HC Deb 09 July 1979 vol 970 cc195-203

Question proposed. That the clause stand part of the Bill.

Mr. Stanley Orme (Salford, West)

Before we pass the clause I want to raise the question of the withdrawal of child tax allowances and the consequential provisions, the issue of child benefits, and that of poverty, already raised by some of my hon. Friends this evening.

There is no doubt that in this Budget all sorts of tax concessions have been proposed, but the one question not dealt with is that of child support. If we had still had child tax allowances, as we have had over recent years, there would have been automatic relief for the family with children. As it is, child benefit has remained at the £4 to which the previous Government increased it, with the proposed increase of 50p that will come for one-parent families. It is within the knowledge of hon. Members that the previous Administration proposed to increase child benefit by 50p per child, to £4.50, in November. Arrangements had been made by the previous Government for this to be met out of the Contingency Reserve Fund. That would have ensured that the family, in a period of rapidly increasing inflation under this Government, would be taken care of.

The Tory Party paid lip service to child benefit and shed crocodile tears in the House when the Labour Government were phasing in those benefits. My right hon. Friend the then Secretary of State for Social Services came under constant attack because we were phasing in child benefits—not immediately implementing them—and so we feel justified in raising this issue.

The present Secretary of State for Social Services said, at the Conservative Party conference in 1977, Our tax system must be more family orientated. We must concentrate relief where there are dependent children. I give you this pledge: the next Conservative Government will retrieve the child benefit scheme from Mr. Healey's waste paper basket and give it top priority. I make the point that it never went into the waste paper basket. It was fully implemented.

Where now is the commitment from the Conservative Government to child benefit to which Tory Members, including members of the present Cabinet, continually pressed the then Labour Government? There is the question of the amendment to a Labour Party Early-Day motion, which stated: The amendments are very significant since they spell out the Conseravtive Party's commitment to treat increases in Child Benefit in the same way as reductions in taxation. In this context the next Conservative Government, which is pledged to major reductions in direct taxation, would regard improvements in Child Benefits which are replacing Child Tax Allowances as part of this process. Where are the reliefs in the Budget and in the Bill? That amendment was signed by two Cabinet Ministers and a junior Minister in the present Administration.

11.30 p.m.

The Government must tell the Committee why they have failed to take such action. If child benefit is not indexed and increased its value declines, and that means that families will be worse off. In November, faced with 17½ per cent. inflation, millions of families with children will be worse off.

The Government must tonight answer the charge that they have neglected the family by failing to uprate the child benefit in their tax proposals.

Earlier in the debate much was made of child poverty and the poverty trap. There was discussion about the tiny minority who might be better off on benefit than working. Child benefit did more to close that gap and help the families on low wages than any other benefit yet introduced. The Government's action, therefore, is a direct incentive not to work to those who are working and are struggling, with perhaps two or three small children, where the wife cannot work and where the husband is on a relatively low wage.

We cannot agree to the clause unless the Government give a satisfactory explanation, and in the absence of that explanation I shall ask my right hon. and hon. Friends to divide against the clause.

Mr. Field

Most of our discussion has been about the redistribution of resources from poor to rich. My right hon. Friend the Member for Salford, West (Mr. Orme) has been dealing with the other important redistribution in the budget—that is, from those with children to the childless.

Therefore, as the campaign on that issue must develop in the rest of this year, I shall draw attention to three important consequences of the Government's failure to live up to much of their loud talk before the election about the importance of increasing child benefit.

Because child benefits have not been increased in the Budget, which has cut taxation by £4 billion, the burden of taxation has been shifted back on to those —rich and poor—with children. Much of the division in the House has been along class lines, but this issue of child benefit ought not to divide hon. Members on that traditional basis. The division should be between those who support families with children and those who support the childless.

There has been much talk about the effect on those who may find themselves better off out of work than following their normal occupations. In the Budget the Government rightly increased all the dependency allowances for children where the parents could not work, but failed to increase allowances for the children of those in work. So the very horror that the Conservatives profess to foresee—of people choosing not to work—has been made more real by their own actions.

The Government have also failed to deal with the real problem of the working poor. The fastest growing group in poverty in this country are not those on benefits but those who do a full week's work but whose earnings are below the supplementary benefit poverty line—in other words, those who earn their poverty.

The only effective way of dealing immediately with that poverty is to increase child benefit. The message that some of us have failed to put across to enough hon. Members is that child benefit now has a twofold function. The only way to maintain equity of income between those with children and the childless is, when personal allowances are changed, to increase the tax-free income of those with children. The only way to do that is to increase child benefit.

