| Previous Section | Index | Home Page |
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell): In quoting that senior Labour source, my hon. Friend has put his finger on the nub of the debate. If there is no case for child benefit for 16, 17 and 18-year-olds, is that not the thin end of the wedge? Surely, if there is no case for child benefit for that age group, the whole principle of universal child benefit is undermined by Labour's proposals.
Mr. Evans: Absolutely. The philosophy and the principle are at stake, not just the provision of child benefit for 16 to 18-year-olds. If the proposal is implemented, everything else will be up for grabs.
Another Opposition Member who agrees with our position is the hon. Member for Islington, North (Mr. Corbyn). He wrote in the Evening Standard on 19 April:
A quarter of families currently receiving child benefit for children aged between 16 and 18 are claiming other income-related benefits. The change could result in members of families that formerly enjoyed child benefit, but who are now just above the threshold to receive the new upgraded level, deciding that it is more worth while to give up work and collect benefits. New Labour would create a new poverty trap.
The loss of working people would have two obvious results. First, unemployment queues would increase substantially; secondly, a much bigger burden would be placed on the taxpayer as more people claimed other benefits.
The existence of a benefits system that encourages people to live off the state is exactly the kind of poverty trap that we should be striving to eradicate. Surely this cannot be the way in which we want to run our welfare state. We need to get people to stay in education rather than taking the option of becoming unemployed because short-sighted politicians have foolishly made that more economically rewarding. The fact that child benefit is not taken away if a family's overall income goes up could act as a work incentive, but it certainly is not a disincentive to work hard, earn overtime and so forth.
Sally Witcher, director of the Child Poverty Action Group, has also come out against plans to reform child benefit. On 19 April, in a press release, she said:
Means testing would achieve the aim of saving money in one area, because people would not be claiming the benefit, but it would be a false economy. Children would have to leave school, and some would claim other benefits--income-related benefits, or even the dole. What is at stake is not just child benefit for a few rich kids; it is the principle that is under fire. The very soul of the child benefit system is under attack.
Moreover, as the Minister has said, means testing would be only the thin end of the wedge. If the philosophy is to remove child benefit from 16 to 18-year-olds and target families with lower incomes, why stop at 16? What about 14, or even 12? In fact, if the principle is right, why impose any age limit?
Is this the secret agenda on which we are about to embark? Will the proposal be aimed not just at 16 to 18-year-olds to save £700 million, but at every family in the land? If that happens, and child benefit is means-tested, the vast majority of families will be under direct attack, and will lose a universal benefit that they treasure.
Lady Olga Maitland:
Would not means testing be an extremely divisive way of going about our business? We should have to work out the level at which to carry out the means test, which in itself would prompt a big debate. If the level is too high, we shall be chucking money across the country, when a broadly based system would be far fairer. Alternatively, only a small number of people will receive a bloated sum, leaving a marginalised group desperate and unable to keep their children on at school. Means testing was a much hated system; how can the Labour party possibly want to bring it back?
Mr. Evans:
I agree. The level at which the system is introduced will be important, because, whatever it happens to be, some people will be just above it. That is where the new poverty trap comes in. I suspect that the means test will be so punitive that many people will be drawn into that trap. This is nothing more than a raid on the wallets of families: it is stealing £10.80 from mothers' purses, week in, week out. We must stop it.
Today it is child benefit; what state benefit will be targeted next? Where will Labour turn its spotlight? Although the hon. Member for Dunfermline, East has said that Labour has no plans to introduce means testing of child benefit as a whole, his record is lamentable. As his shadow Treasury gains in strength, who knows what other U-turns in Labour policy he will have up his sleeve?
Other alternatives that have been suggested include child care allowances and taxing child benefit. Both ideas are fatally flawed, the first because it would not help children whose parents are not working, the second because it would introduce anomalies and divert resources from the intended target--the children.
It is obvious that changing the child benefit system by means of some form of tax mechanism will inevitably disadvantage some children, especially given that child benefit took the place of the discredited child tax
allowance in the first place. To abolish it for those who wish to continue their education would be the equivalent of imposing a selective tax increase of 5p in the pound on the average family with one child aged between 16 and 18. Furthermore, tax allowances simply add to the family income as a whole, rather than producing specific sums of cash for children, as child benefit does.
Another downside of taxing child benefit has been pointed out by various people, including the Child Poverty Action Group. Taxing the benefit for higher earners would cut right across the important principle of individual taxation for men and women. It would fail in the end, simply because a non-working wife would not be affected even if her husband was earning £100,000 a year. Or will that principle be up for grabs as well?
To change a benefit which, it is almost universally agreed, works where, when and how it should, and to introduce the failed mechanism that it replaced originally, is nothing short of madness. Child benefit offers the only easy, clear and effective way of providing an incentive for children to stay at school after the age of 16, and we should not throw it away.
Child benefit provides all our youngsters with an incentive to continue their education, irrespective of the means of their families. It provides an extra £560 a year, which for those youngsters could mean the difference between staying at school and being forced out to get a job before they wish to. Child benefit is successful, because nearly 100 per cent. of mothers collect it. It is simple, clear and effective. Withdrawing it would be like imposing an extra 5p in the pound in tax on average incomes. This proposal is ill thought out, and should be chucked out.
