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Baroness Buscombe moved Amendment No. 21:

("(a) is a student in full-time education at an educational establishment in the United Kingdom; or").

The noble Baroness said: With this, I wish to speak also to Amendment No. 22.

These probing amendments are designed to clarify why the Government want powers to exempt various of non-resident parents--so-called proscribed descriptions--from their duty financially to support their children. The two categories in our amendments have been taken directly from the Explanatory Notes. Both are disturbing.

We recognise and support the Bill's powerful theme that parents should be required to make a contribution to the upkeep of their children and to recognise the financial consequences of their actions, not take for granted that the taxpayer--someone else working hard to meet his or her responsibilities--should pick up the tab.

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We recognise also that the Bill takes account of persons who, with little resources, will make a minimum payment of £5. Do the Government intend to allow all who choose to enter full-time higher education or who find themselves in prison to abrogate entirely their responsibilities for their children?

We know that many students need to take out loans to pay their fees and maintenance but many work. Most noble Lords can attest to that. I concede that under this government, funding one's way through full-time education is much tougher--except for those attending full-time education in Scotland, as we heard earlier from my noble friend Lady Carnegy of Lour.

What is more important--the pursuit of personal academic achievement or acceptance of responsibility, in however small a way, for one's own child? The Minister in another place, in response to a similar amendment, made much of the income of students and the number of student parents who account for the CSA's current workload. Those issues are irrelevant. Whether or not the numbers are small is also irrelevant. Either the Government are serious about requiring parents to meet their responsibilities or they are not. It worried me when the Minister said earlier in defence of ignoring minority cases in relation to Clause 1, "It is not worth it". Surely principle matters as well as practice.

On Second Reading, the Minister confirmed that 30 per cent of parents pay nothing towards the upkeep of their children. The noble Baroness said that reform of the formula of the benefits system will provide incentives for parents to co-operate. We support reform that will incentivise responsibility but believe that the clause will do entirely the opposite. It will provide more opportunities for those wishing to negate their responsibilities. I beg to move.

Earl Russell: I do not wish to appear behind the noble Baroness, Lady Buscombe, in my adherence to principle. The question is, which is the relevant principle? The guiding principle throughout our discussions has been doing the best thing for the children, although we have not always agreed on what that was. The question is even clearer for students than for people on income support. Most students have a lower income than if they were on income support--so if they are assessed to pay, they cannot do so.

I once had a pupil who was assessed by the CSA because she became the partner of a man who was assessed by the agency. Finally, the CSA decided that the assessment was in error and it was withdrawn. Had that not been done, my pupil would have had no option but to withdraw from her education. That is the only effect of requiring students to contribute. They cannot live on the money provided and need extra earnings, to the great detriment of their work, to cope. If they withdraw from education, their long-term earnings may be significantly lower--so the money going to the children would be considerably less.

The Minister might argue that such persons must pay immediately and give up their prospects. One could argue that is in the interests of the children. It is

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a difficult argument to make but not totally impossible. If the noble Baroness wishes to make that argument, she needs to come clean and say that is exactly what she is doing. Then we could discuss the matter on a real and serious basis. But to suggest that people should, at one and the same time, be students and pay maintenance under the CSA is not to be in the real world.

Baroness Hollis of Heigham: I am slightly baffled. I did not understand the meaning of the amendment in the way that the noble Earl, Lord Russell, did. I shall be grateful if the noble Baroness will interrupt if I have misunderstood, but I thought that this amendment sought to remove a general power to prescribe, in regulations, categories of non-resident parents who would have a nil-rate liability and to confine it to the very group to which the noble Earl, Lord Russell, referred; that is, students, prisoners and those with a net weekly income of less than £5.

According to my advice, that is what the amendment means. If that is not the intention of the noble Baroness, I shall be grateful if she will let me know. I understood her to be confining the nil-payment groups to students and prisoners. I was going to argue that a few other groups need to be included in that category. If she is indeed doing what the noble Earl fears she may be doing--that is, saying that nobody is exempt--I should like to have that elucidated.

Baroness Buscombe: I am sorry if I did not make myself clear. I am trying to encourage the Minister to clarify what the Government's intention is. Is there a list of prescribed people? If so, who are they? We are taking the examples direct from the Explanatory Notes. In themselves we find them disturbing and I am happy to respond to the noble Earl in relation to escaping the real world; there is something very real about having children. But I ask the Minister to concentrate on clarifying what the clause intends.

