Previous Section Home Page

Column 369

of all poor people in the United States, even though the proportion of children in the population had declined over the past 20 years. As the American experience is so often alluded to and attempts are made to incorporate that experience into the Government's processes, it is interesting to note that many American politicians are now arguing that they should introduce the equivalent of child benefit, which they refer to as family allowance.

Senator Moynihan has said that, among the major democracies, America is the only country without a child benefit. He said that some people might call aid to families with dependent children a family allowance, but it was typically paid to broken families. He said :

"Why not a family allowance to support the traditional family and help hold it together?"

That is the kind of sentiment that hopefully we would associate with all political parties and a sentiment which the Conservative party more than most would hitherto have sought to make its own. The fact that it can now be cited against the Government from the other side of the Atlantic is further evidence of the distance that the Government have placed between the rhetoric of what they claim to be upholding in terms of social values and the reality of the effect that their policies are having on social cohesion and the family unit.

I support the motion so ably proposed by the hon. Member for Livingston. By freezing child benefit, the Government will reduce the value of the band of tax-free income given by child benefit and therefore increase taxation on all families with children. Freezing child benefit will increasingly each year limit help given to families on modest incomes to whom the benefit is particularly important. The freezing will have a particularly severe effect on large families and it will offer less and less help to those experiencing family, domestic or economic crises. It will force more families into dependence on means-tested benefits and it will increasingly weaken the springboard from which the unemployed can move into independence. In short, it will intensify the poverty trap. For two years, successive Secretaries of State told us that those effects were the entire purpose of the social security reviews and the purpose of changing the social security system.

In the Green Paper "Reform of Social Security" published in June 1985 before the hearings, the consultation and the reforming legislation, the Government stated :

"The Government accept the case for continuing the system of child benefit. It is right that families with children at all income levels should receive some recognition for the additional costs of bringing up children and that the tax benefit system should allow for some general redistribution of resources from those without children to those who have responsibility for caring for them."

That principle and pledge has been thrown to the wind. The Conservative party--the party of the family--is now rightly viewed, whatever the result of the Division tonight, by the people of this country as the party that has manifestly and miserably failed the family.

5.47 pm

Mrs. Marion Roe (Broxbourne) : Contrary to the suggestions of the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), the Conservative party and the Government have always been wholeheartedly committed

Column 370

to the family. We believe that the family is the basic unit of society and the key to social cohesiveness and happiness. The policy on which the Labour party fought and lost the last election was indicative of its attitude towards the family and to economic policy in general. At that time, the Labour party argued for across-the-board increases in child benefit which would have cost nearly £3.5 billion. Instead of directing resources to families that really needed help, the Labour party wanted to tax everyone to subsidise every parent, whatever their level of income.

The Labour party's extravagant plans, had they been funded from increases in taxation, would have added 2.5p to the basic rate of income tax. That would have added £5 to the weekly tax bill of the average manual worker, robbing millions of ordinary working families of what was rightfully theirs, eroding incentives to work and stifling enterprise.

In pursuit of higher levels of child benefit, the Labour party seems to be oblivious to the violence that its proposals might do to other parts of the economy. The Labour party has learned precious little from its election trouncing. Its so-called review document "Social justice and economic efficiency" reaffirms Labour's commitment to increasing resources for child benefit whatever the indiscriminate effects and the costs to the taxpayer. It is instructive to note that under the Labour party's proposals for boosting child benefit, 40 per cent. of the beneficiaries, or 2.5 million families, would have gross incomes of more than £15,000 a year. Extraordinarily, 20 per cent. of families benefiting from increases in child benefit would have a gross income of more than £20,000 a year. Perhaps I should remind the Opposition that their deputy leader, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), described such individuals as the "bloody rich". He said that in Tribune on 10 May 1985.

The thought of the Labour party putting an extra 2.5p on the basic rate of income tax paid by working families throughout the country to raise the level of child benefit, 20 per cent. of which apparently goes to the "bloody rich", is rich in irony. The Labour party considers itself to be firmly opposed to taxing everyone to subsidise the rich. If only its policies matched its principles. Nor do I support the views of my right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour).

