HL Deb 24 February 1992 vol 536 cc78-90

7.5 p.m.

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

My Lords, I beg to move that this Bill be now read a second time.

The purpose of this Bill is to provide for the direct payment to lenders of the mortgage interest component of income support. The House will recall that my right honourable friends, the Chancellor of the Exchequer and the Secretary of State for Social Security, made Statements on 19th December 1991 in which they outlined measures to be taken both by government and mortgage lenders with the objective of reducing repossessions of property. I am sure that the House will agree that this is a worthwhile objective. Mortgage rescue schemes are an important element of this initiative so I am glad to see that some lenders have already announced schemes in an advanced state of preparation. I am sure that the House will welcome the developments. The Bill provides a vital complement to giving reassurance to people who might be at risk of losing their homes. Lenders have given assurances that they will not repossess where direct payments are made to cover the mortgage interest.

The Bill enables direct payment of the mortgage interest allowance in income support to be made to qualifying lenders. It extends existing arrangements which rely on suitable cases being referred to an adjudication officer who considers whether it is in the interests of the claimant for direct payments to be made. The identification of such cases has not been easy. However, as my right honourable friend, the Minister of State, announced in November, new procedures were introduced by the benefits agency at the end of last year to seek to ensure that those cases in mortgage arrears would be more readily identified. Those arrangements are a useful interim measure pending the introduction of the more comprehensive scheme embodied in the Bill which will, subject to the passage of the Bill and to the making of the necessary regulations, start from the end of April of this year.

I turn now to the content of the Bill. It will cover those income support claimants who have an amount for mortgage interest included in their income support assessment and who should therefore make the appropriate payments to qualifying lenders. The provisions of the Bill will cover all such claimants but regulations will specify the point at which direct payments are to be started. I hope that the House will agree that, as a significant proportion of unemployed claimants stay on benefit for fewer than 16 weeks, it would not be sensible to disturb their existing mortgage payment arrangements for a period of but a few weeks. After 16 weeks the income support calculation for claimants under 60 years of age includes 100 per cent. of the eligible mortgage interest. It is our intention to provide in regulations for direct payment to start once 100 per cent of the eligible interest is payable in income support. Regulations will also define what are termed relevant benefits from which deductions may be made.

I should make clear that by "qualifying lenders" we mean building societies, banks, insurance companies and other institutional lenders. Local authorities and certain other public bodies with home loan facilities will also be included. Most qualifying lenders are prescribed on the face of the Bill by generic title but provision for others, including some institutional and centralised lenders, and public bodies, will be made in regulations.

The arrangements will cause a significant increase in the administrative costs of the benefits agency which we intend should be met in part by qualifying lenders. We envisage this being achieved by means of a transaction charge levied on the lenders. I am glad to say that the Council of Mortgage Lenders has consented to such an arrangement.

This scheme is an important element in the response from the Government and the lending institutions to the problem of repossessions. It offers a significant and practical contribution to our efforts to increase the security of many people who might otherwise be at risk of losing their home. I have no hesitation in commending this Bill to your Lordships. I beg to move.

Moved, That the Bill be now read a second time.—(Lord Henley.)

7.10 p.m.

Baroness Hollis of Heigham

My Lords, I thank the Minister for his clear introduction of the Bill. Mortgage default is one of the fastest growing causes of homelessness, accounting for perhaps one instance in 10. As a result, we have seen mortgage repossessions rise by 72 per cent. this year over last year, to 75,000. Behind them stand another 90,000 to 100,000 families who are 12 months or more in arrears; 190,000 or so families who are between six and 12 months in arrears and, according to Shelter, perhaps 1 million who are between two and six months in arrears. In other words, 1.3 million of the 9.4 million householders with mortgages—or one in seven—are in difficulties, while one in 100 is being repossessed.

