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Mr. Tyrie: That is an extremely thoughtful intervention from a senior former Cabinet Minister. If he cares to look at the amendment paper, he will see that I tabled an amendment with that specific purpose in mind—perhaps he already knows that. Unfortunately—I am not sure how far I can stray down this path—it was not called for debate this afternoon. But it goes to the heart of the matter: when such measures are introduced we need to be clear how we will assess whether the money is being spent usefully. If we have that clear in our minds, we can work out later what yardsticks we will watch to find out whether adjustment is needed. We have not had that from the Government.
I am very surprised and disappointed that we have not had such estimates. Secondly, how many people will be encouraged by the extension of child benefit for 19-year-olds to stay in full-time non-advanced education? As far as I can tell, the behavioural effects will only work one way: there will be costs and no savings for the Exchequer—but I may be wrong, and I may have missed something. Again, I would have liked an estimate, and I have not had it.
The Government could have provided that through sampling, as I have mentioned, or some kind of survey. We all understand that we will not get an exact figure—I hope that we would be intelligent enough not to hold the Government to such a figure if it turned out to be something else. But we should have some indication that the Government have been thinking about the issue and trying to find the right yardstick by which to measure it. After all, we are talking about nearly £200 million in
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expenditure, and it may be much more if the behavioural effects are considerable. We need to know what the deadweight cost is, but we do not know.
At the heart of all this is a very important group of people. The Government claim to have helped them through the new deal and other measures, but they have not really helped them as much as they say—although we heard the customary noisy bluff and bluster from the Chancellor during Treasury questions today.
Surely the group about whom we should be most worried consists of those who are not in employment, education or training. The latest figures show that far from diminishing, over the past seven years that group has grown larger. More than a million young people are now economically inactive and not in education. That is worrying, and it should be close to the heart of the Bill. Through various measures, the Government's support for this overall area runs into billions, but the policy does not seem to be delivering what we should expect of it.
I am by no means alone in being worried about the absence of proper cost estimates. I have taken soundings from a large number of people and groups, including the Prince's Trust, Cornwall and Devon Connexions, the Foyer Federation, Barnardo's and the Association of Colleges. Many of them allude to this issue in one way or another. They do not oppose the Government's intentions; they do not even oppose the principle behind the Government's approach. That is territory that we share. What worries them is that the Bill may not have the intended effects. The chief executive of the Association of Colleges says:
"the limited information on the costs of the reforms during the consultation period and on the publication of the Bill make it difficult to assess the impact . . . It is surprising that the same government that spent 3 years testing EMAs"
—education maintenance allowances—
also costing a lot of money, without testing it, and with only one year's implementation.
That is very gently worded. The chief executive makes a number of other serious points about the risk of fraud and the need for good advice for young people, and the danger that the Bill could make obtaining such advice more difficult.
I have raised all those points not because I want to oppose the Bill, but because I want to encourage the Government to think more clearly about the questions that they are asking civil servants in order to justify it here. I am sorry we have not been told enough to be able to make an informed judgment on whether the money involved will be used effectively. There is much in the Bill that gives us pause for thought, and much that may cause concern among those on the ground. There is a lack of clarity about the Government's destination. A page in one of their consultation documents refers to "the long-term vision", and provides about 100 words on the subject and a rather curious diagram. That does not constitute a long-term vision worthy of the name, and again there is a lack of clarity about the Bill's likely effects.
Let me end with a point which, although highly controversial, needs to be made time and again. How on earth can a Treasury Minister be presenting a spending
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measure? It is extraordinary that the Treasury should be both gamekeeper and poacher, responsible for controlling public spending and at the same time arrogating to itself the power to write very large cheques.
It does not surprise me at all that the No. 10 policy unit, and, we are told, the Prime Minister and John Birt, are working together vigorously to create an effective public expenditure control system for implementation in the event of Labour winning the election and the present Chancellor being moved to another job. Perhaps part of the reason for our inability to obtain clear answers to the questions I have asked this afternoon is the fact that we have a Department that is not suited to such tasks. An Inland Revenue Department is trying to run part of the benefits system. That inevitably leads to the question whether the right people are doing the right things in the Government. All sorts of problems concerning not only the implementation of policy, but whether policy is being devised intelligently and sensibly, will occur down the line.
Mr. Gummer: Has my hon. Friend looked through the records to find the last time the Treasury produced a child benefit Bill? It would be more normal for another Department to perform that function—or have I been here too long and missed something?
