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Earl Russell: I thank the Minister for that reply. He has gone unerringly for the most difficult points in the amendment. I understand what he says about conduct. It would in fact be appropriate only if we were fully reuniting spousal maintenance and child maintenance.

I take also the point that the Minister makes about the different criteria for the Secretary of State and the tribunal. It was not my intention but I told the Minister at the beginning that in trying to amend the Bill to bring it into line with our principles I am trying to pour new wine into old bottles. That is a notoriously unsuccessful process. The Minister has provided me with one good example of why.

The amendment was put down mainly in order to illustrate the principles which we would like to see, in general terms, to go into a fully redrawn Act on this subject. I accept that it is difficult to insert it into the Bill. I am sorry that it is so, but I understand why. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 38 not moved.]

Schedule 2 agreed to.

Clause 7 [Effect and duration]:

[Amendment No. 39 not moved.]

Clause 7 agreed to.

Clauses 8 and 9 agreed to.

19 Jun 1995 : Column 115

Baroness Hollis of Heigham moved Amendment No. 40:


Before Clause 10, insert the following new clause:

("Child maintenance disregard

.—(1) In section 36(5) of the Social Security Contributions and Benefits Act 1992, after paragraph (b), there shall be inserted the following paragraph—
"(bb) in calculating the income of a person claiming income support, a prescribed amount of any payment or payments of maintenance made or due to be made by—
(i) the claimant's former partner, or the claimant's partner's former partner; or
(ii) the parent of a child who is a member of the claimant's family, except where that parent is the claimant or the claimant's partner,
shall be disregarded;".
(2) At the end of that section, there shall be added the following—
"(6) In this section "partner" shall have the meaning prescribed."").

The noble Baroness said: We believe that Amendment No. 40 is one of the most important that is likely to be moved from the Opposition Benches. We ask that the principle of the disregard be established. I have half a dozen reasons and I am not sure which the Minister will take most seriously. Perhaps I may put forward a few of them.

First, lone parents and their children are very poor. Today 70 per cent. of lone parents are on income support and half are in debt with arrears in rent, fuel and social fund loans. Even a modest disregard of an extra few pounds a week would make a great deal of difference.

Secondly, not only are lone parents very poor but by losing benefit which pound for pound is being replaced with maintenance some become poorer still because they lose all passported benefits. They lose free school dinners, which could be worth £10 per week for two children; they lose health prescriptions for the parent although not for the children; and they face greater insecurity of income because they lose the guarantee of a weekly Giro. At the very least, a modest disregard would compensate at the point at which maintenance benefits equate to income support. At the very least, a disregard would compensate to some degree for the loss of passported benefits and would leave the parent no worse off.

Thirdly, the disregard will give absent parents an incentive to co-operate if children retain some of the allowance. The Minister will say that there is no evidence to prove that; but, equally, there is no evidence to the contrary. Certainly, anecdotal evidence suggests that that is the case. Furthermore, it is undeniable that it will give parents with care an incentive to co-operate. I believe that approximately 40,000 parents with care are refusing to co-operate with the agency and that the agency has found that only 46 per cent. have good cause. The Minister will correct me if I am wrong.

A possible reason for the refusal to co-operate is that the parent with care is better off with a benefit deduction of £9 to £10 per week and then striking a private deal with the absent parent for that £10 and another £5 or £10 on top. He is better off and she is better off; they collude in fraud and the children are better off in consequence. No one—certainly no one on these Benches—supports fraud

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or the abuse of the system. It is sensible for the Government to recognise that such fraud may occur and to take steps to make it less attractive to the colluding parents. The amendment will help to do that.

Fourthly, the amendment produces greater fairness between the parent with care and the absent parent. All the concessions, which were announced last autumn and which took effect in April, have been made to the sharp-elbowed absent parents. They have extracted concessions from the Government worth some £180 million. We do not begrudge those but as yet nothing has gone to the parents with care who are almost always poorer than the absent parents in terms of the effect of the Bill. A £5 disregard, for example, would cost £110 million gross or some £85 million net if displacing the back-to-work bonus. A £10 disregard, for example, would cost some £205 million gross or £180 million net. That is precisely the scale of the additional moneys that the Government were happy, or at least willing, to return to the absent parents.

