Benefit Cap (Housing Benefit) Regulations 2012
Baroness Sherlock Excerpts(11 years, 6 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, so much wisdom has already been shared with the Committee that I am not going to try to tread over the ground so impressively covered. I would like, however, to ask the Minister to focus on two particular categories of people. I am particularly concerned about families with children, especially vulnerable families with children. The Minister may recall that, among the many amendments that he faced during Committee stage, I moved an amendment that specifically asked that families be exempted from the cap if their household contained a child who was the subject of a child protection plan, a children-in-need assessment or a common assessment framework team. The Minister sadly did not smile on that amendment, but I hope that he has had the opportunity in the mean time to think some more about what happens to particularly vulnerable children. Since the Government now have data about the families who will be affected by the cap, will he tell the Committee today how many of the households that will be affected contain a child who was the subject of any of those protection plans or assessments or a common assessment framework team? If he cannot do so today, would he commit to write before his regulations are considered or, if time does not permit it, to place that in the Library as soon as possible?
I briefly remind the Committee why this matters. I raised this on Report and I am not going to revisit the principle, but I was concerned at that stage because of discussions that we had had in Grand Committee, where I had heard a noble Lord—I shall not name him, because he is not here, but he was someone with great experience—describe having sat in a serious case review of a very serious incident with a child. He described what I have heard over and over again from social workers, which is that when you get to a serious case review, people gather around the table from all the different agencies and, about an hour in, somebody always says: “If only we had talked to each other sooner; if only we had all shared information previously, maybe it would not have come to this”. Reports from one London safeguarding board showed that, in a significantly high proportion of families affected by serious case reviews, rent arrears or impending eviction had been an issue; of them, a significant number were known to more than one authority.
A number of noble Lords from all sides raised throughout our consideration of the Bill the question of what happens to families who are forced to move repeatedly—in particular, what happens if households containing vulnerable children of the kinds that I have described are forced to move some considerable distance. There must be a real danger that these children disappear from the system. Could the noble Lord tell me whether he has considered my proposal to exempt those families from the cap? If he has not, what assurance can he give the Committee as to precisely how those families will be protected and how those children in particular will be protected?
Picking up the point made by various noble Lords about families in temporary accommodation, I am very concerned about the considerable distances that they and other families with children may end up moving. Like other noble Lords, I have been reading the newspapers this week—but I do not read those left-wing communist rags. I shall quote a headline to the noble Lord:
“Homeless families to be kicked out of London and sent as far away as WALES as councils buy up cheap properties to house them”.
The article goes on to state:
“Local authorities say sky-high rental costs in the capital, combined with the incoming benefits cap has forced them to send people miles away from home. Areas as far away as Manchester, Merthyr Tydfil and Hull … ‘It is going to be practically impossible to provide affordable accommodation to meet our homelessness duties in London,’ Dagenham Council say”.
I am sure that the noble Lord recognises that that is from the Daily Mail.
Will the noble Lord tell the Committee whether that is true? Is he expecting significant numbers of homeless or potentially homeless families to be rehoused hundreds of miles away? If not, why are so many of our grand newspapers labouring under such a misapprehension? Perhaps the Minister could put their minds at rest. He might want to write to the editors with a copy of his speech when he has reassured us today.
I would be interested to know whether there is any danger that families could be forced to move, as has just been described by the noble Lord, Lord Best, more than once, either because accommodation for the homeless has become too expensive or simply because, as was raised in Committee, the median rents have gone up over the area. Rents may rise in an area as a result of an influx of families and then they could hit a cap again. Is there any danger that that could happen? I am sure that the noble Lord is aware of the evidence showing the impact of repeated house moves on a child’s achievement in school. If that is the case, will he say how the Government will protect vulnerable children in particular from the damage that could happen to them not only in childhood but in later life as a result of their schooling being impaired?
Finally, turning to the report from the Child Poverty Action Group, to which my noble friend Lady Lister of Burtersett, referred earlier, I should like to draw the noble Lord’s attention to a paragraph on page 40. It states:
“Authorities are also concerned about the impact of the cuts on their ability to meet other government priorities, in particular around the ‘troubled families’ agenda”.
Will the Minister tell the Committee what discussions he has had with the DCLG and other departments about the extent to which this policy may impact on their ability to deal with troubled families? If so, what steps are being taken to address that?
Lord McAvoy
My Lords, I rise to speak briefly because my noble friend Lady Sherlock has spoken with wisdom and analysis, as have my noble friend Lord McKenzie, the noble Lord, Lord Best, and others. I do not think that I could hope to match that. I prefer to speak about the effects of what this Government are doing on families and people. First, I should make it plain that I am not a social liberal or a bleeding-heart liberal with a small “l” or even with a large “L”. As a genuine member still of the honest working class, I am totally opposed to people fiddling the public purse and the benefits system.
I do not think that the Government care so much about that. I am not trying to paint a picture of an uncaring Government, although the effects of what they are doing here are exactly that. Some of the stuff that has come from the Government for dealing with the people who will be affected by this is in the Explanatory Memorandum to the regulations. Paragraph 7.7 states:
“The Government expects different households to have different behavioural responses to the cap but those affected will have a number of options to consider”.
What are the options to consider? The options include,
“reducing their non-rent expenditure”.
I should like to ask the Minister some questions. Under what budget heading should that come? Does he have any suggestions about which item of household expenditure in these poor households should be cut to make up the shortfall in rent? Paragraph 7.7 suggests that they should make up the shortfall,
“using a proportion of their other income or moving to cheaper accommodation or area”.
We will come to that later, because to me that has the biggest impact on families who are being treated in this way.
Young Offenders: Employment and Training
Baroness Sherlock Excerpts(11 years, 7 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I should start with a confession, which is that 18 months ago I knew precisely nothing about this subject, but that would not have necessarily deterred me from contributing to the debate. In the intervening period, something happened that taught me a lot. I was asked to serve on the Riots Communities and Victims Panel, which the Government appointed to look into the riots of last year. That was an experience that left me profoundly concerned about what happens to the astonishingly high number of young people who end up in Britain’s prisons.
