HL Deb 29 April 1991 vol 528 cc485-91

3.20 p.m.

The Lord Chancellor

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be further considered on Report.—( The Lord Chancellor.)

On Question, Motion agreed to.

Schedule I [Maintenance Assessments]:

Lord Carter moved Amendment No. 95: Page 31, line 39, leave out ("zero") and insert ("0.24").

The noble Lord said: My Lords, this amendment was moved in Committee by the noble Earl, Lord Russell. It has been retabled to discover whether we can receive a clearer explanation from the Government of how they propose to deal with the problem which is the subject of the amendment.

The amendment aims to ensure that, where an absent parent enjoys a degree of affluence, an equitable share of that income is directed to the children who remain with the caring parent. The amendment seeks to secure an increase in the additional income to a level which is higher than is currently proposed.

There is a wealth of evidence—much of which has been quoted during the passage of the Bill—to show the hardship which many lone parents and their children endure. Even with appropriate benefits and maintenance paid, many lone parents and their children exist on lower income levels than those of comparable two-parent families.

The amendment seeks to ensure that, where the absent parent has sufficient income, the caring parent and the children should have the chance to share in that affluence and to experience a lifestyle which approximates more nearly to the one they might have led had the marriage not broken down. The White Paper proposed that once the maintenance bill was met, the absent parent should pay only 15 per cent. of his or her assessable income as maintenance. As the maintenance bill is set at income support levels, that low percentage ties the maintenance much too closely, in our view, to income support levels.

When the matter was discussed in Committee, the argument seemed to be that the low paid spend a higher proportion of family income on children than do the affluent. The noble Lord, Lord Henley, said: But we wish to maintain a proper balance between recognising that children should share in parents' prosperity and the practical fact that this share does not necessarily remain constant as income grows".—[Official Report, 19/3/91; col. 564.]

We believe that that is incorrect. It is common sense that children generally benefit from their parents' higher standard of living through their shared consumption of many items such as home, holidays, cars and so on, and also through the direct expenditure which is made upon them. Indeed, the whole idea of child maintenance in family law contains relationships to the standard of living that the child would have enjoyed if the marriage had not broken down.

By reducing the maintenance calculation so dramatically once the maintenance bill is met, the Government are tying the maintenance bill much too closely, in our view, to income support levels. We know that these are set at subsistence levels. The effect of living at such levels over many years has been the subject of much research which has shown that it becomes increasingly hard to meet the children's needs when there is a long-term reliance on income support.

As regards what would happen to families if they went to the child support agency, once again we detect a difference in treatment between the children of the poorer lone parent, who has to go through the agency, and the children of the richer lone parent, who can afford to go to court to obtain a settlement.

The issue here is most important. We would appreciate a more detailed assurance from the Minister than that which we received in Committee. At that stage the Minister, at col. 564, said: I shall certainly consider the points he made as to what the rates should be for those on higher incomes. We propose to consult on the regulations". The Government may not be too happy with our suggestion of 0.24 per cent. in the calculation. Therefore, may we please be told what figure the Government have in mind? I beg to move.

The Parliamentary Secretary of State, Department of Social Security (Lord Henley)

My Lords, I am not sure whether I can take the noble Lord any further than I did in Committee. However, I should stress that the figure of 15 per cent. quoted in the White Paper was given purely for illustrative purposes. I accept that the noble Lord, and indeed many other commentators, may feel that the deduction rate of 15 per cent. is not high enough.

The amendment would ensure that the rate had to be at least 25 per cent. I should emphasise again that this is the rate which applies to assessable income in excess of the amount needed to meet the maintenance requirement. Until the maintenance requirement is met, we propose that the deduction rate should be 15 per cent.

In passing, perhaps I may correct something that I said in Committee. I referred to a "reduction rate". I believe that that was a slip of the tongue and one which I should have corrected in Hansard. I am sure that I meant to refer to the deduction rate.

I believe that the noble Lord, Lord Carter, myself and many others, would agree that maintenance should not stop with the basic provision, because there will be some expenses which it does not always cover. We agree that children should have a share in parents prosperity. However, the issue is how best to maintain a proper balance between recognising that children should share in parents' prosperity and the fact that this share will not necessarily remain the same as income grows. Parents should meet their basic maintenance responsibility as quickly as possible, but obviously once they have done so the lower rate is appropriate.

