HL Deb 03 March 2005 vol 670 cc383-98

1.34 p.m.

The Parliamentary Under-Secretary of State, Department for Culture, Media and Sport (Lord McIntosh of Haringey)

My Lords, I beg to move that this Bill be now read a second time.

I am very pleased to have the opportunity today to introduce the Child Benefit Bill to the House. It is very short, but it paves the way for significant improvements in the financial support available for young people who continue in education and training beyond the age of 16.

Before I explain the detail of the Bill, I think it would be useful if I began by setting it in the context of the Government's commitment to ensure that all young people reach the age of 19 ready for higher education or skilled employment, regardless of their background.

Reaching the age of 16 is, of course, a major milestone in the transition from childhood to adult life, not least because it marks the end of compulsory education. At this point, young people, for the first time in their lives, have the freedom to choose what to do with their days. The choices they make are of great importance in shaping their future life chances and opportunities. Opting to continue in learning to develop further skills and qualifications brings many benefits to the individual. All the evidence shows that the level of educational achievement is linked to future success in the labour market, and that basic skills and level 2 qualifications in particular are key to preventing social exclusion.

What young people do matters a great deal to the country as a whole because it directly determines the level of skills flowing into the labour market. Raising the participation of young people in education and training is essential to meet the demand for skills in a dynamic, modern economy such as the United Kingdom. By 2010, it is forecast that 80 per cent of new jobs will require high and intermediate levels of qualifications and that 95 per cent will require at least a level 2 qualification.

The Government are committed to supporting post-16 choices, ensuring that all young people reach the age of 19 ready for higher education or skilled employment. We have much more to do to reach this objective. We have increased the number of young people participating in education and training after the age of 16 but a quarter of 15 to 19 year-olds are still not in formal learning. The UK compares badly internationally in this respect: we currently lie 25th out of 30 OECD countries for participation in education at age 17. That goes a long way to explaining the skills gap in this country. More than 30 per cent of UK workers—about 7.8 million people—have low skills, compared with less than 20 per cent in Germany and 15 per cent in the United States.

The Government are determined to reverse the historic failures in the education system which have caused this skills shortage. We have made much progress since 1997, with pupils now getting the best ever results from primary through to GCSE and A-levels. But some historic weaknesses still remain, particularly in the post-16 phase. Over the next 10 years, we want to raise our post-16 participation to match the best in the OECD, increasing it from 75 per cent to at least 90 per cent at age 17.

Our strategy to achieve this has three strands. First, as set out in the 14 to 19 education and skills White Paper published last week, the Government are reforming the curriculum structure in Britain to make it more flexible, rewarding and engaging. However, I shall not repeat the arguments which have already been put forward on that issue.

Our second strand, designed to underpin these curriculum and training reforms, is to strengthen the advice, guidance and support we offer young people to ensure they are able to make informed choices about the range of learning options and opportunities.

The third and final element of the Government's strategy is to remove the financial barriers to learning. The Chancellor announced in Budget 2003 that the Government would review financial support for 16 to 19 year-olds, with the aim of delivering a more accessible system which provides every young person with the support and incentive they need to participate in education or training. The review sought to build on the success of the educational maintenance allowance pilots which have demonstrated the important role of financial support in delivering higher rates of post-16 participation. It was rolled out nationally for 16 year-olds in September last year, with a framework of rights and responsibilities for young people who decide to stay on at school and college.

The review of financial support for 16 to 19 year-olds sought to find ways in which the principle could be extended to other groups of young people to ensure that all individuals are supported and encouraged to make the most of their potential. The initial findings and proposals of the review were set out in the report, Supporting Young People To Achieve, which was published alongside last year's Budget. The evidence collected during the review indicated that the complexity and anomalies in the current system of financial support create major barriers to learning for some young people, particularly the most vulnerable. To remove those obstacles, the review proposed a long-term vision of a single, coherent system of financial support, designed to engage young people and support their post-16 choices and transitions. The consultation with young people, parents, voluntary sector organisations and employers has demonstrated strong support for that approach. The Government will respond to that consultation and setting out the next steps in the Budget on 16 March.