Why? The problem is caused by the interlocking of high housing costs with declining incomes. High housing costs include not only high interest rates, but high repayment rates due to overgenerous lending. In 1989, 14 per cent. of borrowers received building society loans of more than three times annual income, compared to 4 per cent. in 1985. Many people also face declining incomes due, above all, to unemployment. In addition, there are fewer pathways out because falling house prices have meant that many people have mortgages that surpass the value of their property so they can neither trade down nor, given the market, sell up.

That tragedy is constructed partly by Government policies. It is the Government who determine the level of interest rates and who have shaped the level of unemployment which, we are told, is "a price well worth paying". It is the Government who have determined that owner-occupation is now virtually the only option available to young couples who are entering the housing market, whatever their income. Last year local authorities were permitted to complete just 6,000 houses and housing associations just 11,000, while repossessions numbered 75,000 properties. Young couples who, 15 years ago, would have started married life in a council house, saved for five years before going on to buy their first home on an 80 per cent. mortgage that was well within their means, are now battered all ways round. They cannot rent, so they have to buy but, because they cannot really afford to buy, they go into arrears and their home is repossessed. For the past four or five years research has been telling us that between 30 and 40 per cent. of all young couples cannot afford to enter owner-occupation, but too many have tried and are now facing repossession.

Tonight we are dealing with the casualties of Government policy. What a pity that the precipice was not fenced at the top by, for example, providing more social rented housing, instead of relying on a few ambulances at the bottom. The Government have, however, provided three kinds of ambulance, which were outlined by the Minister, and it is not our intention to oppose them. As he said, the first is that housing associations are taking short leases on repossessed properties to make them available to homeless families. Eighty housing associations were interested, but the building societies, such as the Bradford and Bingley, are already beginning to walk away from the scheme because the economic rents are too high. Indeed, such a scheme does not stop families being repossessed. How much more sensible it would have been to bring local authorities fully into the scheme, especially when they are required by law to provide temporary accommodation for homeless families. However, I understand that they are deterred even from acquiring former council houses, with the capital receipts coming from the sale of former council houses standing idle.

The second ambulance—and the source of the Bill—is to make income support payments directly to the lenders. Of course, we do not disagree that money that is made available for mortgage payments should be spent on that purpose, which is why we are not opposing the Bill, although I am sure that, on another occasion, the Opposition will seek to amend it. I shall return to that point.

Thirdly, we have had the December initiative of the mortgage-to-rent scheme, worth some £750 million for existing owners via housing associations. That looks unlikely to aid more than 5,000 to 10,000 families because the resulting rents are likely to be well over £100 per week and well beyond the coverage of housing benefit. Ironically, the only point at which the local authorities are invited to become involved is to cover the difference between the economic cost and the housing benefit. Although 50 per cent. of the money may be reimbursed, poll tax payers are expected to find the rest.

What about the effectiveness of the ambulances? Phillips and Drew has given us the most detailed forecasts available. It believes that the leases on repossessed properties and the mortgages-to-rents scheme may help between 15,000 and 20,000 families. The direct payment of income support may save 10,000 families, but Phillips and Drew forecasts that there will still be 80,000 plus repossessions in 1992. Perhaps I may ask the Minister what the Government have in mind for those people. Council housing? There is none. Bed and breakfast? The social and financial cost of that is appallingly high. I should like to know what the Government propose and I hope that the Minister will tell us.

Finally, I return to the attachment of income support payments. The Bill presumes, to a degree, that there is a culpable and wilful refusal to hand the money over to the lender. Certainly, the lenders seem to think so. They calculate that only half of the income support payments that should go to to the lender do go to the lender. However, they do not know, because they do not know which of their borrowers are on income support, which of those on income support are in arrears and what proportion of those arrears could have been averted by direct payment.

Although we shall not oppose it, we want to argue that the scheme is flawed for at least four reasons. First, even when after 16 weeks mortgage interest payments are met in full by income support, income support still leaves unmet considerable costs that are associated with mortgages, such as the capital repayment element, which is rolled up; the insurance element of endowment mortgages; maintenance costs and even excessive costs. Therefore, the scheme meets only a proportion—although a substantial proportion—of the housing costs that are experienced by someone on income support.

