Select Committee on Social Security Minutes of Evidence

Examination of witnesses (Questions 40-46)



  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.


  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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