lower incomes must rely on Members of Parliament, 1618 or on officers of the Department of Health and Social Security, who are very helpful indeed. On the other hand, what is worrying is the amount of time that must be spent by staff behind counters explaining the increasingly complex social security system to claimants when, with the constraints on manpower in the Department, they could be doing something else.
I should like to mention briefly something to which my hon. Friend the Member for Braintree (Mr Newton) referred. At present people are getting new tax codings. These show the removal of child tax allowance, to be replaced eventually by child benefit. However, those with children at university do not get the child benefit, and those whose children are leaving university or college this summer will not benefit from the grants that begin next year. Therefore, they will be permanently out of pocket for the six-month period that begins next April. As I understand it, they will receive no compensation. One or two people have telephoned me to find out what is going on. I shall have no hesitation in saying to them that the Secretary of State has told them to wait and see.
I find the regulations somewhat depressing. As a House, we seem to be going deeper and deeper into the swamp, with no objective in sight and no logical steps towards a fairer, logical and comprehensible system of family support. At some stage the Government must outline a coherent strategy of family support. Without such a strategy it will become apparent that the Government do not have the slightest idea where they are going each time we get further regulations.
§ 10.50 p.m.
§ Mr. Peter Bottomley (Woolwich, West)
I am grateful for the chance to address the House on the regulations. Some of the mutterings that have come from the Treasury Bench indicate what a joint consultative committee with the Liberals will be like. I am sorry that the Liberals are not present.
§ Mr. Bottomley
We are dealing with regulations that will affect 28 million people if we include all the parents and children who come within their terms. It 1619 is perhaps indicative of how politics have moved away from the interests of many of the people most of the time that the House is not exactly overcrowded although we are dealing with matters that figured in the election manifestos of all the major parties in the past two elections. It is most significant that those who are willing to be vociferous on behalf of people at work are not willing to become involved in the complications and ramifications of regulations that affect families at home.
Ministers will not be surprised when I say that I do not think that we shall get anywhere near a way out of the terribly complex position in which we find ourselves until we pay substantial tax credits for children. I am talking of something in the region of 10 per cent. of average net take-home pay for each child, or about £5 a week per child. I do not think that anyone will claim that a child can be brought up for less than about £5 a week. If we take account of family circumstances and the money that people earn at work, it is up to the community to have tax credits.
That will come as no surprise to the leading members of my party, who think that I am a bit way out, or to Labour Members, who think that the only sensible way of raising family income is by trade union negotiated payment at work. There are 40 million parents bringing up children, and they will not all get the right rewards through activists in the Labour movement.
I shall read part of Statutory Instrument No. 417. It is an example of the sort of thing that those not now in the Chamber have missed. I think that they should be brought up to date. Regulation 2 states:Regulation 15 of the principal regulations (which makes consequential amendments to the Social Security (Attendance Allowance) (No. 2) Regulations 1975(d)) shall be amended in accordance with the following provisions of this regulation—(a) in paragraph (2) before the words 'for Paragraph (2)' there shall be inserted the words '10A of the Family Allowances (Qualifications) Regulations 1969, as amended (certain persons exempt from United Kingdom income tax)' in sub-paragraph (f) of paragraph (1), there shall be substituted the words 9 of the Child Benefit (General) Regulations 1967(e), as amended(f) (persons exempt from tax) and';".1620 Paragraph (b) states:(b) in paragraph (3) before the words 'for sub-paragraph (ii)' there shall be inserted the words 'the words from "so however that" to the end of paragraph (1)(a) shall be omitted and'; and after the word 'payable' in sub-paragraph (ii) as so substituted there shall be inserted the words 'in respect of the child'.That makes a great deal of sense to those of us who have been following the whole saga, but it will not make much sense to others. Perhaps they will not have to face the regulations, because they will put in their claim and get the money.
That brings me to my reason for hoping to divide the House on the motion. The value of the child benefit in the documents sent out by the Department is worth 30p for the extra child. Where does 30p go when the average manual wage in 1976 was £60 a week—£50 after deductions? Many married women work, and if, despite the Equal Pay Act, they earn only half what their husbands earn, that means an after-tax family income of £75. Yet after six years of the highest inflation that this country has seen for many years we can offer only 30p extra for the extra child. If the family receives FIS, that means an extra 25p—75p in all.
That is why the Government are in even greater disgrace over this matter than we managed to put them in last night. That is why—as a symbol, but symbols count—I hope to divide the House against the consequential amendment regulations.
§ 10.56 p.m.
§ Mr. Deakins
The hon. Member for Wallasey (Mrs. Chalker) mentioned specifically the effect of the poverty trap. I cannot altogether reassure her, but I can give some information in relation to FIS. The effects of the poverty trap for low income families and those on FIS can be very serious, but they are seldom felt because of the time lag between receipt of an earnings increase and the review of the benefit award and because of regular benefit upratings.
