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Baroness Hollis of Heigham: My Lords, we thank the Minister for repeating the Statement. I thank him personally for making available to me the White Paper and the Statement earlier than is often the case. That was extremely helpful.

Rather like the poll tax, and for many of the same reasons, the Child Support Agency was always going to be trouble because it brought 20 million people into the net of DSS to pay out very large sums of money, overriding court settlements and, in many cases, throwing family and financial lives into catastrophe.

As the Minster rightly said, no one doubts that parents may divorce each other, but not their children. It is right and proper that adequate contributions should be made to their children's maintenance. But, as this House has repeated on many occasions, those contributions from the absent parent have too often not been appropriate and have not taken account of the circumstances: second families, stepchildren, unexpected additional costs, property and clean-break settlements. Only belatedly following the orders of 12 months ago—last February—were the new arrangements phased in.

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In addition, as the Minister has recognised, the agency's staff has had too vast a job and inadequate time in which to be thoroughly trained. The ombudsman's report of last week is a devastating catalogue of mistake after mistake: mistaken identity, inadequate procedures, failure to answer correspondence, incorrect advice, delay in assessment and delay in payments to parents with children.

Thirdly, not only was the formula unfair to the absent parent, not only has there been a catalogue of administrative mistakes but seldom, if ever, did the arrangements benefit the parent with care. Benefit was lost pound for pound and in the process, parents with care lost the certain income from the DSS. That was replaced by uncertain income coming from irregular maintenance payments. Very often lost with it were the associated passported benefits such as free school meals. Not only were most parents with care not better off; very many were worse off as a result of the Government's changes.

I repeat that Labour has always supported the belief that both parents should contribute to the maintenance of their children. We have called for a more flexible financial formula. Secondly, we have called for an appeals procedure. Thirdly, we have called for a disregard, even a modest sum, for those parents with care so that, at the very least, women should be no worse off than they were on income support. After all, women with care are often the poorest, taking half of the Social Fund loans. They are often in debt, with top-slicing for fuel and water bills. Their children risk being poorly fed, poorly clothed and falling behind at school.

Against that, how adequate is the Government's Statement today? How adequate are the proposals which we shall see reflected both in the amendments which will be before us shortly and in the promised primary legislation? First, many of the proposals, especially those which affect absent parents, are greatly to be welcomed and we do welcome them.

The Government are proposing discretionary appeal procedures where otherwise hardship would result for the absent parent. That is splendid. Back on 9th February 1994, when we pressed the Minister to provide such a procedure, he said that to introduce discretion "is not practical" and would not work. We are delighted that, if belatedly, the Government have come around to our point of view.

Secondly, the Minister referred to property and capital transfers. We are delighted about that. Again, that was rejected by the Minister on 9th February 1994 on the ground that the formula already took account of that. Today we are delighted to see that the Minister has qualified it and has said that all such settlements are not fully taken into account and that in future they will be. We welcome that.

Thirdly, the Minister proposes changes in the formula such as a statutory maximum of 30 per cent., which we welcome, along with costs of travel to work, which we welcome, and, above all, support for stepchildren where there is no other means of support, which we welcome. However, we shall wish to reflect on the point of maximum maintenance payments. We welcome those changes.

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Fourthly, we believe that the Minister is wise to defer the addition of new cases but that is only if it is deferral and not abandonment. On this side of the House we do not wish to see a Child Support Agency for the poor and court settlements for the rich. Will the Minster give us an indication of the timescale in which he expects those additional cases to be brought back into a common procedure for all?

Therefore, this is a whole series of changes benefiting absent parents, which we are delighted to support. We only wish that the changes had come earlier, as so many of us from all sides of the House have consistently argued.

However, what about parents with care? The Minister was surprisingly silent in his Statement about the implications for parents with care. Obviously, we are especially pleased about the modest adjustments to family credit because many of us in this House have long lobbied for those. But at the heart of the Minister's response there was no mention or proposal for any modest disregard so that parents with care might keep even a modest sum—£8, £10 or £5—from the maintenance paid before there was a pound for pound deduction from benefit.