Child benefit has the other important function of making a major attack on family poverty, particularly among those at work. Therefore, it is to be deplored, in the terms stated by my right hon. Friend, that in a Budget that has cut taxation by £4 billion not one penny has gone specifically for children, whether those children be in families of rich or poor parents.

Mr. Lawson

You have been extremely generous, Sir Stephen, in allowing a debate on child benefit on a clause that has nothing whatever to do with child benefit—[Interruption.]

The Temporary Chairman

Order. I have listened to all those who have spoken, and now I should like to listen to the reply.

Mr. Lawson

—but is concerned with certain consequential provisions arising out of the ending of child tax allowances. The right hon. Member for Salford. West (Mr. Orme) was so carried away that he announced that if we were not careful he would advise his right hon. and hon. Friends to vote against the clause.

I do not know whether the right hon. Gentleman has taken the trouble to read the clause, but the substance of the matter is contained in schedule 1, and the clause merely relates to the schedule. One of the main purposes of the schedule is to ensure the exemption from tax of the dependency allowances for children received by widows and others in receipt of taxable social security benefits. I should be surprised if the right hon. Gentleman wished to vote against that.

Mr. Orme

We shall vote against the clause because that is the only way in which we can express our opposition. The lion. Gentleman can deal with this matter in other ways, but we have only one opportunity of expressing our views and we shall take it and vote this evining.

Mr. Lawson

If the right hon. Gentleman wishes to do that it is his right to do so, but he will be voting against the exemption from tax of the dependency allowances for children received by widows and others in receipt of taxable social security benefits. That is what he will be doing, because that is what the clause and the schedule are about. He will not be voting for anything to do with child benefit.

As for the right hon. Gentleman's points about child benefit, it is an impertinence, after the biggest tax-cutting Budget that there has ever been, with 75 per cent. of the tax cuts going to those on the basic rate of tax or below, for him to ask, in effect, why we have not made more tax cuts. The families of married couples get a substantial increase in allowances.

It is a further impertinence for the right hon. Gentleman to ask why we are not increasing public expenditure, bearing in mind that he and his Administration left the incoming Government with an economy in which public expenditure was roaring out of control and the borrowing requirement was yawning wider and wider in a most inflationary way. No Government have had a harder task than we have to try to bring public

expenditure back into control. That is what we have to bear in mind when we are talking about public expenditure, and I think that a little humility is called for on the part of the right hon. Gentleman.

Mr. Rooker

Before the hon. Gentleman sits down—

The Temporary Chairman

Order. In my opinion the hon. Gentleman has sat down.

Question put, That the clause stand part of the Bill:—

The Committee divided: Ayes 277, Noes 233.

