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Lord Desai: I ask my noble friend to clarify one matter. I start by confessing that rules for social security payments are so complicated that I find it very difficult to understand what is going on. I am extremely grateful to the noble Earl for explaining case by case what is happening.
I was surprised and shocked--as were my other noble friends--by the cuts in lone parent benefit. I understand that the Government wish to encourage lone parents to get back into work. I understand also that that particular cut applies only to lone parents entering benefits as of this year. But there is an anomaly and I should be grateful to my noble friend if she will clarify the matter when she replies.
It is concerned with lone parents who are in jobs but who may lose their jobs. I understand that if that happens, they cannot obtain the benefit to which they were previously entitled. If that is the case, that is a great disincentive to taking work, and I am sure the Government do not want that. Even going along entirely with the Government's logic, I still see an anomaly in relation to cutting benefit for people who lose their jobs because those people must go back to zero and start all over again. That seems to me to be an added injustice and perhaps my noble friend will clarify the position.
The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): There are two principles underlying the Government's strategy for benefit rates for families. First, we do not believe that the current structure, which pays a higher fixed rate of child benefit and family premium to all lone parent families and to no two-parent families, is the best way or the right way to address the extra costs which particular families may face. Therefore, it is right that we should change that structure to align the rates of benefits paid to families in respect of their children irrespective of the family structure. That is why we are going ahead with this measure.
Secondly, the Government are committed to supporting all families with children. We believe that support for families should be based on the needs of children and, as I say, not on the basis of family structure. Therefore, it may help the Committee if I seek to set out the measures which we are implementing to deliver those two principles.
As the noble Lord, Lord Higgins, mentioned, we inherited measures aligning rates of benefit from the previous government. The Social Security (Lone Parents) (Amendment) Regulations 1998 were laid on 8th March. They align the rate of family premium in the following income-related benefits--income support, income-based jobseeker's allowance, housing benefit and council tax benefit. Those measures come into force today and will apply to all new claims from lone parent families. Existing lone parents will not be affected and will continue to receive the higher rates, as Members of the Committee have already identified.
Those regulations replace regulations already debated in this House--the Social Security (Lone Parents) (Amendment) Regulations 1997. Perhaps I may address the point made by my noble friend Lord Desai by saying that the only substantive difference is the introduction of linking rules to protect lone parents who take up work and return to benefit after a short period of work. For the first time, we are introducing a 12-week linking rule which is more generous than the linking rule proposed by the Social Security Advisory Committee. That was only eight weeks. I hope my noble friend will take comfort from that fact. We are seeking to introduce those linking rules to protect lone parents who take up work and return to benefit after only a short period of work and to ensure that lone parents who receive the higher premium, such as the disability premium, but have an underlying entitlement to the lone parent premium, receive the same protection as other existing recipients.
The measure we are debating today is not the regulations associated with family premium and not, with this amendment, the linking rule, although we shall return to that. This measure will align the rate of child benefit because that is required to be changed through primary legislation while other aspects of child support can be dealt with through regulations. It is our intention that this measure should come into force in June 1998, at the same time as improvements to the childcare disregard. Again, it will apply to new claims only, with existing recipients continuing to receive the higher rate.
In addition, we are introducing extra help for families with very young children. The child allowance in all the income-related benefits will be increased by £2.50 a week; in other words, there will be an extra £2.50 per week per child for those under the age of 11 for all families who are on income support or other income-related benefits. Again, that was announced in the Budget and will be implemented from November of this year.
All families in receipt of these benefits with children under the age of 11--not just children under five--will receive this higher allowance, including all existing lone parents, even though they will retain entitlement to the existing higher lone-parent premia. We will follow up these measures by introducing more help for families in work, as has been mentioned, through the working families tax credit and the childcare tax regard in October 1999. So there is an increase in the rate of the family premium for families who are on income-related benefits, an increase in the rate of child benefit for those families who are in work and not on an income-related benefit, an increase of £2.50 per child for those families on income-related benefits whose children are under 11, and additional help through the working families tax credit and the childcare tax credit in October 1999.
I believe that I am right in saying that something like four separate measures will come together and produce, in our view, real help to all families, whether they consist of single parents or two parents and whether they are fractured or intact. They will be concentrated, focused and targeted on the needs of the children, especially those under the age of 11. I trust that the Committee will accept that these four measures together meet the two principles that I outlined at the beginning of my remarks. They align the benefit rate for families with children for all family types but they will also ensure that the financial needs of families, especially those with younger children, are recognised through the benefit system.
However, those measures do not mean that the tax and benefit system will not take account of the specific difficulties and extra costs that some families face. We are focusing resources specifically on meeting those costs rather than giving higher fixed rates to particular families. Perhaps I may identify them. Our childcare tax credit will provide extra help for all working families who need help with childcare costs. Lone parents will be the main beneficiaries of that tax credit and will receive more help with childcare costs--which is the main obstacle to their being able to spring out of the poverty trap and move into work--than has previously been the case.
But some two-parent families may also need help with childcare. It is right that the childcare tax credit should also help those families. The improvements to the childcare disregard that we will be introducing in the interim will also be open to all families. We believe it is right to give extra help to families who are unable to work or whose opportunity to maximise income from work is limited by parental responsibility. That is why we are introducing those two measures to improve the incomes of those families. I repeat: we are increasing the family premium in income-related benefits by £2.50 a week for all workless couples and we will increase the child personal allowance for the under 11 year-olds by a further £2.50 a week. This means that a family with two young children will be better of by £7.50 a week. I hope that the Committee will agree that that is consistent with our strategy to help all vulnerable families receive an adequate income when out of work.
The third element of our strategy is to help those people move into work. We are already breaking down the barriers between lone parents and work by way of the New Deal and our national childcare strategy; indeed, our working families tax credit will guarantee every working family, including lone-parent working families, an income from full-time work of at least £180 a week. We have also put in place measures to ensure that all four year-olds have an early education placement at the start of the school year.
The Government inherited measures to remove differential benefit levels for the children of lone parents and the children of two-parent families. We believe it is right that benefit rates should be aligned. We have introduced legislation to implement that measure. However, that would have meant, if I can use the cliche, "levelling down" lone parents to where jobless couples find themselves. We have taken the obverse approach: we have sought to increase benefits by targeting them on children and children in need for all families--both lone parents and two-couple families--which is effectively a levelling up of couples to where lone parents, in very broad terms, though not exactly, currently find themselves. That is why we are introducing this package of measures and doing so as early as possible. We believe that it is right to target specific help. That is why we are meeting the needs for childcare through our national childcare strategy and why we are helping lone parents into work.
Finally, we have the linking rule which I mentioned earlier. Therefore, with all those measures in place, I hope that noble Lords will agree that we genuinely have a new deal for all lone parents, as well as workless couples, as they enter the next few years.
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