CHILD TAX ALLOWANCES (Hansard, 18 January 1978)

§ Lord BROCKWAY
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The SOLICITOR-GENERAL for SCOTLAND (Lord McCluskey)
My Lords, may I apologise in advance for the length of the Answer I am about to give, but I judge it to be necessary because of the complications of the Question. Section 25(2)(d) of the Finance Act 1977 does not deny tax allowances for children resident in new Commonwealth countries. Child tax allowances are being replaced by child benefit payments and are being reduced by stages. Apart from residual allowances for older children, child tax allowances will be withdrawn altogether in April 1979. But Section 25 provides that the parents of certain children living outside the United Kingdom (including children living in new Commonwealth countries) are entitled to claim for 97 1977–78 tax allowances at the same rate as for 1976–77; and subsection (2)(d) merely excludes from such entitlement persons such as civil servants and members of the Armed Forces who are working temporarily abroad but who are eligible for child benefit. The special transitional relief afforded by Section 25 applies for 1977–78 only and it was announced last March, after careful consideration, that the Government did not think it would be justifiable to extend these special arrangements into later years.

§ Lord BROCKWAY
My Lords, while I am not sure that I followed all that complicated Answer, the Minister was courteous enough to communicate with me in advance. May I ask him this. Is it not the case that, from next April, the advantages will be limited to residents who have dependants living in richer nations—Europe; the old Commonwealth, Australia, Canada and New Zealand; and Israel—and will be denied to residents who have children in the poorer countries of Africa and Asia? And if this is the case, is it not a denial of the Government's White Paper and the policy that priority of assistance should be given to the poorer countries?

§ Lord McCLUSKEY
My Lords, as I sought to indicate in the long Answer I gave, child tax allowances are to be phased out altogether. The payment of social benefits is a different matter. It never has been the tradition that social benefits intended for children in Great Britain should be paid to children who have never been in this country, living in countries with which we do not have reciprocal arrangements. We do have reciprocal arrangements with some of the richer countries and that is why social benefits fall to be paid in those cases.

§ Lord AVEBURY
My Lords, if parents are seeking to bring their children from, say, the Indian sub-Continent to join them in the United Kingdom, and ultimately they are successful in doing so, those parents in the end would qualify for child benefit, would they not? So is not the Government's policy in maintaining these lengthy queues, particularly in Dacca and Islamabad, tantamount to denying the parents the financial support they would receive if, in accordance with declared Government policy, families were reunited in this country?

§ Lord McCLUSKEY
My Lords, the length of the queue of dependants was one of the important factors taken into account when the Government allowed special and additional relief for the year 1977–78. The queue never exceeds two years, and it has fallen recently to a maximum of 18 months.

§ Lord BROCKWAY
My Lords, while I appreciate that this is a very difficult problem, may I ask the Minister whether he will approach the Ministry for Overseas Development before next April to reconsider this decision, because will it not in effect mean that residents with children in poorer countries will suffer compared to residents with children in the richer countries?

§ Lord McCLUSKEY
My Lords, this decision was taken after the most careful consideration, and it would be misleading the House if I were to say that it is likely to be reviewed.