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Mrs. Browning: Of course, we are aware that the consultation document shows that the Government are trying to protect carers from any form of exploitation or outside responsibility. However, their proposals will put carers in danger, despite the fact that the document claimed that that was not the case.

Mr. Johnson indicated dissent.

Mrs. Browning: The hon. Gentleman shakes his head. However, I quote from a letter sent to his right hon. Friend the Secretary of State for Trade and Industry from a London agency, which is most concerned. The letter states:

"By insisting that bureaux such as ourselves become employment businesses as opposed to employment agencies Regulation 7(1) would mean that the cost of care would increase drastically and well beyond the reach of all but wealthy clients . . . Most significantly VAT would be chargeable on the whole of this increased amount (rather than, as at present, the agency fee element only). It seems nonsensical that an elderly person who receives Attendance Allowance would have to give more than the amount of that benefit back to the Government in VAT."

Members of the DTI Front-Bench team are known for their frequent use of the words "fairness" and "justice". The Minister is new to the Front Bench, but he will have followed his Secretary of State's words on various subjects and will know that fairness and justice are parroted regularly by his ministerial colleagues. However, there is nothing fair or just to the elderly in the policy that the Government propose.

The agency's letter continues:

"Small specialist agencies such as ourselves will be squeezed out of the market. Some of the most vulnerable in our society would be denied the choice to purchase care from such specialist agencies, who provide a high level, one to one personal service . . . This does not seem to accord with the stated aims of this Government."

Although the hon. Gentleman makes the point that the purpose of the consultation document's proposals was to protect the frail elderly from any form of exploitation, in practice, the Government's very policies will do the opposite.

Mr. Johnson: This is an important point. Some employment agencies have legitimate concerns, but others have illegitimate concerns. Last week, an article in The Economist states of unnamed agencies that

"The agencies think this bureaucratic burden"--

5 Nov 1999 : Column 598

by which they mean paying the national minimum wage and complying with employment law and the working time directive--


"is all the more unnecessary because many carers come from abroad, mainly the Commonwealth."

Those are not legitimate concerns. Such agencies are looking to avoid their responsibilities.

Mrs. Browning: Wherever the staff come from, the fact remains that there are people who live in their own homes at the moment and receive care from other people, who come in to help them get up in the morning and put them to bed at night. Sometimes, extremely frail people or those who are severely disabled have full-time, live-in carers. Those carers will now be subject to VAT on their salaries, which was not formerly the case.

When the Minister was asked about that matter at DTI questions yesterday, he replied that representations were being made to the Treasury by DTI Ministers. He may not have had as much experience as Opposition Members in dealing with former Treasury Ministers--of whom he numbers three among his colleagues in the DTI ministerial team. They do not have a good track record on facing down their Treasury colleagues on taxation policy, where the Treasury is seen to be a net gainer, while others are the losers. If this is a battle between the Treasury, which wants to raise more VAT revenue--clearly it will do so--and DTI Ministers, who are standing up for the interests of those people whom their legislation will affect, I tell the Minister, in the strongest terms, that his duty should be to go to those Treasury Ministers, with his colleagues, and fight as hard as they possibly can for a proper solution to a potentially serious and damaging policy. That policy will affect the most vulnerable members of families throughout the country.

Mr. Bottomley: May I help my hon. Friend to make the Minister understand? Normally, when an employment agency charges VAT, it charges a business that can recover the VAT because it sells goods to a customer. However, in this case, the only customer is a person who is frail, elderly or handicapped. I should be grateful if the Minister intervened again in my hon. Friend's speech to say that he understands that the VAT will fall on the frail, the elderly or the handicapped, who are normally on low incomes, rather than on businesses that can pass on the charge to customers.

Mr. Johnson rose--

Mrs. Browning: I give way to the Minister.

Mr. Johnson: This is strange. I am not quite accustomed to the procedures--

Mr. Deputy Speaker (Sir Alan Haselhurst): Order. Because the hon. Lady took an intervention from her hon. Friend the Member for Worthing, West (Mr. Bottomley), it is for her to give way to the Minister at a later stage. This is not Question Time.

Mrs. Browning: I am grateful for your guidance, Mr. Deputy Speaker. I shall make a little progress, then give the Minister an opportunity to answer specifically the point made by my hon. Friend the Member for Worthing,

5 Nov 1999 : Column 599

West (Mr. Bottomley) and me. It is important that Department of Trade and Industry Ministers, who are in the driving seat of the policy, fully understand their responsibilities and make proper representations to Treasury Ministers.

Let us consider what the policy is likely to cost and how individuals will be affected. It has been calculated by the Federation of Recruitment and Employment Services that the policy will increase the cost of care by about £1 an hour, so people who need four hours help a day will face an increase of £28 a week. We all know the sort of incomes received by many of those who need care; even with attendance allowance and other benefits, such an increase in living costs would force many of them to reduce the number of hours of support they receive. In addition, those requiring full-time live-in help, whose care costs a great deal more, would for the first time be forced to consider stopping being independent within their own home and going into residential care--they would be priced out of their own home. That has a consequence: it means that social services departments throughout the country should be made aware that there might be a sudden demand for residential care from people whose care requires great expertise.

When we hear, as we often do from Ministers, the language of self-congratulation, it begs the question whether they realise that the elderly, the frail and people with disabilities are all members of families; and that their relatives, whether they live close by or far away, willbe desperately concerned about their plight. If the Government intend to pursue the policy, I warn the Minister that it will be seen as VAT on grannies. As the Minister knows, unless he is able to ward off the Treasury, such a policy will not be greeted with widespread acclaim.

Yesterday, the Minister said that the DTI was

"working closely with the Treasury"

to resolve the issue. As I interpret that answer, it means that DTI Ministers recognise that the policy that they created has developed a complication.

Mr. Johnson indicated dissent.

Mrs. Browning: If the Minister does not see the problem, that concerns me greatly, given that, in the DTI, he is surrounded by former Treasury Ministers. We all know that, once part of the Treasury, something happens to hon. Members.

Mr. Johnson indicated assent.

Mrs. Browning: I am glad the Minister realises it. I am not sure what happens to people in the Treasury, but they are never again the same and they never again see things the same way. The Treasury initiation ceremony appears to ensure that, whatever portfolio Ministers take on after leaving the Treasury, they never quite dump the baggage of thinking that they must bring more revenue into the Treasury at every opportunity. However, in all fairness, they should not behave that way at the expense of Britain's pensioners and people with disabilities.

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Lorna Fitzsimons (Rochdale): Will the hon. Lady give way?

Mr. Denis MacShane (Rotherham): Will the hon. Lady give way?

Mrs. Browning: I give way to the hon. Member for Rochdale (Lorna Fitzsimons).

Lorna Fitzsimons indicated dissent.

Mrs. Browning: Is there to be an auction? In that case, I give way to the hon. Member for Rotherham (Mr. MacShane).

Mr. MacShane: Not an auction, but a choice. I am fascinated by the hon. Lady's comments on what happens to people who become Treasury Ministers--that they leave the Treasury totally deformed, transformed individuals. Does that explain what happened to the former right hon. Member now standing for election in Kensington and Chelsea? Was the right hon. Gentleman a human being before he became Chief Secretary to the Treasury and only became Michael Portillo when he left?

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