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Lady Olga Maitland: Does the hon. Gentleman agree that, far from having a so-called pathetic record, the youth training scheme has been an enormous success? Is he not aware that 80 per cent. of those who complete youth training courses go on to jobs? Surely that is a success.
Mr. Wicks: I am pleased that many of those who complete their courses find jobs; that is the purpose of the
scheme. To be fair, the hon. Lady must be extremely concerned that less than half those who start youth training courses complete them. I use the word "pathetic" because something is wrong with the quality of the courses.
Faced with these facts, and given the immense challenges facing policy for young people, can anyone say that resources are currently being spent effectively and equitably? Are policies encouraging young people to pursue their education or to enter training courses? We consider those questions to be vital, so we have announced a review of policies and resources for children post-16.
The review will examine the whole range of post-16 finance and policy, including grants, fees, discretionary allowances, education maintenance allowances and child benefit. The Government are seldom able to look effectively at policies across Departments--we are doing that through this review, in shadow government.
Despite the scaremongering from the Government Benches this morning, the Labour party has no intention of interfering with child benefit for children under the age of 16. The Labour party initiated the child benefit scheme--in fact, the great pioneer Eleanor Rathbone was the founding mother of family allowances in this country. The Labour party is committed to child benefit as a universal payment, not least because it is an income for mothers. Let there be no scaremongering about that.
Mr. Nigel Evans:
If the Labour party is opposed to parents who are wealthy or on high incomes getting child benefit for children aged between 16 and 18, why does it not hold the same view in relation to wealthy parents with children below the age of 16?
Mr. Wicks:
Those below 16 are children; those between the ages of 16 and 18 are in a vital transition period through childhood, into adolescence and then into adulthood. We are talking about a range of policies--education, training and social security--that impact on that age group. I have argued that, at the moment, those policies are ineffective, and that is the case for a review--we want something better, fairer and more effective. No decisions have been made because the review is currently under way. It would be wrong to pre-empt any options at this stage.
I believe that the review represents a major step forward. It shows that the Labour party is not complacent about the position facing many young people in Britain today. I think I heard the Under-Secretary of State for Social Security say that we have had four years--by golly, the Government have had more years than that, and look at the mess that we are in.
It is sensible to examine the use of existing resources to see how they are being spent and whether they can be spent more effectively. The review deals with some substantive and complex matters. The prime concerns of the review are to encourage and enable significantly more young people to enter education or training, and equip them to take their place in the employment market in a modern, complex and challenging world. The review is
about offering support to young people and their families, and about producing a coherent system that operates uniformly across the nation.
Ms Lynne:
Does that mean that the Labour party is committed to restoring benefits to those aged between 16 and 18?
Mr. Wicks:
There is no point in us undertaking a review if we know all the answers before the review. We are looking rigorously at the resources and the policies, so that, when we take our place in government, we will have the policies that Britain needs.
I have welcomed the debate with great enthusiasm because it enables us to remind the House of the Tory record on child benefit. The hon. Member for Ribble Valley--who clearly has a dry sense of humour--presented the Tory party as the party of child benefit. That is one of the better jokes we have heard in the House in an already somewhat whimsical week for the Tory party.
The Government's record on child benefit includes a three-year freeze on the level of child benefit in the late 1980s. Today, Conservative Members have posed as the champions of the family and of child benefit. However, so committed were the Conservative Government to child benefit that they chose to freeze it for three consecutive years: 1987-88, 1988-89 and 1989-90. This was a withering on the vine strategy. The Government thought that, if they could get away with freezing the benefit, it would disappear and be replaced by the means-tested family credit.
How does that square with what the hon. Member for Ribble Valley had to say today about the universality of child benefit and his critique of means tests? When he was a parliamentary candidate and Conservative activist in the late 1980s, did he have the courage to attack the Conservative Government because of the freeze of child benefit? I suspect not.
Nigel Lawson was the Chancellor of the Exchequer at that time. In his memoirs, he was remarkably candid about the strategy. He stated:
This policy, mean-minded as it was, was changed only because of the force of public opinion, led by attacks from the Labour party. The so-called party of the family, after its three-year freeze-up, was forced to increase the rate of this key family benefit. In 1991, child benefit was uprated, and the Conservative party had to commit itself to raising benefits in line with inflation. Why did this happen in 1991? Because a general election was forthcoming--for political reasons, they had a change of heart.