There is a more fundamental issue at stake. The Labour party continues to subscribe to the collectivist nostrum that the only way to raise the living standards of families on lower incomes is to give them more Government handouts. I believe that the best way to help those in need is to create conditions in which the economy can thrive, thereby ensuring that living standards and public services improve. The last Labour Government pushed the standard rate of income tax up to 35p in the pound and the top rate to 83p in the pound, all in the name of what Opposition Members like to call social justice. The results were absolutely disastrous. A couple with two children living on just half average earnings saw their real take-home pay rise by just over 4 per cent. in the five years to 1978-79. The take-home pay of families on average earnings or above hardly rose in real terms, and, as my right hon. Friend the Secretary of State has pointed out, in many cases it actually fell. High taxes wrecked the performance of the economy and failed miserably to deliver a massive increase in benefit levels as would have befitted Labour's

Column 371

supposedly egalitarian strategy. Despite the fact that the basic rate of income tax was one third higher under the last Labour Government, for almost the whole time Labour was in office, the real value of child benefit to families on average earnings was far below what it has been under this Government.

Mr. Alan Meale (Mansfield) : I was interested to hear what the hon. Lady said about the Labour party's view that handouts to the poor are the only solution. Does she not consider that the Chancellor's most recent Budget, which consisted largely of a major redistribution of wealth and major handouts to a minority of very rich people in society, was a similar exercise in the opposite direction by the Conservative Government?

Mrs. Roe : I remind the hon. Gentleman that, as a result of the tax cuts, the revenue from taxation has enabled the Government to target more money to those in need.

Mr. Frank Field : Will the hon. Lady give way?

Mrs. Roe : No. I should like to continue and to enable more hon. Members to participate in the debate.

The plain truth is that the last Labour Government's much-vaunted "caring" strategy failed on both counts. It failed to deliver economic success, leaving living standards stagnant or falling for millions of families, and it failed to deliver the big increases in benefit levels that Labour has always claimed are necessary. That was Labour's "family" policy.

On the basis of what we know about its current policies, today's Labour party is just as keen to repeat in the 1990s its failures of the past decade. By contrast, the Government's policies have gone to the very heart of the problems that Labour failed to tackle in the 1970s. Today we are enjoying our eighth year of steady economic growth, the longest period of sustained growth since the war. Growth on that scale has lifted living standards and benefits to the needy to record levels. Since 1979, a married couple on half average earnings and with two children have seen their take- home pay increase by 23 per cent. in real terms. Families on all levels of the earnings scale have seen big increases in their living standards under the Conservative Government. It is no wonder that more families than ever own their homes, can buy shares and are taking foreign holidays. The plain truth is that the best family policy is one which creates a prosperous, dynamic economy in which living standards are rising rapidly. Thanks to the buoyancy of tax revenues, the Government have been able to target more help than ever to the families who need it most.

Anyone with a modicum of common sense knows that a large proportion of any increase in child benefit goes to the families that have benefited most from our policies of cutting income tax rates and raising personal allowances. Moreover, as my right hon. Friend the Secretary of State has mentioned, the poorest families on income support would gain nothing at all from an increase in child benefit, and neither would those claiming family credit. Using increases in child benefit to raise the standard of living in the most needy families is about as cost-effective as using a cruise missile to dislodge a coconut in a shy.

Column 372

The Government have shown their commitment to helping poorer families through the generous funding of family credit. Family credit is particularly valuable because it offers families with children a helping hand out of dependency and into the world of work. It is also an effective way of tackling the poverty and unemployment traps because it extends a relatively long way up the income scales. A person earning £9,300 a year with two children aged 12 and 14 will still be eligible for family credit next year. I understand that at the end of last year the Department of Social Security had received almost 500,000 claims for family credit and had made some 300,000 awards. That is a promising start, but I hope that my right hon. Friend the Secretary of State will assure the House that no effort will be spared in bringing the scheme to the attention of more families. Family credit is an excellent way of helping needy families ; it deserves the widest possible publicity.

The 1970s proved decisively that Socialist policies of intervention, planning and redistribution are utterly incapable of delivering the improved public services and rising living standards on which the quality of life in ordinary families so crucially depends. By contrast, the 1980s has been a decade of increasing prosperity and choice for families on all levels of the earnings scale.

