HL Deb 17 December 1996 vol 576 cc1470-80

7.47 p.m.

Earl Russell rose to move to resolve, 0054hat this House calls on Her Majesty's Government to withdraw the Child Support (Miscellaneous Amendments) (No. 2) Regulations and lay amended regulations omitting Regulation 9.

The noble Earl said: My Lords, this Motion, if carried, would request the Government to delete Regulation 9 from the Child Support (Miscellaneous Amendments) (No. 2) Regulations. I have two different reasons for moving the deletion of Regulation 9. First, I believe that what the Government are doing is in itself quite seriously mistaken. Secondly, I believe that in terms of normal procedure in this House what they are doing is—and I choose my words carefully—unusual.

The previous law provided that when a benefit penalty—now 40 per cent. of benefit—was imposed on a woman who did not co-operate with the Child Support Agency, that penalty, which is itself heavy enough, could be suspended—and I say suspended, not remitted—if that person was already subject to a large and serious number of deductions from benefit. That is what is now withdrawn. I think the Government are mistaken because they are creating a very heavy burden on the women concerned and therefore also on their children. They are in fact in danger of infringing the basic principle of social security, which is, "Don't let poor Nellie starve".

In November 1996, 1.7 million people had more than one deduction from benefit. I shall run through some figures which may be familiar to the Minister because they have been quoted in the other place; but they are good figures and they bear repeating. The average—I am not dealing in exceptional cases, this is the average—deduction from benefit is 11.99 for electricity; f10.49 for gas; £4.90 for rent arrears and other housing costs; £5.83 for water—I fear we may expect that to go up—and £6.37 for social fund payments. That makes a total of £39.58. There are various figures that that omits such as deductions for court fines, which may on occasion be quite heavy. The noble Lord, Lord Gisborough, drew attention to these in the House very recently.

Put on top of a deduction like that—an extra 40 per cent. deduction from gross benefit—one is not going to be left with very much. I do not understand how people are meant to make a honest living on that figure. The Minister is in fact leading them into temptation. We know whose office that is and it ought not to be the office of the Government. So my first objection is simply that this is too heavy: it infringes the basic principle of social security that people ought to be able to live.

If I know the Minister's line of argument he is going to come back to this with a fairly standard set of arguments about why is this the business of the taxpayer. It is the business of the taxpayer because if any taxpayer is that badly off he ought not to be paying taxes at all. It is in the interests of the taxpayer that those who go out of work—I believe that that has happened to 8 million people since the last election—should not waste away, but should be able to resume work at some future date. So I believe that the taxpayer has a concern for keeping his fellows alive. He has that concern as a matter of self-interest as well as of altruism. So I believe that the taxpayer, if he refrains from starving women and children, may be doing so in his own interest.

I come to the circumstances of this change. The old system, the provision for suspension whose disappearance I so much regret, was first agreed to by the Government in response to an amendment moved by the noble Lord, Lord Carter—and I have given him notice of what I am doing today—to the Child Support Act 1995. The Minister's acceptance of that provision introduced this power to suspend in order to reduce benefit directions in cases of hardship.

On that occasion the noble Lord, Lord Carter, remarked, perhaps just a little smugly that it shows what one can do when one sets out to improve a Bill rather than mortally to wound it. Yes, it does. Appeasement does not work and it has not worked on this occasion either.

That measure was brought into effect by regulations introduced in December 1995 and came into force as recently as January 1996. So this concession has been withdrawn after merely 10 months in operation. It is that which I describe as "unusual". If one is to withdraw a concession that quickly, without casting doubt on the original concession itself, one needs to have a pretty strong reason. I have looked carefully at what Mr. Mitchell said in another place on 11 th December. If I have understood him correctly, he says that he is withdrawing the concession simply because a lot of people used it. It is not open to abuse, but open to use.

