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By the way, this is not an issue for just one community. It covers a variety of communities and it used to happen in this country in the time of Shakespeare and beyond. It involves Middle Eastern, Far Eastern, African, South American and eastern European communities. It is prevalent right across the spectrum of communities in this country. The Forced Marriages Unit, to which I pay tribute, does an incredible amount of work. It takes 5,000 calls a year and helps 400 people a year. It is important that we should support it. It is also important to provide information in schools, just as it was important in India to provide information in the communities. The young people whom I met who had been victims said that they often went to talk to young people not of their own culture. It is important to educate children in schools who are not of the cultures that I have just
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My noble friend Lady Rendell talked about Sharia law, which is a code of religious law. This is not part of the law of England and Wales and we have no intention of making any change that would conflict with British laws and values. That said, provided that an activity prescribed by Sharia law does not contravene the laws of England and Wales, there is nothing in our law that prevents people from abiding by it if they want to. It is not part of our law, but I understand the issues that my noble friend was raising.
The noble Lord, Lord Stern, and the noble Baroness, Lady Walmsley, spoke with great passion about international issues and the important matter of women in conflict. I agree with the noble Baroness that women are particularly vulnerable in conflict situations and have no recourse to law. I do not have time to go through all the different issues that affect them. As an aside, I think that women have an important role to play when we get to peace-building and reconstruction efforts. On the need to involve them, we are funding the UNIFEM programme of supporting women’s engagement in peace building and preventing sexual violence in conflict. We have contributed £3.8 million to the UN Department of Peacekeeping Operations to look at issues such as women’s participation in elections, support for women in civil society and gender-based violence. I agree that there is more to do.
The noble Baroness also raised, with the noble Baroness, Lady Thomas of Walliswood, the issues of HIV and AIDS. In 2007, 61 per cent of adults with HIV in sub-Saharan Africa were women. We are the second largest donor on HIV/AIDS; we have committed £1.5 billion in the past three years. I agree with the noble Baroness, Lady Thomas of Walliswood, about the link between providing services on maternal and sexual health and providing services for AIDS. That is happening in a number of countries. I do not have the details before me, except to say that I know that such initiatives are contributing—and we are contributing to make sure that that happens.
It is of course important to deal with issues of maternal mortality. The figure that I have is that 529,000 women die each year, although the noble Baroness had a higher figure. None the less, the figures are far too high; it does not really matter what they are. Most of these deaths take place in sub-Saharan Africa and Asia.
On women in Iraq, we have committed £10 million through the Iraqi civil society fund and the political participation fund to support particularly marginalised and vulnerable groups, which clearly include women.
The noble Lord, Lord Stern of Brentford, talked about developing policies made in developing countries. I could not agree more. The impact of climate change is very important, although I hesitate to tell the noble Lord things that he knows better than I do. Women’s livelihoods are more vulnerable as a consequence of climate change. Women are likely to
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Perhaps I may end by returning to something that the noble Lord, Lord McNally, said about how we see ourselves—how men see us and how women see themselves. My noble friend Lord Giddens talked about the reticence of women to promote themselves. I have to say that all the women in the Chamber nodded at that point. The noble Baroness, Lady Howe, talked about barristers becoming judges. I can tell her, from memory, that 50 per cent of young barristers who come through each year are women. The traditional tapping on the shoulder or recruiting in one’s own image has been a barrier that we have, I hope, removed—not least in relation to the Judicial Appointments Commission, which is so ably chaired by the noble Baroness, Lady Prashar.
The noble Lord, Lord Addington, talked about sport and body image and the responsibility of celebrity, which was also mentioned by the noble Lord, Lord Strathclyde. The role of the fashion industry was also referred to. It is important that we develop policies to deal with those. My noble friend Lord Haskel talked about women who do not ask for the right salaries at the beginning and who may never catch up as a consequence. Those are real issues that we as women have to address in terms of our own image of ourselves and of how we think men see us.
