Front-loaded Child Benefit Bill [HL]

Debate between Baroness Berridge and Baroness Sherlock

Friday 2nd December 2022 Lords Chamber

[Baroness Berridge (Con)]

My Lords, with the leave of the House, I will speak to Amendments 1 and 3 in the name of my noble friend Lord Farmer, who is unavoidably detained today. I thank the noble Baroness, Lady Sherlock, for helpful discussions and advance notice of the specific questions that her amendments seek to address. I hope that we can make the most of our Committee on this Bill. I am also grateful for the letter from the Exchequer Secretary to the Treasury outlining various concerns around this proposal.

Amendment 1 seeks to address the legislative difficulties that the Treasury has highlighted, as it would simply leave out the words “on a sliding scale”, which introduced unworkable complexity into the Bill and would potentially require HMRC to make very regular changes to the child benefit rates available to claimants. As the Treasury said, this would be challenging to operationalise and potentially expensive for taxpayers. This amendment would also hopefully answer some of the concerns raised by the noble Baroness, Lady Sherlock, around adding complexity for parents into the child benefit system.

With Amendment 1, the Front-loaded Child Benefit Bill would be deliberately simple and merely provide the legislative lever or framework around which the Government can then build detailed policy. They would of course be aided in this respect by the many respected think tanks that have published reports providing solutions to the cost of living crisis that we know is facing many families, going beyond giving money and aiming to help improve choice and encourage responsibility.

My noble friend Lord Farmer explained at Second Reading that the rationale is to increase choice for parents in how they manage childcare in the early years. We have all benefited from the research and information about the importance of those early years and the foundations that are laid at that time. During those first two or three years, many parents would like to care for their children themselves but face a considerable and increasingly insurmountable sacrifice of income to do so. Receiving the same flat rate of child benefit throughout childhood no longer fits with the financial realities of many families.

Interestingly, since the Second Reading debate in October, other think tanks such as Civitas have proposed a family support benefit, which would roll out £16 billion of government child benefit and childcare expenditure into a front-loaded payment. In August, the Policy Exchange think tank made a similar recommendation for what it termed a “baby boost” allowance for parents of children aged two and under, which would double child benefit and be funded by reallocating the significant underspend on tax-free childcare. It is that kind of thinking that this Bill is part of in terms of renewing the financial framework for families in the early years. Those costed proposals are important, because one criticism of the Bill was the upfront additional burden on His Majesty’s Treasury from a higher rate in the early years, even if the measure was ultimately cost-neutral, as there could be a correspondingly lower rate in later childhood. This reform of child benefit would be part of a much-needed redesign of financial support.

I heard at Second Reading what other noble Lords said around the expense of teenagers. No one is pretending that that is not also an expensive time, but parents are usually much less restricted in terms of the hours that they can work when their children are at school and childcare is much easier. That is also reflected in the fact that the Government give disadvantaged two year-olds, three year-olds and four year-olds all the hours that they do, usually free. Additionally, the age at which the benefit might taper off would be an age at which certain children find that they want to add to the family household income themselves.

There are advantages to this front-loaded child benefit being part of what we see as a greater overhaul of the system of financial support. However, that aspect of any new passage would need primary legislation, which is why this Bill has been brought forward. With the removal of the sliding scale, it is hopefully a very simple framework into which any Government could fit any detailed policy proposals.

Amendment 3 would insert a new clause to enable the Secretary of State to set different rates at which parents could choose to be paid in the early years and later in childhood. Importantly, that amendment would put all the policy implementation detail into the hands of Ministers to craft, so that it can be more easily changed as circumstances change than if it was in primary legislation. This would enable the front-loaded child benefit to be part of a suite of reforms benefiting parents in the early years. The second amendment makes that important change: it would no longer be up to parents to request a particular proportion, but the Government would set within the framework, for example, what proportion could be drawn down and within what age range of the children, et cetera.

As originally drafted, the Bill would have allowed the child benefit claimant to request the front-loaded payments without details of what the new rates would be and how they could be discounted in a child’s later life. That was not my noble friend’s intention, so that change in who has control would come through Amendment 3, and the delegated powers would be with the Government to develop the front-loaded system.

