§ Motion made, and Question proposed, That this House do now adjourn.—[Mr. Conway.]
1.31 am§ Ms Ann Coffey (Stockport)I am pleased to have this opportunity to bring the issue of foster carers and their access to pensions before the House. Perhaps I could begin with some facts. According to statistics produced by the National Foster Care Association, there are approximately 27,000 foster families in the United Kingdom and around 40,000 children in foster care. I congratulate the National Foster Care Association on its ceaseless campaigning on behalf of foster carers.
The majority of children in care or accommodated by any local authority are in foster homes. In my town of Stockport, 58 per cent. of children in the care of the local authority are in foster homes. Those children range from 0 to 16 years of age. The reason I am giving those rather dry statistics is to give an appreciation of the valuable service offered by foster parents to local authorities for children in need.
I shall give some more statistics. According to a written answer to a parliamentary question by the hon. Member for Redcar (Ms Mowlam) on 4 March, 1993, the average cost to the Exchequer is £102 per week for a foster placement, £530 per week for a children's home and £943 per week for a registered voluntary home. I make it absolutely clear that not many foster parents receive as much as £120 per week. Indeed, according to figures calculated by the National Foster Care Association and other sources, only 3 per cent. of foster carers receive any financial reward in the way of a wage. The remaining 97 per cent. receive only boarding-out payments.
As hon. Members will be aware, boarding-out rates differ. In the north west, which is of specific interest to me, the figures are £42.75 for a child up to seven years and £46.41 for a child from eight to 10 years. I could continue to give the boarding-out rates, but I think I have made my point. The boarding-out payment is intended to cover all the costs associated with care of the child including food, replacement clothing, heating, dinner money, hospital visits, family outings and many other items.
Foster parents, unlike child minders, cannot set their own charges. Such charges are decided by local authorities. For many years, foster carers have said that the boarding-out rate does not cover the cost of care, which is subsidised by the foster family out of its pocket and good will. I wish to emphasis that because I shall return to good will later in my speech.
I can remember visiting a children's home some 15 years ago when I was a social worker. That home had a residential nursery, as many children's homes had in those days. Happily, those days are gone because foster carers are available to provide family care to children. Indeed it would cost the Government a fortune to accommodate those 40,000 children in foster care. In Stockport alone, homes would have to be found for 167 children. By my estimate, that means six new homes. I emphasise those economic arguments because I know that the Government will appreciate them.
To return to the children—who are, after all, the important people in the debate—they are not easy children. They often come from disturbed backgrounds. They come into foster care with emotional, physical and educational 461 difficulties. They come at short notice. They can stay for unplanned periods. They can be very needy of love and endless attention. Looking after them needs skill, patience and perseverance.
Foster parents have other tasks: for example, helping to write and give evidence in court and preparing children for eventual adoption. In addition, the Children Act 1989 requires foster parents to work closely with the children's family, which may involve visits from the family to the foster parent's home—a very sensitive area.
There is an increasing difficulty in attracting foster carers because it is becoming a tough job although it has its rewards. I fear that the Government are relying on good will too heavily and that that good will may be running out. Some authorities are having so much difficulty in recruiting foster parents that, for instance, one local authority has been known to use child minders as an emergency measure, paying them at an hourly rate. In some cases, that could cost up to £200 or £300 for an emergency placement.
In this debate I am asking the Government to provide their share of good will and do something for foster carers that will underline the fact that they are valued and that their contribution is valued. I am asking the Government to extend home responsibility protection to foster carers.
The recent Budget confirmed the Government's commitment to encourage men and women to take responsibility for their own pension arrangements. It also confirmed a move towards establishing a state pension age of 65 for women. That move poses an especial problem for women foster carers because the great majority of them are not in paid employment and are therefore unable to make private pension arrangements. Although a few foster families receive a small fee in addition to the normal cost of looking after children, approximately 97 per cent. of all foster families in the UK receive no taxable fee-paying element whatsoever. That means that women who are not in paid employment because they are looking after foster children in their own home are at a disadvantage compared with women in outside paid employment and those caring for their own children and not in employment, who receive some protection of their pension rights.
