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Community Finance Tax Credit

Mr. Tony Colman accordingly presented a Bill to introduce a tax credit to encourage investment in community finance institutions to enable development of social enterprise in areas of deprivation: And the same was read the First time; and ordered to be read a Second time on Friday 3 March, and to be printed [Bill 44].

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Orders of the Day

Child Support, Pensions and Social Security Bill

Order for Second Reading read.

Madam Speaker: I should inform the House that I have selected the amendment in the name of the Leader of the House--I am sorry, in the name of the Leader of the Opposition. I regret to say that Back-Bench speeches are limited to 15 minutes today, as demand to speak is so great.

3.41 pm

The Secretary of State for Social Security (Mr. Alistair Darling): I beg to move, That the Bill be now read a Second time.

It gives me great comfort to know that my right hon. Friend the Leader of the House has not tabled an amendment to the Bill.

The Bill takes welfare reform a stage further by introducing reforms in three key areas. First, it tackles the inherited mess of child support and will help more than 1 million children who miss out on the help that they should get. Secondly, the Bill strengthens the links between the benefits that people receive and their debts to society, and provides for new action to reinforce community sentences. Thirdly, it introduces the second stage of our pension reforms, which will help more than 14 million people--the low paid, carers and others who have lost out in the past.

The Bill contains several other measures, including changes that will bring the war pensions appeals system up to date and toughen fraud inspectors' powers. They all build on reforms that have been made since the election, and promote opportunity, reduce dependency and provide greater security--in short, everything that a modern welfare state should do.

We are determined to ensure that children get the best possible start in life. We are the first Government to be committed to eradicating child poverty in a generation and to halving it in 10 years. We are determined to end the scandal of child poverty, which wrote off a whole generation of children who were born at the wrong time in the wrong place under a Tory Government. Reforming the Child Support Agency will help to achieve that.

We are also committed to making work pay, getting more than 125,000 young people off dependency and into work through the new deal and tightening the benefit system to stop abuse. The Bill takes that a step further. We are also tackling another Tory legacy--pensioner poverty--today and in future with long-term reforms to the pension system.

I want to focus on the three main reforms: child support, community punishments and pensions. However, I shall, of course, be happy to answer questions on other measure in the Bill. First I shall speak about our reforms in part I of the Bill to sort out the CSA. Our starting point is that the primary responsibility for looking after children

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lies squarely with both parents, whether they live together or apart. The Government have to ensure that, when parents live apart there is an effective system of child support in place. That is not the case at the moment. We must ensure that the child support system makes sure that children get the support to which they are entitled and on which they depend.

The current system has failed children. The agency spends 90 per cent. of its time chasing information and only 10 per cent. ensuring that money gets through. Consequently, only 300,000 of the 1.5 million children on the agency's books gain from maintenance paid; only 100,000 receive all the money that is due to them. It is worth bearing in mind that by 2004 we reckon that 2 million children will be on the CSA books.

Under the new system that we propose, mothers and their children--it is usually mothers, though not exclusively so--will get what they are due, and quickly. The system that we inherited is also failing those parents who live apart from their children but want to support them. As hon. Members will know, the agency often needs so much information to work out how much is due that it can take months before a decision is made. As a result, parents can face huge debts through no fault of their own. Our reforms will change all that and, as a result, more than 1 million children who miss out today will receive help.

Mr. Eric Illsley (Barnsley, Central): I am most grateful to my right hon. Friend for giving way so early in his speech. During consideration of the Bill, and particularly in Committee, will he look at perhaps giving the CSA powers to investigate fraud, which could improve its decision-making process? As I understand it, the agency has no such powers and investigations have to be passed to the Benefits Agency, which leads to breakdowns in communication and certain delays. I am sure that the agency's situation would improve if it were given those powers.

Mr. Darling: I am well aware of that problem and we shall introduce through the Bill the power to appoint inspectors to investigate cases in general. Under the present system, if there are complaints about a case, uncertainties or suspected wrongdoing we have to appoint an inspector who is designated to a particular case. That takes time. We propose to designate inspectors who shall have general powers to investigate suspected wrongdoing and see whether anything needs to be done. With regard to fraud, it should be borne in mind that the Department of Social Security and its agencies ought to operate far more closely together, which I have been encouraging. I want to avoid having several different fraud arms, because fraud is a specialist field, but I am mindful of the point made by my hon. Friend. The whole system will depend on us being able to fix and pay the right amount quickly, so we do not want delays involving papers being passed from office to office. The new powers to appoint inspectors to look at individual cases will go some way to dealing with that.

Before I deal with our proposals, I want to deal with the Liberals and the lawyers, if I may put it that way, who want us to go back to the courts. I speak as someone who practised in the courts and has some experience in this area. It is important to dispose of this matter once and for all. Those of us who have worked in the divorce courts

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know that going back to the courts is not the answer. It is worth bearing in mind that in 1979--to take a date at random--slightly more than half lone parents on income support received maintenance. The rest did not. By 1990, the courts were getting money to less than half that figure. Those of us who have worked in the courts will know that decisions are often unpredictable, unreliable and unfair.

Mr. Archy Kirkwood (Roxburgh and Berwickshire): They still are.

Mr. Darling: The hon. Gentleman says that they still are, but it is Liberal policy to go back to the courts, which is absolute nonsense. Certainly in my experience, income support, like rock bands, was something that judges did not know much about. The result was that those who were arguing on behalf of a client on income support were frequently met with a completely blank expression from the person on the Bench, who had not a clue what they were talking about because the numbers were so small. He did not recognise that such numbers could possibly exist.

Dr. Norman A. Godman (Greenock and Inverclyde): My right hon. Friend is looking for a temporary sheriff's job.

Mr. Darling: I do not think that I want to be a temporary sheriff. The important point is that going back to the courts would not only resurrect unfairness and all those uncertainties, but would cost £800 million a year--a fourfold increase in the cost of running the CSA. I do not know whether the Liberals have thought about that policy, but I should point out to them that the cost of going back to the courts would eat up almost half the extra penny on income tax that they want to raise, allegedly for improving education. I understand the lawyers' interest in the point, but if the Liberals seriously want to go back to the courts they have to reflect on the fact that putting 1 million cases into the court system would not only involve a cost, but would completely jam the system. That would prejudice the interests of not only children, but the whole civil and criminal justice system. I do not believe that their policy has any credibility whatever.

Dr. Godman rose--

Miss Anne McIntosh (Vale of York) rose--

Mr. Darling: I shall give way to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) and then to the hon. Member for Vale of York (Miss McIntosh).

Dr. Godman: I welcome the provisions of clause 10, but may I ask whether the Government intend to extend legal aid to child support appeal tribunals? What is the point of an appeals system if adequate representation is not possible?

Mr. Darling: My hon. Friend will not be surprised to learn that the Government do not intend to extend legal aid to the tribunals. The tribunal system is there, and it works. When it was established, the idea was to try to keep lawyers out of it. We hope that, by simplifying the

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system, we can substantially reduce the number of people who want to go to tribunals, and thus make the system fairer.

I shall stop knocking lawyers now, as one day I may wish to practise in the courts again.

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