5.58 pm

Mr. John McFall (Dumbarton) : Child benefit is currently £7.25 per week. To maintain its present value, it should be £7.70 and to make good the April 1988 freeze it should be £8. Taking into account compensation for the lack of a real rise in November 1985 it should be £8.35 ; that is more than £1 a week more than it is now. The undeniable consequence of this situation is that it will increase the poverty trap and tilt the balance away from the carer.

The question in our minds tonight is why do the Government retain child benefit? Is it simply because they do not have the moral courage to admit that they are abandoning it? But to be charitable, we will investigate some of the areas in which the Government might have a good case. Let us consider economic, social, political and ideological factors. The economic factors have been well rehearsed by the Government and by the Opposition.

There is a £5 billion Budget surplus. The Government's public expenditure target has been achieved--so much so that they are now paying back part of the national debt. From the Government's point of view there is a sound economy, yet they are not increasing child benefit, and that has dire consequences for families.

The Government like to remind us that they are a tax-cutting Government. That is perverse. Since 1978, the tax burden of the average person has increased. The latest figures given by the Government in the past few weeks show that the tax burden for a married man with two children, on average earnings of £254 a week, has gone up from 35.1 per cent. to 37.3 per cent. The message to be gained is that the poverty that we see today is tax -induced, and the Government have taken no notice of that.

We are now dealing with the consequences of the Social Security Act 1986, the most fundamental reappraisal, we were told, since Beveridge and one that will keep us on course for the next 40 years as Beveridge had done for the past 40 years. Sad to say, the Social Security Act is a disaster for family policy. Only last year, by an

Column 373

amendment to the Act, the Government denied 220,000--almost a quarter of a million--mothers and children entitlement to welfare food and free milk. The consequences of that are to be seen in my constituency. A few weeks ago, I wrote to the director of education. He informed me that from August to December this year there had been a reduction in the number of children taking free meals. The figure was 8,600 a year ago, and it is now about 6,000. That is a reduction of about 25 to 30 per cent.

Does that match what we see day in and day out in our constituencies and our surgeries? Since April, we have dealt with the unremitting consequences of the 1986 Act. Week by week we have witnessed the qualitative degeneration of life. Tensions, crises of conscience, and heartaches have been caused by a lack of economic freedom. That is what mothers tell us in our surgeries week in and week out.

Appeals have been made to Tory Back Benchers. Surely they must be hearing about the same problems. They owe a duty to their consciences and to their constituents to refer such problems to the Government Front Bench. I shall be charitable--at least some of them must know what is going on in the real world, even though they do not live in it. These things are happening every week. Each time child benefit is frozen, more families go into family credit. That has political consequences.

The Government tell us that the Social Security Act 1986 is a targeting measure. The hon. Member for Broxbourne (Mrs. Roe) mentioned the word "targeting" with pride. What does targeting mean? It is a nice description that gives the impression that benefits go to the right people. That is not the case. Targeting increases means-tested benefits. It does not hit the target. It destroys self-reliance and self-esteem and, more important politically, it increases dependency.

Let us leave the social, ethical and moral aspects aside and consider the reality. Forty years ago, a couple with two children paid no net income tax unless the father earned the equivalent in 1988 prices of £250 a week. Today, an individual pays more in tax than he receives in child benefit when his earnings reach £137 a week. To underline the dependency argument, I refer hon. Members to the Minister's reply to my hon. Friend the Member for Birkenhead (Mr. Field) on 28 July 1988. The Minister said :

"After the addition of benefits, the net income of a hypothetical married couple with four dependent children paying average rent and local authority rates, would be £123.25 at gross weekly earnings of £75 Prior to the reform of social security net income at £75 gross earnings would have been about £127."--[ Official Report, 28 July 1988 ; Vol. 1459, c. 509. ]

If that individual's wage is more than doubled from £75 a week to £165, he will receive only £17 a week more. That says everything about the Government's Social Security Act 1986 and about targeting. There is no conclusion other than that targeting increases means testing.

