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Lord Tomlinson: My Lords, if the West Coast Main Line is a top priority--I believe it is the unanimous view of industry and commerce in the West Midlands that it should be and that it should, therefore, be completed and completed on time--does my noble friend the Minister agree that it is imperative that the Government do not become a victim of their own success in attracting passengers on to the railways? What kind of assurance can my noble friend give me that the industry will have the capacity to cope with rising demand that will come from the completion of this modernisation; for example, are enough vehicles being built and old ones scrapped?

Lord Macdonald of Tradeston: My Lords, there has been an increase of 15 per cent in rail passenger journeys since May 1997. Train operators, however, are running 1,100 more trains a day to meet that increased demand. There has been a 15 per cent increase in freight moved by rail since May 1997. However, I am delighted to say that private sector rail investment has increased by 34 per cent in the past two years and now stands at £1.7 billion. Much of that sum has been invested by Railtrack. The main vehicle for promoting increased rail investment will be the franchise replacement programme currently being undertaken by the shadow Strategic Rail Authority.

At this stage we cannot agree any particular figures for future investment. I believe that the precise amounts needed will be illuminated by the sSRA's and the rail regulator's views on the Railtrack 2000 Network Management Statement, which was published at the end of last month. I agree with my noble friend that we must ensure that modernisation is accelerated to cope with the increased demand and growth. I am delighted to say that in the next couple of months over 200 new vehicles will be "rolling" on our railways.

Lord Roberts of Conwy: My Lords, the Minister has given us the completion dates, but is there a firm starting date for the modernisation programme?

Lord Macdonald of Tradeston: My Lords, the modernisation programme is already under way. We are considering upgrades due for completion by the year 2002 on line speeds south of Crewe, which will be taken up to 125 miles per hour. The second stage, which is to be completed in the year 2005, will take speeds up to 140 miles per hour. Some concern has been expressed about the viability of the project because of the huge sums involved. The original figure of £2.4 billion has been increased to an estimate of £5.8 billion by Railtrack. That higher figure is being scrutinised by the regulator at the moment but we are confident--Railtrack has assured us that that is the

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case--that work is under way and that we can look forward to quicker journey times on the West Coast Main Line in future.

British Coal Pension Fund: Surpluses

3.2 p.m.

Lord Dormand of Easington asked Her Majesty's Government:

    Whether they will reduce their annual claim on the British Coal pension fund in order to increase the payments made to claimants who are former miners.

Lord McIntosh of Haringey: My Lords, since 1994 the Government have acted as guarantor to the former British Coal pension schemes. In return the Government receive 50 per cent of any actuarial scheme surpluses; the remaining 50 per cent being available to the scheme trustees for distribution among their membership. While the Government do not mean to re-open the guarantee arrangements, they are discussing with the trustees whether there are opportunities to build upon them to the mutual benefit of scheme members and government.

Lord Dormand of Easington: My Lords, does my noble friend recall that when a Starred Question was asked on this subject on 14th February this year, the noble Lord, Lord Sainsbury, said that, since 1994, £519 million has been received since the 50 per cent scheme came into operation? Is the noble Lord aware that the trustees have said recently that they expect to receive a minimum of £250 million per annum for a number of years ahead? They have also said that there is a reserve fund of £4 billion from which these payments will be made. Given those facts, does not my noble friend agree that for the foreseeable future there is no possibility of a deficit arising in the fund, and that the time is now opportune for the Government to reduce their 50 per cent take? I remind my noble friend that most retired miners now receive only £38 a week pension.

Lord McIntosh of Haringey: My Lords, I confirm the figures that my noble friend Lord Sainsbury gave in February of this year. However, my noble friend Lord Dormand will recall that Her Majesty's Government have paid £400 million to the trustees since 1995 for what is allowed to be used as related expenditure; that is, the surpluses have been allowed to be ring fenced and used to offset expenditure on liabilities inherited from British Coal, such as coal health liabilities, respiratory conditions, vibration, white finger and so on. My noble friend will also be aware of the £354 million which has been committed to coalfield areas over a period of three years since 1998.