Division No. 48] AYES [11.39 p.m.
Adley, Robert Cranborne, Viscount Holland, Philip (Carlton)
Aitken, Jonathan Critchey, Julian Hooson, Tom
Alexander, Richard Crouch, David Hordern, Peter
Amery, Rt Hon Julian Dean, Paul (North Somerset) Howe, Rt Hon Sir Geoffrey
Ancram, Michael Dodsworth, Geoffrey Howell, Rt Hon David (Guildford)
Arnold, Tom Dorrell, Stephen Howell, Ralph (North Norfolk)
Aspinwall, Jack Douglas-Hamilton, Lord James Hunt, David (Wirral)
Atkins, Robert (Preston North) Dover, Denshore Hunt, John (Ravensbourne)
Atkinson, David (B'mouth, East) Dunn, Robert (Dartford) Hurd, Hon Douglas
Baker, Kenneth (St. Marylebone) Durant, Tony Jessel, Toby
Baker, Nicholas (North Dorset) Dykes, Hugh Johnson Smith, Geoffrey
Beaumont-Dark, Anthony Eden, Rt Hon Sir John Jopling, Rt Hon Michael
Bell, Ronald Edwards, Rt Hon N. (Pembroke) Joseph, Rt Hon Sir Keith
Bendall, Vivian Eggar, Timothy Kaberry, Sir Donald
Benyon, Thomas (Abingdon) Emery, Peter Kimball, Marcus
Benyon, W. (Buckingham) Eyre, Reginald King, Rt Hon Tom
Best Keith Fairbairn, Nicholas Kitson, Sir Timothy
Bevan, David Gilroy Fairgrieve, Russell Knight, Mrs Jill
Biffen, Rt Hon John Faith, Mrs Sheila Knox, David
Biggs-Davison, John Fell, Anthony Lamont, Norman
Blackburn, John Fenner, Mrs Peggy Lang, Ian
Body, Richard Finsberg, Geoffrey Langford-Holt, Sir John
Bonsor, Sir Nicholas Fletcher, Alexander (Edinburgh N) Latham, Michael
Boscawen, Hon Robert Fletcher-Cooke, Charles Lawrence, Ivan
Bottomley, Peter (Woolwich West) Fookes, Miss Janet Lawson, Nigel
Bowden, Andrew Forman, Nigel Lee, John
Boyson, Dr Rhodes Fowler, Rt Hon Norman Le Marchant, Spencer
Braine Sir Bernard Fox, Marcus Lennox-Boyd, Hon Mark
Briaht Graham Fraser, Rt Hon H. (Stafford & St) Lewis, Kenneth (Rutland)
Brinton, Tim Fraser, Peter (South Angus) Lloyd, Ian (Havant & Waterloo)
Brittan, Leon Fry, Peter Lloyd, Peter (Fareham)
Brocklebank-Fowler, Christopher Gardiner, George (Reigate) Loveridge, John
Brooke, Hon Peter Garel-Jones, Tristan Lyell, Nicholas
Brotherton, Michael Glyn, Or Alan Macfarlane, Neil
Brown, Michael (Brigg & Sc'thorpe) Goodhart, Philip MacGregor, John
Browne, John (Winchester) Goodlad, Alastair MacKay, John (Argyll)
Bruce-Gardyne, John Gorst, John Macmillan, Rt Hon M. (Farnham)
Buck, Antony Gow, Ian McNair-Wilson, Michael (Newbury)
Budgen, Nick Gower, Sir Raymond McNair-Wilson, Patrick (New Forest)
Bulmer, Esmond Gray, Hamish McQuarrie, Albert
Butcher, John Grieve, Percy Madel, David
Butler, Hon Adam Griffiths, Eldon (Bury St Edmunds) Major, John
Cadbury, Jocelyn Griffiths, Peter (Portsmouth N) Marland, Paul
Carlisle, John (Luton West) Grist, Ian Marlow, Tony
Carlisle, Kenneth (Lincoln) Grylls, Michael Marshall, Michael (Arundel)
Carlisle, Rt Hon Mark (Runcorn) Gummer, John Selwyn Marten, Neil (Banbury)
Chalker, Mrs. Lynda Hamilton, Hon Archie (Eps'm&Ew'll) Mates, Michael
Channon, Paul Hampson, Dr Keith Maude, Rt Hon Angus
Chapman, Sydney Hannam, John Mawby, Ray
Churchill, W. S. Haselhurst, Alan Mawhinney, Dr Brian
Clark, Hon Alan (Plymouth, Sutton) Hastings, Stephen Maxwell-Hyslop, Robin
Clark, Dr William (Croydon South) Havers, Rt Hon Sir Michael Mayhew, Patrick
Clarke, Kenneth (Rushcliffe) Hawkins, Paul Mellor, David
Clegg, Walter Hawksley, Warren Meyer, Sir Anthony
Cockeram, Eric Henderson, Barry Miller, Hal (Bromsgrove & Redditch)
Colvin, Michael Heseltine, Rt Hon Michael Mills, Iain (Meriden)
Cormack, Patrick Higgins, Rt Hon Terence L. Mills, Peter (West Devon)
Corrie, John Hill, James Miscampbell, Norman
Costain, A. P. Hogg, Hon Douglas (Grantham) Mitchell, David (Basingstoke)
Moate, Roger Ridley, Hon Nicholas Thompson, Donald
