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Child Benefit

Volume 931: debated on Tuesday 10 May 1977

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1.

asked the Secretary of State for Social Services whether he will make a statement on the payment of child benefit for non-resident children.

Subject to EEC arrangements and reciprocal agreements with other countries, child benefit is not payable in respect of a non-resident child unless the child has previously been in Great Britain but is temporarily absent. This was also the position for family allowances.

For the definition of temporary absence I refer the hon. Member to my reply to my hon. Friend the Member for Rotherham (Mr. Crowther) on 5th May.

If the Minister accepts that the costs of those with the responsibility of bringing up families are higher than the costs of those without such responsibilities, what is the moral argument for not extending the new child benefit to 200,000 families with non-resident children?

We are adopting the same policy on child benefit as we did on family allowances. The scheme is a replacement of one cash benefit by another cash benefit. Family allowances were not paid in respect of children living abroad. We are operating the same principle with the child benefit scheme.

I recognise the difficulties of paying child benefit to non-resident children, but does my hon. Friend not agree that it would be grossly unfair to withdraw the child tax allowance from those who cannot get the benefit of the child allowance for their children overseas? At the least, until such parents have had a full opportunity to bring these dependent children over here if they wish to do so, will my hon. Friend postpone the cancellation of child tax allowance for these children?

Child tax allowances are a matter for my right hon. Friend the Chancellor of the Exchequer. A concession has been made on those allowances for the current financial year in Clause 23 of the Finance Bill. An announcement about future years was made by the Financial Secretary on 1st April.

Since, when this policy was discussed in June last year, the Secretary of State accused me of wanting to leave 200,000 families positively and sharply worse off, will the Under-Secretary of State ask his right hon. Friend to withdraw his criticism—or does he now admit the charge?

I am sure that my right hon. Friend can deal with that charge. Those families will not be sharply worse off, because of the concession that is being made by the Government in the current Finance Bill.

Does the Minister accept that these families will be made sharply worse off as soon as the Government's decision to phase out tax allowances is finally put into effect? Does he agree that as child benefit is a combination of family allowance and child tax allowance, making child benefit not payable is sharply discriminatory to heads of families who happen to have children abroad?

We have made a special concession on child tax allowance for non-resident children for the present financial year. Thereafter they will revert to the child tax allowance that is appropriate to other families in this country. We have tempered the wind to the shorn lamb for the present financial year.

11.

asked the Secretary of State for Social Services whether it is administratively possible to begin the full child benefit in April 1978 instead of waiting until 1979–8.

13.

asked the Secretary of State for Social Services whether he will increase child benefit rates in November 1977.

It would be administratively possible to begin the full child benefit scheme in April 1978, but our intention is to continue with the phasing in of the full scheme over the period up to April 1979 in line with the recommendation of the Joint Labour Party-TUC Working Party.

Child benefit will not be increased in November 1977; it is to go up in April 1978 in accordance with the next phase of the transfer of family support from child tax allowances.

Does the Secretary of State recognise that the position of families with children is relatively worse now than when this Government came to office, and that the increase in bread and milk prices in the past seven days will further aggravate family poverty? Is not the Government's record over child benefit one of a complete lack of courage and concern for married couples with children, on whom inflation falls particularly hard?

Whatever the hon. Member may say, when his Government were in power child benefits were not introduced. I am very proud that this Government have fulfilled their pledge and have introduced child benefits, which will be the foundation of family support for years to come.

Does the right hon. Gentleman accept that large increases in unemployment dependency allowances for children, by comparison with the small increases in child benefit, will make it more worth while for many family men with children to be unemployed than employed? Will he talk to his right hon. Friend the Chancellor about putting this state of affairs right so that we have a proper family policy?

I believe that we have a proper family policy. The number of people for whom it is any advantage at all to be unemployed as opposed to being in employment is very small indeed. This is one of those canards that the Opposition have flogged around the country. It is absolutely untrue, and it does a great deal of damage.

Is it not a fact that since the working party produced its compromise report for phasing in child benefit the Chancellor has made £1,800 million available for tax reliefs which do not benefit children at all? In that situation, will not my right hon. Friend fight for an earlier increase in child benefit and, at the very least, for the automatic up-rating of child benefit in November with the rest of the benefits?

I can assure my right hon. Friend that I want to see the most substantial increase in child benefit that is possible in April next year. The possibility of an increase in November is simply not on, but I hope that next year we shall see a substantial increase, which will show the full significance of child benefit as introduced in this House.

Will the right hon. Gentleman urgently review the special cases that are worse off in absolute terms as a result of the child benefit scheme, concerning which I have already written to his Department?

I shall examine the correspondence that has come from the hon. Gentleman. If we take into consideration the tax remissions in the Budget, there is no one who is actually worse off in this context. There were some high taxpayers who were marginally worse off as a result of the child benefit scheme, but they will be marginally better off as a result of decisions already announced by my right hon. Friend the Chancellor.