Orders of the Day — Child Benefit Bill

House of Commons, 12 January 2005.

Dawn Primarolo (Labour, Bristol South)

I beg to move, That the Bill be now read a Second time.

The Bill is a short and straightforward measure consisting of seven clauses. None the less, it is a significant milestone in the Government's commitment to removing the financial barriers to young people staying in education or training after the age of 16, helping them to gain the skills and qualifications that they need to succeed in the modern global economy.

I would like to start by thanking the many organisations that have contributed to our consultation on the Government's review of financial support for 16 to 19-year-olds. Their views and evidence have been invaluable in informing the development of our proposals, including this Bill, which is an important first step. We have also been keen to involve young people and parents directly in the policy making that affects them.

Last September, I took part in a consultation event with young people organised by the National Council for Voluntary Youth Services. I was very impressed by the dedication and insightful comments of the young people whom I met. Their ideas and suggestions are now shaping the future of financial support for 16 to 19-year-olds. Indeed, Centrepoint arranged for me to have a very long meeting with a number of young people, who again demonstrated at every point their sensitivities, understanding and determination to have access to education and training to better their opportunities in adult life.

In short, the Bill will enable the Government to lay regulations extending child benefit to new groups of learners aged 16 and over. The House may find it helpful if I explain briefly the background of the steps leading up to the Bill so that hon. Members are able to understand its purpose in the context of the Government's skills agenda and our overriding commitment to build a strong economy and a fair society in which there are opportunities for all.

The Government's stable macro-economic framework has already contributed to lower levels of unemployment and record levels of employment. However, we know that to continue to thrive in the modern global economy and to deliver social justice to all—becoming both a fairer and more prosperous society—we need to improve the skills and fulfil the potential of all our young people and adults. Skills help our businesses and public services to achieve greater efficiency, innovation and excellence and they help individuals to gain employment opportunities and achieve their ambitions for themselves, their families and their communities.

We all know that skills matter, but we also know that the United Kingdom educational system has unfortunately suffered from historical underachievement. Although we perform strongly in higher education and have a large number of highly skilled workers compared with other countries, the historic failure to invest in training and education until recently has led to major shortfalls in terms of the intermediate skills that we need to secure sustainable employment and opportunities for all. As a result, far too many young people and adults are prevented by their lack of skills from getting secure, well-paid jobs and all the social and personal benefits that go with them.

About 7.8 million working-age people in the United Kingdom do not have the level 2 qualifications—the equivalent of five GCSE A to C grades—that are needed as a foundation for many careers. This failure is particularly apparent when we compare ourselves with our key competitors. Some 33 per cent. of the United Kingdom work force have low skills compared with 19 per cent. in Germany and 15 per cent. in the United States. In fact, we have the highest proportion of unskilled workers in any major European Union country.

In the Chancellor of the Exchequer's pre-Budget report statement, he set out the steps that the Government are taking to close Britain's skills gap. Part of this strategy involves ensuring that every adult who has missed out at school will have the funds and the opportunity through time off work, free training and help from employers to acquire skills, starting with a first level 2 qualification. Our commitment to deliver that was underlined by the announcements to roll out the national employer training programme and a pilot of a new learning allowance for benefit claimants, building on the success of the new deal for skills launched in the Budget of 2004.

The Government know, however, that these measures are not enough on their own. In order to secure greater productivity, flexibility and fairness in the United Kingdom economy in the long term, we know that we must ensure that, in future, all young people reach adulthood equipped with the skills that they need to succeed in the economy. Too many adults fail to reach their potential when young. Despite significant increases in the number of young people participating in education and training after the age of 16, a quarter of 15 to 19-year-olds are still not in formal education.

The United Kingdom compares unfavourably in this regard internationally. We currently lie 25th out of the 30 Organisation for Economic Co-operation and Development countries for participation in education at the age of 17. This situation did not occur overnight—it is the result of years and decades of failure to invest in education—and it cannot be put right overnight. However, the Government are committed to increasing the flow of skills into the labour market by ensuring that all young people can reach the age of 19 ready for skilled employment or higher education. Our long-term ambition is that by 2015, United Kingdom staying-on rates after 16 will move from one of the lowest in the OECD to one of the highest. Since 1997, we have been putting in place the effective strategy to achieve this ambition, taking an holistic approach that brings together three different areas of policy with the aim of setting clear expectations for all young people that they should continue in learning beyond 16—whether in school, college or the workplace.

First, we are reforming the curriculum structure for young people in England to provide more coherence, choice and flexibility, including by raising the quality and profile of the vocational route. Much has already been done to improve the quality and quantity of training places. With the expansion and reform of the apprenticeship programme, we are now able to offer a ladder of opportunity from basic to advanced skill levels.

A record number of young people are currently engaged in Government-supported training, with more than 250,000 in England alone gaining skills, experience and qualifications in thousands of businesses. The Government have welcomed the proposals of the working group on 14 to 19 reform, which was led by Mike Tomlinson and recommended the development of a single curriculum structure with the aim of giving academic and vocational qualifications greater parity. We will shortly set out our detailed response to those proposals in the form of a White Paper.

Our second strand of policy is designed to underpin those curriculum reforms by strengthening the advice, guidance and support offered to young people to ensure that they are able to make informed choices about the range of learning options and opportunities that are now available to them. Connexions partnerships and the devolved careers services are playing a vital role in that area and reducing the number of young people outside work, training and education. I pay tribute to the Under-Secretary of State for Education and Skills, my hon. Friend the Member for Bury, South (Mr. Lewis), for working tirelessly in his Department to bring those benefits to our young people.

John Bercow (Conservative, Buckingham)

Much of what the Paymaster General has said has been unexceptionable and I acknowledge that there is a good deal to be said for the Bill. However, she used the term "missed out" in relation to people who did not get what they should have had, or had hoped to receive, at school, and for whom provision must be made thereafter. I am not making a partisan point, because this a matter of great national concern, but does she know why the proportion of companies in recent business surveys saying that the three R's are not good enough and that we must provide remedial training is going up, not down?

Dawn Primarolo (Labour, Bristol South)

The hon. Gentleman follows such subjects closely, so he will know that we must also have a strategy on literacy, numeracy and developing skills in our primary schools, as we do. By putting the Bill in such a context, I was trying to demonstrate to the House that we are addressing the problem by raising standards and developing basic skills in primary schools and through curriculum change in secondary schools. The Bill and other proposals are designed to remove financial barriers and distortions that force young people to take options that are perhaps not right for them, but are the only ones available—some have no options at all. Our measures go all the way through to the announcement in the pre-Budget report of an adult skills agenda. I agree with the hon. Gentleman that there is not a single answer. The most important thing that we must engender is the value of education and the opportunities that that can give to young people, so early years provision, primary and secondary schools, training opportunities and higher and further education must all reinforce that.

Tony Baldry (Conservative, Banbury)

The Paymaster General said that there must be informed choices, and I am genuinely asking for information. Who is responsible for ensuring that youngsters have the information that enables them to make choices? Will there be an opportunity for each pupil to have an interview with Connexions or other people at a specific stage of their school career? There is an understandable tendency for schools to try to persuade everyone to stay on as long as possible because of capitation rates and weighting, so we would benefit from knowing who will ensure that an informed choice is made.

Dawn Primarolo (Labour, Bristol South)

The hon. Gentleman is right to pinpoint the fact that informed choice is necessary as one of the pressure points. Connexions plays a crucial role, but that must be enhanced and developed. I know that my hon. Friend the Under-Secretary is working on that, and the youth Green Paper will need to build on it. The hon. Gentleman rightly points out not only that opportunities must be available, but that young people must know that they are available and be able to decide which are most appropriate so that they can build on their potential.

Judy Mallaber (Labour, Amber Valley)

Following on from the discussion initiated by the hon. Member for Buckingham (Mr. Bercow), I can add that Amber Valley has an incredibly positive programme running from early years through to a 16-to-19 programme for those who are not in education, employment, or training at that age. We also have a sports development programme, to re-engage children from an early age right through. How restrictive will the criteria for who will qualify for the different types of training and the courses be? I want to ensure that the 16-to-19 programme, which might not necessarily lead to a formal qualification, but is very successful, will fall within the parameters of the Bill.

Dawn Primarolo (Labour, Bristol South)

The main criterion must be entry to employment. The hon. Member for Buckingham (Mr. Bercow) talked about doing the basics, and I told him about the primary school programme. Of course, any child who has benefited from the primary school reforms that the Government have already undertaken has not yet left school. We are intervening in the system at every level, especially to address the quality of action.

Judy Mallaber (Labour, Amber Valley)

rose—

Dawn Primarolo (Labour, Bristol South)

Will my hon. Friend allow me to make a little progress because I shall talk about access to training later in my speech? If I do not address her point then, I shall be more than happy to give way again.

Jonathan R Shaw (Labour, Chatham and Aylesford)

I would like to follow up the point made by the hon. Member for Banbury (Tony Baldry). The learning and skills council, the Connexions service and the local education authority in my area have organised the offer of post-16 education and training as part of the strategic area review. Does my right hon. Friend agree that it is vital that information about that, and the benefits available to all young people, is disseminated? Similar areas have different rates of success, so will she and the Department for Education and Skills examine best practice in increasing in the use of post-16 provision? This is a matter of national importance, so we must keep a microscope on what is happening locally.

Dawn Primarolo (Labour, Bristol South)

I agree with my hon. Friend, who is a distinguished member of the Education and Skills Committee. The review of financial support for 16 to 19-year-olds that was jointly organised by the Department for Education and Skills, the Department for Work and Pensions and the Treasury examined the quality of advice and support available to young people. Young people whom I met, and those who contributed to the review but whom I was unable to meet, said that that was a high priority, because many had found out that they could have received advice, support or guidance only when it was too late.

The third and final element of our strategy is removing the financial barriers to young people staying in education and training after 16. The Chancellor announced in the 2003 Budget that the Government would review financial support for 16 to 19-year-olds with the aim of delivering an accessible system of support, and incentives to reduce the appeal of a job at the age of 16 compared with that of the route of learning, which pays far more in the long run.

The review sought to build on the success of the education maintenance allowance pilots, which have already demonstrated how important financial incentives are to encourage young people to stay in learning. The evaluations of the pilots found that the education maintenance allowance was projected to have the biggest impact on post-16 participation levels since the introduction of GCSEs in 1987.

Sally Keeble (Labour, Northampton North)

Will my right hon. Friend give way?

Dawn Primarolo (Labour, Bristol South)

I will give way once more, and then I must make progress. I tried the patience of the House too long in a previous debate by giving way more than I should have done.

Sally Keeble (Labour, Northampton North)

Is my right hon. Friend aware of the skills shortage in areas such as mine, and the importance of measures to ensure that young people stay on at school and are encouraged to undertake the type of training that will provide the skills necessary to meet that shortage in Northampton? That will relieve the heartache experienced particularly by lone parents who have difficulty in supporting their children.

Dawn Primarolo (Labour, Bristol South)

I agree with my hon. Friend. My hon. Friend the Economic Secretary will visit her constituency and others in the area early next month and will have detailed discussions on a number of issues, in particular the role of employers in connection with access to quality training and the removal of barriers facing young people, whatever their background. That is crucial.

The Government's decision to roll out the education maintenance allowance nationally from September 2004 is increasing Government funding for 16-to-19 education by 10 per cent., and demonstrates our commitment to realising the potential of all our young people. The EMA is paid direct to the young person who has decided to stay on at school or college, on top of the financial support already available to their parents or carers through child benefit and child tax credit. It is a bold initiative that only pays something for something, making young people aware of their responsibility in committing themselves to learning and development.

The review of financial support for 16 to 19-year-olds sought ways in which these principles could be extended to other young people, including those continuing their learning after 16 outside school or college. We published the resulting report, "Supporting young people to achieve", alongside the Budget last year. The evidence collected during the review clearly indicated that the complexity and anomalies in the current system of financial support create major barriers to learning for many young people, especially—unfortunately— the most vulnerable. To remove those obstacles, the review proposed a long-term vision of a radically simplified model of financial support designed to support young people's post-16 choices and transitions, ensuring decent minimum income levels and improved accessibility.

The vision builds on the successful model of support already in place for the two thirds of 16 to 18-year-olds who stay on in full-time education and live at home. As I explained earlier, that involves a combination of financial support paid to the parents or carers in the form of child benefit and child tax credit, and a financial incentive paid directly to the young person in the form of the education maintenance allowance. Our intention is to extend this model of support and incentives to more marginalised groups of young people in order to encourage them to participate in learning. Our extensive consultation with young people, parents, voluntary sector organisations, businesses and learning providers indicated that there is strong support for this approach.

Jonathan R Shaw (Labour, Chatham and Aylesford)

Will my right hon. Friend give way?

Dawn Primarolo (Labour, Bristol South)

If my hon. Friend will forgive me, I shall make a little more progress before giving way to him again.

In "Supporting young people to achieve" we set out a package of short-term measures to improve the delivery of benefits to young people, together with some interim steps towards our long-term vision of a single coherent system of financial support for 16 to 19-year-olds. At the centre of those are two proposals to extend child benefit, child tax credit and education maintenance allowance to unwaged trainees, and to extend financial support until young people finish their course, rather than stopping it on their 19th birthday. The Bill is an essential step in implementing those proposals.

The current disparity in the financial support available for full-time education and unwaged training is one of the worst distortions identified by the review. A young person aged 16 to 18 is eligible for child benefit and child tax credit if they stay in full-time education at school or college, but not if they enter one of the unwaged work-based training programmes arranged by the Government to help trainees progress to paid apprenticeships. This differential treatment can distort choices for young people, particularly for the most vulnerable.

Together, child benefit and child tax credit constitute an important stream of income for a young person's family, and the loss of that money may mean that some low-income parents are no longer able to support their child in education. I am sure many hon. Members have received, as I have, letters from constituents who are desperate to keep their son or daughter in training on a course, but who cannot do so because the child benefit and child tax credit have stopped. The young person may have only six months left to complete their NVQ level 2, but everything is destroyed or lost because of the financial pressure on the family. That cannot be right. The Bill provides for arrangements to be put in place to prevent that from happening.

Judy Mallaber (Labour, Amber Valley)

With which institutions, organisations, employers and so on would a trainee placement be eligible for such support? If I give my right hon. Friend the details, will she examine my local sports development programme, which enables some of the participants to access further training—for example, to become sports coaches?

Dawn Primarolo (Labour, Bristol South)

The schemes eligible will be the formally sponsored Government projects and schemes. I do not recollect whether the one that my hon. Friend mentions is among them, but I am more than happy for her to send me the details and I will certainly consider them.

David Laws (Liberal Democrat, Yeovil)

How many of the 80,000 young people who are unwaged trainees will be covered by the welcome new rules extending child benefit and child tax credit?

Dawn Primarolo (Labour, Bristol South)

I do not have the figure to hand, but I will ensure that it is made available to the hon. Gentleman.

The longer-term vision is for a coherent system of financial support. Other Government measures will need to reflect that. For example, much work is being done to determine whether volunteering as a way of acquiring a skill could be included in the scheme in the long run, although that is not covered by the Bill. As far as I am aware, all 80,000 unwaged trainees mentioned by the hon. Gentleman would be eligible for the scheme. There is no question of some being in and some being out.