Mr. Tyrie: That question contains an element of elegant disingenuousness. My right hon. Friend knows that the existence of such a Bill is most unlikely.
Mr. Tyrie: Oh, wait a minute. Perhaps I am wrong, and have not been in the House for long enough.
Dawn Primarolo: The hon. Gentleman may have been here when child benefit was transferred to the Treasury, and I do not remember the Conservative party opposing that legislation.
Mr. Tyrie: I am certainly challenging that legislation now, and I have the strong support of the No. 10 policy unit, John Birt and probably the Prime Minister. The Paymaster General will be pleased to hear that I am coming to the end of my remarks, because we have moved on to a sensitive subject.
I wonder whether we have succeeded in getting to the bottom of the exact effects of spending the £200 million. I have my doubts whether we even know within a factor of about 50 per cent. how much the measure will cost, which should be a cause for concern. On this occasion, the concern is not sufficient to divide the House on Third Reading, but we will certainly keep a close eye on both costs and value for money.
4.51 pm
Dr. Cable:
I reaffirm my hon. Friends' broad support for the Bill, which, as the Paymaster General said, is "small but useful". If my hon. Friend the Member for Yeovil (Mr. Laws) were here, I am sure that he would confirm what the hon. Member for Chichester (Mr. Tyrie) said about the civilised and thoughtful way in which the legislation has progressed.
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Having read Hansard, it seems to me that there are two underlying reasons why the Bill was introduced, and merits support. The first reason concerns broad grounds of equity and fairness. A group of people who are not in formal education have been arbitrarily excluded from child benefit, and the Bill rectifies that unjust situation.
The second reason concerns the promotion of training. In her speeches on Second and Third Reading, the Paymaster General relied heavily on that argument. Broad support clearly exists for the idea that we, as a country, should do more training, but it is not clear whether the Bill will encourage training in general. Most of the people who will receive those benefits would be in training anyway. As the hon. Member for Chichester said, a dead-weight cost problem exists, and we do not know the extent to which the Bill will incentivise training. If the Bill incentivises training, however, that is a desirable and positive outcome.
I agree with much of what the hon. Member for Chichester said about the underlying weaknesses. We do not know the consequences of the proposed changes, and a great deal of uncertainty exists. The regulatory impact assessments were not massively helpful either on the facts or in analysing the economic consequences. We can probably isolate various behavioural changes that could take place, some of which are desirable and some of which are not. The desirable changes include the possibility that people will be encouraged to leave economic inactivity or unemployment and enter training or education as a result of the Bill, which would benefit everybody. As a result of removing the previous discrimination, people may be tempted to leave formal education and enter vocational training, which, given how the situation has been distorted in the past, is almost certainly desirable.
Another change, which is neither necessarily good nor necessarily bad, is that people will be encouraged to move out of unapproved schemes into Government-approved ones, simply because of the definition issue, which we discussed earlier. Another possible and probably less desirable change is that some people might be encouraged to move out of work and into training. That could be a good thing if they were investing in their long-term knowledge capital; equally, there could be a loss to the economy and to the Treasury. So there is a mixture of gains and losses, and as the hon. Member for Chichester emphasised, we do not really know what the net effect will be. We will doubtless have to return to this issue in the next Parliament.
Finally, as has already been pointed out, the immense complexity of the benefit system is extremely intimidating, particularly for those of us who have come to the Bill rather late. The Bill touches on but one tiny corner of that complexity. The argument about the proliferation of benefits and tax credits has been well rehearsed in many quarters. There are many unforeseen
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consequences of such proliferation, not all of which are desirable. On balance, this legislation probably helps, because child benefit is not means-tested and, unlike many selective measures, it does not have the perverse effect of providing disincentives.
In the next Parliament we will have to have a major look at the proliferation of tax credits and benefits, the unintended consequences of which are often severe and very negative. Ministers often plaintively ask why they do not get more credit for all the good things that they are doing in helping to tackle child poverty, for example. One reason is that many of our constituents simply cannot comprehend the complex system that they have to grapple with. They have to wander through a quagmire of complication, so the system will have to be simplified. The Bill deals with only one corner of that much bigger problem. That said, broadly speaking this is useful legislation. Unanswered questions remain, but I am happy to subscribe to the Bill and to support it.
Bill accordingly read the Third time, and passed.
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