Baroness Hollis of Heigham: I shall do my best. I shall not describe what I believe to be the effect of the amendments but come back to the intention of the Bill.

The Bill proposes to prescribe for a group of people that they should have a nil maintenance liability. The first group of those would be students. I understand around 1,500 students are non-resident parents. We are proposing that, given that their income is loan based, for these purposes they should be regarded as having a nil income that is assessable for child support purposes. I believe the noble Earl, Lord Russell, and I agree on that.

The second group we are proposing should have a nil maintenance liability are prisoners, for fairly obvious reasons; that is, that they are imprisoned and have no access to earnings. The other categories that we have in mind to prescribe are persons receiving an allowance in respect of work-based training for young people or, in Scotland, skill seeker's training. But I cannot help the noble Baroness in relation to numbers in that regard; we do not possess any useful figures.

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The next group we are proposing to exclude from maintenance liability are 16 and 17 year-olds in receipt of income support or income-based job seeker's allowance. We believe there to be around 40 non-resident parents who are 16 or 17 year-olds in that category. We are proposing to exclude a child as defined under Section 55 of the Act. We are proposing to exclude a person in hospital who is receiving income support pocket money at the higher or standard rate which, as Members of the Committee will be aware, is a very modest sum (again, I cannot put a figure to that) and the 60 or so persons in residential care or nursing homes who either have their fees paid in full or in part by the local authority or are in receipt of a benefit which would normally attract a £5 flat rate liability.

That need not be an exhaustive list. But at the moment that is the list we are proposing to prescribe for. In all cases, they either clearly have no income or, alternatively, so few, as possibly with students, have any serious alternative income that it is not worth the hassle.

The noble Baroness criticised me saying that I said something along the lines that a parent with care's income was not worth it. I had that as number two or three in my shopping list of reasons. My first reason was equity and fairness, which the parent with care is already paying in kind. It seems to me that if I can show that something is not only not fair, but also not worth it in terms of administrative simplicity, then we have two good arguments and not just one. I was certainly not thinking simply in terms of mechanical expediency.

Why are we doing this in regulations? Having the ability to prescribe in regulations provides us with the flexibility to add or amend categories where necessary and to reflect changes in other legislation. A simple transparent scheme is the only way to ensure that children receive the support they deserve. But the maintenance levels must be fair and reasonable. We are therefore seeking to exempt from those categories those who have no income. However, for the rare exception where there may be a mature student who has earnings or savings of the sort the noble Baroness might have in mind, parents with care will still be able to apply for a variation. Where a non-resident parent with a nil-rate liability, because they fall into a prescribed category, has nonetheless significant income or capital, the parent with care will still be able to apply for a variation.

Let me give an example. Somebody may have been in work, had savings and so forth and then decides to do an MBA for a year. They become a student. They have a nil-rate liability. But the former partner knows perfectly well that they have substantial savings and income, some of which can reasonably be used to support the child. Or someone may have been in work and stopped work to become a student and therefore their maintenance liability stops. In that situation, the parent with care can then go to the tribunal and seek a variation on the grounds analogous to, "He is declaring £100 a week but is living on £500 a week and therefore I should like my child maintenance assessed

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as though his income were £500 a week". It comes into one of the two categories that I explained earlier; that is, the first being child-related expenses and the second where the income as reported is not a fair reflection of his true financial position.

Should there be those few exceptions--we do not accept there are many--of either a mature or exceedingly rich student, then the parent with care will be able to apply for variation. But basically we are seeking to cut out of our trawl all of those who have no income to provide and at the same time seek to do it by regulations so that, if there should be other groups that I can conceive of that might fall within that category a year or two down the line, then we would have power to include them. It would then be up to your Lordships as to whether or not the House wanted, by affirmative regulation, to add to the proposals.

I hope with the explanation that there is a good reason for doing it--that they have a nil income or in the rare case where there may be an income the parent still has the right to apply for a variation--the noble Baroness will agree that we have got the balance right in terms of simplicity, but with the possibility of variation in those rare circumstances where a student may have significant income or savings. Of the 1,500 students who are in this category, I should be surprised if 40 of those had an income or savings that would bring them into a significant calculation. But if that is the situation, then there is recourse to variation and that was designed to cover precisely those situations; for example, where someone reduces their income and transfers it all into capital to be exempt.

I hope with that attempted explanation the noble Baroness will feel reassured and able to withdraw her amendment.

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