With FIS, an award continues for 52 weeks, regardless of any subsequent increase of income after the date of claim. Since it is uprated every 12 months, at some time in the currency of an award the prescribed amounts will have been uprated so that for the next award higher earnings are set against higher prescribed 1621 amounts. Moreover, the high upratings in July 1975 and July 1976, coupled with the fact that the proposed July 1977 interim uprating is in line with the pay guidelines mean that no family can lose FIS and therefore the passport benefits which go with it solely because of an increase of pay within the guidelines.
Figures of the numbers of families theoretically subject to high marginal tax rates are calculated from the Family Expenditure Survey. The latest figures which the hon. Lady quoted for families which would have a marginal tax rate of 75 per cent. or over are 90,000 at December 1975, as compared with 60,000 at December 1974. Those figures are subject to considerable sampling error. I am not a statistician, but I am assured that, although the increase is 50 per cent., in terms of the 6 ½ million families in the survey it is not statistically significant.
§ Mrs. Chalker
I am aware that it is not statistically significant, but not only this figure but all the others which may be pointers, from slightly different bases than the Family Expenditure Survey, show a development of this trend. More and more families are becoming subject to high rates of marginal taxation as a result of the inability of tax thresholds and benefits to work co-operatively.
§ Mr. Deakins
I do not think anyone could possibly disagree with that analysis. Put in the context of the total number of working families with children being 6,500,000, about 1½ per cent. are theoretically subject to very high marginal tax rates. Actual figures are not known but the absence of authenticated cases suggests that in practice the numbers affected by a net loss of income are very small.
The hon. Lady made great play with tax credits. This is an argument that has gone back and forth across the Floor of the House on many occasions. Conservatives are very fond of talking about their tax credit scheme, and they seem to regard their 1972 scheme as a panacea for all ills—real and imaginary—affecting the entire tax and social security systems. Maybe they get a bit carried away when they talk about it—but that is certainly the impression they give. They tend to ignore the enormous cost of the scheme.
§ Mr. Patrick Jenkin
The hon. Gentleman cannot be allowed to get away with that. He must realise that the progressive reduction in real terms of tax threshholds means that that very few families are below it. Therefore, the cost of changing from tax allowance to cash benefit has been drastically reduced because there are so few families for whom the cash benefit represented an increase over tax allowance. To go on extrapolating figures from the 1972 Green Paper is absolute rubbish. I am astonished that this is in his brief.
§ Mr. Jenkin
Then I exonerate the hon. Gentleman's advisers. The condemnation must fall more heavily on him.
§ Mr. Deakins
I am grateful to the right hon. Member for putting forward Tory policies. To date there has been an absence of them. Certainly we did not hear any yesterday. I take it that the right hon. Gentleman's 1972 scheme will not now cost the £5 billion he originally thought it would, because he now talks of its being introduced in stages. That suggests that the Opposition are aware, albeit with the developments the right hon. Gentleman has mentioned, that it would still cost an enormous amount of money at a time when public expenditure is very much constrained. We have not had any concrete illustration of what the phasing in would mean. This is not the occasion to pursue that in detail, but I hope that on a future occasion we can have more light shed on what is involved.
§ Mr. Patrick Jenkin
The hon. Member's Department answered a Question from my hon. Friend the Member for Haltemprice (Mr. Wall) saying that it did not subscribe to the Conservative Monthly Newsletter as a means of keeping in touch with Opposition thinking. In that case, the Minister cannot stand up at the Dispatch Box and say that he knows nothing about it. I made a major speech a year ago in which I envisaged the phasing in of tax credits and that speech was reprinted in the Conservative Monthly Newsletter. Had his Department subscribed to it, the hon. Member would know all about our thinking on this matter.
§ Mr. Deakins
The hon. Lady asked specifically about one-parent families. I can give her more up-to-date information. 1623 I have figures for December 1976. Basically, there were 77,000 families receiving FIS; 35,000 were one-parent families, of which 34,000 were headed by females and 1,000 were headed by males. An interesting figure relates to the percentage of one-parent families receiving FIS as a percentage of all families. Whereas in 1974 and 1975 the figures were 54 and 53 per cent. respectively, in 1976 the figure totalled 45 per cent.
The hon. Lady also asked about the maximum amount. I can give no undertaking, but it is one factor that needs to be reviewed in November when we examine the broad uprating of FIS.
