in the first session of the fifty-second parliament of the united kingdom of great britain and northern ireland commencing on the seventh day of may in the forty-sixth year of the reign of





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House of Lords

Monday, 26th January 1998.

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

Prayers--Read by the Lord Bishop of Lincoln.

Domestic Workers: Tax Treatment

Baroness Gardner of Parkes asked Her Majesty's Government:

    Whether, as an aid to the creation of more jobs, they have any proposals to treat domestic employment, particularly of those providing care for the elderly, the sick, the disabled or children, as fully tax-deductible positions for those employers in need of this assistance.

Lord McIntosh of Haringey: My Lords, decisions on tax are a matter for the Chancellor of the Exchequer's Budget, but the Government are committed to helping people into work and making work pay.

Baroness Gardner of Parkes: My Lords, I thank the Minister for his Answer. Is he aware that when they introduced this type of system in France they created hundreds of thousands of new jobs? Further, does the noble Lord agree that it would quite probably be revenue neutral because most people who employ someone on that basis at present are just paying cash in hand?

Lord McIntosh of Haringey: My Lords, as regards the noble Baroness's second point, I am not sure that I should respond about what is, after all, law breaking. Those who are paying cash in hand and not paying tax, or not encouraging their employees to do so, are breaking the law. I do not believe that we can calculate on the basis that any such change would be "revenue

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neutral". The problem with the change proposed by the noble Baroness is that it would very much help the better off rather than those most in need, because it would only be accessible to those who can afford to pay the gross costs of employment.

Lord Gainford: My Lords, does the Minister see a possibility of using the situation to enhance the trade of domestic service? I ask that question because servants are no longer considered to be menial; indeed, they are highly valued, especially in households where the husband and wife have professional qualifications. I have an indirect interest in the matter. A daughter of mine, who lost her executive job, went into domestic service and now runs her own housework and gardening business.

Lord McIntosh of Haringey: My Lords, I congratulate the noble Lord's daughter on her enterprise. Of course, I have the greatest respect for the honourable profession of caring, especially for disabled people and children. However, there is a risk that much domestic service, other than the kind to which I and the noble Lord referred, would be relatively short term, without qualifications and might not lead to full-time permanent employment.

Baroness Masham of Ilton: My Lords, with the serious lack of nurses, would this proposal not help to provide carers for the community, especially for very severely disabled people? Indeed, caring is very expensive to provide.

Lord McIntosh of Haringey: My Lords, I thought that the noble Baroness was going to refer to the nurses' need for childcare. I do not believe that the noble Baroness meant quite that, although, if I may anticipate questions on that point, the whole of the Government's New Deal proposals for getting young people into work and for after school childcare ought to help nurses, as well as others. As regards the noble Baroness's other

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point, there is of course a gross shortage of skilled nurses and our welfare-to-work proposals ought to assist in tackling that problem.

Lord Campbell of Alloway: My Lords, if the Minister accepts that there is a desperate shortage of nurses--and indeed there is--and suggests that the welfare-to-work proposals will help, can he say how they will do so? Must not something be done as a matter of urgency right now to enable these nurses to have a respectable recompense and to get the National Health Service running again as it should be?

Lord McIntosh of Haringey: My Lords, the noble Lord will not expect me to anticipate the findings of the review body or, indeed, the Government's response to them. I must apologise for shortening my answer too much when I referred only to welfare-to-work proposals. Indeed, a number of other government initiatives will help with the problem with regard to nurses; for example, the 10 pence starting rate of tax, the forthcoming minimum wage, reform of national insurance contributions and working families tax credit. All of those projects operate in the same direction to encourage this kind of work.

Lord Campbell of Alloway: My Lords, is the Minister aware that I am not interested in these reviews? I am interested in what is going to be done now in a desperate situation to give a fair deal to nurses.

Lord McIntosh of Haringey: My Lords, the noble Lord has repeated his question. I must also repeat that he will not expect me to anticipate the report of the review body or, indeed, the Government's reaction to it. I fully agree with the noble Lord that a shortage of 8,000 nurses is a very serious problem for the National Health Service.

Lord Dean of Beswick: My Lords, is not the Minister aware--

Baroness Robson of Kiddington: My Lords--

Lord Dean of Beswick: My Lords, it is the turn of this side.

The Lord Privy Seal (Lord Richard): My Lords, I think there is enough time for both the noble Baroness and my noble friend. Perhaps the noble Baroness will go first.

Baroness Robson of Kiddington: My Lords, I support the Question asked by the noble Baroness, Lady Gardner of Parkes. The Minister said that we do not have enough qualified people and there is a risk that people who are not qualified will take up these jobs. Does he agree that at the moment the Government are planning to spend money to create more childcare facilities for working mothers? He must agree that it is wrong to double tax people. If we implemented the measure we are discussing, that would provide great

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opportunities to reduce unemployment and would also teach young people how to run a home and how to look after a family. There is no reason why we should not set certain standards for these people before they are employed.

Lord McIntosh of Haringey: My Lords, I believe that I have already given sufficient indication of the Government's policies, including the childcare policies to which the noble Baroness referred. Those policies will help to get people into work, which is what we must be concerned with above all. However, I must repeat that the suggested relief would benefit the relatively well-to-do, who can afford to employ a carer in the home. It would be expensive to provide relief at a marginal rate on the gross salary cost of the carer and it would, of course, mean a windfall for those who already have domestic help.

Lord Dean of Beswick: My Lords, is the Minister not aware of some of the more savage financial penalties that were inflicted on those in the nursing profession by the previous government in the steep rises in the cost of accommodation that were inflicted on nurses without their having any say in the matter? I refer to rented accommodation.

Lord McIntosh of Haringey: My Lords, I do not disagree with my noble friend's analysis of past problems.

Lord Marsh: My Lords, on a slightly wider point, does not the Minister agree that it is now government policy that we should move away from these incredibly wasteful across-the-board benefits and move to benefits focused much more closely on need?

Lord McIntosh of Haringey: My Lords, much as I would like to answer that question, the noble Lord is going a good deal wide of the original Question on the Order Paper.

Baroness Trumpington: My Lords--

Lord Richard: My Lords, I am sorry to rise so early but I believe that we have spent eight minutes on the first Question. I think that perhaps we should move on.

Post Office: Future

2.45 p.m.

Lord Ezra asked Her Majesty's Government:

    Whether they intend to give the Post Office more commercial freedom.

The Minister of State, Department of Trade and Industry (Lord Simon of Highbury): My Lords, the options for granting greater commercial freedom to the Post Office are being examined in the context of the review announced by the Government last May.

Lord Ezra: My Lords, I thank the noble Lord for that Answer, but last May is a long time ago. It is reported

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that the results of the review have been in the hands of Ministers since early November. When will the report be published and when will a decision be reached? Is the noble Lord aware that a number of other countries have commercialised their post offices with great success and that the British Post Office has been under inquiry since 1992? In particular there is the question of the excessive dividend which is taken, amounting to no less than about 80 per cent. of the post-tax profit. That is double what any normal company pays, as the noble Lord well knows from his own past experience. Not only is virtually the whole of that profit taken, but the Post Office is not allowed to borrow externally. When will those two issues be put right?

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