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Public Interest Disclosure Bill

7.12 p.m.

Read a third time, and passed.

Child Benefit and Social Security (Fixing and Adjustment of Rates) (Amendment) Regulations 1998

7.13 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham) rose to move, That the draft regulations laid before the House on 8th June be approved [37th Report from the Joint Committee].

The noble Baroness said: My Lords, the Government came to power with a mandate to reform social security. One of the key principles guiding reform is that the system should support families and children and tackle child poverty. We are committed to supporting all families with children. All families have extra costs as a result of bringing up children. That is why we are committed to retaining child benefit as a universal benefit and why we are increasing the standard rate of child benefit for the first child by £2.50 a week.

We believe that support for families should be based on the needs of children, not on family structure. We also believe that the benefit system should recognise specifically identified costs that any family may face. That is why we have increased benefit allowances in respect of children under 11 years of age and why we revolutionised the support that parents can receive towards the cost of childcare.

Within that context, we do not believe it is right to pay a higher fixed rate of child benefit to lone-parent families. Direct help with the cost of childcare addresses the in-work costs of lone parents much more effectively. Many lone parents will be able to receive substantially more in-work help. These regulations implement the measures of Clause 72 of the Social Security Act. We debated those measures at some length on a number of occasions during the passage of the Bill and I do not intend to detain your Lordships by repeating those arguments now.

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Instead, I thought it might be helpful to your Lordships if I were to outline what the regulations are designed to achieve. Regulation 1 covers citation, commencement and interpretation provisions. Regulation 2 amends Regulation 2 of the 1976 regulations by revoking the provision for a higher rate of child benefit to be paid in respect of the elder or eldest child of a lone parent. However, the Government's intention is to ensure that existing lone parents are protected. Regulations 3 and 4 set out the details of that protection.

Regulation 3 provides protection for existing lone parents who are not currently entitled to receive the lone parent rate of child benefit because they are receiving what is described in the 1976 regulations as a "specified benefit". These specified benefits, such as invalid care allowance, overlap with the lone parent rate of child benefit. So, if a lone parent is receiving one of these benefits, she will be able to receive the standard rate of child benefit only for her only or eldest child. Regulation 3 provides for such a lone parent to be able to receive the lone-parent rate of child benefit after these regulations come into force if she ceases to receive the specified benefit, as long as she applies for it within one month of the award of the specified benefit ending.

Regulation 4 provides transitional protection for existing lone parents in other circumstances. It includes protection for lone parents who are already receiving the lone-parent rate of child benefit at 5th July 1998--this will ensure that there are no cash losers; for some lone parents who are not already receiving the lone-parent rate of child benefit at 5th July 1998; and for those who have entitlement at 5th July but have not yet claimed it, as long as they claim it within a specified period. So, if a woman without a partner gives birth shortly before the regulations come into force, she will not be penalised if she is unable to get her claim to the child benefit centre before 6th July. Moreover, if a mother leaves her partner shortly before these regulations come into force, she will not be penalised if she is unable to get her claim to the child benefit centre before 6th July.

The regulations will also protect existing lone parents who move off benefit into work. Many lone parents do not take up their entitlement to the lone-parent rate of child benefit when they are receiving income support or jobseeker's allowance. That is because it is deducted from their benefit entitlement. Such a lone parent will still be able to claim the lone-parent rate of child benefit after these regulations come into force provided that she leaves income support or jobseeker's allowance for work and was receiving the lone-parent rate of family premium or, in some cases, a higher overlapping premium when her benefit award ended, as long as she claims it within a month of leaving benefit. This will preserve work incentives for existing lone parents.

The regulations deliver our commitment to protect existing recipients and preserve work incentives for existing lone parents. They also give all existing lone parents ample time to claim the higher rate even beyond the 6th July period.

The electorate have made it clear that they expect more from social policy than the previous administration delivered. They told us that they want an active

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approach to welfare so that everyone can take part in society and work for their living if they can. That is what we have promised to do; and that is what we are doing.

The combination of the national childcare strategy and the New Deal for lone parents, together with a working families tax credit, a childcare tax credit and a national minimum wage, will help make the transition to work much more attractive to the thousands of lone parents who currently feel trapped on benefits. However, at the same time, we are protecting vulnerable families through increases in child benefit and in the family premium in the income-related benefits and by providing extra help for families with young children. We promised to provide help to lone parents in moving into work. We promised to protect vulnerable families who are unable to work. That is what we are delivering. I commend these regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 8th June be approved [37th Report from the Joint Committee].--(Baroness Hollis of Heigham.)