Secondly, the problem has been created in part because families do not receive full reimbursement of the interest element of their mortgage. Since January 1987, for the first 16 weeks on income support, families get only half of their mortgage interest paid. That penalises at least one-third of those on income support. Let us assume a mortgage of £40,000 and outgoings before mortgage interest relief at source of £400 per month or £100 per week. The family will have to find half of that for the first 16 weeks. That means that out of an income support level of barely over £100, a couple with two young children will have to find £50 gross.

Thirdly, the provisions take no account of the other direct deductions that such families probably face. A Written Answer the other day suggested that one family in seven on income support had deductions of about £9 per week in May 1990 terms, which is probably nearer £12 per week now, for social fund loans, poll tax debts, fuel and water charges and certain fines. If a family with an income of about £100 per week and two dependent children is suddenly thrown onto income support, it will find that for the first 16 weeks well over one-third—and nearly one-half—of its income will go on the mortgage. On top of that, it is likely to face the attachment of a further £9 to £12 per week for other debts. It is not surprising, therefore, that when, after 16 weeks, that family moves on to full payment, the extra money is diverted and juggled into paying off the fuel bills—otherwise the heating will be disconnected—or the poll tax, because household goods will otherwise be lost to bailiffs.

All that is harsh enough but, turning to the fourth area in which we believe that the Bill is flawed, from April 1992 the nightmare of the 16-hour rule begins. From April 1992, full-time work begins not at 24 hours per week, but at 16 hours per week. At that point, families with children will be entitled to family credit, rather than income support. For many families, that will be more generous, and we welcome that, but it will lose some families their passport to mortgage repayments. Those without children will be eligible for nothing at all. Manchester City Council's survey found that one-fifth of all jobs were in the 16 to 24 to 28-hour range. Every one of those low paid, part-time workers will now lose the entitlement to income support and, therefore, to help with the mortgage.

It has not yet hit people. When it does I predict with considerable sadness that we shall see a soaring number of repossessions for those coming into the social security system for the first time. It will be especially damaging for those couples where one partner is in part-time work and the other becomes unemployed. They will experience not only a catastrophic drop in their income but a severe problem in facing their outgoings.

How will they cope? It is even more unfair because of course families on family credit who can claim housing benefit will not be able to get help with their mortgage. The Rowntree research in December 1991 found that a family with two children with a £70 a week mortgage would have to earn over £200 a week to be better off than on income support. That is the size of the sum, and that is the Rowntree research. I put that forward for consideration. Perhaps the Minister will tell us whether families in that situation will have a better buy choice? Will they be able to choose between income support with mortgage help or family credit?

Finally, how confident are the Government that DSS offices can expedite such claims? There are notorious delays in arranging direct payments to utilities such as gas or electricity of sometimes many months. There are notorious delays, also of months, when mortgage direct payments have been requested but are "still being handled". As I say, we do not oppose the Bill but we shall seek to amend it. We wish that the Government had lifted their eyes to fencing the precipice and doing something to tackle the underlying problems of homelessness.

7.21 p.m.

Earl Russell

My Lords, when I was giving my mind to this Bill I was vividly reminded of an occasion when I was five. I was taken to visit an eccentric millionaire on whom my father was for the time being completely dependent. It was of course impressed on me with more than usual vigour that I must behave politely. I was taken into the millionaire's picture gallery. It was covered with ornate Rubenesque canvasses, which were not precisely to a five-year-old's taste. I had also been brought up to be truthful. I looked around and finally caught sight of a small picture in the corner, which was a landscape. I said, "I like that one". Looking round the housing landscape, which might have been painted not by Rubens but by Hieronymus Bosch and finding this Bill lurking in the corner, I am prepared to say, "I like that one". It deals with a small part of the problem.

