Child Support Bill

HL Deb 19 June 1995 vol 565 cc82-144

House again in Committee.

Clause 6 [Departure directions]:

Earl Russell moved Amendment No. 21:

Page 5, line 21, leave out from ("Part") to end of line 24.

The noble Earl said: In the first instance, this is a probing amendment. If I receive the answers I want about the intention of the Bill, I hope that I shall be able quickly to withdraw it. If I do not receive those answers, it might be a different matter.

The point concerns Clause 6, the conditions for a direction for departure from the Bill. The words which I seek to delete are condition (b) for a departure direction: The Secretary of State may give a departure direction if … (b) it is his opinion that, in all the circumstances of the case, it would be just and equitable to give a departure direction". My question is this: does that add a further restrictive condition to subsection (a), that, he is satisfied that the case is one which falls within one or more of the cases set out in Part I of Schedule 4B or in regulations"? In other words, I wish to know, if a request for a departure direction fits all the conditions set out in the schedule and the regulations, does the Secretary of State nevertheless have an unfettered right to stop it going forward, if it appears to him not to be just and equitable to do so? If that were a further restrictive condition on the operation of the departure system, it would give me anxiety. I hope that the Minister can tell me that my fears are misplaced. I beg to move.

Lord Mackay of Ardbrecknish

As the noble Earl pointed out, the amendment removes the requirement placed on the Secretary of State to consider whether giving a departure direction would be just and equitable, before he gives such a direction. It will have the result of allowing a departure direction to be given in any case so long as that case falls within one of those set out in Part I of the new Schedule 4B, as introduced by Schedule 2 to the Bill. Subsections (2) and (3) of the section, however, remain in place. That means that certain aspects of the "just and equitable" issue are expanded upon without the concept itself having been introduced.

I assume that it is the intention that the Secretary of State would still be required to consider whether a departure was just and equitable, taking account of the financial circumstances of both parties and the welfare of the children, but that the requirement to consider all the circumstances of the case, rather than only the financial circumstances of the two parties, would be removed.

The requirement to consider whether it is just and equitable, in all the circumstances of the case, to give a departure direction is a very important feature of the departures scheme. I should like to give an example of the kind of case in which such a consideration may and indeed ought to be material to the decision whether to make a departure direction.

Let us suppose that an absent parent has requested a departure because he has a debt which costs him £25 a week to repay. It is clear that the debt is a reasonable one, that he has not been able to reschedule it and that he therefore has to meet the payments. On the face of it, he may qualify for a departure. However, perhaps we may suppose that he is a horse-racing enthusiast, a car enthusiast or something similar and has a part share in a racehorse which costs him £2,500 a year—not that I indulge in such activities, but I gather that it is pretty expensive. The parent may have other enthusiasms that cost him a great deal of money. The Secretary of State may consider that, in view of the circumstances of the case, it would not be just and equitable to allow a debt to reduce support for the absent parent's own child, when he is spending much more on an expensive hobby.

In other proceedings on Bills, I have been urged to put in words like "just and equitable". This is a novelty in that this time I am being urged to remove the concept of "just and equitable". I hope that the noble Earl can realise that it is a reasonable concept to include in the Bill a provision to ensure that in such circumstances as those that I mentioned—and there will be other examples which we could devise—the Secretary of State can take into account all the circumstances of the case. With that explanation, I hope that the noble Earl will feel able to withdraw his amendment.

Earl Russell

The Minister has made just the kind of points at my expense that one might have expected and which I might have done, had the position been reversed. However, perhaps I may draw his attention to some distinctions. One was made by the noble Lord, Lord Renton, when we discussed an equivalent issue on the Jobseekers Bill. The noble Lord pointed out that it is one thing to allow a discretionary power when it is a use of the prerogative of mercy, when it is beneficial and a relaxation, when it is for the benefit of the subject. However, it is quite another to use a discretionary power in a penal manner to deprive people of rights which they would otherwise enjoy. That seems to me to be a fair and important distinction.

The second distinction which I wish to point out to the Minister is that I am drawing attention to the uneasy marriage between a series of statutory conditions and a discretionary provision for things to be just and equitable. I do not see why we need both, or why the two can go together in any sensible way. In fact, I do not see what the provision is doing here.

The third distinction which worries me is this. I entirely take the Minister's point about the racehorse, there is no argument about it. However, I very much wish him to answer this question: why should that decision be taken by the Secretary of State? Why should it not be taken by a child support appeal tribunal or by commissioners? Why should it be the Secretary of State who, as I see it, is here usurping the judicial function in order to try to decide an individual case which ought to be judicially decided by known rules of law? While the Secretary of State takes all the discretion away from the judicial authority, he is giving it to the executive authority. I should like to hear how the Minister can justify that.

Lord Mackay of Ardbrecknish

First, there is more than the mere question of whether something is beneficial to the absent parent. There is the question of whether it is beneficial to the child or children of the absent parent whose welfare must come into the matter to some extent for there to be a balance in all such matters. We cannot look on it as being a bad thing if the proposal is not beneficial to the absent parent. By definition, asking the absent parent to pay anything, a penny piece to his child, children or to the parent who cares for the children will not be beneficial to the absent parent. I am afraid that the only way one can run a system that would be beneficial to the absent parent is to say to absent parents: "All right, the taxpayer will pay, you may go off and not bother with any financial obligations". I know that that is not what the noble Earl wants to see, but I fear that would be the consequence of his particular question.

The other point that the noble Earl made shows the difference between us. He would like a system that is entirely court-dependent—either on courts as we know them, or on some other kind of courts to be set up by the Government to deal with those cases. I understand that. It is the argument of his party on this matter. I have said all that I have to say on this point, although I have no doubt that we shall return to it on a number of occasions. I mentioned my position in this respect earlier this afternoon. I stand by what I said.

There is a point that is worth making; namely, the absent parent can appeal, he can go to the tribunal about the departure. In that case, as I also said this afternoon, the tribunal, whether made up of a single member or of three, will have as its chairman a legally qualified person. To that extent at least, the noble Earl's desire to bring into play some lawyers will be met if the absent parent decides to appeal. In many cases, the absent parent may be prepared to accept the conclusions. In that case I do not see the need to bring in the legal process. That is the position as I see it. "Just and equitable" is a reasonable provision to have in the Bill. I should like to think that the noble Earl can agree that the provision should be there, even if he does not agree that we should have this particular system. Perhaps he can agree that, if we must have it, it is sensible to have these words.

8.30 p.m.

Earl Russell

I am not sure that the Minister has yet given a justification for using prerogative powers to take away people's legal rights. Nor has he given me any coherent explanation for showing why a discretion in an individual case—which must, if it is to be used properly, involve a full hearing—should be used by the Secretary of State. His answer does not at present make sense to me.

However, rather than asking the opinion of the Committee now, I feel that I must read the Minister's answer very carefully indeed to see whether I can make any more sense of it then than I can now. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 22:

Page 5, line 21, at end insert: ("() in cases where the absent parent is applying for departure under Schedule 4B, paragraph (2), it is his opinion that hardship would be caused to the absent parent or any member of his family should he not do so; and").

The noble Baroness said: This amendment would insert the provision as printed on the Marshalled List. Its purpose is to introduce evidence of hardship as a fundamental criterion for access to the departure system. Although the Bill introduces some gateway, so to speak, in relation to departure, we are worried that it is perhaps not at present fully balanced.

In the present system an absent parent could gain access to the system merely because, for example, he has high travel-to-work costs, regardless of how much he earns. In the original White Paper regarding improving child support, it was clear that the absent parent would have to meet two conditions. The first was that because of the special circumstances of the case he faces specific additional expenses, not taken into account in the formula. The second was that he would face hardship—that is, he would be unable to support himself and any new family if he were to pay maintenance at the level determined by the formula. This amendment would ensure that departure is not simply to reduce maintenance payments at the expense perhaps of the parent with care, but to ensure that that is coupled with evidence that genuine hardship would be caused were such departure not permitted. I beg to move.

Lord Mackay of Ardbrecknish

As the noble Baroness explained, this amendment will require the Secretary of State to consider whether a refusal to grant a departure would cause hardship to the absent parent or his family; and if he were to consider that it did, he may give a departure direction.

I believe that there are two reasons why this amendment should not be accepted. First, it is inequitable to consider the issue of hardship in respect of the absent parent only. This provision could result in an absent parent benefiting from a departure which would not otherwise have been made; the resultant reduction in maintenance may well cause hardship to the parent with care, but the Secretary of State will have given no consideration to this matter.

Secondly, I believe that the amendment is unnecessary. The Bill already contains the provision in new Section 28F(1) (b), which we just discussed, which requires the Secretary of State to consider in all cases whether it would be just and equitable to make a departure direction. This provision enables the Secretary of State to consider all the circumstances of all parties to an assessment—and in particular their financial circumstances. This is a much fairer way of dealing with the issue that this amendment is trying to address; it enables the Secretary of State to look at the situation of the parent with care, the absent parent and any children affected, to balance their needs and then decide whether a departure direction would be just and equitable.

For those reasons—namely, that there is a wider interest to be considered than just the absent parent, and that all three are catered for inside the just and equitable position—I hope that the noble Baroness can withdraw her amendment.

Baroness Hollis of Heigham

I thank the Minister for that reply. Where we are agreed is that we want this measure to be even-handed to all the parties involved in the negotiations. I am not sure that I am persuaded that the words "just and equitable" cover the situation that the Minister outlined. However, I can only take further advice on that point. In the circumstances, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 23 and 24 not moved.]

Lord Carter moved Amendment No. 25:

Page 6, line 26, at end insert (", and (c) of the consideration which has taken place under section 2 as to the welfare of any child likely to. be affected by his decision").

The noble Lord said: In moving this amendment, I shall also speak to Amendments Nos. 43 and 44 in the name of the noble Earl, Lord Russell, which go rather wider than the particular amendment that I am moving. All three deal with the question of the welfare of the child. That is a concept with which those of us who worked on the 1991 Act are certainly familiar. The purpose of this amendment is to ensure that parties are notified about the ways in which the welfare of the children has been considered. This is an attempt to prevent the Secretary of State—if I may put it in a rather pejorative way—going through the motions as regards the welfare of the child.

During the passage of the 1991 legislation, I moved successive amendments in Committee, on Report and at Third Reading. In each case, the noble and learned Lord the Lord Chancellor, who dealt with the Bill, said that each amendment did not go far enough, and at each stage we tried to amend them. At Third Reading the noble and learned Lord agreed to accept the amendment on the basis that it could he changed in the other place; it was changed, and that led to Section 2 of the 1991 Act.

Under Section 2 of the 1991 Act, the welfare of any children has to be taken into consideration when discretionary decisions are made. That was the change that the Government made when the Bill returned to the other place. It refers to the welfare of any children, but only when the people concerned are involved in discretionary decisions.

In practice, although it is maintained that this is considered, we are advised that this statement is made as protection from judicial review. We are also advised that there is little evidence that welfare issues are truly considered or are given any weight. So far as we know, the CSA staff receive very little information on this subject. Staff who make the decisions must be given substantial training in issues of child welfare. Otherwise, lip service only will be paid to this issue, which should be at the centre of the provisions. I think that we can all agree with that.

Counsel representing the Secretary of State for Social Security six months ago in the Biggin case argue that: as long as the agency notices welfare in passing it cannot be challenged on the grounds that it did not attach sufficient weight to it. Welfare is not a paramount or even a particularly significant consideration". The quotation by counsel that welfare is not of paramount consideration is interesting. That is what the debate on the 1991 Act was about. In our first amendment in Committee, we tried to make the welfare of the children the paramount consideration, as the noble Baroness, Lady Faithfull, will well remember. That is in the Children Act. But in the Child Support Act, the Government were not prepared to accept that because there were other considerations to be taken into account. But the remark made by counsel in the Big gin case for the department was revealing. The judge in the case certainly thought so too. Mr. Justice Thorpe responded: If [Section 2 of the 1991 Act] has so little influence on the discretion to enforce the formula assessment, the heading words of the section seem hollow indeed. I am not convinced that the agency is at liberty to decide whether or not to issue a deductions of earnings order without giving considerable weight to the welfare principle". The response of the Government in the other place, at its third sitting in Committee, was that that was unnecessary as all reasons should be given in the decision and it would be wrong to single out the welfare of the child.

The Minister provided Members of Standing Committee E with a note concerning the guidance given to CSOs when dealing with the welfare of the child, arguing that among the other factors which form part of a CSA decision are the interests of the taxpayer. I have a copy of that note, which was placed in the Library of the other place by Mr. Alistair Burt on 24th April. He gives the background to the consideration of the welfare of the child.

It is interesting that at the end of the note—the Minister goes into some detail—paragraph 11 says: A code of practice is being developed which will give advice to staff and information to advisers. It will be available later this year". It seems odd to me, unless I have missed the point, that we should still he waiting for a code of practice which spells out to advisers what they should do about this consideration of the welfare of the child.

In practice, the reasons given for decisions of CSOs and the Secretary of State do not include details as to the welfare of the child. This amendment is intended to persuade the Government to give a commitment about the importance of this issue, which was fought hard for—I can speak from experience—during the debate in 1991.

The guidance referred to by the Minister in the other place—the child support manual and the child support adjudication guide—advises CSA staff to consider the welfare of children when making discretionary decisions. It would be surprising if it did not, because that is a requirement of the 1991 Act. However, it does not include guidance about how such decisions are to be made. The only factor specifically mentioned is that of mental or physical disability.

Also, it is incorrect to include the interests of the taxpayer as a factor which must be taken into account by CSA staff. I am sure that the Minister, when he responds, will refer to the interests of the taxpayer. But that is a matter for the Government. They are dealing with the Bill. It is not a matter for the CSA staff. Unlike the duty of parents to maintain children in Section 1 of the 1991 Act and the welfare of the child in Section 2, the interests of the taxpayer ate not contained in the Act at all as a specific requirement to be considered.

We would argue that the reality is that under the current arrangements there is little or no obligation for the child support officers formally to consider the welfare of the child. The commitment to ensuring that decisions are made with regard to that factor is, as I said, demonstrated by the lack of guidance to CSOs about how to implement the provision in practice.

Departure introduces new powers of discretion to the Child Support Agency. In that situation it is essential that the welfare of the child is properly taken into account. This amendment could help to ensure that the agency implements the provisions regarding the welfare of the child made—with a lot of effort, I have to say, in this House and another place—under Section 2 of the 1991 Act. I beg to move.

8.45 p.m.

Earl Russell

I am glad that the noble Lord, Lord Carter, moved this amendment. It is a good amendment. Naturally, I should like to see a stronger one, but if I could not have a stronger one I would rather have the amendment of the noble Lord, Lord Carter, than mine.

Amendment No. 43, which stands in my name, is a good deal more forceful. In 1991 I was one of those who argued against using the word "paramount" in relation to the interests of the child. Mea culpa, I had not realised that the effect of attempting to be reasonable would be to weaken the weight of "the welfare of the child" quite so drastically as it has done. I had not realised that in trying to avoid a situation in which one interest takes priority over all others regardless of the details I had helped create a situation in which the interests of the child had become entirely nugatory. I am ashamed of myself.

As things stand at present. Mr. Pannick, counsel for the Secretary of State in Biggin v. Secretary of State argued that welfare is not paramount or even a particularly significant consideration. In another case decided on 15th May 1995, the commissioner said: The overriding purpose of the legislation is to ensure that the absent parent makes proper financial provision for his or her children and the exercise of discretion cannot be circumscribed so as to impede that objective". In other words, maintenance must he levied whether or not it is in the interests of the child. That appears to be the present state of the law. I do not believe that it is right. After all, we were told with some eloquence in 1991 that it was all being introduced in the interests of the child.

My amendment will, I hope, force a genuine consideration of the interests of the child. It empowers the courts to consider regulations according to whether they serve the interests of the child. It is quite possible that the Minister, who does not believe in parliamentary sovereignty when it is a matter of ministerial discretion, may start to make a great speech about it as soon as it becomes a matter of the authority of the courts. But the construction of statutes is not like the clause in the Thirty-nine Articles which says that the Church may not so expound one part of scripture that it should be repugnant to another. In fact, it is perfectly clear that the courts regularly recognise conflicts between statutes and between different statutory enactments. They have rules for according priority between them. To clarify and add to those rules would not be improper nor would it be outside normal practice.

Moreover, where we have regulations, those regulations have vires. The courts have always been capable of striking down the regulations on the ground that they are outwith the vires. The Minister may remember the case of the Woolwich Building Society v. Inland Revenue, where the Appellate Committee of this House decided that the whole of the regulations were ultra vires and struck them down, lock, stock and barrel. So the effect of bringing regulations under the principle of welfare would be to add a further condition to the vires of the regulations. I do not see that there would be any problem with that.

The meaning of "welfare" is to be the same as in the Children Act 1989. We are all familiar with that. It is capable of working. It would provide for all the children in the household to be treated in the same way: children of the absent parent's second marriage and the step-children. I believe that that gives effect to undertakings made by Mr. Michael Jack in the other place on 18th July 1991. Also, it avoids the risk of a breach of the European Convention on Human Rights. Under the case of Marckx v. Belgium—that is spelt M-a-r-c-k-x in the Belgian manner, and he has no political significance whatsoever—it was ruled that under the clause of the convention requiring respect for family life and prohibiting discrimination it would be contrary to the convention to distinguish between natural children of the household and step-children and others residing in it.

So, if we are not to add another to the sad list of our violations of the European convention, the Minister might do well and might save the Government considerable legal costs if he were to accept Amendment No. 43 now. I hope that the Minister will think very seriously about that.

Lord Mackay of Ardbrecknish

Whenever the Secretary of State makes a discretionary decision he is required to consider the welfare of any of the children concerned in the case. Amendment No. 25 would require information about the matters which have been considered in relation to welfare to be conveyed to both the parties to an application for a departure.