The latest figures for 1985 show that 4 million people and families are living on the poverty line. That is double the 1979 figure. Also, 2.25 million children are in poverty. That is nearly double the 1979 figure. We get that information from the low-income statistics that the Government are wilfully stopping from now on, because they do not want people to know the real situation.

Therefore, one examines an aspect of the Government's ideology and says, "If they are freezing child benefit and putting more on means test as a consequence, why do the

Column 374

Government go ahead with it? Did the Government know what they were doing?" When the Secretary of State explained it to the Prime Minister and the other members of the Cabinet, was there unanimous support? Was a majority in support? Was it done in the knowledge that the consequences were an increase in means-tested benefits, because it goes against the rhetoric? Or was it done in ignorance? If it was done with full knowledge, the Government are guilty of nothing less than political mendacity. If it was done in ignorance, they should take the opportunity to look again at what they did. Was the Cabinet decision unanimous? Was it taken at full Cabinet level or by a sub-committee of the Cabinet?

By not increasing child benefit the Prime Minister has demonstrated that she is interested only in a small constituency--the top 1 per cent. Individuals such as Sir Ralph Halpern will gain £4,800 a week as a result of the Government's tax cuts--enough to keep 60 families of four individuals on income support. The Prime Minister has gone to Scotland to state her ideology over the past year. She has used the platform of the Church of Scotland to put her case and to tell us to stop moaning and to get on with it. I shall quote selectively from the New Testament, in just the same way as the Prime Minister does. I refer to St. Mark, chapter 10, verses 13 and 14. The disciples were dismayed by the people who brought children to Jesus. He rebuked them and welcomed the young ones, saying

"Suffer the little children to come unto me".

That quotation is appropriate. To put that remark in a contemporary context, the Government are echoing the words of the New Testament, but in a perverse manner, by telling young children and their parents to suffer, but to suffer in silence, because the Government are not putting up child benefit. The Government want them to suffer away from the public gaze, because they are too preoccupied with their own narrow constituency. That is the gospel of St. Margaret for the Sir Ralphs of this world. That is the Government's message. By their deeds you shall know them. The Government have made that crystal clear by their de facto abolition of child benefit. 6.7 pm

Mr. John Marshall (Hendon, South) : I have been surprised by Opposition Members' speeches. They have ignored the basic conundrum of our social security system--that, at a time of record spending on social security, some of our fellow citizens live in shameful squalor. The reason for that deplorable state of affairs is simple : the vast bulk of our social security expenditure is non-selective. Surely it is wrong that, for every pound spent on family credit which goes to those in need, £11 should be spent on child benefit which is non-selective. Surely it is a strange state of affairs that £406 million is spent on family credit, but £350 million is spent on child benefit going to taxpayers paying more than the standard rate of income tax.

Last year, Opposition Members wrongly criticised the community charge, saying that it would bear equally on the dustman and the duke. However, tonight they are asking that the dustman and the duke get the same increase in child benefit. They said last year that the Budget tax concessions were unnecessary, but 80 per cent. of those who would benefit from an increase in child benefit are taxpayers. Of those, 500,000 pay tax at the higher rate.

Column 375

This debate is not about the relief of poverty. Anyone who is concerned about that should merely ask one question : is it better to spend a given sum on family credit, which goes only to the needy, or should that money be spent in uprating child benefit, which goes equally to the scholar at Eton and to the child in a single-parent family? As the hon. Member for Birkenhead (Mr. Field) said, is it right that, at a time when a large majority of people enjoy far greater prosperity, everyone should be given higher child benefit? Is it right that, for every £1 spent on family credit, £11 is spent on child benefit?

The Opposition's strategy is not to cure poverty in the family, but rather to hanker after a non-selective benefit. At the last general election, the Conservative party made a promise that child benefit would be paid, as now, to the mother. I hope that my right hon. Friend the Secretary of State will come forward at the next election with a different promise--of a root-and- branch reform of child support. The present system is inadequate because it often leads to money being given to parents who do not need it, whereas those in real need and poverty are given an inadequate amount.

Dame Elaine Kellett-Bowman (Lancaster) : I hope that, in talking about root-and-branch reform, my hon. Friend is not suggesting that child benefit should be taken away from the mother.