As part of that experience, we went into prisons and talked to a number of young men who had been sent to prison for riot-related offences, and their stories highlighted a lot of the issues that noble Lords have raised. One young man described having applied for hundreds of jobs. He attended 19 interviews and completed two apprenticeships, but had not been able to get a job. If he could not get a job before he went into prison, what were his chances when he came out the other end? Another young man had been employed when he committed the offence, and when I asked, “What are you going to do when you get out?”, said, “I want to go back to my job”. I thought, “You haven’t even begun to appreciate what is going to happen to you when you come out the other end”. As the noble Baroness, Lady Young, pointed out, so many young people do not understand the consequences of what will happen when they have served prison sentences.
When the riots panel published our interim report in November last year, we noted that nearly three-quarters of those brought before the courts for riot-related offences were under 25. Most of those in court had a previous conviction and a small group were serious serial offenders. However, as my noble friend Lady Nye noted, young adults are overrepresented in the prison population. They also seem to be more likely to reoffend. In the year ending March 2010, more than 113,000 young people were given what is rather unpleasantly called a formal disposal, of whom a third committed a proven reoffence within a year.
However, what scared me was that the 2009 re-offending figures state that 65% of offenders aged 18 to 20 who are discharged from a custodial sentence of less than 12 months reoffend within a year. Let me say that again: 18 to 20 year-olds come out of prison after a sentence of under 12 months, and two-thirds of them reoffend within a year. What are we doing about that waste of lives, or indeed of public money? What an astonishing figure. What are we going to do to tackle the lives ruined, not just the young people’s lives but those of the victims of the riots? I had the opportunity to meet all kinds of victims whose lives were ruined too. If these young people go out and reoffend, more people’s lives will be ruined. Even if one does not—and I really do—care about those young offenders, as a society we should at least care about the consequences of failing to treat them appropriately.
The riots panel produced a large report, which I hope the Minister has had every opportunity to read, mark and inwardly digest by now, because much of it related to his areas of responsibility: young people, work, the criminal justice system, and a great deal more. Today, I can pull out only a small number, but I want to ask about just a few of the conclusions we reached. Some of the others have been raised by other noble Lords.
A key issue seems to be the transition between the youth and adult justice systems. We heard all kinds of stories about where this goes wrong. However, aside from the general problems of transition, we heard stories of young people either being unable to take courses or that moving them resulted in the loss of all records, which meant that they could not carry on where they had previously left off. That meant that the value of any education or training they received in prison was simply wasted. The panel recommended that a nominated officer be assigned to each young adult whose case is passed between young offending and probation teams to help to manage that.
As my noble friend Lady Healy noted, the provision of proper wraparound support is crucial. We were impressed by many schemes, such as that operated by the Prince’s Trust, mentioned by the noble Baroness, Lady Stedman-Scott. Its scheme at HMP Lewes includes meeting at the gates, mentoring as role models, having someone on hand to sort out practicalities, and support about everything from college places to housing and employment. They are all crucial to the support. However, there is only so much a mentor can do if appropriate provision is not readily available.
Given that the Minister who has the pleasure of replying today is the noble Lord, Lord Freud, I decided that I would pick out a few issues related to his empire, rather than more generally, as it might make it easier for him to respond. In March, the Government announced that people claiming jobseeker’s allowance in prison or within 15 weeks of leaving would be fast-tracked on to the Work Programme. This seems to be a marvellous idea. Does that include all young people leaving custody, even those on short sentences? Is the fee still £5,600 for getting an offender into work if they stay there for two years, as was the case when the scheme was announced? I can see the Minister nodding. Is that amount enough? I understand that the highest payments to Work Programme contractors who aim to get people into work who are a long way from the labour market is £13,000. If £13,000 is paid for some categories, why is such a small sum paid to those who are helping young offenders get into work, given how difficult we have heard it is for them to get in there?
What happens if someone does not get a job within two years? The riots panel was very concerned in general about young people being parked on the Work Programme. Because of the nature of the contracting arrangements, there came a certain point when there was no economic benefit to the provider to do anything more with them; if they passed that time, you might as well let them sit there. The panel recommended that that simply should not be allowed to happen.
I very much support the point made by the noble Lord, Lord Aberdare, about the importance of contracting directly with some of the smaller voluntary or specialist organisations that have the experience to work directly with this client group. I understand why procurement might tempt the Government into awarding contracts only to large prime contractors and letting sub-contracting arrangements go on, but all the evidence shows that that simply is not working for most voluntary organisations. Many voluntary organisations have gone out of business or are simply unable to work in those conditions. Frankly, I would sooner trust the kind of work described by the noble Baroness, Lady Stedman-Scott, and the work I have heard about from the St Giles Trust and many other voluntary organisations, than something sub-contracted, either from a much larger provider or even directly from Jobcentre Plus.
Finally, what kind of career development advice can be provided to young people coming out of prison? I am still haunted by one young man I spoke to. We asked him to describe what happened when he came in. He thought for quite a long time and then said that when he arrived, someone had asked him: “What do you want to do with your life?”. The reason it was so memorable was that no one had ever asked him what he wanted to do with his life, and maybe someone should have. If no one had up to that point, is that not something that whoever the Government ask to work with these young people should have the time and space to do?
I will not go on as time is short. There have been so many wonderful speeches, and I congratulate my noble friend Lady Healy on having provoked a marvellous debate. I hope very much that the Minister will be able to give us the answers that we need.
Child Support Maintenance Calculation Regulations 2012
Baroness Sherlock Excerpts(11 years, 7 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I should like to pick up where the noble Lord left off. I am grateful for the opportunity to discuss this rather large package of regulations. In doing so, I should remind the Committee of my declared interests, which include having been a non-executive director of CMEC and, in the dim and distant past, a deeply historic interest in having once been the chief executive of the National Council for One Parent Families, which is now part of Gingerbread—to whom I am very grateful for their briefing, as with other organisations.