Briefly, I believe there is one point that the noble Baroness has raised which is not covered by the amendments. It is her query about why the Bill includes “without prejudice” in Clause 1(1B). The only reason that bit is there is as kitchen-sink legislation, just to make sure. Obviously, the provision referred to means that child benefit can never be lowered. We wanted to make it crystal clear now that even if you ended up with a group of parents claiming flat rate for the entirety of a child’s life, and then a group doing front-loaded plus decrease, none of those rates could be lowered. We are just kitchen-sinking it to make sure it does not provide any wiggle room for a future Government to say, “We’re raising child benefit, but those discounted years and the old years do not get the same percentage increase.” That is why the provision is there; it is without prejudice to that, so it would mean there could be no change to that fundamental principle—basically, that child benefit never goes down.

I hope that has clarified those questions for the noble Baroness and I beg to move.

[Baroness Sherlock (Lab)]

My Lords, I thank the noble Baroness, Lady Berridge, for standing in for the noble Lord, Lord Farmer, and introducing the amendments in his name. I shall speak to Amendments 2, 4 and 5 in my name. Having suggested to the usual channels that we have a single group, I will cover everything in one speech, so it may be slightly longer than normal. These are all probing amendments, which I have tabled simply to allow us to explore how the proposal to front-load child benefit would work. I would like to look at three sets of issues.

First off, there is the value of child benefit paid up front. At Second Reading, the noble Lord, Lord Farmer, argued—and the noble Baroness, Lady Berridge, agreed—that the aim of the Bill is to direct more money to parents in the early years to allow them to make different choices. For that to work, it would need to be enough to make a difference but that is going to be quite hard. Child Poverty Action Group research shows that last year the additional basic cost of a child from birth to age 18 was over £76,000 for a couple family, of which child benefit covers about 22%. If you add in housing and childcare costs, the figure rises to over £160,000. The figure for single-parent families is higher still, so how much extra could they get?

Amendment 3 would leave the framing of options to the Government, as we have heard, so my first question is therefore for the Minister. Could the child benefit computer cope with the level of complexity this would introduce? It is a long time since I was a Treasury spad, but my memories of it are such that it made me wonder: when Ministers decided to withdraw child benefit from higher-rate taxpayers, was there perhaps a reason they used the tax system, rather than deciding to means-test it in the more conventional way?

I ask the noble Baroness, Lady Berridge: would the Bill as amended allow Ministers to choose any combination of sums? Could a choice be to have 95% of lifetime child benefit in year 1 and the other 5% over the rest of a child’s childhood, or vice versa? More likely, I imagine, is the Policy Exchange model, to which the noble Lord, Lord Farmer, referred at Second Reading. That proposed that half the total entitlement to child benefit should be available during the first three years of a child’s life, and the other half spread over the remaining years of entitlement.

The Bill provides, and the noble Baroness has confirmed, that the intent is that the amount payable over a child’s life would be the same, whichever path was chosen. My Amendment 2 says that it should be the same in real terms, which is there to allow me to ask the noble Baroness, Lady Berridge: is it the intention that front-loaded child benefit would be paid at nominal value—in other words, at today’s child benefit rates—or would some account be taken of the impact of inflation and change in purchasing power over the years?

Because I am sad, I did some back-of-the-envelope calculations, using the example of a family with two children who took the Policy Exchange model at the start of this financial year. I confess that I made the children twins to make the sums easier. If the money is paid out at nominal value—that is, today’s child benefit rates—I estimate that the total amount paid over 16 years would be £30,160.

Skills and Post-16 Education Bill [HL]

Debate between Baroness Berridge and Baroness Sherlock

Committee stage
Wednesday 21st July 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the noble Lord, Lord Willetts, for introducing his amendment, and the noble Baroness, Lady Bennett, for her reflections—and for her courteous but quite unnecessary apology. The current arrangements for student loans are now quite complicated. A recent House of Commons Library brief gave a lovely timeline of all the changes from 1990, when the first loans were introduced for student support—then at just £420 a year. It then tracked the developments, as loans gradually replaced grants for maintenance, and there was a shift from mortgage-style loans to income-contingent repayment schemes. Then loans for fees started, and some maintenance grants came back.

The big shift came in 2012, when fees trebled and the current system was in put in place. The effect of this pattern showed up when I was chatting recently to a member of our small opposition staff team. She had compared notes with a couple of colleagues in the office, and realised that although the three of them had graduated not so many years apart, each had a different package of debt and repayments.

