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Earl Russell: My Lords, I am grateful to the Minister for giving way. The point about collusion has been made many times before. Is there a single piece of hard evidence to sustain it, and, if so, could we please hear it?
Lord Mackay of Ardbrecknish: My Lords, I was in the midst of explaining that. I shall not produce hard evidence because I am simply speculating that it may happen. To the extent that this may happen, it is a risky route for the parent with care as she will have no means of ensuring that the absent parent will actually pay the money he offers each week. She will also be acting fraudulently if she fails to declare any maintenance received. The maintenance bonus, which forms part of this Bill, will give parents with care a real bonus when they begin work of 16 hours or more a week. Parents with care will come to realise that they are losing money if they collude in this way.
The noble Earl, Lord Russell, suggested that the back-to-work bonus was a gimmick. He seemed to suggest that a £5 a week disregard would help the parent with care at the moment that that person decides to move into work from being out of work. I suggest to your Lordships that the back-to-work bonus that we are instituting in this case would build up over what I accept is quite a long period. Nevertheless it will build up and it will give the ladyit usually is a ladya great deal more than £5 in the week or two in which she makes the leap from being out of work to being in work.
I would therefore suggest that it is not a gimmick but rather it is an important way to help a parent with care move from income support to being in work. I have said this in relation to the Jobseekers Bill as well as here. The parent with care will have various start-up costs associated with a return to work. It is for that reason that in this Bill and in the Jobseekers Bill we have instituted the back-to-work bonus, as we called it in the Jobseekers Bill, so that people will have something to use to cross that bridge. I agree with the noble Baroness, Lady Hollis; and it is important that we try to find a way across that bridge. To be honest,I do not think that
The fourth pointit is a point which is often made and it has been made again todayis about greater equity between parents with care and absent parents in the context of the package introduced by this Bill and the changes to regulations which we introduced in April. As I said in my response at the time, a number of measures in the Bill benefit the parent with care, for example the departure scheme, the child maintenance bonus and the compensation for family credit and disability working allowance recipients. But the measures both in this Bill and in the changes to regulations which I introduced to your Lordships in April will remove the legitimate causes of concern of absent parents and should ensure that more of them co-operate in meeting their maintenance liability. That should ensure that more maintenance is paid more regularly to more children.
The noble Baroness referred to net costs of £85 million for the £5 per week disregard. I believe that she calculates that as the long-term costs of the disregard less the cost of the child maintenance bonus. We calculate that the long-term costs are £110 million. Whether one looks at it as reduced savings or increased costs, £85 million is a significant sum to spend on a disregard in income support, with all its disadvantages.
Both I and my colleagues in another place have said that we think that it is right that resources should be directed at easing the transition from income support into work. Furthermore, the long-run costs of disregard were calculated on the basis that that disregard would apply only to cases where maintenance was being paid. The amendment provides for disregard to apply to all maintenance due. I believe that that would be inappropriate since it cannot be right to disregard something that is not actually being paid; it would also further increase the cost to the taxpayer.
However, to respond to one of the points that was made, there is no assumption on our part that lone parents should be at work rather than at home. I fully accept that some parents with care will decide that it is appropriate to stay at home to care for their children, particularly when those children are young. It is for the parent with care to decide what is right for her. Surveys of lone parents show that most want to return to work, and the child maintenance bonus will help them to do so. A parent with care who builds up the bonus steadily over time, say from the time her child is a year old, will be entitled to the full £1,000 if she starts work when the child starts school.
The final point made by the noble Baroness was the need for extra help while the parent with care is on income support because many already work and incur child care costs. However, lone parents already benefit from a higher disregard of earnings within income support, getting a £15 disregard compared with the £5 given to others. That is given in recognition of the extra in-work costs, including child care in those cases where it is needed.
As I said at the beginning, we have considered this issue seriously. I listened to and have considered the points made by your Lordships when we debated the matter at Committee stage. However, for the reasons that I have outlined, I remain of the view that this is not the best way to proceed.
As the noble Baroness explained, Amendment No. 2 is intended to ensure that parents with care who benefit from the disregard proposed by the amendment I have just discussed are protected from losing any of the benefit of that disregard as a result of a departure direction in favour of the absent parent. It is consequential on the major amendment, and my arguments are similar.
For all the reasons that I have put forward, I cannot accept that we should have a child maintenance disregard for this particular type of payment. I know that the noble Baroness feels strongly about the matter. It is not that I do not understand the argument, but I believe on balance that the position we have taken is the right one. If the noble Baroness decides to put the amendment to the test I invite my noble friends to support me.
Baroness Hollis of Heigham: My Lords, first I should like to comment briefly on the contributions of the noble Earl, Lord Russell, and the noble and learned Lord, Lord Simon of Glaisdale. I appreciate that we disagree on the principle of the Child Support Agency, but I am happy that the noble Earl, Lord Russell, who frequently shares the same view on such matters as I do, and the noble and learned Lord, Lord Simon, nonetheless support the amendment. The amendment would ensure that women with childrenthe parents with carewere no worse off because they received maintenance rather than income support pound for pound. It provides that no one should be worse off because they co-operate with the agency and replace their income support with maintenance. Without the amendment many women will be worse off as a result of co-operating with the agency. That is a fact.
The noble and learned Lord, Lord Simon of Glaisdale, teased me, as to be fair he warned me he would, about Fabianism. He said that I was not aware that the age of Fabianism was dead. However, as George Bernard Shaw and the early Fabians argued, Fabianism was the application of reason to social problems. Is the noble and learned Lord, Lord Simon, quite so sure that he wishes to dissociate himself from that? Does he really favour its opposite, irrationality?and that from a very distinguished Law Lord.
As for the Government's view and the points made by the Minister, I rather feel that they have helped to reinforce my points for me, even if the Minister answered the speech made in Committee rather than on Report.
First, we argued then and now that lone parents are very poor. The Government did not deny that. Secondly, we argued that under the Bill those poor lone parents will be made poorer still because they will lose passported benefits. The Government did not deny that.
Fourthly, the Minister referred to the back-to-work bonus which, as he said, is a maintenance disregard paid when the mother leaves her children to go back to work. The Minister said, perfectly reasonably, that that is a decision for the mother and the Government should not make the decision for her. She must judge when it is right, and it would be unreasonable for her to leave her children when they are very small. We agree. It is the mother's choice. Then why is it that the Government are loading the maintenance disregard to construct that choice so that the mother is given a baita carrotto go back to work? If the Government were genuinely neutral about allowing a mother to make the best choice given the age of her family, she would have the choice of a maintenance disregard paid weekly or a maintenance disregard rolled up as a lump sum to be paid at the point when she returns to work.
The fact that the Government will not offer that choice between the two options means that they are loading it in favour of the mother with young children, who may be a year old or two-and-a-half years old. She is being persuaded and pressured by the Government, as a result of the back-to-work bonus, to leave them in the hands of someone else, often reluctantly, to go back to work. As the party of the family, and as the House of the family, we should not do that.
The Minister said that it was the mother's choice. What the Minister accepts and did not challenge at any point in his reply is that a mother with care receiving maintenance in place of income support will often be worse off. Is that what we want? Do we really want a mother with care to be worse off unless she is forced back into work by the back-to-work bonus? Is that fair? Is that reasonable? Is it even-handed? Is it wise social policy? I do not believe that it is, and I shall seek the opinion of the House on the matter.
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