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Child Support, Pensions and Social Security Bill

8.46 p.m.

Consideration of amendments on Report resumed.

Clause 18 [Financial penalties]:

Baroness Hollis of Heigham moved Amendment No. 60:

The noble Baroness said: My Lords, in moving this amendment, I shall speak also to Amendment No. 61. These amendments are minor technical amendments. First, Amendment No. 60 will put beyond any question that we might, by using the words "absolute discretion", intend to create a bar on the exercise of judicial review in connection with the imposition of penalty payments. The amendment, however,

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maintains the policy intention that discretion will be exercised reasonably, based on the circumstances, in order to determine the amount of the financial penalty.

During consideration of the Bill, the noble Earl, Lord Russell, moved an amendment to probe the intention behind the meaning of "absolute discretion" in connection with this clause. There was concern that the intention was to oust the jurisdiction of the courts as regards judicial review. There was never any such intention. We always expect the Secretary of State to act reasonably but I thought that the noble Earl made the better case. Therefore, I am happy to bring forward an amendment to meet the noble Earl's concerns without changing the policy intent.

Amendment No. 61 is a minor amendment intended to clarify the drafting of Schedule 3 to the Bill. Currently, paragraph 11(3)(b) of the schedule amends Section 4(9) of the Child Support Act 1991 by adding the words "treated as made" after the word "application". However, the word "application" appears twice in Section 4(9). We are therefore taking the opportunity to clarify our intention and to put beyond a doubt which part of Section 4(9) is to be amended. With that brief explanation, I beg to move.

Earl Russell: My Lords, I thank the Minister very warmly indeed for Amendment No. 60. I am extremely glad that she is satisfied about the case, although I must admit that when she sat down at the end of our discussions in Committee, you could have fooled me.

She has discharged her duties like a trooper, as a junior Minister should. She is to be congratulated on spotting the point; on having the clout to persuade other people within the Government of its validity; and on drafting the amendment in such a way that it is a good deal better than my original one. I am absolutely satisfied and I warmly thank the Minister.

On Question, amendment agreed to.

Schedule 3 [Amendment of enactments relating to child support]:

Baroness Hollis of Heigham moved Amendment No. 61:

    Page 107, line 27, after ("after") insert (""an").

On Question, amendment agreed to.

Clause 30 [Earnings from which pension derived]:

[Amendment No. 62 not moved.]

Lord Astor of Hever moved Amendment No. 63:

    Page 26, line 41, leave out ("six") and insert ("eleven").

The noble Lord said: My Lords, in moving Amendment No. 63 I shall speak also to Amendment No. 64. We shall not be moving Amendment No. 65.

With six children of my own, I feel I can comment objectively on the amendment. Even after children reach the age of six, they can place major demands on a carer. My nine year-old son needs just as much, if not more, care now than he did when he was five. It seems unreasonable that pension rights for those who make a major commitment to their family should suffer as a result.

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In Committee the Minister gave the Government's reasons for the requirement that a child should be under six for its carer to qualify for the state second pension carer's credit. I did not find those reasons persuasive. We propose instead that deemed benefit contributions be received by those who look after children up to the age of 11. That is consistent with labour market reality. Many more women work full time when their children are over 10.

We are sympathetic to the amendment tabled by the noble Lord, Lord Goodhart, although we prefer the age of 11 to that of 12. I beg to move.

Lord Goodhart: My Lords, Amendment No. 64 stands in the name of myself and my noble friend. It is, of course, to exactly the same purpose as Amendment No. 63 which has just been moved by the noble Lord, Lord Astor of Hever. The arguments we would put are exactly the same as those which he put. The only difference between us is that we propose the age of 12 rather than 11. We do that because we believe that for many children the first year of secondary school is a difficult and, in a few cases, a traumatic one, and it is reasonable for mothers to decide that they will stay at home rather than commit themselves to work until the end of the first year of secondary school of their youngest child. Therefore, we suggest that the appropriate age is 12 rather than 11. However, subject to that, we are in agreement with the amendment moved from the Conservative Benches.

Baroness Hollis of Heigham: My Lords, I am sorry that I was unable to persuade your Lordships in Committee that the Government's policy was the right one. As your Lordships will know, the Government propose that anyone who earns less than the annual lower earnings limit in a given year who is looking after a child under age six and receiving child benefit will accrue entitlement to state second pension (S2P) in respect of that year. In effect, we are targeting extra help on people looking after children up to early primary school age.

That is because we recognise--as can be seen in the employment patterns of mothers with young children--that carers (usually mothers of children below school age) have the least opportunity to work and earn above the lower earnings limit. That is why we are seeking to help them and to ensure that they have the opportunity to build up a decent pension in older age.

The problem currently under SERPS for people caring for a young child is that for every year that they are not working they get a smaller pension when they come to retire. That is a significant reason for women, who are most often affected by periods of caring for children, getting less from SERPS on average than men.

Our proposals for S2P will help to address that problem. Almost 1.5 million women will benefit. Five years out of work looking after a young child will give someone additional pension of about £5 a week in state second pension. Under SERPS, that same person would have received nothing at all.

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However, the amendment focuses on whether that guarantee or passport into S2P should apply beyond the age of five up to either 11 or 12. Your Lordships will know that many mothers of school-age children choose to combine their caring duties with part-time work. Many of those parents will benefit from the low earner's boost in the state second pension by earning as little as £3,500 per year. That means that as a result of the minimum wage, someone will only need to work about 18 hours a week to gain access to the boost.

I have done some calculations. If, for example, a mother with a child from five or six upwards was working five hours a day just for term times weeks--which is well within the school day, even for children of the age of six onwards--at a minimum wage she would already be above the LEL and qualify. That means that a person working a fairly low number of hours--five a day, in term time only--at minimum wage will qualify. Anyone who combines a part-time job with child caring, as around 60 to 70 per cent of married women with children over the age of five or six do, will qualify for S2P. I believe that that is a perfectly reasonable position for us to propose.

Obviously, some mothers may choose to stay at home even when their children are older; whether they are 10, 12 or 14. Some may have no choice because of family or other circumstances. If, for example, those circumstances include a disabled child, they might receive ICA. That would give them other qualifications. It is not our intention to punish them for that. Indeed, we are doing a great deal to help stay-at-home mothers, including big increases in child benefit and really big increase in income-related benefit rates for young children, which have gone up by nearly 100 per cent in three-and-a-half years since the Government came to power.

We are also introducing new rights for parental leave. But we have to ensure that mothers have the choice to return to work if they want to, and the majority do. That is why we have introduced the working families' tax credit, the childcare tax credit and the national childcare strategy. As a result, women are coming into work.

Focusing S2P and the HRP credit for it on those caring for children under school age matches the choices most women make. Generally, mothers take career breaks or periods out of work when their children are very young. As most children start school well before they reach age six, mothers will have had time to adjust to the change and look for suitable part-time work if they choose to do so, as most do. They will be able to qualify for S2P by working within the normal hours of a school day. It is a decision about individual choice. Entitlement to state second pension will simply be one more factor to consider.

Obviously, bringing up children is a valuable contribution. Given what I have said, I hope that your Lordships do not think that mothers have to choose between part-time work, if that is what they wish, and bringing up children over the age of five or six and thus disqualifying themselves for state second pension. These are combinable and are combined by most

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women. However, we are focusing help on those mothers with younger children, below the age of five, where there is not that same access to part-time work, given that the children are still dependent upon them. That is where we believe our priorities should lie. I hope that with that explanation, your Lordships will not feel the need to pursue the amendment tonight.

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