John Bercow (Conservative, Buckingham)

Will the right hon. Lady give way?

Dawn Primarolo (Labour, Bristol South)

Yes, but this really will be the last time. Many hon. Members want to speak, and I do not think that I have been strict enough.

John Bercow (Conservative, Buckingham)

I am grateful; the Paymaster General's generosity is exemplary. The Bill is short, but I hope that she will understand when I say that my brow furrowed when she referred to the regulations that are to come. Will they be subject to the negative procedure of the House, or to its affirmative counterpart?

Dawn Primarolo (Labour, Bristol South)

The hon. Gentleman may not have had an opportunity to obtain a copy of the draft regulations that were made available at the beginning of the week to assist hon. Members in the debate, and which I am sure will answer many questions that he might have. The regulations will be subject to the negative procedure, as with all other regulations in this category.

John Bercow (Conservative, Buckingham)

I had better go and get a copy.

Dawn Primarolo (Labour, Bristol South)

That would be an extremely good idea. Perhaps the hon. Gentleman should read the regulations before he makes any further comments.

The Government believe that young people should be able to choose the learning route most appropriate for them, rather than basing their decision on the amount of financial support available. The Child Benefit Bill is therefore important, because it is the first step in removing the distinction between education and unwaged training with regard to child benefit and tax benefits. Corresponding amendments will also be made to income support and other benefits to ensure that unwaged trainees who cannot live in the family home also benefit from the new arrangements. Those changes will strengthen young people's choices between the academic and vocational learning routes, and are very much in line with the proposals of the working group on 14-to-19 curriculum reform. They will bring about additional investment in financial support for unwaged trainees of around £100 million a year, delivering more money for tens of thousands of young learners, especially those from low-income families and those who are unable to live in the family home.

The Bill will also enable us to remove another damaging anomaly in the financial support system identified by the review—the cut-off at the age of 19, to which I have already referred. Child benefit rules are based on the assumption that post-16 participation comprises two years of A-level study at school or college, completed before the young person's 19th birthday. But this model of post-16 education does not match the pathways and experiences of many young people continuing in learning today. Each year thousands of young people reach the age of 19 while still studying for non-advanced qualifications. Most of these young people will be in this situation because their education has been disrupted for some reason, including vulnerable groups such as care leavers, young offenders and those who are homeless and have been estranged from their family.

Under the current rules, child benefit and tax credits cease on the young person's 19th birthday, irrespective of whether they are still studying. Young people from low-income households may be forced to leave their course before achieving their qualification, and that cannot be right. The situation is even worse for young people who cannot live in the family home, as their entitlement to income support may cease and they must instead claim jobseeker's allowance, which by requiring them to be available for work stops them from studying full-time. The loss of income support also triggers the loss of housing benefit, often making it impossible for them to continue on their course without losing their home or running up rent arrears.

The personal testimonies that we received during the review revealed the distress and frustration caused by these rules. The young people affected had overcome previous obstacles to engage in education, but then at 19 faced severe hardship and debt if they wanted to complete their course. There was a real sense among the respondents that although they were seeking extended support in the short term, in the long term they would contribute much more to society if they completed their studies.

It is a wasted investment both for the Government and for the young people if they drop out before achieving their qualifications. This is why we propose to reform the rules for child benefit, child tax credit and income support, so that young people who reach 19 while still studying for non-advanced qualifications are supported until they complete their course. The Government are committed to ensuring that all young people are supported to achieve their potential.

Andrew Tyrie (Conservative, Chichester)

Will the Paymaster General give way on that point?

Dawn Primarolo (Labour, Bristol South)

I said that I would not give way again. I have now been speaking for a long time, and the hon. Gentleman is about to make his own speech. I am sure that he will be able to make his point then, and my hon. Friend the Economic Secretary will be able to reply. Forgive me, but I have tried the patience of the House too much again.

Having set out the context and background to the Bill, I want to explain briefly its provisions and how these will be used to achieve the reforms. The Bill will restructure the existing definition of a "child" in child benefit by introducing a new concept of a "qualifying young person". A child will be defined as a person who has not reached the age of 16, which I can reassure hon. Members means that the Bill will have no impact on the payment of child benefit for under-16s. The Bill enables the Government to lay regulations prescribing the circumstances in which someone aged 16 and over is defined as a qualifying young person. That replicates the approach already used in the legislation for the child tax credit, ensuring greater consistency in the criteria for the two streams of support.

As I announced in my written statement to the House, we published draft regulations on 10 January to demonstrate how we intend to use the powers provided by the Bill. In addition to the existing entitlement for 16 to 18-year-olds in full-time education, the regulations show how we propose to extend support to unwaged trainees on specific training programmes arranged by the Government. The regulations also confirm that we will extend support to 19-year-olds until they complete their course, up to an age limit of 20. We intend to implement both the reforms in April 2006, along with the corresponding changes to the child tax credit and income support, which will be made via separate amending regulations.

The April 2006 launch date will represent a major milestone on the way to our long-term vision of a radically simplified system of financial support for young people in learning. It is worth pointing out that one of the benefits of using regulations to define eligibility for child benefit for 16 to 19-year-olds is that it provides us with greater flexibility to respond readily to the long-term curriculum changes and policy developments. This change has been too long in the making. Regulations enable us to respond more speedily. We must ensure that the financial support system reflects the diverse range of learning opportunities available to young people today and in the future.

We know there are innumerable barriers to education and training for all those over 16 years of age. Financial support should not be one of them. The Bill starts the process of ensuring that it is not, and I commend it to the House.

Andrew Tyrie (Conservative, Chichester)

I have a couple of quick points to make at the start. First, the Opposition will not oppose the Bill this evening. Secondly, I just want to say how grateful I am for the responses that I have received from a number of organisations to my request for their views on the Bill, in particular, Barnardo's, Connexions, the Foyer Federation and the Prince's Trust. Some of what I will say today reflects points that they have made to me, and no doubt my hon. Friend the Member for Rayleigh (Mr. Francois) will raise others in Committee. The hon. Member for Amber Valley (Judy Mallaber), who is just leaving the Chamber, also raised some of the points that they have made. I did not mean to embarrass her; I meant to compliment her. The eligibility rules point to which she referred features in several of the representations that I have received.

I intend to make three general points. First, with only seven clauses and a couple of schedules, this is a small and relatively straightforward Bill, even taking into account the regulations and changes to the tax credits system that will accompany it. However, it raises a number of detailed and important questions that I shall deal with in a moment. I am afraid that that will probably be the most boring part of my speech for some hon. Members who are not so interested in the detail. [Hon. Members: "No!"] I am pleased to have such a ready audience for such material.

Secondly, the existing system of support is getting incredibly complicated. It is unacceptably complicated and reflects what is going on in the benefits system more widely. I worry that the Government do not have a clear idea of their destination in some of the reforms, despite what the Paymaster General said, and that the Bill will not help us get there anyway. I shall deal with that point in a moment.

The third point derives from the fact that a relatively senior member of the Treasury team is presenting the Bill to the House. Does it really make for good government that the Treasury has become a benefits agency? Is it sensible that gamekeepers have become poachers? How on earth has all that happened? I shall get into that issue at the end of my speech.

We need first to do a bit of detailed analysis of the Bill. The Paymaster General rightly ranged widely in setting out the reasons for the Bill, and I shall not repeat that background. The Bill is part of a much broader reform, and as she said, there will probably be more in the Budget. There will also be a White Paper, as she mentioned. The Bill is designed to make only a couple of simple amendments to the eligibility rules—one affecting unwaged trainees and the other dealing with people over 19 who are on courses.

On the first change, as the Paymaster General said, the idea is to remove the apparent discouragement in the current system for people in training. A number of them choose to stay in full-time education because the financial support is better, even though they may be better suited to training. That is one of the concerns that have been expressed to me. The other aim is to help people stay on after their 19th birthday. At present, payments stop as soon as they reach that point.

The provisions on unwaged trainees look uncomplicated, although it should be remembered that the eligibility criteria for child benefit affect a number of other benefits, so the Bill has had to introduce amendments in respect of the widowed mothers allowance, the widowed parents allowance and the guardians allowance, among other payments. It is claimed that the Bill will remove distortions. I am not convinced that they will all be removed, although I shall perhaps save the detail—I have some of it here—for the Committee stage.

The entitlement of parents and carers to child benefit and the child tax credit currently stops at the 19th birthday, and the Government want people to be able to go on receiving the benefit while they are doing an appropriate course. As I have made clear, the Opposition will not oppose that proposal.

It is important—the hon. Member for Yeovil (Mr. Laws) began to get into this territory a moment ago—that we look at what impact the measures will have. In that regard, we have to rely on the regulatory impact assessments. I use the word "assessments" because we have already had two of them. First, an assessment was published in December. Frankly, it was so thin that I was surprised that the Paymaster General allowed it to get out of the Treasury at all. Secondly, a couple of days ago, we were given an assessment called the "Supplementary Partial Regulatory Impact Assessment". It is pretty partial and thin. It is a welcome supplement, but even when the assessments are taken together, we still have a pretty thin gruel.

Yet again, the Government have introduced a measure in quite a major spending area and we still do not have a proper regulatory impact assessment. The language of regulatory impact assessments is used, but the substance is not delivered. That is extremely worrying, and it probably explains the fact that so much money is being wasted in some areas of the public sector.

Rob Marris (Labour, Wolverhampton South West)

I have read both the documents to which the hon. Gentleman refers. As he said, the Bill seems a fairly simple measure, even though it will cost £105 million a year. What is he saying is missing from the regulatory impact assessments? Is he saying that he wants more complex assessments when in fact we do not need them?

Andrew Tyrie (Conservative, Chichester)

If the hon. Gentleman will contain himself for a moment, I shall ask a few questions of the Paymaster General. If he wants to come back with the answers because he already knows them, I shall be delighted to take a second intervention.

At the heart of the matter is the fact that we do not know what the cost or effects of the measures will be. We do not know what the behavioural effects or deadweight costs will be; how many people will be brought into, attracted to or kept in training; or what the consequences would be if the measures were not introduced. The most basic question is: how many extra people will benefit and what is the extra cost over and above the amount that will have to be paid to those who would go into training anyway? We need to compare those two numbers to decide whether to proceed with the measure. That is not an easy question.

Rob Marris (Labour, Wolverhampton South West)

In paragraph 10 of the supplementary partial regulatory impact assessment, which I think was published on Monday, the final words are "£105m a year", referring to costs in relation to the 80,000 young people mentioned in the first line of that paragraph. As I understand it, the benefit is non-means-tested. If double the number of young people went on to unwaged training courses and the figure was 160,000, the costs would presumably be £210 million a year. Surely, that is the hon. Gentleman's answer.

Andrew Tyrie (Conservative, Chichester)

I am grateful to the hon. Gentleman for illustrating what I am trying to say. If he reads the paragraph carefully, he will see that it refers to

"trainees in all programmes of Government Supported Training",

as well as to child tax credit. We need a breakdown between those two aspects and to know what proportion would be spent on people who had not changed their behaviour in any way as a consequence of the measures. There is a deadweight cost. What we need to know in order to make a proper assessment and what the core of any regulatory impact assessment should be is how many extra people will be involved and the extra take-up that will result from the measure. That information is not provided in the document. Indeed, no attempt at all has been made to provide it. How many extra people will be trained? That is what we need to know, and I see that he nods in agreement.

We are not even absolutely sure about the straight-line cost—the point that I made in the beginning of my response to the hon. Gentleman. On reading carefully paragraphs 8 to 10 of the regulatory impact assessment, I see no breakdown of the £105 million between the cost of child tax credit, child benefit and income support. I may have misread the document, and perhaps he knows that information. I do not have it, and as the Paymaster General is not leaping to her feet to tell me, I fear that she does not know either, even though she is introducing the measure. In order to assess the value of such a measure, it seems absolutely basic that we must know that information, and we do not.

Let us turn to the age 19 cut-off and see how far we get in trying to work out what the regulatory impact assessment has to say about that. The Government have changed their mind on this issue. I thought that they were proposing a cut-off at the 21st birthday, but it seems that that the age has now changed to 20, only one extra year. Incidentally, they say that they are doing so because they have some concerns about behavioural effects, a point made in paragraph 23 of the regulatory impact assessment, but the cost, which is put at £65 million, does not take account of behavioural effects, which seems extraordinary. We have been given a cost estimate, which we have been told by implication immediately to ignore. If we do not ignore the cost estimate, there is little logic in excluding 20-year-olds. We have been told that lifting the age from 19 to 20 will cost £65 million, but raising it to 21 will cost only £10 million more. If the cost tails off that dramatically, why have the Government rejected raising the age limit a little further?

The Paymaster General referred to representations, and a number of relevant organisations have made representations that people will still be caught at the cut-off at 21. She could consider raising the cut-off to 22, bearing it in mind that the cost tails off so quickly. She may want to consider that option, but we have not been provided with the information to assess it. I would be grateful if she told me the Government's estimate, which must be extremely small, of the cost of bringing help to people aged 21?

I realise that the Paymaster General may not have all the answers on the tip of her tongue—I see that reinforcements are now arriving—and she may want to reply in a letter or in Committee, because it is important that those questions are answered. I have no illusions that they are easy, but they are relevant, and I hope that the Paymaster General and the Economic Secretary asked them vigorously of officials before they agreed to go ahead with the proposals.

At one point, the partial regulatory impact assessment states that it relies on anecdotal evidence. If that is the case, the Government should consider conducting a sampling survey. They have held a pilot; why not conduct a sampling survey on the points that I have just raised? Such a survey would not cost much and would enable the Government to answer the crucial question whether we are getting value for money for those proposals. We do not have evidence in front of us showing that we are getting value for money for the £170 million that will be spent as a consequence of the Bill.

I shall say a few words about complexity, which is my second major point, but I shall do my best not to detain hon. Members for too long. At the beginning of my speech, I said that complexity is a serious problem, and the tax credit and benefit system is now so complicated that scarcely anybody fully understands it. I am not suggesting that all the problems began in 1997, when the system was already complicated, but reforms since then have not made the situation any easier. As a result of recent reforms, seven benefits are specifically available to families with children—child benefit, child tax credit, working tax credit, statutory maternity pay, maternity allowance, guardians allowance and education maintenance allowance.

Three separate Departments are responsible for policy: the Treasury rules the roost on child benefit and child tax credit; the Department for Work and Pensions examines most other benefit issues; and the Department for Education and Skills runs the education maintenance allowance. That is not a good way in which to make benefit policy. The Bill originates in a review conducted by all those Departments, called "Supporting young people to achieve: towards a new deal for skills", which was published in March last year.

In truth, support for young people is, of course, horrendously complicated. The Government make that clear on page 16 of the document, which includes a chart that would leave even someone who is well versed in such matters bewildered as to their entitlement. The system is far too difficult to understand: I do not think that there is a family in the country who could successfully navigate its way through the thicket of regulations and rules, and I am not sure how many hon. Members could, either.

