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Business Improvement Districts Bill [H.L.]

3.7 p.m.

Read a third time, and passed, and sent to the Commons.

Electricity Generation Bill [H.L.]

Read a third time, and passed, and sent to the Commons.

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Social Security Bill

3.9 p.m.

Lord Carter: My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Carter.)

On Question, Motion agreed to.

House in Committee accordingly.


Earl Russell moved Amendment No. 105A:

After Clause 69, insert the following new clause--

Lone parent regulations: commencement

(" . The Social Security (Lone Parents) (Amendment) Regulations 1997 shall not come into force before 1st October 1999.").

The noble Earl said: In moving Amendment No. 105A, I shall speak also to Amendment No. 115A. The effect of the amendments is to delay the two different cuts in benefits to lone parents--one made by regulations relating to premiums for income support and so forth and the other relating to child benefit made under Clause 70--until October 1999. Without prejudice to anything I may wish to do with the amendment during the progress of the Bill, for the purpose of today's debate I wish to confine it to one simple and, I hope, uncontroversial purpose. I wish to set the stage and establish what we are discussing.

One of the difficulties with debates on single parents is that a great variety of issues constantly overlap. The problem is like the Irishman's pigs; he could not count them because they would never stand still. I hope that it will be for the convenience of the Committee if I use the amendment to set the stage. In the debate on Amendment No. 110, I wish to deal with the rights of single parents who are not working. In the debate on whether Clause 70 shall stand part of the Bill and on Amendment No. 112, which are grouped together, I wish to deal with the case for having a benefit specifically for lone parents. That is a personal suggestion. I hope that that course will be for the convenience of the Committee and worth making clear.

The cuts in benefits for lone parents fall under two principal headings. The first is achieved by regulations which come into force today, unless otherwise corrected. It is the abolition of the single parent premium on income support, housing benefit and council tax benefit. There will be a loss of £4.70 a week in income support and a loss on housing benefit and council tax benefit amounting at its maximum to £9.35 a week but varying according to circumstances. The second cut, introduced under Clause 70 of the Bill, begins on 1st June 1998 and amounts to a maximum of £5.65 a week. That is a hefty collection of cuts.

In order to balance those cuts, the Government are offering, mainly through the Budget, a series of replacements of income. The first is child premium for children under the age of 11 of £2.50 a week. That applies to income support, housing benefit, council tax

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benefit, family credit and disability working allowance and kicks in in November 1998. The second is family premium on income support of £2.50 a week and that kicks in in April 1999. The third, working family tax credit, kicks in in October 1999. In the absence of detail, one cannot quantify what that might be worth. It may be considerable for those in work, but it will be worth nothing to those out of work. There is to be a child care tax credit, but, again, one cannot quantify it without the details. It may be considerable to those in work but worth nothing to those out of work. It kicks in in October 1999, which is some way off.

As regards everyone affected by the cuts, some will be affected from today and the rest from 1st June this year. There will be no gain before November 1998 and no big replacement gain before April 1999. The effect will vary from group to group. Single parents on income support with one child under 11 will, in money terms, recover their existing position in April 1999. However, in real terms--that is, keeping up with an existing protected claimant who normally would be uprated--they will be £2.20 a week short.

A single parent on income support with two children would recover existing income in November 1998, which is a little better, but in real terms is £2.20 below existing claimants. A single parent with two children over the age of 11, and therefore not eligible for the new premium, will not recover the position until April 1999. That is still £2.20 a week short in real terms. A new claimant in work with an income of £85 a week will be a net gainer by the substantial sum of £7.09 a week by October 1999, but there will be a net loss of £5.65 a week in June 1998 and £3.15 a week in November 1998. Therefore, such claimants will be all right in the end, but getting there will take a long time. A new claimant in work with £150 a week will in June this year lose £9.13 a week. In April 1999, he or she will lose £4.13 a week and will not gain £4.82 a week until October 1999. Again, such claimants will be all right in the end if they can hang on until that day arrives.