Mrs. Thatcher, the then Prime Minister, was hardly happy about this, as she revealed in her memoirs--they all write memoirs. She stated in her memoirs--I am sure that Government Members know every passage off by heart:
More recently, the No Turning Back Group--which includes the hon. Members for Rutland and Melton (Mr. Duncan), for Chingford (Mr. Duncan Smith), for Colchester, North (Mr. Jenkin), for Milton Keynes, South-West (Mr. Legg) and for Colchester, South and Maldon (Mr. Whittingdale)--issued a paper on the welfare state. They are the welfare state sceptic wing of the party.
What did these five social philosophers have to say about child benefit? Did they agree with the hon. Member for Ribble Valley? No, they did not. They stated in their pamphlet of 1993:
The Parliamentary Under-Secretary of State for Social Security (Mr. Andrew Mitchell):
As the hon. Member for Croydon, North-West (Mr. Wicks) said, this is a timely debate. My hon. Friend the Member for Ribble Valley (Mr. Evans) has done a service to the House in introducing the debate: it can examine the extent to which the thinking of the Labour party on this most important area of public policy has progressed since the debate on 17 May. As is becoming increasingly clear, the answer is that it has not progressed at all.
We absolve the Labour Front-Bench spokesman from any guilt, because he is far too intelligent to believe in that absurd proposal. To use a military metaphor--there was reference to defence earlier in the debate--he has laid down smoke, and not addressed the proposal that we are discussing today. He is simply the hapless Labour spokesman who must come to the Chamber today to defend it.
The proposal lies alongside Labour's much-vaunted social security review, which has been revealed as a sham and a shambles. The Leader of the Opposition urged his social security team to think the unthinkable, but I am
sure that those hon. Members could not have dreamt that such an unspeakable proposition would emerge. To be fair to the hon. Member for Islington, South and Finsbury (Mr. Smith)--who is my Member of Parliament when I am in London--it is not entirely the fault of him and his colleagues. He has had to endure an ill thought-out intervention from his colleagues in the shadow Treasury team.
Virtually no Labour Members defend the proposal. My hon. Friend the Member for Ribble Valley referred to the Labour Members of Parliament who live in or near Islington and to their comments about the scheme. The hon. Member for Rochdale (Ms Lynne)--with whom I usually never agree--eloquently highlighted the foolishness of Labour's proposal. Although the hon. Member for Preston (Mrs. Wise) was not keen on my hon. Friend's argument, in a concise and a withering attack, she dismissed the thinking--if one could call it that--of her own Front Bench. She has the courage to say publicly in the House what her Back-Bench colleagues are saying in the highways and byways of Westminster.
It is important to examine where this absurd proposal has come from. It is wrong in principle, profoundly unfair in practice, based on inaccurate information, and likely to achieve the opposite result to that which is intended. On 17 April, the shadow Chancellor announced plans to abolish the child benefit for 16 to 18-year-olds for the purpose of providing additional educational opportunities to children from less well-off families. It seems this week that young people would receive up to £20 per week to encourage them to stay on at school.
Whatever the plan, Labour's policy is founded on the assertion that 80 per cent. of children with unskilled parents leave school at age 16. It would be shameful if the Government had presided over such a record. Some 20 years ago--after four years of a Labour Administration--those figures prevailed. However, the figure today is 56 per cent. Last year, 72 per cent. of 16-year-olds stayed on at school or further education--an increase from 42 per cent. in 1979-80. Almost 90 per cent. of all 16-year-olds now take part in education or training--five percentage points higher than four years ago.
As my hon. Friends have said, Labour's proposal would take away £560 per year from families with one child. That sum would not be returned to taxpayers, in whole or in part, through lower taxes. Therefore, it is effectively a tax increase equivalent to a 5p increase in the standard rate of tax for families on average earnings. It is Labour's teenage tax. Labour Members who are always keen to suggest that our provision is deficient in comparison with that of other European Union states should note that removing child benefit would make the United Kingdom the only country in Europe that did not provide assistance to families with 16 to 18-year-olds in non-advanced education.
It is an understatement to say that the response to the initial proposal was critical. It was criticised by other Opposition spokesmen who had not been consulted, and it was roundly condemned by Back Benchers on both sides of the House in early-day motions. The Child Poverty Action Group opposed the proposal, and correspondence columns in the newspapers showed that the public were profoundly unimpressed. In fact, apart from the Leader of the Opposition and the shadow
Chancellor, the only person to support the proposal was the hon. Member for Rotherham (Mr. MacShane)--a man whose good sense is clearly exceeded by his ambition.
