CHILD BENEFIT AND SOCIAL SECURITY (FIXING AND ADJUSTMENT OF RATES) (AMENDMENT) REGULATIONS 1979 (Hansard, 26 July 1979)

§ Lord WELLS-PESTELL
My Lords, I wish to thank the noble Lord the Minister for putting the position so succinctly and so clearly. Obviously we on this side of the House welcome the additional 50p as a premium to lone parents, but I think the noble Lord will understand me when I say that it is really inadequate, when one recognises what will be the inflation rate which I think is accepted by all people at the present moment, and not least by his own Government. The 50p will be absorbed almost immediately it comes into effect as a result of the increase in the cost of living; and when the noble Lord says that they want to do a great deal for children and it is only a question of money that prevents it, I would ask him—not that I want a reply to this—whether there can be 2054 any other group of people or individuals who need it more than the children themselves, and not only the children of lone parents but the vast army of young children of two-parent families.
I think we know from statistics and research that it is inevitably children who suffer and I am reminded that the present Secretary of State for Social Services said, I am told, on 12th July 1977: We must concentrate relief where there are dependent children. The next Conservative Government will give it top priority ". I do not mean to be facetious when I say, if this is an example of top priority I hope that we never just get ordinary priority.
As the noble Lord quite rightly said, there is no increase in child benefit itself, and I understood him to say that that is on the ground that it was raised by the last Government from £3 to £4 as recently as last April. He will know, as other Members of your Lordships' House will know, that we made it perfectly clear before and during the election that we would have raised it to £4.50 this November. I want to point out that this group of children—children of two-parent families—will find that school meals are increased by something like 25 per cent. a week in the autumn, which will mean that school meals go up to 30p a day, and there is nothing to offset that. It is a little unfortunate that child benefit has not been increased, when many of us feel that that could have been done out of the Government's contingency fund.
When I was speaking a few days ago on another order I referred to the effect of VAT on children's clothing, and one noble Baroness, quite rightly, pointed out that there is no VAT on children's clothing. I did not say that there was. What I referred to was the effect of it, because anyone who has children knows that the older and bigger children—and most of them today are bigger than they have been for a good many years, and very well developed—cannot take the sizes of clothes which are zero rated. That means that the parents of a very high percentage of children cannot take advantage of the zero rated clothes, because they are too small; and an enormous number of children will be wearing school uniforms, normal clothing, special clothing, clothing for gym and sports purposes which is subject to VAT, because of the size.
2055 I would ask the Minister just one question. Will the Government be looking at the amount of child benefit in time for an increase next April, or will they not consider any increase in child benefit until November, 1980? If the latter is the case, it means that there will be no child benefit increase for something like 15 months. I do not want to come back to the question of inflation, but obviously that is what is in the back of my mind. If the noble Lord the Minister can say something about the Government's intentions in relation to an increase in child benefit—I hope in the near future—I am sure that the House will be grateful.

§ Lord BANKS
My Lords, I, too, should like to thank the noble Lord, Lord Cullen, for his explanation of this order. We on these Benches warmly welcome the increase in the addition paid for the first child in a one-parent family from £2 to £2.50. This is a substantial increase and we recognise that. Nevertheless, we share with the noble Lord, Lord Wells-Pestell, regret that the Government have not at the same time increased the child benefit for all children. This would have helped one-parent families further, and would have helped larger families proportionately. It would also have helped all the poorest families, and while a high percentage of one-parent families are among the poorest, the number of the poorest families who are one-parent families is about 10 per cent., so that there is nothing done for the 90 per cent.
The very large tax cuts, which are acceptable for other reasons, do not help these people, and that is why in our election Manifesto we linked tax cuts with a redistribution in favour of the poorest, through a tax credit scheme. An increase in the basic child benefit would have helped all families with children, not just the poorest, and the Child Poverty Action Group have produced a good deal of evidence to indicate that the position of families with children has been deteriorating relatively in recent years. It would also have helped to eliminate the poverty trap, and to reduce the small number of cases where someone on benefit can draw more than he can in 2056 work. It seems to me that the aim should be to raise the level of child benefit, so that it corresponds to the child addition paid with short-term benefits.
I should like, in conclusion, to underline the question asked by the noble Lord, Lord Wells-Pestell. Is there to be an increase in the basic child benefit, or at least a review to see whether one is necessary, so that it could take effect next April; or have we to wait till November, 1980, by which time, according to all the present predictions, the benefit will have been considerably eroded? Surely there ought to be a regular process of uprating for this benefit.
Finally, there is the point made by the noble Lord, Lord Wells-Pestell, that there is a precedent for increasing the benefit six months after the last increase, and I regret that that has not been observed this time. The noble Lord, Lord Wells-Pestell, mentioned the promise of the present Secretary of State that the next Conservative Government would give top priority to child benefit. So far, I do not think we can say that he has.

§ Baroness PHILLIPS
My Lords, I should like to take advantage of the moving of this order by the noble Lord the Minister to ask him a slightly different question, but one which is relevant to child benefit. I have been increasingly approached by people who have not received their child benefit books, owing to a go-slow, an industrial dispute or something which is snarling up the machinery. The irony of this is that the tax adjustment has already been made, so that the husband has already lost the money which he would otherwise have had, whereas the wife has not received child benefit. In some cases, this has been going on for months, and I appeal to the Minister to see that this needs to be looked at, because it is causing serious problems. It is not sufficient to say that they can go on supplementary benefit, because they cannot. This is a group which would not qualify in any case, so that they are just losing the money. Therefore, I hope that the Minister, with his great compassion, will look at this matter and will see what it is that is holding up the works.

§ Lord CULLEN of ASHBOURNE
My Lords, I hope that the House was not unduly frightened by the noble Lord, Lord Wells-Pestell, when he suggested that the inflation rate would be so high that a 25 per cent. increase in the premium would not be adequate. It is a 25 per cent. increase and I think, as the noble Lord, Lord Banks, said, that that is a substantial increase. So far as the ordinary child benefit is concerned, it is the duty of the Secretary of State to review this each year. I do not think it is reasonable to suggest that, the last Administration having increased the child benefit from £3 to £4 only three months ago, a further increase could be expected now. The noble Baroness, Lady Phillips, suggested that I had compassion. I certainly feel very compassionate on the question of children, and I entirely agree with statements made by the Government that the children should be top priority. I am absolutely certain that as soon as we can put that into effect, we will do so.

§ Lord WELLS-PESTELL
My Lords, will the noble Lord allow me to say that I believe that, when this matter was before another place, it was said that there was likely to be 30 per cent. inflation in the next 16 months. I can find no record of that being denied.

§ Lord CULLEN of ASHBOURNE
My Lords, it is a question that would probably better be put to one of the Treasury Ministers.