If the Government had understood the reasons why this concession was asked of them and when they so generously agreed to it, they would have expected that a lot of people would take advantage of it. They would have known that the extent of the deduction from benefit was very wide indeed and that the amount of hardship with which we are dealing was very widespread. The number of people who took advantage of this concession seems to me to show exactly how right the noble Lord, Lord Carter, was to move the amendment in the first place. It is really not a sufficient excuse. The Minister needs a better one.

The Government are also getting themselves into a real moral panic about people not collaborating with the agency. But I explained to them in 1991—and everything that has happened since confirms it—that one simply cannot find an economic incentive which is strong enough to make a woman co-operate when she is determined not to do so. I told the Government in 1991 that by believing that they could do it all by economic incentives they were missing so much. The repugnance in many cases to resuming negotiations is an emotional one. One might starve them before one makes them overcome it. So I believe that attempting to make life more difficult for the women concerned is not going to achieve the desired effect however severely it is done. I warned the Government of that and I believe that experience bears me out.

It may be that they have good reasons for this. I know the Minister of old as an honourable opponent and I am pleased to be opposite him. But when future historians read these exchanges—

Baroness Hollis of Heigham

They won't!

Earl Russell

They may: one will, at least. There is no subject so obscure that it cannot be the subject of a Ph.D, as I am sure the noble Baroness knows very well. They may think that the concession made in 1995 followed hard on the vehement reproaches from the noble and learned Lord, Lord Simon of Glaisdale, because the Minister was conceding nothing. Therefore, it may look as though it were done for show and not for substance. I believe that that impression would be unfortunate especially since I believe it to be untrue. Some response might help to take that bad taste away. I shall listen to advice from the Opposition Benches because it is the Opposition's honour which has here been wounded. If it were my honour I would know what to do, but since it is their honour I must listen to what they say about it. I beg to move.

Moved, That this House calls on Her Majesty's Government to withdraw the Child Support (Miscellaneous Amendments) (No. 2) Regulations and lay amended regulations omitting Regulation 9.—(Earl Russell.)

7.57 p.m.

Baroness Hollis of Heigham

My Lords, if I should trespass on the conventions of the House because I misunderstand the order of procedure, I apologise. Perhaps I am a little confused about what we are doing. I wish to register some concern about this matter. A Starred Question was changed at the last moment. This Motion was inserted today, thus requiring a re-ordering of our debate speakers' agenda without prior notice and consultation. I cannot believe that that is the best way to get the most helpful and constructive debate.

I cannot and will not suggest to my noble friends on these Benches that we support any such Motion in the Lobby. We do not do so although I support many of the sentiments and share many of the concerns of the noble Earl. As I said, this might have been a more effective contribution had we had more than a few hours' notice that the order of today's agenda was going to be reshaped.

Like the Government, we believe that absent parents should pay proper child maintenance and, like them, we do not believe that one should condone collusion between the parent with care and the absent parent, although I would add that I share with the noble Earl the belief that a proper maintenance disregard and not just the job bonus would encourage more voluntary co-operation from lone parents.

However, this might be the place to pay tribute to the agency. In no case, as far as I know, has the CSA erred in requiring a parent with care to disclose information where that parent is in fear of violence. I hope very much that the CSA will continue to have such an honourable track record. I am sure that if it did make such a grievous error and a lone parent was assaulted that would severely damage the credibility of the agency, which needs to ensure that on this issue, above all, it is protected. The CSA is absolutely right to be very careful indeed.

To come more substantively to the point of Regulation No. 2, since January 1996 the Government decently suspended the imposition of benefit penalties where the lone parent already has deduction from her—I shall use the word "her" throughout for this purpose—benefit for arrears of rent and utilities. Now, less than one year later, that suspension of the Government is being overturned—and why? The Government insisted in the other place that lone parents were using weekly deductions for rent and utilities from benefit as a way of avoiding incurring benefit penalties for failure to disclose relevant information; in other words, lone parents were manipulating their direct deductions to avoid the benefit penalty.