In addition to these radical, long-term proposals, the review identified two specific, short-term measures to tackle some of the worst distortions in the current system. The first aims to support young people's choices between classroom-based and work-based learning by creating a level playing field in the financial support available for both.

About three-quarters of young people at 16 choose to continue in full-time education at school or college, and a further 10 per cent enter waged apprenticeships with an employer. But some young people, particularly the most disadvantaged, may not be ready or willing to enter structured learning. They may need basic skills training such as the Entry to Employment programme in England provides. At the moment, what activity an individual decides to pursue at 16 determines the financial support to which they are entitled. If they continue in education at school or college, a very generous package of child benefit and child tax credit is paid to their parents, and educational maintenance allowance is paid directly to them. That can total around £75 a week for a low-income family, depending on household circumstances.

Some young people prefer to continue learning in the workplace; for example, through an apprenticeship programme. Most apprentices do not need financial support from the Government because they are based—

Lord Higgins

My Lords, I did not quite catch what the Minister said was "paid directly to them". I presume he means the "child".

Lord McIntosh of Haringey

My Lords, the educational maintenance allowance is paid directly to them, in addition to the child benefit and child tax credit paid to the parents.

Most apprentices do not need financial support because they are based with an employer who pays their wage. The review recommended that all employer-based apprentices should be paid a weekly wage of at least £70 to £80.

Some young people in some occupations may need preparatory training before they are ready to proceed to a waged apprenticeship. For example, they may need to acquire basic skills or develop personal and social competencies, particularly if they have been disengaged from mainstream education. The Learning and Skills Council for England and the devolved administrations therefore fund and manage unwaged training places for such young people. An example of this is the Entry to Employment programme in England, which is delivered on behalf of the Learning and Skills Council by local training providers such as voluntary organisations.

This is why I call the Bill the Padraig Harrington Bill. My wife is the chair of a charity in north London called the Harington Scheme. It provides horticultural training for young people with learning disabilities. They are exactly the kind of people for whom this programme is designed, because they are simply not able to stay in school or college and they are not able to get paid jobs. The charity, with the support of the Learning and Skills Council, provides horticultural training. Fifty per cent of the trainees land up in jobs at the end, and the others are able to join a scheme where assisted work is available for them. The problem which that scheme addresses is that those who are aged 16 to 19 simply do not have the support that they would enjoy if they had stayed in school or college. That is what this Bill is designed to correct.

At the moment, young people who want to pursue an unwaged training programme such as the Harington Scheme are entitled only to a minimum training allowance of £40 a week. The difference between the financial support available for that form of learning and the generous package available for those who stay at school or college distorts the choices of young people. Together, child benefit and child tax credit make up an important stream of income for a young person's family. The loss of that money may mean that some low-income parents are no longer able to support their child. The young person may be forced into a course at college— if he can get in—that may be inappropriate for him, rather than join a course with a training provider because of the additional financial support available. He may end up dropping out of learning altogether if the course does not suit him.

We believe that young people should be able to choose their learning route, rather than making a decision based on the amount of financial support available to them. That is why the Bill is important. It is the first step in removing the distinction between education and unwaged training in the financial support system. The changes will strengthen young people's choices between learning in the classroom and the workplace. They will bring about additional investment in financial support for unwaged trainees of around £100 million a year, delivering more money for tens of thousands of young learners, especially those from low-income families who are unable to live in the family home.

The second damaging anomaly that the Child Benefit Bill will enable us to remove is the automatic cut-off in financial support at the age of 19. The current rules are based on the assumption that post-16 participation consists of two years of A-level study at school or college, completed before the 19th birthday. That model of post-16 education does not match the pathways and experiences of many young people who continue in learning today. Each year, thousands of young people reach the age of 19 while still studying for non-advanced qualifications. Many will be in that situation because their education has been disrupted. Vulnerable groups such as care leavers, young offenders and homeless young people often face challenges that prevent them from completing their non-advanced education before the age of 19.