Mrs. Audrey Wise (Preston):
I am completely opposed to the withdrawal of child benefit from 16 to 18-year-olds, but Conservative Members would be wrong to think that that means that I am with them on this issue. I was interested that the hon. Member for Ribble Valley (Mr. Evans) did not attempt to use my name in support of his argument, although, as a neighbour of mine, he knows my views. I am here to make my views clear, and I will not allow them to be distorted by Conservative Members.
So far, the debate has been absolutely fascinating, and I shall treasure the Hansard report. Conservative Members have given a commitment to universal benefits, referred to "our welfare state" and come out against targeting, giving a good explanation of its drawbacks and disadvantages. It is unusual to hear those views from Conservative Members, who normally tell us about the advantages of targeting. It is Labour Members who usually talk about the administrative costs, unfairness and lack of take-up of targeted benefits. There has now been a conversion, and it is the Government who are in favour of universal benefits. I shall look at the future utterances of Conservative Members on this subject with great interest.
The hon. Member for Sutton and Cheam (Lady Olga Maitland) said that Labour would bring back the hated means test, but I can tell her that it has never gone away. Means test after means test is carried out in pursuit of that darling of the Conservative party, targeting. If Conservative Members are to debate the matter convincingly, they will have to do more homework. The hon. Member for Ribble Valley suggested that the proposal to remove child benefit might lead to youngsters claiming the dole, but they cannot do so. The Government have waged war on 16 to 18-year-olds and their families, and I say that advisedly.
The hon. Member for Ribble Valley talked about Labour's meanness towards what he referred to as "old-age pensioners"; the modern term, I believe, is "retirement pensioners". That is rich from the Tory party, one of whose first acts in office was to ensure that retirement pensioners would no longer share in any increase in national prosperity, by breaking the link between pensions and earnings. That immense attack has cost pensioners dear, year after year. We are not talking about one frozen Christmas bonus, but about pensioners receiving less, week after week, year after year. If the hon. Gentleman is going to delve into history, he should do so a little better.
I am very much in favour of social justice and the maintenance of essential public spending, but it is news to me that that spirit motivates the Secretary of State for Social Security. If so, why was an order laid before the House on Friday concerning the withdrawal of mobility allowance from people in NHS care? I am pleased to see that the order is to be prayed against by my right hon. Friend the Leader of the Opposition.
That allowance has been accepted as necessary for vulnerable people since its inception about 20 years ago--it was, of course, introduced by a Labour Government. Some £40 million will be saved by an act of meanness that will affect children, as well as adults, and the most vulnerable 16 to 18-year-olds who are unable to work because of disability. If they happen to be in NHS care, bang goes their mobility allowance. Then the Conservatives have the nerve to accuse Labour of meanness and to claim that they stand for social justice.
A distinct ignorance about young people has been shown in the debate. When child benefit was introduced--and family allowance before it--it did not extend to youngsters over 16 who left school or full-time education, because it was assumed, correctly, that they were going to work. If they were at work, they would have an income, would be making a contribution to the family budget, and would have some money left over for themselves. They would therefore not be treated as dependent children.
Youngsters who leave school now have no income, and that has introduced unfairness into the system. My hon. Friends on the Opposition Front Bench are wrong if they think that the way in which to deal with that is to remove, or partially remove, the payment of child benefit.
We must ensure that young people and their families are not left without income. But the claimed lack of universality of the benefit arose because, at the time it was introduced, it was not necessary to go on paying those youngsters child benefit, because they would be going to work. Later, it was thought that youngsters in that age group would receive training and a training allowance. So
a youngster could be at school or in full-time education and getting child benefit; in training and receiving an allowance; or in work and getting wages.
It is unfortunate that work has just about disappeared for 16 to 18-year-olds, and training and training allowances are woefully inadequate. Not enough suitable training is available, and some 16 to 18-year-olds are left in limbo. That matter should be addressed, and my hon. Friends intend to do so. I give them full credit for reviewing the situation; the Government do not review or consult--they simply act against young people.
The review will have caused my hon. Friends to concentrate their minds because of the strong objection to the removal of child benefit from Opposition Back Benchers and from within the Labour movement. But Labour's opposition comes from people who are consistent in their determination to safeguard the rights of young people, whereas the Conservative party is simply engaging in some mischievous politics to try to stir up trouble.
"I know of many young people and families who rely on Child Benefit to help them out and enable them to continue in education."
He is right. According to the hon. Member for Birkenhead (Mr. Field), the loss of child benefit as a universal benefit would create a poverty trap by making it more economically worth while for low-income mothers to give up their jobs and claim benefits. He, too, is right.
"If you remove Child Benefit, how are young people's basic needs going to be met? We recognise the value of training and education but we don't want the benefit taken away".
Several alternatives have been discussed at one point or another, but none is as effective as child benefit. What about means testing, for example? It would ensure that
take-up rates for the benefit fell, even among those on low incomes, because--for whatever reason--some would see it as degrading. They might decide not to bother to claim the benefit, feeling that it would seem as though they were sponging. They would not be, however. That is the one thing that child benefit gets over.
| Next Section
| Index | Home Page |