I am neither so sanguine about the ability of lone parents to do that, given the complexity of their finances, nor so cynical that they would do that as the Government's remarks appear to suggest. Essentially, the Government say that lone parents are doing conjuring tricks with their income to avoid having to pay a penalty. In one of two cases that may be the case. However, in my experience it is also true that lone parents give priority to the most urgent and pressing bills. For most of them, that means a home to live in for themselves and their children; that is, their rent payment, followed by payments for their utilities so that they can cook and stay warm, especially as many will be in poor housing and their children may be in poor health.

As the noble Earl said, the simple truth is that benefit levels are so low that 1.7 million claimants are in debt and in arrears and therefore have deductions from benefit. That situation existed long before the Child Support Agency existed. Debt and deductions are a feature of poverty, not a response to the Child Support Agency or a manipulation of its rules. For the Government to believe otherwise indicates cynicism of a very high order. The Government support that contention by saying that among lone parents as a group there is a high percentage of benefit fraud.

I should like to press the Government on this matter. It is known that, whereas the typical male benefit fraud is for a man to claim unemployment benefit or JSA while doing jobs on the side—any man must know that moonlighting is cheating and wrong—the "typical" fraud perpetrated by a lone parent is to have a boyfriend living in while continuing to claim benefit as a lone parent. I do not condone that financial arrangement, but in no sense is that an offence of equal magnitude as the man who claims JSA and works on the side. Why not? Often, the boyfriend is temporary, feckless and fails to contribute financially to her maintenance and the maintenance of the children, whatever the benefits agency may believe about the bedroom arrangements. He may judge that as the children are not his he should not have to contribute to the household budget for their support. She may have taken him into her bed but it does not mean that she has taken him into her family or that he contributes to the family budget. Understandably, she may believe after her experience that in financial terms she is indeed on her own and is entitled to claim benefit as if she were on her own. That reflects the realities of the world in which she lives. I do not condone fraud. However, to insist that among lone parents there is a high incidence of fraud, and that that is the type of fraud exhibited, is to misunderstand and misread the domestic and financial situation in which lone parents, in good faith, regularly find themselves.

When the draconian 40 per cent. penalty was introduced we argued that instead of increasing the penalties the correct response was greatly to increase the number of home visits to see the true home situation; for example, whether the lone parent had good reason not to reveal information. If the lone parent was not truly "lone" but falsely claimed benefit when she was in a proper and sustained partnership, obviously that would be wrong. However, as that is not always or necessarily the case lone parents should not be abused by treating all of them as fraudulent. That is what the Government do.

My fear, which I am sure other noble Lords share, is that the end result of the Government's draconian policy will not be improved child support but increased child poverty. A lone parent with a child under 11 in the current year will receive income support of about £80 per week. A benefit penalty will leave her with £61 per week. If on top of that she suffers the average level of deductions for arrears on electricity, gas, water and the social fund she and her child will have just £26.26 per week on which to live for all their food, clothes, travel and household costs. That is a sum of money that one of us might spend on one meal in the Barry Room tonight.

Already one child in three in this country is born into poverty. There is no doubt that by adding to the financial pressures on the parent with care the regulations will add to the poverty of the child who is cared for. When we punish the mother we punish the child. To say that the mother should behave differently is all very well, but the child will still suffer. They are without our support and protection. The Government are wrong in what they are doing. I hope that even at this late stage they will consider reverting to their original position and suspend the benefit penalty where other deductions are in place.

8.5 p.m.

Lord Mackay of Ardbrecknish

My Lords, in responding to the Motion of the noble Earl, I shall also address the two draft regulations standing in my name on the Order Paper which were laid before the House on 25th November.

