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Baroness Hollis of Heigham: My Lords, there are obviously several responses to that question. First, I suspect that the point about children at the age of five and full-time education is now one that is shifting back, given the commitment of the entire House to nursery education, and so on. Therefore, lone parents may well choose--and, in my view, quite properly--the right to go to work when the child is much younger. The second point is one made by my noble friend Lord Evans; namely, that the latter is conditional on finding work. Is the noble Baroness arguing that, even if the lone parent cannot find work when the child has reached the age of six, the benefit should be cut? That seems to me a dilemma that we would face were we to introduce an age-related premium which runs contrary to the current structure of income support.
Moreover, in terms of the under fives, there is also the consistency with workless couples to consider. At the moment there are twice as many workless couples--some 600,000 of them--as there are lone parents, the number of which is about 300,000, in the bottom income decile. It seems to me to be quite difficult to argue that we should restore it for lone parents with children under five but not for workless couples with children under five. One then starts talking about very significant sums of money.
What this Bill does is to address the second set of changes which affect lone parents which are the child benefit changes, as the noble Lord, Lord Higgins, rightly
identified. What this Bill does is to align the rate of child benefit paid to new lone parents with that paid to couples. At the moment a working lone parent with one child who receives family credit and the higher rate of child benefit receives a higher net income than does a couple with one child on the same wage. The lone parent receives more money from child benefit even though both she and the couple are in work, they both earn the same wage and they both receive the same family credit. Is one really saying that a lone parent plus child requires a higher income than two adults and one child?
Earl Russell: My Lords, does this not rest on the same principle as disability living allowance; namely, that the situation necessarily involves extra costs?
Baroness Hollis of Heigham: Yes, my Lords, but the extra costs are associated with childcare. That is precisely why we are addressing a childcare strategy and the more generous treatment of childcare disregard. I am entirely at one with the noble Earl on that.
These changes apply only to new lone parents. The noble Lord, Lord Higgins, waxed eloquent on perverse incentives and these changes. I am not sure that he is right. I wonder whether he has fully understood them. These child benefit proposals are not affected by the work status or the level of income of the lone parent. We are saying that a lone parent on income support who currently enjoys the higher rate of child benefit can move into work with the higher rate of child benefit unaffected and move back from work on to benefit with the higher rate of child benefit protected. In this Bill there are linking rules. She can lose that higher rate of benefit only if she ceases to be a lone parent.
Lord Higgins: My Lords, I am most grateful to the noble Baroness; she is explaining matters extremely clearly. However, on the point I was seeking to make--and what I dubbed an in-and-out question--the noble Baroness is now reassuring us as regards the Bill. What I am not clear about is whether the same is true as regards the previously passed Statutory Instrument. Is it or is it not the case that as regards those provisions if someone starts work having received the higher rate of benefit, when he or she goes into work and comes out again, that person will go on to the lower rate of benefit? In other words, are the two things consistent?
Baroness Hollis of Heigham: My Lords, the noble Lord is entirely correct in his understanding. The linking rules apply to child benefit, which is what we are talking about in this Bill. The linking rules do not apply to the income support family premium which has already been discussed and accepted in this House when we discussed regulation.
Lord Higgins: My Lords, surely then the situation with regard to the Statutory Instrument is inconsistent with the Government's policy because, as the Sunday Telegraph article pointed out, this is a deterrent to someone taking the risk of going into employment?
Baroness Hollis of Heigham: My Lords, the point we are making here is that 50 per cent. of lone parents
have one child. At the moment large numbers of them stay on benefit because they are trapped in benefit even when their child has gone to school. We are seeking to assist through childcare measures and the like, as well as the national minimum wage, to produce a positive incentive and the positive "carrots" to persuade them to go to work. We believe that that is the best and most appropriate way to focus our expenditure.We have a linking rule on this Bill. I believe that the previous government did not propose a linking rule on child benefit. The noble Lord said I had said that the child benefit proposals were perverse and batty. That was precisely because the then government did not propose a linking rule. It was therefore a disincentive for those lone parents with higher rate child benefit to go into work. We are now producing that linking rule for child benefit. Given that linking rule, our proposals for childcare, our proposals for the minimum wage, and our proposals for turning around the Child Support Agency, we firmly believe that our priorities in aiding lone parents into work are right.
My noble friend Lady Kennedy referred to a maintenance disregard for those women on income support to enable them to keep some of the maintenance from their former partners. I greatly welcome her suggestions and I shall ensure that they are brought to the attention of those conducting the review of the Child Support Agency. If we can get fathers to pay the maintenance for their children that they should pay, and get that flow of money going to the lone parent, whether that lone parent is on income support, or is on family credit and is in work, that is clearly an appropriate and important way to sustain children at home.
