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Lord Burlison: My Lords, I beg to move that the House do now adjourn during pleasure until 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.

[The Sitting was suspended from 8.26 p.m. to 8.30 p.m.]

Child Support, Pensions and Social Security Bill

House again in Committee on Schedule 1.

[Amendments Nos. 16 and 17 not moved.]

Earl Russell moved Amendment No. 18:

The noble Earl said: Today I am slightly more fortunate in my timing than when I moved this amendment in 1991. I moved the amendment and then divided the House at 10 minutes to midnight with my Chief Whip standing at the Bar, beaming at me like a bishop giving the blessing. I hope that I shall not have to do it again, but the principle of this amendment is of some importance.

The amendment seeks to delete the requirement to pay a flat rate of £5 binding on those receiving benefits of a prescribed kind. A "prescribed kind" is the usual open-ended phrase used by the department when it might want to do anything. Effectively, it refers mainly to people on income support or jobseeker's allowance. We are told that those are subsistence benefits--although of late that phrase has been heard less often. Another amendment to be moved later will address this point, but in fact there is no estimate available of the minimum needs necessary for good health. Many other countries calculate such an estimate, but we do not. But at least it is clear that income support and jobseeker's allowance do not provide any substantial surplus over minimum needs.

Deductions from income support should be made very sparingly indeed. Already such deductions are used quite heavily to pay for gas bills, water bills, court fines and God knows what else. We all know of the Acheson report. That report stated that the level of income support was insufficient to maintain good health. The consequences of that may be quite serious. The Medical Research Council work on low birth weight is known by repute to many of us. It states:

    "Inadequate nutrition can impair cognitive development and is associated with educational failure among impoverished children. Nutrition early in life has a big impact on the development of the brain".

By inflicting further hardship on people receiving income support or jobseeker's allowance, we may be facing longer term consequences of quite considerable severity.

I do not understand exactly what useful purpose is served by such an adamant insistence on a flat rate payment of £5. I am sure that we shall again hear from

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the Minister much of what we heard on the amendment concerning the parent with care who is rich; namely, about the abstract principle. On occasion there is much to be said for abstract principles, but when those abstract principles cause real and gross hardship to people who are already suffering enough of it, without providing any substantial compensating benefit, then I tend to wonder whether that principle is perhaps mistaken.

Successive governments, in adhering to this flat rate £5 deduction from those on income support, have been inflicting a quite unnecessary degree of hardship and have been achieving nothing for it. If they are that determined to continue with this requirement, then they will have to increase income support levels above the rate of inflation in proportion. At present I can see no sign that the Government will be willing to do that.

I have reminded the Minister of what happened when I moved a similar amendment in 1991. I shall not repeat that tonight, but I cannot answer for what might happen during later stages of the Bill. I beg to move.

Baroness Hollis of Heigham: Originally, Amendments Nos. 18, 19, 20 and 23 were grouped together, because they all deal with the same matter. However, I see that the noble Earl is signalling otherwise. Amendment No. 18--from the Liberal Democrat Benches--seeks to establish that there should be no deduction from benefit for maintenance, including those people who currently have £5.20 deducted from JSA and IS. In particular, the amendment seeks to remove all references to cases where the non-resident parent or their partner is in receipt of a prescribed benefit, pension or allowance and leave only those whose income is £100 or less--those not receiving benefit--to be required to pay maintenance.

Briefly, I should like to make three points. First, people on JSA and income support pay a contribution towards child maintenance. At present that contribution is £5.20. In the future we propose that it will be a flat rate of £5. Secondly, unlike at present where the £5.20 charge goes straight to the Treasury, in future the £5 will go directly to the child so that the child will share in the father's income, as it would if that family were an intact family and the father was claiming jobseeker's allowance and looking for work. I think that it is right that parents with care who are themselves on modest incomes can expect to see a contribution from the non-resident parent, whether it is £5 if he is on benefit, up to £10 if she is on benefit and he is in work or the full amount if both parents are in work.