I will focus on three specific issues. One has just been picked up, about the readiness of the new statutory maintenance system. Secondly, perhaps the Minister could help us better understand the decisions behind what income to include or exclude. Finally, I will pick up another issue raised by my noble friend Lord McKenzie of Luton about the readiness of parents for the introduction of the new system.
First, on the readiness of the system, I was very glad that the noble Lord picked up the issue of the pilot group. I was going to ask the Minister to give the names of the members of the pilot group because frankly I cannot believe that it is so big that he could not, with his legendary skills, memorise their names very easily. The question is whether he is confident that a pilot group of that size and peculiarity, statistically speaking, will provide all the evidence the department needs to assess whether the system will work once it is rolled out properly.
The second question raised by the noble Lord, Lord Kirkwood, is much more worrying. It is the idea that we will end up seeing the critical testing of phase two performed in parallel with the programmed delivery of phase one. What will that tell us down the line? I read the report from the Public Accounts Committee, which I am sure is acid-etched on the Minister’s heart. He may recall the questioning by Mr Bacon, who was teasing out whether, when simultaneous testing and development had been tried in the past, it had led to problems. He mentioned tax credits, the Criminal Records Bureau and the Rural Payments Agency. He said:
“The testing was done in parallel in all of them. In some, they hit the go-live button when they knew it didn’t work properly, so we are right to be concerned about this, aren’t we?
The committee was taking evidence from the Permanent Secretary, Mr Robert Devereux. Mr Bacon went on to say:
“So you are not going to hit the live button until you are sure it works, even if it means a delay?”
Robert Devereux replied by saying:
“Absolutely not, and you can assume that that is exactly where Ministers are too. We are perfectly aware of the history”.
I should like to give the Minister the opportunity to go on the record himself on this. Can he assure us that this will not happen? Does he personally have confidence in the amount of testing that it will be possible to carry out before the system goes live?
What assurances can the Minister give about the consequences of the potential losses that have just been mentioned? If delay is going to cost the department £3 million or £4 million a month, will that money come from anywhere else in child maintenance? If so, will we have an opportunity to scrutinise the effect of that? I am also interested in what potentially could happen. My noble friend Lord McKenzie said that a series of different systems could all be running at the same time. Could there be a period, and how long would it be, when delivery staff might be running four systems in parallel? These would be CSR, the pre-2003 old-rules system; CS2, the 2003 current-rules system; the offline clerical system; and the new IT system. What is the maximum period during which the four systems might run in parallel? Given the cuts in staffing levels under the resource constraints the department is facing, can he give an assurance that the department can manage this so that existing CSA clients do not suffer as a consequence?
The next area that I want to address is the effect of the decisions that the Government have taken in relation to the amounts that will be payable. I am particularly exercised, as my noble friend Lord McKenzie flagged up, about the decision that the new system will ignore tax credits when considering the income of a non-resident parent. According to the Government’s own estimates, around 100,000 existing CSA clients could lose an average of £6 per week in child maintenance as a result of changes to the way it will be calculated. Tax credits will no longer be counted as part of gross income. That is significant because at present just under a third of non-resident parents within the CSA are entitled to tax credits, and therefore a significant financial blow to many single-parent households will be coming at a time when they are already suffering in other areas. They will end up having to pay fees for charging out of their current income, and they are facing cuts to benefits in other areas. There are all kinds of problems for this category, and they could be quite significant. I will not go into any more detail until the Minister has had a chance to respond, but I reserve the right to come back on it. Can the Minister explain quite carefully what alternatives were considered? Given that tax credit information rests with HMRC and is therefore available to the department, why can that information not be considered?
Secondly, as others have mentioned, the Government have confirmed that for non-resident parents within the statutory scheme, they intend to raise the minimum flat rate of child maintenance from £5 per week in current-rules cases to £10 per week. That rise is far above inflation, which would probably have been to around £7, but it amounts to 14% of a single person’s weekly jobseeker’s allowance of £71 per week. That is a significant amount of money and is even more than the 12% of earnings that a working non-resident parent in the £200 to £800 band will be expected to pay. Two things have happened here. The parent with care may be getting less money while the non-resident parent in the poorest income bracket will have to pay a higher proportion of his income than those who earn more. On top of that will come the 20% collection charge, should that become necessary.
At the same time, the scheme will be more generous to self-employed parents. The Public Accounts Committee recently criticised the fact that the maintenance calculation will be based on taxable earned income for PAYE taxpayers and total taxable profits for the self-employed. Unearned income such as dividend income or rental income will not be counted. The onus shifts to the parent with care to find that out and apply for a variation. It is only at that point that HMRC will be asked to provide details of taxable unearned income, which it presumably must have anyway. I accept that that will not be the case below the threshold, but I am interested in how that will happen in practice.
The PAC report states:
“The Commission should plan to access all information on income when assessing how much maintenance non-resident parents should pay”.
The report explains how in the new system’s maintenance calculations will happen, and continues:
“Relying solely on parents with care to identify such practices by the non-residential parent to ensure all significant taxable income is taken into account is unreasonable when taxpayer data are available to the Commission. The Commission should access all data on all taxable income sources, such as capital gains and dividends, to calculate the maintenance due, not just PAYE information. Where self-assessment data is not filed until later, the Commission should reassess the maintenance due as part of the next annual review”.
This is particularly especially important because—if I have understood correctly, and I may well not have done as I am rather out of date—HMRC data on income will in future be treated as final so there will not be an opportunity for the parent with care to seek a variation on the grounds of lifestyle, which is what I think the Minister was saying at the outset. This means that there will not be an opportunity for a child maintenance assessment to take account of significant non-taxable income, as my noble friend mentioned, such as substantial ISA and savings certificate holdings or a failure to declare income. I am interested in how the Government respond to the PAC’s concern. Will the Minister explain to the Committee how that combination of the fact that this income does not have to be taken into account and the greater difficulty for the parent with care in being able to persuade the authorities to take it into account, should she be aware of it, will be dealt with? What steps will the Government take to make sure that any potential deliberate evasion of maintenance due will be tackled?