Under the current rules, child benefit and child tax credit cease on the young person's 19th birthday, irrespective of whether they are studying. Young people from low-income households may be forced to leave their course before achieving their qualification because of the pressures on family finance. The situation is even worse for young people who cannot live in the family home. Their entitlement to income support may cease, and they must instead claim jobseeker's allowance, which requires them to be available for work rather than studying full-time. The loss of income support triggers the loss of housing benefit, making it impossible for those young people to continue on their course without losing their home or running up rent arrears. The personal testimonies which the Government received during the review revealed the distress and frustration caused by those rules. It is a wasted investment for government and young people if they drop out. That is why we are proposing to reform the rules on child benefit, child tax credit and income support so that young people who reach 19 while still studying for non-advanced qualifications are supported until they complete their course, up to an age limit of 20. About 80,000 young people a year will benefit from the measure.

The Child Benefit Bill is the essential first step in implementing these two important reforms. The Bill restructures the existing definition of a "child" in child benefit rules by introducing a separate definition of a "qualifying young person". A "child" will be defined as a person who has not reached the age of 16, so there is absolutely no impact on the universal payment of child benefit for under-16s. The Bill enables the Treasury to lay regulations prescribing the circumstances in which someone aged 16 and over is defined as a "qualifying young person". That replicates the approach that is already used in the legislation for child tax credit, ensuring greater consistency in the criteria for the two streams of support.

The Treasury published draft regulations on 10 January to indicate how it intends to use the powers in the Bill setting out the proposed new entitlement for unwaged trainees and 19 year-olds completing a course. The Government intend to implement these reforms in April 2006, along with the corresponding changes to child tax credit and income support which will be made via separate amending regulations.

It is essential that we equip all our young people with the skills and qualifications they need to face the challenges and opportunities of global economic change over the next few decades. Choices made at 16 matter a great deal. The Bill will help to support those choices by removing some of the worst financial barriers to learning. I have great pleasure in commending the Bill to the House.

Moved, That the Bill be now read a second time.—(Lord McIntosh of Haringey.)

1.50 p.m.

Baroness Gale

My Lords, I am pleased to speak in this debate and to express my support for the Bill. I know that it will be welcomed by many organisations. It deserves praise because it will put young people and families in a much better financial position, especially those on low incomes and young people who are unable to live at home and are already independent of their families.

The Bill is long overdue and puts right a wrong which has existed for a long time. I refer to the loophole which, in certain circumstances outlined by the Minister, prevents many 19 year-olds obtaining any money or benefit. I have some knowledge of this, which is why I am particularly interested in the Bill.

I became aware of the anomaly under which young people studying a full-time course at a further education college no longer qualify for child benefit when they reach their 19th birthday. That affected a member of my own family. The young man concerned was aged 18 years and 11 months when he enrolled on a course due to start in the September. By the next month, with approximately one year and 11 months left to complete the course, he reached the age of 19, the cut-off age for child benefit. His single parent mother could no longer claim child benefit for him. This meant that either she had to keep him financially or he would have to give up his course and find a job. Giving up the course would mean that he would not have any qualifications. Fortunately, he was able to continue with it, although it was quite a struggle financially.

I had not previously been aware of this and I did not believe it was correct, so I asked the Library to check the facts for me. The information I received showed that it was correct and that the Government, aware of the loophole, were carrying out consultation on it. I am pleased that the Government have responded to that consultation in such a positive manner.

Although my initial concern was for the over-19s, I am pleased about the other measures in the Bill, such as removing the distinction between education and unwaged training in the financial support system. This is a good Bill which will help low-income families to provide support at a time when their children need to obtain qualifications. We badly need to help our young people in this regard as our record is not that good, a point already outlined by my noble friend.

I appreciate that there are other schemes to help young people, such as the education maintenance allowance which has been available since September 2004. That weekly payment has been a great help in supporting and encouraging young people to stay on in education. I understand that it has to be a means-tested allowance based on parental income, so not all young people receive it. But anything which helps young people to obtain qualifications, especially those who are not academically minded, is to be welcomed. We need plumbers in this country as much as we need professors. Dawn Primarolo MP, the Paymaster General, said at Second Reading in another place that: We all know that skills matter, but we also know that the United Kingdom education system has unfortunately suffered from historical underachievement. Although we perform strongly in higher education and have a large number of highly skilled workers compared with other countries, the historic failure to invest in training and education until recently has led to major shortfalls in terms of the intermediate skills that we need to secure sustainable employment and opportunities for all. As a result, far too many young people and adults are prevented by their lack of skills from getting secure, well paid jobs and all the social and personal benefits that go with them".—[Official Report, Commons, 12/1/05: cols. 316–317.]

