Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Astor of Hever: I support Amendment No. 5 moved by the noble Lord, Lord Goodhart. I wish to be a little more charitable to his amendment than he was to our last one.

One of the many criticisms of the Bill expressed by many informed parties is that it removes potentially the main carer's guarantee to receipt of payment under the WFTC. The TUC--with whom I believe the Government are on good terms--stated in its 1999 budget submission that it was concerned that the WFTC might be diverted away from the family's primary care giver. There are currently 300,000 couples in which the man is the principal wage earner. Under the WFTC it could mean £900 million going to the man rather than to the mother. The wallet versus purse argument has been well documented and yet the Government have failed adequately to address it.

Lord Swinfen: I also support the amendment. We should bear in mind that many people change careers today whereas some 30 years ago they were likely to go into a career and stay there for the rest of their lives. That is not the case today. It is not only women who need to retrain; men need to as well. Some of the retraining may be on a part-time basis as well as on a full-time basis, and I hope that that will be taken into consideration.

Baroness Hollis of Heigham: The noble Lord, Lord Goodhart, was disappointed with what we said at the Committee stage. I fear I may again disappoint him, but I hope that he will accept the substance of our argument in such a way that he will not feel it necessary to press the amendment.

As I understand it, the aim of the amendment is to enable families whose income comes within WFTC limits, with one partner in work and another in education and training, to receive the kind of help with childcare costs which will enable the non-employed partner to study.

18 May 1999 : Column 264

As to the narrow point of whether the amendment is strictly necessary, the noble Lord, Lord Higgins, asked at the Committee stage for an explanation of how the regulations could be amended to provide for what the new clause aims at. All of the detail will be in regulations, as it is for family credit. With family credit, the rules for the childcare disregard are in Regulation 13(a) of the Family Credit (General Regulations) 1987. It is there that one will find the current condition that a lone parent or both members of a couple must be working 16 hours or more a week, or that one member works 16 hours or more a week and the other is incapacitated. The rules in Regulation 13(a) will be the basis for the childcare tax credit; in other words, WFTC takes over the FC regulations. Regulation 46(a) will set out the rules for childcare tax credit, as our draft amending regulations clearly show. An amendment to new Regulation 46(a) will be used to alter the qualifications for getting help through the childcare tax credit. Primary legislation of the kind put forward by this amendment to the Bill is not necessary. I hope that clarifies the points raised on this issue by the noble Lord, Lord Higgins, in Committee.

To return to the amendment of the noble Lord, Lord Goodhart, and to the wider issue of whether it is a desirable thing to do, we have to look at the arguments for use of WFTC as a vehicle. The first issue is who it would help. First, the amendment would limit the credit to couples where one is working; it would do nothing to help lone parents get back into the labour market as there is no suggestion that they would get WFTC childcare credit while in education; and it would do nothing for families where both parties wanted to retrain.

The purpose of the amendment is laudable. It seeks to ensure better educated and trained second earners. Of course that is a good thing, whether they are part time or full time. I entirely accept the point made by the noble Lord, Lord Swinfen, that people no longer have 40 year careers and very often need retraining several times through their lives. But the social security system is not designed to support the education system; that is, students in education are not eligible for JSA, they are not eligible for housing benefit, and they are not eligible for a range of benefits of that kind. Neither will they be eligible for tax credits.

Lord Swinfen: My Lords, I am thinking of the case where someone is made redundant and therefore needs to retrain, possibly because the whole industry in which he had been working had been running down. It is a matter of helping him get back into work. Very often the wife is working only part-time and drawing in a low income. That should be covered by this amendment.

Baroness Hollis of Heigham: My Lords, I certainly recognise what the noble Lord is describing. But there is no difference in principle between whether she is in work and he is not or whether he is in work and she is not. The same principle applies. We do not believe it is appropriate to use the social security system to support students through education. We do not believe in building WFTC on family credit. We believe that

18 May 1999 : Column 265

training, further education and so on are entirely laudable. But it is not the job of this benefit to do it. Working families' tax credit is a work incentive. Giving help to those with working partners who want to study is not a work incentive; it is an education incentive, the recipient of which may, but not necessarily will, subsequently return to work. The Government's priority is to give help to those who face the greatest barriers in returning to work, such as lone parents. Therefore, through the New Deal, the Government are providing help to lone parents in educational training with childcare costs, course fees, fares and finding childcare and are giving support, for example, where they are taking NVQ qualifications, either to Level 2 or, exceptionally, to Level 3, over courses lasting a year. All lone parents on income support are eligible for the New Deal though the programme is targeted specifically at those with children of school age. They are given support for their childcare costs in the New Deal.

In Committee, noble Lords asked what other grants were available for childcare costs; in other words, if we were not willing to support students with childcare costs through the social security system and, building on that, through the tax system, what support was available for students through the education system--the alternative? Some grants are specifically available for childcare costs. Lone parents and students with dependants as well as the partners of those in low paid work are eligible for additional grants which are to help with the extra costs that those students incur--part-time students, full-time students, mature students or non-mature students.

Educational establishments have discretionary funds in the form of access funds to help those who need extra help, such as childcare costs, to get proper access to education. It is for the educational establishments themselves to decide on their priorities in using those funds. I am sure that they will use them wisely to meet the kinds of need that have been described and to help those who would most benefit from education and training. From September these access funds will have £42 million available to them for HE. That will increase to £48 million in 2000-01. The kinds of student we have been talking about, with a partner in low earning work, would not be disqualified from those access funds any more than other students in potential hardship.

Around £10 million will be available through the FE system as opposed to the HE system--through the Further Education Funding Council--to compensate further education colleges offering free or subsidised childcare places. At the moment it receives £4.5 million which helps some 18,000 students and 22,000 children. That £4.5 million will increase to £10 million. Again, the student partners of men or women who are in low paying work will also be eligible for those awards, which are discretionary. But many establishments already provide good quality subsidised childcare places for their students. The extra money will help to provide more places and, as I have said, students with working partners would be eligible.

I hope the noble Lord, Lord Goodhart, will accept that it is not appropriate in our view to give additional support to student partners for childcare through WFTC. That has read-across implications for the whole field of

18 May 1999 : Column 266

eligibility of students for social security benefits. It is appropriate to help them through the educational support system. They are not excluded from the discretionary schemes run by HE and FE establishments which could meet hardship, possibly incurred by childcare costs. In the light of that explanation, I hope that the noble Lord will feel able to withdraw his amendment.

10.30 p.m.

Lord Goodhart: My Lords, I thank the noble Baroness for that reply. I think that she has to a considerable extent mistaken the reasoning behind this amendment. She suggested that we proposed to provide support for a student in education. That is not the purpose of the amendment at all. Its purpose, which is very much in line with the Government's intention for tax credits, is to provide not the student partner but the claimant working partner with a childcare credit where the other partner has a good reason for not being available to provide the care.

Under the present system there are two reasons why a working claimant might be able to claim childcare credit. One of those, no doubt the commonest, is that the other partner is also in work. The second possible reason is that the partner is disabled. On the basis of exactly the same principle, this amendment seeks to add a third reason why the partner is not available to provide the care; that is, that she (as will usually be the case) is undergoing retraining. I do not think that that is any different in principle from the other two cases. One is looking not at the subsidy to the student but the subsidy to the working partner, which is the whole purpose of the Bill.

I understand the Government's views on this matter. They have pointed out the various sources of help that are available to mothers who are seeking retraining. However, I regret that the Government have not been able to be more generous on this point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Next Section Back to Table of Contents Lords Hansard Home Page