Mr. Marshall : I love my wife too much to suggest that ladies should have that money taken away from them. I am suggesting that the money should go to those in greatest need rather than to everyone, as it does under the present system. That does not deal with the problem of family poverty, which is an insult to a civilised society. By hankering after a universal solution and giving the same to everyone, the Opposition would guarantee the continuation of poverty. It is only my right hon. Friend's policies that give those in greatest need any hope of escaping from the present trap.

6.13 pm

Mr. Jimmy Wray (Glasgow, Provan) : The Secretary of State is taking us down memory lane. Obviously, he does not live in the real world. Child benefit, which is paid to every mother, is a lifeline for my constituents. I only wish that some Conservative Members would realise what the Tory Cabinet is planning. It intends to take away child benefit, and it is dishonest of the Secretary of State to say otherwise. We know that £203 million has been saved in the past year by freezing child benefit. Where did £133 million go? In improvements in the other means -tested benefits, the Government paid out only about £70 million. The freeze is not intended to help the poor or poor children, but to help the Conservative party. It has helped to fill up the vaults and safes where the Government have put the money they have saved by making cuts over the past 10 years.

The Opposition are especially disgusted and dismayed by the begging-bowl society that is being created. We do not want means-tested benefits, and that is why we favour child benefit. No labels or stigma are attached to child benefit. The benefit is claimed once and then paid until the child becomes an adult. Labour Members know what poverty is like. We live with it every day, and when we look

Column 376

around us we see children and youngsters who receive no benefit under the system that the Government have introduced.

Denmark has had a change of heart. In July 1987, the Danes opted for a child benefit system because they felt that it was much fairer. They reckon that 1 million children in some of the poorest families may lose because of a low take-up of family credit. My hon. Friend the Member for Livingston (Mr. Cook) has made it clear that, in talking about targeting and ill- targeted benefits, the Secretary of State does not favour child benefit. When the Secretary of State made his statement in October 1987, he mentioned that child benefit was ill-targeted, so he believed that it needed to be reviewed and changed.

The Secretary of State also made a statement about family credit, of which he said that there would be a 70 per cent. take-up. He was wrong : there is still only a 54 per cent. take-up for family credit. People on family credit are subjected to snoopers. These snoopers receive memos from the Department of Social Security which clearly state that, when defaulters are taken to court, the snoopers should ensure that the judge reads their diaries and notes, because the people with whom they are dealing are wholly ignorant and inarticulate. If the snoopers need other assistance or resources, they can go to the depot and collect their spying glasses, wellington boots and cameras. That is the society that the Government ask us to accept and those are the memos that are given to snoopers. That shows how much the Government care about the poor. They must change their attitude on child benefit and lift the freeze. They should pay £8.25 a week to bring child benefit up to its proper level.

6.17 pm

Mr. David Madel (Bedfordshire, South-West) : The Government amendment to the Opposition motion is more an addendum. I welcome what the Secretary of State has said about the additional resources to be provided from April for low-income families with children, although the goal of higher take-up of the new family credit remains a challenge. I am sure that other organisations can help and encourage people to claim family credit, and I am sure that the claim forms could be simplified in due course. It is not easy to obtain benefit nowadays, because benefit offices are vigorously thorough in processing claims and one must not run away with the idea that new or existing benefits are easily claimed.

I welcome what my right hon. Friend the Secretary of State has said about child benefit. I welcome the fact that the Government will keep child benefit and that my right hon. Friend will review it every year, as is his statutory duty. Helping families has always been a major item in the social programme of Conservative Governments. When the Conservative party has been in opposition, helping the family has always been a major plank of its policy at elections. Child benefit is a popular benefit, with virtually 100 per cent. take-up. It plays an important part in strengthening family stabiliy and it is a great reassurance to mothers if family circumstances change abruptly for the worse--as they often do, alas--to know that child benefit is coming through.