Lord Ezra: My Lords, is the noble Lord aware that I tabled the Starred Question on 14th February to which the noble Lord, Lord Sainsbury, replied and to which the noble Lord, Lord Dormand, referred, and

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that I thought that I obtained a fairly sympathetic response to the fact that the Government--as the noble Lord, Lord Dormand, has pointed out--have obtained out of their share of the coal pension fund a vastly greater amount than was previously expected? In view of that, will the noble Lord, together with his noble friend, try to do something which has never been done before in history; namely, attempt to locate the heart of the Treasury, appeal to that organ, if they can find it, and make sure, as the noble Lord, Lord Dormand, also urged, that more of this money should be dedicated to benefit ex-mine workers in poor circumstances?

Lord McIntosh of Haringey: My Lords, I am as sympathetic to this matter as my noble friend Lord Sainsbury. I said in my first Answer that we are discussing with the trustees whether there are opportunities to build upon the guarantee arrangements to the mutual benefit of scheme members and government. The reduction in risk of the scheme, which I acknowledge and which was mentioned by the noble Lord, Lord Dormand, may make it possible, for example, for the trustees to adopt a more aggressive investment policy which would produce higher returns to the benefit of everyone.

Lord Marsh: My Lords, are provisions such as the Minister has outlined available to the other former nationalised industries' pension funds, and, if not, why not? I declare an interest.

Lord McIntosh of Haringey: My Lords, I believe that that is a general rather than a specific interest. I know that the noble Lord is a pensioner! The scheme which we are discussing today was set up under the Coal Industry Act 1994. Different arrangements arise from different privatisation legislation of the previous government.

Lord Eden of Winton: My Lords, has the Minister made any assessment of the numbers of former miners who might be claimants, which would give some indication to the House of the scale of the provision that might arise?

Lord McIntosh of Haringey: My Lords, I do not have an assessment of the number of miners, but certainly the trustees have made assessments of the cost of various options which might be open to them--for example, the cost which might arise if former miners were to be given pensions at the age of 50, or if coal board staff were to be given pensions at the age of 50. The former case would involve costs of the order of £1.4 billion. I understand that at the present time the trustees are not able to meet that cost. However, different ways of improving the pension provision would involve significant and varying costs.

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Child Support, Pensions and Social Security Bill

3.7 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham): My Lords, I beg to move that this Bill be now read a second time.

The Bill introduces reform in three key areas. First, it supports the Government's commitment to eradicating child poverty in a generation by radically reforming child support. Secondly, it introduces the second stage of our pensions reforms. Thirdly, it strengthens the link between the benefits people get and their responsibilities to society, with new action to encourage compliance with community sentences. These reforms build on those we have made since the election--reforms that promote opportunity, reduce people's need to rely on benefits and produce greater security in old age.

Part I of the Bill sets out our reforms of the child support system. There is, I believe, widespread agreement in this House that the primary responsibility for the support of children lies with parents--and that means both parents, whether they live together or apart. The challenge for government is to ensure that where the parents do live apart, there is an effective system of child support in place.

The failings of the current system are well documented. Parents are left angry and confused by a formula of Byzantine complexity. It can take months before a decision is made, and the agency spends 90 per cent of its time chasing information and only 10 per cent chasing up missing payments. The result, not surprisingly, is a system that fails children. Of the 1½ million children on the agency's books, only 300,000 gain from maintenance paid, and only 100,000 of that 1½ million see all the money that is due to them.

Currently, the CSA faces an impossible task. It is required to administer a hugely complex formula that parents do not understand; parents with care go for months without seeing any maintenance; and because of the delays, non-resident parents--usually fathers--start with huge unanticipated debts and, faced with a cliff to climb, understandably some of them choose not to start. The income support of parents with care is reduced pound for pound, so parents see the purpose of the CSA as reducing benefit expenditure--Treasury support--rather than providing meaningful support for their children. To the mothers, the CSA represents all hassle and no cash--hardly a system that encourages co-operation and involvement from parents.

Going back to the courts is not the answer. The failure of the courts to deliver a fair system led to the introduction of the child support scheme in the first place. That is why we, as the then opposition, backed the previous government's introduction of an agency. But, in their efforts to make the agency acceptable, they made the system too complex to understand and too difficult to administer. We are determined to

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remove the obstacles in the current scheme and to give the CSA the extra powers it needs to deal with parents who continue to seek to avoid their responsibilities.