Part of the reason for the complexity is that the system has so many moving parts. A Government wanting to save money have a range of ways to do it. They can change the size of the original debt, as they did dramatically in 2012. They can change the repayment threshold, as they did in 2016, when they decided to stop tracking earnings and freeze the threshold until 2021—although that went down so badly that they changed it again, not just unfreezing the threshold but raising it to £25,000 from 2018. They can change the contribution period; indeed, Augar recommends raising it to 40 years. They can change the contribution rate. That is still 9% for undergraduate degrees, but loans for master’s programmes were introduced in 2016, and for PhDs in 2018. That rate could now go up to 15% of earnings above the threshold for postgrads. Or they could change the interest rates. Indeed, they are spoilt for choice here: they could change the rate while studying or the rate when repaying, or they could change one or both of the lower and upper thresholds. Each of those changes or combinations would have a different distributional effect.

I take it from his introduction that the noble Lord, Lord Willetts, wants a periodic systematic review, and he made his case for that. But does his amendment mean that changes could be made only then? I suspect that the answer to that might affect the Government’s interest in the idea.

One benefit of the systematic approach would be the opportunity to ensure that factual information about the impact of changes to the system was gathered and disseminated. Does the Minister agree that work is needed to ensure that the student loans system is widely understood? After all, if Governments are to make changes to student finance, it is vital that it is not done by sleight of hand, or by banking on the HE version of a fiscal drag. It is crucial that the differential impact on people with different likely lifetime earnings is made crystal clear. After all, if the state is advancing £17 billion a year to higher education students in England and the value of outstanding loans is some £160 billion this year, the least the Government owe the country is transparency, and a good public debate. Does the Minister agree?

[The Parliamentary Under-Secretary of State, Department for Education and Department for International Trade (Baroness Berridge) (Con)]

My Lords, I am grateful for the amendment tabled by my noble friend Lord Willetts, and for his thanks. It is a pleasure to engage with noble Lords. This is my first piece of legislation in your Lordships’ House, and I hope that this is the shape of things to come in terms of the tone and the reaction to this legislation.

With £19.1 billion paid out in student loans in the financial year 2020-21, and further increases forecast for future years, it is essential that the Government keep careful control of the student finance system. It is also important that they retain the ability to review and make changes to the student finance system as and when needed, without the potential delays, or the focus on process, that a requirement for a review every five years could impose. I appreciate my noble friend’s comments, but inadvertently, a process may, as the noble Baroness, Lady Sherlock, outlined, become constraining, even if it was introduced with the best of intentions.

We must ensure that the system can remain responsive to the needs of the labour market and the wider economy, and thus continue to deliver good value for students and the taxpayer. We agree that, as the noble Baroness said, there is a need for transparency. A wide range of data on student loans and repayments are regularly produced and made publicly available, which enables the Government, and other interested parties, to monitor the student loans system. These include regular publications from the Student Loans Company and the Higher Education Statistics Agency.

As the noble Baroness, Lady Sherlock, outlined, the Government have updated the student loan offer in recent years, with the introduction of several new loan products, including loans to support postgraduate and doctoral study, and we will continue to make changes as and when necessary. Through the Bill, the Government are also introducing a lifelong loan entitlement that will open up new routes for people to retrain and upskill flexibly throughout their lives.

In relation to some of the questions raised by the noble Baroness, Lady Bennett, the fees cap of £9,250 is frozen for this year and the next academic year. She talked about the burden, and the responsibility, obviously, is to repay a loan, but 30 years is at the moment akin to many of the mortgage products available on the commercial market.

As the noble Lord, Lord Willetts, correctly predicted, I shall take this opportunity to remind noble Lords of the recommendations regarding higher education, including on student loans and graduate repayments, that were made by the independent panel appointed to provide input to the review of post-18 education and funding. The Government are carefully considering these recommendations before setting out a response to the review, along with the comprehensive spending review.

In conclusion, while I am sorry to disappoint my noble friend for the second time in recent days, I hope that my remarks have reassured him, as I know this has been an issue of concern to him for many years. I hope that he will feel comfortable in withdrawing his amendment.

Skills and Post-16 Education Bill [HL]

Debate between Baroness Berridge and Baroness Sherlock

Committee stage
Monday 19th July 2021 Lords Chamber

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the Minister for her explanation of these amendments. From what she said, this appears to be a minor change to Schedule 2 to HERA. I gather it will apply only to providers that have a TEF award but not an access and participation plan, which therefore can charge only the basic fee plus a TEF supplement. The legislation currently says that they have to have held the TEF award on 1 January in the year before the course starts, but I presume it should have said on 1 January before the course starts. That is a good lesson to all of us on the importance of careful drafting. Although it went through in 2017, I am glad they have now been able to correct it.