A more serious point is that there is widespread evidence of the extent to which the divorce and separation rate has increased. It is increasing in all parts of the

Column 377

country, regardless of whether unemployment is increasing or decreasing. It is a great reassurance to mothers in personal difficulties, which are unsettling, to know that one easily claimable child benefit will continue to be paid to them without any bureaucratic hassle. Within this general background of increasing family break-ups and tensions, it is surely not in the national interest that child benefit should fade away because of inflation. Much has been said and written about targeting, and one should say right at the outset that, if the target of child benefit is to help mothers and their families, that target has been reached effectively. We must accept that it is not possible to have absolute precision in all benefits and, although one entirely accepts that some social security benefits must be means-tested, there is a danger in taking the theoretical argument too far. My hon. Friend the Minister for Social Security who, alas, is not in his place will recall the late Iain Macleod's advice to the Conservative party : when getting on a train to the land of political theory, it is important to get off before it hits the buffers.

I should like to give two examples of universal benefits that are claimed almost 100 per cent., although there could be a theoretical argument for having some selectivity for them. The personal tax allowance and the married man's tax allowance are claimed almost 100 per cent., although one could argue that, because of today's high earnings, there should be some selectivity. Subsidised school meals are claimed in many areas of the country ; that is, where local education authorities provide them. However, it could be argued that children from better-off families should not enjoy the advantage of subsidised school meals. Any attempt to change the universality of those two provisions--subsidised school meals in particular --would cause uproar and would be a bureaucratic nightmare.

From the practical point of view, trying to tie a graduated system of child benefit to the mother's earnings would be another tax and bureaucratic nightmare. Apart from anything else, it would completely contradict the Government's policy, which has been successful and welcome, of creating a sharp growth in the number of self-employed women for whom earnings fluctuate sharply from year to year. Changing to some form of graduated system would run clean contrary to the Government's general economic policy of encouraging more women into part-time work, which is vital to sustain economic growth. As we have fewer and fewer school leavers and as we get nearer to 1992, the part-time work of women will be vital for us in meeting the challenge of 1992 and the economic benefits that that will create.

The economic benefits of having more women in part-time work could easily pay for the cost of unfreezing child benefit. My examples show that, although targeting child benefit is theoretically interesting, practically speaking, it is hopeless.

In 48 hours, Mr. Bush will be inaugurated as the 41st president of the United States of America, having been swept to power partly for saying that he wanted to create a gentler and kinder America. By building on the social security changes of the 1970-74 Conservative Government and by extending and developing those changes, the Government have done much to create a gentler and kinder Britain, but we would make faster progress in that direction if child benefit were unfrozen.

Column 378

6.22 pm

Ms. Mildred Gordon (Bow and Poplar) : Thank you, Mr. Speaker, for giving me this opportunity to speak in favour of increasing child benefit in line with other benefits. I welcome the comments of the hon. Member for Bedfordshire, South-West (Mr. Madel) and hope that many Conservative Members will have the courage of their convictions and vote for the motion and against the amendment.

It is an indisputable fact that child benefit is being constantly eroded by inflation and that £7.25 does not go very far as an income supplement. In many areas more than half of that £7.25 would be needed just to pay for school meals.

I well remember when I was bringing up only one child the nightmare of paying just for footwear. I was a part-time teacher and my husband was a printer so we had quite a good income, but so that my son could take full advantage of his school curriculum, he needed a pair of ordinary shoes, a pair of plimsolls, wellington boots, football boots, tennis shoes, and climbing shoes and he grew out of all of them every few months and they had to be replaced.

The other day the Under-Secretary of State for Social Security recommended that pensioners buy second-hand clothes at jumble sales. I hope that no one will advocate buying second-hand shoes for children. Unfortunately, parents often have to do so and, as a result, their children's feet are ruined. Even if they have reasonable earnings parents need a much bigger supplement to their income--much more than £7.25 per week per child.

Women note that, although the Government are so grudging about child benefit, they always seem to find the money for military spending, for example, £1 billion for modernising tanks. If one asked most of the women in this country, they would say that they wanted more money for life, not for death.

As has already been said, child poverty is rising. The Child Poverty Action Group has shown that more than one in five children are in families living below the poverty line.

The universality of child benefit is important. The hon. Member for Hendon, South (Mr. Marshall) said that the benefit should be selective and referred to dustmen and dukes. I remind him that we are talking about women, not about dustmen and dukes, as a few lines from a letter referred to in an article in The Independent makes clear. It states :

"As a woman with two children who had a husband earning £250 per week who provided us with nothing, the only way we survived was with our child benefit, and that was only because he couldn't get his hands on it."