The noble Baroness, Lady Hollis of Heigham, quoted the UBS Phillips and Drew figures, which seemed to me as good an estimate as we can make. I should like in this context to pay tribute to my right honourable friend Mr. Ashdown for the contribution he has made to getting action taken on this. The mortgage to rent schemes that the building societies and lenders are undertaking are capable of being extremely useful. But we have here an example of the propensity of governments through the centuries to solve problems at other people's expense. Those schemes are happening at the lenders' expense. This Bill is being administered at the lenders' expense.

The lenders necessarily are interested in some quid pro quo, which, as I understand it, is the payment of mortgage interest from the DSS direct to the lender. We on these Benches also support that. But we wonder whether, had it been possible to spend a little more time on the Bill, and indeed if we can spend a bit of time on the Bill in its Committee stage, we might perhaps improve it.

I am not happy with the principle that the lender should be made to pay. I agree with Mr. Blackburn that it was not a building society executive who said, "If it isn't hurting, it isn't working". The Council of Mortgage Lenders' figures published this month suggest that a fairly substantial proportion of the repossessions we are dealing with are the result of the recession. The figures are 20 to 30 per cent. as the result of unemployment, 10 per cent. as the result of another drop in income and 5 per cent. as the result of business failure. This means 35 to 45 per cent. are the result of the recession.

We have no solution in sight for the 20 per cent. to 25 per cent. that are the result of relationship breakdown. That is a problem we shall have to address in future. It is being said that the problem of inability to sell the house is on some occasions preventing divorce. We are all keen on the preservation of marriage, but I am not certain that chaining the couple together in a house they cannot sell is the best way of doing it. In fact I am even moved to wonder whether this might have something to do with the rising figures announced last week for cases of domestic violence.

I am also interested in the reasons why it has been felt necessary to transfer income support directly to the lender. We are told that there were a number of people who were not paying their mortgage out of the income support. We do not have figures on this. As I understand it, we rely on anecdotal evidence. Now I make my living out of the careful, I hope, use of anecdotal evidence. I have no objection to anecdotal evidence but my noble kinsman has never quite taken the same line. Indeed I think it was last week—and I must apologise that I was not present on that occasion—on 18th February at col. 1149 that my noble kinsman said this: I suspect that if we put forward policies based on anecdotal evidence we should be, rightly, laughed out of court". I shall be consistent. I have no intention of laughing my noble kinsman out of court. I think this is a perfectly good case, but it is anecdotal. I hope that he may therefore consider other anecdotal but soundly based cases with a little more sympathy in future.

Another point that causes me doubt about this Bill is that I am not certain whether it is necessary for the procedure to be compulsory when there are no arrears on the mortgage. A citizens advice bureau in South Wales has reported a case that puts my misgivings about this in a nutshell. There were no arrears. By the action of the DSS the mortgage interest element was transferred directly to the lender. The lender thereupon discovered for the first time that the woman was on income support and immediately began proceedings for repossession. That is not exactly the object of the exercise. I shall listen with care to what my noble kinsman says about this. I hope that we shall discuss this in Committee, and I shall be interested in hearing the case on the other side.

If there is a problem about paying income support to the lender, I wonder whether this may be because there is not quite enough to go round in some cases. An article in the Financial Times on 20th December recommended this measure on the ground that it was giving people protection from any temptation to waste the money on food. I wonder whether we might not find in a year's time that we are listening to a lot of medical evidence complaining about malnutrition and asking for us to take action to prevent people from wasting the money on housing. We need to think about this. I should like warmly to support the point that the noble Baroness, Lady Hollis, made about deductions, including the 20 per cent. payment for the poll tax.

There are some detailed changes that I should be interested to see. Like the noble Baroness, I would be interested in doing something about the position for the first 16 weeks. I should like to ask my noble kinsman for clarification on the cost of that, because somewhere in Hansard for another place there is a misprint, and I should like to know which one it is. I have seen figures quoted of £35 million and of £75 million as the cost of doing that. I should like to know which it is. I should also like to ask again the question asked by my honourable friend Mr. Kirkwood in another place. He wanted an estimate of how many repossessions we could prevent if we introduced this change. He accepted that the Government were not able to answer then. He hoped that they soon would be, and so do I.