If consideration of the welfare of the child affects their decision, the matter will already be covered by the existing wording of Clause 6. Where it does not affect the decision, the amendment would lead to gratuitous information about one parent's family circumstances being passed to the other parent. We shall have to give a great deal of information to each parent about the other. I do not want to add unnecessarily to the information about the family circumstances of one parent that is conveyed to the other parent. For that reason I ask the noble Lord to withdraw his amendment to Clause 6, bearing in mind that if consideration of the welfare of the child affects their decision, that is already covered by the wording in the clause.

The noble Earl, Lord Russell, in proposing other amendments relating to the welfare of the child, is addressing issues which arc already part of the substance of child support legislation. Section 2 of the 1991 Act exists to ensure that the welfare of the children is given due weight when discretionary decisions are taken on cases.

The noble Earl wishes to incorporate the 1989 Children Act definition of welfare into the Child Support Act. But Section 1 of the Children Act relates to specific, limited circumstances and to the decisions of courts in those circumstances. The wording of the Children Act section does not readily translate across to child support. Section 2 of the 1991 Act ensures that whenever discretion is being applied, the welfare of any child likely to be affected is considered. I have no evidence which suggests that officials are neglecting their responsibility in this matter. Crucially therefore, the 1991 Act already ensures that due weight is given to the welfare of the children concerned.

Lord Carter

I am grateful to the noble Lord for allowing me to intervene. We have seen evidence which perhaps is anecdotal. However, if I send it to the noble Lord perhaps he will consider it in the light of what he said.

Lord Mackay of Ardbrecknish

I shall be happy to look at any evidence which the noble Lord has in this regard; and, as I always do, I shall reflect on the various points made during the debate.

Section 1 of the Children Act is specifically about the determination of questions which are central to the child's life—his upbringing; or the administration of his property or the application of any income arising from his property. It also relates to residence and contact orders, and to care and supervision orders. Clearly, in those circumstances, it is right that where the child is so pivotal to the discussion, his welfare should be paramount. However, the impact of child support goes wider than just the child. It is important for Parliament to consider the position of all the people with an interest: the children, their own parents and the wider community of tax payers.

Parliament supports the principle that parents should maintain their own children if they can afford it. The Government believe child support improves the position of children whose parents live apart by opening up opportunities for the parent with care to become self-sufficient by taking up employment, which not only improves the family's standard of living but also has wider implications for the messages given to children about individual responsibility. It was never the intention of Parliament that Section 2 of the 1991 Act should be used to undermine the basic principles of that Act. Yet the noble Earl's amendment would have precisely that effect. It would tie the decision-making process up in knots whenever discretion was involved.

Section 2 of the 1991 Act relates to the exercise of discretion in any case, and the section has no application to the making of regulations. The section is confined to the exercise of discretionary powers by the Secretary of State or a child support officer in individual cases. The noble Earl, Lord Russell, goes further than Section 2 of the 1991 Act by requiring the welfare of the child to be considered whenever the Secretary of State exercises his regulation-making and amending powers. The wording of Section 2 is not appropriate to the general power of the Secretary of State to make regulations under other sections of the Act. If Parliament wished to impose this requirement, then it would be more appropriate to do so either in the individual sections which give the regulation-making power, or in Section 52 of the 1991 Act, which gives a general regulation-making power.

Having said that, I may invite the noble Earl to try an amendment in that regard. However, my answer may be the same so perhaps I can help him, or at least help the rest of us and save the noble Earl the problem of devising more amendments. Bearing in mind the number of amendments the noble Earl has tabled, I am surprised that I have seen him around the place in the past week or so. Such is the quantity of drafting and knowing the time it takes to get drafting out of parliamentary draftsmen, I congratulate the noble Earl on the way he managed to draft these detailed and complex amendments.

I do not believe that it would be right to attach the welfare of the child provision to the Secretary of State's regulation-making powers. Parliament decided that child maintenance should be set within a clear framework, which takes due account of the needs of all the parties involved. It also decided that, fundamentally, the welfare of the child is best served through the support of his own parents based on their ability to pay. There are already safeguards to ensure the proper use of regulation-making powers, such as those relating to intra and ultra vires, and unusual and unexpected use of powers.

The noble Earl's amendment would make the Secretary of State liable for the actions of child support officers in the context of Section 2, but would nevertheless create a situation in which individual staff members making decisions on a daily basis would be fearful that their decisions, honestly made, would be subject to court action simply because one or other of the parties objected to them.

As I have explained, consideration of the welfare of the child is already given due weight in child maintenance matters. That is why I do not believe it would be appropriate to write into the Bill this amendment as proposed by the noble Earl, Lord Russell.

The noble Lord, Lord Carter, asked if we would publish the guidelines on the welfare of the child. Instructions to consider the welfare of any children involved are currently in several procedural guides used by the Child Support Agency staff, and the agency makes those guides available on request. However, the department is in the process of preparing a comprehensive guide for the use of staff making discretionary decisions on behalf of the Secretary of State and in due course that guidance will also be made available on request.

Earl Russell

I do not know by what authority the Minister tells us what was the intention of Parliament in 1991. This provision was introduced in this Chamber. At least three people are present who shared in the responsibility for introducing it. The Minister was not present. How does he know what the intention of Parliament was in 1991? It was certainly my intention—the noble Lord, Lord Carter, and the noble Baroness, Lady Faithfull, may or may not say it was theirs—that the welfare of the child should be taken into account in making assessments; that we should not have an assessment which was contrary to the welfare of the child. That is not happening.

I can quote one recent communication from the Child Support Agency to a solicitor who was dealing with a case based on Section 2. He said: I note your comments regarding the welfare of the children in this assessment. However, you must realise that whilst it is of undoubted concern to the parties concerned, it is not a matter to which the Child Support Agency can become a party". Is the Minister really sure that Section 2 is being so fully taken into account? I quoted a commissioner's decision. I shall give the Minister the reference for that decision and I hope he will check it before we return to this at another stage. I refer to case CCX/011/1994 Kirkley, decided on 15th May of this year.

I hope that the Minister will think again about whether the welfare of the child is being adequately taken into account. It is not being adequately taken into account if it does not influence the assessments. Before the Minister again invokes the interests of the taxpayer, I remind him that I am a taxpayer and I would be ashamed to build my prosperity on the unnecessary and useless ruin of other households, especially since I think that I would end up paying more taxes in the end because they would not be able to pay any more. So, altruism and self-interest always work in the same direction—

Baroness Seear

Not always.

Earl Russell

My noble friend Lady Seear says "Not always", but that depends on whether self-interest is adequately understood because often it is not. On that point, my noble friend is entirely right. It is not always perceived.

I see nothing whatever wrong with imposing further conditions on the vires of regulations, but if this is not the right place to do it, I shall think about it. I am afraid, however, that the Minister may hear more of this later. I am not satisfied by his replies and until the welfare of the child is actually taken into account, I will not be satisfied.

9 p.m.

Lord Carter

I am extremely grateful to both the Minister and the noble Earl, Lord Russell. I am prepared to concede that the noble Earl made a very good point, although he was extremely rude about one of our amendments earlier. Besides the welfare of the child being paramount, the welfare of the noble Earl is always paramount for those of us who have had to deal with social security matters over many years.

He is right that we accepted in the 1991 Act that it was wrong to regard the concept of the welfare of the child as paramount. I am sure that the noble Baroness, Lady Faithful!, remembers that we moved an amendment in Committee to establish that concept and that the noble and learned Lord the Lord Chancellor pointed out that we could not make it paramount because of all the other considerations that had to be taken into account. We accepted that on the legal basis. However, we have since found that, in practice, if it is not being ignored, it is largely neglected. We shall have to return to that point in one way or another and send the Minister evidence, which I am sure he will consider, of cases where that is actually happening.

The noble Earl, Lord Russell, did not say much about Amendment No. 44, which includes in subsection (2) the remarkable phraseology, 'ordinary circumstances' include any circumstances which are not extraordinary or amazing". I do not think that I have ever seen those words before in legislation. Perhaps it was "extraordinary or amazing" that the noble Earl made a Freudian slip, thinking of the possibility of a Liberal Government. I understand that that event is likely to coincide with the bicentennial celebrations of the 1906 Liberal Government.

The Minister has answered our point on Amendment No. 25 in which we sought to deal with a narrower point. We are still not totally happy about the way in which this matter is being handled. As the noble Earl said, we should remember the intention of Parliament. It was not only the expression of this House but actually an amendment moved by the Government in another place, which ended up as Section 2 of the 1991 Act. That led the Government to spell out how they saw the welfare of the child. We do not think that now, in practice, the welfare of the child is being taken into account as it should be. Perhaps we were wrong not to insist at the time on wording to make the welfare of the child paramount, but we understood the legal reasons for that. We are now not sure that that wording is right. As I said, we shall have to return to this point on Report but, at this stage, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 agreed to.

Schedule 2 [Departure Directions: The Cases and Controls]:

[Amendment No. 26 not moved.]

Earl Russell moved Amendment No. 27:

Page 25, line 21, leave out ("may") and insert ("shall").

The noble Earl said: Amendments Nos. 27 and 38 are cases of what I may describe as "negative discretion" where discretion is used to restrict the legal rights that people might otherwise have enjoyed rather than for purposes of the prerogative of mercy. I shall endeavour to be fairly quick because I hope that the Minister can give me some at least moderately reassuring answers.

Amendment No. 27 deals with the provision for departures. The grounds for departures are to be laid out in regulations. The schedule lays down that the Secretary of State "may" make regulations. Why can it not say "shall"? Does that cautionary use of the word "may" indicate that the Secretary of State, after having all this power to create departures conferred on him and after all the fanfare of trying to make out that all injustice is now rectified, may not do anything about it? If so, I may be tempted at some later stage to press the amendment. I hope that there is a minor reason why the provisions state "may" and I look forward to hearing what it is.

Amendment No. 38 deals with circumstances being prescribed by regulations in which the Secretary of State may disregard travel costs. Again, we have no limit on the vires of that. As the Minister knows, I am interested not only in regulations and in the policy intention, but also in what other people could do with the regulations at some future time. I am afraid that that will always be the case. When regulation-making powers are granted, if we want an early night it be worth drafting them in such a way that other people cannot do too many different things with them. I beg to move.

Lord Mackay of Ardbrecknish

Amendment No. 27, as the noble Earl explained, seeks to place a duty on the Government to prescribe all the categories of special expenses listed in the new Schedule 4B, as introduced by Schedule 2 to the Bill, as grounds for departure. I am happy to assure the Committee that it certainly is the Government's intention to bring forward regulations to cover all of the areas mentioned in the schedule, but I do not consider it appropriate that the primary legislation should impose such a duty.

We have given careful consideration to the expenses that parents should be able to rely on as grounds for a departure. It would, of course, be possible to draw up a very long list of expenses which any individual may have. But it would be wrong to place all other expenses ahead of child maintenance. We have always made it clear that child support should be the first call on a parent's income, not the last. We must guard against a return to the old system where child support had become almost an option after all other possible expenses had been met. A parent's first duty must be to support his child whenever he is in a position to do so.

We have made it clear that, at least at the outset, the departure system will he tightly circumscribed. The formula assessment will be the norm; departures will provide the flexibility to deal with the exceptional. The list of expenses in the schedule is framed to meet the major concerns which have arisen since the scheme began operating, and there is a power to include other types of expenses should this at any time be considered right. At the same time, experience may show that there are good reasons why a particular type of expense should no longer be included as a ground for making a departure direction. It should be open to the Government to propose amending the list of expenses—whether by adding to or subtracting from the list—if that seems right. I am happy to repeat the assurance I gave a minute or two ago that it is the Government's intention that all these areas will be included.

I turn now to Amendment No. 38 which, as the noble Earl, Lord Russell, explained, seeks to remove reference to one of the additional grounds for departure. This is the provision to allow either party to argue that the travel-to-work costs of the other party should not be allowed in the formula assessment. From April, the Government introduced a broad-brush allowance into the maintenance formula to meet high travel-to-work costs. It is our intention to allow the other parent to apply for a departure direction where the application of this allowance is unreasonable.

We recognise that many absent parents, and indeed parents with care who are in work, have always travelled some distance to work, or may have no option but to live a long way away from their place of employment; for example, because their job has relocated or there is no suitable employment in their local area. In such cases it is right that there should be provision for some allowance in the formula to take account of high travelling costs. That is why the Government introduced the broad-brush formula allowance in April. Furthermore, where the broad-brush formula allowance does not properly reflect the cost an individual may incur in travelling to work, he may apply for a departure from the formula so that some account is taken of these extra expenses.

Having said that, there will be instances where an individual is able to satisfy the simple conditions to qualify for a broad-brush formula allowance but it can be argued that it is unfair to allow that to lead to lower maintenance for his children. For example, where an individual has chosen to move some considerable distance from the area where he works, in the full knowledge that the journey is not served by public transport and that travelling costs will be high, the other party may reasonably argue that he should accept the consequences of that choice and not seek to defray the costs at the expense of his children. For those reasons, and having heard my explanation, I hope that the noble Earl will withdraw his amendment.

Earl Russell

I am grateful to the Minister for the care which he has taken. He tempts me once again to enter into a discussion of his claim that child maintenance ought to take priority over all other expenses. I shall resist the temptation, but I shall not promise to do it all night. If the Minister wants us to get on, he would be wise not to go on asserting the general points of his thoughts, which a large number of people are likely to want to challenge. I resist the temptation, but only for the time being.

I understand what the noble Lord is saying about the policy intention as regards Amendment No. 38. As I understand it, he means to introduce a provision on intentionality very much along the lines of intentional homelessness. It is not quite the happiest of precedents, but at least it is intelligible. That view, although neither true nor interesting, is at least intelligible, as Bernard Shaw might have put it. But if that is the Minister's policy intention, why does he not say so? Why wrap it up in this general Humpty-Dumpty formula, saying that he can leave out anything he likes; ignore anything he likes and give the Secretary of State discretion to do whatever he likes? It is not the right drafting way of achieving that policy intention.

As regards the main amendment, I am not entirely satisfied with what the Minister said. At this time of night I shall not go into the reasons why, although I believe that he can probably guess pretty well all of them. However, he has given me the major assurance that I wanted that the Secretary of State definitely will introduce regulations. With that, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 28:

Page 25, line 22, at end insert ("including the costs of car ownership when it is impossible or unreasonable to expect the applicant to travel to work by any other method").

The noble Earl said: This amendment is of some importance; indeed, it is one of the most important amendments which I have left tonight. The Minister is familiar with the general outline of the argument. In fact in the Statement on 23rd January he went so far as to express a very faint scintilla of sympathy for it, but it was very faint. He did not lead me into any false hopes.

My concern in this amendment, which deals with car ownership, is that people must remain able to continue going to work. That is in the interests of the children because maintenance cannot be paid if they do not; it is in the interests of the taxpayer because those people cannot pay taxes if they do not; it is in the interests of parents with care if maintenance is in any way above income support level as it is, sometimes.

Sadly, an increasing number of people live in places, especially country areas, where they cannot go to work unless they travel by car. It is a time too when, in the spirit of the Jobseekers Bill, people are being encouraged to travel longer and longer distances to work. If you have a car, you may not find that going to work takes up a particularly high proportion of its use, but if you cannot maintain the car you cannot work. So unless the formula allows you to meet the standing costs of owning a car (the road fund licence, the insurance and the MOT) then you cannot go on working. Also, as often happens—it has happened to a number of the people who have corresponded with me about the Bill—you may be buying the car on an instalment payment system. If you cannot pay those instalments, then you cannot continue to go to work.

I had a letter from someone who was caught by all those things; he called the Child Support Agency helpline to ask how he should cope. He was advised to sell his car. That cannot make sense. I know that the Social Security Select Committee was not persuaded by that point, but its reasons for not being persuaded were less than clear.

If the Minister will not accept the amendment, the Government will be pushed into a position where they find that they are under pressure to lay on adequate public transport to every place in the British Isles. The cost implications of that are fearsome. You cannot press people to do what they cannot do. The interests of keeping people in employment need to come first; neither children nor anyone else benefits if that is not the case. I beg to move.

9.15 p.m.

Lord Mackay of Ardbrecknish

As the noble Earl explained, the amendment seeks to place a duty on the Government to provide for the cost of car ownership where the use of a car is essential for the purposes of travelling to work.

Earl Russell

The Minister may, entirely inadvertently, have misled the Committee. I was not asking the Government to provide for the costs but to allow for them. There is a significant distinction.

Lord Mackay of Ardbrecknish

Yes, indeed; I stand corrected. I may come to the question of whether people should be provided with these costs slightly later in my argument. Yes, the costs should be allowed for in the calculation of maintenance.

The Committee is aware that the Government intend to bring forward regulations for each of the grounds for departure listed under the category of special expenses. The detailed criteria for the granting of departure directions for each of the grounds are being considered, including the possibility of making some allowance for the costs of car ownership, at least in limited circumstances.

The Bill deliberately does not go into detail on the criteria for qualifying for a departure direction under any of the grounds, partly because extensive detail is inappropriate in primary legislation but, more importantly, to provide the maximum possible flexibility to adjust the system in the light of experience. The Delegated Powers Scrutiny Committee explicitly approves that approach in its report when it says: We … consider that it would be difficult to see how substantially greater detail could be written into the bill". To expand upon the specific issue of whether some account should be taken of the costs of car ownership where use of a car is essential for the purpose of travelling to work, I should say that that raises some difficult issues that need careful consideration.

