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Earl Russell: This is a good amendment and I congratulate the noble Lord, Lord Carter, on tabling it. It is not quite as good as getting rid of the benefit penalty altogether, but I fancy that the noble Lord would not disagree with that.

If we have to have a fallback, this is as good as we can get. In subsection (2), the case for the disabled is extremely strong. The extra expenses of disability are a great deal more than the OPCS calculated, and make the benefit penalty more punitive than it would be for anyone else.

Subsection (3) imports a very welcome discretion which, to my delight, is administered judicially and not administratively. It allows the penalty, such as it is, to be apportioned to the circumstances of each case.

Subsection (4) reduces the benefit penalty to 10 per cent. It also reduces the period for which it lasts. It is almost identical to an amendment that I pushed to a Division on consideration of Commons reasons in 1991. I support it not one whit less strongly now than I did then. I have always thought that the 20 per cent. rate of reduction was absolutely penal and entirely without any justification in any reason that was put forward for it. If there must be a reduction, 10 per cent. is about as much as is compatible with subsistence—and even that is pushing it a bit, as I am sure that the noble Lord, Lord Carter, agrees.

However, probably the very best part of the amendment, like the very best wine, is saved until last. I refer to subsection (5), which provides that the reduced benefit direction takes priority over other loans and that those should not be repaid from a person's weekly benefit during the period of the reduced benefit direction. The Minister keeps talking about priority for child maintenance over other commitments. Why should not that apply where there is actually a hungry child hoping to eat as a result of it? The Government do not do nearly enough to study the effects of "top-slicing"—as the noble Baroness, Lady Hollis, recently described it—as a result of the long series of deductions from benefit. The rate of deductions for court fines, for example, is often penally steep.

The purpose of benefits is to allow people subsistence. That is in our national interest. It is in the interests of common humanity and in the interests of all concerned. The amendment would go a significant way towards getting us back to that, and I am happy to support it. I am glad that the noble Lord moved it. If he does not manage to get it accepted tonight, I hope that he will persist with it.

Lord Mackay of Ardbrecknish: Under the 1991 Act, a parent with care who receives, or whose current partner receives, a relevant benefit must give her authority for maintenance to be pursued from the absent parent unless she has good cause for not doing so. We have already discussed that in some detail earlier today. If she fails to give her authority without good cause, her benefit may be reduced by 20 per cent. of the income support adult allowance for six months—I think that I underlined earlier that the 20 per cent. reduction impinges only on the adult allowance portion—followed by a reduction of 10 per cent. for the next 12 months.

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Amendment No. 95 seeks to change a number of matters relating to reduced benefit directions. I should like to restate that I believe that it is right that the parent with care should co-operate with the agency unless she has good cause for not doing so. Taxpayers should not have to shoulder the burden. No parent with care will have benefit reduced without careful regard being given to her circumstances and those of her children. The purpose of the benefit reduction is to make a parent with care think carefully about her decision not to co-operate. We believe that the current amount and duration of the reduction achieves that. We have already discussed that when dealing with amendments tabled by the noble Earl.

Amendment No. 95 would make changes to reduced benefit directions. Directions could not be imposed where the parent with care or any child affected by the benefit reduction was disabled. Secondly, child support appeal tribunals would be able to alter the amount and duration of the reduction depending upon the individual circumstances of the case. Thirdly, the maximum amount and the duration of the reduction could be lessened. Fourthly, a deduction could not be made where the parent has a loan which she is repaying from her benefit.

We believe that the amount and duration of the benefit reduction is set at the right level and should neither be reduced nor made subject to the discretion of appeal tribunals. Parents with care should know the consequences of their refusal to co-operate when they make their decision whether to comply. They should not be uncertain about how much the reduction will be or how long it will last.

Under the 1991 Act, the parent with care already has the right to appeal to a child support appeal tribunal, which will consider whether or not the reduced benefit direction was properly imposed. If a parent were successful on appeal she would be repaid any benefit due.

That leaves two issues; waiving the reduction where the child or the parent with care is disabled and waiving it where the parent has other loans. I am willing to look further at the noble Lord's suggestion relating to those two factors. I will look at cases of disabled parents and children and at cases where the parent is already having deductions made from her benefit, for example, to cover rent arrears at the time the reduced benefit deduction is made. Perhaps I may make it clear that I will look at those two issues but that I am rejecting and not promising to look at the other two issues. I hope that on that basis the noble Lord will withdraw his amendment.

Earl Russell: The Minister has shown some small mercies and for that we must all be grateful. He has put forward a great deal of argument for justifying the imposition of a benefit penalty, which was relevant to a previous amendment but not to this one. He has given no justification for making the penalty 20 per cent. and not 10 per cent. Is there any reason for that?