I take this opportunity to ask the Minister a couple of quick questions. First, will any current providers be affected by this? I imagine that none will be, as the last TEF assessment exercise was in 2018-19. All TEF awards had been due to expire this summer, but were extended to 2023 to give the Government time to create a new TEF scheme and make assessments under it. I imagine that means that the only people who will be affected by this amendment, any time soon, are new providers applying for provisional TEF awards. Could she confirm that? Since that provisional award process has only just opened and the awards will not be confirmed until September, I imagine it will only affect courses starting in 2022, but it seems a sensible move.

We are now in the strange position of most providers having a TEF award but being told by the Office for Students not to advertise it, because the assessments that led to them are now out of date. This is a rather sad state of affairs for a system launched with such fanfare, so could the Minister take this opportunity to give the Committee a brief update on what is happening with TEF and when we can expect to see proposals for a new TEF system?

[Baroness Berridge (Con)]

My Lords, I thank noble Lords for their contributions, particularly the comments of the noble Lord, Lord Addington, and his thanks for this technical amendment to fix an error in the existing legislation. In relation to the points raised by the noble Baroness, Lady Sherlock, as far as I understand it, the most recent TEF assessments were from 2017-18. This is a change to make the legislation fit for purpose for when the new round of TEF is announced. I will write to her with any update of the course for the new TEF.

I had hoped, given that these amendments would not affect any underlying policies, that noble Lords would be able to support them but, in the circumstances, I beg the leave of the Committee to withdraw Amendment 76B.

--- Later in debate ---

[Baroness Sherlock (Lab) [V]]

My Lords, I thank the noble Baroness, Lady Garden, for stepping into the breach and introducing this amendment and thank all noble Lords who have spoken. I may try to fill in some of the gaps left by the absence of the noble Lord, Lord Storey. I should say at the start that we fully support the outlawing of cheating services.

The Minister needs to address three questions: is there a problem, is it getting worse, and what is the right policy response? I think we now all agree there is a problem. We discussed this recently at the Second Reading of the Private Member’s Bill of the noble Lord, Lord Storey. In responding to that debate, the Minister—the noble Lord, Lord Parkinson of Whitley Bay—acknowledged the growing availability of cheating services and said that this

“puts vulnerable students at risk and threatens the reputation of our world-class higher education sector … it is reprehensible for essay mill companies to profit from a dishonest business that exploits young people’s anxiety and can undermine our world-class institutions.”

Yes, we have a problem. Is it growing? Again, yes, it is. The QAA believes there are now over 1,000 essay mills in operation.

In that debate, the noble Lord, Lord Parkinson, told me that he had not read the paper by Lancaster and Cotarlan published this year in the International Journal for Educational Integrity. I hope that the noble Baroness, Lady Berridge, has read it or that at least she has been given a summary in her brief. It cites the 2015 work by Ardid et al which found no difference in the results students got when they took exams in person or online, provided that both types of exams were supervised. But when students took an exam online and it was not supervised, they got higher marks. That raised the obvious question as to whether students were using contract cheating in online exams. Lancaster and Cotarlan took up the challenge raised by the noble Baroness, Lady Neville-Rolfe, and analysed how one website, Chegg, was used during the pandemic by students in five STEM subjects.

They found that students were using it to request answers to exam-style questions and that these could be put live and answered within the duration of an exam. The number of student requests posted for those five subjects increased by almost 200% between April and August last year compared with the same period the year before. Of course, that was exactly the time when many courses moved to being delivered and assessed online. They conclude that

“students are using Chegg for assessment and exam help frequently and in a way that is not considered permissible by universities.”

In 2016, the QAA said it that would approach the main search engine companies and ask them not to accept adverts for essay mills and to block them from search engines. That does not work. This week I did a search, and loads of them appeared. I visited the Chegg website today and it still says:

“Ask an expert anytime. Take a photo of your question and get an answer in as little as 30 mins.”


There is even a website which acts as a comparison site for essay mills. I went mystery shopping on one website before the Second Reading of the Private Member’s Bill, and last week I tried another one. This time round I priced up an undergraduate essay on Anselm’s ontological argument for the existence of God, with three sources and Chicago referencing. With a new customer’s discount, I could have had 750 words in just three hours for £72. A full 2,500-word essay could be mine in 12 hours for £193. I did not even have to subscribe to find that out.