Finally, I want to explore what steps will be taken to prepare parents for the impact of the changes. The new calculations seem to be creating considerable losers and gainers among existing CSA clients who move into the new system. Of course, some gain and others lose, but each time that that happens, there are two parties to that transaction, so it is not always a zero-sum game. The department has managed to make it worse than a zero-sum game by taking charging out on top so everyone is potentially worse off. At the very best, it will be a zero-sum game.
When the new historic gross-income method of calculating comes in, around 9% of existing non-resident parents—just over 100,000 cases—could see a rise in liability of £40 or more per week. Around 3% of existing parents with care—some 33,000—could get £40 per week less. These are very significant sums. Given that, what information and advice will be given to parents regarding the impact of the new rules to prepare them for the translation to the new system? Have the Government given consideration to any kind of transitional help? In other changes in benefits or tax credits, or even in the replacement of council tax benefit, the Government have been able to be persuaded that some sort of transitional help should be available because the jumps in the amount people have to pay or the reduction of the amount they receive are simply too great. Why have the Government not been able to come forward with some means of helping parents in this system?
I shall not say any more at this stage, but I should like the opportunity, if necessary, to come back at the end. I hope the Minister will be able to give us a detailed account of these very significant regulations with enormous consequences. I look forward to hearing his response.
Lord Freud
We are still on that timetable, absolutely. But we will be flexible as a department. The one piece of advice that the Public Accounts Committee has given to us as a Government, and to the last Government, is to feel our way into these things, to be flexible, pathfind the way and build from there. So we are taking that advice. We cannot have it both ways. This means that there is not a date on which we must press the button, and if we do not press the button on that day we are late, it is a delay and a fiasco. I believe it is wrong of us as politicians to play with computer systems in that way. It is not the right way to do it. We must go in steadily and introduce these systems in a smart, incremental way. That is the lesson that we have learnt from some superhumungous tragedies. When it comes to computer systems, the Government get a lot of the stick for bad computer system introduction. This is because Government computer systems are publically known. The private sector has just as many snafus with computers as the public sector, it is just that they do not make them public.
This ties in neatly to the point about four schemes in parallel, from the noble Baroness, Lady Sherlock. We already have three systems running in parallel, and this new system will be more automated and more efficient than those. By using the pathfinder approach that I have described, the new system will be working well before we introduce it full tilt. If the new system is working and sustainable with the kind of volumes that I described, then we will be able to manage the four systems that we will have under our hand at any one time.
Baroness Sherlock
I am grateful to the Minister. As I understand it, one of the arguments for the new system was that, as it would be more efficient, there would be fewer staff needed to run it and it would be cheaper et cetera. I know that that may all be up for grabs, but is the Minister confident that the kind of cuts in resource that CMEC had before its transition will leave enough staff to be able to run this? I understand the point he makes about agile development and wanting to take time to run the system in before shedding its predecessor systems. However there is a danger, as seen both here and with housing benefit. As each new system has come in, everybody has been assured that the new system will be the thing that will render all previous systems unnecessary, but all that has happened is an accretion of systems. I just want to be confident that he feels that he has the resource to manage all these systems for as long as it takes, because otherwise people stuck on the earlier systems could suffer and find their situation getting worse, not better.
Lord Freud
Yes, my Lords. The approach is to bring in a new system, which is efficient and automated, at a level that does not consume a lot of resource to start with. You are running your existing systems with the resource that they require. As you ramp up the new system, it starts to establish itself, because you are doing it on a careful pathfinder basis that maintains that automation and efficiency. Then you can start, in practice, reducing the load on the other three systems. That is how you get the gains by doing it, and that is why it is so important to ramp up the new system so that it does not throw a huge amount of clerical work back into the system to compound the clerical overload. We are still running 100,000 cases clerically in one way or another. It may appear a bit smoother to the outside world now, but every £100 transferred is costing the state £35, and that is not something that any Government can tolerate. That is the process: get something efficient; roll it out when you know that it works; build it up; and then start to work down your existing portfolio. That is the process.
The noble Lord, Lord McKenzie, and the noble Baroness, Lady Sherlock, asked about assets and lifestyles. The reality is that that provision was very difficult to use, as everyone involved knows. It was not a successful mechanism for the parent with care to use. Capturing actual income is far more meaningful for parents and far more administratively achievable, which is why we switched over to that approach.
The minimum flat rate of £5 has not increased since 2003 and will remain until the new scheme is fully open to all new applicants. I fully accept the point made by the noble Baroness, Lady Sherlock, about whether it is compatible with UC. At some stage in the future, it may be possible to look at tapers and matching it up, but it is too soon to do that. I accept the general point, but I do not think we are there yet.
The noble Lord, Lord McKenzie, asked about ignoring unearned income in the calculation. We are making the main calculation on taxable employment income, trading income or pension income because HMRC holds that information for the vast majority of taxpayers. Taxpayers who are not liable for self-assessment are not required to declare income of less than £10,000 per year from savings and investments. It would be unfair to take account of unearned income details sourced from HMRC and not pursue parents who had that income but were not required to declare it. Asking non-resident parents to supply that information would be to repeat the delays of the current schemes where non-resident parents are often unco-operative. A parent with care can apply for a variation to take account of unearned income. It is the same with shared care. The noble Lord was right that where it was agreed that there was shared care and the disagreement was about how much it was, the one-seventh assumption would come in. Where there was no agreement that there was sharing, it would have to be done by way of variation.
On taking account of pension schemes, the new scheme will, as now, allow contributions to an occupational pension scheme to be deducted from income, with the resulting figure used to calculate child maintenance. There is no limit on the amount of contributions that can be deducted. That is not a change in the existing system.