So much for selective benefit. It is universal benefits that help women and we are talking about women who are trying to take care of their children.

Child benefit is also important as a form of recognition for women. Another woman wrote to The Guardian :

"I am a single parent with three young children and I am dependent on Income Support. As such, I do not benefit financially from Child Benefit because it is deducted at source from the Income Support I am entitled to. However, I feel at least that the child benefit is my money, that it is my right to receive it, that I would get it regardless of my financial situation, and it makes me feel less dependent on state means-tested benefit.

Perhaps I am foolish but psychologically it is useful. When my youngest child is at full-time nursery or school, I will do my utmost to return to work although it may have to be

Column 379

part-time employment. Knowing that I will have my Child Benefit to boost my income will be an incentive to return to work."

The woman goes on to say that in the future her taxes will contribute to many kinds of tax relief, including, for example, mortgage interest relief, in which she is not interested. She therefore feels that people without children should in principle have to contribute towards the welfare of people with children because it is the children who are the future of this country.

Child benefit is also an insurance for mothers. Often men walk out and leave their families penniless, but the mother knows that she has the benefit book and that she can therefore at least provide food for her children until she can get more help. As has already been said, the take-up rate of child benefit is good whereas targeted benefits do not always reach their target. Less than half the poor families in this country get all the benefit to which they are entitled either through ignorance, pride, or bureaucratic stumbling blocks. The fact is that targeted benefits do not work as well as universal benefits. I often talk about harmonisation in Europe and I should like to quote the comparable figures. In Great Britain a mother of three receives approximately £87 a month in child benefit, which is very little recognition for her role as a carer. In West Germany, the benefit is £125 ; in Luxembourg it is £198, which is more than double what mothers in Great Britain receive ; and in France the figure is £257.

I ardently support the motion. Child benefit should be increased in line with other benefits as a start to recognising the value of women's work in bringing up children.

6.29 pm

Mr. Robin Squire (Hornchurch) : Time allows me to make only two or three brief points. We switched to child benefit many years ago, partly because the old child tax allowance could not benefit the poorest.

The poorest are now, by and large, protected, but two specific categories are losing out. The first is the majority of those eligible for family credit, because, as we have heard from the figures given today, only a minority of those are claiming. The second is those paying income tax at the standard rate and earning just about the level of family credit, who received no increase, but many of whom in fairly limited circumstances are looking after children.

I welcome, as I am sure do all hon. Members, the fact that there is a major campaign under way to increase take-up of family credit. However, until the take-up is at least twice the present level it is surely not credible to base our support for families on that system. That simply does not add up. I again urge the Government to reconsider their policy in that respect.

My right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) rightly mentioned that we have a selective amnesia about child benefit as against reductions in taxation. Of course, he is right. However, it goes a little further, because, as he rightly said, we look for a mixture of means -tested and universal benefits. When my right hon. Friend said that, several hon. Members nodded. I nodded and so, too, did my right hon. Friend the Secretary of State. If every time we have a universal benefit we tear it apart by saying that sometimes it will go to

Column 380

people who earn a little more than others and, therefore, that invalidates it, we will end up with a system that has no universal benefits. It will have only selective benefits, and the poverty and employment traps will be horrendous to behold.

6.31 pm

Mrs. Margaret Beckett (Derby, South) : This has been an interesting debate, and in some respects a strange one. I listened carefully to what the Secretary of State said. During the 1983-87 Parliament I became inured to the idea that in the Conservative Government, of which I had previously not had experience, Ministers talk much more of previous Governments' records than their own. However, it is said that hope springs eternal, so I nurtured the illusion that in the Parliament of 1987 and beyond perhaps that phenomenon would cease. Clearly, that was a mistake.

I begin by mentioning something that the Secretary of State said about the Government's record and a point about which he became quite emotional. I believe that he thumped the Dispatch Box, or came as near to doing it as any Secretary of State ever does. He said that he was not prepared to put the economic success of the Government in jeopardy. The clear implication of his remarks was that to increase child benefit at all would mean putting that economic success in jeopardy.