I believe that this Bill will go a long way to improving our skills shortfall because the financial support will encourage more young people to stay on in education and training. However, I hope that the Minister can clear up one point. The Bill states that support for 19 year-olds will continue either until they reach the age of 20 or until the end of their course, whichever comes first. Someone like the young man I mentioned earlier will be over the age of 20 before his course ends. I do not know if I have this right, but it would mean that their entitlement to benefit would end at 20, even though the course may have six or more months to run. That would put them in a difficult position. Would it not be better for the Bill to provide for whichever date comes later?

Despite that, this is a really great Bill and I am sure that it will meet with the agreement of your Lordships' House. It is much to be welcomed.

1.56 p.m.

Lord Haskel

My Lords, I, too, thank my noble friend for introducing this Bill, and I want to join my noble friend Lady Gale in saying a few words in support. In various incarnations, both in government and in opposition, I have spoken up in support of skills training in the DTI. But do not just listen to me. Listen to what Steve Stewart has to say about the Bill.

Mr Steve Stewart is the Deputy Chief Executive of Wakefield District Council in Yorkshire. He is facing the difficult problem of young people coming into the labour market without basic skills—and I mean basic numeracy and literacy. He is busy developing a public service agreement with local partners to tackle worklessness and skills development, because in the district of Wakefield 24 per cent of boys and 13 per cent of girls enter the labour market at 16. That is significantly higher than the national average for both sexes.

Mr Stewart has said that the proposals in this Bill will help clear some of the hurdles identified by Wakefield council in terms of supporting skills development. It will assist the council in encouraging students to stay on at 16 to develop skills in sectors such as the construction industry, which are vital to the regeneration of the district.

He also pointed out that the proposals will contribute to beating the poverty trap that encourages young people in Wakefield to enter low-paid jobs with low prospects at the age of 16 rather than remain in learning. He thinks that the Bill will help to send a clear message to the traditionally hard-to-reach communities about the advantages of remaining in learning and training. These are communities where the lack of educational achievement and basic skills goes back generations. Noble Lords have long recognised the need to break that chain. It is hoped that the Bill will be one more small way of doing that.

The point I want to make is that this is not a politician speaking. This is a public official at the sharp end, trying to deal with the social and economic effects of a lack of skills. Mr Stewart is reluctant to put youngsters into dead-end jobs, and, frankly, very few unskilled jobs now exist, either dead end or otherwise. He needs the flexibility and freedom to provide some benefit or allowances while the public service agreement is in operation. That is precisely what this Bill addresses.

Wakefield is not alone: 25 per cent of our youngsters reach the age of 19 without a level 2 or equivalent qualification. We compare very badly with other countries.

As the Minister explained, one of the purposes of the Bill is to introduce the educational training allowance. I agree with him that the minimum training allowance distorted choice and made the transition from school to work more difficult. Parents of young people aged 16 and over and under 19 in non-advanced education receive child benefit and child tax credit, but the parents of young people of the same age group in unwaged training do not. It is this which distorts the choice and sometimes pressures young people into a course at college who might otherwise have benefited from training at work. The move to an education maintenance allowance is to be welcomed as it helps to remove this distortion.

I understand that there are around 80,000 unwaged trainees across the UK and that the Bill will provide the same financial support for either education or work-based learning. The choice will be theirs.

The more suspicious-minded of us will perhaps ask, "Ah, does this mean that businesses can stop paying their trainees by encouraging them or their parents to take advantage of these allowances?". Perhaps the Minister can tell the House how the Government are going to safeguard against that. There are safeguards with education maintenance allowances. The EMAs are strictly monitored; there is a learning agreement and FE colleges are set up to track a student's progress to make sure that the money is not wasted. Will there be similar requirements where young people receive unwaged training at businesses or at charities? There is a great deal of administration involved in this which small firms or voluntary organisations may not be able to provide.