At present, home responsibility protection is automatically paid to anyone in receipt of child benefit, and ceases when the child is 16. I should like home responsibility protection to be extended to foster carers who are at home and not in paid employment.
As well as an extension of home responsibility protection to foster carers, I should also like there to be an extension of the maximum number of years that home responsibility protection can be granted to foster carers. Twenty years is the current maximum. Foster carers who have themselves been parents will possibly not start caring for other people's children until a later stage in their lives and are therefore likely to have used up most or all of their rights to home responsibility protection in caring for their own children.
Unless the maximum of years is extended, provision for home responsibility protection is unlikely in itself to have significant impact on the majority of foster families. Figures produced by the National Foster Care Association show that the average woman foster carer is in her middle to late forties. A sample of 4,185 foster families from 30 462 local authorities throughout the UK showed that 66 per cent.—two out of three—were aged over 40 and 62 per cent. were aged between 40 and 60. I should therefore like home responsibility protection to be extended to foster carers who are looking after children in their own home and do not have children under the age of 16. I should also like the number of years that they need to be in paid employment to qualify for a pension in their own right to be reduced.
The alternative to the extension of home responsibility protection would be to use the money saved from child benefit when children are looked after by local authorities to pay voluntary national insurance contributions for foster carers so long as they continue to provide a service, as sums are currently saved by the Government because child benefit does not pass from parents to local authorities or to carers after the first eight weeks of any care episode.
The Government may say that they would need an army of civil servants to identify and keep records of any entitlement to HRP or voluntary national insurance contributions for foster carers, but it is now possible for the local authority to inform the appropriate Government Department of the foster carers who are approved and registered by them annually. It would seem to be a fairly easy arrangement for the local authority at the end of each financial year to send a list of approved carers to the local social security offices. The officers could then record those carers either for HRP purposes or for the crediting of voluntary contributions.
I tabled a question on 27 April 1993:
To ask the Secretary of State for Social Security if he will extend the home responsibility protection to foster carers who do not receive a financial reward from fostering; and if he will give reasons for his answer.The reply was:Eligibility for HRP is dependent on entitlement to certain benefits, primarily child benefit. To avoid double provision from public funds for the cost of child care, child benefit is not paid to foster carers who receive an allowance from the local authority. Consequently HRP is not available in these cases."—[Official Report, 27 April 1993; Vol. 223, c. 382.]However, I am not talking about the cost of child care, because it is clear that the Exchequer benefits from the contributions of foster parents. I am talking about the cost of foster care to the foster parents themselves. It is only fair that the home responsibility allowance should be extended to them.In extending the allowance, the Government would offer recognition and show that they value the enormous amount of work done day after day by countless foster parents who pick up the pieces of desperate family situations and provide valuable care for the victims—the children. It would be grossly unfair for the Government to continue to withhold home responsibility protection.
To sum up the arguments, we need foster carers for children. Foster carers save money. They should therefore not suffer financially when they reach pension age after a lifetime of service to the community. No doubt the Minister will acknowledge that contribution, and he will be sincere in doing so. I ask him to carry that sentiment further and agree to consider the issue again. If he does, he will give a valuable and overdue message to foster carers. He will be saying, "We thank you for caring for our children and in return we shall try to look after you." Surely we do not want foster parents to be consigned to an old age of poverty on the minimum state pension as a result of their 463 lifetime of service to the community. I ask the Minister to reconsider, and to extend home responsibility protection to foster carers.
§ The Parliamentary Under-Secretary of State for Social Security (Mr. William Hague)I congratulate the hon. Member for Stockport (Ms Coffey) on securing the debate, albeit at a time of night at which attendance in the House is much diminished. However, we are joined by my hon. Friends the Members for Langbaurgh (Mr. Bates) and for South Dorset (Mr. Bruce). My hon. Friend the Member for Shrewsbury and Atcham (Mr. Conway) is also with us—but, of course, he is here in his capacity as a Whip, and Whips never sleep anyway, so his being here is not the result of any special effort on his part.
