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House of Lords

Tuesday, 31st October 2000.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Oxford.

Parental Support: Tax and Benefit Policies

Lord Northbourne asked Her Majesty's Government:

    Whether they will introduce tax and benefit policies which will support parents who make a long term commitment to work together in partnership to care for and support their children.

Lord McIntosh of Haringey: My Lords, the Government are committed to supporting all children through tax and benefit policies. Households with children will be on average £850 a year better off because of measures introduced in this Parliament.

Our ambition is to halve child poverty by the end of the decade on the way to abolishing it within 20 years. As a result of this Government's policies, a single earner family with two children, earning £12,500, will be £2,600 a year better off.

Lord Northbourne: My Lords, I am grateful to the noble Lord for that Answer. Does he agree that there are in this country today 1.7 million lone parent families headed by mothers and 200,000 lone parent families headed by fathers? Does he further agree that last year the Exchequer spent £9.9 billion to support lone parent families? Has not the time come for the Exchequer to spend rather more money on encouraging young men to take seriously their responsibilities towards their children and their children's mothers?

Lord McIntosh of Haringey: My Lords, I am not sure whether that is a question about taxation policy or about moral exhortation. As a point of fact on taxation policy, because of individual taxation a single-earner couple pays more than a two-earner couple. Therefore, there is some incentive for couples to have two earners. I do not think that our taxation policy can be said to be driving anyone into single parenthood. Surely the opposite is the case.

Baroness Gardner of Parkes: My Lords, does the noble Lord agree that a creche is not the answer for all children, particularly when they have to be taken to and from school? Is it not time that he put to his right honourable friend the Chancellor of the Exchequer the suggestion that we have been pushing for many years of a tax allowance for parents who have to employ someone for child help and care?

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Lord McIntosh of Haringey: My Lords, I am slightly puzzled by that question. Under the working families tax credit--now claimed by more than 1 million families--100,000 families are claiming childcare benefit. That is more than double the number of those who were claiming the family credit disregard in the past. Taking the matter as a wider issue than the creches to which the noble Baroness, Lady Gardner, refers, I should have thought that the Government are doing a good deal.

Earl Russell: My Lords, does the Minister agree with my right honourable friend Charles Kennedy that family life and the way we raise our children are private matters? Does he also agree that while it is the proper object of government policy to help parents do what they choose, whether it is as full-time carers or at work, it is not a proper object of government policy to announce--as the right honourable gentleman the Chancellor of the Exchequer did on Radio Scotland yesterday--that the Government intend as an act of policy to change the proportion of those choices? That is beyond the Government's competence and, in the literal sense of the word, ultra vires. If he does not agree with my right honourable friend, perhaps he will say why he does not.

Lord McIntosh of Haringey: My Lords, the noble Earl, Lord Russell, will have noted my reluctance to follow the noble Lord, Lord Northbourne, into the sphere of moral exhortation. I agree that it is for people to decide how they live their lives. On the other hand, it is a proper object of government policy to see that children are taken out of poverty. The actions which I have described, the taxation policies, the encouragement of parents of children to work and benefit substantially from that, are proper objects of government policy.

Baroness Young: My Lords, does the noble Lord accept that the Answer which he gave to the Question of the noble Lord, Lord Northbourne, referred only to supporting children and not to parents who make a long-term commitment? Does he not also agree that this is not a question of moral exhortation when in the Government's White Paper on the family the point was made that families with both a mother and a father bringing up children provide the best circumstances for children to grow up in?

Lord McIntosh of Haringey: My Lords, I think that possibly both the noble Baroness, Lady Young, and I are guilty of over-simplifying the matter. When I talk about supporting children, she talks about supporting parents. Clearly, if we support families with children, we are supporting both the families and the children.

Baroness Strange: My Lords--

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Baroness Nicholson of Winterbourne: My Lords--

The Attorney-General (Lord Williams of Mostyn): My Lords, I think the feeling of the House is that we should hear from the noble Baroness, Lady Strange.

Baroness Strange: My Lords, I should first declare an interest. My husband and I have been happily married for a considerable number of years. We have brought up six children. Four of those children are already married and have children of their own. They are dedicating their lives to bringing up those children. I was talking to a lady on the bus this morning about children and education. She said, "If you do not have love in your heart, then you cannot achieve anything".

Lord McIntosh of Haringey: My Lords, this gives me the opportunity to congratulate the noble Baroness, Lady Strange, on her happy family life and on her choice of the people she talks to on buses!

Baroness Nicholson of Winterbourne: My Lords, does the Minister agree that the declaration of the Convention on the Rights of the Child, which has been incorporated into our law, is the right and proper instrument within which taxation or other policies should be framed? Does he also agree that, when the European Charter of Fundamental Human Rights starts to impact on British legislation, the convention should take priority?

Lord McIntosh of Haringey: My Lords, it is not the position of Her Majesty's Government that the Charter of Fundamental Human Rights will impact on British legislation.

Lord Saatchi: My Lords, the Minister said a few moments ago that the Government believe in supporting children with their tax and benefits policies. But is the noble Lord aware that in the case of a single mother the present tangled web of tapers and disregards in the tax and benefits system means that her earnings will actually fall if she works for 27 hours a week as opposed to 26 hours a week? Do the Government think that that is supporting children through their tax policies?

Lord McIntosh of Haringey: My Lords, there are still anomalies in our taxation policies as regards children. We acknowledge that, which is why we have undertaken a fundamental review with results that will not become fully implemented until 2003. Nevertheless, in the shorter term the children's tax credit, which is to be introduced in April 2001, will be much better targeted than the old married couple's allowance. It will go only to families with children as it will be tapered away from higher rate taxpayers, which I assume is what the noble Lord is referring to, and therefore will be targeted more closely at people on low and middle incomes, and it will be substantially more

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generous than the married couple's allowance, with up to £442 compared with £197 for the married couple's allowance.

Euro Intervention

2.44 p.m.

Lord Willoughby de Broke asked Her Majesty's Government:

    Whether they intend to participate in further operations in support of the euro.

Lord McIntosh of Haringey: My Lords, as the noble Lord will appreciate, in view of the market sensitivity of this issue, it would be inappropriate for me to comment.

Lord Willoughby de Broke: My Lords, I thank the Minister for that uninformative reply. Does he agree that the most recent intervention in favour of the euro in September was not an unqualified success as the euro now stands somewhat below the rate at which it stood before the intervention? Does he further agree that the problems of the euro have to do with the fundamental difficulties of a euro-zone economy, as people do not want to invest in the euro? Does he accept that intervening is about as much good as giving a patient an aspirin when what he needs is a heart transplant?

Lord McIntosh of Haringey: My Lords, I do not know why the noble Lord should be so surprised at my first Answer. He did not seriously think that I would announce from this Dispatch Box that at some time in the near future we would embark on a support intervention for the euro or indeed for any other currency. I have made it clear from the very beginning that intervention is applicable only in very rare circumstances. As to whether the intervention in September was a success, I think it is difficult to say. There was a stabilisation of the euro for some time after the intervention took place. I do not think that anyone could make a judgment as to whether the subsequent decline in the value of the euro was greater or less as a result of the intervention.

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