I was shocked to learn that the people who are supposed to administer the system and provide expert help do not seem to have a firm grip. Lest hon. Members think that I am exaggerating, I shall quote from the Government's own document, which states:

"several young people who contributed to the Review had received poor and inconsistent advice".

The Paymaster General referred to that point, which is obviously a major concern. To their credit, the Government have acknowledged that there is a crisis as a result of the paucity of advice. The social exclusion unit report, "Bridging the Gap", also makes that point clear.

The Bill does nothing to address those problems. To solve them, we must rely on what "Supporting young people to achieve: towards a new deal for skills" describes as

"a radical simplification of financial support",

which the Paymaster General referred to earlier and which will occur at some unspecified future date. The detail on how that will be accomplished consists of little more than a table on page 35, which is worthy in itself but is scarcely the stuff of serious policy making. I will believe in the simplification when I see it.

In the meantime, the DFES and the DWP will work in consultation with the voluntary sector to try to ensure that young people at least get better help and advice in understanding their entitlements. That is, of course, welcome, but sophisticated advice centres to explain people's benefit entitlements are not a solution but a reflection of the problem. Young people most need advice not on the benefits system but on what courses to take and on the crucial questions that will affect their lives, as my hon. Friend the Member for Banbury (Tony Baldry) pointed out in his intervention.

I have made it clear that we will not oppose the Bill, but I regret yet further layers of complication being added to child benefit. When child benefit was introduced, its great advantage was that it was simple: it was a universal benefit paid regardless of income, and it had almost 100 per cent. take-up. It could therefore play a role in relieving poverty, particularly at the bottom end, where people often suffer the most by missing out on benefits designed for them. Because it was a universal benefit, it did not have severe disincentive effects.

The tax and benefits system is now being constructed on an ad hoc basis, and it is far more complex. It creates more disincentive effects, often has unacceptably low take-up and often fails to help those who most need it. Anybody who reads the recent National Audit Office report on tax credits will find plenty of evidence for what I have just suggested. The new tax credits, including child tax credit, have not worked as intended, causing problems for claimants, employers and the Government, and they are extremely complicated.

A moment ago, I said that child benefit was originally a simple benefit for a simple purpose; it is now a much less simple benefit for multiple purposes. The Government see it as a tool to encourage more people to choose unwaged, work-based training, if that is their preference, instead of paid work-based training. It is seen as one of the tools needed to tackle the skills shortage and as part of the education system. This Bill, its accompanying regulations and the raft of measures that are likely to be announced shortly are no doubt well intentioned, but will they have the effects intended? I am not sure.

A Dutch economist, Jan Tinbergen, won a Nobel prize by making this simple point: use one social policy for each policy objective. The Government have located a problem, a skills shortage, which is what, "Supporting young people to achieve: towards a new deal for skills" is all about, and they have decided to use multiple policy instruments to tackle it.

My best guess, and my worst fear, is that the law of unintended consequences will apply, although I shall not try to predict how. If the Government were to get the chance to implement more legislation after the election, I would wager that before long they would have to return with yet another raft of measures to tackle the unintended consequences of the last set. There are so many examples of that having already happened with the Government's reforms that I hardly know where to begin. Perhaps, as I have already been speaking for a while, I will confine myself to three.

First, there were the individual learning accounts. Remember those? They were an early attempt by the Government to address the skills agenda, but they had to be abandoned because they generated so much fraud. Then there is the pension credit, a flagship policy introduced as recently as October 2003, but just over a year later we have had a number of press reports suggesting that it is to be scrapped. There are also the new tax credits to which I alluded. Those were presented as a light-touch system, responsive to the needs of families, but the overpayments problem seems to be growing all the time, and we do not yet know the full extent of it.

The plain fact is that this Chancellor cannot resist meddling. He is a spending Minister struggling to get out. He sometimes reminds me of an earnest professor of social engineering, with his incessant tweaking and adjusting of his own creation. We only have to look at the history of tax credits to see that. In the space of four years, this Chancellor has abolished family credit and introduced the working families tax credit.

Rob Marris (Labour, Wolverhampton South West)

Very generous.

Andrew Tyrie (Conservative, Chichester)

He has introduced the child care tax credit and the disabled person's tax credit.

Rob Marris (Labour, Wolverhampton South West)

Hear, hear.

Andrew Tyrie (Conservative, Chichester)

He has introduced the employment credit, the children's tax credit and the baby tax credit.

Rob Marris (Labour, Wolverhampton South West)

Hear, hear.

Andrew Tyrie (Conservative, Chichester)

The Chancellor has abolished—and I do not know whether I will get more "Hear, hears"—the working families tax credit, the disabled person's tax credit, the children's tax credit and the baby tax credit. He has also abolished the employment tax credit and introduced the working tax credit. The results are predictable: low take-up, confusion and complexity. Those are the unintended consequences of a system in which fraud and error are rife and many people do not get the support to which they are entitled and which they deserve.

That brings me to my third and final point, which is about the Treasury as a spending Department. After all, most of what I have just described is a direct consequence of the Treasury's having started to meddle in this area. How on earth can it be that the Prime Minister has allowed a Chancellor to turn the Treasury into a spending Department? How on earth is it that the only gamekeeper that we have in Whitehall is now on the loose as a poacher? The answer comes in one word: Granita.

The truth is that just over a decade ago, in an Islington restaurant, the then Leader of the Opposition, now the Prime Minister, promised his shadow Chancellor that if they won the election he would have a free run of the fairness agenda—social justice, employment opportunities and skills. As a result, we have Treasury measures such as this, and the DWP, which is just about the only repository of wisdom in Whitehall about how to run a benefits system, lost half its remit. It is scarcely any wonder that there has been such chaos in the take-up of benefits. The Inland Revenue was never geared to run a benefits system; its job was to get the tax in. In the long run, neither the making nor the running of policy in this way is sustainable.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I hate to puncture this entertaining narrative, but has not the effect of the changes introduced by the Chancellor been to end the growth of income inequality which so scarred the country under the last Conservative Administration?

Andrew Tyrie (Conservative, Chichester)

That is a very broad question, but it is a fact that in the past seven years the number of those at the bottom end who are most in need—the so-called million who miss out on education and training—has increased from a little under a million to well over a million. The indicators point in several directions, and the picture is certainly unclear. What is more, that change took place at a time when the economy has been growing very strongly and unprecedented sums have been thrown at these problems. Never has so much money been spent, with so many good intentions, to so little effect.

As I said a moment ago, that is no way to run a Government. I have noticed that a number of new Labour's keenest, innermost, kitchen cabinet-type supporters have started to say the same. What does John Birt's proposal to extract the spending Departments from the Treasury and place them in the Cabinet Office really mean? It is about recreating something that was lost when the Treasury became a spending Department. It is about recreating a workable system of public expenditure control and review. That is what we desperately need in Whitehall now. Of course, it is also about trying to wrench back some control for the Prime Minister over the empire-building of his neighbour in No. 11.

If one wants to know the real origin of this child benefit proposal and the whole of the Treasury-driven skills agenda, one finds it in Granita. It is not all good and it is not all bad, but it lies there. The Granita deal has a lot to answer for, for the plain truth is that a great deal of Whitehall machinery has been wrenched apart and restructured to placate the ambitions of a thwarted Chancellor. This Bill is just one small part of that decision.

Rob Marris (Labour, Wolverhampton South West)

I shall return in a while to the out-to-lunch remarks about Granita by the hon. Member for Chichester (Mr. Tyrie).

I want to put the Bill, which I very much welcome, into an historical context. Many of my generation, and those of others in the Chamber today, were scarred politically by our communities' experience of the 11-plus and the idea that, at age 11, one was either going to become a manual worker or an academic, A-level type with a higher certificate, as it used to be in England. We worked hard politically to overcome that bifurcation at age 11 with our support for comprehensive education and for encouraging young people into higher education. The pendulum has swung too far and what many of us, including me, overlooked, is that training is necessary for many manual jobs and that we should be looking for people divided off at age 11 into the non-academic stream to be able to get back, as adults, into the academic stream. That is what the Open university, one of the jewels in the crown of Harold Wilson's 1966 to 1970 Labour Government, was about. What has only just started to happen in the other direction is that, in the past three or four years, we have been looking at ways for those who were on the academic track to take a non-academic or less academic route to education and training.

Also part of the historical context is the fact that we have 2 million more people in work and the fact that in certain areas of the country there are huge skills shortages. Some of that is being addressed by imported labour, which in some cases will be temporary—for example, the use of Filipino nurses in the health services. However, the bulk of the problem should and will be solved by training home-grown labour.

The support that we as a society, the previous Government and this Government provided for those entering higher education was entirely worth while, but again the pendulum swung too far. Those who were continuing with training but were not in higher education were second-class citizens when it came to social and Government support for their endeavours. That is true of young people as well as mature students. I very much welcome the 14 to 19 strategy for increased curriculum flexibility that has come from the Tomlinson report. The Bill fits neatly with that as additional financial support for those who, for example, have had disrupted schooling and go on to do at 19 or 20 what some of their peers might have done at 17 or 18. It is very welcome and it is overdue.

You will know, Madam Deputy Speaker, of the huge skills shortages in your area, which is the same as mine—the black country—and of what the Learning and Skills Council and Connexions have been doing. We are starting to change that, but it will take a long time. It is particularly relevant for an industrial area such as the west midlands. Not so much down in the southern part, where you are, Madam Deputy Speaker, but where I am in Wolverhampton, there is a history of people training on the job but not getting formal qualifications. Although that is important, we need to move as a society towards more formal qualifications as well as training on the job that leads to qualifications. The Bill dovetails nicely with that, and it will be of tremendous benefit to our region and sub-region.

The hon. Member for Chichester rightly mentioned the complexity of the Bill. He talked about the various ways in which young people could access not only training but financial support, whether child benefit or education maintenance allowance. He mentioned the "Bridging the Gap" report, which refers to slightly different figures from his but reaches exactly the same end point. It says:

"Money is paid through at least eight different agencies (with a ninth heavily involved) on behalf of two Government Departments."

That was also mentioned by the hon. Member for Banbury (Tony Baldry) when he talked about how young people would find out about this support, and it is what I found in my preparatory research for the debate. The aims of the Bill are twofold—to provide state support for trainees who are unwaged on training courses and for those who are, to put it in shorthand, at further education colleges and carrying on with courses until the age of 20 or so.

That is a simple and laudable goal; the complexity lies in the delivery mechanism. I caution the hon. Member for Chichester as regards talking about simplicity. Simplicity is one of those things, like cutting red tape, that is terribly attractive to Members all over the House, who hope that it will be attractive to those whose votes they seek to garner. As my hon. and learned Friend the Member for Redcar (Vera Baird)—a fellow member of the Work and Pensions Committee who will speak later—and I know, the Child Support Agency is a classic example. Parliament decided to simplify CS1, the first system that was brought in, and introduced CS2—a system based on 15 per cent. for the first child, 20 per cent. for the second child, and 25 per cent. for three or more children in terms of the non-resident parent's obligation to pay. That is a simple formula that is understandable to the man—it usually is a man—in the street, but the complexities of putting it into effect have bedevilled the Department for Work and Pensions and the Child Support Agency. What appeared to be simple on paper became terribly complex when one tried to put it into operation. The reason for that is simple—people lead complex lives. If we as a House try to simplify matters too much, it may well imperil support for children and for young people engaged in education and training who will be covered by the Bill potentially from the ages of 16 to 21.

The Bill is a step forward because it will start to address the skewed choices that some young people have made through force of financial circumstance. Paragraph 28 of the regulatory impact assessment states:

"One possible positive effect is that training providers may find they are on a level playing field with FE colleges because young people's decisions are not being skewed by differentials in financial support between the two learning routes."

It is very important that young people have a more level playing field of choice.

The costs have been adverted to. Government spending is massive. One should never be cavalier with taxpayers' money, but the Bill is a very positive step. As set out in the regulatory impact assessment—there will of course be changed behaviour, as the hon. Member for Chichester said—the cost of the 80,000 unwaged training positions will be £105 million per year. In fact, one hopes that there will be some change in behaviour and that more young people who are not on the training contracts will engage in them, thereby helping to address skills shortages. Relative to Government spending, that cost seems small. If the number of positions were to double from 80,000 to 160,000, and the per capita costs were roughly the same, the figure would rise to £210 million, with tremendous social benefit in terms of those young people's self-respect and dignity. There will be positive benefits for society when those young people come through the pipeline having been trained.

The cost of paying for FE places—again that is shorthand, but they are the main focus—is £65 million a year up to the age of 20 and £75 million up to the age of 21, with some attendant costs that are not mentioned.

David Laws (Liberal Democrat, Yeovil)

As a matter of interest, if the Government said that they were not expecting any behavioural effects from these two changes, would the hon. Gentleman still think the measures worthwhile in their own right?

Rob Marris (Labour, Wolverhampton South West)

I certainly would and I thought that I had said so. This training is a social good in terms of respect and dignity for young people who undergo it and receive some form of social recognition through money, which for many people, particularly young people, is a good way of getting recognition. Some young people who do not change their behaviour will be better off as a result. There will be significant advantages if there is changed behaviour in the direction that most of us would expect—that is, more, rather than fewer young people undergoing training.

Before I move on to my final remarks, I want to make some miscellaneous points. I am delighted that the Government published a regulatory impact assessment, and the partial one on top of it, so that we have some figures. They may not be as full as some Members would like, but they were published in time for the debate. I am particularly pleased to see the indicative draft regulations, which I am sure that the hon. Member for Buckingham (Mr. Bercow), who ducked out of the Chamber briefly, dashed out to read with his usual thoroughness. They are but two pages, so they are a quick read. Regulation 2 defines "approved training" as:

"in relation to England, arrangements made by the Government known as 'Entry to Employment' or 'Programme Led Pathways into Apprenticeships'".

I confess that I do not know the exact details of those programmes, but I am pleased that in this case the Treasury managed to produce some draft regulations for Second Reading. Would that every Department did that in time for Second Readings of Bills that contain references to regulations that will be made after their passage.

John Bercow (Conservative, Buckingham)

I am in a generous mood. May I tell the hon. Gentleman that, although ordinarily I am struck principally by the opacity of secondary legislation, and by the fact that it tends to raise more questions than it answers, this set of draft regulations is truly a model of clarity and of brevity?

Rob Marris (Labour, Wolverhampton South West)

I certainly agree. That is nothing less than the hon. Gentleman and I would expect from the Treasury.

I have a couple more miscellaneous points with which I think that the hon. Member for Buckingham, who is somewhat pedantic—strangely, I too am sometimes accused of being so—will sympathise. Clause 6(2) starts with a conjunction—"But". That is a horrible piece of journalese, and I hope that the Committee will change it. Conjunctions such as "because" and "although" are acceptable words with which to start a sentence, but "but" is not.

Clause 7 gives the short title of the Bill. It states:

"This Act may be cited as the Child Benefit Act 2005."