It was then suggested that child benefit be withdrawn only from those children at fee-paying schools. That idea was also based on erroneous statistics. We were told that 25 per cent. of 17-year-olds in education attend fee-paying schools, but the true figure is closer to 10 per cent. That is another miscalculation, by a margin of 150 per cent.
Parents naturally want to do the best for their children, and many make great sacrifices to send them to fee-paying schools. The children who attend such schools are not all from well-to-do families. The 75,000 families who would be affected by such a change include many of modest means. That is useful information, which proves that Labour has lost none of its malice and envy towards those who try to better their position and that of their children in that way. Young people must be supported while they stay on in education, and child benefit can make an important contribution in that regard.
As the hon. Member for Rochdale pointed out, child benefit may be crucial in determining whether young people from less well-off families stay in education to gain better qualifications that improve their prospects and life chances. Economic pressures may force many young people to leave school and enter the world of work prematurely. For example, child benefit for a 16-year-old contributes a healthy chunk of the income for a family that is just above the point where entitlement to income-related benefits runs out.
The absurdity of Labour's proposal to abolish child benefit is highlighted by its other proposal, to make it available to bogus asylum seekers. I recently received a letter from the Labour Nottinghamshire county council urging me to support Labour's amendment in another place to pay child benefit to the children of those who seek to enter this country illegally. In other words, Labour believes that ambitious young people from British families should be penalised, but that the children of those who come from overseas and have no right to remain in this country should retain child benefit.
It is not only young people in education who will be penalised: the Opposition's other policies would damage the opportunities available to any young person with ambition. Between now and the general election, the electorate must try to imagine what life would be like under a Labour Government. They should heed this warning: "Don't be young under Labour. Don't come from less well-off families. Don't try to better yourselves."
Labour's policies would hit people from five directions. First, they would hit those young people who want to stay on at school after the age of 16. As I have described today, Labour would take £560 from families by abolishing child benefit as a result of introducing the teenage tax. Secondly, Labour's policies would hit those young people who wish to leave school and enter employment. Labour's minimum wage would cost hundreds of thousands of jobs, as employers would find it more costly to hire new staff.
Thirdly, young people, who tend to earn low wages, would be hit the hardest. Those who choose to leave school and learn a trade would face many difficulties. At present, employers are taking on more young people as apprentices and training them in a practical and successful manner. Under Labour, employers would have to give
16 to 18-year-olds one paid day off a week--whether or not it suited their training needs. Labour would tell employers that they must give five days' pay for four days' work. Why should employers take on young people in those circumstances, when they could employ older people whom they could train in the manner which best suited the firm and the individual concerned?
Fourthly, young people will be damaged by the abolition of grants as a result of Labour's proposal to introduce a graduate tax. Fifthly, there is Labour's proposal for a curfew on young people, which even some Labour Front Benchers have rightly dismissed as crackers. Under that proposal, Labour would make it a police priority to catch youths, whether guilty or innocent, who are not in their homes after a certain time. Labour fails to understand that guilty youngsters, not the innocent, are the real problem. While the Government seek to crack down on the guilty with our tough law and order policies, Labour Members regularly vote against our proposals.
"The argument was that help should be concentrated on the poorest families--which meant that what mattered was not the indiscriminate Child Benefit, but the means-tested Family Credit."
I wonder what the hon. Member for Ribble Valley has to say about that? Nigel Lawson continued:
"Needless to say, having established the principle, John Major (the then Chief Secretary to the Treasury) . . . with my strong backing, was anxious to consolidate it with a further Child Benefit freeze".
That was the strategy of today's Prime Minister. The Government froze benefits--they had a frozen heart about social policy. The policy was implemented by the then Chancellor of the Exchequer and by his loyal Chief Secretary--today's Prime Minister.
"This sum was paid--tax free--to many families whose incomes were such that they did not really need it, and it was very expensive."
She would have preferred a reform that included child tax allowances.
"We believe that the full up-rating of Child Benefit . . . is unsustainable."
That is the view of the hard right of the British Conservative party. It is certainly different from what we have heard today. So much for the Tory party posing as the friends of child benefit.
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