May I again illustrate with a specific case history why I think this change could be beneficial. It is another citizens advice bureau case; a painter-decorator in London whose work is occasional, and at the moment extremely occasional. He has continued to go on income support; he has gone through the first 16 weeks; obtained work again; finished work; and gone back into the first 16 weeks again. Debt builds up rapidly that way. Although my noble kinsman may say that that is just one case, I recall the discussions about the employment patterns of actors during the passage of the Social Security Bill 1989. A similar problem arises there. I am sure that it arises with freelance journalists, workers in the construction industry, and among people who have casual employment. We may find that the problem is a great deal more common that we believed.

I also agree with everything that the noble Baroness said about the part-time rule: people working between 16 and 24 hours a week who will not now receive income support for their mortgages. Those people will be better off if they do not work. I had always understood that the Government were against perverse incentives, but here they have introduced one. Again, I have a specific case which I believe illustrates the principle. A CAB in Essex reported that a single parent with four children completed a course of training and was offered a job paying £7,539 a year, but she lost help with the mortgage, and free school meals for all four of the children. She was £40 a week worse off. Does that make sense?

There is a case for having a specific mortgage benefit rather than tying the benefit to income support; but I suspect that that is something that will have to wait until the next Social Security Bill, if, indeed, we ever have one. I agree strongly with the case for including insurance premiums on an endowment mortgage within the scope of the Bill. That is at the very heart of the mortgage itself. One cannot have a mortgage without it.

I am worried about the pressure of work that the Bill will place on benefit offices, and the possible delay that may result. I should like to ask my noble kinsman whether the finance or the staffing levels of benefit offices will be adjusted to take account of the extra work, or whether benefit offices will merely be asked to be more efficient or, as the rest of us might put it, more inefficient. I welcome the Bill. I should like it on the statute book, but it needs a good Committee stage before it gets there.

7.34 p.m.

The Earl of Onslow

My Lords, it is worth going into some of the reasons why horrendously high house prices arrived in the late 1980s. It was due to financial deregulation and a lax money supply. Those two factors combined resulted in high house prices. When there are high house prices, there is high inflation, and that is what happened. Noble Lords opposite have complained about the problem being the fault of the Government, but at the time they were advocating an even looser money supply which would have increased inflation even more, but I will let that pass.

I welcome the Bill. With high mortgages and debt there is now a definite need for debt counselling. Sir Gordon Borrie, in a report in the late 1980s, hinted that that was necessary. As a result of a committee, I believe headed by the noble Lord, Lord Ezra, a body called the Money Advice Trust was set up in September 1990. Its purpose is to raise money from the private sector to fund independent debt advice which adds to and complements central and local government support for money advice.

The trust is chaired by Sir George Blunden, former deputy governor of the Bank of England. He has given three main reasons why lenders should contribute to the trust. First, it is clearly in the interests of the lending institutions themselves to help to ensure the availability of an adequate supply of debt counsellors. Secondly, responsibility for many of the problems with which money advisers struggle must fall on the lending institutions, and it is clearly right that those institutions should contribute to the costs of resolving the mess. Thirdly, there is a desire on the part of government and the Office of Fair Trading to see lenders fund money advice.

The trust has a four-point plan to improve the provision of debt advice: regional expert back-up for CABs through a planned national network of money advice units (CABs are the main agencies through which advice on debt problems is given); provision of a national telephone debt advice service; access to self-help packs through a national answerline; and, training of money advice workers. The DSS now pays £750 million in interest payments.

Baroness Hollis of Heigham

My Lords, income support for mortgages.