In addition, the Minister told us that replacing the minimum training allowance with EMAs will move money away from the young person to the family. Are the Government satisfied that this will not be exploited by the adults to the detriment of the youngsters?

Some may say that with employment at record levels in Britain, who needs this? The answer is that the skill gaps in Britain remain stubbornly persistent. Those who attend business meetings—and I see in their places one or two noble Lords who do attend such meetings, particularly business breakfasts—will agree that the most common complaint is a shortage of skilled staff. Obviously the Government must and are taking action to tackle this, of which the Bill is a small part.

I hope that noble Lords on all sides of the House will join me in supporting the Bill so that tomorrow I can send a copy of the Hansard containing the record of this debate to Wakefield council, with a note saying, "Keep up the good work. Help is on its way".

2.3 p.m.

Lord Oakeshott of Seagrove Bay

My Lords, it is a pleasure to follow the constructive and thoughtful speeches of the noble Baroness, Lady Gale, and the noble Lord, Lord Haskel. I am happy to make it clear from these Benches that, like them, we support this modest but sensible Bill. I am not sure whether I should be here at all. Many of the issues we have been discussing are educational and this feels as much an education Bill as a Treasury one. But we have an all-encompassing Treasury these days and so I shall do my best.

As I read through the record of the debates in Committee in the other House, I felt that there had probably been a certain amount of manufactured controversy. It did not seem to me that many serious issues were raised, and I was not quite sure why it took as long as it did. I am sure that, in this House, we will not go down that route.

The main question that arises on the Bill concerns the 80,000, or however many it is, unwaged trainees and unpaid youngsters on job experience. Given the question of whether the Bill is intended to cover assistance only for trainees on government-supported training schemes, how many families of unwaged trainees, in total, will receive child benefit and child tax credit? The debates in the other place seemed to turn on that issue.

Will the Government expand the eligibility criteria for those in unwaged training or unpaid work experience? Barnardo's, in particular, has made a very good case for the need to expand the criteria to cover the large group of young people who are often disaffected and do not necessarily fit easily into the benefit and educational assumptions made by governments, which tend to suit the majority of young people who pass through the educational and training systems. It is very important to ensure that benefit and training systems are sufficiently flexible to allow groups of young people who do not fit into those simple categories to be properly provided for.

The noble Lord, Lord Haskel, pointed out the risk of not very well qualified young people falling through the net, as it were. It is very important that we try to be as inclusive as we can to these people and reduce the risk of them being alienated from society and possibly even falling into crime.

We have received other representations, making a similar point, from the Prince's Trust. It stated: If it is only approved 'Government supported schemes' that are eligible, then young people may not feel that they have the financial support to participate in", more informal training activities. It asks for clarification of, what is meant by 'Government supported schemes' and whether voluntary work, work experience and other more informal forms of training are going to be eligible for Child Benefit".

Skill shortages clearly are a major problem in our economy. The statistics quoted by the noble Lord, Lord Haskel, about our relatively low position in the skills and training league internationally are a serious problem. It is a major problem for the British economy and, particularly in London and the south-east, it is quite clear that we are suffering from very strong skills shortages. At its most obvious, where would the London building trade be without Polish workers, to name just one group, let alone those from other countries? So anything that will help in the medium term to ease our skills shortages is obviously essential.

We also face ever increasing competition in many areas of our economy and industry, from China and India in particular, and the levels of educational achievement among some of our young people clearly leave a great deal to be desired. We will not be competitive internationally unless we can raise our game.

The other matter arising from the debates in the Commons which I should like to pursue here is the substantial question raised by both major opposition parties about the Government's reluctance to make any estimate of likely behavioural changes arising out of the Bill and the consequent cost effects. Now that the Government have had a month since the debate on 3 February in the other place, will they have a first stab at estimating the behavioural changes, which I think it fair to say are likely to be quite significant?