However, we have come a long way. My noble friend Lady Lockwood talked about the cases in which she had been involved. We know about women in public life. My right honourable friend the Prime Minister has appointed the first female Home Secretary and the first female Chief Secretary to the Treasury, and we have the first female Attorney-General. The Leaders of both Houses are women; two out of three Chief Whips in this House are women. Move over David, if you are listening to this. Of course, this weekend my right honourable friend is meeting a number of prominent women to look at the whole question of international women’s issues, including the millennium development goals. I can say to the noble Baroness, Lady Howe, and the noble Lord, Lord McNally, that we have extended all-women shortlists for parliamentary candidates until 2030. That was announced by my right honourable friend today.
I end with a quotation from Emmeline Pankhurst on the fight for suffrage—the battle between women and government. She said in 1913:
“Well, they little know what women are. Women are very slow to rouse, but once they are aroused, once they are determined, nothing on earth and nothing in heaven will make women give way; it is impossible”.
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4.34 pm
Baroness Gould of Potternewton: My Lords, once again we have had a well informed and diverse debate reviewing the past year as regards the state of women in today’s society. I sincerely thank all those who have taken part. I appreciate very much the fact that the two leaders opposite felt the debate important enough to contribute to it; we thank them very much for that.
I make special reference to the extremely powerful and eloquent speeches from our two maiden speakers. I greatly support the words of the noble Lord, Lord Stern of Brentford, when he said that we have much to learn from the work that is being undertaken in some of the villages in developing countries. I have always believed that liaising and having dialogue with women from other countries, and learning from them, can help us to shape our policy considerations on many issues. The noble Baroness, Lady Afshar, charmingly outlined growing up as a Muslim woman and her first experience on arrival in this country. I am delighted that she joined the barricades in our campaign to achieve women’s equality. We know that we can rely on her working with us in the future.
The debate, as always, covered a wide range of issues, including gender equality, equal pay, women plumbers, women’s health, forced marriages, Sharia law and so on. I congratulate my noble friend the Leader of the House on her comprehensive reply to the debate. She managed to cover all the issues raised and to answer many of the questions that she was asked. That is a real accomplishment, for which I am sure we all thank her. I beg leave to withdraw the Motion for Papers.
Motion for Papers, by leave, withdrawn.
Tax Credits Up-rating Regulations 2008
4.36 pm
Lord Davies of Oldham rose to move, That the draft regulations laid before the House on 6 February be approved.
The noble Lord said: My Lords, I shall speak to the three orders this afternoon as well. Tax credits, together with child benefit, deliver financial support to the vast majority of families with children in the UK and are vital in our commitment to tackling child poverty. I am pleased to introduce these regulations and orders, which increase certain elements and thresholds of tax credits, and raise the rates of child benefit and the guardian’s allowance. In my view, the regulations and orders are compatible with the European Convention on Human Rights.
First, I turn to the Tax Credits Up-rating Regulations 2008. Tax credits play a major role in ensuring that work pays and in tackling child poverty. Overall, nearly 6 million families, containing nearly 10 million children, benefit from tax credits. These regulations increase the child element of child tax credit by £175 above the earnings index to £2,085 a year from 6 April 2008. This element will have increased by £640 since its introduction in April 2003,
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In the 2007 Budget, the Government announced the next stage in modernising the tax and benefit system. This included increasing the thresholds for working tax credit by £1,200 to £6,420 in April 2008, and raising the withdrawal rate to 39 per cent for those who have income above the threshold. These regulations bring this into effect and further strengthen the incentives to work while retaining the current focus of tax credits. They also increase most of the other working tax credit elements in line with prices.
I turn to the Child Benefit Up-rating Order 2008 and the guardian’s allowance orders. Child benefit is payable to over 7 million families for around 13 million children and young people. Almost all families in the UK who have to bring up children receive a worthwhile contribution towards that cost. These instruments increase rates in line with prices. From 7 April 2008, child benefit will be worth £18.80 per week for the first child and £12.55 for each subsequent child. The Government continue to meet their commitment to increasing child benefit in line with prices. As a result of these increases, the rate payable for the oldest qualifying child remains over 25 per cent greater in real terms than the rate payable in 1997. A family with two children now receives more than £31 per week.
The guardian’s allowance will increase to £13.45 per week. With the increases introduced by these instruments, we will deliver even more support next year. We remain committed to our long-term aim of eliminating child poverty within a generation and halving it by 2010, and tax credits and child benefit will remain a key part of this strategy. As a result of all changes to the personal tax and benefits system since 1997, by April 2009 families with children in the poorest fifth of the population will be £4,000 a year better off. I commend these regulations and orders to the House, and beg to move.