I think that that should read: "This Act may be cited as the Child and Qualifying Young Persons Benefit Act 2005." That is not pedantry. There is a problem with the Bill, as I read it, and the approach of the Government, as I read it. The goals are simple, but the ways of getting there are complex, as the hon. Member for Chichester pointed out. I am not sure that the Bill adequately addresses the question of independence for young people. We have to bear it in mind that, since about 1971, the age of majority has been 18. As I understand it, the education maintenance allowance, which was piloted in Wolverhampton, has been successful throughout the country. Year 12 participation increased by 5.9 per cent and year 13 participation by 4.1 per cent. in the EMA pilot areas. It is paid to the student and that is a mark of independence. Many students who are doing A-levels in a traditional sixth form in year 13 will be 18. I understand that they get the money directly, although I am prepared to be corrected because of the complexity of the matter. That gives the individual independence.

Similarly, the minimum training allowance is paid to the trainee. Conversely, child benefit—or child and qualifying young person's benefit—will be paid through the parent or guardian. If so, 18 and 19-year-olds, one and two years into their adulthood, will remain locked in, not only through means-testing but because of who receives the giro—or automated credit transfer, as it probably is nowadays. Who will get the money? Will the young people get it in their own name and right or will it be refracted through their parents or guardians? As I understand the Bill, the latter will apply. That is a step backwards and I shall highlight the point, and the way in which some young people feel, by referring to my experience, albeit not directly of the subject of our debate.

As some hon. Members know, I emigrated to Canada when I was 18. I was born and raised in Wolverhampton and I wanted to see the wider world. I have been back in Wolverhampton for many years and am very happy there, but I emigrated to Canada, where the federal age of majority was 18. Thus, at 18, with a scholarship for university, I could go there so I went and I had a great time. I was at the university of British Columbia, which, as some hon. Members know, is a distinguished institution, and I picked up a couple of degrees there. However, in British Columbia, the age of majority was 19 and a driving licence could be obtained at 16, 17 or 18 only if a parent or guardian co-signed the application form. I had a United Kingdom driving licence, but it had to be transferred to the provincial jurisdiction in Canada. One could not get one's driving licence without parental consent until the age of 19. That was the age of majority in the provincial jurisdiction for road traffic matters, which, under confederation, were in the power of the province. Hon. Members will not be surprised to know that I was darned if, having emigrated at 18 and being totally financially independent of my parents, I would seek their permission to get a driving licence. I therefore had to wait several months until I was 19 to take a driving test.

David Ruffley (Conservative, Bury St Edmunds)

What has any of that to do with the Bill?

Rob Marris (Labour, Wolverhampton South West)

I am sorry if the hon. Gentleman believes that my comments are irrelevant. I am trying to make a point about young people's feelings by referring to mine at the age of 18 about being perceived as appendages of their parents when they are adults. The Bill appears to perpetuate that and make the position worse. Whereas the minimum training allowance is paid to the individual trainee, the replacement young person's child benefit will be refracted through a parent or guardian, thereby lessening the young person's independence. That is the relevance of my comments. I apologise to the hon. Gentleman if I did not make it entirely clear. I wanted to make a point about the Bill's structure and the way in which the expanded child benefit, which I greatly welcome, will be assessed and paid. I should like the Government to tackle that.

David Laws (Liberal Democrat, Yeovil)

We join the hon. Member for Chichester (Mr. Tyrie) in welcoming the Bill, especially two specific provisions: first, extending child benefit and the child tax credit to unwaged trainees and, secondly, allowing young people who reach the age of 19 and are on a course to continue on it with the benefits that they received previously. We believe that both changes are sensible and we support the broad thrust of the Government's strategy to try to ensure a coherent, simple and helpful system of support for young people.

The hon. Member for Wolverhampton, South-West (Rob Marris) mentioned one reason for the Bill: to ensure a fair and level playing field between young people in training and those in formal education. That is sensible and clearly reflects some of the changes that the Department for Education and Skills is currently considering. The Bill has to be viewed against the background of the Government's attempts, for example, through the education maintenance allowance, to encourage young people to develop their skills and to help those young people who would otherwise be under pressure to leave education and training and go straight to work. We welcome the opportunity for those people to continue in education and training.

The hon. Member for Chichester made several points about the Treasury's involvement, on which it is worth commenting at the outset. We welcome the strategic interest that the Treasury has shown since 1997 in economic and social issues. The Red Books have got larger over the years. Although those of us who read them note their increasing cost and length, we also note the broad strategic economic and social set of objectives that the Government present, steered by the Treasury, either because of the Granita dinner or for some other reason. It is important for any Government to have a set of broad economic and social objectives. They should be pursued by some part of Government—the Treasury or perhaps the Cabinet Office in future. The Cabinet Office would have to do a reasonably good job to co-ordinate them and create a sense of coherence in the way that the Treasury has done since 1997.

Those relatively complimentary comments come with a reservation that, although the Treasury has a useful co-ordinating role, I am not sure whether it is sensible for it to be seen to lead on matters that would normally be the domain of individual Departments. No doubt all hon. Members who speak in the debate, including from the Front Benches, will be well briefed, but many of the detailed and substantive provisions in the Bill are matters more for the Departments for Education and Skills and for Work and Pensions. The measure would benefit from not only their involvement but their leading on the issues. It would also benefit from the Treasury playing not only its part in the broad strategic direction of Government policy but a policing role for large amounts of public expenditure. The costs may be clear but the benefits are not.

The Bill is small and uncontentious but important. First, it deals with two substantive matters that affect approximately 160,000 young people. It is a worthwhile measure for that reason. Secondly, it is clearly part of a much broader and longer-term strategy to simplify and rationalise the system of support for children, young people and young adults. The hon. Member for Wolverhampton, South-West made the sensible point that having 19, 20 and 21-year-olds on child benefit appears bizarre and eccentric. I suspect that when people outside the House realise the position, they will find it eccentric. It will lead to even more confusion of the sort to which the hon. Member for Chichester referred. That is amplified by the sketch and graph in the paper that the Government issued in March 2004 and that attempts to set out in visual form the existing systems of support for young people. It is extremely challenging. I hope that the Government will take the opportunity in the longer term to rationalise and simplify support for young people. I hope that, in future, we will not have to rely on child benefit as the means of support for young people who have clearly entered their adult years.

Rob Marris (Labour, Wolverhampton South West)

The hon. Gentleman referred to my comment about the independence, or lack thereof, of 18 and 19-year-olds. Given that a qualifying young person's child benefit will apparently be paid through a parent or guardian, does he agree that there is a potential breach of the Human Rights Act 1998, because 18 or 19-year-olds would have to tell their parents that they were in training or education at a further education college? They may not wish to do that, but if they do not, they may not be able to gain access to the money.

David Laws (Liberal Democrat, Yeovil)

The hon. Gentleman makes an important point. Where there is already a breakdown in the relationship between the young person and the parent, a different category of benefit entitlement might apply anyway and they would not be covered by the child benefit provisions. However, there will be many marginal cases, and this should be one of the issues that we consider very carefully in Committee.

The final reason why this is an important Bill is that although it is short and seems modest, it involves quite a lot of public expenditure. The total cost, as the hon. Member for Wolverhampton, South-West said, is about £170 million a year, or £6 for every taxpaying household in the country. That is not a huge amount, but it is not a modest amount either, and we should certainly subject that sort of expenditure to a great deal of scrutiny.

I want to touch on four issues today. The first is the cost and benefit calculations that have to be made, and the extent to which they have been made in the regulatory impact assessment. Secondly, I want briefly to look at any problems likely to arise when changes are made to the entitlement of unwaged trainees. Thirdly, I want to look at the way in which the changes will affect young people who are still in education or training at the age of 19. Fourthly, I want to make a couple of brief comments about the Government's future strategy in these areas.

I want to start by joining the hon. Member for Chichester in expressing surprise at the paucity of information in the initial regulatory impact assessment, and to express my relief that a partial supplementary assessment was published recently. There was a wonderful letter at the back of the initial regulatory impact assessment, which was no doubt among the many things on the Paymaster General's desk that she had to sign at the end of a busy day. She had to put her signature beneath this sentence:

"I have read the regulatory impact assessment and I am satisfied that the benefits justify the costs."

I do not know how she came to that conclusion by reading the regulatory impact assessment, because it is extremely brief and extremely unhelpful in terms of assessing both the benefits and the costs.

In fairness to the Treasury, we have had the supplementary partial regulatory impact assessment, which is pretty clear on the costs. Some issues might arise in relation to the costs based on our assumptions about what individuals will do in responding to these changes, but the cost side of the equation is pretty clear, as I am afraid it usually is when any Government introduce a change in policy. We always know what it will cost, and those cost estimates tend to be reasonably reliable.

It is far less clear what kind of benefits we can achieve through these changes. Some might be achieved simply through creating a fairer system and having a more socially acceptable set of benefit entitlements. That was the implication of the comment made by the hon. Member for Wolverhampton, South-West when I asked him whether he would still be in favour of the two changes even if there were no economic benefit. It is quite possible that we would be in favour of them for other reasons, although I doubt that that would be the case in relation to educational maintenance allowances. If we had spent additional money on those and there had been no increase in the staying-on rate, I suspect that few of us would think that it had been money well spent.There are, therefore, reasons for us to look very closely at the economic benefits of the proposals.

This area of public expenditure is competing with every other one for a slice of the national cake and for available expenditure, which is likely to be quite scarce after the next election, given the state of the public finances. If we look at the section of the regulatory impact assessment that discusses benefits, which the hon. Member for Chichester was generous enough not to read out earlier, we find that it states:

"The benefits of the Bill are two fold. Firstly it enables implementation of the reforms to the definition of a child to address two key anomalies".

It then sets out the anomalies that are dealt with in the Bill. It goes on:

"Secondly it introduces a degree of flexibility to respond to curriculum changes in England expected to flow from the 14–19 working group, chaired by Mike Tomlinson".

In other words, all that the section on benefits says is that the benefits are what the Bill does, and that it is going to introduce a degree of flexibility in relation to changes that we do not yet know will actually take place, but that are simply expected to take place. On that basis, the Paymaster General has signed a piece of paper stating that she is satisfied that the benefits justify the costs. I am glad that she did not say that the benefits exceeded the costs, because it would be very difficult to establish that from the information that we have. This is an important issue, however.

The hon. Member for Chichester alluded earlier to some of the estimates that we would expect the Treasury to have made in order to come to a reasonable monetary estimate of the benefit of this legislation. The Treasury must have made some sort of assessment of the effect of the extension of child benefit and the child tax credit to unwaged trainees. Presumably, it could have an impact in two ways. First, it could encourage individuals who would otherwise have gone into paid employment to go into unpaid employment. That could have a significant cost to the Exchequer. Secondly, it is quite possible, as the Government have acknowledged, that it might act as an incentive to draw people out of formal education into unwaged training, which could end up being less expensive—in that narrow sense—for the Government.

However, we are left with no sense of the estimate that the Government have made of the effect of these changes. Without that, we have no sense of what the Government would consider to be a success or a failure in terms of the effects of these changes on people's behaviour. If we are to know how successful the provisions have been, and whether the extent of the incentives is sufficient, we need to know what the Government expect. I hope that the Economic Secretary will be able to say more about that later.

Mark Francois (Conservative, Rayleigh)

I am following the hon. Gentleman's argument closely, and I think that we all agree that there is some slight confusion about the Government's figures on the benefits of these changes and exactly how much they are going to cost. This could have been a Department for Work and Pensions Bill, or even, arguably, a Department for Education and Skills Bill, but it is a Treasury Bill. Is there not a delightful irony in the fact that the Treasury, of all Departments, cannot be specific about the figures involved?

David Laws (Liberal Democrat, Yeovil)

The hon. Gentleman makes a good point, and it is made stronger by the fact that it is the Treasury that should be acting to exert discipline in these circumstances. However, if the Treasury is seen to be the lead Department, it is much more difficult for it to enforce a degree of rigour in relation to the costs and benefits.

The costs and benefits are also relevant to any incentives that might be created by the changes for people to extend their courses. The Government have expressed their concern that there might be an incentive for people who have turned 19 to carry on their courses for longer. This is not an area in which I claim to have expertise—input from colleagues from the Department for Work and Pensions and the Department for Education and Skills would be useful here. Will there also be an incentive for employers to switch from having young people in training on a waged basis to doing so on an unwaged basis in order to exploit the changes in benefit entitlements? The Government have suggested in some of their comments in the regulatory impact assessment that they are concerned about that, and there are allusions to the need to deal with the issue. However, we are given no sense of how they intend to do so. The effects that the changes will have in regard to child benefit and child tax credit also relate to those people who stay in education beyond the age of 19. We need to know what effect the Government expect that to have.

It would also be helpful if the Economic Secretary could clarify whether the costs of the Bill have been built in to the existing public expenditure estimates, or whether the Chancellor will need to make an additional provision for this expenditure in the next Budget. In other words, is this already in the Treasury's public expenditure plans, or will they have to be increased to take account of these provisions?

We need to consider a number of issues relating to the substantive non-cost issues resulting from the two changes. The first category relates to the changes in regard to unwaged trainees. The Paymaster General said earlier that she believed that all the 80,000 people currently in unwaged training—that was the figure as at September 2004—would receive child benefit and child tax credit under the changes. That is not the impression that I get when I read sections 9 and 10 of the supplementary partial regulatory impact assessment, as it seems that the Government have had to make a judgment about how they extend this entitlement in practice, and how they define and seek to regulate the category of people who are counted as unwaged and in training.

The Government appear to have had two different options: one was to extend those entitlements to all unwaged trainees, and the other was to try to come up with some definition. I think that the definition that the Government have come up with is that those benefits will be extended to

"those who do not have a contract of employment on Government Supported Training programmes".

Section 9 of the supplementary regulatory impact assessment goes on to say that the Government

"will do this by naming the relevant programmes of Government Supported Training in the new regulations".

I am therefore dubious—I admit that the Paymaster General said that she would come back to me on this—about whether her comment that all 80,000 individuals on unwaged training would be covered is likely to be realised in practice. I suspect that a small group of people will be missed out, but without the expertise in that area I am unable to speculate on how large that group may be. I hope that the Economic Secretary may be able to comment on that later and tell us whether any groups might otherwise miss out.

Rob Marris (Labour, Wolverhampton South West)

Is not the answer to the hon. Gentleman's question in the final sentence of paragraph 10 of the supplementary partial regulatory impact assessment, which reads:

"The Exchequer cost of extending the same package of support as for full-time education to unwaged trainees in all programmes of Government Supported Training is £105 million"?

David Laws (Liberal Democrat, Yeovil)

I am grateful to the hon. Gentleman for making that point. That is not how I read it. My reading is that that cost estimate of £105 million is based on the conditions imposed in paragraph 9, which relate specifically to particular Government-supported training programmes that will be spelled out. I think that that is an attempt by the Government to make sure that there is not abuse of those entitlements by employers or others who make bogus claims about people on unwaged training programmes. I fear that some people may be missing out, perhaps understandably, as the Government want to make sure that it is policed effectively, but it would be useful to know a bit more about it.

Andrew Tyrie (Conservative, Chichester)

The hon. Gentleman is on to a strong point, which I considered making myself. The point was made to me by the Prince's Trust, whose letter I have in front of me. It strongly urged clarification on this point, and specifically wanted to know what is meant by Government-supported schemes, and whether voluntary work, work experience and other more informal forms of training will be ineligible.