Baroness Hollis of Heigham

My Lords, perhaps the noble Lord will allow me to intervene. It is for that reason that I am confused about the procedure. Is the Minister saying that at this point he is to speak to the regulations dealing with the child maintenance bonus? I tried to discover the answer to that question by a hasty exchange of notes. I intended to speak to them but I did not do so. I believed that it was ruled out because the House was dealing with a Motion only on the first set of regulations. This confirms my concern that there should not be a re-arrangement of the agenda at such short notice, as that means that at some stage we are talking at cross-purposes. I do not quite know what we should do now.

Earl Russell

My Lords, I too would find it easier to take the other regulations separately, if the Minister was agreeable to that course.

Lord Mackay of Ardbrecknish

My Lords, I am happy to help both the noble Baroness and the noble Earl by re-phrasing what I said. I shall respond to the Motion of the noble Earl and speak to the Child Support (Miscellaneous Amendments) (No. 2) Regulations. After we have dealt with that, I shall deal with the Social Security (Child Maintenance Bonus) Regulations.

This is not the first time on which we have discussed the benefit penalty for those parents with care who claim benefit but refuse to co-operate in seeking maintenance for their children. I am sure that your Lordships are well aware of the background. That is especially true of the noble Baroness and the noble Earl, because we have discussed this together on a number of occasions. The penalty known as a reduced benefit direction is intended to make clear to the parent with care the seriousness of her decision not to co-operate with the Child Support Agency. It is important to remember that a reduced benefit direction is imposed only on those parents with care who have no good reason for failing to co-operate.

The Child Support Act rightly places an obligation on both parents to support their children wherever they can afford to do so. This principle would be seriously undermined if the incentive effect of the reduced benefit direction were to be weakened in any way. One of the regulations before the House today, which is the subject of the Motion of the noble Earl, removes a provision that has been shown to have exactly that effect. Regulation 9 of the Child Support (Miscellaneous Amendments) (No. 2) Regulations, which has already been approved in another place, removes a provision that currently allows a reduced benefit direction to be suspended when, at the same time as that direction is imposed by the child support officer, other deductions are already in place from her income support; for example, to cover repayment of a Social Fund loan or arrears of fuel and rent. Reduced benefit directions are suspended where arrears deductions are made, not deductions for current consumption. The maximum arrears deduction is £7.20. Payment for current consumption will have to be met by the parent, whether she pays by deduction or directly to the supplier, if it is electricity or gas or whatever. It is also true to say that the RBD is suspended where there is any deduction for arrears, so there is not, so to speak, a threshold. If there were any reduction for arrears, the RBD would be suspended.

That provision was introduced in January of this year following a government amendment which I announced at the Report stage of the Child Support Bill. At that stage I was persuaded by the noble Lord, Lord Carter, of two things. One was that the benefit direction should be suspended if either the parent with care or the child was disabled, and nothing we are doing in these regulations changes that.

It is the second part of my remarks that evening that we are now addressing, because during the Report stage I announced that we would suspend the benefit direction if the parent with care had other deductions made directly from her income support. I said at the time that, if we were to suspend reduced benefit directions in these circumstances, we would be discriminating against those parents who were better able to budget or who chose to pay off loans themselves without involving the benefits system. I stand by that view today. I did however agree to put down an amendment to do exactly what the noble Baroness and the noble Earl approve of, although I put in a caveat that I was not at all sure of it. That remains my position, but more so.

I shall come to the reason why we decided to change our minds on that. Since the suspension was introduced, a clear picture has emerged of a pattern of behaviour being adopted by increasing numbers of parents with care who set out not to co-operate with the Child Support Agency. I want to emphasise that again. We are actually talking about parents with care who decide not to co-operate with the agency.

The proportion of parents with care who have their reduced benefit direction suspended because they have deductions for arrears from their income support in place has been steadily increasing, and reached more than 50 per cent. in October. The indications are that this trend may well continue over the coming months. The evidence from Child Support Agency staff is that parents with care who set out not to co-operate with the agency are well aware of this loophole and are not, I am afraid, slow to exploit it. They do this by making sure they have a deduction in place from their income support as quickly as possible so that when the reduced benefit direction is imposed it is immediately suspended. This behaviour nullifies the incentive effect of the reduced benefit direction, and the numbers involved now make the situation unacceptable.

