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Viscount Astor of Hever: My Lords, in principle, would not the Government rather see the payment going to the wife?

Baroness Hollis of Heigham: My Lords, no. It is not a principle about it going to the wife. It is not child benefit. It is not support for the wife. It is not support for the children. I want it to go to the family, but I want it to go to the family in such a way that it is a work incentive. If it is detached from the pay packet, as the noble Viscount's amendment would make it, then we address the issue of family support--I give the noble Viscount all credit for seeking to preserve that--but it does not perform the function of being a work incentive.

Lord Astor of Hever: My Lords, if the Government care as much as they say they do about the family, is

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not the idea that this should eventually go to the children in the family and that, therefore, the wife is the best route to use to enable that to happen?

Baroness Hollis of Heigham: My Lords, we have two separate arguments going here. We agree that we want to support families. We are seeking to do so with increased child benefit. I do not need to go into the statistics but we are increasing it by £15 for the first child and £10 for the second child from this year. We are improving working families' tax credit and the array of in-work support that goes to families, as compared with family credit. There is no dispute between us. Above all, we want to lift children out of poverty. As we know, the best way to do so is not by payments of income support but by helping families into work and ensuring that they have a working member in the household.

The reason children are poor and the reason poor children need our support as taxpayers is precisely that they live in households in which there is no adult in work. The best way to springboard those children out of poverty is to help one of their parents into work. The best way to do so is to increase the work incentives to go into work. Therefore, in my view, the noble Lord's amendment would not achieve what he seeks. If he wants to help children, the best way to help them out of poverty is to ensure that we make work as attractive and as feasible as possible for one of the parents. That will spring the children out of poverty. The best way of doing that is through the working families' tax credit and not through a disguised form of income support.

Therefore, I am sure that we do not disagree about our philosophic objectives, but we do disagree as to what is the most effective way of achieving them. If we believe that the best way to help children out of poverty is to get one of the parents into work, I hope that the noble Lord also accepts that anything which strengthens the work incentive while also supporting the family--in other words, anything that gives you two gains rather than just one--must add to the public good.

However, we recognise that there is considerable concern about how we handle the cases where couples cannot agree, for whatever reason, on who should apply for the tax credit and how it should be paid. My noble friends Lady Turner and Lady Lockwood also raised such concerns and, indeed, they have been raised again tonight. I hope that the explanations given in the other place set out clearly what we want to achieve. Again, we hope that we have got the balance right.

I now turn to the amendment moved in Committee by the noble Lord, Lord Goodhart, and the concerns that he expressed at that time. We accept entirely the principle and the spirit of Amendment No. 6. We all want disputes to be underpinned by the best legislative framework. We want to make clear that it will be paid to him in work if both agree; but, if there is a dispute between the couple, then, by default--and this is a dispute as opposed to a technical mistake--it will go to the woman. Therefore, having reflected on what the noble Lord said both in debate and in the subsequent letter that he was kind enough to write to me after the Committee stage, I hope that we can see a way forward

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that will address his concerns and put what we want to achieve and what my noble friends are both anxious to achieve on as secure a footing as possible.

The board's powers of care and management are used to deal with rare cases at the margins of a system that it administers. While we believe that disputes will only happen in exceptional cases, doubts have been raised about their frequency. I agree that we can only know that after the event. Therefore, to ensure that we can apply the procedure we want, however frequent the disputes turn out to be in practice, we see the advantage of putting the necessary powers into regulations. I believe that that will address the noble Lord's concerns.

The regulations would still give couples a choice upon which they must agree. They would then provide that, where couples cannot agree, the board will have the necessary discretion to pay WFTC to the partner it determines to be the main carer. Moreover, in those cases, the board would have the discretion to accept an application which would otherwise be defective only because it lacked a partner's signature. Noble Lords will appreciate that this must be a discretionary power because without the involvement of the dissenting partner the application may simply have been mechanically incorrect--some mistake made. To give couples the right to make single signature applications and have them paid automatically to the carer would be to invite such applications with obvious risks for the Exchequer.