Lord Freud
May I offer to write on that issue? We are layers down. Rather than dealing with that impromptu I will aim to write, as I will on how the prompts might work for the non-resident parent on their pensions. Again, that is getting to a level of technicality that I do not have at my fingertips. On tax credits, ignoring that loses 100,000 families about £6 a week in maintenance. Both noble Lords made that point. Again, that is an attempt to get rid of a level of complexity and drive through simplicity. We have set the percentages and thresholds to ensure that changes in liability are minimised except where, as a flat rate, we deliberately intended to raise them. We expect more than half of non-resident parents to pay more than under the current scheme.
Baroness Sherlock
Does the Minister accept that those who will pay more and the lone parents with care who are getting less may not be the same pairs of people? Obviously one cannot assume that the poorest parents with care are necessarily partnered to the poorest non-resident parents, but actually research shows that broadly speaking it is not uncommon for partnerships to be among people of very similar socioeconomic backgrounds and demographics. Is the Minister conscious that, even if overall many non-resident parents are paying more, the poorest parents with care may end up getting less as a result of the fact that the poorer among the non-resident parents are having this income ignored?
Lord Freud
I am not sure I have a precise breakdown within the socioeconomic groups to do that analysis. I will look later to see if I can send the noble Baroness some information on that. I am not sure off the top of my head that I know how that balances out but I will see what I have and include it to the extent that I do.
Baroness Sherlock
I am very grateful for that. Also, if that is not the case, I would settle for an alternative justification of the decision.
Lord Freud
I will either produce information or a justification.
On the war pension point made by the noble Lord, Lord McKenzie, a war disablement pension is considered a prescribed benefit, in which case the flat rate of maintenance will apply. A parent with care can apply for a variation to take account of any additional income received by the non-resident parent.
On the 12-month rule and the position with the Scottish minutes of agreement, we are in discussion with the Ministry of Justice and colleagues in the Scottish Government to ensure that the statutory maintenance system and the family justice system both north and south of the border work together as effectively as possible in the interests of parents and children. We are hoping to meet family lawyers’ representatives in England and Wales and Scotland to discuss this soon. However, I should say that at this point we are yet to be convinced that there is a compelling case for legislative change.
In reply to the question from the noble Baroness, Lady Sherlock, on the level of information and evidence required from a parent with care to make an application for variation, the link with HMRC means that the department has immediate access to a non-resident parent’s income information, which removes the requirement for the parent with care to supply substantial evidence of the non-resident parent’s financial circumstances. That means that fewer applications will be rejected at the preliminary stage and makes it easier for the parent with care to apply for variations. I believe that I have dealt with all the questions.
Lord McKenzie of Luton
Perhaps I may briefly revert to the issue of shared care when it is equal shared care. Obviously if both parties agree that there is equal shared care, they would not be in the system anyway because no maintenance would flow from it. Clearly it is potentially in the interest of the non-resident parent to claim equal shared care because then there would be no maintenance liability. What will the process be for determination of that and whether any form of appeal is attached to it?
Baroness Sherlock
One of the questions I asked was in relation to preparing parents in the current system for moving across to the new system, in particular transitional protection. I apologise if I missed the Minister’s answer.
Lord Freud
On transitional protection, the basic approach is that these rules have been very difficult to operate and our intention is to have very simple rules that are capable of being applied to the majority of parents. While there may be winners and losers, we expect there to be relatively few large losers. Many of them are likely in any case to go into a family-based arrangement, which may be a better option. That is the reason for not planning transitional protection. We will be providing an expanded service of information and advice to customers before the launch of the new system, to be called “Help and support for separated families”.
The way it will work is that if there is equal shared care and there are no payments either way, both parents have to agree that. If there is no agreement, we will go to the one-seventh proportion; that is, one night of shared care. We will accept verbal information about shared care, but both parents must agree. If they do not do so, we then move into the more formal process.
I am down to a very few issues on which I can now write to noble Lords, otherwise we will be here all night. There will be plenty of opportunities to debate these issues since further debates on the child maintenance system are coming up, and I know that many of us are looking forward to those. However, these regulations are narrow in scope and focus on simplifying the statutory child support scheme, improving the service to clients, reducing the costs to the taxpayer and increasing the flow of maintenance payments to children. I am heartened by the fact that there is support in principle, albeit that I will provide some more detail. On that basis, I commend this instrument to the Committee.
Credit Unions
Baroness Sherlock Excerpts(11 years, 10 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
My Lords, the whole point of this exercise is to expedite the growth of the movement. There are currently 1 million members of credit unions. The target that we have set is to double that within five to seven years and to make credit unions self-sustaining, which they currently are not.
Baroness Sherlock
My Lords, I am very glad that the Minister has given us that target of 2 million people but, in the light of the figures given by my noble friend Lord Kennedy, if 7 million people are using high-cost credit at the moment, with the extortionate interest rates of doorstep lending, is 2 million too unambitious a target? Should the Government not be shooting for a far higher figure?
Lord Freud
My Lords, we have to build an industry that is self-sustaining. That is the vital priority. It is no good piling money into an industry that cannot effectively absorb it. It is vital that we get this right, and this expansion project is the right way to go.
Public Bodies (Child Maintenance and Enforcement Commission: Abolition and Transfer of Functions) Order 2012
Baroness Sherlock Excerpts(11 years, 10 months ago)
Grand CommitteeRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, first, I apologise to the Minister for having missed the beginning of his opening remarks. I am afraid that I misjudged the timings somewhat. In speaking to these regulations, I remind the Committee of my registered interests. In particular, although the Child Maintenance Enforcement Commission had a brief life, I managed for two of its years to be a member of its board, serving as a non-executive director until 2010, shortly after I entered the House. I also declare that I am a former chief executive of One Parent Families, now Gingerbread, to which I am grateful for the briefing.
These are small regulations to effect a major reorganisation. I want to ask the Minister a couple of questions, picking up some points made by my noble friend Lord McKenzie. When CMEC was set up by the Child Maintenance and Other Payments Act 2008, its primary objective was,
“to maximise the number of those children who live apart from one or both of their parents for whom effective maintenance arrangements are in place”.