I have taken note of what the noble Lord said, what has been said outside the House and all the representations which have been made. We propose to set out the rate for these deductions in regulations and we shall consult upon those regulations. I hope that I can, again, persuade the noble Lord to withdraw the amendment. I should stress that I am not completely dismissing the figure of 25 per cent., nor am I saying that it will be 15 per cent. which, as I said, was set out in the White Paper for purely illustrative purposes. However, I believe that the matter requires further thought. With that assurance, I trust the noble Lord will feel able to withdraw the amendment.

Lord Carter

My Lords, I am not sure whether, when the Minister referred to the "reduction rate" instead of the "deduction rate", that was not a Freudian slip. I believe that we are beginning to get the idea that the 15 per cent. figure was purely illustrative and that the figure of 25 per cent. is perhaps on the high side. It would seem that the rate may be between 15 per cent. and 25 per cent. However, it would be unfair to ask the Minister to comment on that speculation. I believe that we have got a little further on the matter—although not as far as we would have wished—and we hope that, by the time the Bill completes its passage through this and the other place, we may perhaps have a better idea. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 96 to 103 not moved.]

Lord Henley moved Amendment No. 104: Page 34, line 10, at end insert:

("References to qualifying children

. References in this Part of this Schedule to "qualifying children" are to those qualifying children with respect to whom the maintenance assessment falls to be made.").

The noble Lord said: My Lords, this amendment clarifies the meaning of a "qualifying child" in paragraph 1 of Schedule 1. There may be circumstances where there are qualifying children in the household of the parent with care who are not the children of the absent parent whose ability to pay maintenance is being calculated. They are not "qualifying children" in relation to the assessment of his or her resources, but will be qualifying children in relation to any maintenance assessment of their own absent parent. The amendment merely seeks to put that position beyond doubt. I beg to move.

Lord Mishcon

My Lords, this is purely a technical amendment. In the circumstances, we have no opposition to it.

On Question, amendment agreed to.

Lord Carter moved Amendment No. 105: Page 34, line 10, at end insert: (". Where receipt of maintenance or the reduction in hours for family credit entitlement entail a loss of entitlement to free school meals or social fund payments, the person concerned shall be eligible for such benefits on the basis of low income or family credit entitlement.").

The noble Lord said: My Lords, this amendment also was moved by the noble Earl. Lord Russell, in Committee. We were not at all happy with the answer we received from the Government. Therefore, we have retabled the amendment so as to have a last try at changing the Government's mind. The aim of the amendment is to ensure that, where lone parents are floated off income support through an increase in their maintenance payments, the so-called "passported benefits"—that is, free school meals and social fund payments—are available to those on low incomes.

Under the current DSS rules, health benefits are available to people who are not on income support on the basis of their low income. The DSS compares the "requirements" of the person with his or her "income resources". For example, if the income resources are less or the same as the requirements, such a person will be eligible for full help and even if the income resources are greater they may qualify for partial help.

The amendment seeks to extend to the other benefits in question the principle of the low income provisions relating to health benefits. Such benefits are only available to people on income support. I refer to free school meals, community care grants and the budgeting of loans. The latter two benefits come within the social fund. It is obvious that the loss of those passported benefits will cause a large reduction in the standard of living of many one-parent families. Where there are two children in a family, the loss of free school meals will mean an effective drop in income of 11 per cent. or £8 per week. We all agree that the loss of £8 from a subsistence income will inevitably have a considerable effect and could lead to deficiencies in diet and subsequent health problems for the children concerned.

We are also aware that lone parents are some of the main recipients of social fund payments. In 1989, they received £21 million in the form of community care grants; £16 million in the form of budgeting loans; and £4.8 million as crisis loans. Maintenance payments could help float people off benefits and thus deny them the passported benefits.