Our first objective is to address the complexity inherent in the current scheme. The Bill introduces a much simpler system that is easy for parents to understand and for the CSA to administer. Non-resident parents will pay a flat-rate percentage of their net income (after tax, national insurance and pensions contributions) of 15 per cent for one child, 20 per cent for two, and 25 per cent if they have three or more children. There will be ready-reckoner booklets containing that information--the income at the top; the number of children at the side--available in post offices and libraries. So, even for a couple who have broken up, he will know--it is usually "he"--what maintenance he may be expected to pay, and he can make arrangements for it. This approach will mean that decisions can be made in days rather than in months, getting the money flowing faster.

Our second objective is to ensure that children see the benefit of the maintenance paid. Currently, families on income support get no benefit from the payment of maintenance. Under the Bill, in future, if he is on benefit and she is on benefit, the £5 that he currently sends over to the Treasury, of which she sees not a penny, will in future go to her and her child for support. If he is in work and she is on benefit, the first £10 of maintenance will stay with her. If the mother goes into work and receives working families' tax credit, she will keep every penny of the maintenance paid--another £30 or £40 a week extra money available for child support.

We believe that this will provide a major incentive for parents to co-operate in the assessment and collection of maintenance. It will ensure that extra help goes to the poorest families and to the poorest children.

Our third objective in reforming the CSA is to provide it with the teeth that it needs to ensure that parents cannot avoid their responsibilities. Currently, 30 per cent of parents pay nothing towards the upkeep of their children. Reform of the formula and the benefit system provides incentives for parents to co-operate. The simpler system will mean that the CSA has more time to spend on ensuring that effective payment arrangements are in place.

We are also taking new powers to tackle those who continue to try to avoid their responsibilities. Parents who misrepresent or withhold information from the CSA will face fines of up to £1,000. The agency will also have new powers to appoint new specialist inspectors, allowing it to gather information more quickly and effectively than now. Parents who deliberately delay paying money for their children will face a new penalty of up to 25 per cent of the money due. Persistent non-payers could, as now, still face gaol but, in addition, the courts will be given the power to take away their driving licence.

Parents will have every reason to co-operate in the assessment and collection of maintenance for their children under the new and simple system, with the

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direct benefit going to the children. But if they do not, the CSA will have new powers to hold them to account. We want compliance--that benefits children--but if we do not get it, enforcement will kick in.

We are also closing a loophole that allows some fathers to delay an assessment of their liability by denying paternity. We intend to extend nationally the existing arrangements for Scotland. In future, if a child was born while the father was married to the mother, if he is named on the birth certificate or if he refuses to take a DNA test, the burden will be on him to prove that he is not the father.

These reforms pave the way for a radically improved service from the CSA, but we must avoid the failures of the current system which may be caused by introducing the reforms too quickly. The new scheme requires significant changes in the way that the agency works, including new IT systems. It is crucially important that we get the reforms right from day one if we are to build parents' confidence.

To ensure that the new system beds in properly, we shall introduce the new measures for new cases first so that we can get it up and running with a manageable take-on of cases. We expect this stage of the reform to be introduced by April 2002. Existing cases will be transferred at a later date, once we are sure that the new system is working well.

So, to complete my remarks in regard to this part of the Bill, we all agree, I hope, that the current system has failed parents and children alike. This Bill will put that right. The new system will be simple; it will cut out the complexity, bureaucracy and delay that have undermined the existing arrangements. This will allow parents to understand what they can expect; it will get maintenance flowing quickly; and it will allow the agency to spend more time on ensuring that maintenance is paid and less time on chasing paper.

The new system will be fair. It will be fair for parents with care, who will get regular and reliable maintenance for their children more quickly. Obviously, reliability is as important as even the sum of money collected. It will be fair, too, for non-resident parents, who will know quickly what they should pay; they will understand how it has been calculated--they will be able to do the calculations themselves effectively--and they will see the maintenance that they pay directly benefit their children. But, most importantly--at the end of the day, this is what matters--it will be fair to children, who will have access to the support that they need. By helping parents who want to support their children and by cracking down on those who do not and will not, a total of more than 1 million children will see the benefit of maintenance for the first time--600,000 of those in the poorest families in our land.

Part II of the Bill deals with our reform of pensions.


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