Moved, That the draft regulations laid before the House on 6 February be approved. 10th Report from the Joint Committee on Statutory Instruments.—(Lord Davies of Oldham.)
Baroness Noakes: My Lords, I thank the Minister for introducing these orders, which are one of the highlights of the Treasury calendar. They are not in themselves controversial, but as usual they give us an opportunity to raise related issues with the Minister. Let me deal first with the indexation basis of the child benefit and guardian’s allowance orders. These have to be uprated in line with the general level of prices. The figure that has been used, give or take rounding, is 3.9 per cent, which is what the RPI stood at last September. That sounds generous, but the experience of inflation varies with underlying expenditure patterns, and many families, especially those on lower incomes, are experiencing much higher levels of inflation than is reflected in the RPI. Crucially for them, fuel costs are rising at a multiple of RPI and even some basic foodstuffs like bread are rising at a
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I turn to the tax credit uprating, where things are not so simple. Here we have the Section 41 report, which obliges the Treasury to publish the rates of tax credit that would result if they kept pace with the rate of inflation. Here, the Treasury appears to be using a general inflation rate of 4.1 per cent. RPI was 4.1 per cent last August and also again in January this year. Can the Minister explain why different rates of general inflation have been used for the different orders before us today? I find it confusing. More importantly, can he explain the rationale for the different uprating increases in the different categories of tax credit? Working tax credits are rising by the general inflation rate of 4.1 per cent, while child tax credits are all over the place. The family element gets no rise at all and therefore falls in real terms. Most of the other elements rise by something over 7 per cent, but the child element rises by over 13 per cent. I would be grateful if the Minister could explain those.
We need no explanation for the standstill applied to the income rise disregard of £25,000. This hugely costly element of the tax credits scheme—Ministers last year were finally forced to admit that it would cost approximately £850 million a year—was put in place to save the face of the Prime Minister and conceal the fact that the tax credits scheme was a shambles. The fact that it remains at £25,000 is a tacit admission that the scheme remains a shambles. This view is endorsed by the Public Accounts Committee in another place, which reported on tax credits in its eighth report of this Session. It is worth quoting several paragraphs from the summary of that report that pull together the mess that the Prime Minister invented:
“HMRC has paid £65 billion to tax credit claimants since the scheme was introduced in 2003 ... The Department overpaid £6 billion in the first three years of the scheme. By the end of March 2007 it had collected £2 billion of this debt and written off £0.7 billion. £3.3 billion of these overpayments remain to be collected. It is unlikely to recover £1.6 billion of the debts.
Although the administrative cost has increased from £406 million in 2003-04 to £587 million in 2006-07, there is little evidence the Department has the scheme under control. Many claimants continue to struggle to understand tax credits and why they are overpaid. There have been many complaints about the process for recovering overpayments and the Ombudsman continues to receive and to uphold a large number of complaints.
Tax credits continue to suffer from the highest rates of error and fraud in central government. HMRC estimates that claimant error and fraud led to incorrect payments of between £1.04 billion and £1.30 billion in 2004-05. This level of error led the C&AG to qualify his opinion on the HMRC Trust Statement for the fifth year running. The Department still has no targets for reducing error and fraud”.
I do not doubt that tax credits have helped the finances of many families, but they cannot be counted a success because they have inflicted misery on too many other families. When are the Government going to look again at the scheme? Does the Minister think that it can ever be counted a success while it has embedded within it an income disregard level which approximates to the value of average full-time earnings in this country?
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The Minister will no doubt seek to justify the high level of child tax credits in terms of reducing child poverty. He referred to the Government’s targets when he introduced the orders, but he did not say what I am sure he knows—that the Government are failing to achieve their own target of halving child poverty by 2010. Yes, the Government have made some progress but, as the Work and Pensions Select Committee in another place pointed out at paragraph 44 of its second report published earlier this week:
“On current projections, the Government will miss the 2010 target by close to a million children in poverty when measured before housing costs and close to 1.5 million when measured after”.