The wording is significant. As the Minister knows, this does not refer simply to maximising the number of maintenance arrangements made through the statutory system but to maximising the number of arrangements in total. In other words, CMEC had a duty, which it took very seriously, to maximise the number of private maintenance arrangements alongside those undertaken using the statutory system. Given that, what assurance can the Minister give us that this objective will be taken on by the Secretary of State, to whom CMEC’s functions are being transferred? How will that be discharged? The noble Lord, Lord German, suggested that perhaps a report to Parliament might work.
Before CMEC was created, when the Secretary of State had responsibility for child maintenance, the Secretary of State actually issued targets and then reported publicly to Parliament on the extent to which those targets had been met—or not. That might be something that the Minister might like to take on board. Can he tell us if the Secretary of State would be willing to do that, and if not, what other mechanism is there for reporting to Parliament and for ensuring that Parliament can have some criteria for judging the report that is thus made?
The Minister, I am sure, will have read the report on CMEC by the National Audit Office of 29 February 2012, as well as the report of the Public Accounts Committee from April. In relation to the decision to charge parents for using the statutory maintenance service, the PAC report noted:
“A successful fee regime will depend on the Commission being able to deliver reasonable standards of service”.
However, it also said that because of problems with the service, there was a danger that parents would not want to use it. The committee noted:
“The risk is that parents who cannot agree private arrangements and do not trust the statutory system are left without effective child maintenance arrangements and that could impact on child poverty. The Commission should work with stakeholders to monitor whether more separated families agree their own arrangements and understand any service-related reasons for lower than expected applications”.
It also suggests that:
“The first monitoring report should be carried out six months after the introduction of fees”.
What is the Government’s response to that recommendation from the PAC? I apologise if the Minister mentioned that in the first five minutes of his opening remarks. Will the Government accept that recommendation and the timetable, and if not, by what other means are they going to address the concerns raised by the PAC?
Can the Minister give the Committee some assurances about the readiness of all involved for this transfer? The PAC report also noted that the commission’s plans to deliver the £117 million of cost reductions imposed on it by 2014-15 were “high risk”. It said:
“There is a £16 million funding gap for 2014-15 which could widen by some £3 million for every month the new IT system is delayed. A further shortfall of up to £30 million could arise in 2014-15 if projected fee income does not materialise”.
What assurances can the Minister give the Committee that the statutory service has adequate funding to deliver the service promised when the Welfare Reform Act was passing through this House?
Finally, I know that the Welfare Reform Act has made the decision to transfer this but can the Minister tell us what lessons the Government have learnt from history? The department has had the opportunity to see the CSA operating both inside and outside government. In bringing it back in, what lessons has the department learnt and how does it hope to avoid some of the very considerable problems the CSA had in the early 1990s?
Lord Kirkwood of Kirkhope
My Lords, I am delighted to follow the noble Baroness, Lady Sherlock, because she said just about everything I had in mind to say. I concur with the important points that she made.
I am very pleased that the noble Lord, Lord Freud, offered us a meeting later in the year. That is part of his unique way of doing business and it is very helpful to the rest of us as we try to understand what is going on. I understand that he and his colleague in the other place are putting a great deal of work in to this important area.
I will stress—because it is easily forgotten—that the client group with whom we are dealing may be disproportionately affected by the impact of the austerity measures that the country faces. I am sure that the Minister and his advisers are already aware of this. As a board member of the Institute for Fiscal Studies, perhaps I could draw his attention to the analysis by James Browne that was published by the IFS for the Family and Parenting Institute in January 2012. It predicted an 8% net loss of income for working single parents and a 12% loss for non-working single parents. We are dealing with a particularly vulnerable client group here, and we all know that. The IFS analysis is useful as a reminder of the importance of getting it right. I know how concerned the noble Lord, Lord Freud, is about these vulnerable groups because he is doing a lot of work on universal credit to try to make sure that these issues are addressed.
In addition to the points addressed to the Committee by the noble Baroness, I will say that other NAO and PAC reports that came out earlier this year—particularly on client fund accounts and on CMEC’s plans to reduce its own spending, which was in an NAO report on 12 February this year—raised matters about which we should all be concerned, including the ability of CMEC to achieve its estimated £117 million savings between now and the fiscal year 2014-15. That is something I would like to put on the agenda for the meeting later in the year, which I would be very pleased to attend—if I get an invitation after this speech.
The NAO was also concerned about the plans to levy charges. I do not need to repeat the point that there is some disjunction between the early planning and the work that the NAO did in highlighting some of the gaps. This will have been worked on and I hope that there will be further and better particulars available. At any future meeting I would like to try to understand how much risk there is in the levying charges policy that is currently being publicly promoted, at least by CMEC.
I agree with the NAO analysis about planning for a 71% take-up of the new statutory system. I have no way of knowing the metrics, systems or processes that CMEC has for measuring that 71%. It is relying very heavily on that as an income stream from which it hopes to move forward. The Comptroller and Auditor-General, the NAO and the PAC were interested to learn more about that, and again expressed concerns. I will also reinforce the point about maximising payments. That is an important duty that will be lost. Any system, whether or not it involves annual reports, should underpin efforts to win back as much of that as we can in the circumstances. That would be useful.
Finally, we still expect a consultation on charging mechanisms. That is a very important piece of outstanding work in which the community, pressure groups and others to whom this area of public policy applies are particularly interested. Perhaps we could add that to the agenda of what now looks like quite a busy meeting some time in the autumn.
This is an important area. I am very ambivalent about this change but I can understand that the costs have to be reduced in a sensible way. I just hope that we are able to do that in a way that does not disproportionately affect the client group we are seeking to serve here. But I have trust that my noble friend Lord Freud is aware and alive to all these things. I hope that the Committee can look to him to give us reassurance, whether privately or publicly, going forward.
Lord Freud
Actually, I would like to turn that around on the noble Baroness; I will accept a letter from her on the lessons from history, and I will pass it on and make sure that they are applied. I look forward to receiving that.