The noble Lord, Lord Addington, is quite right: if I were a student and I succumbed to this, as well as risking my academic career, I could be putting myself at risk of being blackmailed. The HE blog wonkhe.com has given examples of students who had problems either because they felt the quality of the work was not good enough or they got cold feet, and were told that if they did not pay the fee, and sometimes pay more money, the site would tell the university that they had used an essay mill.

We accept that we have a problem and that it is growing. What is the policy solution? In the past, Ministers have insisted that legislation was not needed, and they would get sector bodies to get tough and issue guidance and penalties. The noble Lord, Lord Parkinson, said that the Government have been working with the HE sector and tech companies but concluded:

“Despite that work, cheating services remain prevalent.”


That takes us to legislation. It is now three years since 46 vice-chancellors wrote a joint letter calling for these websites to be banned. Meanwhile, other countries have banned essay mills, including New Zealand, South Africa and, most recently, Australia and Ireland.

On 25 June, the noble Lord, Lord Parkinson, mentioned emerging evidence from Ireland and Australia which

“suggests that those laws are deterring essay mills from providing services to students, and regulators there have reported that having the legislation has provided them with more tools to engage students, higher education providers and cheating services”.—[Official Report, 25/6/21; cols. 536-37.]

Can the Minister tell the Committee why the Government do not think British students deserve the same protection from being preyed on as students in those countries? Contract cheating is a growing problem which puts students at risk and threatens academic integrity. If it keeps growing, it will start to disadvantage students who will not cheat, and that is a problem for all of us. We need to know that our doctors, engineers and lawyers have qualified based on their own merits, not on those of strangers on the internet.

So when will the Government act? If the Minister does not like this amendment, fine: she can bring her own back on Report. But if she does not, how long will we have to wait for another legislative opportunity to deal with a problem which even Ministers acknowledge is real and growing? I look forward to hearing her reply.

[Baroness Berridge (Con)]

I begin by thanking the noble Baroness, Lady Garden, for moving Amendment 77 on behalf of the noble Lord, Lord Storey. It would make it a criminal offence to provide or advertise academic cheating services in connection with post-16 education. I pay tribute to the tenacity and detail with which the noble Baroness, Lady Sherlock, has given your Lordships examples of the situation, which the Government accept is a growing problem. The noble Lord, Lord Storey, is obviously to be commended for his unstinting efforts to clamp down on essay mills, where unscrupulous online operators write assignments and other pieces of work for students for financial gain.

The Government have consistently made it clear that using these services is unacceptable. Research indicates that cheating services are prevalent, and the evidence suggests that higher education is the area of greatest risk. This is despite the Government working closely with the higher education sector to clamp down on the cheating services, and we have worked with the Quality Assurance Agency for Higher Education, the National Union of Students and Universities UK to produce guidance for providers on how to combat contract cheating. On a specific point raised by several noble Lords, we have worked with the National Union of Students, which has also provided advice for students so that they are aware of the consequences of contract cheating, sending a clear message that these services are not legitimate.

The use of plagiarised assessments is, of course, unacceptable and, as my noble friend Lady Neville-Rolfe said, it devalues the hard work of those who succeed on their own merit, as well as potentially undermining the reputation of our world-class higher education sector.

As the noble Baroness, Lady Garden, will know, that is why the Government welcomed the principles set out in the Private Member’s Bill of the noble Lord, Lord Storey, the Higher Education Cheating Services Prohibition Bill, at its Second Reading, and we agree that we should put an end to the scourge of essay mills.

However, the noble Lord’s amendment would make the provision and advertising of cheating services to all post-16 further education and higher education a criminal offence. Although we support the principles behind the amendment, there is little evidence to suggest that cheating services are a problem in post-16 and further education providers, as they are for higher education. We are therefore of the view that this Bill is not the appropriate vehicle for this important policy.

To note the points made by the noble Lord, Lord Addington, the amendment lacks sufficient legal detail and precision to demonstrate how it would work in practice. We shall, however, be working with the noble Lord, Lord Storey, on his Bill, which covers much of the same ground. It is important that, when we legislate in this area, we legislate correctly and make clear the implications for those who use these services. Sometimes, that can be a response of support for vulnerable students; but, in certain situations, that will be a sanction. We need to make clear, as the amendment does not, what will be the penalties for either advertising or being a service that offers cheating services, or essay mills, and what sanction will follow. I therefore hope that the noble Baroness, Lady Garden, will feel comfortable in withdrawing the amendment.