The majority of people—we are still very much an urban-based society—have the option of using public transport to go to work. However, there may well be some instances where individuals have no option other than to travel to work by car; for example, where there is no public transport available or where a disability makes use of public transport impracticable. But it is extremely unlikely that someone in that position would run their car for the sole purpose of travelling to work and not use it for other social and leisure purposes. The question therefore arises of whether it is right to make allowance for the costs of car ownership aside from the cost of fuel on the journey to and from work. Where people travel by car purely as a matter of personal preference, there is a strong argument that petrol costs in excess of the cost of public transport should not be considered for the purposes of the departure scheme. There are considerable difficulties surrounding the whole question of how one should or could take into account the costs of car ownership in the question of travel to work.

Baroness Seear

The Minister must realise that in parts of the country there is no public transport. For instance, in parts of Cornwall one cannot hold down a job unless one has a car. There is not the transport.

Lord Mackay of Ardbrecknish

Of course I understand the point that there may not be much public transport. The noble Earl rightly pointed out that it would be prohibitively expensive to arrange public transport in every corner of the Kingdom where someone might fall into this category. Therefore, I fully appreciate the importance of car ownership.

However, car ownership goes a little wider than the absent parent. It goes to the next-door neighbour, whose position I raised previously. He may be happily married and living with his children and, equally, he may need to use his car to go to work. He too will have car costs which he must balance against his obligations to look after his wife and children. He is unable to claim those costs either through the income tax system or through family credit if his wages are sufficiently low.

In this regard, we must try to bear in mind the wider public. I agree that there are difficult issues and I have indicated that we are looking at how to deal with the costs of travelling to work if the person concerned must go by car. I have pointed out a number of issues. I am not sure whether the noble Earl accepts them, but I believe that they are clear and concise. First, they refer to all the population who could be in the same position as regards travel-to-work costs and who do not receive help with those costs. Secondly, they are how to define car costs as opposed to petrol costs when it comes to how much use the person makes of the car for one purpose against another.

This is a difficult issue. I hope that I have indicated to the noble Earl that we are looking carefully at how we can make some allowances for those costs. However, I should not like to pretend for one moment that it would be easy to do so or that they could be given at the rate I suspect he wishes, which is probably very generous, to the absent parent, unlike the poor neighbour who has no such help.

Baroness Faithfull

The Minister said that this is a difficult issue. Does he agree that in some cases it is more expensive to travel by train, especially as fares are rising, than it is to travel by car? Should we not bear that in mind?

Lord Mackay of Ardbrecknish

My noble friend and I might have a discussion about that matter. It might depend, for example, on whether one has parking charges when one gets to work. I suspect that while some train journeys may be comparatively expensive, the total costs of car ownership are such that those journeys are very few.

Lord Simon of Glaisdale

This may be a convenient moment to review the departures as against the various headings in sub-paragraph (3). As regards the departures, all are the kind of issues which the magistrates' courts took into account before 1991 and that the family court will take into account when it is established. Secondly, every single one was urged by way of amendment to the 1991 Bill. Thirdly, every single one was resisted. Fourthly, we were unable to carry them in a Division because the Chamber was habitually as empty as it is now late at night, and we knew that the Chief Whip had his little possé outside, including the payroll vote.

It is depressing that by bringing forward these departure headings the Government now recognise that in 1991 they were wrong and your Lordships were right. What is even more depressing is that the Minister, however able—and perhaps it is worse that it has been done so ably—has set his face, as it was set in 1991, against every single amendment which has been put forward.

At any rate, it would have been disarming if he had said, "Yes, we were wrong then and, in view of that, we are considering what is now urged with an open mind". We might have accepted that. But what is unacceptable is the same bland assurance that we had in 1991 that everything in the Bill is absolutely tickety-boo. So much for the departures.

I turn now to the sub-headings under this paragraph. Again, they deal with the sort of matters which magistrates' courts considered. In relation to travel costs, the Minister said that it is difficult to provide otherwise than by regulation for particular cases where travel costs may be exceptional; for example, where there may be rural bus difficulties, train difficulties and so on. Of course, he is right. But those are essentially the sort of matters which a local magistrates' court knows all about and would allow for.

The same applies to the other headings. Therefore, perhaps I may say with real respect to the Minister that it is not good enough for him to utter the same bland phrases which we heard before and to dismiss every single amendment that is put forward. The matters have been argued cogently and the noble Earl has been particularly impressive with his great knowledge of constitutional history and law. It has got him nowhere. Not a single argument has been conceded. All have been brushed aside. I hope that the Minister will be able to assure us that some little flexibility and humility will be shown when further amendments are proposed.

Lord Carter

The only correction which I would make is in relation to what the noble and learned Lord, Lord Simon, said when he referred to the fact that, during the passage of the 1991 Act, the Chief Whip had his "little possé" outside. As I remember it, it was a very big possé.

Those of us who were involved with the 1991 Act make our remarks under the general heading "I told you so". The Minister will become fairly bored with that as we proceed through the Bill but we shall keep reminding the Government of it.

I understood much of what the Minister said. He said that it would be difficult to determine costs in relation to car ownership. The drafting is not perfect because it is the running of the car that is important rather than the ownership. I have been involved in management accounting for 40 years and I can tell the Minister that it is quite possible, bearing in mind all the other difficulties of the formulae, to calculate the proportion of the running costs of the car involved in travel to work. Other than that, I understood many of the arguments which the Minister put forward.

Earl Russell

I am most grateful to the noble and learned Lord, Lord Simon of Glaisdale, for giving vent to the impatience which we all feel at the continual resistance to any attempt to be genuinely helpful. It is the glory of this Chamber that those remarks came from the Cross-Benchers and we on the Front Bench of the opposition parties have bitten our tongues. I am glad that it is that way round. It is right that it should be so.

I turn now to the Minister's remarks. In an amendment dealing with car ownership, I might be misunderstood if I said that I did not know whether it was a light at the end of the tunnel or an approaching train. However, the Minister gave a very faint ground for hope. I grant that there are difficulties, but I agree with the noble Lord, Lord Carter, that they are no greater, in fact they are possibly considerably smaller, than other things which we have included in the formula. As the noble and learned Lord, Lord Goff of Chieveley, put it in the case of Woolwich Building Society, to which I recently referred, caution, otherwise known as the Treasury, would never allow it". But caution, otherwise known as the Treasury, by its caution runs itself into all sorts of trouble from which anyone with a genuine concern for saving public money ought to rescue it.

The Minister put forward two arguments which need different sorts of answer. The first is the case of the poor, next-door neighbour. I do not believe that the Minister rightly understood that situation. If the poor next-door neighbour were to attempt to sell the car which takes him to work in order to give more maintenance to his children, I do not believe that his wife or his children would be particularly appreciative. In fact, I think that they would tell him in words of one syllable—or even less—that he should give up any idea of doing any such thing.

It is not, in fact, the case that people living in ordinary happy or moderately happy marriages maintain their children at the expense of going to work. If they should ever attempt to do so, they would of course fail. So the Minister has invoked a comparison which should in principle have been fair; but he has entirely misinterpreted the way that it actually works. In effect, it works against his argument and not for it.

The second point relates to caution, otherwise known as the Treasury. It is the one about the sole purpose of car ownership. It is, of course, possible that people will use cars for other purposes. I am not arguing that they should be allowed the petrol for the mileage used for other purposes. As my amendment says, my basic concern is with ownership. After all, people can give up taking their children to the zoo on a Sunday afternoon. It may not be a good thing for them to do so, but they can. So they could make such adjustments. However, unless they keep the car in such situations they simply cannot go to work. Therefore, there must be an allowance to cover all those costs without which you cannot own a car.

The word "ownership" was chosen for the amendment in order to cover the road fund licence, insurance and the MOT; in other words, those things which simply must be done otherwise you cannot run a car. If people are going to be stopped doing that then working is impossible. Therefore, I argue that the full cost of those expenses should be allowed but that the mileage for private use should not. I see that the noble Baroness wishes to intervene. I give way.

9.30 p.m.

Baroness Hollis of Heigham

I am grateful to the noble Earl for giving way. I am now somewhat confused. Under the heading "Special Expenses" in new Schedule 4B, paragraph 2(3) (a), reference is made to, costs incurred in travelling to work", as a grounds for departure. Is the Minister saying that where those costs are incurred when the only means of travelling to work is by car they may not be counted? I must say that we had assumed that the noble Earl's amendment referred to the difference between the costs of travelling to work by car and full ownership. In that respect, we sympathise with the Minister's comment about the analogy with the next-door neighbour.

It would assist us if the Minister could make it clear whether the Government accept that costs detailed in the new Schedule 4B include the cost of running a car in so far as mileage is associated with going to work and that he is merely excluding the additional costs of the car beyond that point.

Earl Russell

Perhaps I can help the noble Baroness. She might find it useful to look at the exchange on this between the Minister and myself on 23rd January when we had the Statement. The position is that the mileage is allowed but the costs of ownership—the ones to which I have been referring—are not. If anything, I think that that is the wrong way round but as we have a lot of things in front of us at the moment, and clearly with the regulations to come we have many more different arguments about this also to come, I shall beg leave to withdraw my amendment for the time being. However, discussion on this subject in public and, I hope, in private may continue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Simon of Glaisdale

I beg to move that the House do now resume. I promised the noble Lord the Chief Whip, whom I am glad to see has returned to the Treasury Bench, that I would not move this Motion until 9.30. May I repeat what I said on the earlier occasion? The Committee is, like most second Chambers, an elderly Chamber. The Committee is, unlike most second Chambers, an unsalaried Chamber. It is quite unreasonable to keep the Committee up on a Bill of this importance at very late hours. However, the matter is far more important than that. At this hour of night, with the Committee as it is, it is quite impossible for the Committee to perform its proper parliamentary function. We saw that in 1991 and the result has been—it should be recognised—a legislative disaster. We do not want another one. It is extremely bad for the Chamber. So I hope we may he assured that the Committee will now adjourn as there can be hereafter no realistic test of opinion in the Lobbies. I beg to move that the House do now resume.

Moved, That the House do now resume.—(Lord Simon of Glaisdale.)

Lord Mackay of Ardbrecknish

I listened with care to the noble and learned Lord, Lord Simon of Glaisdale. However, I do not agree with him. We have a programme to get through and many amendments have been tabled. I know that it is late but, frankly, it is early in comparison to two of the Committee days last week. I believe we can go a little further. I shall try to exercise some restraint in the length of my speeches and I hope that that will encourage a precedent to be set. We shall try to make some progress because otherwise we shall be in exactly the same situation tomorrow night. I believe that we should make progress tonight as far as we possibly can, as has been agreed through the usual channels. I understand that the noble and learned Lord has tabled some interesting amendments to be discussed later and I understand his concern not to stay here too late. However, I rather fear that if we are to make progress we shall have to do just that.

Baroness Hollis of Heigham

I wish to support the Minister. I, too, feel that we should continue, at least past 11 o'clock tonight, and possibly later, because otherwise we shall certainly he here until gone midnight tomorrow. It seems only reasonable that we should try to get the bulk of the business done today if we can.

Lord Simon of Glaisdale

It is not ordained from Heaven that we have only two days on this Bill in Committee. Perhaps the Minister would say up to what hour he considers it reasonable—

Lord Carter

It is ordained from a much higher authority—the usual channels.

Lord Simon of Glaisdale

I am afraid that I do not quite know where I am at the moment, and my hearing instrument has come adrift.

The Minister has conducted this Committee stage to all our admiration. Perhaps he will indulge us by saying up to what hour he thinks it reasonable for the Committee to sit tonight on a Bill of this kind. However, I shall not hear what he says.

It is a matter of great joy to us that the noble Lord the Government Chief Whip has been honoured by being summoned to the Privy Council. This is an admirable opportunity for him to show his good will to the Members of the Committee.

On Question, Motion disagreed to.

[Amendment No. 29 not moved.]

The Deputy Chairman of Committees (Baroness Lockwood)

Amendments Nos. 30, 31 and 32 have been wrongly marshalled. I shall call Amendment No. 31 first.

Earl Russell moved Amendment No. 31:

Page 25, line 40, at end insert: ("() costs incurred to support a young person in further or advanced education;").

The noble Earl said: I shall be very brief with this amendment because before we discuss it sensibly there needs to be discussion between the Department of Social Security and the Department for Education.

The liability to maintain a child continues only up to 18, but the need to pay a parental contribution for the child's university education extends well beyond that. The parental contribution may be considerable. A parent who is paying the parental contribution will need a departure in order to allow him to continue to do so. That may be in the interests of the children of the family as a whole.

Either the parent should not be bound to pay a contribution under the Department for Education regulations or, if he pays that contribution, the paying of the contribution needs to be taken into account by a departure under the formula. It is not of desperate importance to me which way that is done, but I hope that the two departments will succeed in getting their heads together and working out a way of making this work. We have enough problems in education with parents who cannot pay the parental contribution without adding any more. I beg to move.

Lord Mackay of Ardbrecknish

The amendment proposes a further ground on which an application for a departure might be made—that of costs incurred in supporting a young person in further or advanced education.

Clearly the Government acknowledge the importance of further education and of educating young people. However, we cannot accept that expenses incurred by parents for this purpose should be placed above their responsibility to meet the basic needs of their dependent children. That would he the effect of the amendment. Children who are dependent must take precedence over those who are no longer dependent. Young people who are in further education are no longer dependent. That is a rule which child support has in common with social security benefits. We have always made it clear that a parent's first duty is to provide for the basic needs of his own children, whenever he is in a position to do so.

Where a parent with care has young children for whom she receives child maintenance under the formula as well as an older child in college, she would receive no additional maintenance in respect of the student. It therefore seems illogical to allow an absent parent to apply for a departure on the grounds that he is contributing towards the support of a young person in further education.

It would be quite wrong to let the costs of higher education for an older child take precedence over the basic costs of supporting younger children.

We propose, and are introducing, a system for departing from the formula amount for child support maintenance because we accept that there are cases where the lack of recognition of specific expenses in the formula can cause problems for both absent parents and parents with care. We carried out a thorough review of the child support scheme, culminating in the issue of the White Paper in January. We listened carefully to all representations from Members of Parliament, Members of this House, parents with care, absent parents and their representative organisations.

The list of special expenses that we propose to allow through the departure system reflects our careful consideration of what appeared to be the areas of greatest concern during that review. There were minimal representations on the issue of costs associated with supporting young people in further education in the context of child support. I do not believe that it is necessary, therefore, to include those costs in a scheme intended as a safety valve to relieve areas of greatest pressure.

I have made clear on a number of occasions that the departure system is designed to deal with the issues that have been of major concern since the Act came into operation. It is not our intention to allow any conceivable expense to be cited as grounds for a departure order. To do so would be to return to a discretion-based free-for-all. Therefore, I cannot accept the noble Earl's advice that I should reconsider the matter and accept the amendment. I am afraid that I cannot accept it. I hope that he will withdraw the amendment.

9.45 p.m.

Earl Russell

I shall do the Minister the courtesy of taking that answer as a smokescreen behind which real thought can take place. It was a reflex answer. If, at the end of the day, it were to be the Government's considered position, it would mean that the children of all parents caught under the CSA would be unable to go to university. That consequence would not be in the public interest. It certainly would not be welcome in universities; and it certainly would not be welcome to the children.

The Minister's position could make sense only if the parental contribution rules were to be adjusted by the Department for Education in such a way that maintenance being paid under the CSA were allowed for in the contribution rules.

Has the Minister in fact already had any consultation with the Department for Education on the subject; or will he undertake to do so before the next stage of the Bill? If he says yes to that question, then I should be prepared to leave the matter there.

Lord Mackay of Ardbrecknish

I have not personally had consultations with the Department for Education on these matters. So far as I am aware, there has not been any formal consultation with the department. Maintenance is taken into account in the calculation of grants in much the same way as it was before the Child Support Agency was introduced. That, I believe, was the point made by the noble Earl.

I should add that in the context of child support, maintenance, as I have already said, is not an area where there has been most pressure for change. I have indicated that maintenance is taken into account. However, I shall certainly discuss with my honourable friend Mr. Alistair Burt the points raised by the noble Earl and ensure that the point that I have answered him on is correct. I refer to the fact of maintenance being taken into account in the calculation of grant.

Earl Russell

I am most grateful to the Minister for that reply. I believe that it creates the possibility of some progress taking place behind the scenes—which I think is the easiest way for it to be done.

There is, of course, a problem about the concept of a dependent child. Formally it may extend only to 18, but in practice any young person at university relying on a parental contribution is, from any practical point of view, dependent. Therefore we must either allow for that, adjust the parental contribution rules to take account of it, or deprive all those young persons of a chance to go to university. As I believe we all agree that that would be a pity, I hope that the two departments can get their act together and tell us at Report stage how jointly they would like to see the system working. Then perhaps we could discuss whether the system really will work.

With that, and with thanks to the Minister for the trouble that he has taken, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees

I shall now call Amendment No. 32 in the name of the noble Earl Lord Russell.

Earl Russell

I believe that Amendment No. 30 in the name of the noble Lord, Lord Carter, comes first.

Lord Carter

The grouping list may not be right.

The Deputy Chairman of Committees

Yes, it is.

Lord Carter moved Amendment No. 32:

Page 25, line 40, at end insert: ("() child care costs incurred by a person with care who is in full-time or part-time employment;").

The noble Lord said: I wish to move Amendment No. 32 and speak to Amendment No. 30. I am sure that the noble Earl, Lord Russell, whose name is on Amendment No. 32, will somehow find a way of entering the debate.

'The two amendments deal with child care costs as a factor in departure. The purpose is to ensure that parents with care who will suffer hardship as a result of staying in work shall be allowed access to the departure process to increase their maintenance where the money is available from the absent parent on the grounds of child care costs. It was debated in the other place, and rejected by the Government on the basis that child care costs are already taken into account in the carer element of the formula and through the provision of the new child care allowance for claimants on family credit.