Some people will not gain at all from the measures in the Budget. I refer to people who are in work but working less than 16 hours a week and therefore still eligible for income support. There are those receiving child maintenance under the CSA who are not eligible for the passported benefits and whose maintenance often arrives extremely irregularly. Therefore, they are sometimes dependent on child benefit for all their basic necessities. There are student single parents whose loan is counted as income whether they take it out or not. There are those who have been disentitled under the actively seeking work rules, some of them in slightly surprising situations. I give as an example the woman who was working an evening shift in a wine bar and was three times sexually assaulted. She asked to be moved to a different shift, was refused, dismissed, found to be voluntarily unemployed, and deprived of all benefit. Child benefit is the only benefit which a single parent in that situation will keep. That is why its universality is absolutely vital; it may be a life saver.

People in those positions gain nothing whatever of the conditions in the Budget--or practically nothing. In any case, the gains are mainly for those in work. When

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we reach Amendment No. 110 we will argue that the right of a parent with a young child not to work is, like the right to work, vital. When the time comes, we on these Benches will be prepared to uphold both rights.

I am sorry to have spoken at length. I hope that I have saved the Committee's time in the long run. I beg to move.

Lord Higgins: The noble Earl has clearly explained the amendment, but it is in the context of a confused sequence of events with regard to lone parents. The situation is further complicated by the fact that some of the changes are implemented by statutory instrument and others by primary legislation. Therefore, we have had a whole series of debates on those issues over recent months.

In the House of Commons there was a substantial Labour Party rebellion on this issue, and the matter then came to us. We have subsequently had the Budget and we are now in Committee. The Budget changes are very closely related to some of these measures.

However, the main point made on the amendment is one which the Committee should consider very carefully and perhaps return to at a later stage; namely, that a large number of lone parents will suffer as a result of the statutory instrument and the primary legislation if the Government's intentions go forward.

As the Minister will know, that was something which was foreshadowed under the previous government and therefore we understand that it may well be something on which there is agreement between the two Front Benches. Be that as it may, the situation which is now likely to occur if the Government succeed with their intentions is that there will be a number of lone parents who lose initially, and then subsequently gain. Of course, they will not gain in relation to the preferred position which they held previously as regards two parent families. That is a point to which we can return on the clause stand part Motion.

Nevertheless, there will be individual lone parents whose incomes will fall; and, after a considerable time--which may be extremely distressing for them--that income will be reinstated, albeit not in the same form in which it was previously being paid. That seems to be an extremely unfortunate situation and I hope that the Minister will let us have her views on how that is to be overcome, perhaps by acceptance of the amendment proposed by the noble Earl.

Lord Ashley of Stoke: I had tabled amendments on this issue before the Budget because there was no doubt in my mind that those on income support and new claimants were getting a raw deal under the provisions of the Bill. The poorest were being hit and that is unacceptable.

But the Budget changed the picture. The provisions in the Budget were very welcome and government figures show that on average no fewer than 1,470,000 lone parents will be £6.30 per week better off. I recognised that the Government acted to effect those cuts and so I withdrew my amendments. But it is now clear, as the noble Earl has indicated, that the working

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families' tax credit will not be introduced until October 1999. It is that which provides the major gain for lone parents.

Until that time, many lone parents will face the cut, which was explained so admirably by the noble Earl. Such a cut is both unjustified and unacceptable. We must ask: why should the impecunious be impoverished (as they will be) by that cut just because the dates of changes are made to suit the Government's convenience? It means that families already deprived of a spouse are to be deprived further.

Lone parents are among the poorest in the country and they simply cannot afford to lose pence let alone pounds. Every penny counts and must be counted and accounted for. That hardship cannot be wished away, rationalised or elbowed aside, and certainly not by the laughable excuse that it does not apply to present lone parents but only to new ones. As an honourable Member said in another place, the new ones are still people. Why should a family which becomes deprived of a parent after June of this year be ordered to live on less money than a current lone parent? It simply does not make sense and the whole concept of a fair deal goes out of the window.

The effective answer is to delay the cut in the lone parent benefit until October next year. That is all we are asking, and that is what the amendment achieves. It is the common-sense, reasonable solution to a major problem for lone parents. I hope that my noble friend will be able to accept the amendment.

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