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Earl Russell: My Lords, I am most grateful to the noble Baroness, but I wish to seek a point of clarification. As regards the figure of £50 a week better off, is that before or after childcare?

Baroness Hollis of Heigham: My Lords, that is before childcare, and that is precisely why in the previous Budget and the statements of the Chancellor we have always supported the childcare disregard which ensures that the cost of childcare does not negate family credit.

As I say, we know that lone parents want to be included in society. We know that promoting social inclusion benefits the whole of society. The Government inherited a society which over the past 18 years has seen dramatic increases in the gap between rich and poor. Some 20 per cent. of households of families of working age have no one in work; a quarter of all children in Britain now live in families where no one has a job; 1 million out-of-work lone mothers bring up 2 million children on income support; and expenditure on lone parents on income support costs £8 billion a year. Although 20 per cent. of families are headed by a lone parent, and 90 per cent. of lone parents want to work, up until now there has been no recognition that the best way to improve the living standards of those families is through work and there has been little on offer to help them.

Our priority for lone parents is to help them achieve what they themselves want; namely, an increased standard of living for their families and increased personal independence through work. We are turning those words into action. The key to helping lone parents into work and improving their income is practical help with job search, with finding the right childcare, with building confidence and motivation and with developing skills. We are already addressing those issues. The first phase of the New Deal for Lone Parents was launched in July this year. This is a joint initiative by the Benefits Agency and the Employment Service to provide support for lone parents in moving from welfare to work. It offers the option of using an individual caseworker to provide advice and guidance, and a package of help, including job search, training and after-school childcare.

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We are seeking innovative solutions to the problems lone parents face. For example, in Cambridge and Peterborough kiosks are available that allow touch screen access to update information about jobs, childcare and training via the Internet. I have attended interviews between caseworkers and lone parents. I have seen the change of mindset that occurs as the interview progresses, as the options become open and possible and as the active support of that caseworker is available to help the lone parent with the interview, with finding childcare while the interview is in progress and with obtaining the information that the lone parent needs. I have seen that process transform people's lives. We shall extend that facility to 20 more of the first phase offices by early 1998. Early results from the New Deal are encouraging, although there is as yet insufficient data to draw firm conclusions. A report of the first three months of the programme was published on 23rd October. This showed that over 2,000 lone parents have already had an initial interview, four in five are taking part in the programme and are working with their advisers to find employment and a quarter have already found work.

One crucial area--which was referred to earlier--where lone parents need support is in ensuring that childcare is available and affordable. Access to high quality, affordable and accessible childcare is essential to help families, and above all lone parents, to balance the demands of family and working life. The National Childcare Strategy, which we promised in our manifesto and which we are delivering, will ensure that provision of childcare is planned to meet the needs of parents. The Government will announce the details shortly but we have already made a number of commitments. We are committed to providing a nursery place for every four year-old in Britain. Midweek lottery money is available for homework centres, with up to half the places containing an element of childcare. We have already announced improvements to the childcare disregard. From June 1998 we shall extend help with childcare charges in family credit, disability working allowance, housing benefit and council tax benefit to ensure that greater financial help is available for families with more than one child. We shall also extend help to families with older children. As a result, families will be able to receive help up to a maximum of £95.50 a week towards the cost of childcare.

While the support is available to all families who meet the qualifying conditions, I am sure that we all recognise, as the noble Earl has stressed, the particular benefit these measures will have in supporting lone parent families, given their particular needs. The receipt of regular child maintenance is also a key part of our strategy for helping lone mothers into work. Maintenance is a portable income which lone mothers keep when they start work and they need to know that the Child Support Agency will take every action to ensure that it is paid. We are therefore reviewing all aspects of the operations of the CSA to ensure that it provides a fair, efficient and effective service. I am taking part in that review. We are determined to ensure that cases are processed faster, backlogs are cleared,

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non-resident fathers who pay irregularly are helped to pay regularly and non-resident fathers who avoid paying altogether are chased. We have also allocated an additional £15 million to the agency from April 1998 to be used specifically to get more non-resident fathers to pay the maintenance they owe. They must recognise that they have a responsibility for that maintenance. Lone mothers, and the children they care for, have a right to receive that money which can help them get back into work, to become more independent and to improve their standard of living.

Why are we implementing this measure? I have taken some time to set out our priorities for lone parents. We are promoting work as the best means of supporting family life. We are also promoting policies of social inclusion to fulfil the aspirations of lone parents who for too long have been marginalised and have been excluded from prosperity, from work and from the wider personal and social benefits that independence, an improved standard of living and increased self-esteem can bring. We are delivering the practical support which lone parents need to overcome the real barriers they can face in re-entering the world of work. The measure we are debating today is one of a number of measures we inherited from the previous government which had not been implemented but were already included in our expenditure plans. We are committed to live within those expenditure plans, but staying within expenditure limits involves tough decisions. That is the context in which these measures must be viewed.