I am sure that the Minister will advance the Government's argument which suggested that the carer element can be split between the cost of the parent looking after the child and the cost of paying a child minder or other carer. The Government propose that the carer element of £46.50 per week compares well with the average cost, as they claim, of child care of £40 per week. However, that would leave the parent with care just £6.50 to care for the child after paying the average child minder. We would argue that the carer element cannot be realistically assumed to cover the two expenses.

The Government have also suggested that it is unfair to place a greater burden on the absent parent. However, the Government have made provision for the financial circumstances of both parties to be taken into account before a departure direction is allowed. So the extra burden, in the Government's phrase, would only be asked of those absent parents who can afford to pay more maintenance.

The Government have also said that there was little evidence that the lack of child care expenses in the formula was causing difficulties. However, the monitoring from organisations suggests the contrary, particularly in cases where the parent with care is not claiming any benefit but is on a low income. The Government claim that in such cases the parents with care should have sufficient income, together with maintenance received from the absent parent, to meet the costs of child care. The amount of maintenance may be small. Ironically, the absent parent could have his maintenance payments reduced to reflect high travel-to-work costs, yet the parent with care will be unable to apply for similar work expenses to be taken into account.

The Government also argued in the other place that the increase in maintenance would be small; but for many lone parents who are struggling to make ends meet, any small amount would be most welcome, even if it only represented an increase of £2 or £3 a week. We argue that the actual costs are not taken into account. For example, a person with care who is in employment will receive the same level of maintenance, irrespective of whether she has to pay child care costs, as her income which is taken into account is considered before the child care costs. That is the point that I made earlier. Departure would not be granted where the costs had already been fully provided for by the standard formula.

If departure is to be operated in a just and equitable way, the extra burden would only apply to those absent parents who could afford it. Furthermore, absent parents who are having to pay child care costs in order for them or their partner to remain in employment would rightly gain from the amendment. As well as difficulties for low income second families, significant numbers of families separate with the father caring for one of the children and the mother for the others. In the situation where only one of the parents was working, that parent would pay the same amount of maintenance, irrespective of any child care costs incurred in remaining in employment.

It is an important point, it is significant for those who are affected by it. We feel that it should be rectified and that would be addressed by Amendment No. 32. I beg to move.

Earl Russell

I must confess to being out of date. I have not yet read the new report published last Friday by the Institute for Fiscal Studies and the Equal Opportunities Commission. I have been too busy preparing amendments to the Bill. If any of the arguments that are developed prove to be out of date for that reason, I should be grateful to have it pointed out.

I have no particular preference between Amendment No. 30 in the name of the noble Lord, Lord Carter, and my Amendment No. 32. The great glory of the amendments on child care is that they manage to square all the circles. I believe that they take the interests of the Treasury fully into account. My reasoning for that is like the reasoning of the Chancellor of the Exchequer in introducing the child care disregard on family credit in his Budget. That was a very welcome move by the Chancellor and the principles behind it were sound. It takes the interest of the taxpayer into account. It goes with the grain. It helps people to do what they want, rather than forcing them to do what they do not want to do. That is generally a far easier method of legislation from which to get results. That point is very far from negligible in its importance. It helps women to get back into employment. That is the ultimate justification of this amendment.

I argued at Second Reading that the 1991 Act tries to stand on a one-legged tripod. It tries to get everything out of the fathers, when what we need is a three-legged division between fathers paying what they can and mothers earning what they can. Most mothers tell us—and I believe that it is normally true—that they would like to return to work and start trying to support themselves if they could once get over the problem of child care.

Child care is extremely expensive. In our present deregulated labour market low wages are common, and when the Jobseekers Bill is in effect they are likely to become more common. Very often they do not meet the cost of child care. If we get people back into work, they will, of course, begin paying taxes. Being, as I have reminded the Minister many times, a taxpayer myself I believe that there is strength in numbers. I should like there to be more of us. That is in my interest; it would share the burden rather more comfortably. This amendment would satisfy all the interests concerned.

A study by Sally Holtermann from the Day Care Trust on which I previously relied, and which I know is known to the department, makes a case for arguing that the Exchequer would actually obtain a net benefit. I believe that the Institute for Fiscal Studies is slightly more cautious. I do not have the figures available. In either case, the costs would not be very great.

The Minister may choose to tell us that there is an adult personal allowance. There is, but it is not targeted. It is not proportionate to the amount that is actually spent on child care; so it does not provide the incentive to get into employment, the help to get over the hurdle and to float off benefit, which is what we really need.

This amendment is a central plank in our attempt to reassess what is being done under the 1991 Act. It is an attempt to share the costs round so that the burden in any one place should not be crippling. It is a constructive amendment. It is meant to help. I very much hope that it will be considered seriously.

Lord Mackay of Ardbrecknish

I do not think that there is much between us on the general matter of principle, of the recognition of the importance of child care, especially in the context of assisting lone parents back into employment. But I am afraid that I do not accept the need for such expenses to be incorporated into the departure system. Perhaps it will clarify why I do not accept that need if I explain how the current legislation makes provision for child care costs.

When a maintenance assessment is made, the first stage is to calculate the maintenance requirement, the amount calculated as necessary to meet the basic needs of the child. The maintenance requirement is based on income support rates and includes an amount in respect of the fact that a child needs to be cared for. This carer element is £45.60 if the youngest child is under 11 years of age. Because the need for day-to-day care lessens as children get older, this amount reduces with age and is removed completely when the child reaches the age of 16. The carer element is designed to recognise that either the parent with care has costs, if she stays at home and provides care; or she incurs costs in providing for care, if she chooses to work. Thus, the formula already makes a significant contribution towards any childcare costs that may be incurred.

In addition, when a working person with care is eligible for family credit, up to £40 of her income can be disregarded, as the noble Earl pointed out, in assessing her entitlement to that benefit. Moreover, the family credit rules also allow the disregard of the first £15 of any maintenance received. The additional income provided by that disregard can be used towards the costs of childcare where such costs are incurred. Where the person with carer's income is above those levels, she should have sufficient income to meet such costs. To make any allowance in child support would be to duplicate the childcare provisions in family credit by allowing twice for the same costs.

Baroness Hollis of Heigham

I am speaking now from memory but perhaps the noble Lord would just confirm one point. Am I right in saying that if you receive maximum family credit, you are not effectively in a position to take advantage of the £40 childcare sum?

10 p.m.

Lord Mackay of Ardbrecknish

If you receive maximum family credit, yes, that is probably right. My recollection of this complicated matter is that that is right.

Baroness Hollis of Heigham

I am glad to have that confirmation. In that case, it would follow that those mothers who are on family credit and the poorer mothers, because they receive full family credit, would effectively have no additional allowance for childcare. Therefore the amendment pressed by the noble Earl and my noble friend Lord Carter is even more urgent.

Lord Mackay of Ardbrecknish

Yes, but they would still have the carer's allowance which comes from the maintenance from the absent parent because, as I explained, the carer element is £45.60 of the maintenance requirement in that regard. So, while my argument is that there should not be double counting, equally my argument is that there is already provision in the system, whether or not the parent with care stays at home. The money is not designed for her. I gather that that is one of the great aggravations of absent parents, who believe that it is designed for her. It is not designed for her as some kind of spousal maintenance. It is in fact designed for her as the carer of the child. If she chooses to work, then that money obviously is available for help in providing alternative care for the child, if that is needed. I think that that is quite clear.

Baroness Hollis of Heigham

That element is certainly clear. But then there is the ambiguity that if, for example, a mother was receiving full family credit (let us say, £60 or £65 a week) and she was in work receiving another £40, and getting maintenance of, say, £50 or £60, she would be getting the carer's element in maintenance; but because she was on maximum family credit she would receive no additional disregard for childcare. But if she was getting £20 or £30 less than that in family credit because she was earning more and she was also getting maintenance, she would then be entitled to an additional disregard on her family credit. In other words, those with the greatest need and maximum dependence on family credit are least likely to benefit from the childcare arrangements and childcare allowances that they would need to propel or lever them into work.

Lord Mackay of Ardbrecknish

That is an issue on family credit, whether or not we are talking about a parent with care. Here we are talking about the parent with care and the portion of the allowance that comes from the absent parent that is designed to represent the caring part as opposed to the direct payment, if I may call it that, to the child. So the payment has already been made.

I was saying that if the person with care is eligible for family credit, then up to £40 of her income can be disregarded. I use the words "up to" because I appreciate that that does not necessarily mean that £40 is available for every case. That is one of the complexities of family credit.

My principal argument is that included in the amount of money which comes from the absent parent is a portion which takes care of, so to speak, the carer element. If that element is present, then the parent with care either stays at home, and that sum helps to maintain her in her role of looking after the child, or chooses to go to work, when that money is available to help pay for any childcare that she needs while she is out at work. As I said, a parent with care on maximum family credit is unlikely to be working full time. That would mean, therefore, that she would not require the child to be looked after for as long as if she did work full time.

Earl Russell

Before the noble Lord, Lord Carter, decides what to do with his amendment, perhaps I can answer one or two of the Minister's points. I thought he would rely on the carer element. He said £45.60 but I believe he should have said £46.50. He did not answer my point that it is not targeted money. It is not in any way related to the amount actually spent on childcare. It is flat rate and goes to everybody. In fact, the Minister would employ money a great deal more effectively if he would concentrate it on childcare. Then it would provide the incentive effect and enable people to go out to work. That is the crucial point; that people who want to work should be free to do so.

There is an issue of human rights in this regard as well as convenience to the Treasury and everyone else concerned. If the Minister is not prepared to do it this way, then he may be prepared to consider a disregard on income support. He may remember that I made that point on the up-rating statement instantly when the Chancellor brought in his concession on family credit. I know he set his face against that, so I believe he should consider this instead. The trouble with doing it only on family credit is that we help only those who have got into work already and gone through the very slow process of getting family credit set up. I know that the Government are trying to speed that up, which I welcome, but it is a slow job. We need something that will get people back to work. I believe these amendments will; I do not believe that any of the alternatives the Government suggest would. I think this is better and I look forward with great interest to see what the noble Lord, Lord Carter, proposes to do with the amendment.

Lord Carter

The noble Earl will not be too surprised when I decide what to do with the amendments at this time of the evening and at this stage of the Bill. I am now responding to Amendment No. 32 in the name of the noble Earl, Lord Russell, and I have to decide what to do with it as I moved it.

A number of complicated points were made, not least by my noble friend Lady Hollis who made an excellent point about family credit. The Government are adamant on this matter. By reading what was said in the other place I tried to answer the Government's arguments which were made there. Not surprisingly, the brief put the arguments again and did not answer the points I made. Perhaps next time I should allow the Government to make the arguments again and then try to answer them.

We have not finished with this issue. I do not intend to press the matter to a Division now. It is an important point. The report produced earlier last week by the Institute of Fiscal Studies throws some light on the whole of the family credit argument, which is extremely complicated to build into the childcare point in the Bill. We shall have to try again. We shall certainly come back to it on Report. In the meantime I beg leave to withdraw Amendment No. 32.

Amendment, by leave, withdrawn.

[Amendments Nos. 30 and 33 not moved.]

Earl Russell moved Amendment No. 34:

Page 26, line 10, leave out ("an agreement between them of a prescribed kind") and insert ("a legally binding agreement between them").

The noble Earl said: In moving Amendment No. 34 I wish to speak also to Amendment No. 36, which is a related case. The amendments deal with grounds for departure. They deal with subsection (2), where agreements will be allowed which are of a "prescribed kind". The Committee will know that I am allergic to those words. It is a particular medicine which I do not wish to be prescribed. But it so happens that I also disagree with the policy intention.

I have been trying to lay my hands on the Government's excellently lucid memo to the Delegated Powers Scrutiny Committee. They say that they will not cover all agreements and that they intend to leave out some. They are not going to deal with all legally binding debts or agreements, only with a few. I believe that that is a mistaken decision, clothed in a discretion which is so generally worded that we simply cannot address it and try to persuade them to change their mind. That is making a mistake behind a smokescreen, which is confounding a felony. I beg to move.

Lord Mackay of Ardbrecknish

We are taking Amendments Nos. 34 and 36 together as both seek to remove the power to prescribe in secondary legislation various types of orders and agreements. I shall deal first with Amendment No. 34. It relates to departure applications on the grounds of financial commitments entered into prior to April 1993, that is prior to the coming into force of the 1991 Act. It is intended that such commitments can be cited as ground for a departure order but only where a clear agreement about the maintenance liability for the children was in existence. The rationale of the Government's proposal is that parents who thought the question of their child support liability was settled and entered into the commitment on that basis have been unduly disadvantaged by the child maintenance arrangements brought in by the 1991 Act. However, if no maintenance agreement existed there should be no question of meeting other financial commitments at the expense of support for children.

The sub-paragraph the noble Earl seeks to amend provides for the type of maintenance agreement which will allow a parent to qualify to apply for a departure under this ground to be defined in regulations. Despite the conclusion of the Delegated Powers Scrutiny Committee in its report, the noble Earl continues to press for regulation-making powers to be withdrawn. The proposed amendment would take away the power that enables the type of agreement entered into by absent parents and persons with care to be prescribed in regulations.

The effect of the amendment would be perverse in that it would allow a departure where, for example, the "legally binding agreement" was solely in respect of spousal maintenance with no agreement as to the maintenance liability for children, which is clearly not the intention of the provision. On the other hand, it would exclude other cases such as those where the parents had reached a child maintenance agreement via the old DSS liable relative arrangements. That is exactly the type of case which should be allowed to benefit from the provision.

Turning to Amendment No. 36, the delegated power which the noble Earl seeks to remove is required to allow for more detailed provision to be made for property and capital settlements which are not fully reflected in the formula assessment. The intention is that a departure will be considered if the "broad brush" allowance under the regulations introduced last April underestimated or overestimated the value of the transfer or because no allowance was made and the applicant believes that it should have been made.

This is a complex area and the list of provisions is likely to be lengthy, making it unsuitable for inclusion in primary legislation. It is therefore our intention to introduce regulations to define the type of property transfer which can be considered for a departure. For example, we may wish to prescribe that items such as a second-hand car, new and valuable items of furniture, jewellery, antiques and valuable paintings may be taken into account but not used household equipment or furniture with little or no resale value or the personal effects of the family who remain in the home.

As with many aspects of the departure system, time and experience may indicate that some items should be added to or removed from the list. Members of the Committee will be well aware that changes can be made much more readily to regulations than to primary legislation and that they are therefore the most appropriate vehicle for dealing with this issue.

Regulations will, of course, be subject to the affirmative procedure since their exercise will directly affect access to the departure system. In common with the other delegated powers in the Bill, the case for this provision has been accepted by the Delegated Powers Scrutiny Committee. With that explanation of the sort of use that we shall make of the two regulation-making powers, I hope that the noble Earl will withdraw his amendment.

10.15 p.m.

Earl Russell

I very much hope that the Minister will take the Delegated Powers Scrutiny Committee quite as seriously as this when it finds against a Government Bill. The Government have been known—

Lord Mackay of Ardbrecknish

Perhaps I may remind the noble Earl about the decisions I took on the Jobseekers Bill in pursuance of what that committee said.

Earl Russell

That is a fair point, but I believe I said "the Government" and not "the Minister". I did not mean to make any personal reproach of the Minister. The example I had in mind was the provision in the railways Bill to override the hybrid instrument procedures of this House. The committee expressed itself very strongly on that. The Government were not impressed. If they have the right to a judgment separate from the committee, then, although I take the committee very seriously indeed, so must I. I was also expressing a doubt about the policy intention. Without a doubt about that, I would not have pressed this matter further.

Before leaving the subject, I refer to the Minister's statement that changes can be made more easily by regulations. He did not say by whom. The Government are not the only people who want to change anything in the whole of our legislative system. Occasionally, some of the rest of us want to address the need for change in a particular area. When the matter we wish to change is in regulations it is, as this House discovered on 6th July 1992, extremely difficult to do anything about it.

I am still not at all clear what agreements of a prescribed kind, or any other, the Minister wishes to disregard. I am not at all clear how he intends to set about it. I am not sure that I am happy about it, but I shall read what the Minister said a great deal more carefully and decide what I think about it then. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 35 and 36 not moved.]

Earl Russell moved Amendment No. 37:

Page 26, line 40, at end insert:

("() When considering an application for a departure direction under this paragraph the tribunal shall have regard to the contents of section 25 and 25A of the Matrimonial Causes Act 1973.").

The noble Earl said: Once more I begin to feel like Jack-in-the-box. This amendment again deals with grounds for departure. It attempts to provide that they shall be considered in terms of the eight factors listed in Section 25 of the Matrimonial Causes Act 1973. It is the same approach; namely, to subject the regulation-making power at the discretion of the Secretary of State to a certain number of general principles. As far as those principles are relevant, they include, the income, earning capacity, property and other financial resources which each of the parties to the marriage has or is likely to have in the foreseeable future; the financial needs, obligations and responsibilities which each of the parties to the marriage has or is likely to have in the foreseeable future; any physical or mental disability of either of the parties to the marriage". Those involve bringing together again responsibility for spousal maintenance and child maintenance. I agree with the point made by the noble and learned Lord, Lord Simon of Glaisdale, many times tonight, that separating those two simply does not work. It is now seen not to have worked. That is one of the arguments for going back to a court system.

The Minister constantly denigrates the court system, but compared with what we have had since 1991, absolutely anything would be a good system. I may be held to those words, but I hope not. Certainly the court system, warts and all, as it existed before 1991 was a very paradise compared with what we have had since, largely because it did attempt to work in the way in which the noble Lord, Lord Renton, outlined earlier this evening in terms of general principles which could then be applied to specific cases. The Matrimonial Causes Act 1973 has provided us with a very good example of that which I believe is tried and tested and which has worked a lot better than anything under this Bill has ever done. I beg to move.