Monro, Hector Ridsdale, Julian Thorne, Neil (llford South)
Montgomery, Fergus Rifkind, Malcolm Thornton, Malcolm
Moore John Roberts, Michael (Cardiff NW) Townend, John (Bridlington)
Morris, Michael (Northampton, Sth) Roberts, Wyn (Conway) Townsend, Cyril D. (Sexleyheath)
Morrison, Hon Charles (Devizes) Rost, Peter Trippler, David
Morrison, Hon Peter (City of Chester) Sainsbury, Hon Timothy Trotter, Neville
Mudd, David Scott, Nicholas van Straubenzee, W. R.
Murphy, Christopher Shaw, Giles (Pudsey) Vaughan, Dr Gerard
Myles, David Shaw, Michael (Scarborough) Viggers, Peter
Neale, Gerrard Shelton, William (Streatham) Waddington, David
Neubert, Michael Shepherd, Colin (Hereford) Wakeham, John
Newton, Tony Shepherd, Richard (Aldridge-Br'hills) Waldegrave, Hon William
Nott, Rt Hon John Shersby, Michael Walker, Rt Hon Peter (Worcester)
Onslow, Cranley Silvester, Fred Wall, Patrick
Oppenheim, Rt Hon Mrs Sally Skeet, T. H. H. Waller, Gary
Page, Rt Hon R. Graham (Crosby) Smith, Dudley (War, and Leam'ton) Ward, John
Parris, Matthew Speed, Keith Watson, John
Patten, Christopher (Bath) Speller, Tony Wells, John (Maidstone)
Patten, John (Oxford) Spence, John Wells, Bowen (Hert'rd & Stev'nage)
Pattie, Geoffrey Spicer, Michael (S Worcestershire) Wheeler, John
Pawsey, James Sproat, Iain Whitney, Raymond
Percival, Sir Ian Squire, Robin Wickenden, Keith
Pollock, Alexander Stainton, Keith Wiggin, Jerry
Porter, George Stanbrook, Ivor Wilkinson, John
Price, David (Eastleigh) Stanley, John Williams, Delwyn (Montgomery)
Prior, Rt Hon James Steen, Anthony Winterton, Nicholas
Proctor, K. Harvey Stevens, Martin Wolfson, Mark
Pym, Rt Hon Francis Stewart, Ian (Hitchin) Young, Sir George (Acton)
Raison, Timothy Stewart, John (East Renfrewshire) Younger, Rt Hon George
Rathbone, Tim Stokes, John
Rees, Peter (Dover and Deal) Stradling Thomas, J. [...]ELLERS FOR THE AYES
Rees-Davies, W. R. Taylor, Robert (Croydon NW) Mr. Anthony Berry an
Renton, Tim Tebbit, Norman Mr. Carol Mather.
Rhodes James, Robert Temple-Morris, Peter
Adams, Allen Cunningham, Dr John (Whitehaven) Hattersley, Rt Hon Roy
Allaun, Frank Dalyell, Tarn Healey, Rt Hon Denis
Alton, David Davidson, Arthur Heffer, Eric S.
Anderson, Donald Davies, Rt Hon Denzil (Llaneill) Hogg, Norman (E Dunbartonshire)
Archer, Rt Hon Peter Davies, E. Hudson (Caerphilly) Holland, Stuart (L'beth, Vauxhall)
Armstrong, Rt Hon Ernest Davies, Ifor (Gower) Home Robertson, John
Ashton, Joe Davis, Clinton (Hackney Central) Homewood, William
Atkinson. Norman (H'gey, Tott'ham) Davis, Terry (B'rm'ham, Stechford) Hooley, Frank
Bagier, Gordon A. T. Deakins, Eric Horam, John
Barnett, Guy (Greenwich) Dean, Joseph (Leeds West) Howells, Geraint
Barnett, Rt Hon Joel (Heywood) Dempsey, James Huckfield, Les
Beith, A. J. Dewar, Donald Hughes, Mark (Durham)
Benn, Rt Hon Anthony Wedgwood Dixon, Donald Hughes, Robert (Aberdeen North)
Bennett, Andrew (Stockport N) Dobson, Frank Hughes, Roy (Newport)
Bidwell, Sydney Dormand, Jack Janner, Hon Greville
Booth, Rt Hon Albert Douglas, Dick Johnson, James (Hull West)
Boothroyd, Miss Betty Douglas-Mann, Bruce Johnston, Russell (Inverness)
Bradley, Tom Dubs, Alfred Jones, Rt Hon Alec (Rhondda)
Bray, Dr Jeremy Duffy, A. E. P. Jones, Barry (East Flint)
Brown, Hugh D. (Provan) Dunnett, Jack Jones, Dan (Burnley)
Brown, Robert C. (Newcastle W) Dunwoody, Mrs Gwyneth Kaufman, Rt Hon Gerald
Brown, Ronald W. (Hackney S) Eadie, Alex Kerr, Russell
Brown, Ron (Edinburgh, Leith) Eastham, Ken Kilroy-Silk, Robert
Buchan, Norman Ellis, Raymond (NE Derbyshire) Kinnock, Neil
Callaghan, Rt Hon J. (Cardiff SE) Ellis, Tom (Wrexham) Lambie, David
Callaghan, Jim (Middleton & P) Ennals, Rt Hon David Lamborn, Harry