Our suspicions are further aroused when we consider that only 14 per cent. of all lone parents with a child under five have any deductions from their income support, and 27 per cent. where the child is over five. We already know from the Child Support Agency's own review of "good cause" published earlier this year that 45 per cent.—nearly half—of all parents with care who have a reduced benefit direction imposed fail to contact the Child Support Agency throughout the whole of the good cause process. Your Lordships will recall that this is quite a lengthy process, with a number of different steps in it, yet nearly half simply do not make any contact with the CSA during the procedure, which they must know is going to end up with a reduced benefit direction. Surprisingly, more than half make sure they contact the Benefits Agency in order to obtain a deduction from their benefit before that reduced benefit direction is imposed.

We should also bear in mind that the Benefits Agency's comprehensive and statistically valid review, published last year, showed that nearly 20 per cent. of lone parents were claiming or suspected of claiming benefit fraudulently—the highest proportion of any single client group. Allowing such large numbers of parents with care to have their reduced benefit direction suspended cannot be allowed to continue.

The noble Earl has expressed concerns about the levels of benefit that will be available to a parent with care who has a reduced benefit direction on top of other income support deductions. Indeed, the noble Baroness also expressed her concern about that. The answer to this potential problem lies fairly and squarely in the parent with care's own hands. She can choose to co-operate with the agency and, instead of actually checking with the Benefit Agency that there is a deduction in place, she ought to be checking with the CSA to explain to it what her position is and why she does not wish to co-operate. Of course, if she does that, and if she has a genuine reason for not co-operating and makes representations to the agency, her case will be treated sympathetically. I am pleased to say, and indeed confirm what the noble Baroness said in her speech, that the CSA has a very good record in this area of taking on board the representations of a parent with care and, where it sees that the reasons are genuine, it will not ask the parent with care to continue to work with them and to move to get benefit from the absent parent.

I believe it is simply not fair to the taxpayer or to the majority of parents with care who want the CSA to pursue child maintenance on their behalf to continue to allow others to dodge the penalty of the reduced benefit direction when they have no good cause for refusing to co-operate, and of course letting the absent parent get away without facing up to the responsibilities of the child. The requirement for a parent with care to co-operate with the CSA, unless she has good cause not to do so, is a founding principle behind the child support scheme, and I believe it has the support of the two main political parties and the vast majority of the British public.

I hope, therefore, with that explanation—an explanation which shows that we have not come to this conclusion lightly; that these are actually the statistics that are coming through from our work—that the noble Earl can see why we have come to the conclusion that we have in order to deal with the issue in this way. Any parent with care who has a genuine reason for not co-operating because she is fearful of the absent parent and how he might react only has to approach the agency to explain and it will take that on board very sympathetically. It has a good track record on this. I am afraid, however, that there is increasing evidence that the only agency they actually contact is the Benefit Agency to make sure that a deduction is in place, which of course blocks any reduced benefit direction. It simply suggests that this concession, made by us and agreed by us all in good faith, is being abused, and I do not believe that that can continue.

On the remainder of the regulations in this miscellaneous amendments package, there are various child support measures which simplify and speed up the handling of applications, together with a number of minor and technical changes. I do not believe that either the noble Earl or the noble Baroness has raised any of these matters and I need not dwell on them further. I hope that the noble Earl can withdraw his Motion, see the good sense of the proposal I am putting this evening and perhaps join us in encouraging parents with care who have a problem to contact the agency to seek its advice and help.