Lord Mackay of Ardbrecknish

As the noble Earl explained, this amendment proposes that, in considering a departure application on the grounds that there has been a property or capital transfer between the parties, the child support appeal tribunal will have regard to the contents of Sections 25 and 25A of the Matrimonial Causes Act 1973. Section 25 lays down the matters to which a court is to have regard in deciding on maintenance payments or property transfers on divorce and so on. Section 25A imposes on the court a duty to consider for how long maintenance to the former spouse should be paid.

The amendment would result in a rather odd situation in that the Secretary of State would not be required to have regard to that legislation although a tribunal would. So where a tribunal was considering an appeal against a Secretary of State's decision, it would apply substantially different criteria from those on which he had based his decision. I doubt the noble Earl, Lord Russell, intended that to be the effect. I think he was trying to aim at the more general point.

We have accepted that where a property or capital transfer was made and it is clear that part of that settlement was made in lieu, or as an early payment, of child maintenance, the financial effect of that transfer should be recognised and reflected in a reduction of ongoing child maintenance liability. We have decided that the reduction should be made as a departure from the formula where the "broad brush" formula adjustment does not properly reflect the effect of the transfer.

In considering such a departure application the Secretary of State will look at the monetary value of the transfer in relation to the maintenance position and reduce the maintenance liability on the basis of the financial effect of the transfer where it would be just and equitable in all the circumstances of the case so to do. Regulations may provide for certain factors which should or should not be taken into account in considering the question.

We do not intend that those regulations should be comprehensive or overly restrictive: the decision-maker must be free to exercise his discretion as he sees fit. It may be that we will feel it necessary to include in regulations some of the matters covered in Sections 25 and 25A of the Matrimonial Causes Act, and they will be discussed at the appropriate time when the regulations are before this place.

However, there are aspects of the Matrimonial Causes Act which we do not feel should apply in the calculation of child support. For example, the Matrimonial Causes Act requires a court to consider not just the current financial circumstances of the parties concerned but also their future financial circumstances in terms of their future earnings capacity and any future financial obligations they may have. It also includes the conduct of the parties as, in some cases, a relevant consideration. That could mean, for example, that a departure decision might be influenced by the question of which party was at fault in causing the breakdown of the relationship. We believe that the conduct of the parties should decidedly not be a factor in considering a departure. I hope that with that explanation the noble Earl will feel able to withdraw the amendment.

Earl Russell

I thank the Minister for that reply. He has gone unerringly for the most difficult points in the amendment. I understand what he says about conduct. It would in fact be appropriate only if we were fully reuniting spousal maintenance and child maintenance.

I take also the point that the Minister makes about the different criteria for the Secretary of State and the tribunal. It was not my intention but I told the Minister at the beginning that in trying to amend the Bill to bring it into line with our principles I am trying to pour new wine into old bottles. That is a notoriously unsuccessful process. The Minister has provided me with one good example of why.

The amendment was put down mainly in order to illustrate the principles which we would like to see, in general terms, to go into a fully redrawn Act on this subject. I accept that it is difficult to insert it into the Bill. I am sorry that it is so, but I understand why. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 38 not moved.]

Schedule 2 agreed to.

Clause 7 [Effect and duration]:

[Amendment No. 39 not moved.]

Clause 7 agreed to.

Clauses 8 and 9 agreed to.

Baroness Hollis of Heigham moved Amendment No. 40:

Before Clause 10, insert the following new clause:

("Child maintenance disregard

.—(1) In section 36(5) of the Social Security Contributions and Benefits Act 1992, after paragraph (b), there shall be inserted the following paragraph— (bb) in calculating the income of a person claiming income support, a prescribed amount of any payment or payments of maintenance made or due to be made by—

	(i) the claimant's former partner, or the claimant's partner's former partner; or
	(ii) the parent of a child who is a member of the claimant's family, except where that parent is the claimant or the claimant's partner,

shall be disregarded;".

(2) At the end of that section, there shall be added the following—

"(6) In this section "partner" shall have the meaning prescribed."").

The noble Baroness said: We believe that Amendment No. 40 is one of the most important that is likely to be moved from the Opposition Benches. We ask that the principle of the disregard be established. I have half a dozen reasons and I am not sure which the Minister will take most seriously. Perhaps I may put forward a few of them.

First, lone parents and their children are very poor. Today 70 per cent. of lone parents are on income support and half are in debt with arrears in rent, fuel and social fund loans. Even a modest disregard of an extra few pounds a week would make a great deal of difference.

Secondly, not only are lone parents very poor but by losing benefit which pound for pound is being replaced with maintenance some become poorer still because they lose all passported benefits. They lose free school dinners, which could be worth £10 per week for two children; they lose health prescriptions for the parent although not for the children; and they face greater insecurity of income because they lose the guarantee of a weekly Giro. At the very least, a modest disregard would compensate at the point at which maintenance benefits equate to income support. At the very least, a disregard would compensate to some degree for the loss of passported benefits and would leave the parent no worse off.

Thirdly, the disregard will give absent parents an incentive to co-operate if children retain some of the allowance. The Minister will say that there is no evidence to prove that; but, equally, there is no evidence to the contrary. Certainly, anecdotal evidence suggests that that is the case. Furthermore, it is undeniable that it will give parents with care an incentive to co-operate. I believe that approximately 40,000 parents with care are refusing to co-operate with the agency and that the agency has found that only 46 per cent. have good cause. The Minister will correct me if I am wrong.

A possible reason for the refusal to co-operate is that the parent with care is better off with a benefit deduction of £9 to £10 per week and then striking a private deal with the absent parent for that £10 and another £5 or £10 on top. He is better off and she is better off; they collude in fraud and the children are better off in consequence. No one—certainly no one on these Benches—supports fraud or the abuse of the system. It is sensible for the Government to recognise that such fraud may occur and to take steps to make it less attractive to the colluding parents. The amendment will help to do that.

Fourthly, the amendment produces greater fairness between the parent with care and the absent parent. All the concessions, which were announced last autumn and which took effect in April, have been made to the sharp-elbowed absent parents. They have extracted concessions from the Government worth some £180 million. We do not begrudge those but as yet nothing has gone to the parents with care who are almost always poorer than the absent parents in terms of the effect of the Bill. A £5 disregard, for example, would cost £110 million gross or some £85 million net if displacing the back-to-work bonus. A £10 disregard, for example, would cost some £205 million gross or £180 million net. That is precisely the scale of the additional moneys that the Government were happy, or at least willing, to return to the absent parents.

I do not regard the softening of the impact of the Child Support Agency on absent fathers as an expenditure commitment on behalf of the Government. I regard it, and I will word it, as a reduction in savings. I regard the principle of the disregard in exactly the same way, no more and no less, as a sensible and reasonable reduction in savings. It is the difference between gross and net savings. It is an honourable difference, not yet one more expenditure item at which the Minister can wave a metaphorical calculator at these Benches. Indeed, given that some of the savings to the absent father are actually being paid for by the parent with care—so that there is a redistribution from the poorer off to the better off; for example, by delaying the date on which maintenance liability begins or by waiving the initial arrears—that equitable treatment is surely only fair.

Fifthly, the Government have accepted the principle of the equivalent of a disregard going to the parent with care but have rolled it up on the model of the Jobseekers Bill and labelled it instead a back-to-work bonus. This is meant to be a Child Support Bill and not a Jobseekers Bill. And yet the Government are responding by turning the disregard into a jobseeker's bonus instead of a child support disregard.

The Government say that by rolling up the disregard into a lump sum and calling it a back-to-work bonus, that creates an incentive for people to go back to work and that a disregard would be a disincentive. The assumption, of course, is that the lone parent's place is in the workplace even if children are as young as one to two-and-a-half years-old. We may argue about that.

I believe that the Minister misreads the situation very profoundly. What stops lone parents going back into work is not the possible disincentive caused by a modest disregard. It is much more significant and fundamental: it is that with very young children of one, two or three years of age, the parent with care might reasonably feel that those very young children have already lost a father and should not also be expected to lose a mother. With such very young children, it is a reasonable choice for the parent with care to want to bring them up herself at home. When the children are somewhat older and reaching nursery age, a parent with care may then be deterred from entering the world of work—as was argued by the noble Earl, Lord Russell, and my noble friend Lord Carter—by the high cost of childcare and, above all, the lack of jobs. Lone parents want to work, especially when their children approach and reach school age. The reason they often cannot work is lack of childcare and jobs. Almost certainly they will not be deterred by the possibility of a very modest disregard.

We agree with the Government that over time the only way for lone parents or parents with care to come out of poverty is for them to re-enter the world of work. There is no difference between us about that. But the point at which they are poised for somewhat greater financial comfort because they have re-entered the world of work is not the point at which they most need the rolled-up disregard which is labelled the back-to-work bonus. They need it before that happens—day in, day out, week in, week out, year in, year out, as they struggle to maintain a child on very basic benefits.

Finally, the assumption is that if one is receiving income support, one is not in work; if one is receiving family credit, one is in work and one can have a disregard. My argument is that that obscures the reality of part-time work. If a lone parent can find work, it is likely to be part-time and is more than likely, given the changing nature of the economy, to be for less than 16 hours per week. In that case, the parent continues to receive income support. Such a disregard would help that parent to meet the costs of childcare while holding down that part-time job and while receiving income support which will, at a later stage, allow the parent to springboard into work with longer hours and to move off income support into work plus family credit.

Perhaps I may remind the Minister of the array of reasons I have given in favour of this proposal. First, the lone parent is very poor and needs help. Secondly, by going onto maintenance and off income support, many parents will be poorer still because they will lose passported benefits. Thirdly, such a disregard would give not only the absent parent but, perhaps even more importantly, the parent with care an incentive to co-operate. Fourthly, it produces greater equity. The Government have already returned £180 million to absent parents and a modest disregard would be, in justice, a similar response to the situation and would represent net savings. Finally, parents need the extra help when they are not in work rather than when they are. I move this amendment as a just and equitable response to the poverty of parents with care. I beg to move.

Baroness Seear

Briefly, we on these Benches support the amendment. I cannot believe that the Minister will not also agree with the noble Baroness, Lady Hollis, that, however much one may want single parents to get back to work, it surely is not realistic—nor, I would suggest, desirable in most cases—that that should happen when the children are as young as one, two or three years. Although I do not know anything about such matters, it seems only common sense that, at that point, the mother should be aided, if she so wishes, to stay at home rather than have to seek work away from the home.

Lord Mackay of Ardbrecknish

I listened carefully to the speeches made by the two noble Baronesses on the o subject of supporting a maintenance disregard in income support. I appreciate the fact that the noble Baroness, Lady Hollis, feels most strongly that such a disregard is the right way forward. However, I do not believe that the noble Baroness will be surprised if I tell her that my colleagues and I hold equally strongly the view that a disregard is not in fact the best way to help families to improve their standard of living and normally, therefore, the quality of their lives.

I am not sure that I want to dwell on one of the arguments put forward; namely, that it might encourage absent parents to pay maintenance and so reduce the need for enforcement action by the Child Support Agency. I do not agree with that view. Many changes have been introduced to help absent parents; and, indeed, to help the parent with care. I am not entirely sure if the campaigns by at least some absent parents to frustrate the purposes of the Act have in any way been reduced. However, that is only one of the arguments.

My colleagues in another place have described how experience has shown—and I believe that we have discussed the matter here in this Chamber on a number of occasions—that the best way of helping families to improve their standard of living has been to ease the move from benefit dependency into work. We know from surveys of lone parents that the majority of them want to return to work. That was very clearly demonstrated in the work carried out for the original child support White Paper which was published in 1990.

The £15 maintenance disregard within the in-work benefits—that is, family credit, disability working allowance, housing benefit and council tax benefit—is, I believe, a better way of providing help to parents with care who want to work than a disregard in income support. Members of the Committee will be aware that the Bill contains a provision further to assist work incentives and help improve family income. The proposed maintenance bonus which is worth up to £1,000 will provide significant help to parents with care when they start work. I believe that the bonus will be welcomed by parents with care because it will provide them with extra cash at a time when it will be helping them to establish their independence to meet the bridge from being out of work to being in work.

The noble Baroness mentioned the expense of the disregard that she seeks. We estimate that a £5 a week disregard in all cases would cost £110 million a year. That is a considerable sum of money. We believe that the proposed maintenance bonus is a more imaginative and effective use of resources.

I believe that we should help parents to work when they wish to do so, and that we should provide assistance and encouragement to parents with care to make work financially worth while. We are creating an environment where parents with care can return to work if they wish to do so. The existing disregards in the in-work benefits and the proposed maintenance bonus provide the most effective way of providing help and incentives.

I appreciate that one of the other arguments put forward by the noble Baroness is that nothing has been done to help the parent with care. While I understand that argument—and, certainly, the vociferous voices have come from the absent parents—I should like to remind the noble Baroness that, as well as the maintenance bonus, the Government have provided some compensation for the parent with care on family credit or DWA if his or her maintenance is reduced as a result of changes in the legislation.

The grounds for departure also apply equally to the parents with care. For example, if a parent with care works and is liable to contribute to maintenance she can ask for a departure for her travel to work costs. I would remind the Committee that there are also some grounds for departure which are specifically aimed at the parent with care, in particular in paragraph 5 to Schedule 2.

I will concede that I am not arguing that a major shift has been made in favour of the parent with care, but at least I want to counter the suggestion by the noble Baroness that nothing in the Bill helps the parent with care. She also asked me about the numbers refusing to co-operate. Since the launch of the scheme, in 73,400 cases the parent with care has had good cause accepted and has not had to co-operate in seeking maintenance. In 18,000 cases the agency has not accepted the parent with care's refusal to co-operate and has imposed a reduced benefit direction.

I do not suppose the noble Baroness is too surprised that I am not accepting her amendment. I understand where she is coming from on this and her desire to help the parent with care, but I believe that other steps I have mentioned help the parent with care, especially in the transition into work and when the parent with care is in work, perhaps of a low paid nature—

Baroness Seear

The noble Lord has completely ignored the point about the single parent—the parent with care—with small children; for example, a baby and perhaps another child of one or two. I do not know anything about the noble Lord's personal circumstances but I cannot think that even if he were at home he would want his wife, if she had a child of under one and perhaps another child of two, to go out to work. If that is the only parent—for all I know she works morning, noon and night—surely she needs to be with the child. I am the last person to argue against women going out to work but there are circumstances in which that is quite unrealistic and, I should have thought, very undesirable, and this is one of them.

Lord Mackay of Ardbrecknish

As I think I explained in response to an earlier amendment, part and parcel of the maintenance calculations which are made by the agency are to take account of the fact that the child needs a carer—I think there is a nursery rhyme that runs something like that—and that carer requires some resources. That is one of the aspects of the total amount of money that the absent parent is asked to pay to the parent with care.

On the more general question of whether the mother of a one or two year old child should stay at home, I think I am in more than enough trouble with the legislation I have already put through the Chamber without adding to it by coming to a judgment on whether mothers ought to go out. to work if they have young children. Suffice it to say that my wife has extremely strong views on the matter, but I think I shall take a neutral position on that and say that it is a decision for the mother concerned.

10.45 p.m.

Baroness Hollis of Heigham

That was very prudent of the Minister. I shall come back to the phrase, "a decision for the mother concerned". I think that is the most useful phrase the Minister has uttered for the past quarter of an hour. I think the Minister made three points, one of which he dealt with lightly, the second of which he dealt with in a far more heavy-handed manner, and the third which he ignored altogether.

On the first point, I was glad to note that the Minister did not this evening belabour the question of cost. This is a welcome relief for which I give many thanks, but then it would have been a little impertinent of the Minister to have done so in the light of the fairly substantial hand-outs that the Minister had offered only a month or two ago. I recognise that it would have been inconsistent and graceless of the Minister to have given hand-outs a couple of months back and then to have belaboured the question of cost a couple of months on. At least a decent reticence prevails on that front and I think we are all appreciative.

The second point that the Minister made—which I think he did belabour—was that the Government had adequately, generously, substantially, usefully, undeniably helped parents with care, and that we were failing to recognise this. The evidence for that was, first, a back-to-work bonus—and we shall come to that later. That takes four years before one achieves the maximum sum. That is modelled on the Jobseekers Bill and benefits only those women moving into work, not those women out of work.

Thirdly, the Minister made the point about family credit. Perhaps he did not emphasise sufficiently the fact that the only changes made to family credit were for those affected by the April changes and the preceding changes in the formula. We shall return to that subject in subsequent amendments. Any later changes in maintenance payments will nonetheless not allow for subsequent changes in family credit.

We find that very worrying because, as the Minister will know, family credit is fixed for six months at a time and any discontinuity or erratic quality in maintenance payments will not be overcome by family credit. Therefore, the much vaunted changes in family credit the Minister mentioned are only a temporary smoothing so that, as we change the formula, parents with care will not be immediate losers. That is not to say that that is not welcome, but it is a once-and-for-all concession to get over the Government's difficulties and will do nothing to address the continuing problems of women on family credit. Therefore, that is not a serious contribution to women's welfare.

I note the point about the 18,000 people who did not have good cause and whose benefit was therefore deducted. That was half the number of 40,000 I had estimated. The Government were not able to address our concern that to some extent there was no financial incentive for women to co-operate with the agency, while not colluding with any fraud. The Government would perhaps persuade more of those women to work with the agency were they to have a disregard.