David Laws (Liberal Democrat, Yeovil)

I am grateful to the hon. Gentleman for reinforcing that point, which seems to indicate that it may be useful for the Economic Secretary to clarify that issue today.

My other concern is that there may be employer incentives to switch between waged and unwaged training, which I mentioned earlier. The Government seem to share that concern, because in the initial regulatory impact assessment, in paragraphs 20 and 21, they set out that there might be some problems in that area. Paragraph 21 says specifically that devolved organisations, with responsibility for securing the progression of trainees from unwaged to waged status, may have to bring in new accountability arrangements to ensure that no adverse impacts or unintended consequences flow from treating unwaged Government supported training more generously. I would be grateful if the Economic Secretary could comment on what proposals there may be to make sure that there is no abuse or adverse impacts.

Finally, Barnardo's has made some useful representations. It is concerned— including on the issue of unwaged trainees—about whether the proposals will reach the underachieving and hard-to-reach group of young people with whom it must often deal, who do not always fit into the neat packages in terms of behaviour, work patterns and benefit entitlements, that the Government, and all Governments, would like. The Barnardo's briefing, which many of us will have received before today's debate, states:

"The aim of the new financial support package is to encourage more young people into training or education but it is difficult to see how a measure that 'rewards' the family rather than the individual young person will assist training programmes to recruit under achieving or hard to reach young people."

That touches on the argument that the hon. Member for Wolverhampton, South-West also made earlier. I would be grateful if the Economic Secretary could comment on that, too.

On extending the benefit entitlements and child tax credit entitlement to those who reach the age of 19 and over, we support the change, which seems entirely sensible. Clearly, there are risks of wilful or passive abuse, and the Government's initial suggestion that the cut-off would be raised only to 20 rather than higher seems sensible. The hon. Member for Wolverhampton, South-West also pointed out the sheer oddity of potentially extending child benefit to 20 and 21-year-olds and he is absolutely right that we should hope that that is not the long-term mechanism that the Government intend to use to get help to those young people. Fortunately, we understand that the Government are engaged in a much more far-ranging inquiry into support for young people in future, which will be designed to rationalise all that. I do not imagine that the Government will be considering child benefit to support people in those circumstances in future. If the Economic Secretary could clarify that it would be useful, and it might also address the concerns of the hon. Member for Wolverhampton, South-West about parents getting involved, even though the young people concerned have become adults under UK law.

Barnardo's also makes a very effective point about hard-to-reach young people and the age 19 cut-off. Its briefing says that

"from our own experience we know that there are young people who, because of their life circumstances, do not access training until later and require a longer period of training before they are fully ready to move into employment . . . If the Child Benefit and Tax Credit extensions are not to apply to them—and we acknowledge the incongruity of "Child" benefits for 21 year olds—then we would wish to see some other sort of continuing financial support for this group of young people."

That reinforces the comments made by the hon. Member for Wolverhampton, South-West and the need for us eventually to move beyond reliance on child benefit in this area.

Those are the issues that are specifically relevant to this Bill, with which I hope the Economic Secretary will deal. It is also worth making a couple of points about the Government's wider strategy, because this Bill is something of a milestone along the way to a new system of support for young people. We ought to be thinking about what we are seeking to achieve in that new system.

There is a degree of ambiguity in the Government's strategy in relation to what they are seeking to achieve. A useful paper came out earlier this year, "Supporting young people to achieve", which was sponsored by the Treasury, the Department for Work and Pensions and the Department for Education and Skills. On page 34, it states:

"As well as providing a stable bridge of income between activities, support paid at the same level irrespective of activities would not distort choices."

The argument is that the Government would put in place a system of support for young people in which choices between different elements of education and training would not be distorted by economic incentives and the way in which young people are supported. That comes back to the level playing field argument and the reasons for extending benefits to unwaged trainees. If we read on, the next paragraph states:

"Financial incentives would influence young people's behaviour in several ways. First the additional weekly amount payable direct to the young person would provide an incentive for them to progress into learning."

There we come to the other part of the Government's agenda, which is not really to have a simple level playing field, but to try to tackle some of the problems to which the hon. Member for Wolverhampton, South-West alluded earlier—the inability of many young people to stay on in education and training at age 16 or 17 because of economic pressures to go into work and earn money. That is causing the Government not to create a level playing field, but to create certain incentives that are deliberately designed to encourage people to stay in education and training. That may be a very good thing, but it is not the same as a level playing field. It also raises a series of problems in terms of Government policy—which brings us back full circle to the issue with which the hon. Member for Chichester began, namely, costs and benefits.

If the Government are going to spend a lot of money, they must be very cautious. They must ensure that spending that scarce money actually does change behaviour, rather than simply leading to the deadweight costs that we spoke of earlier. The incentives that the Government implement may not always achieve that balance between costs and benefits. Moreover, in making these changes the Government may, as Barnardo's suggests, impose conditions that will not be easily met by the most vulnerable in society.

There are a number of concrete issues on which we need reassurance from the Government—not just the issue of the cost-benefit balance, but some of the practicalities involved in the Bill's implementation. There are far bigger issues relating to the Government's strategy, with which we will deal on another occasion.

Liam Byrne (Labour, Birmingham, Hodge Hill)

I am grateful for the opportunity to speak in this important debate. It is important because it is about young people—the people who will inspire us and take our country, our communities and our economy in new directions during this century. They are the young people who, I hope, will not just reinvent the country but support us in what I trust will be a long and happy retirement.

The fact is, however, that many young people do not receive the credit they deserve. Sometimes our communities blame them for many of society's problems; sometimes, indeed, they are afraid of them. Nevertheless, our young people are not just an equal part of society but—as President Kennedy once put it—the gold reserve of any nation. They are the source of our future wealth and well-being.

I came to understand that vividly last Friday, when I was joined at Shard End community centre by the chief constable of West Midlands police, Paul Scott-Lee—a remarkable public servant in his own right, who has served the west midlands extremely well. He joined me for a cup of coffee and a talk with local residents about antisocial behaviour. It was a feisty meeting, as such meetings often are, but Mr. Scott-Lee made a simple and powerful point: he said that as a community, we must take care never to demonise our young people. It is true that some young people will always cause problems for others, just as many old people will. I have dealt with enough nuisance neighbours in Hodge Hill to know that the middle-aged are sometimes just as big a problem as the young.

I have to say that when I first heard Paul Scott-Lee express his views I was sceptical, but on reflection I realise that he was right. We should remember that young people can be inspirational too. We need only think of the way in which Amir Khan captivated a nation at the Olympics; we need only think of young Ms MacArthur battling her way around the southern oceans at this very moment. Indeed, this country once appointed someone in his early 20s as Prime Minister. Young people in history and today have helped to make the country great, and it is young people of genius and spirit who will power it to a greater future.

Everyone who will work in the labour market of 2020 is now alive, yet that world of 2020 will be very different from the world of today. First, our young people will have to support rather more senior citizens. By 2020, 30 per cent. of the UK population will be over 60, up from 20 per cent. today. Today the over-65s constitute 24 per cent. of the working population; by 2025 that will rise to 33 per cent., and by 2050 it will rise to nearly 40 per cent.

Secondly, it will fall to our young people to rise to the challenge of reinventing the way in which our world works. We can see clearly some of what will happen in the future when we reflect on what has happened over the past 20 years. Today, a throwaway musical birthday card has more computing power than the mainframe computer of a couple of decades ago. In 2020, computers will be 4,000 times as powerful as they are today. Nowadays, an estimated 10 to 20 new medicines resulting from biotechnology are launched every year. By 2015, genetic therapy will treat 30 per cent. of life-threatening diseases with a genetic root. All those new possibilities will change the way our country looks, and will power an economy that by 2020 will be 50 per cent. bigger than it is today. It is our young people who will drive those changes.

We will all have different stories about what that means in our constituencies. I know what it means in Hodge Hill. I recently visited Hodge Hill mixed school, where the head teacher, Marie McMahon, rightly talked proudly of the transformation in the school's results over the past year. She introduced me to some of the school's outstanding graduates. Once upon a time, they would have left school for unemployment, or worse; now, thanks to this Government's reforms over the past seven years, they are ambitious to stay in education, and financially equipped to do so.

All those young people had one thing in common: an ambition to leave school and go on investing in themselves—working hard not just for themselves but for their families and communities. They were, quite frankly, an inspiration. In a way, the Bill is about how we as a country can support people like them as they face the possibilities of tomorrow. That is of particular concern to many of us in Hodge Hill, because we have one of the lowest post-16 participation rates in education, and consequently one of the lowest rates for participation in higher education. Children and young people are now very well served by many of the schools in my constituency, and by many of the local further education institutions—organisations such as City college, blessed by great public servants such as Kate Morris, who retires today after a lifetime of service.

Nevertheless, the country confronts two problems. How can we create an economy that is healthy, but in which each of us has an equal chance to become wealthy? To achieve that goal we must not just improve our national productivity but ensure a more equal distribution of skills. In the past few years, we have made great strides in transforming productivity. We are now as productive as Germany, and we are fast catching up with France. That is due in no small measure to our national investment in skills. In 1981, 7.8 million workers were without qualifications; now 90 per cent. have formal qualifications. Today 28 per cent. of the work force are educated to NVQ level 4 and above, an increase of 133 per cent. in 20 years. Seventy per cent. of those aged between 25 and 64 have had a secondary education, and half those between 16 and 18 are in full-time education or training, compared to just one third in 1985.

That is a pattern that we must sustain and improve if we are to stay ahead as a nation. In the years to come our economy will need reskilling, and reskilling again. In 1980 almost no one predicted the advent of the personal computer, and in 1990 no one predicted the rise of the internet; yet today information technology skills are judged essential by every employer. If we are to accelerate the pace of investment in productivity and create real opportunities for all our young people to share in the wealth of tomorrow, we have a long way to go in terms of investing in skills, as my right hon. Friend the Paymaster General explained so eloquently.

Today, the single most important reason for economic inactivity is a lack of education and training. Our intermediate skills still do not compare well with those of our competitors. Indeed, just over one third of the UK work force have reached NVQ level 3 or equivalent, whereas three quarters of the German work force have done so. That is why the Bill is so welcome to the 7,500 young people in Hodge Hill. It provides nothing short of a 40 per cent. pay rise for those of our young people who seek a training-based option at 16.

Thanks to this Government, students from poor backgrounds who want to stay on at school can now access up to £30 a week in education maintenance allowance—a payment that does nothing to affect access to a range of other benefits. Yet those who take up a training allowance might receive as little as £40 a week, with their access to supplementary benefits disallowed. Given that income support currently stands at £43.25 a week, we can see that any such person, no matter what their ability or ambition to learn, would face a very difficult decision if they were experiencing hard times. We must change that. We must make sure that investing in oneself has a pay-off. We have to ensure that the right benefits are available to our young people, and maximise their chances of living a life off benefits.

Many Members from all parts of the House share a simple ambition for this country: that if we can find a shred of talent or potential in any of our young people, we should nurture it and invest in it, and help it to grow into something of pride and value not just to one family but to a whole community, and not just for a fleeting moment but for a lifetime. That is surely a worthy ambition for this House, which is why the Bill deserves unanimous support.

Tony Baldry (Conservative, Banbury)

The hon. Member for Birmingham, Hodge Hill (Mr. Byrne) has made a thoughtful and interesting speech, and none of us would dissent from anything that he said. Many of us enjoyed walking round his constituency last year; getting to know a part of Birmingham that we had not hitherto known was an interesting experience. In 22 years as a Member of the House, this is the first time that I have taken part in a debate, other than Budget debates, to which Treasury Ministers are replying. Indeed, the Whips suggested to me that participating this afternoon would widen my horizons.

I want to make only three points, and I hope not to bore the House in doing so. The first echoes the comments of the hon. Member for Birmingham, Hodge Hill. I am fortunate enough, in my work with the International Development Committee, to travel the world fairly extensively. We often think of certain places as being poor, but if I were king for a day, I would try to ensure that as many people as possible visited China. There are cities and towns growing up in China of which we have not heard, and which are as large as, if not larger than, cities such as Coventry and Bristol. China's growth and its skills capacity are phenomenal, and it will challenge the competitiveness of Europe and the rest of the developed world in a way that UK and European business has not even begun to grasp. We think of countries such as India as poor, and some parts of it indeed are. However, places such as Bangalore are incredibly successful and high-tech. If we do not ensure that our young people acquire the maximum number of skills, Britain and Europe will fall behind; it is as simple as that. Unskilled and unqualified people will undoubtedly become unemployed.

My second point echoes the one that I made in an intervention. The Sure Start scheme is excellent, but perhaps we also need a "firm finish" scheme. We need an undertaking from the Department for Education and Skills that every youngster, at some stage in their school education, will have an individual interview with someone from Connexions who can go through all the options available to them. It is human nature for schools to want to encourage the maximum staying-on rate. Given the current capitation formula, the more people who stay on, the more money schools get, so they tend not to explain to youngsters that other opportunities exist, such as attending local colleges and doing NVQs, BTECs, national diplomas and various other training. I simply am not confident that such possibilities are pointed out to them. To be honest, nor am I confident that Connexions is even connected in my part of the world. The learning and skills council is an element of the machinery of government that still needs to be fitted in.

On paper, having a uniform and straightforward maintenance and support system for youngsters is a brilliant idea, but parents have got to be able to understand it. I hope that the Inland Revenue, perhaps with the help of the Plain English Society and others, will produce a booklet explaining to parents how the system works. Library briefing papers and other such documents tend to assume that all parents are rational, and that we sit down and think of all the options. Often, our children tell us what they want to do and we interact with them, and we must also remember that many parents have other dimensions to consider. They may have children with disabilities, they may be divorced or separated, or their children might themselves be carers. Life is not simple, therefore, and I hope that Treasury Ministers will undertake to produce for parents straightforward information that they can understand.

Kelvin Hopkins (Labour, Luton North)

I am interested in what the hon. Gentleman is saying, and he is right to emphasise the role of parents. However, many parents are not competent in this regard—they are not fully literate or numerate—so the state has to intervene in such cases to make sure that young people get a good start. Will he not commend the Government for the emphasis that they have placed on teaching basic skills in primary education? That is the first base, which all children must get to.

Tony Baldry (Conservative, Banbury)

We all want to enhance primary education. If the hon. Gentleman is right in suggesting that some parents have difficulties in that regard, that is all the more reason why we need to be confident that they understand the various choices available to them. Youngsters must not feel under pressure to leave school early because their parents or guardians do not believe that they have the financial resources to support them.

If we do not enhance our skills base, we will simply get left behind. Secondly, I hope that every youngster at some stage during their school career, before they take their GCSEs, can have a personal interview with a Connexions representative, who can go through the various options with them and ensure that they have some form of career and education plan between the ages of 16 and 19.

Thirdly, I hope that we can be confident that parents will be given some straightforward briefing, and I hope that it will be better than that given for the tax credit schemes. What I am about to say might sound rather portentous, but I am not sure that it is possible to say such things without sounding that way. I am fortunate enough to be a lawyer—a barrister—and I spend all my time construing documents, yet when people come to my constituency surgery with information on the various tax credit schemes, I find trying to understand it all harder than dealing with High Court pleadings. How ordinary people can be expected to understand it I do not know.