Baroness Hollis of Heigham

My Lords, before the Minister sits down, and given that he has spilled over into some of the other issues caught up by the regulations as opposed to the benefit deduction, may I ask him whether he will be kind enough to answer two points which, because I was confused about the procedure, I failed to make in my remarks. As I understand it, under the regulations on the proposed changes, the Government intend to give parents who are not on benefit in court orders dating back to 1993 the right to apply to the CSA for collection, but this was deferred while the CSA caught up with the backlog. When might we expect them to be brought within the remit of the CSA?

The second question is this. Given that we continue to have unacceptably poor levels of accuracy from the CSA—and I do not think even the Minister will doubt that; it has been regularly drawn to our attention by the National Audit Office—will he confirm that nonetheless the CSA expects to face a cut in its budget for running costs of about a quarter in the year 1998-99? How will that improve the efficiency of the CSA?

Lord Mackay of Ardbrecknish

My Lords, I am sure that the noble Baroness will appreciate that I am not able immediately to give her a detailed response. Of course we accept that the CSA has had, and indeed continues to have, accuracy problems, although they are improving. It is a difficult field, with some pretty unwilling participants. We mentioned parents with care earlier when referring to the subject of this discussion. There are also some pretty unwilling absent parents. Obtaining the right information is sometimes difficult. I believe that we are making progress. Perhaps I may answer the noble Baroness in writing or in the next debate when I move the next set of regulations.

8.20 p.m.

Earl Russell

My Lords, before I disappoint the Minister, I must make my apologies to the noble Baroness about the timetable. I understand that was inconvenient, and I regret it. The reason is that I had a severe cold over the weekend and my business has been put rather behindhand. I shall try not to cause that sort of inconvenience again, but we all do it to one another sometimes.

I was a little surprised by what the noble Baroness said about the CSA having never erred in a case involving domestic violence. I remember well one that came to me from Todmorden CAB where the woman who had been alleging domestic violence was told—I paraphrase from memory—to run away and stop making a fuss. I have had at least a dozen other such cases through my hands, most of which came to rest in the files of the Minister's honourable friend, Mr. Burt, who dealt with them expeditiously and effectively. If he checks his files, he will find that that is not true.

It is an unwise way of dealing with intimidation to assume that it does not matter because it has not actually been carried out. It is like the famous case of the asylum seeker from Bosnia who was told that the death threats against him must not have been genuine since they had not been carried out. It is an unwise way of dealing with it.

The Minister says that no one suffers a benefit penalty unless they refuse to collaborate for no good reason. How on earth can the Minister know that? He can know that he has not discovered a good reason. He can know that he has not been persuaded by the reason that has been alleged. But how can the Minister know in all the private history of a dead marriage that none of the reasons is good? People do also—this has survival value—act upon impressions.

I recall evidence given once by a woman who said, "It is difficult to describe. He had a strange and odd effect on me. It was the way he looked at me". I am sure that the Minister would not accept that as good cause. The man of whom the woman was speaking was Thomas Hamilton. We are unwise to ignore that sort of impression.

The Minister says that it would be discriminatory to relax rules in favour of people with a particular load of debt. The Minister would not do very well in banking. That is bad banking practice. He says that there is a pattern of behaviour involving non-co-operation. He would do well to study the various reports on the subject by Professor Gary Craig of the Children's Society. He has found a great many reasons for non-co-operation with the CSA, some of them extremely good ones. The Minister is also unwise always to assume the worst possible motives. It is like a certain sort of hellfire preacher. As a limerick addict I quote: Said the Reverend Jahez McCotten Of the devil the foxtrot's begotten! Said Jones to Miss Bly, Never mind the old guy. To the pure almost everything's rotten! I cannot help but think that that is the attitude of the DSS where it thinks that it can find collusion.

We have been at these arguments a long time. We shall he at them a long time longer. The Minister has not got an inch nearer persuading me that he is right and that the CSA will last, but we will not settle that tonight. So I beg leave to withdraw the Motion.

Motion to resolve, by leave, withdrawn.