On my noble friend Lord Kirkwood’s question about how we will achieve the savings, we are talking about securing ministerial accountability—this is not about driving savings. The amount of savings from this measure is pretty modest: direct savings are probably running at about £500,000 a year, and that is due to changes to IT systems and one-off costs. We would hope to see longer-term savings from integrating services more deeply into the department. I think, and this point was raised by my noble friend Lord German, that there are some real opportunities here to get holistic support. The longer that I have been in this job, the more I have realised that bringing support together for people and families in trouble is the way to go. There is an opportunity for us to pull the services together in this context as well as in other contexts.
I am tempted to offer to write to the noble Lord, Lord McKenzie. I always feel that it is a triumph if I can get out without offering him a letter because I can answer all his very clever questions. I think that I am down to the one on adverse tax consequences. Although it is always difficult to prove a negative, I cannot imagine how there can be adverse tax consequences because we do something in the middle of the year, when they are both effectively Crown bodies. If that is a wrong tentative statement, I will commit to write, but I hope that I will have avoided any need to put pen to paper for him on this occasion; that would be one of my personal targets. This is about making sure that Ministers are fully accountable to Parliament.
Child Poverty
Baroness Sherlock Excerpts(11 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
Yes, my Lords, this is an important point. We have a different approach from many of our continental peers. Looking at the figures, we do not seem to be doing well enough in some of these areas. When there are people who need real support, we need to look more closely at the education of the workforce.
Baroness Sherlock
If the UK is second in transferring money to help children, I personally am rather proud of that. If the Minister does not want to focus on income transfers, will he take this opportunity to reassure the House that when his universal credit comes in he will carry on supplying free school meals to children?
Lord Freud
Let me make clear why I do not think it is good enough. We are second as regards the number of income transfers—that comes out in the UNICEF report—but we are 22nd out of 35 countries as regards relative child poverty. That shows that we are just not getting value for our money. I can say that we are making arrangements to ensure that school meals continue in basically the same way, although longer term I am looking to try to incorporate that in the universal credit even more tightly and to make some improvements.
Youth Unemployment
Baroness Sherlock Excerpts(11 years, 11 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I commend the noble Lord, Lord Adonis, on an incredibly impressive start to the debate. In case there is a noble Lord present whom I have not bored on the subject, I should declare that I serve as a member of the small, cross-party Riots Communities and Victims Panel, which published its final report in March 2012. We are still awaiting the promised government response, which will be any day now, I am sure.
In touring riot-hit spots around the country, we asked people why they thought the riots happened. Lack of opportunities for young people came up everywhere we went. I do not for a moment posit any simplistic causal link between youth unemployment and rioting, but the issue was raised so often that we felt as a panel that we had to look into youth unemployment alongside other issues, so we looked at the various steps that are being taken and the schemes that are being used to help young people into work, and made a series of recommendations.
With regard to the Government’s Work Programme, the panel questioned whether the payment structure built in enough incentive to those providing it to work with the most difficult cases. We were concerned that, for example, if someone was an entrenched NEET, to use that term, and the provider had not managed to get them into work after a significant period, there was not much incentive to carry on working with or investing resources in them. That suggested that targeted intervention was needed. The panel recommended that there should be a joint central and local government intervention after someone was unemployed for a year and that any claimant still unemployed after two years on the Work Programme should be offered a guaranteed job and additional support. There was a clear feeling that people should not be parked on the Work Programme and not moved on. My view is that we should intervene far earlier than that, but that was the shared view.
There are various ways to guarantee someone a job. The most common ones that we hear about are wage subsidies or incentives for employers, but I also want to highlight the use of intermediate labour markets. During my time as an adviser in the Treasury, I spent many happy hours discussing the cost/benefits of intermediate labour markets with officials, and I suspect that the Minister may have had similar experiences. I have always been rather a fan of ILMs, but as I am sure the Treasury has pointed out to the Minister, they are expensive and times are tough.
However, if we look at both sides of the account book, as my noble friend Lord Wood showed us so eloquently we begin to see the extent of the economic problem caused by having so many young people not in education, training or employment. For example, it is estimated that the cohort of 2008 NEETs will cost the UK economy £22 billion and the taxpayer £13 billion over their lifetimes. In three local authority areas alone, the estimated direct cost to support just 1,989 NEETs for one year is £14.8 million: almost £7,500 each. The extra costs to the public purse—for example, through benefit claims, crime or mental health-related issues—were estimated at another £40 million.
In other words, the costs of inaction are extremely high. ILMs have been shown to work well. Research from the Joseph Rowntree Foundation found that, properly managed, ILM programmes can deliver more sustained progression from welfare to work than other programmes for the long-term unemployed. More than 90% who get a job are still in work after six months, compared with just 40% in other programmes, and their longer-term earnings tend to be higher. An evaluation of ILMs in Australia found that the benefits consistently outweighed the programme costs.
My second point is the regional dimension touched on by the noble Lords, Lord Roberts and Lord Bates. The touching optimism and commendable positivity of the noble Lord, Lord Bates, notwithstanding, my experience in my home town of Durham is that there is considerable unemployment among young people and considerable fear about the future. There is a growing challenge: as young people still in school look at their older brothers and sisters leaving school and not getting jobs, it becomes even harder to persuade them to stay on and work through to their full potential.
Has the Minister seen the latest edition of the Northern Economic Summary from IPPR North, which showed that the number of NEETs is highest in the north of England, at 19%, compared with just 16% in England on average. Furthermore, the amount of time people are spending on JSA is increasing. Almost half those claiming JSA in the north have been doing so for more than six months, with the average length of time for which people are claiming benefits more than double what it was during the 2008-09 recession. That goes to the points made by the noble Lord, Lord Wood, about the risks of the depth of unemployment this time around and the consequences for the economy as well as the individual.
IPPR North suggested that unless targeted measures are introduced to help young people urgently, the gap between the north and other regions in the number of NEETs is likely to carry on growing. Interestingly, its solution was not dissimilar to that reached by the riots panel. It concluded that the Government should offer a guaranteed job paid at the minimum wage or above to anyone who has been unemployed and claiming JSA for more than 12 consecutive months. It proposed that the guarantee should be matched by an obligation to take up the job or to find an alternative that does not involve claiming JSA. It suggested introducing that on a targeted basis: for example, for people living in areas where the job density ratio is twice the national average.