The Government handled the argument in relation to cost lightly. That was wise. The argument that parents with care are being treated generously is not true. I wish to return to the original arguments, which were well made by the noble Baroness, Lady Seear. We all agree that over time the best way for a single parent or parent with care to move out of poverty is to get back into work. There is no doubt about that. However, while they have very young children, perhaps tiny children of six months or 18 months, while child care is not available or affordable, and given the present economic situation in which appropriate jobs are not available, such parents cannot move into work. If they cannot work they are dependent on maintenance. If they are dependent on maintenance they need a disregard now, not rolled up, at the time when they go to work, and they are moving up two or three steps on the ladder and beginning to look forward to a period of relative prosperity.

I think that the Minister agrees with us but is stuck with his brief. He is stuck with the brief because the Jobseekers Bill has cast a long shadow over this Bill. As a result, we have the bright idea of a rolled up, back-to-work bonus. A hack-to-work bonus in the context of jobseekers is relevant. One is dealing for the most part with unemployed men who are moving in and out of the labour market. There is something to be said for a back-to-work bonus which helps to overcome the immediate problems of the costs of getting back into work. That is not the situation with lone parents who are carers. They need the money now, not at the point when their situation is going to improve substantially because they are going into work.

I should like the Minister to respond, because this is one of our most serious anxieties with regard to the Bill. We part with the Liberal Democrats on the issue. We support the principle of a child support agency. We do not begrudge the changes which occurred earlier this year to help absent parents, because we believe that many of them had a good case and were hard done by under this Bill. However, we believe with all our hearts that the Government have not recognised with equal clarity the situation of parents with care. They have not done so because those parents with care, being mothers, do not walk away from their children, do not go on strike, do not abandon their kids, do not "sharp elbow" and do not harass the Minister at public meetings. Had they done so, we might have had a disregard by now.

I hope that the Minister will respond once more. It is a matter about which all noble Lords on the Opposition Benches feel strongly. I believe that in his heart of hearts the Minister would prefer to be on our Benches on this issue. I hope that the Minister will respond to me.

Lord Mackay of Ardbrecknish

The noble Baroness is at her most beguiling. I am not entirely sure what I can add to the previous arguments. I have some sympathy with the point she made about the parent with care, and the fact that by definition inevitably the parent with care has had to shoulder the responsibility of the children on her own, and so on. However, I sought to explain why I do not believe that we should have a disregard on income support and why I believe it is more important to concentrate on incentives (if I may so call them) to help the parent with care back to work vis-à-vis the bonus. That bonus accumulates. If the parent with care goes into work at any stage, she will be able, so to speak, to cash that figure up to the maximum. I believe that that is important when helping the parent with care into work.

The maintenance disregard on family credit and the like is equally important because in many cases, especially if the children are young, the parent with care is likely to want to work part-time and therefore is not likely to be earning the considerable amounts of money which she might earn if she were able to work full-time. Therefore I believe that the £15 maintenance disregard is important.

The noble Baroness sought to inveigle me to her side by trying to win my sympathy for the parent with care. In many cases she already has my sympathy for the parent with care who is left to bring up the children on her own. However, my sympathy will not quite extend to agreeing with her on the amendment.

Baroness Hollis of Heigham

With reference to the Minister's care and discretion from reading the gaps and listening to the silences in what the Minister said, I think we can deduce the Minister's own views to which no doubt we shall return.

Basically, the Minister has offered us only one argument in this second round: that a modest disregard would be a disincentive to go back to work. He knows that that is psychologically as well as empirically simply not true. What stops a lone parent going back to work is that the children are too small and child care is unsatisfactory. If relatives are around, it is possible that she will try to do so; otherwise the children are too small and the child care is unsatisfactory. Most lone parents go back to work when the children reach school age. That is a fact. The average time a lone parent spends on income support is only about two and a half years. That is evidence enough that income support, dependency on a benefit, is a passing phase when the children are very small and the mother cannot realistically leave them to go to work. That is the time at which her poverty is most acute; it is the time when her isolation is most acute; it is the time when she most needs the disregard.

I had thought that, despite the occasional double dose of original sin, the Tory Party were at least the party of the family. That is clearly no longer the case. The Tory Party has become the party of "the lone parent's place is in the workplace" concept. Frankly, little attention has been given by the Government to the welfare of the child. That surprises me coming from the Minister and from that party.

Clearly we shall return to the issue with, I hope, many more voices at Report stage. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 [The child maintenance bonus]:

Baroness Hollis of Heigham moved Amendment No. 41:

Page 9, line 17, at end insert: ("(k) the bonus to accrue at the weekly rate (subject to paragraph (c)) whether or not the child support agency has actually collected the money for each week, in all cases where the total maintenance payable by the absent parent would allow for this.").

The noble Baroness said: The amendment ensures that where the agency has failed to collect maintenance on behalf of the parent with care, the parent with care would not be penalised by receiving a reduced lump sum on her return to work. The Minister may tell us that we misunderstand the Bill and that the parent with care will receive the full lump sum notwithstanding, in which case we shall be delighted. However, I fear that the Government may argue that maintenance can only be paid in a lump sum that has been collected. If it is to work effectively as a return to work measure, the agency will need to guarantee it; otherwise parents with care who know that their maintenance has not been collected, due to no fault of their own, will have no such incentive.

If the agency were to pay out the lump sum, the mother would have a modest incentive to go back to work and there would be a bigger incentive for the agency to collect the money from the absent parent and to enforce the measure where necessary. I beg to move.

Lord Mackay of Ardbrecknish

Although I shall not go into detail, the amendment is a little defective to do what I believe the noble Baroness seeks. As she clearly said, the noble Baroness wishes the weekly bonus to be paid regardless of whether maintenance is actually paid. It should be based therefore on the maintenance assessed rather than the maintenance paid. I shall not go over the arguments in favour of the maintenance bonus; I did that in the last debate.

I wish to try to help alleviate some of the concerns which the noble Baroness has in proposing the amendment. Our plans are that a credit of £5 a week will accrue for each week in respect of which maintenance is paid (or a credit of the actual amount of maintenance paid, if that is less). Where an absent parent pays his maintenance weekly, on time and in full, then it is quite easy to see that a parent with care will accumulate a bonus up to the maximum rate of £5 a week. But we will have to deal with circumstances where payment is not weekly, not on time and not in full.

For example, non-weekly payments may be because the absent parent pays monthly and therefore the Child Support Agency would have to take that into account. People pay every two weeks or every four weeks, as well as monthly. We shall have to look at the payment made over the agreed charge period and translate it to a weekly equivalent. That should not cause a problem. However, a payment might be late and added to a later period. Our aim will be to recognise that such arrears also count towards any bonus due. I hope that that answers some of the concerns of the noble Baroness.

What happens will be complex, I fear, because sometimes people will make sporadic payments, under-payments, arrears, all over a prolonged period. It will not be so obvious what bonus is due. Nevertheless, our aim is the same: to allocate a bonus accordingly for the period over which payments are made.

Perhaps I have not gone quite so far as the noble Baroness, because I say that the bonus should be accumulated if the maintenance is paid. However it is paid, we shall try to accommodate the situation, whether it is paid late, paid in arrears, paid weekly, monthly or whatever it is. I am not sure whether the noble Baroness was inviting me to go further—

Baroness Hollis of Heigham

Yes, I was.

Lord Mackay of Ardbrecknish

I was trying not to be too positive about it, just in case; but I am sure that she wished me to go further and allow the bonus to accumulate, even if the maintenance is not paid at all. I do not think I can go that far. However, I hope that there will be few absent parents who will not split the responsibilities and pay their maintenance and therefore allow the bonus to be accumulated. We all hope that through the improvements made in the agency, it will be able to pursue the absent parents who seem reluctant to pay their dues and will ensure that they pay and that the bonus will be collected for the parent with care, if she returns to work.

While this does not go so far as the noble Baroness wishes, I hope that it is helpful and will show that I am going some of the way in addressing her anxieties.

Baroness Hollis of Heigham

It does not quite do that because all that the Minister said or conceded is that if any money is paid in the course of one month, six months or a year, it will be apportioned to the weekly bonus base. I had taken it for granted that it would; it is just a question of our computers dealing with it properly. What I was concerned about was where the agency was the collection agency, and where the collection had failed to take place, either because the CSA was inefficient or because the absent parent had managed to avoid making maintenance payments or where maintenance payments had fluctuated for whatever reason, nevertheless the back-to-work bonus would be protected in the circumstances where any failure to pay was no fault of the parent with care. Can the Minister give us some helpful move on this?

11 p.m.

Lord Mackay of Ardbrecknish

I do not think I can. It is all predicated on the fact that the absent parent pays, as the noble Baroness accepts. So long as he pays, we shall try to equate how he pays with the bonus.

In the case of an absent parent declining to pay and somehow or other still managing to elude all the powers of the agency to call him to account and make him pay—and I hope that such cases will be a very small minority—I do not think that we could pay the bonus because the principal condition is not being observed; namely, that the maintenance is being paid. It is out of the maintenance paid that the £5 bonus rolls up. I know that that will disappoint the noble Baroness, but I hope that I have made my position clear.

Earl Russell

Before the noble Baroness replies, I should like to take up the Minister's description of those who do not pay maintenance as failing to face up to their responsibilities. It sounds awfully like the sort of language that was used about those who did not pay the poll tax. When the Minister talks about using all the resources of the agency to ensure collection, his language sounds remarkably like that used by the noble Baroness, Lady Blatch, in 1991 to justify continuing to chase poll tax defaulters. Will the Minister take warning from that example?

Lord Mackay of Ardbrecknish

There is a world of difference between how one levies taxation for local government—we could go over all that argument again—and the responsibilities that parents have to their children. That may mark me out as being rather old-fashioned, but I believe that parents have that responsibility and that they should address it when they are separated so far as their means allow.

Earl Russell

In using the words "so far as their means allow" the Minister makes a rather crucial concession. Will he think through the implications of that concession? Will he think it possible that their means may not always allow them to do what is assessed in the formula?

Lord Mackay of Ardbrecknish

My words should not come as a revelation. I have used words such as "ability to pay" at times today. It depends, I am afraid, on the definition of "means allow". The definitions are in the formula, and within the departure system it would appear that a minority of absent parents, reports about whom I have read over time, think that they should decide how much they pay. I do not believe that they should be given the opportunity to define the expression "means allow".

Earl Russell

What if their bank managers try to define what their means allow?

Lord Mackay of Ardbrecknish

I shall not go any further. I do not see what the bank manager has to do with it, unless he is an absent parent.

Baroness Hollis of Heigham

Am Ito take it from the Minister's reply that the only broadly conceivable circumstance in which the parent with care would not get the back-to-work bonus is if the absent parent refused to pay? In other words, if there were errors, mistakes, delays or ineptitude on the part of the agency in enforcing and collecting—and I have to say that we do not have a lot of confidence so far in the agency's performance in some of those roles—the parent with care would not find herself losing her bonus because of faults that could be largely attributed to the agency. Is it correct that only in circumstances where the absent father was solely to blame would she lose the bonus but where the agency was in any sense a contributory factor, the Government (the taxpayer) would shoulder that responsibility and make up the bonus? Can we at least get that point established?

Lord Mackay of Ardbrecknish

We are beginning to go down quite difficult roads. I made clear the general principle that the absent parent must pay for the bonus to roll up. I hear the point made by the noble Baroness; namely, that if it is the agency's fault that the absent parent has not paid, where does that leave the parent with care? I wonder whether she would mind if I consider that question and reflect on it.

Baroness Hollis of Heigham

I am delighted for the Minister to do so. In that case, I am happy to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 10 agreed to.

Clauses 11 to 17 agreed to.

[Amendments Nos. 42 to 44 not moved.]

Earl Russell moved Amendment No. 45:

Before Clause 18, insert the following new clause:

("Absent parents: non-residence with child

.—(1) Section 3 of the 1991 Act shall be amended as follows. (2) In subsection (2) (a) after "child" there shall be inserted "or expected to reside with the parent with care as soon as he can reasonably be expected to do so".").

The noble Earl said: In moving this amendment, I should like to speak also to Amendments Nos. 46 and 71. These amendments, or the major part of them, like so much else in my amendments result from a case which was in my postbag last week. Last Tuesday I wrote to the Minister, with a copy to Mr Alistair Burt, about that case. If the Minister's desk is anything like mine, my letter will not have worked to the top of the pile just yet. I do not blame the Minister for that. I apologise for not having written to him sooner, but I could not write until I got the case.

The case concerns a pair of teenage lovers who became parents and were left responsible for an infant, for which both of them wished to assume responsibility. In effect, they had practically no income to do so. The two sets of parents were both supportive. The couple continued the relationship while living with their parents, in the hope of finding a place where they could live together as soon as their means allowed them to do so. Meanwhile, for reasons which I am still seeking—I have only just received this case, so I do not yet have them—an assessment was placed on the young man on the ground that he was an absent parent, even though there was a continuing relationship and continuing responsibility.

The couple now have a housing association tenancy together. They have the kind of wages that teenagers can expect and they are saddled with arrears of £2,600. The absent parent's mother wrote to me and pointed out that, at the current rate of repayment, that is likely to take the young man more than the whole of his natural life.

It seems to me that mistakes have been made in that case. There are more mistakes, which are the subject of later amendments. It seems to me that calling a person an absent parent because he is not physically residing in the same building may be an unduly simplistic way of deciding who will be an absent parent. That is the point of Amendment No. 45, which provides that a parent who is expected to reside with the parent with care as soon as he (or she) can reasonably be expected to do so should not be construed to be an absent parent.

In this case it should be the responsibility of the parent with care who, after all, knows a good deal more about the matter, to decide what the allegedly absent parent can afford to pay. There would have been no difficulty in interpreting the provisions of the amendment. The couple were looking for a joint tenancy, which they have now found. The intention to live together was manifest and both their sets of parents would have vouched for it.

Amendment No. 46 deals with a similar matter. It provides that people should not be held to be absent parents and brought within the system of the Act under the age of 18. Most of them simply cannot cope with the liability at that age. That would be without prejudice to any continuing liability after they reach the age of 18.

I decided to insert in the same amendment, because the principle is the same, an exception for full-time students. In 1991, until we dealt with the regulations, I did not realise that full-time students were expected to come within the scope of the Act. By that time it was too late to table an amendment to take it out because of course regulations by their nature cannot readily by amended. If it had been in primary legislation, it would have been a matter of a major debate in this Chamber, and probably a vote. The Government may even have thought twice about it.

The Minister knows how hard up most students now are. I can tell him. If one has to advise a student, one advises him or her in their own interest. Were any pupil of mine to become the subject of the Child Support Act, I would instantly advise them to withdraw from university, which would not be in the long-term interests of the parent with care. The long-term amount of maintenance that the young man might be able to pay would undoubtedly drop. In their present financial state, the application of the Bill to students is unjustifiably harsh and I hope that the Minister will think again about that.

Amendment No. 71 provides that when the absent parent and the parent with care shall resume or take up residence together, there shall be a discretion to pardon any outstanding arrears. In that situation, the parent with care who knows the circumstances, who knows what she can and cannot press the man to do, is a much better judge of how much of these arrears it is reasonable to try to get out of him than the Secretary of State can ever be. That provision would save a considerable number of marriages. This is a package of amendments which deserve serious consideration.

Lord Mackay of Ardbrecknish

Let me say, first, to the noble Earl that I have indeed received his letter and my honourable friend Mr. Alistair Burt replied to it this morning. I fully appreciate that, given the pressure of work we are under today, the noble Earl has not had a chance to see the letter, if it has actually caught up with him.

I shall not deal with that question because, as the noble Earl knows, I am bound by the rules of confidentiality in replying to him about an actual case, as is my honourable friend. And it was not either of the parties to the case who wrote the letter to the noble Earl. However, I hope I can help him or at least explain some of the aspects of principle as I respond to the amendments before us.

These amendments seek to remove the liability of absent parents to pay maintenance in a number of circumstances. Amendment No. 45 is intended to remove liability for child maintenance from an absent parent who, although not living as part of the family of the child to be maintained, is likely to do so in the near future. I understand the intention of this amendment and at first glance it might seem reasonable to suppose that where the absent parent is clearly going to rejoin the family in the near future, he should not be pursued by the Child Support Agency. However, such an approach would undermine the first basic principle of the 1991 Act; that is, that each parent is responsible for maintaining their children. It would be wrong to create a situation whereby a parent could remove his responsibility to maintain his child merely by making a commitment to rejoin the family at some stage in the future.

Where the parent with care is receiving income support, the cost of maintaining the child would fall wholly on the taxpayer. The logical corollary of treating a parent as "not being absent" for child support purposes, would be to do the same for benefit purposes. That is, an absent parent who benefited from this provision ought to have his resources aggregated with those of the parent with care when assessing any claim to benefit that the parent with care may make. I doubt if that is what the noble Earl would wish.

In addition, this amendment would create an incentive for contrived separations, which would be very difficult to detect. Parents with care would be able to claim benefit for as long as both parents could convince the CSA that they intended to reconcile in the near future. We believe that the introduction of the agency has had a marked effect in reducing the number of benefit claims arising from such fictitious desertions. The amendment would introduce a loophole for such claims to proliferate again.

The effect of Amendment No. 46 would be to remove from the ambit of the child support legislation absent parents who are not yet over 18 or who are students. For the children of such parents, there would be no recourse through the Child Support Agency, and those caring for them would be forced to seek maintenance through the courts.

The provisions of the child support legislation are intended to give a fair and reasonable assessment of maintenance in a wide range of circumstances. There is no reason why such assessments should not apply to young people and students, some of whom are financially perfectly well able to support their children. There can be no justification for removing the duty to provide for one's own child simply because a parent is young or a student. If such an absent parent has a low income, his child support maintenance will also be low, or even nil. Students are assessed on the same basis as anyone else, but if grant is their only form of income, the assessment will be nil.