The trouble for the Government is that they simply cannot buy their way to meeting the target. The Institute for Fiscal Studies estimates that it would cost another £3.4 billion in credits or other benefits to meet it. We obviously await next week’s Budget but it does not take a genius to work out that, with one of the largest budget deficits in Europe, the Chancellor has little room for manoeuvre.
In any event, although we support the aim of reducing and then eliminating child poverty, we do not believe that state handouts are the right way forward. They may improve the statistics in the short term but they can increase welfare dependency in the long run. Britain already has the highest proportion of children in workless households in Europe and the incentives to work have weakened in recent years. That was the conclusion of the research carried out by the Joseph Rowntree trust and the Institute for Fiscal Studies some 18 months ago.
For more than 2 million people, benefit withdrawal rates—not just for tax credits but all the other social security benefits that attach themselves to the poor and/or out of work—are higher than the marginal tax rates of well paid people such as the Minister. For some, the marginal rate is over 90 per cent. We have yet to hear more than rhetoric from the Government about tackling this and focusing on work as the most viable way of avoiding mass poverty.
I have one final point for the Minister on tax credits. For social security benefits, the Government’s policies and practices are scrutinised publicly by the Social Security Advisory Committee. We know that its reports are often unwelcome to government, which in turn gives confidence that this body is no mere cipher. When the tax credit system was introduced, the Treasury—then led by the Prime Minister—refused to allow tax credits to be subjected to SSAC scrutiny. Instead, there is a Memorandum of Understanding that effectively gags the SSAC when it considers tax credits. In its 2005-06 report, the SSAC called for a review of the Memorandum of Understanding but its 2006-07 report noted that virtually no progress had been made and that this was of considerable concern to stakeholders. That concern is unsurprising, given the mess that tax credits are in, as I have already mentioned. Will the Minister say whether a proper review will now take place and, further, will he agree that openness and transparency should now be extended to the tax credits work of the SSAC?
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4.49 pm
Lord Oakeshott of Seagrove Bay: My Lords, I do not propose to follow the noble Baroness, Lady Noakes, in her detailed questions, many of which we support and look forward to hearing the Minister’s reply to, but I want to ask one specific question about the method of uprating or calculating the uprating and then ask some wider questions and point to wider problems on the Government’s overall record on fighting child poverty, of which tax credits are at the heart.
I come first to the specific question. The Explanatory Memorandum shows that Section 150(1) of the Social Security Administration Act 1992 states that the Secretary of State shall in each tax year review the rates of child benefit,
- “in order to determine whether they have retained their value in relation to the general level of prices obtaining in Great Britain estimated in such manner as the Secretary of State thinks fit”.
Why does the Treasury think fit to estimate the general level of prices—a comprehensive description of retail prices in this country—for those purposes at the retail price index, when they use the much less generally representative consumer price index as their chosen method elsewhere?
I turn to the Government’s failure on child poverty, and, as I say, tax benefits are the key stone of the policy. I have picked up from the Printed Paper Office a glossy document called the DWP Autumn Performance Report 2007. In particular I want to ask the Minister about the child poverty targets. In this wonderful Civil Service language one cannot fail on PSA targets. Ongoing targets can be met early, which means that there is no possibility of subsequent slippage during the target’s lifetime; we can be ahead, which means that progress is exceeding plans and expectations; we can be on course, which means that progress is in line with plans and expectations; or we can have slippage. Progress is slower than expected; for example, by reference to criteria set out in a target’s technical note.
All four key child poverty and development targets—(1)(a), (1)(b), (1)(c) and (2)—three of which are DWP and one is joint with the Treasury, have slippage. The noble Baroness referred to the overall failure to make relevant progress towards the child poverty target, but let me ask one or two more detailed questions. On page 16, it is pointed out that the,
- “baseline figure for the number of children in households with less than 60 per cent of contemporary median income is 3.4 million”,
and to date, over the period from 1988-89 to 2005-06, there has only been a fall from 3.4 to 2.8 million. Last year, there was an increase of 100,000, which, in these charming words,
It is certainly statistically significant if we are meant to be making significant reductions. I would not call that slippage; there is not so much as a snowball’s chance in hell of meeting the Government’s target.
The second target is to reduce the proportion of children living in workless households by 5 per cent
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