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Baroness Hollis of Heigham: My Lords, I did not expect to be let off so gently by the Liberal Democrat Benches--not as gently as the Conservative Benches because there is a meeting of minds between Labour and Conservative Benches. However, the noble Earl, Lord Russell, was sincere in making his points. He asked whether there was any discretion in penalty payments, saying that if I could assure him that there was, he would be content. I am happy to say that I look forward to the noble Earl being content because the penalty will be totally discretionary. The agency will use its powers to encourage compliance and will not automatically impose a penalty whenever a payment is late. I do not know whether the noble Earl will be satisfied with the remaining answers, but I hope that he will regard that as a reasonable start.

He went on to ask whether we have a reasonable definition of "full-time" education, given the hours of study and reading. As a former academic, I take his point, but the provision reflects the position in other legislation; for instance, the child benefit provisions. Therefore, we are being consistent.

The noble Earl asked a substantive question about the reduced benefit directions about which he has been concerned over the years. He asked about the increase to 156 weeks of reduced benefit decisions. There may be

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a misunderstanding because that duration was last increased in 1996 and there is no change as a result of these regulations. Therefore, the Act has not worsened the benefit penalty.

He then went on to ask whether the Government have a coherent, informed position of what happens to women in that situation. As I knew the noble Earl would be properly concerned about the issue, and because we wanted to have the information, we undertook research as the Bill progressed. We know that of the 70 per cent of people who lose their reduced benefit direction within a few months of its imposition one-third will have started work, one-third will have co-operated with the agency, and one-third will have repartnered. We undertook, first, a sample survey to discover how many people were being affected and then, secondly, a detailed qualitative survey following what happened to the women who had been sanctioned. The survey was small and quick but seems to confirm our other evidence.

As I said, we understand that of the 70 per cent, one-third start work, one-third co-operate and one-third repartner. Of the remaining 30 per cent, approximately two-thirds lose their reduced benefit direction within the year because they are co-operating, and we suspect that where claims to benefit are withdrawn, there may be fraud. I do not know whether that helps the noble Earl but I assure him that I would not want to be party to any such scheme of sanctions if I did not feel it was decent and appropriate under the circumstances. A child is entitled to the support of both parents. The noble Earl is entitled to press me on whether the definition of "good cause" is adequate, but if there is no good cause the woman has no right to expect the taxpayer rather than the child's natural father to act as the father of the child. That is why we have such sanctions.

Earl Russell: My Lords, I am grateful to the Minister for undertaking the research and I note her information. First, will the research be published? Secondly, does it contain information on the means of subsistence which are open to the women concerned while they are not receiving benefit?

Baroness Hollis of Heigham: My Lords, no, it will not be published because it was undertaken quickly, based on a qualitative sample, by the analytical services divisions of the DSS and the CSA. We shall in any event monitor the effect of our policies but will not publish the research.

The noble Earl asked whether we know what happens to those who have no means of subsistence. I suggested that of the 70 per cent of those exposed to reduced benefit direction, one-third repartner and are then no longer of lone parent status and entitled to income support; one-third return to work and are not entitled to income support; and one-third go on to co-operate with the agency and receive their benefit. The 30 per cent who do not end their RBDs lose their income support. I do not want to malign lone parents, but our evidence--it is speculative because there is no way of

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detecting this undetected fraud--suggests that someone may be cohabiting and therefore unwilling to have her income support claims further exposed. In that situation, such women tend to come off benefit.

We have done the best we can. We have reached the point where women are refusing to provide the information we can use in order to discover the consequences of their behaviour.

Earl Russell: My Lords, in future research questions, will the Minister include those which show whether benefit sanctions encourage fraud?

Baroness Hollis of Heigham: My Lords, if the noble Earl would like to write to me with the counterfactual evidence which would prove that, I should be pleased to consider it. However, you cannot have as a question for research whether benefit sanctions include fraud. The question is not answerable in that form. If the noble Earl would break it down into sub-questions to which numbers can be attached so that they could be quantified, I should be pleased to ensure that they would be counted. However, in all humility I suggest that as he phrases the question, it is not answerable because it is a qualitative statement about cultures. One can count only those questions which have numbers attached.

However, at the end of the day the noble Earl must stand behind it and ask why we are doing this. It is not the intention to be nasty to lone parents, but there may be a point at which the perceived interests of the lone parent diverge from those of the child. We believe that the child is entitled to the support of his natural parents, including, for the most part, the non-resident father. We also believe that because of the pain and anguish of divorce sometimes the mother may wish to have a clean break. However, she is not entitled to project that onto the child. Therefore, she should be required to co-operate. Alternatively, she may take the consequences of not co-operating and accept a benefit penalty.

As a result of the system that we have developed, which means that we work with the Benefits Agency so that at the point at which the lone parent first comes onto income support she is encouraged to fill in the form, we have moved from the inherited situation in which only 20 to 30 per cent of lone parents co-operated with the CSA to one where over 80 per cent co-operate with good grace to the benefit of the child. Obviously, I should like to see all lone parents co-operate. We know that where reduced benefit directions kick in most lone parents either co-operate or have alternative sources of income. At the end of the day, those who do not co-operate may be operating within the informal economy and do not wish to expose themselves in that way. I hope the noble Earl accepts that we are not doing this to get at lone parents but to ensure that children receive from their fathers the support to which they are entitled. The taxpayer should not provide that support in lieu simply because the lone parent prefers a clean break.