Lord Mackay of Ardbrecknish: I gave that justification earlier today. It was that the penalty must be such that it is meaningful but at the same time we must balance that with the fact that we do not wish to deprive the parent with care of her benefit. It must be

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of such a size that it is realistic and that it will act as a deterrent to someone who without good reason is not giving the name of the absent parent.

As I said earlier, in 73,000 cases we have accepted the good reason and have not pursued the matter. In 18,000 cases we have imposed the reduction. It is a matter of balance—20 per cent., 15 per cent., why not 25 per cent.? It is 20 per cent for six months and 10 per cent. for the following 12 months. That appears to us to be a reasonable balance, leaving the parent with care with some of her income while at the same time making it clear to her that we do not believe her actions to have been reasonable. I know that the noble Earl does not agree with me on these issues but it lies in the hands of the parent with care to restore her benefit to 100 per cent.

Lord Carter: I suspect that the real reason why the figure is 20 per cent. is the sophisticated reason that it is twice as much as 10 per cent.

I am almost overwhelmed by the Minister's response. As regards the first two amendments that I moved yesterday, which now seems a long time ago, the Minister was most helpful and promised to look at one of them. He promised to look at the first two amendments that I moved tonight. However, he has cherry picked as regards this amendment. I did not believe that he would buy subsection (4) but it was worth having a debate. However, he has promised to come back on the disability and loan issues. He has been most helpful and I congratulate him. It shows what one can do when one sets out to improve a Bill rather than mortally to wound it. I understand the Minister's comments—they are not assurances—which are most helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 [Compensation payments]:

Earl Russell moved Amendment No. 96:

Page 19, line 7, leave out ("may") and insert ("shall").

The noble Earl said: Amendment No. 96 deals with Clause 24, which overall is one of the Bill's more welcome clauses. But, as usual, this Government have shown themselves to be the Old Man of Thermopylae; they never do anything properly. Having introduced a welcome concession they have not done so thoroughly and have not made it properly effective.

Perhaps I may explain the context. The clause deals with the situation which came to light during the debate on the February 1994 regulations. For some people, they meant a reduction in the maintenance that they were paying and for the parent with care a reduction in the maintenance which she was receiving. But if those people were on family credit it was fixed only once every six months so they had lost a large part of their income for whatever period of the six months remained until the next assessment.

On the debate on the regulations the noble Baroness, Lady Hollis, and I attempted a vigorous right and left—and I did not say which was which. That has been heard. In this clause we now have a provision for making compensation, through the machinery of family credit,

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to a parent with care who has lost some of the maintenance that she was receiving and whose income has therefore dropped.

The first point that I make about that and other later amendments is that instead of saying the Government "will" do something, we have instead the tedious words:

    "The Secretary of State may by regulations".

My first question is whether the Secretary of State will introduce these regulations. Are the Government making a firm commitment to bring in regulations to introduce this concession which, in principle, is extremely welcome, or are they saying only that they may do so?

If the answer to that question is reassuring, which I hope it will be, then I shall ask the Minister why, if he means "shall" he says "may". Why do these Bills perpetually give the Secretary of State weasel let-outs in every direction when the Government will not, for one moment, consider giving them to anyone else? Why should the Secretary of State be free to escape from every obligation when everyone else is bound? That does not seem fair to me. I beg to move.

9.15 p.m.

Lord Mackay of Ardbrecknish: The Government made it clear in the recent White Paper Improving Child Support that they intend to make compensation payments to parents with care who are in receipt of family credit or disability working allowance if their maintenance assessment is reduced as a result of changes in child support legislation.

In April, your Lordships approved a number of changes to the child support regulations; and because those changes led directly to reductions in many maintenance assessments, we have, in advance of this Bill, been compensating parents with care who have lost out as a result.

There will, however, be circumstances in which it will not be appropriate to make such payments. For example, we do not think that it would be right to compensate parents in the same way if a departure order leads to a reduction in their maintenance. Departure orders merely allow some discretion to Child Support Agency officials to take account of certain aspects of parents' circumstances for which the normal formula does not allow. So a reassessment as a result of a departure order is different from a reassessment flowing from changes in the rules governing the maintenance formula.

Similarly, there may be circumstances in the future where a change in the legislation is needed to restore the policy intention; and it may not be appropriate to make compensation payments in those circumstances. So we need to leave ourselves free to look at future changes as they are made and to decide then whether or not it is appropriate to make compensation payments. Further compensation exercises will be triggered when we decide, in relation to subsequent changes in legislation, that compensation is warranted. This will then be achieved through a provision in the legislation which introduces the changes.

I assure the Committee that it is the Government's intention to compensate parents where maintenance assessments are reduced by a specific change in the

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legislation which introduces a clear change of policy. We intend to lay general regulations under this clause in the autumn setting out the basis of how compensation payments will be calculated and administered.

Although I may not accept the "may" and "shall" exchange, I hope that my assurance will reassure the noble Earl of my intentions in that regard.

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