I found that an extraordinary remark for many reasons, but I want specifically to mention two. In the Budget before last, I listened to the Chancellor--it was not long after the decision to freeze child benefit had been announced--telling us in his playful way how he liked to entertain himself in each Budget by abolishing some little obscure tax of which no one had ever heard. He felt that it was a perk that went with the job. He listed two or three minor and capital taxation changes and one or two others, and indicated that the lost revenue to the Treasury from those changes would be between £100 million and £120 million. That was the very sum that he had not been able to spare that year to increase child benefit. Of course, in last year's Budget, as a result of changes to inheritance tax and inheritance tax relief, precisely 2,000 wealthy people benefited instead of 12 million children because those changes cost the same amount that would have been needed to increase child benefit in line with inflation. We can dispense, therefore, with the emotion of the Secretary of State when he tells us that he is not prepared to jeopardise the economic success of the country. If it can be jeopardised for 2,000 already wealthy people, it will not do much harm to give more to 12 million children.

The Government's argument about child benefit now, as opposed to comments made in the past by senior members of the Government, appears to be based on three assumptions. My hon. Friend the Member for Birkenhead (Mr. Field) laid the first one very ably before us. It appears that the Government, and perhaps some of their Back Benchers, may no longer be committed to financial support specifically for families with children. The Government claim to recognise, nevertheless, the difficulties that withdrawing that support might cause to families on especially low incomes. They further claim that they are dealing effectively with those difficulties and are putting special emphasis on families in low-paid work.

Secondly, the Government appear to have decided to give effect to their apparent decision that child support

Column 381

should go only to the poorest by switching funds from universal child support through child benefit to pay for the improvements, of which they boast, in help for the poorest families with children. Thirdly, the Government appear to have decided--this is an important point, which has been mentioned by hon. Members, especially the hon. Member for Bedfordshire, South-West (Mr. Madel)--to ignore the evidence, which they and their predecessors have found compelling for at least 10 years, that the overall income being received by a family unit is not necessarily a clear, simple and direct guide to the distribution of that income within that family. I say that the Government have decided to ignore that because I know of no study--the Government have not cited one-- that suggests that this is no longer a problem. Indeed, anecdotal evidence continues to roll in, especially from women, suggesting that there is still a problem over the distribution of income within a family. It does not occur only when there is family breakdown ; it occurs on a more day-to-day basis. It is crucial that a regular income of a known size should go into the mother's pocket.

The Government's overall approach is not only flawed in theory, but is more than a little dishonest in its execution. We believe that it is strange that this is the only Government in Europe, if not in the developed world, who appear wilfully to give no recognition to the contribution made to society and to the future of all citizens by those who are able to and choose to have children. To abandon the idea of general child support would be an extraordinary and far-reaching decision, but it appears to be one that the Government are considering.

The Government, having apparently decided to renege on the principle of universal support for families with children, are boasting of the extra support that they are giving to such families. A number of Conservative Members who spoke in support of child benefit have, nevertheless, not only welcomed the support that the Government claim to be giving to poorer families, but felt that the Government's case in that respect was to some extent justified. Of course, the Government have used that argument to justify the freezing of child benefit in cash terms--in other words, cutting it in real terms. They say that some of the money--one third on the last occasion--has gone to children in the poorer families, and the Government emphasise that it goes especially to families in low-paid work.

In view of the odd questions that my hon. Friend the Member for Livingston (Mr. Cook) was asked earlier, I should make it clear that the Opposition believe that families with low incomes and in low-paid work should receive extra support, but we do not believe that that should be at the expense of other families with children, many of whom may be only slightly better off.

Does the Government's claim that they are giving extra resources to the poorest families stand up to close examination? On more than one occasion we have drawn the House's attention to the fact that the poorest families on income support are worse off than they were in April 1988 because of the net effect of all the Government's changes. They remain worse off in net terms even after the extra money that was released by the freezing of child benefit ; at least that money did not go to the Treasury.

In these debates the Government usually concentrate not on the money going to those on income support but on the money that goes to those entitled to family credit. My hon. Friend the Member for Livingston and a number of

Next Section

  Home Page