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7.38 pm
Mrs. Jacqui Lait (Beckenham): I begin by adding my welcome to the two hon. Ladies on the Government Front Bench. Let me say to the Paymaster General that I shall miss our annual bouts on smuggling and bootlegging tobacco and alcohol, but I welcome the Financial Secretary to a similar fate. Before moving on, I mildly observe that capable as both hon. Ladies and my hon. Friends on the Opposition Front Bench are, it is sad that the debate on a Bill that was advertised as crucial to the Government policy has not been graced by the presence of either the Chancellor of the Exchequer or the Secretary of State for Social Security. Their presence would have reinforced to the public that the Government take the issue seriously. The Opposition take it seriously, and we have had a wide-ranging and interesting debate. I agree with the points made by my hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) and other hon. Friends who have spoken. Rather than reiterate them, there are a number of specific issues to which I wish to refer.
The right hon. Member for Birkenhead (Mr. Field) said that, primarily, the measure was designed to help lone parents. All of us know that under the heading of "lone parents" we lump together those who are widowed or divorced, and those who have never had a stable relationship.
My hon. Friend the Member for Canterbury (Mr. Brazier) and the hon. Member for Northampton, North (Ms Keeble) referred to the Child Support Agency. Given the complexity of the human relationships thrown up by the case work of the agency, I wonder whether we will have to deal with exactly the same sort of problems in relation to the working families tax credit in our surgeries. Mothers and fathers might argue about how many days they care for the child over the week, or, because one parent with care looks after the child for 240 days and the other for 110, about whether the benefits should be split between them. That would be an administrative nightmare--on top of the administrative nightmare that we are predicting. That may be a Committee point, but it would be useful to know whether the Government have even begun to think about it.
The Bill also aims to encourage two working parents, but it penalises one-earner couples. My concern is that low-income families with two or three children under the
age of five, and with a mother at home who is not working, will not get the child care tax allowance. I understand the theory that the mother should be looking after the children all the time. However, it has been apparent to many of us for many years that even when a mother is at home looking after children, those children can benefit from nursery school. Children in low-income, one-earner families will not be able to benefit from pre-school education, other than the rising fives.
Ms Buck:
I am slightly confused by the hon. Lady's point. The provision of pre-school places, such as by the Pre-School Learning Alliance--those places are virtually free; there is a nominal charge--is widely available to parents. Such provision took something of a hammering under the previous Government as a result of the nursery vouchers scheme, but it is now witnessing a resurgence. There has been a significant expansion in places for three and four-year-olds in the state nursery sector. I am confused by the idea that there is no free or affordable child care for children under five.
Mrs. Lait:
That is most interesting. On the one hand, the hon. Lady argues for not having a child care allowance for children under five because the care provision exists and is free. On the other, she is suggesting that one-earner, low-income couples should not be able to benefit from other forms of child care. The hon. Member for Northampton, North spent a lot of time saying that women need choice. That is what we should provide for them. The Government have not done so.
As a member of the Conservative party, I may not think that widespread and generous tax allowances are the best way to help people back into work, or to provide for children. However, we must get some logic into the scheme, and that is what is missing. I am not recommending one thing or the other. I am merely asking the Government to think about that exclusion of low-income, one-earner couples.
Ms Keeble:
Does the hon. Lady accept that a couple with a child, with the woman at home, will shortly have the choice--if the child is over three--of putting thechild into a nursery? However, the other option of a child minder would not normally be taken, because a child minder normally provides child care at home--which, if the mother is staying at home, she would do herself. The choices offered by the Government are perfectly realistic in both cases.
Mrs. Lait:
I am very glad to hear that, and I hope that that proves to be true in practice. I would imagine that a mother with three children under the age of five--and one over the age of three--will still have the problem of getting the other two properly ready for school. That is the result of pre-school education. We must make sure that the Government have thought this through properly.
I accept that this is a tax credit and not a benefit, but there is an increased dependency on state provision because of the terms of the credit. The Government have said that they want to get away from the dependency culture. The Conservatives have long wanted to do that, but the working families tax credit increases the number of people who are dependent on the state.
In the long run, those people who are not dependent on the state will find that they become resentful of the number of people for whom they are paying through
their taxes. We must remember that this is not Government money--it is taxpayers' money, which comes from companies and individuals to pay for other people. Eventually, if the burden becomes too great, we could have a taxpayers' revolt, as in the late 1970s.
The hon. Member for Northampton, North dwelt at great length on the issue of child minders--another point that may well come up in Committee. At present, there is confusion as to who can be a child minder. In the Social Security Select Committee, it became clear that the Inland Revenue believes that it is possible for relatives or friends to become registered child minders. I do not have a problem with that, and I suspect that we shall see a growth in the number of registered child minders. However, there is a gap in the provision of care for children between the ages of eight and 14.
If both parents are at work and there are no after-school clubs, we will have latchkey kids, and all of the problems that go with that. Will the Government amend the Children Act 1989, so that registered child minding can go up to the age of 14, or 16 if the child has a disability? Are the Government going to insist that every child between the ages of eight and 14 is looked after in something like a kids' club? What would happen if the child did not want to go to such a club?
My mother was widowed when I was 12, and I used to come home to a house where sometimes there was somebody there, and sometimes not. I must say that I preferred it when no one was there--that suited me down to the ground. That was the choice of a child and, under the provisions of the Children Act, we must give children choices.
I wish to ask about au pairs, because au pairs are being hit badly by the national minimum wage rules and regulations. The Government are saying that au pairs are employees and are not there on an educational basis. Under the terms of the working families tax credit taper, some couples who employ au pairs may be eligible for the working families tax credit and child care allowance. The au pair currently does not necessarily get paid the national minimum wage and is not a registered child minder, but could well be the person providing child care for eight to 14-year-olds.
If we increase the number of registered child minders, local authorities will incur registration and inspection costs. If we ask employers to take on the burden of distributing the working families tax credit--leaving aside the question of who will know what--there will be increased costs for the public sector, which employs nurses, teachers and others. What provision have the Government made to ensure that the public sector does not have to try desperately to find the funds to administer the system?
Ms Karen Buck (Regent's Park and Kensington, North):
I warmly welcome the introduction of the working families tax credit, which I see as an integral part of the
The National Association of Citizens Advice Bureaux, which daily deals with thousands of people who are trying to calculate whether they would be better off going back to work, has welcomed the proposals. It said that the
I apologise for the fact that I was out of the Chamber for an hour and missed some of the contributions, but I was more than a little disappointed with what I heard from some Opposition Members. I was especially disappointed at the lack of willingness to recognise the additional incentive that will be introduced by making payments through the wage packet.
That incentive has been casually dismissed by many, although the hon. Members for Canterbury (Mr. Brazier) and for Beckenham (Mrs. Lait) recognised that the proposal offers a tax credit and not a means-tested benefit. That is what distinguishes it from the family credit system, and there is a profound psychological difference. There is a real prospect of people being able to supplement their incomes without having to go into the social security system. That is the central raison d'etre of the Bill.
It is absolutely impossible to estimate what the impact will be, but common sense dictates--and we know from speaking to people in our surgeries and elsewhere--that people do not like going into the means-tested social security system if that can be avoided. In particular, they want to be able to work without having to do that.
"introduction of the Tax Credits will mean considerably greater resources being directed to boosting the earnings of groups in low paid work."
The Child Poverty Action Group said:
"In conjunction with the minimum wage, the working families tax credit will make a substantial difference to families in low paid work."
Those organisations have not hesitated--and, I am sure, will not hesitate--to criticise the Government if they feel that resources are not being directed in the best possible way to assist people on low incomes.
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