The Earl of Onslow

My Lords, I thank the noble Baroness. The response from the banks and the utilities has been broadly positive with over £1 million collected, of which a quarter is in cash, a quarter in secondments, and half in direct support for money advice projects. That goes towards the £3 million needed by the trust from the financial institutions so that it can fulfil its essential duties. The initial response from the building societies has been poor. Apart from Nationwide Anglia and the Woolwich, commitments to money advice by the societies have been negligible. On 3rd February representatives from leading societies met the chairman, director and trustees of the trust at the DTI. The meeting was chaired by Mr. Edward Leigh, Consumer Affairs Minister. Following the meeting it was hoped that societies would reconsider their decision not to support the trust. In an extinct peerage case in the early 17th century Sir Ranulphe Crewe said: Where is Bohun, where is Mowbray, where is Mortimer? Nay, which is more and most of all, where is Plantagenet? I paraphrase that to say: where is the Alliance and Leicester? Where is the Cheltenham and Gloucester'? Where is—I have missed my place. Where is another one? Most of all, where is the National Provincial? They should be contributing towards this excellent trust. If I do not receive an encouraging reply from my noble friend I may introduce an amendment in Committee. Otherwise, I support the Bill.

7.37 p.m.

Lord Henley

My Lords, the noble Baroness, Lady Hollis, spoke generally on housing issues and possible problems in that area. I do not intend to follow the generality of her speech but to stick to the subject matter of the Bill and the small part it plays in the larger package announced over the past few months by various other members of the government. My noble kinsman Lord Russell, predictably, made a general attack upon the adequacy of income support. I am sure that he will not be surprised if I say that I do not agree with him on that matter, and repeat that there is no evidence that it is not possible to sustain an adequate diet on income support; but this is not the time or the place to discuss those matters.

Everyone will agree that there is a broad measure of support for the Bill and its intentions. Certain points about the Bill and income support payments for mortgage repayments have been raised with which I shall deal. I shall deal first with the initial 16 weeks and the 50 per cent. of eligible interest covered in those first few weeks about which the noble Baroness, Lady Hollis, and my noble kinsman Lord Russell complained. They alleged that that could be a significant cause of repossessions. I shall repeat what the CML assured us when the changes were made. It assured us that the changes in isolation would not be a factor that would cause repossession. We feel that—

Baroness Hollis of Heigham

My Lords, I thank the Minister for giving way. How would it know that was the case because that first 16 weeks place such a strain on family budgets that they run into debt in other areas? When the money begins to come through, it is perhaps "improperly used"—I say that in quotation marks —to pay off other debts. The Minister speaks confidently on this matter, but I do not see how the council could know about these factors.

Lord Henley

My Lords, I cannot speak for the CML. I can, however, say that it does not feel that in isolation what we are discussing is a cause for repossession.

What I wanted to go on to say was that we feel that the 50 per cent. we have discussed strikes the right balance between helping people through short-term difficulties and—this must be a factor that is relevant—the burden that is placed on the generality of taxpayers by benefit expenditure. I should add that what the noble Baroness fails to remember is that any arrears built up as a result of that 16 weeks can be capitalised and interest on them can be met subsequently. There is, therefore, help available to borrowers for debts they might have built up. However, in the main people in the first 16 weeks of unemployment—or whatever may be the cause of their being on income support —are more likely to have some other resources. They might be payments in lieu of notice or payments in lieu of redundancy, for example, which will allow them to meet many of these bills far better than after the 16-week period is up.

The noble Baroness also commented on the changes in respect of the 16 to 24-hour rule. I think I am right in saying that the noble Baroness partially welcomed these changes for some people on family credit. There will be protection for those who are on income support who would otherwise lose out at the point of change. Again in that case there will not be losers as a result of the Bill or as a result of the change in the hours rule from 24 to 16.

My noble kinsman objected to the charge being made to the Council of Mortgage Lenders. One must look at this again as part of the package. It is something that has been agreed by the Council of Mortgage Lenders as part of the quid pro quo that it would not make any repossessions where income support payments were being made. In return, the council agreed to pay some of the administrative costs as appropriate. The subdivision of the agreed contribution will be carried out, we hope, on an equitable basis. Whatever charging arrangements might be appropriate for future years will be considered later this year in consultation with the lenders.