Amendment No. 71 provides that in cases where the absent parent and the parent with care are reconciled and living together, arrears of maintenance may be waived. Clearly, the continuing collection of arrears would, in cases where they are not in receipt of benefit, merely result in a transfer of money within the household with no overall benefit to either party.

The position is a little more difficult if the arrears are not due to be paid to the parent with care because she was receiving income support at the time they should have been paid. It is not right that the absent parent should evade his liability, and the taxpayer foot the bill for the unpaid maintenance, just because the absent parent and the parent with care are now living together.

However, the existing legislation already gives the flexibility sought by this amendment as the agency always has discretion as to whether to continue collecting maintenance and arrears. In cases where there is no benefit interest and the parent with care states she does not wish collection of the arrears to be pursued, action will be suspended, rather than the arrears being waived. Should the parents subsequently separate again and the parent with care ask for it, action to collect the arrears can recommence, subject to the six-year limitation period.

In cases where the arrears are due to the Secretary of State rather than the parent with care, careful consideration will be given to the question of continuing to pursue arrears if the parents are now living together. Because decisions relating to collection are discretionary, regard will always be had to the welfare of the child and there may be some cases where it would not be appropriate to proceed for that reason; but equally there will be cases where the absent parent can afford to pay the arrears with no implications for the welfare of the child. In such cases the agency will always seek to reach an agreement with him about repayment. It would not be right in such cases for him to expect the taxpayer to meet his liability.

I hope that I have gone some way to answering some of the noble Earl's concerns. If I heard him aright, perhaps the advice that he should give to that fictitious student (if he is on a grant) should be reviewed in the light of what I have said. With those explanations, I hope that the noble Earl will withdraw his amendment.

11.15 p.m.

Earl Russell

I am, as always, very grateful to the Minister for the trouble that he has taken, and in this case grateful also to his honourable friend Mr. Alistair Burt. That letter had not arrived at one o'clock, but if it was written this morning, that is hardly surprising. It may now have arrived but, as the Minister said, we have been otherwise occupied since then.

I understand what the Minister says about confidentiality, and I agree with it. However, I think that the Minister misdescribed the purpose of my amendment. He said that Amendment No. 45 was designed to remove the liability of the absent parent. It was not. It was designed to redefine the "absent parent" so the parent should not be construed to be absent because I thought in this case that the application of the term "absent parent" was misleading, inaccurate and inappropriate. If that was my intention, I was not trying to subvert any principle of the 1991 Act. I should like to, but I was not trying to do it here. It is only if one begs the question and assumes that the parent was absent that one subverts any principle of the Act at all.

The Minister should look again and consider some criteria, other than physical absence, before deciding whether a parent is absent, otherwise he will be having all the members of the Merchant Navy construed as absent parents, and that is not what he intended.

Abrogation depends on the case. It would need to be decided on a case-by-case basis. As regards contrived separations, I know that we keep hearing about collusion, but I have yet to see a single authenticated case. If the Minister has an example perhaps he will send it to me and I shall be glad to look at it. But even if there were collusion, I believe that people are often better judges of their own best interests than any Secretary of State or agency. If people are forced to act against their own interests to the point where they are unable to remain together or in employment, that is not in the interests of the taxpayer either.

The Minister took me back to 1991 in considering students. I understand the principles that they are not subject to the provisions as regards their grants, but they are for any additional earnings. But since no student now can live at university without income beyond grant flow—about £1,000 above the two together—if they do not have additional earnings they cannot remain in the department. That is the kind of case which lands on my desk over and over again, practically every week of every term. So if they then have to pay maintenance on their additional earnings, they will be set on something like the curve of the pursuit of Calculus, running towards an object which is going in a different direction so they are perpetually chasing after a point they cannot reach.

No, I shall not withdraw the advice I give to any student in that position. The Minister is entirely without information on quite how hard up students are. I can give him plenty if he wants it. However, what he said about discretion and arrears I found rather encouraging. Suspending arrears for people who like to live in a law-abiding manner is not the same as wiping them out. It has a Damoclesian effect. Although the discretion is welcome I wonder whether the Minister understands quite how big a burden is placed on the agency. I do not know whether he understands how difficult it is for the agency to keep up with the weight of cases, the bulk of paper, the number of phone calls and the number of different types of decision which have to be made. So although the agency has a discretion, I wonder whether it has the time to exercise it. But that is not a question to be pursued on this amendment. I give way to the Minister.

Lord Mackay of Ardbrecknish

I ought to make clear one point which the noble Earl mentioned in his speech and again in his response. I would not like it to get out that Merchant Navy men, for example, when away from home, are immediately treated as absent parents. Perhaps the noble Earl will not mind if I say a word or two about that. Men, like those who work in the Merchant Navy and work away from home, usually support their families while away. If they do not do so and if the mother claims benefit, then she will be required to co-operate in seeking maintenance unless there is risk of harm through undue distress, and so on. If the mother does not receive financial support while the father is working away, and does not claim benefit, she will be able to make a voluntary application for child support provided she does not have a court order or a written maintenance agreement predating April 1993. That deals with the minority of cases, but in the great majority where people work away from home—my noble friend Lord Lucas has pointed out that we are doing a fair amount of that—as long as they are maintaining their families then the fact that they are working away from home is neither here nor there.

Earl Russell

I am grateful to the Minister. In conceding that a person who is not physically present does not automatically become an absent parent, he may have opened a wider door than he realises. I hope that the Minister will look to see what goes through that door, but that is not to be pursued now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 46 not moved.]

Earl Russell moved Amendment No. 47:

Before Clause 18, insert the following new clause:

("Authorisation to recover maintenance,

.—(1) Section 6 of the 1991 Act shall be amended as follows.

(2) In subsection (1) for "shall" substitute "may" ").

The noble Earl said: With the leave of the Committee, I should like to take Amendment No. 47 in a group with Amendments Nos. 48, 49 and 50. I beg the pardon of the Committee for not having formally grouped them, but it seems to me that they can be dealt with together, and at this time of night one might as well save time if one can.

The effect of Amendment No. 47 is to put the 1991 Act on a permissive basis. That is something that I proposed in 1991. I shall not soon forget the expression of horror that that provoked in a quarter to which I am not at present allowed to refer. It would have saved a great deal of trouble had it been done. The point I am making, that people are usually the best judges of their own interest, is one which has a good deal of force.

Amendment No. 48, which comes with Amendment No. 47, would remove the power that the Secretary of State can override a harm and undue distress provision on the request of the parent with care. If the Minister reads any of the literature that comes out of women's refuges, he will appreciate the incredible generosity and sometimes optimism which affects many women who have been the object of violence. There are a good many who might well request the Secretary of State to override the harm and undue distress provision, because they were, as so many women in refuges have been, prepared yet again to exercise trust. A great deal of that trust will be misplaced, and if that happens, a vast cost will be created to public funds. I believe that that provision of the 1991 Act was mistaken.

Amendment No. 49 deals with the maintenance application form. We have been over that in this Chamber a good many times. The maintenance application form has not always made clear, and people dealing with it have not always made clear, that parents have the right to refuse to give the name of the father because it might cause harm and undue distress. I have written to the Minister's honourable friend, Mr. Burt, about such cases a great many times. I have never had one word of complaint about Mr. Burt's replies.

The problem here lies not in government. The problem lies altogether at a lower level. The problem is with Jacks-in-office, using their little brief authority to inflict harm, to inflict pain on people subject to them. It is not necessarily particularly common, but such people occur in all walks of life.

We have had a great many ministerial assurances on this point. Those assurances were given in complete good faith and with complete good will. I am telling the Government that those assurances have not proved sufficient to bring such a practice to a stop. Because they have not proved sufficient, and because I am certain of ministerial good will on this, I ask the Government whether they will think of something rather more stringent to make absolutely certain that every woman who has a maintenance application form knows about the harm and undue distress provision.

The proposal in the amendment for typing the provision of harm and undue distress on the form in bold type seems to me as effective as anything I can think of. If the Minister thinks, for any technical reason, that that will not work, I shall listen to him. But I very much hope that he will think of something equally clear and equally unambiguous, because what has been done on this so far, well-intentioned though it was, is not enough.

I think that I had better not speak to Amendment No. 50 for a moment because I do not have my hands on my Keeling schedule. I beg to move.

11.30 p.m.

Lord Mackay of Ardbrecknish

It may be for everyone's convenience if I deal with each amendment in turn, as did the noble Earl.

The purpose of Section 6 of the Child Support Act is that parents with care in receipt of relevant benefits should be required to co-operate with the agency in pursuing maintenance from the absent parent unless there is a good reason for her not to do so. Just as it is right as a matter of principle that an absent parent should pay child maintenance if he can afford to do so, so it is right that a parent with care should not refuse to co-operate in the pursuit of maintenance without good cause.

The wording of Section 6(1) adequately reflects its intention. The noble Earl's clause would amend Section 6 to provide that parents with care could decide for themselves whether or not to give their authority, even though there might be no good reason why they should not give it. That is not reasonable. If a parent with care has a genuine reason why she should not give her authority, she is given ample opportunity to make representations and these are carefully considered. In any case, the amendment would not prevent the imposition of a reduced benefit direction where a parent with care had unreasonably withheld her authority and so it would make no material difference to the outcome. There is no need for any change to the wording of Section 6.

I turn to Amendment No. 48, which would remove subsection (3) so that parents with care could no longer ask the Secretary of State to pursue maintenance in these circumstances. There may well be instances where a parent with care wishes maintenance to be sought from the absent parent, even though the Secretary of State considers that harm or undue distress might result. She may well feel strongly that the absent parent should not be freed of his responsibility to support his children. It would be wrong to remove the means by which she would seek to obtain maintenance. The present provision is entirely voluntary and it is right that where the mother wishes it, in the full awareness that she does so of her own volition, maintenance should be pursued. If she later changes her mind, she can ask the Secretary of State to withdraw the requirement. He will comply with that request where he considers that harm or undue distress might result.

Amendment No. 49 would amend Section 6 so that all maintenance application forms would be required to carry the full wording of the key harm and undue distress provisions. These provisions are already carefully explained to the parent with care before she is sent an application form and asked to give her authority. All those parents with care who are likely to be required to give their authority are sent a letter which fully explains in day-to-day language the requirement to authorise the Secretary of State and the harm and undue distress provisions. The letter includes a declaration which the parent may return to say whether or not she wishes to make representations about harm or undue distress. If the parent makes representations they are investigated. If the Secretary of State agrees that there would be a risk of harm or undue distress were she to give her authority, that requirement would be waived and the matter goes no further—

Earl Russell

I am grateful to the Minister for giving way. He has described accurately what should happen. I am telling him, as I have told him a great many times before, that in a great many cases it does not happen. That is the problem that I am bringing to his attention.

Lord Mackay of Ardbrecknish

I have tried to explain that all the parents with care who are likely to be required to give their authority are sent the letter. If the noble Earl tells me that that is not the case, I shall certainly pursue that matter during the next day or two. I shall not promise to pursue it tomorrow because we have business in the Chamber. I shall certainly check that matter.

The maintenance application form pack includes a general explanatory leaflet and a set of helpful notes, which also again explain the harm and undue distress provision in straightforward terms. I believe that the present arrangements to advise parents with care of their legal rights are fully adequate and that there is no need to reproduce the wording of the harm and undue distress provisions on maintenance application forms. Parents with care are given information about the provisions both before they receive the application form and later with the notes accompanying it. However, I will look into the matter raised by the noble Earl. To include on the application form an extract from the Act is entirely unnecessary and, I suggest, the legalistic wording may be intimidating for some parents with care.

No parent with care is required to give her authorisation without the agency first giving careful consideration to whether giving that authorisation would cause her or any child living with her harm or undue distress. Even after she has given her authorisation, if she considers that she or any child living with her will be caused harm or undue distress, if it remains in force, she can ask the Secretary of State to consider the position. If he accepts that there is a risk of harm or undue distress, he will lift the requirement.

I gave some figures earlier to the noble Baroness, Lady Hollis, about this matter. I believe that something like 73,000 such applications were accepted by the Secretary of State and 18,000 were not. I am sure that we all agree that it is important that parents with care are able to exercise that opt-out, so to speak, in those cases where they are fearful for themselves or for their children. The agency must look sympathetically at that matter and the figures that I have mentioned indicate that the agency takes on board very seriously that particular aspect of the problem of maintenance.

Earl Russell

I am grateful to the Minister. I am certain that he is right that Ministers and the agency take the matter seriously. However, I am saying that some of the people on the ground do not take it seriously. People occasionally behave in ways they should not and become impatient. I ask the Minister to consult one of the organisations involved with women's refuges on the working of the provisions and also with regard to Amendment No. 48, on which I did not receive a very lengthy reply.

We cannot pursue this issue much further this evening. I am grateful to the Minister for his undertaking to look again at the matter and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 48 to 51 not moved.]

Earl Russell moved Amendment No. 52:

Before Clause 18, insert the following new clause:

("Removal of carers' allowance from maintenance requirement

.—(1) Schedule 1 to the 1991 Act shall be amended as follows.

(2) In sub-paragraph (3) of paragraph 1 of Schedule 1 to the 1991 Act, leave out (a) (b) and (c) and insert—

1. "(a) with respect to each qualifying child, an amount equal to the amount specified in column (2) to the Income Support (General) Regulations 1987 for a person of the same age (income support personal allowance for a child or young person); and
2. (b) an amount equal to the amount specified in paragraph 3 of that Schedule (income support family premium)."

(3) In sub-paragraph (2) of the said Schedule, for

"MR = AG - CB"

there shall be substituted

"MR = AG",

and the definition of CB shall be omitted." ").

The noble Earl said: This amendment is designed to remove the carers' allowance from the formula. This has caused a great deal of anxiety and a sense that it is inequitable as between the first wife and the second wife because there is no equivalent carers' allowance for the second wife, even if she is caring for young children.

On Second Reading I said that the legislation rests very heavily on an old-fashioned, pre-Beveridge bread-winner world. I know that the language is definitely not sexist and is entirely politically correct, but the actual assumptions are not.

There should be equality of treatment between the first wife and the second. If there is not, there will be an immense amount of resentment because the second wife feels, in effect, that she is earning in order to pay money to the first. The Minister can imagine—I think he probably knows—the recriminations to which that might lead. It is not a provision which is working well at the moment.

On a previous amendment I made the point also that it is a case where the money is not targeted. If the money spent on that element were targeted on child care where that is relevant it would do a great deal more good there than it does here. The Minister or anyone else may say that that would produce a further pressure on the parent with care. That is a point which the amendment has attempted to address by taking child benefit out of the calculations in the formula so that that, in effect, replaces some at least of the money that goes to the carers' allowance.

I understand that at all times the Minister wishes to reduce the benefit bill. But short-term reductions may provide long-term increases, as the noble Baroness, Lady Faithful, illustrated in her Second Reading speech.

Lord Mackay of Ardbrecknish

We are now discussing another amendment which would, in most cases, favour absent parents unfairly at the expense of their children. As the noble Earl pointed out, it seeks to reduce the maintenance requirement—the amount which is calculated to meet a child's basic maintenance needs. The amount included to represent a child's need to be cared for by an adult would be omitted, as would the amount equivalent to the income support lone-parent premium in cases where the parent with care has no new partner.

The noble Earl correctly pointed out that there would be some mitigation from the fact that the maintenance requirement would no longer be calculated net of child benefit. However, child benefit is a universal benefit intended to provide a worthwhile contribution to the costs of bringing up children. As such, it would be illogical not to take account of that in the maintenance requirement calculation. In effect, absent parents would be asked to pay maintenance already provided by child benefit. By way of example of the overall effect of the amendment, I should point out that the basic maintenance for one child aged under 11 in a lone-parent family would reduce from £67.50 to £26.20 per week. That means that many parents with care who previously had court orders would find themselves worse off than under the previous arrangements.

I recognise that the amount for a child's care has been represented by some absent parents, and the media, as being akin to spousal maintenance rather than to child maintenance. That idea has arisen largely because the amount is based on the income support allowance for someone aged 25 or over. However, as the Social Security Select Committee recognised, the income support rates provide a benchmark for assessing need. That allowance was the obvious amount on which to base a child's need to be cared for by an adult.

Without continuing much further, I believe that that is probably the answer to the noble Earl's point. There is, perhaps, a divide between us. If no payment is given for a carer to look after the child, I am somewhat puzzled as to who will care for the child. Will the child end up like Romulus and Remus—looking to see if there is a spare wolf around?

Baroness Hollis of Heigham

It is late at night!

Lord Mackay of Ardbrecknish

It is indeed late at night, and we do not want to start all that again.

However, I believe that it is unrealistic to divorce the question of paying something for the child's costs from paying for someone to look after the child. It is quite an artificial division to make, although I understand why it is made by the organisations representing absent parents. They feel that they are actually paying spousal maintenance; but, of course, they are not. They are paying carer's maintenance to look after the child. If that carer's maintenance was not paid and the carer was not there, I am not entirely sure who would look after the child. Therefore, while I understand some of the problems involved, I do not believe that one can somehow disconnect the needs of the child from the same need of the child to be cared for. That is why the formula is devised in that way and that is why I am afraid I cannot accept the suggestion from the noble Earl that that portion of the maintenance assessment should fall by the wayside.

Earl Russell

I am very glad that the Minister said what he did about income support levels as a benchmark for need. His words will come back to him when we consider the benefit penalty tomorrow; and, indeed, when we consider a great many other cases of deduction from benefit, reduced benefit directions, and so on.

The Minister asked who is to care for the child if there is no carer element. But the parent with care presumably has spousal maintenance, which will be calculated outside the terms of the Act. We are told that the legislation is not meant to deal with spousal maintenance, though the Minister's answer has just illustrated extremely clearly why that is a very difficult line to hold. If the parent with care has spousal maintenance, there will not be very much in the way of extra costs that arise simply from the act of caring. There will be such costs but not of the order illustrated by the element.