One criticism of the Bill is that it is designed much more to reduce expenditure on social security benefits than to help lone parents. The Government's attitude to the amendment in Committee confirmed that view. With all the problems that lone parents face, the loss of free school meals and social fund payments could be a crippling blow. As always, it is the children who will suffer. If the Minister is minded to reject the amendment, will he explain how his rejection will help the children who are the victims? I beg to move.

3.30 p.m.

Lord Henley

My Lords, the Bill sets out a new maintenance system for children. However, the amendment seeks to change the rules of the schemes under which social fund payments are made and local authorities provide free school meals. Neither of those are the subject of the Bill. The amendment therefore has implications which go much wider than child maintenance.

Social fund payments, including budgeting loans, and community care grants, are intended to focus help on those people in the greatest need. A line has however to be drawn between those who can get help and those who cannot, and we believe that the most appropriate place to draw that line is at the income support level. That applies as a general principle and it would be wrong to make an exception in this case.

However, I remind noble Lords that some social fund payments are available to people not on income support or family credit. In particular there are crisis loans which can be paid to anyone who is without resources.

As noble Lords will be aware, local authorities have a duty placed upon them to provide free school meals only to those children whose families are in receipt of income support or to pupils who receive it themselves. The amendment would create new arrangements and responsibilities for education authorities, but again only for this type of case. It would also mean that an amendment to the Education Act would have to be made before it could be implemented.

On the detail of the amendment, a person ceasing to receive income support would be compensated automatically without proper regard to the new level of his or her income. The amendment provides that family credit has to be in payment, but the amount of family credit could be small. I stress that family credit rates also incorporate cash assistance for free school meals, so people protected by the amendment could well be at a significant advantage compared to other family credit claimants.

I note the noble Lord's anxiety about the issue. I remind him of the Government's commitment contained in the White Paper Children Come First, to take action where appropriate to protect those working between 16 and 24 hours and receiving income support at the time of the change. We therefore do not accept that the issues raised in the amendment are for this Bill. We do not believe that it is right to seek to amend the rules of those other schemes just for the peculiar circumstance that has been highlighted by the noble Lord. I therefore ask him to withdraw the amendment.

Baroness Elles

My Lords, before my noble friend sits down, will he explain the Government's resistance to the amendment, which I understand is on the basis of having to introduce new legislation and of administrative difficulties? As I understood it, the implication was that comparatively few children would be affected. However, it is clear that children will be affected where the mother, or the caring parent, receives maintenance instead of income support when the passport to free meals is automatically removed. Those children will be disadvantaged compared with others. I should have thought that if the rejection of the principle is for administrative reasons only and the need to table an amendment to the Education Act, it is unacceptable. I may have misunderstood what my noble friend said. I should be grateful for clarification.

Lord Henley

My Lords, with the leave of the House, the rejection is not purely because other legislation would have to be changed. I was trying to show that the amendment goes beyond the Bill and would be treating the children of those parents in receipt of maintenance differently from the children of other parents who are on income support but who then cease to be on income support. In other words, the children of parents receiving income support, and not in receipt of maintenance, if they cease to receive income support would lose their passport to free school meals. If they lost their passport to free school meals purely because of an increase in maintenance but were still guaranteed free school meals, they would be treated differently from other families. I hope that my noble friend will accept that explanation.

Baroness Elles

My Lords, I shall read carefully what my noble friend said, but since the Bill has been drawn up so that caring parents should receive maintenance and not income support, that caring parent is putting his or herself in a position where, as I understand it, he or she will be deprived of free school meals for the children. I shall read carefully what my noble friend said and perhaps return on Third Reading if I find that I misunderstood what he said.

Lord Carter

My Lords, that is the answer that I expected from the Minister. With respect, it is a bureaucratic answer. I asked the Minister to explain what would be the effect on children, but we seem to be lost because of "this Bill" and "that Bill" and have been told that the proposal could not be implemented. The Bill is about the problems of lone parents and their children. Those problems are highlighted in the amendment. As the noble Baroness said, lone children and their parents will lose. The only way to put that right is within the Bill. We obviously shall not be able to change the Government's mind by argument. The only thing to do is ask for the opinion of the House.

3.37 p.m.

On Question, Whether the said amendment (No. 105) shall be agreed to?