I shall write to the noble Earl about "untraversable". He was kind enough to notify me of the point. However, because we were tied up with the earlier Bill I was unable to provide a satisfactory answer. I shall also deal with

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the noble Earl's point about taxis. I believe that that exhausts the specific points that he made about the regulations.

On Question, Motion agreed to.

Social Security Benefits Up-rating (No. 2) Order 2000

7.12 p.m.

Baroness Hollis of Heigham rose to move, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee].

The noble Baroness said: My Lords, I can blame only the Opposition Benches for insisting that we deal with a long series of social security measures. Obviously, the Government do their best to accommodate the wishes of the Opposition. That all of these matters should be dealt with in one day, which requires that we move from one topic to another, was, as I understand it, the wish of the Opposition rather than the Government. I apologise to the House for moving to yet another subject.

As noble Lords are aware, this annual order and the other standing in my name on the Order Paper are a routine but vital part of DSS business. The original uprating order contained a minor drafting error which has been corrected in the measure before the House today. The order will increase most income-related benefits by the Rossi Index, which is 1.6 per cent. Most national insurance benefits will rise in the usual way in line with the Retail Prices Index, which is 3.3 per cent. As usual, the increases are based on changes to the relevant price indicators over the 12 months ending in September.

But there are areas of social security where we want to provide more than price protection. For families with children, people with disabilities, carers and pensioners we want to provide more help. First, we want to do more to help children. As your Lordships know, when we came into office we were faced with the unacceptable situation in which one in three children in this country lived in very poor households. We are determined to right that wrong. As a result of our Budget measures, thus far 1 million children will be lifted out of poverty. As part of our programme to eliminate the scourge of child poverty from this country, we shall introduce further measures from April of this year. The increase in child benefit, the new children's tax credit and increases in WFTC mean that a single earner family with two children on half average earnings (12,500) will see their standard of living rise by 20 per cent this year, which is the biggest annual rise for 25 years.

By the end of the Parliament we shall be spending almost 6 billion extra a year on support for families with children. Most of that help will be directed at the poorest families. These cash measures, initiatives to tackle social exclusion, such as Sure Start, and improvements in education standards will ensure that all of our children get the start in life that they deserve.

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The second area where we want to do more is to provide help to people with disabilities and carers. From April we shall for the first time extend benefits to severely disabled three and four year-olds. Some 6,000 disabled children and their families will be better off by over 38 a week. We are also raising the disabled child premium by 7.40 a week above inflation. Around 80,000 children will see a rise in the disabled child premium from 22.25 to 30 a week which is a real increase for some of the neediest families in the country.

We also want to do more for adults with severe disabilities. In April the new disability income guarantee will be introduced, but not at the original rate of 128. The guarantee will be 142, which is an extra 14 a week. For couples, the guarantee will be 186.80. In addition, young adults disabled early in life will, as a result of the changes we made two years ago, benefit from an extra 27.60 a week.

We are also doing more to recognise the enormous contribution made by carers. The carer's premium will be increased by 10 a week on top of the normal uprating. That means the premium will rise in April from 14.15 to 24.40. This measure will help over 200,000 carers on low incomes. We are also increasing the earnings threshold for invalid carer's allowance from 50 to 72, which is the rate of the lower earnings limit in national insurance. That will allow carers realistically to retain contact with the world of work and bring them within the contributory benefits system of the national insurance scheme. This package of measures will ensure that nearly 200 million extra will be spent annually on helping people with disabilities and carers.

The third area where we want to do more is pensioners. The order introduces measures to tackle pensioner poverty, ensure that every pensioner shares in the rising prosperity of our country and reward pensioners for their saving. Our first priority for pensioners was to get more help quickly to the poorest. That was why we introduced the minimum income guarantee and made a commitment to increase it by the level of earnings for the rest of this Parliament. But in this order we shall raise the minimum income guarantee to 92.15, not just for those pensioners on the highest rate but all pensioners on the guarantee.

The second priority is that as we move towards the pension credit from 2003 we shall increase the basic state pension. We believe that that should be the foundation of pension provision as part of the partnership between state and funded pensions, and it is essential if people are to retire on a decent income in the future. This order will increase the basic state pension by 5 for single pensioners and 8 for married couples. Widow's and bereavement benefits will rise by the same amounts.

As a further part of the transition to the pension credit, the order will double the lower capital limit for the minimum income guarantee from 3,000 to 6,000 and increase the higher capital limit from 8,000 to 12,000 in April. That will benefit half a million pensioners who will find that modest savings no longer exclude them from entitlement to MIG.

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In total, we are spending more than 8.5 billion extra on pensioners this Parliament. As I mentioned earlier, we are spending 6 billion on children. We can do this only because we are delivering stable economic growth and reforming social security. We now see the results of our reforms. By moving people from benefits into jobs we are spending 4 billion less this year. Social security spending would be falling in real terms if we had not deliberately chosen to target more money on families with children, people with disabilities and pensioners; in other words, we are spending it on those who need it, not on propping up economic failure. By cutting the bills for economic and social failure we can provide help where it is most needed, giving greater security to pensioners and people who cannot work. The orders that we shall debate tonight deliver that additional spending, and I commend them to the House.

Moved, That the draft order laid before the House on 30th November be approved [2nd Report from the Joint Committee].--(Baroness Hollis of Heigham.)


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