Therefore I do not see that the Minister's point has force if the woman has enough to live on anyway. If she does not, then something has gone wrong with the spousal maintenance. The Minister said nothing whatever about the inequity as between the first and the second wife, and that is a point on which some answer would, I think, be very much appreciated. I do not see why, if there is to be a carer's element, it should not be allowed to the second wife as well as the first, because if they are both caring for children they both have the need. In any case, as the Minister has himself admitted, this does cause a great deal of resentment which is particularly strong among second wives. The 1991 Act has put great strain on the principle of consent. Its success in bringing in money so far has not been extreme. If it is to operate at all, we need the consent. Does the Minister wish to intervene on the paper he has there because, if not, I shall beg leave to withdraw the amendment?

11.45 p.m.

Baroness Hollis of Heigham

Before the noble Lord does that I hope I might intervene. It seems to us on these Benches that the noble Earl, Lord Russell, has a real point with which we identify in that much of the aggravation caused by the child support formula has been caused by what appears to be, however erroneously, a flow of income from the second wife to the first wife looped via the absent parent and all the inequities that are concerned with that. I am not sure that I agree with his point about spousal maintenance because from my experience spousal maintenance has often been traded in for, say, a property settlement and therefore there is not an independent and additional income.

However, what would have been much more sensible and would reflect much more today's society is if there had been no such thing as a carer's element in the formula for the parent with care, but instead that same equivalent sum was looped into additional allowances as part of the individual child allowance. I would have thought that, politically, and in all the ways possible, that would have been far more acceptable. The money would go to the child and part of that element in the child's allowance would be attributable to the needs for care of that child—however that may be dealt with, whether it be through purchased child care or the parent with care—rather than a direct payment being made to a woman, who may in turn have a non-earning second partner living with her, which involves all of the inequities that then seem to flow from the pattern of distribution across adults. The Government would have been well advised if the flow of income had gone from absent parent to children rather than, apparently, second wife to absent parent, to parent with care and, possibly, to the new partner of the parent with care, which produces all sorts of hostilities and frustrations which, however erroneous, are well and easily understood.

Lord Mackay of Ardbrecknish

I am not entirely sure that what the noble Baroness is suggesting is practical. I can see the point that, if the money was all wrapped up in the child and paid to the child, that might remove the aggravation that the absent parent feels that he is paying for this woman who may or may not have walked out on him—who knows?—while the second wife may have some feelings as regards paying for the first wife. But the trouble is that I do not think one can pay the money to the child because I do not think the child can go down to the post office and collect the money. There are some practicalities involved here which one cannot get round. The mother has to get the money because she is the person looking after the child and buying his or her clothes and so forth—

Baroness Hollis of Heigham

Just like child benefit!

Lord Mackay of Ardbrecknish

But child benefit, as I recall, is paid to the mother.

Baroness Hollis of Heigham

It is for the child!

Lord Mackay of Ardbrecknish

I think we are splitting hairs. I see the attractions with the noble Baroness's suggestion. It would remove one of the sources of aggravation from the absent parent groups but I suspect they will just find another way to complain about the £60-odd a week. As regards the second wife paying for maintenance of the first wife, the liability is based on the absent parent's income only. The second wife's income is only relevant in protected income which can only serve to reduce liability not to increase it. So the earnings of the second wife cannot by any stretch of the imagination be taken to be moving through the absent parent to the first wife.

There is a problem here. One cannot will away history. The first wife and the child or children exist. They exist at the moment the absent parent decides to remarry—to repartner, as it is called in the modern jargon—and to have more children. He cannot simply draw a line under history and forget about those who have gone before. That may be a comfortable way for him to deal with the matter, but none of us would agree with it.

Baroness Seear

It is very late and I do not want to indulge in further argument, but I should have thought that it was simple to say that the money is for the child. That does not mean that the toddler has to go and collect it. The money is meant for the child, and the mother goes and collects it. She collects child benefit. That makes the point.

I am sure that we all agree that the chap has to look after his children, if he does not look after his previous wife. That is all dealt with. If we say the money is for the child, that comforts the second wife, who wants to get her claws on it but cannot because it is going to the child. That is all to the good. I cannot see any difference here.

Lord Mackay of Ardbrecknish

It is late. It is a nice imaginary position. The money has to be paid to an adult for the child. Who decides whether it is spent on the child? For example, what about heating and lighting costs that both will share? Although the noble Baronesses seem to think that they have an attractive argument, they are splitting hairs. For example, in the case of child benefit paid to the wife for the child, can anyone give me a cast-iron guarantee that the money collected at the post office is not promptly used for purposes other than for the child?

Baroness Seear

Of course not. We know perfectly well that that happens. We are talking about the psychological problem of the second wife who is fed up because money is going to the first wife. As my noble friend Lord Meston said, that is liable to drive him into the arms of a third wife. That would complicate matters even more.

One could deal with that psychological problem by making it quite clear that the money is for the child. What the mother does with it when she gets it is another matter. One can never know what happens to it. That does not matter. The father says to the second wife, "It's nothing to do with the first woman. This is for Billy, the little boy I left behind". I cannot see any difficulty about it.

Lord Mackay of Ardbrecknish

I suspect that the argument would then shift to the money going to the first family rather than to the first wife.

The clearest indication is that it does not go to the wife, because when the child ceases to be a child and no longer comes within the ambit of the agency all the money ceases. That shows that it is not spousal maintenance in name, theory, psychology or anything else. It is connected totally with looking after the child. I have no psychological problem. I trust that the rest of the world does not have one either.

Earl Russell

I am most grateful to both noble Baronesses for a thoroughly constructive approach to the problem. The Minister's response illustrated that imagination is a plant which does not flourish in Whitehall. His toddler sounds remarkably like the famous James James Morrison Morrison Weatherby George Dupree, who said: You must never go down to the end of the town, if you don't go down with me". It is not quite as complicated as the Minister made out. However, since he introduced the term, the verb, "to repartner" as an intransitive verb—

Baroness Seear

Please do not start on that!

Earl Russell

I was only going to ask the Minister to write to me. I have already drawn his attention to its use in the memorandum to the Delegated Powers Scrutiny Committee. If he can find any previous use of the word I should be very glad to know. I shall not ask for that now. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 53 to 55 not moved.]

Earl Russell moved Amendment No. 56:

Before Clause 18, insert the following new clause:

("Exempt income of absent parent

. In Schedule 1 to the 1991 Act, after paragraph 5 there shall be inserted—

"5A.—(1) Regulations implementing paragraph 5 of this Schedule shall ensure that the exempt income of an absent parent or a parent with care includes—

1. (a) an allowance in respect of the full amount of any council tax or water charges in respect of the parent's home;
2. (b) an adequate allowance in respect of the liabilities referred to in sub-paragraph (2) below.

(2) The liabilities in question are any debts, obligations or other liabilities of the relevant parent which—

1. (a) are legally binding on him (whether under civil or criminal sanction); and
2. (b) arise from transactions effected, or events occurring, before the date specified in sub-paragraph (3) below.

(3) The date in question is—

1. (a) in the case of an absent parent, that on which he first received a maintenance enquiry form under this Act;
2. (b) in the case of a parent with care, the date on which she first submitted to the Secretary of State a completed maintenance application form under this Act.

(4) An allowance in respect of a liability referred to in sub-paragraph (1) (b) above shall not be regarded as adequate within the meaning of that provision, unless (on the basis of weekly equivalence) it is at least equal to—

1. (a) the amount payable periodically by the parent in question in respect of the liability in question under arrangements which were in existence at the date referred to in sub-paragraph (3), where such arrangements then existed; or
2. (b) in any other case, the minimum amount which would be necessary to enable the liability to be discharged by periodical payments within 12 months of the effective date of the maintenance assessment in question" ".).

The noble Earl said: I am sorry for this great flurry of papers. There does not seem to be any time between one amendment and the next to get one's papers in order.

Amendment No. 56 deals with the exempt income of the absent parent. It provides that an allowance should be made for council tax .and water charges—for debts, obligations and other liabilities which are legally binding whether under civil or criminal sanction, and which arise from dates before the parent became subject to the Act.

The amendment deals with the general principle that I have already asserted: that people should not be forced to default on legal obligations. If the Minister denies that, he will risk being portrayed as undermining respect for law. He should be careful how he does that. For example, we are under legal obligation to pay council tax. I cannot say to my local council, "I cannot pay my council tax because I must put child maintenance first". If the Minister insists. on the sort of priority he demands, he will have to provide for a power to default on other items. That will create very different priorities from those which exist in most households. People do not default on legal obligations—at least, we hope that that is the case. But because they do not default on legal obligations, what they pay to maintain their children, however much they regret it, because they respect their legal obligations, is diminished.

I do not believe that the Minister will find in any ordinary married household in the land that child maintenance has the priority that it is given under the Bill. I believe that the Bill is different in this respect from the rest of the world. These matters should be taken into account. If they are not, a court will force them to be taken into account.

If the Act does not take those factors into account, it has to allow people to default on them; and that would be a very poor way out of the situation. I beg to move.

Lord Mackay of Ardbrecknish

The noble Earl has explained that the amendment would alter the calculation of that part of the assessment formula known as exempt income.

Exempt income is the amount deducted from a parent's net income in recognition of his or her basic expenses. It includes set amounts for the living costs of the parent and any natural children in the household and an allowance for housing costs. The formula then deducts maintenance from the parent's remaining income at the rate of 50p in the pound until the basic maintenance requirement is met and, in the case of absent parents, a further, lower, percentage if there is any income left over.

The proposed amendment would alter the calculation of exempt income to include council tax, water charges, legally binding debts and obligations (including, for example, fines) and any obligations arising before the Child Support Agency's involvement in the case. Those expenses would be allowed in all cases with no further consideration as to reasonableness or to whether the allowance would be just or equitable in all the circumstances of the case.

Exempt income is specifically designed only to meet the every day expenses which are likely to be incurred by all parents. These are basic living expenses and housing costs. Other expenses can be met in one of two ways. The first is from the income that is left after meeting the maintenance liability. The current legislation ensures that no absent parent will pay more than 30 per cent. of his net income in child support maintenance. Most will pay a good deal less. In the vast majority of cases this leaves sufficient income to meet essential expenses and to make choices about other expenditure.

For the small number of cases where certain special expenses cause genuine difficulty the new departure system will provide the opportunity for the individual circumstances to be examined in detail and, where appropriate, for liability to be adjusted.

With regard to the specific items of expenditure listed in the amendment, council tax is already allowed for in the "protected income" provisions which reduce the maintenance assessment where hardship would otherwise be caused and debts of the relationship or those incurred before the inception of the Child Support Agency can be cited as grounds for departure. The Government would not, under any circumstances, agree that it was right to make provisions which would effectively pay someone's fines from the money that should be going to their children. The provisions we have already included in the Bill will deal with cases where the present legislation causes difficulty. With that explanation of how we see the issue, I hope that the noble Earl will withdraw his amendment.

Midnight

Earl Russell

I never thought of the Minister as Robin Hood but he appears to be providing that child maintenance shall involve the most cavalier disregard for the law. It surprises me greatly. The Minister said that no consideration was given to the reasonableness of all the charges, but they are all legally binding charges. We do not go around saying that our legally binding obligations are not reasonable or that we shall not pay them. If we do we tend to get short shrift. In terms of the criteria of the noble and learned Lord, Lord Simon, for the rule of law, I should have thought that the Government ought to be subject to the same provisos. Where they recognise obligations to be legal, they ought to respect them.

The Minister said, "We don't all go around restricting the amount that we pay to our children because we have to pay fines." But if we are foolish enough to incur fines, that is what we all do. If we are assessed to pay a fine, we have to pay it, quite regardless of what the effect on our children will be. We cannot get out of it. So allowing the absent parent to pay the fine, as he is legally bound to, will merely put him in the same position as all the rest of the world. We shall have to come back to this because there is no meeting of minds. Where respect for the law is involved, we need to have that meeting of minds.

Lord Mackay of Ardbrecknish

If I hear the noble Earl aright he makes the proposition that if an absent parent is fined, the first place to which he can or is allowed to look, if the amendment were accepted, is reducing the maintenance he pays to the parent with care. I am sure that that is not what he intends, but if I hear him aright that is what will happen. However, either the absent parent ought not to get himself into a position where he has to pay a fine, or if he has to pay it he should look at other things he might not pay for in order to save the money to pay the fine. There will be other places where the absent parent can seek the money to pay the fine, or save up to pay it, without suggesting that he pays less to child maintenance.

Earl Russell

I am sorry to say that the Minister did not hear me aright, but since it is late at night such things happen. I never said that child maintenance was the first place to which one should look to pay one's fine; I said that if one is ordered by a court to pay a fine, one has to pay it. That means that all one's other expenses have to give way to a legal obligation because one may be sent to prison in some cases if one does not.

The Government's approach here is deficient in respect for the law. I do not withdraw that charge; we need to return to it in other contexts. However, for the time being beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 57:

Before Clause 18, insert the following new clause:

("Disregard of invalid care allowance

.—(1) Schedule Ito the 1991 Act shall be amended as follows

(2) After paragraph 5 there shall be inserted—

"5A. Regulations governing the calculation or estimation of the net income, or the disposable income, of an absent parent or a parent with care, shall ensure that any sums paid or payable to or in respect of any person by way of invalid care allowance under section 70 of the Social Security Contributions and Benefits Act 1992 shall be disregarded." ").

The noble Earl said: Amendment No. 57 is, I hope, slightly less provocative. It allows that income which shall be exempt from consideration under the formula shall include invalid care allowance. It may well happen that an absent parent with a second family has one child for whom he receives invalid care allowance. That is a specific earmarked payment for a real need.

It seems to me inequitable and mistaken that the payment should go into the income which is assessed under the formula for charging for child maintenance because that income is attached to one specific need. If it goes elsewhere, that need will be unmet. In terms of parliamentary appropriation, as well as in terms of appropriateness, this is a mistaken and not particularly constructive use of money. This is an amendment which, in terms of respect for the sick, I hope the Minister might consider with slightly more favour than he showed for some of the others. I beg to move.

Baroness Hollis of Heigham

Basically this amendment relates to the cost of sick or disabled children and the ICA that goes with that situation. In responding to the noble Earl's amendment, with which I am very much in sympathy, the Minister could perhaps tell us what is understood by paragraph 2(3) (c) of new Schedule 4B in Schedule 2: costs attributable to a long-term illness or disability of the applicant or of a dependant of the applicant". This is a basis for a departure.

When I read that I assumed that it was designed to take account of the situation that the noble Earl indicated; in other words, that given that ICA followed such a long-term illness or a disability and was a recognition of the costs of caring for that child, this would indeed effectively be exempt income because it would be grounds for departure. I always understood it to mean that. Perhaps the Minister can confirm my understanding. If it is not the case, then the noble Earl is right: we need to revisit this provision.

Lord Mackay of Ardbrecknish

Perhaps I may address the noble Earl's amendment first. He seeks to ignore invalid care allowance in assessing a parent's income under the maintenance formula.

Benefits such as disability living allowance, which are paid to recognise the special needs of disabled people, are ignored under existing rules. However, invalid care allowance is paid to someone of working age who cares for a severely disabled person. It is essentially an earnings replacement benefit, like unemployment benefit and incapacity benefit, and as such is treated in the same way in the formula as the earnings which it replaces.

Very few absent parents will receive this benefit. Those who do are unlikely to have the means to pay more than the minimum amount of maintenance, and may not be required to make any payment at all—for example, if they have a dependent child in their own household.

Where a parent with care receives the benefit, she would normally need to claim income support, so would in any case be treated as unable to contribute to child maintenance. The only absent parents likely to benefit from this amendment are those who have their maintenance reduced under the protected income rules. If they have a new partner who receives invalid care allowance the effect of the amendment would be a reduction in their maintenance liability.

I am asked about paragraph 2(3)(c) of new Schedule 4B. This will deal with cases where someone in the parent's family is ill or disabled and has costs in excess of any benefit provision. "Costs" in this regard means such things as transport, heating, and so on. It refers to those kinds of costs and not, as the noble Baroness suggested it might mean, the invalid care allowance. It refers to costs in excess of any benefit provisions that somebody may receive in these circumstances.

Baroness Hollis of Heigham

Can the Minister give further clarification? He used the word "parent" but did not at the key moment say whether he was talking about an absent parent, the parent with care, or a second parent. What would be the situation if, in the second family, the new wife brought her own child with her (who was therefore the step-child of the absent father) who was disabled and that mother was in receipt of ICA but the absent father was in work. A calculation is then made as to the protected income. Would her ICA be protected?

Lord Mackay of Ardbrecknish

I might just remind the noble Baroness of what I said earlier in reply to the noble Earl, Lord Russell. The second wife's income is relevant only in protected income, which can only serve to reduce liability, not increase it. I suspect therefore—I shall check because we are getting into rather complicated business at the moment—that if invalidity care allowance is treated as income replacement, then the second wife's income, if it were invalid care allowance, would be only relevant and protected income. That would only serve to reduce the liability rather than increase it. In the words of some Members of the Committee that means that it would be beneficial in the way that it was applied.

If I am wrong in my interpretation of the pieces of paper in front of me and what the Bill says, I shall inform the noble Baroness.

Earl Russell

Does the Minister want to contribute anything further to the debate?

Lord Mackay of Ardbrecknish

I think not.

Earl Russell

I am most grateful to the noble Baroness for calling my attention to Schedule 2 to the Bill. The effect of that will depend on the definition of disability, which in due course is to be prescribed. So it is quite hard to know what its contribution will be.

I am grateful to the Minister for the care he has taken. I need to read what he said with a good deal of care. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Lucas

I beg to move that the House do now resume.

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

House resumed.