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Mr. Burstow: I am listening closely to the explanation for retaining war pensions in the measure. Have the Government considered using regulations instead of specifying war pensions in the Bill? Such an approach permits the addition of benefits over time. If the Minister accepts that there is little fraud against war pensions, why not consider using regulations and removing the provision? The Government would thus not insult war pensioners.

Angela Eagle: We are not insulting war pensioners by stating in a measure that it is possible to commit fraud against war pensions. I agree that only a trickle of war pensioners have committed fraud, none of which has been sanctioned. We have been open about the figures in our debates. We do not prosecute when it is against the public interest. However, it is possible to commit fraud against war pensions. Including that possibility in the measure does not mean that the Government claim that all war pensioners defraud the system.

Mr. Pickles: The Minister is right to say that the clause is symbolic and conveys a message. However, including war pensions conveys a bad message for the Government. I am confident that she has examined the figures, so will she answer a simple question? How many war pensioners in the past five years, or the past year, have committed the offence twice?

Angela Eagle: The hon. Gentleman asks a question to which, like those in referendums, he knows the answer. In the past year or so, there have been six cases of war pensioners defrauding the system. None has been prosecuted and none has so far repeated the offence. As I said earlier, we have been as open as possible about the figures. However, that does not mean that the provision should not be included in the Bill. I emphasise that the Government do not claim that war pensioners are fraudsters, but we want to allow the Bill to extend as far as necessary in case there is a problem in future.

Amendment No. 18 uses the term "state retirement pension". It is widely used but has no meaning in law. The reference to "any retirement pension" may appear too broad, and I suspect that that led to the amendment. However, it should be considered in the context of "disqualifying benefit" in clause 7(8). It defines sanctionable benefits as

and lists the exceptions, including "any retirement pension".

Subsection (8) defines a disqualifying benefit as

or its Northern Ireland equivalent, or

its Northern Ireland equivalent or "any war pension". The Bill therefore refers to any retirement pension that is paid under the 1992 Act.

We commonly describe those pensions as "state retirement pensions". The phrase covers the basic pension, the new second-tier pension or the old state

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earnings-related pension scheme. Other pensions, such as private and public sector occupational pensions, are not paid under the 1992 Act. There is therefore no need to tighten the definition because, perhaps despite appearances, the Bill makes the necessary provision.

We strongly believe that clause 7 and the two-strikes provision are important. We therefore oppose Liberal Democrat Members' attempts to remove them. The two-strikes requirement sends an important signal that we will not tolerate continued defrauding of the benefit system and that we will continue to search for methods of protecting public funds from people who believe that they can defraud the system indiscriminately. All the amendments are unacceptable and I hope that they will be withdrawn.

Mr. Webb: The Minister, with her usual prescience, guessed right: we are unconvinced by the responses. The best that the Government can do on war pensions, which united the Conservative party and the Liberal Democrats, is to say that if we squeeze other parts of the system, pressure will be brought to bear on war pensions and that that will lead to a mysterious surge in serial, bogus war pension applications. That seems practically absurd. Regrettably, this is a case of a Department that, at this end of the building, does not accept amendments to its Bills--however flawed they may be--on principle, regardless of the merits of the arguments.

7.30 pm

On the question whether the sanctions provisions should be in the Bill at all, I am grateful to the Minister for making at least some attempt to respond to the question, "What about the children?" She mentioned hardship provisions, and said that the sanctions would affect only the personal allowance, not the other parts of the benefit. However, she seems to be holding two mutually inconsistent positions. The first is that the sanctions are going to hurt and will be a deterrent. She believes that they will put people off, because people will know that if they are bad boys, the sanctions will hurt. Then she says that they will not hurt the children because there will be hardship provisions.

Those two statements cannot simultaneously be true. Either the sanctions are not going to hurt, in which case everything that the Minister claims for the Bill will not work; or they will hurt, in which case they will also hurt the children. It seems to me that, within a benefit unit, when the only income coming in is being paid to the claimant, about whom we are arguing--

Angela Eagle rose--

Mr. Webb: This is very exciting; I give way to the Minister.

Angela Eagle: What I have tried to say is that there are protections for the children, and that there is also a balance to be struck between getting the deterrence right and indiscriminately hurting the innocent. The idea is that the provisions strike that balance, which is what I was attempting to get across to the hon. Gentleman.