Frank Field (Labour, Birkenhead)

Is not the situation even more difficult when constituents appear in our surgeries with 15 different Government documents telling them what their tax credit is? If we as Members of Parliament cannot sort out such things, our constituents certainly cannot.

Tony Baldry (Conservative, Banbury)

There are also cases of constituents getting different letters, dated the same day, giving different amounts.

This is a non-contentious Bill that commands support throughout the House, but perhaps the icing on the cake would be a really good straightforward booklet for parents, produced with the help of the Plain English Society and others, so that we can ensure maximum take-up of the benefits that the Bill seeks to provide.

Iain Wright (Labour, Hartlepool)

I am pleased to follow the hon. Member for Banbury (Tony Baldry), not least because in his comments—which, like those of the hon. Member for Buckingham (Mr. Bercow), who is no longer in his place, were non-partisan—he tried to address the principal point of the Bill. As he said, we have a skills gap in this country and must deal with it in order to compete globally with the likes of China and India. I contrast the hon. Gentleman's welcome comments with those of the hon. Member for Chichester (Mr. Tyrie). He, too, is no longer in his place, but he tried to make a petty party political point.

The fact remains that since 1997, child benefit has increased from £11.10 to £16.10 for the first child. That is what really matters to parents out there. It amounts to something like a 50 per cent. increase in seven years. Perhaps I should declare an interest, as a father of four whose family receives child benefit. More important than my own personal experience, though, is that of the 8,700 families in Hartlepool who have benefited from the Government's child support schemes such as child benefit and child tax credit.

In my brief contribution I shall concentrate on the skills shortages in my constituency, and how the Bill will substantially improve the skills base for the Hartlepool economy. There is a huge anomaly in the present system, whereby child benefit is paid for 16 to 19-year-olds who stay in full-time education, but not for those who enter work-based training. That severely disadvantages young people who may not wish to go on to further or higher education, but choose to enter the employment market through unwaged training.

At the moment, choosing the route of unwaged training has a huge impact on the household budgets of families in which 17 or 18-year-olds are rightly expected to pay board and lodgings in the parental home. In reality, that prevents young people from exercising real choice, and can push them down a route in life that they may not really wish to follow. That sort of conditioning or soft coercion prevents people from fulfilling their potential. I think that the Bill will help to eliminate that problem, and should therefore be welcomed throughout the House.

One of the true success stories for Hartlepool in the last decade has been the educational attainment of our schoolchildren. Last year, for example, Hartlepool schoolchildren provided the fastest improving set of key stage 2 results in the entire country. More 16-year-olds than ever before are now leaving school in Hartlepool with qualifications. I believe that the figures speak for themselves. In 1996, 12 per cent. of Hartlepool's 16-year-olds left school without any qualifications; in 2004, only 5.1 per cent. did that.

Despite those successes and improvements, significant basic skills deficiencies and vocational skill shortages remain in Hartlepool. There is a recognised difficulty in progressing people from low-level, community-based training and learning to high-level skills and jobs. Some specific groups in the community have real difficulty in accessing training opportunities. I am thinking particularly of young carers, of whom there are substantial numbers in Hartlepool. Many of those are 16 or 17-year-olds caring for a sick relative. Every penny counts in such households, and the Bill's provision to continue financial support for young carers to undertake work-based training will help to ensure that they are not trapped in a benefit rut for the rest of their lives through no fault of their own, because of their wish to care for their relatives. That must surely be welcomed.

Hartlepool was one of the areas that piloted the education maintenance allowance, whereby £30 a week was paid to young people and a bonus payment made at specific points in the year. The effect on the traditionally lowest-achieving and hard-to-reach groups was hugely positive. Not only did the EMA help to increase recruitment of these difficult-to-reach groups, it had a massive impact on retention, with people not only starting training but finishing the course as well. It also improved the attendance and behaviour of individuals. I would suggest that the use of EMAs in Hartlepool has been found to have tremendous benefits for the individual, for his or her family, for the local skills base and for society in general. The experience of my constituency suggests that the Bill will have hugely positive benefits in continuing and extending financial support for young people to continue training that they might otherwise have been unable to do.

Another of the Government's successes has been the reintroduction and encouragement of apprenticeships. In the large employers in my constituency, particularly Corus, the profile of the work force is curious. It includes men and women in their 50s or older who came through apprenticeships in the 1960s or 70s. There is then a wide age gap reflecting a lack of regard for apprenticeships, perhaps in the 1980s and 1990s. There may have been a change in fashion in that respect. Then we have young lads and lasses who have started work in the past five years or so. We need more apprenticeships in Hartlepool if the local economy is to flourish. Anything that encourages training and apprenticeships, or the prospects of entering into apprenticeships, as the Bill does, is to be welcomed.

I believe that the Bill complements and expands on the work done in the past seven years to break the cycle of despair, decline and neglect in run-down neighbourhoods, and to create an environment of hope, opportunity, choice and prosperity. The Bill will stand with such worthwhile achievements as Sure Start and the tax credit system. It will also facilitate the improvement of skills in my constituency and elsewhere, which is so necessary to bring about the sustained economic prosperity that will help the country to compete globally. I fully support it.

David Ruffley (Conservative, Bury St Edmunds)

I welcome the opportunity to speak in this important debate, for two reasons: first, to highlight the critical importance to this country of training, particularly vocational training, and secondly to highlight the pressing need for greater simplicity in the system of benefit and support for our young people.

The Government's March 2004 consultation paper, "Supporting young people to achieve: towards a new deal for skills" has many merits. The Government announced their long-term intention to create a single, simplified system of financial support for young people. The paper also announced short-term measures, which are largely contained in the Bill, including the extension of child benefit and child tax credit to unwaged trainees between the ages of 16 and 19, and changes to benefit and tax credit rules to ensure that young people who reach 19 before they have finished school or college continue to be eligible for benefits and tax credits until they complete their course.

The skills shortage reveals a lack of real attention on the part of successive Governments to the importance of achieving true parity of esteem for vocational training with academic education up to 19. That is an important issue and the Bill does something to deal with the problem.

There is a shortage of skills in this country, and we all see it in our constituencies. The hon. Member for Hartlepool (Iain Wright) eloquently drew attention to the problem in respect of the urban part of Britain. I represent a rural part of Britain where the problem is equally pressing. The two main towns in my constituency, Bury St. Edmunds and Stowmarket, would probably be described as market towns, and they have extremely low unemployment. There are many companies in all sectors that just cannot secure the necessary skilled labour. That is partly connected with the fact that there is a buoyant jobs market, but is also to do with a lack of ambition that has afflicted parts of the county of Suffolk for many years.

I am delighted to report, however, that there have been some sterling efforts made in my constituency in respect of technology status for schools. Stowmarket high school, under the leadership of an exceptional head, Mr. David Oliver, and his dedicated team of governors, pressed hard for technology status. The school understood that in the area of Stowmarket there was a huge and pressing need to skill up our young people from 14 onwards. There has not been a particularly marked appetite among GCSE pupils in the area to go on to university, but there is an appetite for getting high-quality vocational training. My sense is that all political parties in this country understand that it takes massive skill to be a first-class electrician, plumber, bricklayer or central heating engineer. Those are good and noble careers that require skill, dexterity and training. I could not do them, as I am clueless in practical matters. Governments of all political persuasions must do more to celebrate, support and talk up vocational training.

That should not be necessary. For example, Germany does not have the same problem. Any vibrant economy must have an appropriate mix of education. People who prefer the academic route need to be catered for, as do those who prefer the vocational route. In that context, I also want to take this opportunity to pay tribute to the other schools in my area—King Edward's, St. Benedict's and County upper in Bury St. Edmunds, and Thurston community college and Stowupland high school.

The battle continues to ensure that our economy has the skilled work force that it needs to preserve its record of economic growth, but some rather worrying statistics have been unearthed by the Learning and Skills Council, which recently published the key findings of its survey of the scale of shortages that obtained in February last year. The survey showed that more than one in 10 of the English work force—that is, 2.4 million workers—lacked the skills that they need to do their jobs as well as they should be done. One third of employers had no training plans to plug that skills gap, and one fifth of job vacancies—about 135,000 posts—remained unfilled because of lack of appropriately skilled applicants. The study also found that poor basic skills cost a typical business employing 50 people about £165,000 a year, and that employers in London were the least likely to offer employees adequate training.

The CBI and the TUC recently estimated the cost of the skills crisis to the British economy at a staggering £10 billion a year—that is, about £170 for every man, woman and child in the country. The Government's skills strategy document of June 2003 conceded that our skills gap had remained stubbornly persistent. The problem did not arise over the past seven years, but it has not been adequately addressed in that time. There is not much point in prating on about what happened in the 1980s and 1990s, because the remorseless demand for a greater competitive edge in this country over the past seven years is there for all to see. Global economic forces mean that we live in a more competitive economy than was the case even 20 years ago. I suggest therefore that it is more urgent for this Government even than for any of their predecessors to get a real grip on closing the skills gap with our competitors.

Kelvin Hopkins (Labour, Luton North)

I am following the hon. Gentleman's speech with interest. We are all concerned about the skills gap, and he has pointed out that, although companies are desperately keen to employ more skilled workers, they are not prepared to train them. Does not that mean that the state must play a much greater role in ensuring that skills are developed, either by offering training itself or by compelling or inducing companies to do that?

David Ruffley (Conservative, Bury St Edmunds)

I shall not be tempted down that path. My party is inveterately free-market, which differentiates it from the hon. Gentleman's. We believe in voluntarism and not the heavy hand of the state. Most of the time, when the state gets involved in such matters, it does a pretty lousy job and messes things up. That is especially true when it comes to work force issues.

One of the great successes apparently celebrated by the present Prime Minister and Chancellor of the Exchequer is the supply-side revolution of the 1980s and early 1990s. That success is not in doubt and is not contentious. It has been adopted by the Labour party as part of an economic consensus, although I agree that the social responsibility that employers should display voluntarily is not as evident as it should be.

Kelvin Hopkins (Labour, Luton North)

Is not it obvious that voluntarism does not work? The most successful economies, even in the capitalist world, are those where the state takes a strong lead in developing skills and investing in them. Taiwan is a good example of what might be called guided capitalism, as opposed to laissez-faire capitalism.

David Ruffley (Conservative, Bury St Edmunds)

The hon. Gentleman cites a selective example. The greatest job-creating economy on the planet is the US, which would not adopt a Taiwanese state-interventionist model. The facts support my choice of example, and not his. However, we can agree that some employers are not sufficiently responsible, even though they should understand that giving a work force the proper skills can be to their benefit and economic advantage.

I resolutely stick to a voluntarist model. The results will always be patchy, and we will never attain perfection in this area of human and economic endeavour. I believe that the heavy hand of the state is to be avoided, and that the hon. Gentleman's prescription is not likely to be adopted by Ministers for the time being. The very simple reason for that is that they understand that that approach was tried in the 1960s and 1970s and that it failed, whereas the Tory economic model of the 1980s and 1990s succeeded. That success laid the foundation for the economic growth currently enjoyed by our economy. We call that the golden economic legacy of my right hon. and learned Friend the Member for Rushcliffe (Mr. Clarke). The current Chancellor has not tried to unwind or reverse that legacy, which is eloquent testimony to its success. The—

Alan Haselhurst (Deputy Speaker, Saffron Walden)

Order. The House is enjoying these exchanges, but they are marginal to the content of the Bill. I hope that we can draw a line under them at this point.

David Ruffley (Conservative, Bury St Edmunds)

That is not the first time I have been called marginal, Mr. Deputy Speaker. I had no intention of trying your patience, but I was led astray by the interesting—although now apparently irrelevant—interventions by the hon. Member for Luton, North (Mr. Hopkins). Even so, I hope that we have demonstrated that there is some common cause between us.

Recent figures show that output per hour worked in the US and Germany is about 25 per cent. higher than in this country. In France, the figure is more than 30 per cent. higher. The percentage of the British work force qualified to intermediate skills level—that is, apprenticeship, skilled craft and technician level— is low, at 28 per cent., compared with 51 per cent. in France and 65 per cent. in Germany. That is the measure of the skills gap.

The complexity of the current system was outlined by the Paymaster General and by my hon. Friend the Member for Chichester (Mr. Tyrie). It is the second aspect of training and the labour market addressed in the Bill, which, in fairness, does something to effect sensible reform. In the 2003 Budget, a wider review of support for 16 to 19-year-olds was announced, including financial incentives to participate in education and training. In March 2004, the Government published "Supporting young people to achieve", and no one can fault the ambitions set out by Ministers in that document.

The Government, we were told,

"is committed to ensuring all young people reach the age of 19 ready for higher education or skilled employment".

We heard about the Government's

"ambition for improving skills of young people"

and that the

"aim of this review is to ensure all young people aged 16–19 have the support . . . they need".

Those all fall into the category of motherhood and apple pie, but did the Government really do enough in the preceding seven years to deliver those ambitions? I suggest that they did not—for one simple reason. No doubt through high-minded intention, the Chancellor of the Exchequer has introduced many versions of in-work benefit and support, starting with the working families tax credit in 1997. With various tweaks and incarnations, the child tax credit and the working tax credit are now the two main in-work benefits. There are education maintenance allowances and a long catalogue, to which reference has already been made, of new initiatives.

The Bill speaks to the position of unwaged trainees, which is especially worthy of note and, in the panoply of changes, one of the more worth while. One of the key changes will be to the current rules, where for child benefit and child tax credit purposes, anyone under the age of 16 is treated as a child, and a young person aged 16 or over but under 19 is treated as a child if they are in full-time, non-advanced education. The Government believe that the current definition of a child in child benefit and child tax credit for 16 to 19-year-olds distorts choice, especially for those who are more likely to take the vocational route. Under the current system, they may be forced to take a course at a college rather than with a training provider, because of the existing differential—the additional financial support that is available. In the Bill, the Government have committed to extend child benefit and child tax credit to the parents and carers of unwaged trainees.

We support the proposals that I have just outlined; we also support the proposals on the age-19 cut-off. I shall not detain the House on those, but the regulations published on 10 January reveal that the Government have decided to use the age of 20 as the initial cut-off point, leaving open the option for a change in future if it is deemed necessary.

I close with some criticisms, which are, I hope, well judged, of the wider welfare and training policy that the Government are offering the country, in the light of the sensible changes in the Bill that I have conceded. In 1997, Labour promised to reform welfare and spend less on wasteful social security while maintaining spending on the sensible parts of what was then the social security budget but is now the budget of the DWP, such as pensions. One would have to be a complete idiot to say that cuts in social security should include the basic state pension and other pension benefits. However, the Opposition believe that, as the James review will make clear in the coming weeks, there is much useless, irrelevant and redundant expenditure in the DWP budget.

