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Baroness Anelay of St. Johns: My Lords, I shall read very carefully in Hansard what the Minister has said. First, I should put on record that I apologise to the noble Baroness for promoting above her station her colleague in another place. I referred to him inadvertently as the Minister of State and thereby put him above her.
I listened with great interest to what the Minister had to say with regard to improving administration by creating three forms instead of one. I shall not seek to make capital out of that with regard to increasing the amount of paper flying around. I appreciate that there may be good reasons for doing so in order to simplify the system.
From what the noble Baroness said, I may be reassured with regard to the conversion of budgeting loans into crisis payments or community care grants. That point may have been covered. However, I am not so convinced at this stage that my concerns with regard to converting the discretionary loans into budgetary loans have been answered. As the noble Baroness will be aware, although budgetary loans are intended to cover expenditure on a less crisis-based matter than crisis payments or community care grants, they have become very much a part of everyday life for claimants. It is not unusual for people to have 10, 15 or 20 budgetary loans, running one after the other, in succession. It has become a serious matter of concern for claimants.
I take issue with the Minister's comment that only a few people may be affected. We might differ on the definition of "a few". I shall certainly read carefully the arguments which she put forward. I appreciate the consideration she showed in going into such detail in trying to reassure me. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell moved Amendment No. 53:
After Clause 70, insert the following new clause--
(" .--(1) The Social Security (Lone Parent) (Amendment) Regulations 1997 ("the 1997 Regulations") shall cease to have effect.
(2) The Secretary of State shall not make any regulations in substitution for the 1997 Regulations which enter into force before 1st October 1999.").
The noble Earl said: My Lords, in moving Amendment No. 53, I should also like to speak to Amendment No. 60. The slogan of this amendment is "bridge that gap", and I must apologise to anyone whom I am preventing from doing it at an appropriate time of day by moving it. Some of the cuts for single parents came in on 6th April and so are already in force and some come in on 6th June. The concessionary measures in the Budget which are meant to bridge the gap come into force in a series of instalments but are not complete before October 1999. That is quite a long time.
I shall run through the detail now to save the House's time later. There are two separate blocks of cuts. The first came in through regulations, which went through this House on 4th November, and concerned the single parent premium on income support, housing benefit, council tax benefit and so forth. That came into force on 6th April. It involves the loss of £4.70 a week on income support, and on housing benefit, depending on the house and the rent, up to £9.35. It means that when people are trying to get back into work they meet the steep taper of housing benefit at the same time as they lose the income support. One has to have tapers somewhere, as I am sure the Minister is just about to say, but if one puts two of them together, one turns a step into a cliff. That is not a very sensible procedure. The other cut, which comes in through Clause 71 of the Bill, is to the single parent addition to child benefit. That is £5.65 a week and comes into force on 6th June next. So total losses can be up to £19.70 a week. It is really quite hefty.
What is being given back in return through the Budget? There is an increase in the child premium on income support for children under the age of 11 only--£2.50 a week. It comes into force in November 1998. There is a gap there but it could be worse. The next one is £2.50 on the family premium, coming into force in April 1999. The next one is an addition of £2.50 to child benefit for the eldest child only, which comes into effect in April 1999. Up to that point it is £7.50 to replace £19.70. We do not get anything more substantial until the working family tax credit and the child care tax credit which come into effect in October 1999. That is why it is the purpose of these amendments to defer the cuts in benefit until October 1999, when the working family tax credit kicks in.
There are some people who do not benefit at all from the Budget concessions--people on income support who are in part-time work of under 16 hours a week; people in receipt, or wishing they were in receipt, or supposed to be in receipt, of child maintenance. They may be particularly hard hit because, as well as losing income support because they go on to maintenance, they lose the passported benefits as well. As we all know, the maintenance very often does not come. In fact, in the latest sample of the Policy Studies Institute, only 5 per cent. are getting adequate maintenance through the CSA. When their maintenance does not come--and it takes the CSA an age to inform the Benefits Agency--
The other case is students who are receiving a loan which is imputed to them as income. There is of course a partial gap for people with children over the age of 11. Children over the age of 11 do not become as cheap to look after as one sometimes hopes they might. In fact the tendency is known to be the reverse on occasions.
When we discussed the amendment in Committee the Minister agreed that the gap was there. In fact, in reply to questions from her noble friends Lord Ashley of Stoke and Lady Turner of Camden, she did not dispute the basic facts of the situation. So the question is: what is the Minister going to do about it? She may plead spending limits. In that case I want to repeat the question I asked her on 4th November. I am still waiting for an answer. Why have the Government adopted the previous government's spending limits? I cannot judge the arguments for doing that until I hear what those arguments are; and until I have heard them, they have no force to restrain me.
I am sure that the Minister has noticed the latest figures for the public sector borrowing requirement which show an almost dramatic improvement. That means that money appears to be a lot less tight than it did last November. That is not only because of increasing revenue, which I welcome, but also because of a large number of public expenditure programmes coming in under forecast. Memorably on one occasion, the Prime Minister accused these Benches of the longest pee in history. But we should remember that comes from a government whose public spending record is of the shortest undershoot in history. They may be prepared to do something about that.
The Minister may urge administrative difficulty. That is genuine. But, frankly, the Government have made a mess. They may wish to say that it was their predecessor's mess. Of course, by definition, all messes are always made by one's predecessors. But it is only a valid argument that it is their predecessor's mess if they believe that the spending limits were entailed on them so that it was beyond their sovereign power to change them. If the Government have any reason for thinking that I have yet to hear what it is. If one makes a mess one clears it up. It may be difficult, but one has to do it.
It is not as though the level of support available for single parents was so generous that there was a safety margin for that type of error. At the Minister's suggestion, I have been reading the work on the costs of children by Oldfield and Yu. They remark,
"Income support is failing to meet the most minimal needs of children".
That is a serious judgment. To make further cuts from that point does not seem reasonable to me. If one makes further cuts one had better fetch the bandage. I beg to move.
6 p.m.
Baroness Hollis of Heigham: My Lords, there are three reasons why I ask the House to reject this amendment. First, there are questions of principle;
secondly, there are questions of cost; and, thirdly, there is the serious question of public administration. As regards principle, as the noble Earl knows well, there are two key principles underlying the government strategy for benefit rates for families. First, we do not believe that the current structure which pays a higher fixed rate of child benefit and family premium to all lone parent families, but not to any two-parent families, is the best way of addressing the extra costs and needs which particular families may face. I am sure that noble Lords will press me further on that point when we debate subsequent amendments. I fear that the noble Earl is gearing himself up for an extended debate on research evidence on this point.The Government believe that it is right to align the rates of benefit paid to families in respect of their children. In other words, what matters is not family structure, but family need. That is why we are going ahead with this measure. Secondly, the Government are committed to supporting all families with children. We believe that support for families should be based on the needs of those children and not on whether they are headed by a single parent or by two parents together. What matters is their poverty.
Our second concern is the financial strategy within which we are working. We came into government with a commitment to stay within existing spending plans for two years and to continue to be financially prudent thereafter. We inherited a number of unimplemented measures which were built into those spending plans, which included measures that aligned the rates of benefit for lone parents and couple families. Our inheritance from the previous government meant that there were difficult choices to be made about priorities.
As regards lone parent measures, we did not, and do not, believe that simply turning the clock back was the right approach even if it were affordable because, as I have said, we do not accept the principle that lone parents should receive special cash benefits beyond--
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