Campbell, Ian Evans, John (Newton) Lamond, James
Campbell-Savours, Dale Ewing, Harry Leadbitter, Ted
Canavan, Dennis Field, Frank Leighton, Ronald
Cant, R. B. Flannery, Martin Lewis, Ron (Carlisle)
Carmichael, Neil Fletcher, Ted (Darlington) Lofthouse, Geoffrey
Carter-Jones, Lewis Foot, Rt Hon Michael Lyon, Alexander (York)
Cartwright, John Forrester, John Lyons, Edward (Bradford West)
Clark, David (South Shields) Foster, Derek McDonald, Dr Oonagh
Cocks, Rt Hon Michael (Bristol S) Foulkes, George McElhone, Frank
Cohen, Stanley Fraser, John (Lambeth, Norwood) McGuire, Michael (Ince)
Coleman, Donald Freeson, Rt Hon Reginald McKay, Allen (Penistone)
Concannon, Rt Hon J. D. Garrett, John (Norwich S) MacKenzie, Rt Hon Gregor
Conlan, Bernard George, Bruce Maclennan, Robert
Cook, Robin F. Gilbert, Rt Hon Dr John McMahon, Andrew
Cowans, Harry Ginsburg, David McMillan, Tom (Glasgow, Central)
Cox, Tom (Wandsworth, Tooting) Golding, John McNally, Thomas
Craigen, J. M. (Glasgow, Maryhill) Graham, Ted McWilliam, John
Crowther, J. S. Grant, George (Morpeth) Magee, Bryan
Cryer, Bob Grant, John (Islington C) Marshall, David (Gl'sgow.Shettles'n)
Cunliffe, Lawrence Hamilton, James (Bothwell) Marshall, Dr Edmund (Goole)
Cunningham, George (Islington S) Harrison, Rt Hon Walter Marshall, Jim (Leicester South)
Martin, Michael (Gl'gow, Springb'rn) Rees, Rt Hon Merlyn (Leeds South) Thomas, Jeffrey (Abertillery)
Mason, Rt Han Roy Richardson, Miss Jo Thomas, Mike (Newcastle East)
Maynard, Miss Joan Roberts, Albert (Normanton) Thomas, Dr Roger (Carmarthen)
Meacher, Michael Roberts, Allan (Bootle) Thorne, Stan (Preston South)
Mellish, Rt Hon Robert Roberts, Ernest (Hackney North) Tilley, John
Mikardo, Ian Robertson, George Torney, Tom
Millan, Rt Hon Bruce Robinson, Geoffrey (Coventry NW) Urwin, Rt Hon Tom
Miller, Dr M. S. (East Kilbride) Rodgers, Rt Hon William Varley, Rt Hon Eric G.
Mitchell, Austin (Grimsby) Rooker, J. W. Wainwright, Edwin (Dearne Valley)
Mitchell, R. C. (Soton, Itchen) Ross, Stephen (Isle of Wight) Wainwright, Richard (Colne Valley)
Morris, Rt Hon Alfred (Wythenshawe) Rowlands, Ted Walker, Rt Hon Harold (Doncaster)
Morris, Rt Hon Charles (Openshaw) Ryman, John Watkins, David
Morris, Rt Hon John (Aberavon) Sandelson, Neville Weetch, Ken
Morton, George Sever, John Welsh, Michael
Moyle, Rt Hon Roland Sheerman, Barry White, Frank R. (Bury & Radcliffe)
Newens, Stanley Sheldon, Rt Hon Robert (A'ton-u-L) White, James (Glasgow, Pollok)
Oakes, Rt Hon Gordon Short, Mrs Renée Whitlock, William
Ogden Eric Silkin, Rt Hon John (Deptford) Willey, Rt Hon Frederick
O'Neill, Martin Silkin, Rt Hon S. C. (Dulwich) Williams, Rt Hon Alan (Swansea W)
Orme, Rt Hon Stanley Silverman, Julius Wilson, Rt Hon Sir Harold (Huyton)
Owen, Rt Hon Dr David Skinner, Dennis Wilson, William (Coventry SE)
Palmer, Arthur Snape, Peter Winnick, David
Park, George Soley, Clive Woodall, Alec
Parker, John Sprlggs, Leslie Woolmer, Kenneth
Parry, Robert Steel, Rt Hon David Wrigglesworth, Ian
Pendry, Tom Stoddart, David Wright, Sheila
Penhallgon, David Stott, Roger Young, David (Bolton East)
Powell, Raymond (Ogmore) Strang, Gavin
Prescott, John Straw, Jack TELLERS FOR THE NOES
Price, Christopher (Lewisham West) Summerskill, Hon Dr Shirley Mr. James Tinn and
Race, Reg Taylor, Mrs Ann (Bolton West) Mr. Hugh McCartney.
Radice, Giles Thomas, Dafydd (Merioneth)

Question accordingly agreed to.

Clause 11 ordered to stand part of the Bill.

Schedule 1 agreed to.

Clause 12 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 13 ordered to stand part of the Bill.

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