Let me turn to the hon. Lady's questions about the regulations made by the Department of Education and Science. The hon. Lady was temporarily absent from the Chamber during the remarks of the hon. Member for Braintree (Mr Newton), but he quoted an answer which gave her the information she requires. The Secretary of State for Education and Science will be introducing regulations shortly providing that in such cases net increases in income will be disregarded for the purposes of the scheme. A parliamentary Question was tabled on this matter on 4th March by my hon. Friend the Member for Sowerby (Mr. Madden) asking my right hon. Friend to elucidate the statement of 28th January with regard to the treatment of child benefit for the purpose of calculating entitlement to free school meals. The answer is on the record on that date at column 328 of Hansard and I shall not quote it. I cannot add anything to what was said by the Government on that occasion.
§ Mr. Newton
My hon. Friend the Member for Wallasey (Mrs Chalker) and I were quoting the same answer. We were making the same point. All the answer said was that regulations would be introduced and guidance given. When shall we see those regulations and the guidance?
§ Mr. Deakins
The Secretary of State for Education and Science said that that would happen shortly, and I cannot go beyond that.
Let me turn to the position, with which the hon. Lady made some play, involving the payment of allowances in respect of 1624 children abroad and the phasing out of child tax allowances in that context. Child benefit is not normally available in those cases.
I could go into great detail about the special provisions for people who are or have been abroad, but let me refer to one or two paragraphs. The establishment of child benefit as the criterion for entitlement to benefit or allowances in respect of dependent children would have the effect of severely limiting the periods and circumstances in which benefit or allowances could be paid in respect of children abroad. Special provisions therefore become necessary to preserve, but not enhance, the current position with regard to the payment of such benefits.
In general, child dependency benefit is not payable for a child who is abroad, other than temporarily. Special exception is made for those absent for medical treatment or education. However, under the EEC regulations on social security and the terms of certain reciprocal agreements a child dependant who is in the other country is treated, for the purposes of the claim to a child dependency benefit, as if he were in this country. That was sufficient to enable the conditions for child dependency benefit to be satisfied under the old criterion but it will in future be necessary to treat such persons as though they satisfy the new criterion for entitlement, that is, as if they satisfied the conditions for child benefit. I could go into a great deal more detail if I had time to do so, but I shall not.
The hon. Lady asked about claims outstanding. I have what I hope will be, if not good news, acceptable news. The number of claims from one-child families is 2,350,000. We are, so to speak, 450,000 claims short. I assure the hon. Lady that the awards can be backdated by one year. Therefore, the cases that come in within the next year are able to be backdated.
The hon. Member for Braintree asked a number of specific questions.
§ Mr. Patrick Jenkin
The Minister suggested that we would be aware of some reasons why some of those 450,000 might never make individual claims at all. I am not aware of any such reasons, but presumably the 2,300,000 include all those who would be entitled to claim.
§ Mr. Deakins
I am delighted to answer that question. Among the missing claimants there are several distinct categories. First, there are children about to leave school. There is a bigger shortfall among older children than among younger ones. We think that parents whose children are going to leave school at Whitsun, now the normal summer leaving date, may simply never bother to claim because they do not think it worthwhile. If they do not, they will not be out of pocket. The CTA for this year would probably be withdrawn in any case because of the child's earnings once it left school. Our estimate is that there could be 300,000 in this category.
Secondly, there are higher rate taxpayers. This group was affected by the change in plan from a taxable to a tax-free benefit, but the position was made plain in the Chief Secretary's statement of 16th November. The indications are that confusion still exists.
§ Sir G. Young
The Minister implied that the CTA would be withdrawn when the child left school, but is it not the case that the CTA is payable for the whole year?
§ Mr. Deakins
Yes, indeed, but it is a question of the tax year ending on 5th April. It depends on the child's earnings once the child starts work. I am not an expert on tax law but I am assured that that is the case.
I come back to the high rate taxpayers. As they begin to get their coding notice and consult their accountants they will no doubt sort themselves out, but they may well not do this until after April. They will lose nothing thereby. Child benefit can be paid for up to 52 weeks in arrears. There are 500,000 higher rate taxpayers with dependent children and perhaps one-third might be one-child families. But there will be others who have claimed FAM, so there could be a substantial number here as well.
I was asked about one-parent families. Present indications are that some one-parent families who have claimed the increase do not understand that they need to claim child benefit also. The numbers are expected to run into tens of thousands and not hundreds of thousands.
The hon. Member for Braintree gave examples of confusion at the Post Office. It is easy in such a complex scheme to 1626 ask people for information and find that they refer to other sources that also seem not to have the information or be able to produce the proper form. I think that we hold the record among Government Departments for the number of leaflets produced. Of course, these leaflets often do not go into the sort of detail that we have been discussing this evening with regard to these detailed and complex regulations. That would be quite inappropriate either because people could not understand them or because of the cost of printing.