The noble Baroness asked whether the benefits agency of the Department of Social Security can cope with this issue. I am certainly confident that that will be the case. These extra resources will go a long way to easing any problems the agency might otherwise be likely to suffer.

I welcome the admirable concern that my noble kinsman expressed on the administrative difficulties of the benefits agency. I cannot give an example, but certainly in the past I seem to recall that when I argued that the administrative concerns of the department should be taken into account my noble kinsman did not consider that to be relevant. I am glad that on this occasion he at least points to problems that might arise. I can assure him we are happy that the benefits agency will be able to cope with this.

My noble kinsman also asked whether we could have a new mortgage benefit for all low income families and not just those on income support. I must say that the main source of help for all home owners is the mortgage interest tax relief which is estimated at some £6 billion in 1991–92. A mortgage benefit scheme on top of that would be costly and could easily increase dependence on state assistance both on the part of individuals and for the housing market itself. We are certainly not convinced that that would be the appropriate response to the present market difficulties. Certainly I suspect it could easily have a distortionary effect on the housing market.

The noble Baroness asked whether income support could also help with repayments of capital, if I understood her correctly. She shakes her head. Obviously I misunderstood her and she did not think it was right that help should be given with capital. I am glad I have obtained that agreement from her.

I turn again to my noble kinsman. He asked how many repossessions would be saved if we abolished the 16-week rule and paid interest from the first week of a claim. Again I cannot go any further than what the Council of Mortgage Lenders has assured us; that is, that such a measure would not in itself make any difference to the number of repossessions.

I now turn to the points raised by my noble friend Lord Onslow. I very much agree with the need for debt counselling. I appreciate how important it can be in preventing people from getting into difficulties that can lead to repossessions later on. The Government put significant sums of money into the National Association of Citizens Advice Bureaux and its counterpart in Scotland. That will certainly help the CABs give general advice, including money advice. We believe, though that the private sector itself should support money advice counselling. My noble friend mentioned my honourable friend Mr. Leigh in another place. We are keen to see an improvement in the private sector's contribution. No doubt my noble friend will come back to this point in Committee. We do not consider that a statutory obligation on lenders to provide funding for money advice would be appropriate. We prefer that support should continue to be given on a voluntary basis. I very much hope that various people have taken note of what my noble friend had to say and will continue to support such bodies as the Money Advice Trust or any other body that offers debt counselling.

I look forward to a thorough Committee stage on this Bill. No doubt my noble kinsman, my noble friend and the noble Baroness, Lady Hollis, will table amendments which we can discuss in greater detail on that occasion. For the moment, as I have said, there is clearly a broad measure of support for this Bill and the purposes it serves. I very much hope the House will give it a Second Reading. I certainly commend it to the House.

Baroness Hollis of Heigham

My Lords, before the Minister sits down, I hope he will be kind enough to answer two questions that were raised by the noble Earl, Lord Russell, and myself. First, I seek clarification on the cost of restoring 100 per cent. benefit from the first week as opposed to from 16 weeks, given the confusion in the House of Commons Hansard. Secondly, we obviously support the transitional arrangements —I raised this point—that families on income support will be protected, but in future after the 16 hour per week rule comes in, will families coming into social security for the first time be permitted to have a "better buy" choice between income support or family credit?

Lord Henley

My Lords, in answer to the first question, my understanding is that the figure is something of the order of £45 million. If I have that wrong, I shall certainly write to the noble Baroness to correct the figure. In answer to the second question, I do not think it will be possible to have what the noble Baroness refers to as the "better buy" option. Certainly for those who are on income support at the time of the change there will be protection, but thereafter they would have to rely on family credit. One must, however, stress that family credit levels are considerably higher than the appropriate amount of income support.

On Question, Bill read a second time, and committed to a Committee of the Whole House.

Earl Howe

My Lords, I beg to move that the House do now adjourn during pleasure until 8.5 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 7.50 to 8.5 p.m.]