Perhaps I may make a general point about unpaid work experience and how it is developing into almost a pre-condition for getting a job in some sectors, certainly in the media and parts of the financial services. The way in which this is developing is very unfair. I have a 19 year-old son and I am very lucky that I am able to afford to support him if he needs to do extended work experience. The current arrangements really discriminate against children from poorer families.

I am to some extent sympathetic to Ministers when they ask why they are not given more credit for the good things they have done. We are happy to recognise that, particularly in areas such as the tackling of child poverty. However, as Vince Cable, my colleague in the other place, pointed out, the problem is that many people simply do not understand the complex system of benefits with which they have to grapple. The situation is the same with pensions. People have to wander through such a quagmire of complication that they do not realise how the system works.

The Bill deals with only part of that problem. Nevertheless, it is useful legislation. We are happy to support it and speed it on its way through the currently very crowded legislative seas in order to get it on to the statute book.

2.10 p.m.

Lord Higgins

My Lords, the purpose of this Bill is clear and we support the objectives. We have had a short and interesting debate about a short and interesting Bill. There is no doubt that the case made by the Minister and other speakers for more action in this area is overwhelming. The regulatory impact assessment spells it out in considerable detail, so I do not need to stress its importance. However, one or two points must be made.

This Bill is unusual, in present circumstances, because it reaches your Lordships' House in quite good shape. That has not been the case of many other Bills. Your Lordships will no doubt have noted that, before Third Reading in another place, complaint was made that the programming of Bills there is applied across the board regardless of the extent to which any programming may be necessary. A complaint was made that only half an hour was allocated in the original programming Motion for debate in the House of Commons at Third Reading. This is a matter for great concern.

The reason this Bill is in good shape is that the Minister responsible showed flexibility. However, the way in which programming is used means that normally your Lordships have a heavy task, as we experienced on the Pensions Bill. We must hope that that does not continue because the other place is not fulfilling its legislative function.

I have some specific points which need to be considered. The Bill is to be administered by the Treasury; so, rather strangely, this is a Treasury Bill. The reason for that is the way in which the Chancellor of the Exchequer has tended to take everything in relation to work and pensions away from that department and put it under the aegis of the Treasury. This is done not only with regard to actual policy but also the way in which it is operated. Thus we suddenly find that because child tax credit is something that the Chancellor has taken over, this should apply also to child benefit.

I will not go over the same ground that we covered last Monday in our debate on various tax credit orders, but the degree of complexity now is extraordinary. We pointed out then that the Inland Revenue is better at collecting money than dispersing it. Allegedly, it has wrongly dispersed a number of payments to people who are affected by this Bill. Against the background of this Bill, the Revenue would be seeking to claw back alleged overpayments on the child tax credit. This will create even greater confusion.

One can understand the Treasury getting involved up to a point if it is a means-tested benefit or depends on means. My understanding is that the provision in this Bill will not be so. The noble Baroness, Lady Gale, said it was means-tested. Perhaps the Minister can confirm whether that is so, because that is not my understanding.

Baroness Gale

My Lords, I was making the point on the education maintenance allowance, which is means-tested based on parental income, but that does not apply to the child benefit element.

Lord Higgins

My Lords, I may have misunderstood what the noble Baroness said, but it does mean we have a hotchpotch of proposals for helping children. Some are means tested—the child tax credit, for example—while this one is not. That brings me to my next question. Who pays out the various allowances and who is receiving them? We seem to be in a slightly strange situation where the child tax credit and child benefit are paid to the parents; but, if I understood it correctly, the education maintenance allowance will be paid to the child.

As the noble Lord, Lord Haskel, observed: is it all going in the right direction? If it is paid to the parents, will it be used by the children or go towards some other expenditure? This is a matter of some concern. We are also raising the age limit further and further. I entirely understand the case for raising it beyond 19, because, as has been rightly pointed out—the Bill provides for this—there may be people who have not yet completed a course. Indeed, the allowance may continue for some considerable time after the so-called "child" has reached the age of 19. However, as the education maintenance allowance is paid direct, is there not also a case for this benefit to be paid direct? We need to look at the actual age limit.