Nevertheless, once people are encouraged to claim, even if they are not sure about to what they are entitled, our local or central offices will sort out the position for each individual. When we have a scheme like this I do not think that we can expect very much more. The individual claimant may not be absolutely certain at the time of filling in the form about what he is entitled to, but it is up to the experts in the local, regional or national offices to get the position sorted out.
The hon. Member also mentioned students. I have already referred to the answer that he quoted. The hon. Gentleman specifically asked about the announcements with regard to student grants and child benefit allowances. These are expected shortly. I am sorry but I cannot add to that this evening. I know that there is only a short time to go, but the attention of my right hon. and hon. Friends in the Department of Education and Science will be drawn to the points made in this debate.
The hon. Member for Ealing, Acton (Sir G. Young) referred to FIS families who were paying tax. This is a well-known matter. We all agree that the interaction of social security and tax thresholds and low incomes catches people in a trap from which it is very difficult to escape. I cannot anticipate the Budget of my right hon. Friend the Chancellor, but I know that there is a widespread expectation that some things will be done to try to alleviate the situation. I do not know whether they will be done.
I do not think that there is any disagreement between the two sides of the House on the principle of moving to- wards a more easily understandable, simplified and unified system of family 1627 support. We regard child benefit, as I hope the Opposition do, as a major social advance, whatever one may think about the way in which it has been introduced and the amount. It is a step towards a proper system of family support for all children in all families. For any Government the key question will be its priority compared with competing claims, in other areas as well as social security, where there are questions of pension increases, disablement benefit and so on. Obviously, more resources will need to be devoted to child benefit if it is effectively to take families out of the poverty trap and enable us eventually to get rid of the means-tested benefits we have been talking about.
I hope that I have dealt with the points that have been made. In the circumstances, in view of the very good and comprehensive debate that we have had, I ask the Opposition to be good enough to withdraw their Prayers.
§ Mrs. Chalker
With the leave of the House, may I say that I should be happy to withdraw the Prayers, but as I did not move them, I was not sure that I had to withdraw them?
§ Question put and agreed to.
|Division No. 96]||AYES||[11.19 p.m.|
|TELLLERS FOR THE AYES:|
|Mr. Tony Newton and|
|Mr. Peter Bottomley.|
|Bean, R. E.||Graham, Ted||Snape, Peter|
|Bishop, E. S.||Harper, Joseph||Spearing, Nigel|
|Blenkinsop, Arthur||Hart, Rt Hon Judith||Stewart, Rt Hon Donald|
|Brown, Ronald (Hackney S)||Henderson, Douglas||Stewart, Rt Hon M. (Fulham)|
|Campbell, Ian||Hooley, Frank||Stoddart, David|
|Cocks, Rt Hon Michael||Jackson, Miss Margaret (Lincoln)||Taylor, Mrs Ann (Bolton W)|
|Cohen, Stanley||John, Brynmor||Tinn, James|
|Cox, Thomas (Tooting)||Lestor, Miss Joan (Eton & Slough)||Urwin, T. W.|
|Cryer, Bob||Luard, Evan||Ward, Michael|
|Cunningham, G. (Islington S)||McDonald, Dr Oonagh||Wellbeloved, James|
|Davidson, Arthur||McElhone, Frank||Williams, Alan Lee (Hornch'ch)|
|Deakins, Eric||Maclennan, Robert||Wise, Mrs Audrey|
|Dormand, J. D.||Marks, Kenneth||Wrigglesworth, Ian|
|Dunwoody, Mrs Gwyneth||Maynard, Miss Joan|
|English, Michael||Mendelson, John||TELLERS FOR THE NOES:|
|Ewing, Harry (Stirling)||Orme, Rt Hon Stanley||Mr. Alf Bates and|
|Fowler, Gerald (The Wrekin)||Skinner, Dennis||Mr. A. W. Stallard.|
§ Question accordingly negatived.1628
That the Family Income Supplement (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved.
§ Mr. Deputy Speaker (Mr. Oscar Murton)
May I ask whether the hon. Member for Wallasey (Mrs. Chalker) wishes formally to move the Prayers?
§ Mrs. Chalker
I shall remain in the position of neither having moved nor withdrawn the Prayers, Mr. Deputy Speaker.
§ Mr. Newton
Perhaps it would help it I indicated that even if my hon. Friend the Member for Wallasey (Mrs. Chalker) wished to withdraw the Prayers, I should resist her wish to withdraw the Prayer relating to Statutory Instrument 1977, No. 417, which I should like formally to move.
Motion made, and Question put:
That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Amendment Regulations 1977 (S.I., 1977, No. 417), dated 7th March 1977, a copy of which was laid before this House on 11th March, be annulled.—[Mr. Newton.]
§ The House divided: Ayes 0, Noes 47.