The noble Baroness, Lady Williams, regretted that the Government were not aligning these changes in benefit with welfare-to-work proposals. She was right to suggest that we should do so. That is precisely why we are aligning these changes. We are unrolling the New Deal proposals nationally in April 1998 at the same time as the changes in family premium come into play. We are unrolling the additional disregard on family credit and extra help in June which is the time at which the child benefit changes come into play. I believe we have met her point on that.
The noble Baroness also said that freezing national insurance re-rating would increase revenues by twice the amount of the savings from Clause 70. I have no reason to challenge her figures but that is the national insurance fund which is hypothecated for other purposes. What we are talking about here is a benefit sustained by general taxation and therefore there is no "read across" between the two. The noble Baroness also mentioned the PSI report and said that a figure of £50 a week was unrealistic. I do not disagree that lone parents because of their childcare costs face higher and additional costs than do couples, although not necessarily proportionately with regard to their day-to-day living in terms of food, clothing or heating. That is why we are focusing on addressing that additional childcare cost when the lone parent does not have the support that a married couple or a cohabiting couple would have where two adults share the childcare between them.
The noble Lord, Lord Newton, mentioned that the balance of taxation has moved against families with dependent children. That, of course, is one of the reasons--he will not need me to elaborate on this-- the Taylor Committee is considering the integration of the tax and benefit systems. I note, however, the concerns that the noble Baroness, Lady Williams, expressed about some of these implications. I know that that has formed part of the evidence submitted to the Taylor Committee for its consideration.
I now turn to backdating. My noble friend Lady Turner spoke on this, as did many other of your Lordships who have a wealth of experience. I wish to clarify the points that I believe were made by the noble Baroness, Lady Ludford, and the noble Lord, Lord Blackwell, on housing benefit and council tax benefit. If I have not answered those points fully, I hope that they will contact me and I shall do my best to satisfy them. Housing and council tax benefits will be brought into line with other income related benefits. There will be no backdating but where one of the special reasons set out in the regulations applies, there may be backdating for up to one month. The clock starts ticking when the claim is received. If there has been administrative delay, arrears will be paid in full. If, for example, the Benefits Agency did not pass on the forms or mislaid them, that would not affect a claimant's rights. If a local authority is confident that the claimant had submitted the forms at the proper time, that claimant's full rights would be protected.
My noble friend Lady Turner asked about exceptions. I tried to cover those in my opening speech. One of those concerned passporting and the second concerned special reasons as regards literacy, language and learning difficulties and poor health. The third concerned cases where delay arose as a result of administrative error or where circumstances such as recent separation or bereavement came into play. Those circumstances have all been set out. My noble friend also pressed me about widow's benefit. I realise that my noble friend speaks from fairly recent experience. I suggest that a widow would normally be prompted to claim widow's benefit when the death of her husband is registered as there is a question about widow's benefit on the form registering the death. The death has to be registered within five days. We therefore normally hope and expect that the date of registration would trigger the date of claim. The widow's benefit would be backdated to that date of claim.
First on ICA and backdating, my noble friend Lady Pitkeathley raised a number of issues. I was glad that she was able to give me prior notice of them. We accept that information about ICA should be included in the DLA claim form. I am pleased to say that officials are looking currently at ways of doing so, as urged by my noble friend.
Secondly, we are aware that the system of double claiming is cumbersome. However, it is there to protect the interests of carers who could lose benefit if they delayed claiming until the qualifying benefits were settled. We hope to streamline that. We are also looking at ways of ensuring that those who identify themselves as carers take up their rights as quickly as possible.
Finally, various points were made about regulations. I am running out of time, even with the points that I have taken, quite properly, from your Lordships, so I shall be brief. However, with regard to the structure of the Bill, the point has been made that it contains a large number of regulation-making powers. There are a number of reasons for that. First, it is important to have a clear grasp of how the legislation is structured. About a third of the powers will be re-enactment. Secondly, we want to introduce unified decision-making and appeals arrangements across the range of the department's business, so some powers need to be repeated for benefits and child support. Thirdly, and most importantly, we want to be in a position to respond over time to operational issues which will inevitably arise during implementation. It may be that we shall find better ways of doing that as the Bill works its way through and comes into effect. We wish to be able to respond to innovations and working practice, developments in technology and from lessons learnt from practical experience and from what claimants tell us. That is why we have the regulatory powers.
My Lords, I have done my best. If I have omitted any points of substance, I apologise to the House. I hope that noble Lords will allow me to write to them. As a result, I hope that the House will allow the Bill to have a Second Reading.
On Question, Bill read a second time, and committed to a Committee of the Whole House.
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