However, I hope that the noble Lord feels that we have met his concern, which was most thoughtfully expressed in Committee. As I tried to say earlier, we have taken the matter away. The noble Lord has a point. We hope that he is not right in thinking that the number of disputes will be higher than we anticipate. But if he is right, then, in the light of what he said, we believe that it will be only right and proper to put the procedure in place. That means that if there is any risk to the woman by default in such a dispute, the payment would go to her. Therefore, we think it right to accept the noble Lord's proposition that we should put the matter on a secure footing by having it covered in regulations.

We want to retain choice for couples and we want to insist that the best way to address child poverty--which we are all concerned about--is to get one of the parents into work. The most appropriate way of doing that is through the working families' tax credit. However, we recognise that disputes could arise. In that situation we certainly want to protect the principal carer who is likely to be the mother. We propose therefore to put that on the footing of regulations. I hope that with those comments both noble Lords will feel able to withdraw their amendments.

10.15 p.m.

Lord Goodhart: My Lords, before the Minister sits down, I hope I may say that I am most grateful to her for what she has said. That satisfies my concerns about the legality of the proposal--which, of course, I support--to ensure that in the case of a dispute the payment goes to the principal caring parent. However,

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the noble Baroness said nothing about the final point I raised; namely, whether the draft forms--the application form and the guidance notes--will be amended so as to give some explanation of what the position will be if there is a dispute between partners.

Baroness Carnegy of Lour: My Lords, before the noble Baroness finally sits down--

Lord McIntosh of Haringey: My Lords, we are at Report stage. I think it is legitimate for those who have already had an intervention to be reminded that we are at Report stage.

Baroness Carnegy of Lour: My Lords, the noble Baroness has not finally sat down.

Lord McIntosh of Haringey: My Lords, the Minister has spoken. We are at Report stage.

Lord Astor of Hever: My Lords, I thank the Minister for her reply. I was, of course, heartened to hear that she sympathised with our amendment. I shall want to read Hansard carefully and discuss the matter with the many organisations who have been in contact with us on this point. They feel strongly that the implication of "purse to wallet" is that the mother should receive the credit. I understood that that is what the Minister said. We shall probably return to this matter on Third Reading, but in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Goodhart moved Amendment No. 5:

After Clause 2, insert the following new clause--


(" . Regulations made by the Board under section 2(1)(c) shall provide that, in the case of a claim for working families' tax credit, where a married or unmarried couple is included in the family and one member is in employment and the other member is receiving education or training of a specified kind and for a specified period, the tax credit may include such credit for child care as may be specified.")

The noble Lord said: My Lords, this amendment was discussed at Committee stage and it raises a short point to which I received a disappointing answer from the Government. The childcare credit is not available under the regulations unless both parents are working for at least 16 hours a week. In general there are obvious reasons for that which I can perfectly well understand, but it means that childcare credit is not available where a woman wants to get trained for a job. I am assuming here, of course, that it is the woman who has been looking after the children.

There are a great many women who want to look after their children when they are small but who want to go back to work at some stage, most commonly when their youngest child reaches school age. The woman may have been out of the labour market for 10 years. If she did a skilled job before then she may need retraining. Anyone who was trained in information technology 10 years ago and has not done any since is likely to need retraining. The woman may have started her family

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when she was young and not had time to acquire a skill before she did so. In that case she may need training if she is to get a decent job.

Surely it makes sense--both economic and social--to make it possible for such women to train or retrain for jobs. That can be done only if the childcare credit is available. I do not propose that there should be a general right for a woman to attend whatever course she wants. It would be reasonable for the Government to say that childcare credit should be available only where a woman is taking a course which improves her job prospects. I am not suggesting that childcare credit should be extended to purely academic or recreational courses. The amendment leaves it to the Government to specify what kind of courses should qualify for childcare credit and to specify such matters as the minimum period per week that a trainee must attend a course.

I believe that this is an eminently desirable amendment and I hope that the Government will be a little more receptive to it this time than they were on the previous occasion.

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