The other point that has been regularly raised is the question of the cost estimates. No doubt the Minister can help us, but we are not clear about the costs or the scope of provision made for paying child benefit. The noble Lord, Lord Oakeshott, pointed out that, apparently, it is so if it is clearly a state scheme; it is so if it is a state-supported scheme; but it is not so if it is something that may increase the skills of the working population outside the public sector. The Minister speaks with passion because of his interest in the Harington Scheme, which I gather this Bill will assist. However, other trusts with educational aims would, apparently, not benefit from these provisions.

Noble Lords on this side of the House welcome the Bill's proposals. Some further points may need to be discussed following representations from outside bodies but, overall, this is a sensible measure and one which we will need to ensure reaches the statute book quickly.

This morning a report was given to me by an organisation called Sodexho, which has carried out a study on how the money provided by this Bill will be paid. The study shows an enormous percentage increase in expenditure for children going to and from school. A large amount of money is spent on what they call the "four Cs"—confectionary, chocolate, crisps and canned drinks. Indeed, the money provided by this Bill may do little to solve the problem of obesity. None the less, this is a Bill which we ought to support and which no doubt will find its way on to the statute book far faster than some of those that the Government sought to accelerate by imposing an unfair restriction on the amount of time available for debate.

2.20 p.m.

Lord McIntosh of Haringey

My Lords, I am grateful to all noble Lords who have spoken in support of the Bill. I am particularly encouraged to hear the noble Lord, Lord Oakeshott, say that it should proceed with all due speed and to hear the noble Lord, Lord Higgins, say that the Bill is in good shape. I hope that that means that no amendments will be tabled for Grand Committee, or if anyone has probing amendments, perhaps we could talk about them beforehand, as that would certainly help.

It is not that I am anxious to inhibit discussion. I do not agree with the noble Lord, Lord Higgins, about the time of Third Reading. The time allotted was 45 minutes, and the Opposition spokesman who opened the debate said that they would not really need 45 minutes. I think they did in the end, but there was no particular complaint about that.

Lord Higgins

My Lords, in fact it was half an hour, not 45 minutes. The system is vastly different from the one that we used to have. If it was necessary to curtail debate because of filibustering or some urgency, at least half a day's debate was allocated to justify it. Now everything is programmed, which was unheard of 10 years ago. The way in which debate has been curtailed in the other place is deplorable.

Lord McIntosh of Haringey

My Lords, I am reluctant to have a debate on the procedures of the House of Commons, although I appreciate the noble Lord's motive if it were to affect the quality of the legislation that comes to us. But as he said, it has not. It has come to us in good shape. I shall not pursue that matter further.

Lord Oakeshott of Seagrove Bay

My Lords, I am just responding to the Minister's request. Subject to his summing up and answering the points that I have raised, I have no plans to table amendments.

Lord McIntosh of Haringey

My Lords, that is helpful.

My only other introductory remark—if I can get to it—is to comment on what the noble Baroness, Lady Gale, said about plumbers and professors. Some people would say that there is a greater need for plumbers than professors. I rather think that if you called out a professor you would get one in 10 minutes in many parts of the country.

The noble Baroness made a valuable contribution because it was from personal experience involving a member of her family. She is right to say that one of the virtues of the Bill is that it removes the distinction—the discrimination—between education in a college and unwaged training. To that extent, I very much agree with her.

I find it more difficult to respond to her question about what happens after the 20th birthday. The member of her family started unwaged training at the age of 18 years 11 months. The benefit of the Bill will expire on the 20th birthday, which is well before the programme of unwaged training is complete. The reason for not making it a later date was because we thought it undesirable from a young person's point of view unnecessarily to delay entering an unwaged training programme. The Paymaster General heard that point in the House of Commons and undertook to have a review.

The noble Lord, Lord Haskel, made a valuable contribution. It referred to experience in Wakefield where, as he said, there is a significant lack of basic skills. That reminds me that I forgot to say when mentioning the Harington Scheme that it is for people with learning disabilities—those who would not get into further education or training in FE or sixth form colleges. I confirm to the noble Lord, Lord Higgins, that they are on entry to apprenticeship schemes funded by the Learning and Skills Council. Local LSCs are able to fund skills, although they have their own policies. But in most of the country funding is available to voluntary organisations.

