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Lord Mackay of Ardbrecknish: I have not personally had consultations with the Department for Education on these matters. So far as I am aware, there has not been any formal consultation with the department. Maintenance is taken into account in the calculation of grants in much the same way as it was before the Child Support Agency was introduced. That, I believe, was the point made by the noble Earl.

I should add that in the context of child support, maintenance, as I have already said, is not an area where there has been most pressure for change. I have indicated that maintenance is taken into account. However, I shall certainly discuss with my honourable friend Mr. Alistair Burt the points raised by the noble Earl and ensure that the

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point that I have answered him on is correct. I refer to the fact of maintenance being taken into account in the calculation of grant.

Earl Russell: I am most grateful to the Minister for that reply. I believe that it creates the possibility of some progress taking place behind the scenes—which I think is the easiest way for it to be done.

There is, of course, a problem about the concept of a dependent child. Formally it may extend only to 18, but in practice any young person at university relying on a parental contribution is, from any practical point of view, dependent. Therefore we must either allow for that, adjust the parental contribution rules to take account of it, or deprive all those young persons of a chance to go to university. As I believe we all agree that that would be a pity, I hope that the two departments can get their act together and tell us at Report stage how jointly they would like to see the system working. Then perhaps we could discuss whether the system really will work.

With that, and with thanks to the Minister for the trouble that he has taken, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Deputy Chairman of Committees: I shall now call Amendment No. 32 in the name of the noble Earl Lord Russell.

Earl Russell: I believe that Amendment No. 30 in the name of the noble Lord, Lord Carter, comes first.

Lord Carter: The grouping list may not be right.

The Deputy Chairman of Committees: Yes, it is.

Lord Carter moved Amendment No. 32:

Page 25, line 40, at end insert:
("( ) child care costs incurred by a person with care who is in full-time or part-time employment;").

The noble Lord said: I wish to move Amendment No. 32 and speak to Amendment No. 30. I am sure that the noble Earl, Lord Russell, whose name is on Amendment No. 32, will somehow find a way of entering the debate.

The two amendments deal with child care costs as a factor in departure. The purpose is to ensure that parents with care who will suffer hardship as a result of staying in work shall be allowed access to the departure process to increase their maintenance where the money is available from the absent parent on the grounds of child care costs. It was debated in the other place, and rejected by the Government on the basis that child care costs are already taken into account in the carer element of the formula and through the provision of the new child care allowance for claimants on family credit.

I am sure that the Minister will advance the Government's argument which suggested that the carer element can be split between the cost of the parent looking after the child and the cost of paying a child minder or other carer. The Government propose that the carer element of £46.50 per week compares well with the average cost, as they claim, of child care of £40 per week. However, that would leave the parent with care just £6.50 to care for the child after paying the average child minder. We would argue that the carer element cannot be realistically assumed to cover the two expenses.

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The Government have also suggested that it is unfair to place a greater burden on the absent parent. However, the Government have made provision for the financial circumstances of both parties to be taken into account before a departure direction is allowed. So the extra burden, in the Government's phrase, would only be asked of those absent parents who can afford to pay more maintenance.

The Government have also said that there was little evidence that the lack of child care expenses in the formula was causing difficulties. However, the monitoring from organisations suggests the contrary, particularly in cases where the parent with care is not claiming any benefit but is on a low income. The Government claim that in such cases the parents with care should have sufficient income, together with maintenance received from the absent parent, to meet the costs of child care. The amount of maintenance may be small. Ironically, the absent parent could have his maintenance payments reduced to reflect high travel-to-work costs, yet the parent with care will be unable to apply for similar work expenses to be taken into account.

The Government also argued in the other place that the increase in maintenance would be small; but for many lone parents who are struggling to make ends meet, any small amount would be most welcome, even if it only represented an increase of £2 or £3 a week. We argue that the actual costs are not taken into account. For example, a person with care who is in employment will receive the same level of maintenance, irrespective of whether she has to pay child care costs, as her income which is taken into account is considered before the child care costs. That is the point that I made earlier. Departure would not be granted where the costs had already been fully provided for by the standard formula.

If departure is to be operated in a just and equitable way, the extra burden would only apply to those absent parents who could afford it. Furthermore, absent parents who are having to pay child care costs in order for them or their partner to remain in employment would rightly gain from the amendment. As well as difficulties for low income second families, significant numbers of families separate with the father caring for one of the children and the mother for the others. In the situation where only one of the parents was working, that parent would pay the same amount of maintenance, irrespective of any child care costs incurred in remaining in employment.

It is an important point, it is significant for those who are affected by it. We feel that it should be rectified and that would be addressed by Amendment No. 32. I beg to move.

Earl Russell: I must confess to being out of date. I have not yet read the new report published last Friday by the Institute for Fiscal Studies and the Equal Opportunities Commission. I have been too busy preparing amendments to the Bill. If any of the arguments that are developed prove to be out of date for that reason, I should be grateful to have it pointed out.

I have no particular preference between Amendment No. 30 in the name of the noble Lord, Lord Carter, and my Amendment No. 32. The great glory of the amendments on child care is that they manage to square all the circles.

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I believe that they take the interests of the Treasury fully into account. My reasoning for that is like the reasoning of the Chancellor of the Exchequer in introducing the child care disregard on family credit in his Budget. That was a very welcome move by the Chancellor and the principles behind it were sound. It takes the interest of the taxpayer into account. It goes with the grain. It helps people to do what they want, rather than forcing them to do what they do not want to do. That is generally a far easier method of legislation from which to get results. That point is very far from negligible in its importance. It helps women to get back into employment. That is the ultimate justification of this amendment.

I argued at Second Reading that the 1991 Act tries to stand on a one-legged tripod. It tries to get everything out of the fathers, when what we need is a three-legged division between fathers paying what they can and mothers earning what they can. Most mothers tell us—and I believe that it is normally true—that they would like to return to work and start trying to support themselves if they could once get over the problem of child care.

Child care is extremely expensive. In our present deregulated labour market low wages are common, and when the Jobseekers Bill is in effect they are likely to become more common. Very often they do not meet the cost of child care. If we get people back into work, they will, of course, begin paying taxes. Being, as I have reminded the Minister many times, a taxpayer myself I believe that there is strength in numbers. I should like there to be more of us. That is in my interest; it would share the burden rather more comfortably. This amendment would satisfy all the interests concerned.

A study by Sally Holtermann from the Day Care Trust on which I previously relied, and which I know is known to the department, makes a case for arguing that the Exchequer would actually obtain a net benefit. I believe that the Institute for Fiscal Studies is slightly more cautious. I do not have the figures available. In either case, the costs would not be very great.

The Minister may choose to tell us that there is an adult personal allowance. There is, but it is not targeted. It is not proportionate to the amount that is actually spent on child care; so it does not provide the incentive to get into employment, the help to get over the hurdle and to float off benefit, which is what we really need.

This amendment is a central plank in our attempt to reassess what is being done under the 1991 Act. It is an attempt to share the costs round so that the burden in any one place should not be crippling. It is a constructive amendment. It is meant to help. I very much hope that it will be considered seriously.

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