Welfare spending has increased by nearly a fifth in real terms since 1997, in clear defiance of the Prime Minister's promise that that would not happen. While spending on welfare and education has risen, recent research from the Library shows that the number of young people aged 16 to 24 who are not in employment or education has risen by 36,000 since May 1997. That may not be a huge increase, but it is not an impressive statistic. The figure would have been going down since 1997 if Labour's promises had been delivered. More than half the young people who are not in education or work—about 670,000—are defined as economically inactive: they are not actively seeking work. Despite the Labour party's rhetoric about prioritising education and skills—we remember that great slogan, "Education, education, education"—the CBI has reported that one in three companies has to provide remedial training for school leavers who have not sufficiently mastered reading, writing and arithmetic. That shames us all, and the Government would be well advised, while making sensible changes in Bills such as the one that we are debating today, to look at the basic skills of reading, writing and arithmetic in primary, middle and upper schools, as those skills precede vocational training. The statistics, however, are worrying.

My hon. Friend the Member for Havant (Mr. Willetts), the shadow Secretary of State for Work and Pensions, has rightly taken every opportunity to criticise the Government for reneging on their promises to reduce benefit payments. We will say something about that, as I have suggested, in the James review. Forensically and with great numerical distinction, the Conservatives have highlighted the failings of the Government's new deal programme, particularly for young people. My hon. Friend recently commented:

"Despite the billions of pounds that Labour have spent on the New Deal, there are now more than 1.1 million young people who are neither working nor studying nor training. This is the highest figure since Labour came to office. After all of Labour's talk about helping the young unemployed, why are so many young people being left behind?"

I do not dispute the Government's good intentions, and we are not suggesting that Ministers are acting in bad faith. However, they are failing to deliver on the new deal, as on many other things.

It is the policy of Her Majesty's Opposition to tackle the crisis in basic skills initially, although not exclusively, in schools. Pupils should be able to specialise in meaningful skills education as early as 13 if they so wish. Also, they must achieve higher standards of reading and writing at a very early age. Our policy of entrusting school heads and governors with more freedom to improve their schools will deliver genuine improvements, giving schools more freedom over their financial management. In the 1990s, we saw the benefits of that policy in grant-maintained schools, which achieved better results because teachers in local schools knew how the money could best be spent to lever up standards. We will introduce other measures to improve the quality of teaching, including, for example, axing unnecessary paperwork. Since 1997, the average school head has received 12 pages of bumf from the Department for Education and Skills every working day. We would cut that material, and we would also reduce interference from appeals panels if a head wished to exclude an unruly pupil. There is therefore a package of measures at the heart of our efforts to improve training.

We will also reform welfare to give more practical help to unemployed young people. We will scrap the new deal, which has been an expensive failure. Only about a third of people who complete the programme find a sustained job and most of them end up back on benefits, according to the new deal summary statistics issued by the Department for Work and Pensions in December 2004. Statistics show that most people who find work while on the new deal would have found jobs regardless of that Government project. We will replace it with "Work First", a policy that allows private, voluntary and charitable providers to deliver employment advice more effectively. There is clear evidence from home and abroad that contracting out employment services to independent providers—but not in the lily-livered way espoused by members of the new Labour hierarchy—achieves much greater success at lower cost.

In conclusion, the Opposition welcome the sensible parts of the Bill, but we do not welcome the Government's record over the past seven years, as it has let down children and young people. More can be done to help them achieve their ambitions. It is vital to create a highly skilled work force that can adapt to the challenges ahead, including a viciously competitive global economic environment. It is not an option to say, "Stop the world we want to get off." It behoves politicians from all parties to have much greater ambitions for our young people. They are our future.

Frank Field (Labour, Birkenhead)

I apologise for not being here for the opening speeches, but I shall in no way apologise if I repeat some of the themes that those on the Treasury Bench have outlined. Those themes are part of the celebration that we are having today. I wish to make two points in my short contribution. The first is to congratulate the Government, and to celebrate with them, on the achievement that the Bill symbolises. Secondly, as we are now into manifesto time, I want to suggest how some of the money might be even more effectively spent than it is currently.

To turn to the celebration, we need only cast our minds back to the last time a Labour Government introduced a child benefit Bill. They had revolts on their hands, faced chaos and withdrew the Bill. There was a major leak of Cabinet minutes and, under pressure, the then Government reintroduced the Bill and the introduction of child benefit followed. What a difference between then and today. There is now such agreement not only in the House but in the country on the importance of child benefit that, try as they may, even the Opposition do not have a case to make against the Government's proposals.

We therefore celebrate the transformation in parliamentary views on child benefit and the extension of child benefit to an older age group to reflect the important changes that are necessarily occurring in education and therefore its interrelationship with the labour market. We also celebrate the fact that, at long last, society is beginning to realise that raising children is a huge cost that is disproportionately borne by a small minority of the population at any one time. As my hon. Friend the Member for Hartlepool (Iain Wright) said, we all have a huge vested interest in making sure that parents do the very best possible job of raising the next generation and the people who will pay our pensions. If we cannot be interested for the right reasons, we can be interested out of self-interest.

David Laws (Liberal Democrat, Yeovil)

The right hon. Gentleman will no doubt be aware of the paper that the Government issued last year that talks about a vision for supporting young people. It talks about support being dependent on household income and appears to suggest that there may be a shift from child benefit to a more means-tested system. Does he have any concerns about that?

Frank Field (Labour, Birkenhead)

Indeed, I have concerns. The only rationale for the tax credit only side is to put it into place and then start dismantling the universal side of the welfare state. Clearly, one needs to be vigilant on this issue, but even though one must be concerned, that is not what is before us today. The Bill is about extending child benefit, so it is a day of celebration.

The hon. Gentleman is right to talk about what might be done in the future and what might be done about support for older children, but I want to consider younger children and our support for mothers. Today, we are also celebrating the influence that the most impressive Back-Bench Member of Parliament ever had on policy. I refer to the influence of Eleanor Rathbone, because when she rose to talk about child benefit, she did not receive a great deal of support from her colleagues. She talked about the importance of endowing motherhood and I fully understand, politically, why she let the campaign move from motherhood to family allowances and the transition to child benefit.

Like my hon. Friend the Member for Hartlepool, my hon. Friend the Member for Birmingham, Hodge Hill (Mr. Byrne) made a significant point about the importance of antisocial behaviour in our constituencies. Antisocial behaviour cannot be divorced from the way in which young children are nurtured. Parenting skills have been lost in many families in our constituencies, which is why Sure Start is important and we must redouble our efforts on that front. We first introduced child benefit, or more importantly family allowances, in a world in which mothers did not work, certainly in the early years of a child's life. It is now clear that most mothers must work because of economic pressures, so I wonder whether we have the right balance between support for children in the first 19 years of their lives and that in the first two years.

When I examined the taxpayers' resources that are provided for children, I was surprised. If we add child benefit, the child tax allowances and the extension to 19 under the Bill, we are talking about a budget of £100,000 per child, which shows that a revolution has taken place in my lifetime from the support that existed. Given that we are in manifesto time and many, if not most, young mothers must go back to work, against their natural instincts, to keep their family finances together, might there not be a better way of spending some of that £100,000?

I hope to engage the services of the Clerks so that I can table an amendment on Report to provide that mothers could opt to take a quarter of that money tax-free during the first two years of their children's lives. That would mean that, if they did not want to work, they would not have to. Such a measure would be important for the welfare of our society because it would raise the financial position of mothers to a level that most women in my constituency could not command in the labour market. We would thus say that motherhood is financially more important than any other job that they could get, and I guess that they would opt for the payment. The scheme would not only interest women who have only the option of low-wage jobs, because it would allow women on higher pay to choose to return to the labour market later than at present. That might greatly influence increasing the importance of the nurturing of children, which is starting to be lost in our society.

Kelvin Hopkins (Labour, Luton North)

Does my right hon. Friend have any statistics to show the number of women with young children who would wish to stay at home and look after them if they were financially able to do so?

Frank Field (Labour, Birkenhead)

No, but given that the Government are rightly into choice, we would not have to worry about numbers. We would make the scheme an option and find out how many people went for a tax-free income of £25,000 during the first two years of their children's lives and how many were not interested and wanted to receive their child benefit and tax payments over the first 19 years of their children's lives. We are normally out of tune with what the voters want, so we might be surprised by the response.

I repeat that this is a day for real celebrations, certainly on the Labour Benches and hopefully among Opposition Members. It marks a transformation of the way in which taxpayers are called upon to support the minority who care for and nurture our children. However, the Bill will rightly increase the sums involved by covering all those with children up to the age of 19. When I asked the House of Commons Library about our investment in children up to the age of 19, I did not believe that it would be anywhere near £100,000. The fact that we are now discussing big money—thank goodness—opens up options for the first time. Do we want everyone, in a ration-book way, to have to draw money equally over each year of their children's lives, or should we use the Bill to offer real consumer choice to people who wish to draw down some of the money in the earlier part of their children's lives so that they can stay at home during that time and go to work when their children are involved in Sure Start, at nurseries or safely at school? This is a moment for real celebration.

I end as I began. Consider the change in opinion over time. The last time a Labour Government introduced a child benefit Bill, a huge, rocketing political debate took place in the country about whether we could have it, whether we should have it and whether it was an awful Bill transferring money from men's pockets to women's purses. Under pressure, the Government withdrew the Bill for a while. Fortunately, once the Cabinet minutes were published, the Government got back their courage and we got child benefit. Back in 1976, who would have thought that we would have another Labour Government introducing another Child Benefit Bill? Child benefit is now so accepted in the country as a necessary part of family support that most hon. Members are hard put to find serious reasons to disagree with what the Government are doing.

Mark Francois (Conservative, Rayleigh)

I am pleased to sum up for the Opposition after an interesting debate. It is a pleasure to follow the right hon. Member for Birkenhead (Mr. Field) who, as the whole House acknowledges, always speaks with great authority on these matters. I am glad that he joined us in the debate today and look forward to referring in detail to his remarks.

I confess to a sense of déjà vu. Just before Christmas, my hon. Friend the Member for Chichester (Mr. Tyrie) and I faced the same two Ministers across the Dispatch Box to debate Second Reading of the Commissioners for Revenue and Customs Bill. Here we are, just after the return from the recess, debating further Treasury legislation, this time on the subject of child benefit. Before I come to the details of the Bill, I shall say a few words about the contributions to the debate.

The hon. Member for Wolverhampton, South-West (Rob Marris) spoke with his usual sense of humour and mentioned the history of some of the issues in his constituency. He advanced an argument about the problems of simplification and took as an example the Child Support Agency. I shall correct him gently, if I may. The problem with the change from CS1 to CS2 was not that the change was wrong in principle—it was right—but that the computer system purchased to deal with the change was deficient. The Government are trying to rectify the situation. An IT failure, rather than simplification itself, lay at the heart of the problem. He made a number of detailed suggestions for amendments to the Bill, which I saw the Whip on duty at the time noting feverishly. Knowing a little about how this place works, I congratulate the hon. Gentleman on volunteering for the Committee next week.

The hon. Member for Yeovil (Mr. Laws), who spoke for the Liberal Democrats, supported the Bill in principle. He pointed out that it could affect 160,000 young people. He agreed with us about the lack of clarity in the Government's figures relating to the cost of the measure and how they will measure the benefits that it produces. As I said in an intervention in his speech, it is ironic that a Treasury Bill, of all things, lacks accuracy on financial matters. It used to be said in some quarters that the traditional spending Departments were often bursting to bring in spending Bills and the role of the Treasury was to attempt to restrain them. It now seems that the boot is somewhat on the other foot and that the Treasury often introduces spending Bills of its own. I simply ask as a rhetorical question who now guards the guards.

The hon. Member for Birmingham, Hodge Hill (Mr. Byrne) made a thoughtful speech about his constituency, and spoke about skills—a common theme in the debate—particularly, in his case, in relation to science and technology. My hon. Friend the Member for Banbury (Tony Baldry) also stressed the importance of skills in a 21st-century economy and argued for clarity in the implementation of the new measures. He referred to his horizons being widened by participating in the debate, but I think that he helped to widen ours as well.

We then heard from the hon. Member for Hartlepool (Iain Wright), the newest addition to the House, who spoke mainly about his own constituency and how the Bill might affect it. It was the first time that I had heard him speak in the Chamber, but I hope that he will not mind me saying that, having heard him today, I now look forward to hearing him again.

We also heard from my hon. Friend the Member for Bury St. Edmunds (Mr. Ruffley). He too stressed the importance of skills in a modern economy and particularly praised the valuable work under way in a number of schools and colleges in his constituency to help to foster that. I very much agreed with him that a key to all of this is to get the fundamentals of education in our schools right, because young people will be playing catch-up for the rest of their careers if they have not been adequately educated by the time that they leave school in the first place. I hope that there will be agreement on both sides of the House about the importance in principle of doing that, even if we disagree about the precise methods for implementing it.

I also very much agreed with the intervention of the right hon. Member for Birkenhead on tax credits. That is something that the Ministers here today have debated before, but he gave some relevant examples of where there are problems in the system. To be fair to the Paymaster General, I think that she acknowledged that from a sedentary position, so I hope that it will be possible to bring about changes in due course. The right hon. Gentleman also hinted at introducing an amendment on Report, which we all picked up on, and we should look forward to debating that in due course.

Rob Marris (Labour, Wolverhampton South West)

Put him on the Committee.

Mark Francois (Conservative, Rayleigh)

I suspect that that may yet happen too.

My hon. Friend the Member for Chichester has already explained to the House that the Opposition do not oppose the Bill in principle and that we do not intend to seek to divide the House on it tonight. However, we will have some specific questions to ask in Committee about particular aspects and the attendant draft regulations, some of which I should like to touch on.

The Bill's genesis goes back several years, arguably to a report by the social exclusion unit in 1999. That then evolved over time into the Government's more recent consultation document, "Supporting young people to achieve", which was published last year alongside the 2004 Budget. Following on from the results of that consultation, the Bill extends the scope for those qualifying for child benefit in essentially two respects: first, by making it available to the families of unwaged trainees on named programmes of Government-supported training; and, secondly, by making it available to the families of 19-year-olds completing a course of full-time education or unwaged Government-supported training that was started before their 19th birthday—in other words, by extending the cut-off that currently operates at 19.

In themselves, those are not particularly contentious measures, but the Bill is not without fault. To begin with, it does little to reduce the overall complexity in the benefits system, which was laid out in some detail by my hon. Friend. The Government's social exclusion unit, in its 1999 report, "Bridging the Gap: New Opportunities for 16–18 Year Olds not in Education, Employment or Training", had already made the point that the system of financial support for young people was extremely complex, so the Government themselves have admitted that for some years.

If we then come forward to today, the Bill's wonderfully entitled "Supplementary partial regulatory impact assessment", published alongside the draft regulations just this week, effectively reiterated the complexity of the current system and then in paragraph 20 stated:

"Evidence presented to the Review showed that vulnerable young people lacked understanding of their entitlement".

We are therefore faced with a system that is already so complex that very few people understand it in detail and, in particular, there is a lack of understanding among those people to whom the system is directly meant to apply. I am not sure that the Bill helps to rectify that as best it might.

