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Lord Goodhart: My Lords, I find some difficulty understanding whether the noble Lord, Lord Haskel, has really appreciated the purpose of the amendment. He says that it would negate the positive effects of the Government's amendments. But, far from doing that, it would strengthen them. It would mean that any employee below the upper earnings limit would be even cheaper to employ than under the Government's present proposals. I acknowledge that there would be a small element of additional complexity but I believe that is a price worth paying for ensuring that the Government's provisions are even more favourable to those on
relatively low incomes, including incomes up to the upper earnings limit, and that the higher burden on employers falls only, but in this case rather more sharply, on those with earnings above the upper earnings limit.The noble Lord, Lord Haskel, says that my amendment is not revenue-neutral. However, he gave no indication of the extent to which it is not revenue-neutral nor indeed of the direction in which it is not. I find the answer distinctly unsatisfactory. Nevertheless, as I made clear, the amendment is introduced for the purposes of discussion and I do not intend to press it. I hope, however, that the Government will take it away and examine it rather more thoroughly than appears to have been the case up to now. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 64 [Liability of directors etc. for company's contributions]:
Lord Haskel moved Amendment No. 9:
The noble Lord said: My Lords, in moving the amendment I wish to speak also to Amendments Nos. 10 and 11. We discussed Clause 64 during the Committee and Report stages. I am pleased that there was general support for the principles behind it: that where national insurance contributions are owed and directors are found to be fraudulent or neglectful they should be held personally liable for the debts. However, the noble Lord, Lord Goodhart, had some concerns about the appeal rights of those found to be culpable, and I promised that we would reconsider the proposals in the light of our discussions. We have now done so, and this group of amendments is the result.
Amendment No. 9 ensures that the personal liability notice will now stipulate not only the total unpaid debt and the amount which is being transferred to that individual, but also the proportion of the debt for which the recipient is held liable. This will enable him to check the calculation used to arrive at the total debt and to make it crystal clear what degree of culpability has been found to fall on him.
Amendment No.10 adds the right of directors to appeal on the grounds that the total amount of national insurance was not actually due from the company. This can be exercised in cases where the company has not already exhausted this appeal right.
I also undertook to consider the noble Lord's request that it should be made explicit on the face of the Bill that the onus of proof in any appeal under these provisions falls on the Secretary of State rather than on the appellant. I shall therefore be happy to move Amendment No. 11 in due course, which does precisely this. I hope that your Lordships will agree that we have
Lord Goodhart: My Lords, these amendments are certainly welcomed by me. I raised these points, both at Committee stage when Clause 64 was first introduced, and at Report stage, when I myself put forward some amendments to it. There are two serious problems which I saw with the original draft. One was that the original version of Clause 64--that is, Clause 64 as it stands without these amendments--makes the Secretary of State the creditor in a claim against the defaulting directors as well as being the investigator and the judge. I believe that that caused very serious problems about compliance with Article 6 of the European Convention on Human Rights. Secondly, I believed that unnecessary complications were created by the Secretary of State saddling herself with the obligation to allot the responsibility between defaulting directors by determining their respective contributions rather than simply imposing joint and several liability.
The second of these problems has not in any sense been dealt with, but it is the less important of the two. As to the first, I remain less than convinced that Clause 64, even as amended, will necessarily be proof against Article 6, but it makes it much more probable. It means that there will be an appeal stage at which the burden of proof will rest on the Secretary of State to prove her case before a tribunal which is probably sufficiently independent to come within the bounds of Article 6.
I therefore welcome the amendment. While we are not entirely happy with the result we on these Benches are most grateful to the Government for having listened to the case and at least accepted an important part of it, as they have on a number of other occasions in dealing with this Bill.
On Question, amendment agreed to.
Lord Haskel moved Amendments Nos. 10 and 11:
On Question, amendments agreed to.
Clause 72 [Power to reduce child benefit for lone parents]:
Earl Russell moved Amendment No. 12:
The noble Earl said: My Lords, this amendment deals with something that is a great deal more important than the amendment recently moved by the noble Lord, Lord Higgins, but I undertake not to spend quite as long in debating it. This is our last chance to look at the issue of lone parents, which has been a contentious matter since the very beginning of this Bill.
The purpose of this amendment is to defer the cut in child benefit introduced by this Bill until research has been conducted which conclusively demonstrates that one and two-parent families should be treated equally by the tax and benefits system. The purpose of this amendment is to address the fundamental issue of whether there should be a separate element of benefit attributable to lone parenthood. We are aware that both the other Front Benches do not agree with the view that there should, but in the world at large I believe that it is the other two Front Benches that are isolated.