I know from the background of the hon. Member for Stockport, and from the question that she asked earlier this year, which she mentioned, that this is a subject close to her heart and one of which she has great experience. I have listened carefully to what she has said and have been impressed by the care and concern with which she has put the issue before the House.
It is, of course, important for all people to think about their pension rights and to plan for their income in retirement, and I would not want to discourage foster carers or anyone else from doing so. On the contrary, the Department of Social Security is devoting considerable effort to encouraging people to consider the matter early in their working lives. Some foster carers will, of course, have built up or will be entitled to pension rights acquired at other times in their working lives, or through their wives or husbands, but I will discuss that aspect in a moment.
It may be useful for me to begin by clarifying briefly the conditions that have to be satisfied for receipt of state retirement pension. The basic state pension is paid at the full rate of £56.10 per week to anyone, man or woman, who has paid full rate national insurance contributions for about 90 per cent. of his or her working life. National insurance credits are available to assist people who are absent from the work force, and therefore not able to make contributions, for specific reasons such as sickness or unemployment. People are thus allowed a gap of some five years in their record without its affecting their basic pension. A scaled down rate of basic pension is available to anyone with reduced contributions, provided that they have at least a 25 per cent. record.
As the hon. Lady is doubtless aware, many married women have retained their right not to pay full rate contributions, choosing to rely instead on the pension paid to them on their husbands' contributions, at 60 per cent. of the husband's basic pension—normally £33.70 a week. While I am on that subject, it may be appropriate to mention that where a marriage ends in divorce a married woman who was seeking to rely on her husband's record should not lose out. On retirement, she is still able to use her former husband's record for the years of the marriage where her own record is insufficient.
Additional to the basic pension, of course, we have SERPS. People have been building up their rights to that additional earnings-related pension since 1978. It is becoming an increasingly large part of the state pensions provision and is set to become even more so as the scheme matures. Entitlement to the basic state pension can, of course, be improved through home responsibilities 464 protection, to which the hon. Lady referred. That provision exists to protect the basic pension position of people who are unable to work regularly and are unable to make their own contributions because they are precluded from the employment field due to caring responsibilities at home. It applies to those who are caring for sick or disabled people at home, but its primary application and the one that is relevant to this discussion is in relation to people who are raising a family.
I should make clear for the record, because there is often confusion about it, that HRP is not a contribution credit and does not make up a deficiency in a person's contribution record. It reduces the number of qualifying years that a person needs to qualify for a full basic pension, and there is a maximum on the number of years, as the hon. Lady has already described.
HRP was brought in by the Labour Government in 1978. They designed it to be of benefit with only the simplest of qualifying criteria as a passport entitlement which was based on the receipt of a qualifying benefit—in this case, child benefit. HRP coverage in cases of child benefit extends until the child is 16.
As the then Under-Secretary of State and former hon. Member for Rotherham, the late Brian O'Malley, said at the time of the introduction of the relevant legislation in 1975,
it is right that we should adopt a 'broad brush' approach to this to keep the system as simple and as straightforward as possible … We should hope to identify most people eligible for protection during periods of home responsibilities by reference to social security benefits in payment … By far the largest group will be those who are at home looking after children and they will be readily identified through the proposed new system of child benefits which will replace the present system of family allowances.So the broad brush nature of HRP is well established and dates back to previous Governments.Why, then, it might be argued, can we not extend child benefit entitlement to foster carers? The purpose of child benefit is to provide a measure of financial assistance for families with dependent children. It is paid directly to the person having care of the child—usually the mother. As well as replacing the previous family allowance, it broadly takes the place of the tax allowances which used to be available to the working parent. It is an established principle of social security provision that there should be no double provision from public funds for the same contingency. For this reason, child benefit is not payable where a foster carer receives a fostering allowance from a local authority. Similar provision existed prior to 1977 under the old family allowance scheme. In my view, and in the view of Governments over many years, that is right. Clearly it would not be satisfactory to use taxpayers' funds to make double provision. I have to say that, in keeping with that long-established principle, we have no plans to change the existing provisions.