We have set out our priorities which we believe constitute the only way to offer lone families genuine and sustainable improvements in their standard of living and their standard of life. As I have said, we have a commitment to live with expenditure limits. It was against that background that the decisions to carry forward these measures--already scored by the previous government--were made. I should make it clear, before addressing the points raised by the two speakers in this debate, that all existing lone parents in receipt of the higher rate of premium will continue to receive it as long as they continue to satisfy the entitlement conditions. No lone parent will suffer a cash loss at the point of change.

In the course of his opening speech the noble Earl, Lord Russell, made, I believe, two main points. If I have overlooked any others I shall, of course, write to him. The first point he made was that in the past I, like him, have resisted the stereotyping of lone parents. I go further and say that, like him, I resisted the stigmatising of lone parents. I do not think that anyone in this House would disagree that the most worthwhile job that any parents can do--whether they are lone parents or are part of a couple--is to bring up their children well and successfully. However, to do that--this was the point of my rather long introduction--most lone parents will want also to work. They will wish to do so for the money certainly and certainly for the benefit of the children, but also to fulfil their own sense of gregariousness, sociability and self-esteem. That is what they tell us they want and that is what we want to offer them.

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The second point made by the noble Earl--I do not think that he and I disagree on it--was the reliance on research and the suggestion by the Social Security Advisory Committee that further research should be conducted to see whether a definitive answer can be reached on whether lone parents should receive only the same financial support as couples, which is the effect of the proposal. I have looked at a lot of the research. I find that it is not all that easy to draw firm conclusions from it. Given the difficulties that all researchers face, there is research that supports the retention of a premium for lone parents, as the noble Earl mentioned. Work by Middleton, Ashworth and Braithwaite, referred to in Small Fortunes, suggests that lone parent families are more deprived than couple families. Yet against that, research by Oldfield and Yu, contained in The Cost of a Child, and by Bradshaw, in Household Budgets and Living Standards, found that lone parent families were relatively less disadvantaged on income support than couple families.

Other research is open to different interpretations. Work by Dickens, Fry and Pashardes, The Costs of Children and the Welfare State, last year shows that lone parents are under-compensated by the benefit welfare system in relation to some family types but over-compensated in relation to others. I have read the research to assure myself of what I am saying.

What is clear is that the research does not produce the conclusive evidence that a lone parent family requires greater financial support than a couple family, partly, I suspect, because, as the noble Earl said and as I have argued, to some extent we seek to compare qualitative and quantitative issues. What lone parents do not have is the qualitative support and shared time and labour of a second adult in the household. In some senses one seeks to set that against the quantitative, somewhat lower overall levels of benefit arising from income support which supports one adult rather than two. I think that the jury is out. However, from the work that I have seen, I am not sure that further research can give us a clear-cut answer.

I turn to the points raised by the noble Lord, Lord Higgins, in an immaculate, polished, informed and incisive maiden speech. He made two points. The second was a series of questions about the effect on public expenditure. The first was whether on these Benches we have done a U-turn. If I may, I shall take them in reverse order.

I refer to the effects on public expenditure and savings. The scored savings for the withdrawal of lone parent premium for new lone parents is £55 million the first year, £125 million the second and £170 million the third. If in addition one adds in--the noble Lord referred to this benefit; it is not the subject of these regulations but will come up through the social security Bill--one-parent benefit, there are additional savings of £5 million, then £15 million, then £25 million. In total over three years we expect to see £400 million in savings from reducing lone parent benefits to the level of that enjoyed by couples. Two hundred million pounds of expenditure funded from the windfall tax will go into the new deal. That is the balance of the equation.

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The noble Lord's second point was that in Opposition we opposed these and similar cuts in benefit. In Opposition we certainly opposed any situation which worsened the position of lone parents and where there was no way for lone parents to take their path out of poverty. The difference between being in Opposition and in Government is that we have had the opportunity, as I sought to spell out earlier, of developing a new deal for lone parents, a childcare strategy for lone parents and, in due course, a minimum wage for lone parents. Those three developments were not proposed or supported by the party opposite. Members opposite fought fiercely the minimum wage. All those developments will directly benefit lone parents as they move into work.

It is within the context of a new deal, of a childcare strategy and in due course of a minimum wage that we feel that this is the right way forward for the future. Had Members opposite when in Government produced those proposals, we should have been able to explore them on their merits. They chose not to do so. We now have the opportunity to promote them and put them forward.

Finally, before I finish, I should like to draw your Lordships' attention to another issue which is perhaps even more important than the measures that I have outlined; that is, the constitutional implications if the House votes on these regulations this afternoon. The noble Earl, Lord Russell, said that he was not sure whether he proposed to push the matter to a vote. However, I wish to remind the House of this. It is essential that we accept the convention of this House--it has been long observed--that we do not vote against statutory instruments.


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