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David Taylor: Does my hon. Friend agree that one way of achieving a national minimum wage that increases

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in the way that she described would be to set the level unambiguously at half male median earnings—the policy on which our party campaigned in the 1992 general election?

Vera Baird: There is much to reflect on in what my hon. Friend says and I am grateful for his suggestion. I shall have to leave what I would prefer to describe as the details of the matter to other people, but I hope that I have managed none the less to make the point that my right hon. Friend the Member for Birkenhead worries too readily about the effects of the Speenhamland system in 2001.

Tony Cunningham: I have heard nothing from Opposition Members about what the Tory policy would be. Does my hon. Friend think that it is wise to remind them of the Speenhamland system?

Vera Baird: I see that I have rashly run into the danger of trying to draft the Tory party's next manifesto. I shall not take another step in that direction.

I should like to add that the danger that my right hon. Friend the Member for Birkenhead saw in respect of the application of such a system to employees is not very real either. He was worried that employees could not take pride in themselves if they could not get themselves out of poverty wages by their own endeavours. That danger—if it has ever been more than theoretical—is completely outweighed by the absolute urgency of helping families out of the poverty that currently diminishes their lives. The figures given by my right hon. Friend the Chancellor show that there are more than 12,000 such families in my constituency alone. That poverty lowers the horizons of parents and limits the outlook of children, so restricting them that they are in danger of growing up blind to the possibility of improving their position by their own endeavours. Such children are unlikely, therefore, to miss the freedom to do that.

I welcome the Bill for children and for the equalising effect that it has on the income of mothers and on the power structure of families by putting money directly into the primary carer's pocket. It is a thoughtful, clever, well structured and progressive measure, and it is very welcome indeed.

9.14 pm

Roger Casale (Wimbledon): In the short time that remains, I wish to add my endorsement of the Bill to the enthusiastic support of other Labour Members. If we listen carefully, we may hear something from Conservative Members that rises above their quiet acquiescence hitherto.

I welcome the principle of the Bill. It seeks to underpin the Government's drive to encourage people off welfare and into work, and to make work pay. I welcome the measure's practical implications because it will directly help hundreds of thousands of people throughout Britain, including more than 400 recipients of WFTC in my constituency.

Mostly, I welcome the political vision behind the Bill. It represents another landmark in our determination to reform welfare and eliminate child poverty. The measure will take its place alongside the minimum wage, the 10p starting rate of tax and many other measures that are either already in place or will be introduced by the Labour

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Government to lift families out of poverty and break the cycle of dependency and impoverishment of aspiration, which was passed down from generation to generation and characterised the long years when the Tories were in government.

I do not have time to go into detail. The measure will give our programme to support working families a much stronger foundation. It will consolidate the support that different arms of government already provide, making the system more accessible and easily understandable. It will make important benefits available to more families, help them out of poverty and increase their incomes.

I especially welcome the fact that the new child tax credit will be paid directly to the carer, not the person in work. I welcome the annual assessment of eligibility instead of an assessment of weekly income, based on the previous year's income.

The Bill is more than the sum of its practical reforms, important though they are. Behind it lies the idea of negative income tax, which the hon. Member for Arundel and South Downs (Mr. Flight) mentioned. He said that the Conservative party had considered and rejected that idea 30 years ago. Although his party rejected it as a mechanism for lifting families out of poverty then, I ask him to consider whether it is right to dismiss that approach today when economic forces are those of the global economy, and families, individuals and communities are subject to its vagaries. However, there are also new opportunities to develop skills and reconnect with the labour market if a hand up rather than a handout can be given.

I must limit my endorsement of the Bill to those remarks, but I should like to refer to two points that other hon. Members have mentioned. Although the measure's benefits are clear and we support them, it is important that we do not shut our eyes to the potential costs. I have received representations from small businesses in my constituency. They understand that the measure is important for getting people back to work and appreciate that more than 1 million have returned to work through our measures and because of economic stability. Nevertheless, they find it difficult to administer some aspects of the programme. I ask the Paymaster General to pay special attention to the needs of small businesses when we implement the measure; I know that she will. Perhaps we can revert to that in Committee.

The Bill will provide a bridgehead from welfare to work and, from there, to a better kind of job and a better kind of future for the people concerned. Rather than simply compensating people for being poor, we are working to liberate their energy and potential. This is not just a question of being compassionate towards the poor; everyone has the right to make a better life for themselves and their families. The Bill will help them to do that.

The Bill represents one of the most important changes in support for families since the Beveridge report in the post-war years. It will help the Government to do what they were elected to do: to tackle child poverty; to boost family incomes; and to help more people back into work. It is central to a modern approach to building prosperity for all by offering opportunity to all. It is a measure that combines a passion for social justice with sound economic common sense, and I commend the Bill to the House.

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9.20 pm

Mr. James Clappison (Hertsmere): The speeches from Back-Bench Members today began with what the House will recognise as an important contribution from the right hon. Member for Birkenhead (Mr. Field). He made a very thoughtful speech, on which we would all do well to reflect. I say that even though it contained some uncomfortable comments about my own party, but my assessment of his speech is based on the appetite in politics now for a more open style of criticism. We see a certain amount of public disenchantment with the constant diet of spin—a disenchantment that seems to extend to some on the Labour Benches, when they put their heads above the parapet. It is incumbent on us all to listen to important criticisms such as those made by the right hon. Member for Birkenhead.

In the same spirit in which I took the right hon. Gentleman's comments about my party, I hope that Labour Members will reflect on the important criticisms that he made of the Bill—what he described as the "bear traps" at its heart—which left him fearful of where the measure would lead. Labour Members would also do well to reflect on the right hon. Gentleman's comments about the effect of the measure on incentives and relativities among those in work, and about the important issue of fraud, which he has raised in the past, and to which I shall return later.

We have heard excellent speeches from my hon. Friends the Members for Bury St. Edmunds (Mr. Ruffley) and for Fareham (Mr. Hoban). My hon. Friend the Member for Bury St. Edmunds drew attention to the fact that up to 1 million people could lose out under the measure. He also mentioned the fact that the Government's treatment of tax credits violated international accounting conventions and would not be accepted by reputable international bodies. He made further important points about the additional burdens that tax credits have created for business. I shall return to that subject in more detail later.

My hon. Friend the Member for Fareham drew attention to the complexity of the Bill, which is self-evident. That point was echoed by at least one Labour Member—the hon. Member for Morley and Rothwell (Mr. Challen). My hon. Friend was also right to say that we needed time to scrutinise the Bill properly, and to consider its details, especially as we have only its bare framework before us at the moment. He also made important points about parental choice in relation to how children are looked after.

We heard from the hon. Member for Northavon (Mr. Webb), and there was a running debate throughout the day about the Liberal Democrats' proposals for an increase in personal allowances and a lowering of the threshold for higher-rate tax payers. The hon. Gentleman was at pains to point out that the higher-rate tax payers who would have their thresholds lowered—as well as the lower paid people—would be compensated by the higher personal allowance. We shall explore those proposals in greater detail in Committee. The only point that I wondered about was that, if the hon. Gentleman's system were tax neutral, there would be a gain for some people at the lower end of the tax scale, with nobody paying for that gain.

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