Lord Higgins: My Lords, the House will be most grateful to the Minister for that explanation, not least because in another place on 25th June the Minister in that House failed almost entirely to explain what the provision was about--I notice the expression on the noble Baroness's face!--and spent most of his time being called to order by the Chairman. No one could accuse the noble Baroness of being in that situation this evening. Therefore we are much clearer about the provision than was previously the case. However, there are one or two points which could reasonably be clarified.

On 25th June, when he finally got around to it, the Minister assured honourable Members that existing recipients would continue to receive the higher rate of child benefit as long as they continued to satisfy the entitlement conditions. He said the Government are protecting work incentives for lone parents who are on income support and receive the job seeker's allowance with the lone parent rate of family premium or higher overlapping premiums. He said they would be able to claim the lone parent rate of child benefit when they leave benefit for work. I was slightly puzzled by that. I am not at all clear what the situation is if they then go back on to benefit, and whether they are still protected in that regard. That may be the case. It would be helpful if the Minister could explain that point.

As the noble Baroness said, we debated a number of these matters at considerable length on the recent Social Security Bill, which is now an Act. Of course it is the case that what the Government are doing here is completely contrary to what they said when they were in opposition. However, we understand the other points that the noble Baroness has made and I do not want to go over that ground again any more than the Minister does. However, the situation with regard to child benefit has become a little less clear than it was, in particular the situation with regard to taxation of child benefit. It would be helpful if we could be told whether the

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situation with regard to taxation of child benefit is a matter on which the Government have taken a permanent decision--if I may put it that way--or whether it is still under review.

I referred to the debate in the House of Commons last week. As the noble Baroness will know, we have already had a Statutory Instrument--I believe that is No. 766--which deals with the question of the so-called linking arrangement. We debated at length whether that should be 12 weeks or, for example, a year. That is why I am not at all clear as to whether what the Minister said in another place is correct. The Minister laid great stress on the welfare-to-work programme for lone parents. It is certainly common ground between both sides of the House that people are better off in work than on benefit. I believe there is no dispute about that. However, there is now considerable confusion as to the extent to which the welfare-to-work programme is working. Last Wednesday the Prime Minister asserted at Question Time that,


    "30,000 young people have got jobs as a result of the new deal".--[Official Report, Commons, 24/6/98; col. 1041.]
My understanding is that even if one were to include the lone parents who are covered by the New Deal and the welfare-to-work programme, the figure is substantially lower than 30,000, as mentioned by the Prime Minister. Perhaps the noble Baroness will tell us the figure.

Another reason there has been some confusion about the welfare-to-work programme is because we seem to be short on figures of those who have taken up a job as against the number of people who have come off income support. The two figures are evidently not the same because a number of people who have come off income support may have got married and their partner may now earn more and therefore they have come off income support. As regards the welfare-to-work programme, what figures do we have of the number of people who have gone into work as against those who have simply come off income support? As regards that programme, it would appear that a considerable percentage go back on to income support after going into work. As we all know from previous discussions, that is related to the linking period. But my understanding is that about one in five go back on to income support within that three month period. Perhaps the noble Baroness will tell us whether that is the case.

The other matter on which the statistics are obscure is the extent to which the welfare-to-work programme--which is in effect designed to offset what these regulations seek to achieve--has helped people to obtain jobs. There seems to be a number of different estimates as to how many lone parents have taken part in the programme and how many have obtained jobs as a result. The costs of the programme are substantial. Therefore it would be helpful for the House to be given an estimate of the cost per job. As I understand it, few people have obtained permanent jobs as a result of participating in the programme. However, given the present state of the economy, it would not be surprising if a considerable number did obtain jobs. I believe that about 80 per cent. of young people--as opposed to lone parents--who have been unemployed for six months

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find a job within the following year. In reflecting on the so-called success of the welfare-to-work programme, one has to allow for that point.

We are all in favour of people going from welfare into work. However, the extent to which jobs are being obtained as a result of this substantial outlay is doubtful. I hope that the noble Baroness can give us an up-to-date appraisal of the extent to which the programme is working, particularly as regards lone parents, and the extent to which that is reflected in the cost per job with regard to the departmental budget. Again I thank the noble Baroness for the explanation which she has given. As I said, the measure is wholly inconsistent with what the Government said when in opposition. However, we have to consider it in the present day context. I believe that is what the House would wish to do.


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