As has been said repeatedly, the Child Benefit Bill is a small but significant piece of the jigsaw to give all young people the means and opportunity to participate in education and training beyond the age of 16. It builds on the success of our economic reforms to date, which have provided macro-economic stability, low unemployment and record employment. We are determined to transform the United Kingdom into a high-skill economy, where everyone, regardless of background, can benefit from the opportunities that global change offers.
As part of that overarching objective, we are committed to ensuring that all our young people reach the age of 19 equipped with the skills and qualifications that they need to make the most of their talents and aspirations. Our long-term ambition is that, by 2015, UK staying-on rates after 16 will move from one of the lowest in the Organisation for Economic Co-operation and Development to one of the highest.
Our strategy for achieving that target has three complementary elements: making the education and training curriculum more attractive for 14 to 19-year-
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olds, improving the provision of information and guidance on the opportunities available, and reforming the financial support system to make it more coherent and accessible to young people.
The Bill is an important step, but not the only step, in delivering the last strand. It will enable us to remove the distinction between education and unwaged training in the financial support system, thus supporting young people to choose the learning route that is most appropriate for them, rather than basing their decision on financial considerations. The new entitlement will apply to all 80,000 unwaged trainees on Government-arranged training.
The Bill will also enable us to extend financial support to 19-year-olds who are completing a course of education or training that they started before their 19th birthday, thus ending wasted investment for young people who, because of financial pressures, drop out at 19 before they have achieved their qualifications.
For the long term, we have been consulting about the activities outside formal education and training that should be entitled to financial support. As we have discussed again today, volunteering and informal skills courses provided by the voluntary sector clearly need to be considered. I repeat that the Government will respond to a consultation on that specific subject in the forthcoming Budget.
The Bill will provide us with the flexibility to extend entitlement to such activities in the future, once the necessary mechanisms are in place. It is clear from the Opposition amendments and the backing for the principle that I can look forward to their full support in taking forward the reforms.
I want to put on record my gratitude to all the young people, parents, voluntary sector organisations, business and learning providers who have again contributed their time and valuable experience to our consultation. Their experience, views and opinions have played an invaluable role in informing the development of our proposals.
Improving financial support for 16 to 19-year-olds in education and training is an investment in the future and aspirations of our young people as well as in the long-term strength and stability of the United Kingdom economy. I have been pleased to hear Members on both sides of the House reaffirm that view and offer their support, in principle, to many of the points in the Bill. That consensus provides us with the foundation to take forward our plans to remove the remaining financial barriers to education and training after 16. I commend the Bill to the House.
Mr. Andrew Tyrie (Chichester) (Con):
We have managed to discuss this Bill, as we did the Commissioners for Revenue and Customs Bill, with a reasonable amount of civility, and to avoid the brickbats that are often associated with the passing of legislation in this place. I would like to thank the Paymaster General for listening, on the whole, to the points that we made and for responding to many, if not all of them. In some cases, we still feel that we have not had an answer, as I have made clear. She has certainly tried, however, and she has done more than merely go through the ritual process that she could have fallen back on in this modern age of programmed legislation.
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The Bill makes a number of simple changes to the eligibility rules for unwaged trainees and people aged 19. We have made it clear that we do not oppose those measures. However, we must bear in mind the fact that although this is a simple Bill, it forms part of a number of other proposals which, together, make it much more complicated. Whether the Bill turns out to be worth while will depend very much on the follow-up in the Budget and on the longer-term simplification proposals that have been set outalbeit only in very sketchy form, which worries me, as the Paymaster General knowsin "Supporting young people to achieve", the consultation document published a while ago.
In Committee, the Government accepted that the current system was horrendously complexI will not list all the major changes that have taken place since 1997and that it needed radical simplification. They also accepted that there was something curious about giving child benefit to adultsthat is, to people who in every other respect are legally entitled to do all the things that adults can do in society, except one. I realised as I was writing my notes that they would not be eligible to be Members of Parliament. For that, they would have to wait until they were 21.
My second point is that even this simple measure will not come cheap. In Committee, we tried to find out whether it would provide value for money, and we were unable to get enough information to do so. I will not rehearse all the arguments that we had about the regulatory impact assessments, of which there have been two. Both of those rather curious documents were wholly inadequate, and neither amounted to very much at all.
We do have estimates of the cost of extending child benefit to unwaged trainees. That has been given as £105 million. We also have an estimate of the cost of extending it to students of 19. That cost is given as £65 million. However, when we look closer, we discover that those numbers do not mean very much, because the Government have made no estimate of the behavioural effects that the measures might have. The hon. Member for Twickenham (Dr. Cable) made that point earlier, as did the hon. Member for Yeovil (Mr. Laws) and I, at length, on Second Reading. With this type of support, it is the behavioural effects that we are looking for. The Government are using public money calculatedly and deliberatelyand probably rightlyto change behaviour. It was therefore not unreasonable of the Opposition to ask them for their estimates of what those changes in behaviour would be.
"we all share the problem that there is a sparsity of information available about unwaged traineesthe group of people we are most concerned with in this context."[Official Report, 12 January 2005; Vol. 429, c. 364.]
All the same, bearing in mind the fact that this is the central issue, I was surprised that Ministers have not been prepared, since we first raised the point, even to have a stab at making an estimate based on some simple assumptions. I think that we will return to this issue after the Budgetand in a few months' time, when we are running policyand it is worth spelling out in a bit more detail the questions that ought to have been answered.
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They could even have been answered through sampling, for example, which would have given us some information.
First, what is the Government's overall estimate of the effect of extending child benefit to unwaged traineeswe now know that it is only those who have become eligible, because they are already on Government supported schemesand on the overall number of unwaged trainees? We do not know the answer. There will be an Exchequer cost in terms of child benefit for young people who are encouraged to take up this form of training. Set against that, the Exchequer may save some moneya point made by the hon. Member for Yeovil (Mr. Laws) and me on Second Reading. That will come to the extent that people are drawn into unwaged training from formal education. We are therefore looking for a net number, and we have not had it.
Mr. John Gummer (Suffolk, Coastal) (Con): Does my hon. Friend agree that with such difficulty of assessment, an alternative or perhaps additional way would be to ensure, in the formulation of the Bill, a specific opportunity to look back and see what has happened? One of my worries is that the House is increasingly asked to make such decisions, perfectly reasonably, as we do not know enough about the position, but we are not yet good enough at allowing ourselves to insist on the kind of independent outside assessment that a business would undertake in such circumstances? A business would take the risk, but be prepared to have a really independent look at it a reasonable time later.