If child benefit cannot and should not be paid in those circumstances, could or should HRP be extended to foster carers by some other route? In theory, of course, it could be, although it could be administratively complex and would be a departure from the simple, broad brush nature of the system as was devised by our predecessors.
Successive Governments have taken the view that such a change should not be made, partly because of the factors that I have described, partly because the pension 465 entitlements of foster carers can be built up in other ways and partly because of the provision made for foster carers elsewhere in the benefit system.
Many foster carers will, naturally, have a husband or a wife who is building up or has built up a full contribution record. A wife can be awarded a category B pension, raising the pension entitlement to the full state pension for a couple on the strength of the husband's contributions. If she is below pension age, the same addition to the husband's pension may be made as an adult dependency increase. Under the proposals made last week for equalising the state pension age, such additions and category B pensions will in future be awarded for a husband on the strength of a wife's contributions as well as the other way round.
Other foster carers will be bringing up children of their own at the same time as they are being foster carers. In their cases, HRP will already be available. I recognise that a majority of foster carers are over 40 and many will already have brought up their own children, with the result that the period during which they could claim child benefit will have come to an end. However, HRP may be of limited further value in many such cases, as the hon. Lady recognised, since 20 years is currently the maximum number of years for which HRP can be awarded. We plan to raise this to 22 years when the state pension age is equalised. The maximum will be 22 years for men and women. To raise it to more than half the working life required to claim a full state pension would seriously erode the contributory nature of the state pension scheme.
So it is by no means always the case that foster carers' pension entitlements will suffer as a result of their work, nor is it necessarily the case that their position would be improved by changing the basis on which HRP is awarded, although that would help some people. It can be argued that where pension entitlements might suffer, the state scheme leaves it open to people to take their own action to safeguard their pension provision through the payment of voluntary class 3 national insurance contributions, currently set at £5.45 a week.
On top of this is the additional consideration that the social security system already provides, quite rightly, some help to foster carers. A foster parent who satisfies the other conditions for income support can qualify for that benefit. Although people would normally be debarred from IS if they work more than 16 hours a week, foster parents are not debarred, however many hours a week they devote to 466 fostering. The fostering allowance is totally disregarded, although no allowance is made in the IS assessment for the foster child.
Alternatively a person who is employed as a foster parent for at least 16 hours a week can qualify for family credit on the basis of that work. In the great majority of cases, of course, that person would be better off on IS, but again the fostering allowance is totally disregarded in the FC assessment.
This brings me to the subject of the fostering allowance itself. As the hon. Lady will be aware, the arrangements for fostering are covered by a comprehensive set of regulations which are the responsibility of my colleagues in the Department of Health. Fostering is arranged through local authorities who pay foster carers a weekly allowance to cover additional living costs associated with caring. Higher rates go to those caring for children with special needs. I am advised by the Health Department that the number of foster carers has remained fairly constant in recent years, at about 30,000. The amounts they receive vary from £50 to £200 a week, with the average being in the order of £100. I recognise, however, from what the hon. Lady said that some payments may be lower than £50. The fact that foster carers are recompensed by the local authority for the work they do is obviously another factor which must be considered when weighing these issues.
I would not wish to deny that the hon. Lady has raised a subject of perfectly legitimate concern for some people. She has presented her case powerfully. It does, however, have to be seen against a background of long-established arrangements which have been adhered to through successive Parliaments and Governments of both parties; of the need for tight controls of public expenditure now and in the future requiring all spending proposals to be judged against other priorities; of the alternative routes available for many foster carers to build up or purchase pension entitlement; and of the extensive and well justified provision already made to help them in their work. When we have, quite rightly, to reassure ourselves that every aspect of social spending is justified and defensible, I cannot conclude at present that there exists a sufficiently strong case for changing the present long-standing arrangements.
I accept, however, that the hon. Lady has raised some valid points on behalf of a group of people who perform a sterling service to the children in their care and to society generally, and I will look in detail at the points that she has raised and the implications of what she has proposed.
§ Question put and agreed to.
§ Adjourned accordingly at seven minutes to Two o'clock.