Clause 12 - Child care element

Tax Credits Bill – in a Public Bill Committee at 4:45 pm on 17 January 2002.

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Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs 4:45, 17 January 2002

I beg to move amendment No. 33, in page 8, line 26, at end insert—

'(2A) The charges of a prescribed description under subsection (2) may include an amount to take account of the loss of earnings of a person or of the spouse or, in the case of an unmarried couple, of the partner of the person by whom a claim for working tax credit is made who does not take qualifying remunerative work in order to care for a child of a prescribed description for whom the person is responsible.

(2B) The amount of tax credit payable under subsection (2A) shall not exceed the maximum amount payable to a person in qualifying remunerative work'.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

The amendment is in related territory and proposes that the child care element should involve an allowance to take account of the loss of earnings of a partner or spouse who does not work but who looks after children. Such an element would not exceed the maximum payable to a person in qualifying remuneration.

The amendment tackles the issue that we discussed in the previous amendment and in amendment No. 31. There are circumstances in which one spouse may not be able to work for reasons of travel, choice, qualifications and so forth.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I cannot say why the amendment would not work, only that it would not produce what the hon. Gentleman hoped for. He went straight to the principle that he wanted to explore: whether there should be compensation for a partner who stays at home caring for the children and does not enter the labour market. It used to be called wages for housework; I do not know what it would be called now.

The Government appreciate and understand that some couples take the decision that one of them will forego paid employment to stay at home because they believe that that is best for their children, and we therefore make payment by other methods, in particular child benefit. It would completely undermine our intentions on work incentives to make compensation for those who stay at home. We oppose the transfer of allowances for the same reason. However, it is important to ensure that those couples receive some recognition. That could be done through the adult element and child benefit, which, I remind the hon. Gentleman, the Government have increased

by 26 per cent, as well as other arrangements. The new tax credits build generously on the working families tax credit. The Government are not prepared to concede this principle. I ask my hon. Friends to oppose the amendment, as it is an inappropriate way of recognising the costs on families, and would require expenditure that we are not prepared to commit ourselves to at this stage.

Amendment negatived.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I beg to move amendment No. 87, in page 8, line 27, after 'provided', insert

'whether in the child's home or elsewhere'.

The argument has been well rehearsed. I raised this issue when we discussed the working families tax credit on Second Reading. It extends entitlement to the child care component of the tax credit to the provision of child care in the person's own home. There are two clusters of beneficiaries. The first are children with special needs and disabilities. I am grateful to Mencap for its briefing on this. It is concerned about children who need specialist care that is not closely accessible, such as in a special nursery that is not nearby, or care that is provided by a specialist carer in the home. Parents of such children are not currently entitled to draw down the child care component of the credit.

Mencap gives a helpful example of

''a working mother, Sue Knight who has a 5-year-old son, with multiple disabilities and is tube fed. In the holidays, he needs someone from a registered agency to come into the house to look after him because he needs higher levels of support than child minders. The Inland Revenue rejected her childcare expenses as part of her Working Families Tax Credit claim. The letter from the Inland Revenue makes it clear that they would pay if her son could leave the house and go to a childminder or a club.''

That was not possible because of his disability and the intense support he required. That case illustrates perfectly the point. I will not add any more.

The second group of potential beneficiaries are those who work antisocial hours. As a parent of a young child I recognise that parents who work from 3 pm to 8 pm are reluctant to move their child from child care in the evening, even assuming that such child care is available. That is a strong disincentive to people taking work.

Photo of James Clappison James Clappison Shadow Spokesperson (Treasury)

I am listening to the hon. Lady with great interest. Obviously she has received briefings from a number of organisations. Can she give us an idea of the number of people who work antisocial hours?

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I cannot give a figure. Among other things, we are talking about a potential group of beneficiaries. We simply do not know who could be drawn into the work force. Representing a constituency in the inner city, I know that the jobs that are increasingly available and that may suit working parents or parents wanting to move into the work place are early evening shifts at supermarkets and shops. The number of potential beneficiaries is substantial. There is a strong argument for the amendment. The issue is about accreditation and paying for child care that is of suitable quality and

consistent with accredited child care through nurseries and child minders.

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

The regulations need to be determined by the Department of Education and Skills. The Chancellor made it clear in the Budget last year that we wanted to ensure that disabled children could be cared for in their own home, but that the provision would apply to other jobs, too. We are working closely with the Secretary of State for Education and Skills. I hope that my hon. Friend will withdraw her amendment.

Photo of Karen Buck Karen Buck Labour, Regent's Park and Kensington North

I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

It being after Five o'clock, The Chairman proceeded, pursuant to Sessional Order D [10 December 2001] and the Order of the Committee [15 January 2002], to put forthwith the Questions necessary to dispose of the business to be concluded at that time.

Question put, That clauses 12 to 22 stand part of the Bill:—

The Committee divided: Ayes 9, Noes 5.

Division number 5 Adults Abused in Childhood — Clause 12 - Child care element

Aye: 9 MPs

No: 5 MPs

Aye: A-Z by last name

No: A-Z by last name

Question accordingly agreed to.

Clauses 12 to 22 ordered to stand part of the Bill.

Further consideration adjourned.—[Mr. Sutcliffe.]

Adjourned accordingly at two minutes past Five o'clock till Tuesday 22 January at half-past Nine o'clock.