The reasoning behind this is not only because we think that it is better for the child if he or she knows that he or she is receiving support from the absent parent and not only because we wish to continue the practice of the existing system, but also because we know from figures of those on IS and JSA--in particular young men on JSA, the main benefit we are discussing here--that around two-thirds of those

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young men will be in work within six months. Three-quarters will find work within 12 months. I refer also to research from Australia that has been quoted in the House on previous occasions. We know that unless the habit of making maintenance payments is set up fairly quickly after separation, it becomes increasingly difficult to collect that money. People must be encouraged into the mindset that states that if their relationship breaks down, they must expect to pay maintenance.

We know that most young people on JSA will be back in work within six months or at most a year. If we have not established the habit of making maintenance payments--a responsibility that goes along with the need to pay any arrears on rent, repaying social fund payments and so forth--then such young people are less likely to carry on making payments once they are back in work. For that reason, we are holding to the broad position of the previous administration on this, but reducing the rate from £5.20 to £5, ensuring that the benefit goes directly to the child and, lastly, continuing to support the principle that the need to establish the habit of making payments must be done early so that when that person moves into work, maintenance will continue to be paid. In the light of these points, I hope that the Committee will not support the amendment.

Earl Russell: The Minister has invoked the matter of encouraging the habit of making payments. Before I respond, can she tell me what proportion of those presently assessed to pay the £5.20 actually pay it?

Baroness Hollis of Heigham: The best statistics that I can offer the noble Earl is that of those who should be paying, around half of them do so.

Earl Russell: That does not strike me as a particularly convincing habit. Does the Minister wish to respond?

Baroness Hollis of Heigham: That is not out of order with the statistics we inherited as regards those who were in work when we came into office. In 1997 we found that only around 30 per cent paid all the maintenance due, 30 to 40 per cent paid part of their maintenance, and the rest paid nothing at all. The mindset that payment was required was broken for everyone, whether or not they were in work--especially the self-employed. Those who paid regularly tended to be divorced, never had a continuing commitment to their children and recognised their obligations to that extent. While I entirely accept the noble Earl's point that the habit of maintenance has not been well established, that is something the system is designed to change.

The other factor that has affected getting the money flowing has been the inability of Benefit Agency computers to talk to CSA computers. When a young person, for example, changes his benefit status, that may be recorded on BA computers but the CSA has to be informed manually. Our inability to obtain

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accurate statistics is criminal. All the statistics that I give have an associated health warning. The new system will not only see that the money goes to children but will be associated with robust IT systems that should provide an accurate snapshot of the individual's benefit status.

Earl Russell: The Minister knows perfectly well why I believe that so little of the money assessed under the 1991 and 1995 Acts has actually come in. In a great many cases, parents have been assessed to pay sums that are more than they can possibly pay--which instantly breaks the habit of payment before it has been instilled. The figures that the Minister has just given are simply another subset of that mistake. If those individuals had been allowed the six months that the Minister invoked, until they had an income, they would have picked up the habit of payment perfectly easily. It is the usual story of the Treasury shooting itself in the foot.

I know perfectly well that the Minister thinks otherwise, but I am entitled to say to her that which she said to me earlier. I accept that she believes these things, but it does not follow that I have to do so. I do not. I accept that the money will go directly to the children, which is a good thing. But the money can only go to the children if it is actually there. The difficulty of living on income support is so considerable that it may not always happen. When the Minister described income support as a modest income, she was carrying euphemism to something near its outer limits. If the Minister had increased benefit levels by 20 per cent, I would have found the whole of her argument persuasive. I do not see that as an immediate prospect. Meanwhile, I beg leave to withdraw the amendment--but it is not the last that we shall hear of this issue.

Amendment, by leave, withdrawn.

[Amendments Nos. 19 and 20 not moved.]

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