§ Mr. Mike Thomas
asked the Secretary of State for Social Services what would be the net cost over and above the current cost of family allowances and taking into account savings on other benefits, of introducing a tax-free child benefit to replace family allowances and child tax allowances for all children including the first at the following rates; £4.35 for children aged under 11; £5.35 for children aged 11–15 £6.35 for children aged 11–17 and £7.35 for children aged 18.
§ Mr. O'Malley
The extra public expenditure involved in such a scheme covering children up to age 19 would be over £2,500 million a year. The net cost to the Exchequer, after allowing for the extra tax revenue flowing from the abolition of child tax allowances, would be about £1,750 million a year.
§ Sir George Young
asked the Secretary of State for Social Services what would be the cost to the Exchequer if age-related child benefits were introduced at rates which left no family worse off after losing family allowances and the child tax allowances.66W
§ Mr. O'Malley
It would not be practicable to introduce age-related child benefits before 1979 at the earliest. But if, for children up to age 19, such a scheme could be introduced now, the additional net annual cost to the Exchequer, by comparison with the illustrative figures given by my right hon. Friend the Secretary of State during the Second Reading debate on the Child Benefit Bill on 13th May—[Vol. 892, c.335–6]—and with the same reservations, would be about £170 million. For the reasons then explained, the extra public expenditure cost would be very much higher.