That really will not do. I recognise that the Social Security Committee did not vote for it. It was a divided committee in which the Conservative Members went one way—they held the majority—and the Labour Party Members went another. Therefore, the Chairman had to abstain. But that will not do. The Government have responded to the sharp-elbowed—the men—and they are right to do so; but they have ignored the plight of those who cannot walk away, who cannot go on strike and who cannot defy the law—that is, the parent, usually the mother, with care.

What sort of signal are we sending out from this House today? Is it that if you defy the law changes are made, but if you obey the law and care for your children you are ignored? Mothers with care are poor. They are often worse off under this system than they are on income support. They and their children need a modest disregard but because the mothers do not go on strike, the Government have ignored their plight.

Secondly, the Government are giving a roll-up credit of £5 per week for when lone mothers return to work. That is downright perverse. It is when mothers are not in work that they especially need the bonus, not when they have returned to work. The Government's line seems to be that when they are earning some money they will give them a little more, but when they are not earning even that, they are given nothing at all.

Thirdly, are we really saying that two very young children, perhaps under the age of five, who have already lost one parent—the father—should now lose the lone parent to work away from home in order to be eligible for the bonus? It may be that that is the mother's choice as she desperately trades time with her children against financial support for them. But again, what sort of signal is this House sending out about family values when we are so obsessed with the Treasury's well-being that we ignore that of the children?

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Of course, we welcome the bonus but only in addition to a disregard for mothers with care and not in place of it.

Therefore, overall, the White Paper and the Statement mark a substantial retreat by the Government; and they are wise to do so. We are delighted that there is a proper recognition of the problems that the Child Support Agency and the Government's legislation have presented to absent fathers, although it is striking that the Minister did not mention the cost involved at any time in the Statement. But the problems of the parent with care have not been addressed. It is a one-sided response to those who have shouted loudest. We should have hoped for a more even-handed response than that from the Government.

Earl Russell: My Lords, on this subject, if it is not too Irish a statement, glasshouses are not confined to one side of the House. For that reason, I am not going to throw stones. But equally for that reason, I should like to pay tribute to those in this House and outside it who saw from the beginning what this Act would mean: first and foremost, the noble and learned Lord, Lord Simon of Glaisdale, whom I am delighted to see in his place, the noble Lords, Lord Houghton of Sowerby, Lord Mishcon and Lord Stoddart of Swindon, and on my Benches, my noble friends Lord Meston and Lord McGregor of Durris. I have learnt a lot from listening to them. I am glad to see that the Minister has also done so.

Last September, when we discussed this matter at the Liberal Democrat party conference, we set out a series of criteria to test amendments to the Act to see whether they were sufficient. The first concerned substantial changes in the formula. In that regard, we are given a great deal of what we asked for, even if not all, and for that I am very grateful. Secondly, we proposed real grounds of appeal—I shall probe that aspect later—and, thirdly, that the changes should benefit both sexes.

Lady Mary Wortley Montagu was once asked to comment on a certain Lord Harvey and replied that the human race was divided into men, women and Harveys. Nowadays, it is divided into men, women and the Treasury. The greatest of the three is the Treasury. One of the things I most deplore about the handling of the Act is the fact that it has been defended by continual attempts to set division between men and women. We already have enough of that; we do not need any more of it.

For that reason, like the noble Baroness, I deeply regret that there is so little in the legislation for the parents with care. Similarly, I welcome, as did the noble Baroness, the changes in the assessment of family credit. In fact, I am delighted by them. However, the big changes that were needed have not been proposed. There is nothing about a disregard. If the legislation is to have enough friends to survive—which, I believe, is still in doubt—it is essential that some people should be better off because of the Act. I say that because women who come on maintenance under the legislation will lose passported benefits. That is not regularly the case at present.

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Where we are dealing with the support of children, free school meals are especially crucial. Therefore, that aspect must be given attention if the Act is to survive. Similarly, there has never been any case for the benefit penalty. If there were a disregard, we could then use a carrot instead of a stick. That is a much more effective way of securing compliance.

Much of the detail in the Statement is good and, in some places, extremely good. We owe our thanks to the department and in particular to Mr. Burt, who has been in charge, for proving, even if a little belatedly, that he can be a listening Minister, and, above all, for being a Minister to whom the Treasury has, in part, listened. There are not many of those.