The noble Lord, Lord Haskel, asked whether there was a risk that businesses would stop paying trainees. They pay trainees when it is to their advantage to do so, and do not when it is not. Programmes are funded by the Learning and Skills Council and frequently include an element of college attendance. If there were a risk of businesses stopping paying trainees, they would not do it by this method. The number of apprenticeships has increased significantly under this Government. I do not have the figures in front of me, but the TUC has indicated support for these measures, which it would not do if employers were capable of exploiting them.

The noble Lord also questioned whether young people could be exploited by their own families. If that were the case, it would apply much more widely to those in further education. I do not think that there is any evidence that they do. The benefits provide some money for the young person and some for the family, which is generally agreed to be the right way round.

The noble Lord, Lord Oakeshott, asked how many of the 80,000 in the cohort would benefit. The answer is all of them. We have provided in draft regulations a full list of all the government-arranged training programmes, including entry to employment and comparable schemes in Scotland, Wales and Northern Ireland. None of the 80,000 will not benefit. It is a coincidence that there are 80,000 unwaged traineeships and also 80,000 between their 19th and 20th birthdays. No one should be led to think that there is anything other than coincidence in that figure.

The noble Lord asked me a proper question from the Prince's Trust about why there are only government-supported training schemes and not work experience and more informal training schemes. That question was asked of the Paymaster General in another place who recognised that it is a significant issue. She said that there would be a response in the Statement accompanying the Budget in two weeks' time.

The noble Lord also asked about likely behavioural training changes and their cost effect. The answer to the latter question can be answered very easily. It is a zero sum game between further education or sixth form colleges and unwaged training. Both will now get the same financial support. The movement between those in colleges and those in unwaged training will not cost the Exchequer any more. We have given figures of £105 million, but the continuing costs will not be significant.

As to whether it will bring in behavioural changes in the sense of new entrants, that is a valid point to which we do not yet know the answer. We have been unable to do a pilot as we did for educational maintenance allowances. It provides a better choice that is not distorted by financial considerations at the age of 16 or later. If the choice is between education and unwaged training, neither affects the Exchequer.

I shall not go back to the little discussion with the noble Lord, Lord Higgins, about proceedings in the House of Commons but, as so often, he queried why the Treasury is responsible for this legislation. It is because Parliament passed it in the Tax Credits Act, the purpose of which was to integrate the tax system with family support. Since we now have 6 million families on tax credit, I do not think that there can be any serious doubt that it has not been advantageous. If there are queries about the administration of tax credits, I would only say that the Office of Government Commerce stated: This is an exemplar of good programme management".

Lord Higgins

My Lords, a situation in which child tax credit has been wrongly paid by the Inland Revenue, which then claims it back from the poor families concerned, who have spent the money, cannot possibly be described in that way.

Lord McIntosh of Haringey

My Lords, we have debated this in this Chamber within the past week, as the noble Lord, Lord Higgins, knows. There is a trade off. Either a system is simple and is assessed only once a year—which leads to overpayment that has to be recovered—or the payment is continually reassessed. There can be different views about which is the better option, but no one can deny that they are legitimate options and that there is a trade off between them.

The noble Lord asked whether this means means-testing child benefit. We are talking about over-16s and there is already a test for child benefit: the independence of the young person and whether he is working 24 hours a week or more. He acknowledged that the Harington scheme would benefit from this legislation and asked whether there were other schemes that would not. As I think I indicated before, the programme of schemes set out in the draft regulations is pretty comprehensive. The noble Lord accused the Treasury of liking to take over social policy, but I think I am allowed to refrain from commenting on the views of Sodexho about obesity. That is one thing for which the Treasury is not responsible.

I hope that I have answered the questions raised in debate.

On Question, Bill read a second time, and committed to a Grand Committee.

Baroness Andrews

My Lords, I beg to move that the House do now adjourn during pleasure until 2.35 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 2.32 to 2.35 p.m.]