Examination of witnesses (Questions 40-46)
TUESDAY 14 SEPTEMBER 1999
BARONESS HOLLIS
OF HEIGHAM,
MR MIKE
STREET and MRS
FAITH BOARDMAN
40. What you said there gives me another thought,
because it may well be that the person who is paying £60
may find his eligibility under the new system is £30—which
will upset him greatly, and I am not looking forward to sitting
there trying to explain what is going on—but even worse,
perhaps, from that person's point of view, is that if he is paying
£60, which may well be phased down to £30 over time,
where the wife is on WFTC she keeps the whole lot. So there is
no argument about her having a massive cut in income overnight,
because she is actually going out to work. I suspect, in those
circumstances, he is going to be more irate.
(Baroness Hollis of Heigham) Yes, but the difficulty
there is that if you were then to take into account that, you
would then build extra complications into the assessment that
was being made under the IT system. Detailed, case-by-case help
in the way that you suggest produces such complexity that you
end up having the system we have, where for too long it has taken
months and months to get the assessment and when it has happened,
because it is into arrears, he does not pay, and therefore the
money does not flow and the children remain without maintenance.
What we have gone for is, subject to the general philosophy that
children should get their money paid and that fathers should continue
to uphold their responsibilities, whether in marriage or not,
that we should keep it simple, to make it transparent and to make
it work. One of our difficulties, even with issues like phasing—and
I think it would be fair to say it would make life much simpler
if we did not have phasing and one went automatically on to it,
but we cannot do that because that would be unfair both to men
and to women—is that all the time, at policy level, we are
trading these two pressures; trying to get as much fairness as
we can against as much simplicity as we must have. If we make
it too complicated then, though we appear to become more fair,
we actually end up making it harder to deliver and that ends up
being less fair. That is what I think happened the last time round.
So you will find what appear to be anomalies all the way through
this, but they are anomalies that we have engaged with, if you
like, with our eyes open and said "What is it that makes
for effective delivery of money?" It is better to have steady
money flowing to children rather than erratic payments, and if
what we are doing increases the problem of risk, uncertainty and
erratic payment, do not do it; go for what is simpler, go with
what we can get compliance on, go for what we can enforce and
go for what is transparent. That is our driver behind those two
general principles. Why the system failed last time, apart from
being retrospective and not having anything in terms of a premium
for the parents with care, was its complexity, and it was a complexity
with the best of intentions, to make it seem more fair by taking
more circumstances into account, and it imploded in on itself.
I think that is burnt very deeply into us.
41. I do, really, sympathise with the problem,
but I do think there will be a political storm from people who
pay almost double than someone with equivalent circumstances.
They are not going to be interested in when the law was introduced;
they are going to be interested in what they pay. We all see it,
you get very upset people on these cases, and I just wonder whether
you have really worked out what you are going to say at the time
when you are faced with two identical circumstances and yet the
payments are very different?
(Baroness Hollis of Heigham) All I am saying is that
they are not identical; that the new parent has come in after
the law has been passed. Whenever you introduce a new system there
is always that cut-off point. There are, so to speak, hard cases,
including Andrew's cases, coming close to the line. There is always
hard luck when you introduce a new system. What, at least, is
fair is that it is not just a new system for newcomers and existing
cases stay on the existing system forever and "aye";
at least we are bringing them over to the new system. Our judgment
may be wrong on this, but our judgment is that the risk would
be colossally high, the system could collapse and if so it would
be calamitous for everybody. That is a judgment we are making,
but, as I say, I do not doubt Parliament will press us on this
as the Bill goes through.
42. Might you be able to give us some clarification
on the time-scale, so that at least we can say "You will
be reassessed in—
(Baroness Hollis of Heigham) We will do our best.
43. I think the face-to-face interviews are
very worthwhile and will help, but I am quite concerned about
the security of the staff, because, again, there can be very irate
conversations. I wonder what kind of provision is being made there.
(Mrs Boardman) The feedback that we have from the
first face-to-face interviews so far is, actually, that there
is a very great relief of tension in a lot of these cases. There
have been high levels of frustration and the mere fact that they
are being seen and seen by somebody with a human face actually
releases a lot of that. So certainly there are security issues
for staff, and I would not want to underplay them, but we have
found a lot of positives and nothing which cannot be handled so
far.
Ms Buck
44. Following up from Julie's point, I think
you are never going to satisfy everybody and I think everyone
round here would have sympathy with that, and Julie rightly highlights
the fact that there are going to be some painful conflicts in
surgeries. Where I do not think you would have so much of a storm
but where there is also an anomaly—and I just wondered if
this was something you are addressing—is the issue of the
parent-with-care, the woman, usually, who is currently on Income
Support and not qualifying for disregard whose circumstances,
again, will be identical in terms of income to someone who, because
of the arbitrary nature of the date of entry into the process,
will qualify for disregard. I just wanted to quickly make that
point and ask if that was something—I know it is difficult—that
you were actually addressing?
(Baroness Hollis of Heigham) We looked at that very
carefully. It is a package. We cannot, I believe, introduce the
maintenance disregard until that individual family, so to speak—her
and him and the child—move on to the new system. I think,
in a way, it is the mirror opposite of Julie's point; that one
is going to have to say "Look, your circumstances are not
identical. You have been on Income Support a long time. When you
go on to the new system then you will get the premium." The
person who is now getting the premium is somebody who has just
broken up and comes under the new caseload.
45. Yet, in a way, the deeper child poverty
is most likely to be in that case of someone who has been on long-term
Income Support, bringing up their children.
(Baroness Hollis of Heigham) I take that point. Of
our caseload about 45 per cent are on Income Support. One last
comment: I think you should see this (and I am sure you do see
this—forgive the phrasing) as part of the wider strategy
of the New Deal, lone parents, WFTC and so on, in which we are
working very closely, because, at the end of the day, child poverty
will be alleviated or ameliorated and, I hope, abolished not just
by what we are doing but, also, by getting her, with her consent,
back into work when she is ready. We are also taking initiatives
on a wide array of fronts, which is one answer, and there may
be help on other fronts there, too. I accept it is not an answer
to that particular problem, but I do not think it should be taken
totally in isolation. If we can get her into work more quickly
she not only gets the benefit of WFTC but she gets the increased
income as well. That may be a more constructive approach.
Chairman
46. I think we have run out of time. We could
spend the rest of the afternoon, but we have the luxury of using
the next 24 to 48 hours to think up even more interesting questions.
Thank you very much. That has been very useful in setting the
scene extremely well, and we are very grateful to you and your
team for coming and being with us this afternoon. Thank you very
much.
(Baroness Hollis of Heigham) Thank you very much.
Chairman: The public session is temporarily
suspended.
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