It is a slightly overstated claim to say that property settlements are the major cause of complaint. However, they are certainly a big point. I am most interested in what has been done in that respect. I shall study the proposal with more care to see whether it is enough.

I have one technical question for the Minister about the broad-brush changes he proposes to introduce for this year. Are those changes to be brought in by primary legislation or by regulation? If they are to be brought in by regulation, what are the vires under which they will be introduced? Further, if the Minister intends to do that, will he study the remarks made by the noble and learned Lord, Lord Simon of Glaisdale, on 1st February last about the use of transitional powers? Those remarks needed attention. I hope that they have received it.

The general changes in the formula, are, on the whole, good ones. I am glad about access and about debts. I hope that attention will be paid to the debts of joint businesses that have been run by previous couples. I am also glad about travel costs, but I have one vital technical question on which paragraph 65 of the Select Committee's report put me into some doubt. It concerns the people who, regrettably, have no public transport available to them and cannot travel to work except by car.

A great deal of the correspondence I have received has come from people who could not travel to work except by car. Some were buying a car on an HP loan but could not keep up the payments if they paid what they were assessed to pay under the formula. Will the broad-brush approach take account of the capital costs of owning a car? Alternatively, will it, as the Select Committee suggested, ignore the overall costs of car ownership? If it does so, there will still be many people who cannot afford to work while paying what they were assessed to pay under the legislation and it will not be true to say that no absent parent has a reasonable complaint regarding what they are assessed to pay under the formula.

I am extremely glad to see the proposals as regards second families; for example, the recognition of all the housing costs of the second family. Had that been done a year ago, couples who are now divorced would still be living together. I am glad about the provision for the exceptional costs of stepchildren. However, I should like to probe what is meant by the word "exceptional". In particular, I want to know whether account has been

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taken of cases where the natural father of the stepchildren cannot support them because he is dead. That has caused much hardship in some cases.

I am pleased to see the cap on maintenance. Indeed, I doubly welcome it because I believe that I was the first person to propose it on 1st February last. What has been done has a considerable resemblance to what I proposed. Therefore, I am doubly grateful for it.

I am also grateful for the deferring of the start of maintenance assessment. I believe that that will help to avoid the enormous interim assessments which have arisen. I am glad about the concession on fees, but I wonder whether the Minister is perhaps slightly wriggling out of the situation when he puts the blame on the performance of the Child Support Agency. I am no fan of the agency, but I believe that account should be taken of the burden which was placed upon it. We should learn from the remarks made by the ombudsman. If such "misfortunes" are to be avoided, he said that,


    "great care should be applied by public servants and those who instruct them whenever a policy decision is taken to devise a fresh administrative task which affects large numbers of the public".

The ombudsman also spoke about "maladministration",


    "where quality of service is subordinated to sheer throughput".

I do not believe that the Government, even now, have any sense of the burden they have placed on the agency. When trying to deal with the agency, I hope they will take that factor into account.

Something must be done about appeals. I have proposed that appeals should be allowed in cases where either parent is left below benefit level; in cases where, under Section 2 of the Act, what is done is not in the best interests of the children; or in cases where the parent paying is unable to maintain the second family, including the stepchildren. Will the proposed changes bear any resemblance to my proposals?

The Government often say that no one is interested in constitutional reform. However, among the many hundreds of letters I have received regarding the Act, one constant theme is the fact that people cannot understand how Parliament allowed such legislation to come into existence. Only last week, I had to write to someone who complained that the Act was illegal. He said, "Although I understood what they were getting at, what they were saying could not literally be true". The feeling that the Executive is not being adequately scrutinised through the parliamentary process is painfully acute in such letters. They represent a large part of the public that is interested in constitutional reform.

If the department studies—as I am sure it has—the Hansard Society report drafted by the noble Lord, Lord Rippon of Hexham, on the drafting of legislation, that would be a start. However, it should be taken into account that the parliamentary sovereignty that is praised so much appears to many of the public to be simply, as the White Paper on the subject was nicknamed, a case of "Treasury comes first". It can, in fact, appear to be a form of arbitrary power. However,

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while we think about the changes in the Act, most of which I welcome, we should also consider the long-term constitutional implications.


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