Moreover, the Government's consultation document described the proposed changes in the Bill as "interim measures", in lieu of a more fundamental review of the system of financial support for young people. The outcome of the review, as predicted by the House of Commons Library briefing note that accompanies the Bill, will be set out in the 2005 Budget. That is the Library's assumption, but could the Minister in his reply confirm that it is still the Government's intention to reveal their longer-term strategy on the whole issue in the 2005 Budget? We have some elements of the package, but we do not have the package in toto, and it would be helpful to know when we might receive it. I am not asking him to betray the date of the Budget, although that would be nice. As a planning assumption, the Budget announcement will be about two months today, and the Government therefore appear to be proposing to introduce an interim measure today that, according to their own draft regulations, would not come into force until at least April 2006, but which they are effectively planning will be superseded in two months' time in any event.

Rob Marris (Labour, Wolverhampton South West)

The hon. Gentleman cited the Library brief, but with due respect, I think that he slightly mis-cited it. Page 16 states:

"It is expected that the Government will announce further details of its long-term vision of financial support for 16–19 year olds in the 2005 Budget."

I draw his attention to the words "further details". The Library does not say that it is expected that the Government will announce their long-term vision, but refers to further details.

Mark Francois (Conservative, Rayleigh)

I have two things to say to the hon. Gentleman. First, the Government's approach has been very disparate—we have had the information very incrementally. The Economic Secretary will appreciate that we are asking for the final package and I am seeking to tease out of him whether we are likely to receive that in the 2005 Budget. Perhaps he can throw some light on that point. Secondly, as the hon. Member for Wolverhampton, South-West chose to intervene on me, I hope that he will not think me uncharitable in saying that he was rather pushing the envelope in making his remarks about driving licences. I say to him charitably that we debated the Road Safety Bill yesterday, not today.

For the record, I appreciate that part of what the Government are seeking to do is to correct an anomaly in the already very complex system whereby parents of those aged 16 to 19 in full-time non-advanced education receive child benefit, while parents of those in the same age group who are unwaged training do not receive it. We can see what the Government are seeking to achieve, but is there not at least a practical argument for cutting to the chase and simply waiting two months for the overall answer and the entire package, if the Government are likely to come up with it, and to move forward from that stage?

The Opposition also have concerns about the timings for dealing with the Bill. This may be a relatively small Bill, but it is nevertheless an important one, not least to those who stand to receive the expanded benefit. That being the case, the Bill has many of the hallmarks of a rush job. First, it is largely dependent on a set of subsequent regulations that were issued only on Monday, along with the now famous regulatory impact assessment, and which did not allow much time for consultation with interested parties, at least on the regulations themselves, which form the heart of the Bill. Secondly, the Bill is now to be hurried into Standing Committee as early as Tuesday next week.

Why that headlong rush, not least for a measure that is not scheduled to be implemented for more than a year in any event? The conclusion has to be at least in part that this is an electioneering measure that the Government are desperate to get on to the statute book prior to an expected election in May 2005.

In addition, I ask the Economic Secretary what the Bill will do for the so-called missing million among our young people—the more than 1 million people mentioned by my hon. Friend the Member for Bury St. Edmunds who are not in employment, education or training. The latest figures, from the quarter August to October 2004, which were published by National Statistics as recently as December, show that the number of under-25s unemployed and not in education or training rose by 36,000 on the previous quarter, while the number economically inactive and not in education rose by 5,000—an increase of some 41,000 to give a new overall total of 1.118 million which is well over a million. That represents a sixth of our young people under 25, and has been described by the shadow Secretary of State for Work and Pensions, my hon. Friend the Member for Havant (Mr. Willetts), as a lost generation. It is not clear what this Bill, which is a relatively minor measure, will do to seek to address a problem that now exists on that scale and is a definite blot on the Government's record.

In reality, the Bill is yet another element in the Brownite agenda. It is not unworthy in its own right, but it has become just a very small part of a much larger game—the struggle between the Chancellor and the other spending Departments, including the Department for Work and Pensions, for control of the Government's social policy agenda in the run-up to the election. It is meant to be part of Brown's Britain, as opposed to Blair's Britain, Milburn's Britain or even Johnson's Britain. Unfortunately, the Bill that is being introduced today by this now obviously divided Government is a benefit Bill, but it is for the Chancellor's benefit rather than anybody else's.

John Healey (Labour, Wentworth)

We have had a good debate this afternoon. Although the Bill is short and straightforward, it paves the way for significant improvements in the support that we provide for young people who continue in learning beyond the age of 16. The Government are determined to offer that support to allow all our young people to realise their potential, regardless of their financial circumstances. I am glad that the Bill has received a widespread welcome from organisations that take an interest in the field and, as I understand it, from both major Opposition parties, which have decided not to oppose it this afternoon.

As my right hon. Friend the Paymaster General has explained, the Government are committed to ensuring that all young people reach the age of 19 ready for higher education or skilled employment. Skills are important for the life chances, employment prospects and earning potential of individuals, but they are also important for the flexibility, productivity and competitiveness of our British economy. The Government are interested in all those matters. Intensifying international competition, accelerating technological change and changing patterns of consumer demand are all likely to increase the demand for higher level skills. By 2010, it is forecast that 80 per cent. of new jobs will require high or intermediate levels of skills and that 95 per cent. of them will require at least a level 2 qualification.

That is why young people moving into the work force must have a firm, strong skills foundation on which they can continue to build throughout their working lives. The Government have already taken steps to broaden the opportunities available to young people, and that is why we are reforming the curriculum and range of learning in England. To support that strategy, we must remove the financial barriers to young people staying in education and training after the age of 16, which is why the Chancellor announced the review of financial support for 16 to 19-year-olds in the Budget 2003, which was followed by the publication of the report "Supporting young people to achieve: towards a new deal for skills" alongside the Budget 2004.

Before I had the privilege of serving in the Treasury, I served as Minister with responsibility for adult skills in the Department for Education and Skills. In February 2002, I visited the excellent further education college in the constituency of my hon. Friend the Member for St. Helens, North (Mr. Watts), where I met him, the principal and the student support officer. My hon. Friend was the first to raise with me the issues addressed by the Bill. He pointed out that families in St. Helens at that time were refusing to allow their children to enrol on work-based training schemes. Such families would lose benefits if their children enrolled, and the rules often led to family disputes over money. He also made it clear that young people refused to accept work-based schemes, even if such schemes were the best options. Many hon. Members have subsequently raised similar points, but the process started with my hon. Friend.

In his contribution, my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) underlined the historical and future importance of vocational skills in his region and recognised the value that the changes in the Bill will provide for young people in the west midlands who want to pursue training that is, at least initially, unwaged.

My hon. Friends the Members for Wolverhampton, South-West, for Birmingham, Hodge Hill (Mr. Byrne) and for Hartlepool (Iain Wright) described the skewed educational choices that young people are sometimes forced to make because of their family's financial circumstances. All hon. Members who have examined the issue closely or who have discussed the matter with local training providers will recognise the present problem. In my home town, Rotherham, we have a good learning provider called Morthyng. Last year, it supported some 1,500 people back into learning, 369 of whom were between the ages of 16 and 21. The company tells me that, last year, 55 young people rejected, at age 16, offers of work-based training places precisely because of the family loss of child benefit and tax credits, and in preference tried to take up college places because of the support that they would receive. The chief executive, Chris MacCormac, told me that, with the new Bill, the company estimates that it can support a further 55 to 90 young people a year in entering learning—learning that suits their needs, that will reduce drop-out, improve achievement and reduce the numbers of those not in employment, education or training locally by 10 per cent. year on year.

The story is the same for the excellent further education college in my constituency, Dearne Valley college, which draws students from Barnsley, Doncaster and Rotherham local authority areas. Barnsley and Doncaster were education maintenance allowance pilot areas; Rotherham was not. The college principal, Sue Ransom, reports that the impact of the EMA pilot in the Dearne area was significant. During 2002–03, it resulted in a 15 per cent. increase in the retention of EMA pilot students compared with non-pilot area students, and an increase of 26 per cent. in the achievement of the EMA pilot level 1 students over non- pilot students. My hon. Friend the Member for Hartlepool made similar points about his constituency.

That, in part, is the answer to the question asked by the hon. Member for Yeovil (Mr. Laws) about the likely behavioural effects of these measures—whether they will encourage people to stay on in education or take up unwaged training options.

David Laws (Liberal Democrat, Yeovil)

Will the Minister give way?

John Healey (Labour, Wentworth)

I will give way on that point, and then I should like to turn to the other contributions to the debate.

David Laws (Liberal Democrat, Yeovil)

It may be that the Economic Secretary is coming to this point. Will he clarify how many of the 80,000 unwaged trainees' families will receive child benefit and the child tax credit, and how many may not receive it because of the way that the Government have defined the entitlement?

John Healey (Labour, Wentworth)

I am indeed coming to the general point made by the hon. Gentleman and by the hon. Member for Chichester (Mr. Tyrie) about what they see as the weakness in the available information that we have been able to set out in the regulatory impact assessment.

I am happy to follow the hon. Member for Rayleigh (Mr. Francois). He made a mostly measured and serious winding-up speech, which I welcome. He noted some of the detailed matters that he intends to develop in Committee, and we look forward to that. I also welcome the declaration by the hon. Member for Chichester that the Conservatives will not oppose the Bill. The Paymaster General and I are rather accustomed to his style of debate. His speeches tend to be a series of detailed questions and narrow debating points. We hear nothing from him about what his party would do or how it might pay for its policies. Perhaps he has not recently had a conversation with his boss, the shadow Chancellor, who has made it clear that his party, in government, would spend and invest less of the national income in public services, that it would cut £35 billion from the spending plans that we have laid out up to 2008, and that it would offer no protection for learning and skills activities. Learners and learning providers will face cuts, and that includes the areas covered by the Bill.

The hon. Member for Chichester also mentioned age limits, a point raised by several other Members. I understand the concerns of hon. Members and organisations cited this afternoon about financial support for young people aged over 19. However, from the Government's point of view it is necessary to decide on a sensible point at which it is no longer appropriate to pay support to a young adult through the parents. We have separate arrangements to support adults in gaining skills and qualifications. The Government's view is that someone aged over 20 should come under the adult arrangements, but we will keep that under review and consider it in light of the initial reforms that we are setting out today.

I come to the information that is available and the confidence that we can have about any cost-benefit and behavioural effects—a point that was stressed by the hon. Members for Chichester and for Yeovil. I have to tell them that we all share the problem that there is a sparsity of information available about unwaged trainees—the group of people we are most concerned with in this context. They are generally in small groups and are not easy to pick up in generalised surveys. Moreover, no one has specific responsibility for collecting data on them and there is no common source of data. Consequently, the RIA is a reflection of the best information that we have. As we improve the information we will certainly share it with members of the Committee and other Members.

I am pleased that the hon. Member for Yeovil gave a general welcome to the Bill. He said that it would be of benefit if the Department for Education and Skills was leading on it. I could ask him why he, rather than the hon. Member for Harrogate and Knaresborough (Mr. Willis), is speaking for his party. On his main serious point of principle, I can assure him that we will, in the long term, rationalise the system of support for young people. That is precisely what was set out in the joint Treasury-DFES report alongside the 2004 Budget. As he says, the Bill is something of a milestone towards that.

David Laws (Liberal Democrat, Yeovil)

rose—

John Healey (Labour, Wentworth)

I had better press on, if the hon. Gentleman does not mind. I have already taken one intervention from him and I am keen to deal with the contributions of other Members.

My hon. Friend the Member for Birmingham, Hodge Hill clearly explained the decisions faced by young people in his constituency and how they may be penalised for taking up the option of unwaged training, as well as setting out the vision and imperative to raise skills levels in the economy and the danger to us as a nation if we do not.

I am glad that the hon. Member for Banbury (Tony Baldry) joined the debate. He cited China as a cautionary tale for us all, and eloquently made the point that increasingly in future those without skills will find that they are less securely employed and have their job and income prospects reduced. As for information, advice and guidance, the Department for Education and Skills has been looking closely at that issue and he can expect some indication of its thinking in the forthcoming youth Green Paper.

My hon. Friend the Member for Hartlepool spoke up clearly and strongly for his constituency. He recognised the increases in child benefit under this Government since 1997. I have to tell him that in April they go up again to £17 for the first child and £11.40 for any subsequent children. He also mentioned the expansion of modern apprenticeships. He is right—the number of young people in modern apprenticeships has more than tripled since this Government came into office.

The hon. Member for Bury St. Edmunds (Mr. Ruffley), who is again in his more accustomed place on the Front Bench, offered us a wide-ranging speech from which I took a couple of specific points. I congratulate Mr. Oliver and his staff at Stowmarket high school on their status as a new technology college. They are clearly making great strides under the Government's education policies, and I welcome that. He argued that the seriousness of the skills gap means that there is a role for the state in helping to fill it and a role for employers in making a greater contribution and being more socially responsible.

David Laws (Liberal Democrat, Yeovil)

rose—

John Healey (Labour, Wentworth)

I will give way one last time.

David Laws (Liberal Democrat, Yeovil)

I am grateful to the Economic Secretary for giving way in these last few minutes. I appreciate that he is trying to be helpful, but there is major uncertainty over one of the big issues in the Bill. The Government are saying that 80,000 young people are in unwaged training, but that only those on Government supported training schemes will get assistance through child benefit. How many of the 80,000 will have access to the additional benefits?

John Healey (Labour, Wentworth)

There are 80,000 young people on unwaged Government-supported training schemes, and that is the number of young people who are potentially eligible for the measures that we are considering.

Let me deal with the comments of my right hon. Friend the Member for Birkenhead (Mr. Field). My right hon. Friend the Paymaster General and I look forward to hearing the advice that he receives about possible amendments on Report. He was right to celebrate not only the extension of child benefit for which the Bill provides but, as he put it, the transformation of parliamentary opinion on child benefit. He knows as well as anyone that part of the ambition and purpose of a progressive Government is to develop not only progressive policy but a consensus that will support that policy and render its dismantling more difficult in any future change of Government. I hope that he will perceive the support for the Bill from hon. Members of all parties as a further small step towards that.

Andrew Tyrie (Conservative, Chichester)

I sometimes wonder whether the Opposition are the only people who read regulatory impact assessments—

Rob Marris (Labour, Wolverhampton South West)

Excuse me!

Andrew Tyrie (Conservative, Chichester)

And one or two more attentive Labour Back Benchers. Throughout the debate, I have asked for the Government's estimate of the total number of people who will be brought into training as a consequence of the measure. I still have not received an answer. That is the most basic information that we need if we are to spend more money on training. What is the answer?

John Healey (Labour, Wentworth)

I explained earlier the precise problems that we experienced in getting accurate information to assess the behavioural effects with any confidence.

We expect to debate the more detailed points that were made this afternoon in Committee. However, I hope that the debate has made it clear that the Bill is modest but important. It reinforces our commitment to vocational education as equal in status to academic education. It removes barriers that may restrict or distort the choices of education and training that young people make. It encourages young people to choose learning that is best suited to their interests, aspirations and aptitudes, rather than basing the decision on the amount of financial support available. It increases the support that we offer to 16 to 19-year-olds as a step towards achieving our ambition for all young people to stay on in education and training until the age of 19.

I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.