I do not regard the softening of the impact of the Child Support Agency on absent fathers as an expenditure commitment on behalf of the Government. I regard it, and I will word it, as a reduction in savings. I regard the principle of the disregard in exactly the same way, no more and no less, as a sensible and reasonable reduction in savings. It is the difference between gross and net savings. It is an honourable difference, not yet one more expenditure item at which the Minister can wave a metaphorical calculator at these Benches. Indeed, given that some of the savings to the absent father are actually being paid for by the parent with care—so that there is a redistribution from the poorer off to the better off; for example, by delaying the date on which maintenance liability begins or by waiving the initial arrears—that equitable treatment is surely only fair.

Fifthly, the Government have accepted the principle of the equivalent of a disregard going to the parent with care but have rolled it up on the model of the Jobseekers Bill and labelled it instead a back-to-work bonus. This is meant to be a Child Support Bill and not a Jobseekers Bill. And yet the Government are responding by turning the disregard into a jobseeker's bonus instead of a child support disregard.

The Government say that by rolling up the disregard into a lump sum and calling it a back-to-work bonus, that creates an incentive for people to go back to work and that a disregard would be a disincentive. The assumption, of course, is that the lone parent's place is in the workplace even if children are as young as one to two-and-a-half years-old. We may argue about that.

I believe that the Minister misreads the situation very profoundly. What stops lone parents going back into work is not the possible disincentive caused by a modest disregard. It is much more significant and fundamental: it is that with very young children of one, two or three years of age, the parent with care might reasonably feel that those very young children have already lost a father and should not also be expected to lose a mother. With such very young children, it is a reasonable choice for the parent with care to want to bring them up herself at home. When the children are somewhat older and reaching nursery age, a parent with care may then be deterred from

19 Jun 1995 : Column 117

entering the world of work—as was argued by the noble Earl, Lord Russell, and my noble friend Lord Carter—by the high cost of childcare and, above all, the lack of jobs. Lone parents want to work, especially when their children approach and reach school age. The reason they often cannot work is lack of childcare and jobs. Almost certainly they will not be deterred by the possibility of a very modest disregard.

We agree with the Government that over time the only way for lone parents or parents with care to come out of poverty is for them to re-enter the world of work. There is no difference between us about that. But the point at which they are poised for somewhat greater financial comfort because they have re-entered the world of work is not the point at which they most need the rolled-up disregard which is labelled the back-to-work bonus. They need it before that happens—day in, day out, week in, week out, year in, year out, as they struggle to maintain a child on very basic benefits.

Finally, the assumption is that if one is receiving income support, one is not in work; if one is receiving family credit, one is in work and one can have a disregard. My argument is that that obscures the reality of part-time work. If a lone parent can find work, it is likely to be part-time and is more than likely, given the changing nature of the economy, to be for less than 16 hours per week. In that case, the parent continues to receive income support. Such a disregard would help that parent to meet the costs of childcare while holding down that part-time job and while receiving income support which will, at a later stage, allow the parent to springboard into work with longer hours and to move off income support into work plus family credit.

Perhaps I may remind the Minister of the array of reasons I have given in favour of this proposal. First, the lone parent is very poor and needs help. Secondly, by going onto maintenance and off income support, many parents will be poorer still because they will lose passported benefits. Thirdly, such a disregard would give not only the absent parent but, perhaps even more importantly, the parent with care an incentive to co-operate. Fourthly, it produces greater equity. The Government have already returned £180 million to absent parents and a modest disregard would be, in justice, a similar response to the situation and would represent net savings. Finally, parents need the extra help when they are not in work rather than when they are. I move this amendment as a just and equitable response to the poverty of parents with care. I beg to move.


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