Mr. Webb: The hon. Lady did, indeed, use the word "balance". However, the question is whether any

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diminution of the living standards of a child is acceptable. Can we go any way down that road when trying to strike a balance with the other things that we are trying to achieve? The rights and welfare of the child should be inviolate in these circumstances, and the punishment should not leave a household, or benefit unit, below the poverty line.

The Minister seemed to suggest that, because one part of the total amount of benefit was being sanctioned, it could somehow be ring-fenced and that the welfare of the child would not be prejudiced because the money intended for the adult would go down, but the money intended for the children would not. It is clearly an absurd notion that the flow of funds into a household can somehow be ring-fenced. Although one part of the money is nominally paid in respect of the adult and another part in respect of the children, in practice that money all goes into one pot in that household. As I said earlier, the first thing that happens is that the necessities are paid for. Necessities such as food and bills do not go away. What is left is then spent on what the household needs.

Angela Eagle: Given that, after a first conviction, an individual will receive plenty of warning not to do it again, and be told what will happen if he or she is convicted of a second offence, does the hon. Gentleman think that that individual should take any personal responsibility for his or her future actions and the effect that they may have on his or her children?

Mr. Webb: I absolutely think that they should take such responsibility. The question is if they breach that personal responsibility, who should suffer--the individual or the children? The Minister appears to be happy that the children would suffer as well as the parent. She has said precisely that. She has said that the appropriate penalty is a loss of income to the household. All the members of the household will suffer. They are not ring-fenced. A person who does something that we all agree is wrong, and who has committed the crime twice, is presumably not the kind of person to say, "Well, I'll keep the money for the kids and make sure that they are all right, while I take it on the chin." Indeed, the contrary would be the case.

Angela Eagle: I thank the hon. Gentleman for being so generous and giving way again.

All through the debate, the hon. Gentleman has said that he is happy for these people to go to prison. Does not he think that household incomes and children might suffer when that happens, probably in a far worse way than would be caused by a benefit sanction lasting 13 weeks?

Mr. Webb: So far as I am aware--the Minister may correct me on this point--the spouse and children of someone in prison retain full benefit entitlement proportionate to the size of the family that remains to be supported. [Interruption.] An intervention from a sedentary position suggests that prison would impose a bigger financial penalty.

Let us assume that a person--to make life simple, let us say a father--is in prison and has gone out of the household. The benefits system determines how much money the mother and children need to live on. Unless the Department of Social Security is saying that the benefit rate for what is left under the provisions is enough

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for a family to live on, that family will have a better standard of living than if it had an extra mouth to feed and a less than proportionate increase in benefit. Hon. Members have not grasped the point that a family whose father is in prison will have one mouth fewer to feed, but under the provisions it will have lost the sanctionable part of the money. Materially, its living standards would, therefore, be higher in the former case.

Imprisonment is an extreme penalty. I mentioned community service. Assuming that we consider community service to be a penalty--there might be those on the Conservative Benches who do not--why would not it be an appropriate response? It would penalise only the person who had committed the crime, not their children.

The Government have said that they want to abolish child poverty: they want no children--zero--in poverty. The measures, applied to a sanctioned family, will leave it in poverty, below the benefit level. So long as the legislation remains on the statute book and is being applied to families with children, the Government will never achieve their stated goal of abolishing child poverty.

My hon. Friend the Member for Sutton and Cheam (Mr. Burstow) suggested that we should delay the implementation of the provisions. In a slightly convoluted argument, the Minister suggested that a delay of two years would be a delay of more than two years because it would take time for things to get going. However, even if the Bill became law tomorrow, it would take time to get going, so my hon. Friend's proposal would entail implementation two years later than the Government's implementation and no longer. That time could be better used to examine the effect on children, for example, of sanctions that are already in place, before introducing any more.

The Government have cited one piece of research that they have carried out. There is no evidence that that research has informed the way in which the sanctions are structured. The Minister has not tried to argue that. The Government have done some research and, so far as I can see, ignored it. The evidence is that families, and particularly children, suffer in these circumstances.

There is clearly a fundamental difference of principle between ourselves and the other two parties. It would probably be fruitless to divide the House on this issue, but we shall certainly continue to campaign--in this Parliament and beyond--for the principle that punishing an innocent person for the guilt of another is not a humane punishment policy. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Order for Third Reading read.

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