Child Benefit (Hansard, 22 January 1991)

§ The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)
My Lords, my right honourable friend the Secretary of State for Social Security is required by law to review the level of child benefit each year. From April the rate for the eldest eligible child in each family will be increased by £1 to £8.25 a week.

§ Lord Molloy
My Lords, I thank the noble Lord for that reply. Is he aware that the original child benefit legislation enjoyed the full support of all sides of the other place and of this House? It was welcomed throughout the nation. Then came the savage attack by this Tory Government in the form of the 79 imposition of the three-year freeze. Is the noble Lord aware that the recent increase of £1 per child in no way makes up for the thousands of pounds lost especially by the poorest in our country in support of their children?

§ Lord Henley
My Lords, as I explained, my right honourable friend has a statutory duty to make an annual review. The freeze to which the noble Lord refers allowed him to make increases in income support for the less well off families this year and in previous years and to provide an improved package for those families and children.

§ Lord Carter
My Lords, is the Minister aware that the increase in child benefit of £1 a week for the first child means that the rich family with one child receives exactly the same increase in its weekly income as the poor family with four children? In fact it is a 13 per cent. increase for the rich family and a 3 per cent. increase for the poor family. What happened to the Government's principle of targeting benefits towards those who need them most?

§ Lord Henley
My Lords, any increase in child benefit would obviously benefit rich families as much as poor families. That is why over previous years we have increased the support available through income support.

§ Lord Molloy
My Lords, is the noble Lord aware that the impositions imposed on the Minister were to make sure that he or she maintained the level of child benefits? Since then it has been decided to freeze the benefits for three years and for there to be a meagre increase of £1. Does not the noble Lord agree that most people are frightened that child benefits will be means tested and gradually eased out of the social services?

§ Lord Henley
My Lords, the original statutory power obliged my right honourable friend to consider the rates then in force having regard to the national economic situation as a whole, the general standard of living and other such matters as he considered relevant. I repeat that the Government will continue to honour their manifesto commitment to pay child benefits as before to all families.

§ Lord Henderson of Brompton
My Lords, will the noble Lord ask the Secretary of State to consider both full indexation of child benefits and bringing them into tax? That would avoid this provision being the great burden on the Exchequer that it would otherwise be.

§ Lord Henley
My Lords, I shall bring the noble Lord's suggestion to the attention of my right honourable friend. As the noble Lord will appreciate, there are considerable problems in bringing child benefits into tax. With separate taxation, that is unlikely to achieve any worthwhile savings.

§ Lord Stoddart of Swindon
My Lords, does not the noble Lord agree that child benefits are the most popular and efficient manner for bringing badly needed assistance to families with children? Therefore, will he press his right honourable friend to reconsider the Government's policy on this matter? I ask that particularly bearing in mind that child benefits 80 replaced tax allowances out of which the Government have had great benefit and which have made a great contribution towards the payment of child benefits?

§ Lord Henley
My Lords, as I have been trying to say, child benefits remain a worthwhile contribution to the expenses of all families. They were never intended to meet the full cost of bringing up a child. For the less well-off we have made appropriate increases over the years both in income support and in the appropriate premiums.

§ Lord Molloy
My Lords, can the Minister give a reply to the one vital point I made in my second supplementary question? Can he give the House an assurance that the Government will not bring in a means-tested supplement for child benefits?

§ Lord Henley
My Lords, as I said, we shall continue to honour our manifesto commitment.