This amendment defers the issue to the results of research and places the burden of proof in that research on the Government. The Minister may say--she would probably be mistaken if she did, but the view would be a defensible one--that the burden "conclusively demonstrates" is too heavy to shoulder. Were that to prove to be the case I would not particularly regret it. However, it gives the Government the opportunity to shoulder that burden if they wish. The Minister has said that the jury is still out on the question of whether there is an extra degree of financial hardship attributable to being a lone parent.
The Minister's office has very kindly sent me a considerable body of research on which the Minister has relied in reaching that finding. I have read all of it. I have also read the report What happens to lone parents? by Reuben Ford and others published since Report stage. I thank the Minister and, through her, her officials most warmly for their co-operation in that. One must set against that research the words of the noble Lord, Lord Ashley of Stoke, at Report stage. His was the voice of experience, and research must always be tested against the voice of experience.
I accept that there is a division within the research. I believe that it tilts on one side, but I shall not make an issue of it. I have tried to see whether I can distinguish anything in research methods or other approaches to the subject which makes people come down on one side or the other. I do not believe that this is just a question of bias; it is a question of how one sets about an academic research method.
The first aspect that is undoubtedly clear from the research is that in dealing with all parents on benefit one starts from a very low base. The research by Oldfield and Yu, for example, stated that income support failed to provide for the most basic needs of children. Professor Jonathan Bradshaw, who has worked out a minimum standard low-cost budget, says that the cost of meeting that budget is 30 per cent. above income support levels. Clearly, "a degree of hardship" is pretty generous. In deciding what to do with lone parents there is no great margin of error.
The conclusion I have come to is that the result depends on the particular research method that is used. There are basically two types of approach, one of them along the lines used by the retail prices index. It is known as the budget standard method. One takes a basket of goods which one believes to represent basic minimum needs and prices them. The other method starts from the other end. Like the family expenditure survey, it comes from the expenditure end of the equation. It looks at what lone parents can afford and what couple parents can afford.
I believe that the conclusion of the research into whether lone parents experience special hardship depends on which of those methods is adopted. It is fairly clear when one thinks about it which of those research exercises is the right one. If one adopts the budget standard method, like the retail prices index, most of the time one simply assesses the costs of the children, but the extra costs of single parenthood are very largely the costs of the parent. Essentially, those costs are concerned with time and the difficulty of being in two places at once, with diseconomies of scale in housing and heating. Some of the studies leave out housing, which must materially distort the resultant findings. No one has actually said that the children of single parents need to eat more than the children of couple parents. Therefore, if one proceeds simply on the basis of the standard method one will arrive at a basket of basic needs which one agrees are the same. The difference between single parent households and couple households is the difficulty in meeting those needs.
There has been a lot of criticism of attempts to assess financial standing by what people can afford. If one goes higher up the income scale, among the more prosperous expenditure measures tend to look at taste rather than poverty. For example, in some of these surveys I have appeared as poor because I do not possess a video recorder. (I did not possess a colour television until I found that I was unable to buy a black and white one on the market.) But if one goes rather lower down and considers such matters as three meals a day, one pair of waterproof shoes and one warm coat, those are not matters of taste but are widely agreed to be matters of necessity. If one finds a very wide variation in those articles one identifies a very real difference.
I know that the Minister is familiar with the Rowntree study, Small Fortunes, which uses the expenditure method. It concentrates heavily on basic physical needs. I have figures showing the number of children who are going without one of the basic items of food. They indicate 24 per cent. of children of lone parents not working, against 8 per cent. of children of couple parents neither of whom work. That is a considerable discrepancy. Furthermore, 42 per cent. of children of single parents not working are going without one basic item of necessary clothing. The equivalent figure for the children of two parents neither of whom work is 25 per cent., which is just above half the figure for single parents. Such figures must have an explanation.
I also draw the Minister's attention to Focus on the Family, published by the Office for National Statistics. It is not on all fours because it is a comparison of all
Page 47, line 32, at end insert ("and
( ) where that sum is given by paragraph (b) of subsection (3) below, specifying the proportion applied by the Secretary of State for the purposes of that paragraph.").
Page 49, line 2, leave out from beginning to ("was") in line 3 and insert ("the whole or part of the amount specified under subsection (2)(a) of section 121C above (or the amount so specified as reduced under subsection (7) of that section) does not represent contributions to which that section applies;
( ) the failure to pay that amount").
Page 49, line 15, at end insert--
("( ) On an appeal under this section, the burden of proof as to any matter raised by a ground of appeal shall be on the Secretary of State.").
5.15 p.m.
Page 52, line 44, at end insert--
("( ) Regulations under this section may not be made until there is evidence from a systematic independent study of relative costs, incomes and expenditures of lone parent and two parent families on
benefit and in work which conclusively demonstrates that one and two parent families should be treated equally by the tax and benefit system.").
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