Their Lordships divided: Contents, 65; Not-Contents. 97.

Division No. 1
CONTENTS
Acton, L. Graham of Edmonton, L. [Teller.]
Ardwick, L.
Aylestone, L. Grimond, L.
Birk, B. Halsbury, E.
Carmichael of Kelvingrove, L. Hampton, L.
Carter, L. [Teller.] Henderson of Brompton, L.
Cledwyn of Penrhos, L. Hollis of Heigham, B.
Craigavon, V. Houghton of Sowerby, L.
Dean of Beswick, L. Hughes, L.
Donaldson of Kingsbridge, L. Jay, L.
Dormand of Easington, L. Jenkins of Putney, L.
Ennals, L. John-Mackie, L.
Ewart-Biggs, B. Kilmarnock, L.
Ezra, L. Leatherland, L.
Faithfull, B. Llewelyn-Davies of Hastoe, B.
Fitt, L. Longford, E.
Gallacher, L. Lovell-Davis, L.
Galpern, L. McCarthy, L.
Gladwyn, L. McGregor of Durris, L.
Mackie of Benshie, L. Sefton of Garston, L.
Mason of Barnsley, L. Serota, B.
Mayhew, L. Stallard, L.
Meston, L. Stedman, B.
Mishcon, L. Stoddart of Swindon, L.
Molloy, L. Strabolgi, L.
Morris of Castle Morris, L. Taylor of Blackburn, L.
Nicol, B. Taylor of Gryfe, L.
Northfield, L. Tordoff, L.
Ogmore, L. Underhill, L.
Porritt, L. Wallace of Coslany, L.
Prys-Davies, L. Walston, L.
Robson of Kiddington, B. White, B.
Scanlon, L. Winchilsea and Nottingham, E.
NOT-CONTENTS
Ampthill L. Lauderdale, E.
Astor, V. Long, V.
Auckland, L. Lurgan, L.
Belhaven and Stenton, L. McColl of Dulwich, L.
Beloff, L. Mackay of Clashfern, L.
Blatch, B Malmesbury, E.
Blyth, L. Mancroft, L.
Borthwick, L. Margadale, L.
Boyd-Carpenter, L. Merrivale, L.
Brabazon of Tara, L. Mersey, V.
Brigstockie, B. Monckton of Brenchley, V.
Brougham and Vaux, L. Morris, L.
Butterworth, L. Mountevans, L.
Campbell of Alloway, L. Mowbray and Stourton, L.
Carnock, L. Munster, E.
Cavendish of Furness, L. Murton of Lindisfarne, L.
Cawley, L. Nelson, E.
Clanwilliam, E. Newall, L.
Cochrane of Cults, L. Norrie, L.
Cockneld, L. Nugent of Guildford, L.
Constantine of Stanmore, L. Orkney, E.
Cottesloe, L. Park of Monmouth, B.
Cullen of Ashbourne, L. Pender, L.
Dacre of Glanton, L. Peyton of Yeovil, L.
Davidson, V. [Teller.] Rankeillour, L.
De Freyne, L. Reay, L.
Denham, L. [Teller.] Renton, L.
Effingham, E. Rippon of Hexham, L.
Ellenborough, L. Rodney, L.
Elliot of Harwood, B. Selborne, E.
Erroll of Hale, L. Selkirk, E.
Ferrers, E. Shannon, E.
Flather, B. Sharpies, B.
Foley, L. Skelmersdale, L.
Fraser of Kilmorack, L. Strange, B.
Gainford, L. Strathcarron, L.
Gardner of Parkes, B. Strathmore and Kinghorne, E.
Gridley, L. Strathspey, L.
Hailsham of Saint Marylebone, L. Sudeley, L.
Swansea, L.
Harmar-Nicholls, L. Terrington, L.
Harmsworth, L. Teviot, L.
Henley, L. Thomas of Gwydir, L.
Holderness L. Trumpington, B.
Hooper, B. Vinson, L.
Hylton-Foster, B. Waddington, L.
Ironside, L. Wade of Chorlton, L.
Jeffreys, L. Westbury, L.
Johnston of Rockport, L. Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.