Many noble Lords have commented that there is potential cross-party agreement in this area. Certainly we can agree on one thing about youth unemployment—we are all against it, but we would like a step beyond that from the Minister. I want to hear a sense of urgency in tackling the problem. There is always the risk that we feel that unemployment is always there, but the noble Lord, Lord Wood, made the case that it has not always been here on this scale. If we go back to the situation of the 1980s, as described by the noble Lord, Lord Adonis, the country as a whole will suffer considerably.
The economic case for action has been made. I also agree with the right reverend Prelate the Bishop of Chester that there is a moral case. For me, it is simple; the core job of government is to so order society as to enable its citizens to flourish. I spend too much time going around the country meeting young people who, by the age of 19 or 20, already feel that they have no choice, that their life course is set and that they will never achieve the kind of things that other people took for granted. It is up to us today, and I want the Minister to take a lead. What steps will the Government take to ensure that those young people have hope and that we as a country can live with the consequences of our policies?
Employment: Work Programme
Baroness Sherlock Excerpts(12 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Freud
My Lords, we monitor very closely what is happening within each of the prime provider contracts, and we have introduced—I think for the first time by any Government, in this country certainly—a process where the prime providers look after their supply chains, which we call the Merlin Standard. That is the main protection for subcontractors to make sure they are treated appropriately.
Baroness Sherlock
My Lords, when travelling the country with the Riots Communities and Victims Panel, a frequent complaint was that the Work Programme did not have any subregional targets. For example, if you had a couple of wards with very bad unemployment, which could potentially be a reason for future disturbances, a contractor could actually meet all its targets by cherry picking people from other areas who were easier to move into work, and leaving that area untouched. Can the Minister tell the House what the Government are doing about that?
Lord Freud
My Lords, the way that we are trying to reduce the cherry picking, which has been natural in all of the programmes that have been introduced, is to try to fine-tune the financing so that providers are incentivised to help the hardest to help. That is why providers can earn up to £14,000 to help the very hardest to help. If we see problems developing, in that we have not priced accurately, we will need to look at pricing structures, because that is the way to solve the problem.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 2 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Lord Boswell of Aynho
My Lords, having listened to this debate and many of the discussions in Committee on the Bill, I commend the amendment of the noble Lord, Lord Best. I hope that the Minister will accept it, first, because the noble Lord has performed a considerable service in bringing his expertise to bear on the issue. I need not go on about that, other than to say that as someone who has no claim to expertise in housing policy I have increasingly come to the view that in many areas of social policy and social advance housing policy is cardinally important because it impacts on all the other areas. Therefore, by extension, the review that the noble Lord proposes will begin to consider some of the ripple effects of these changes on other situations or aspects.
Secondly, perhaps the most relevant analogy that I can make is that we never quite know when we embark on a major element of social change how it will end up. We all have political positions, we ground them in advance, and we then have to sit back and wait for the consequences. Generally, it is unwise to go for the big bang, although Ministers have to do that. I give as an example the changes made in industrial relations policy unsuccessfully in the 1970s. They were then brought in successfully and seriatim in the 1980s rather than in one big advance. We are not in that situation today and I can understand where the Minister finds himself.
We need a process and I shall pick up just two points from the debate. One is from my noble friend Lord German who stressed in his very happy analogy of the Harrington report the importance of independence. The amendment specifically states as a rubric that the review should be independent. As a government supporter, I am entirely relaxed about that; we should follow where the argument goes, look at the consequences and amend them.
I also pick up a point made by my noble friend Lord Kirkwood. He talks about in-flight corrections. We have two stages to this process—the regulations to come, which might be called pre-take-off corrections, and the review following the experience of the initial running of the system, which we should look at carefully. The Minister should do that with a measure of flexibility. We know that resources are very limited. The noble Lord conceded that when moving his amendment, but we should be ready. It is very much in the spirit of the discussion that we have had throughout this long saga, in which the Minister and other noble Lords have played a commendable part. We have done our best in limited circumstances. We sort of launch in hope without certain knowledge of where we will go but, given the noble Lord’s amendment, with a determination to keep our eyes open as to what is happening and to make such corrections as may be appropriate and just.
Baroness Sherlock
My Lords, I shall say just a brief word. Barristers always say that you should never ask a question in open court unless you know what the answer will be. I fear that Ministers often take a similar attitude to research: do not ask a question unless you know what the answer will be and you know that you will like it. I commend the Minister, because I have had the impression throughout the passage of the Bill that he is not that kind of Minister but is genuinely interested in information. Because of that, I hope that he will feel able to give a generous response to the encouragement of many Members of the House to look for information.
I have two things for the Minister to think about. One is to follow up the point made by the noble Lord, Lord Kirkwood, which is that if the Minister is right and rents change as a result, we will all be interested to learn that. If they do not, we will have learnt something about the market. If that is the case, that creates a question rather than just answering one: what is happening with the state of the housing market and what other levers are available to the state? It would be extraordinarily helpful to the country as a whole if the Minister would use his position in government to commend that set of questions to his colleagues, rather than stopping at that point.
My second point is in response to the comments made by the right reverend Prelate the Bishop of Ripon and Leeds, which concerned the broader effects, particularly on families with children. Many noble Lords will be aware that when the United States engaged in significant welfare reform, one fear expressed at the time was that many people would simply disappear from the system altogether. Research was undertaken and that proved to be the case. I have expressed concern at different points during the Bill's passage about what happens to vulnerable children, in particular, and, more broadly, to vulnerable families. Perhaps the Minister can take this opportunity to reassure the House that the Government will do all that they can to track what is happening to individuals so that they do not fall out of the notice of the authorities.
Baroness Grey-Thompson
My Lords, briefly, I commend the noble Lord, Lord Best, on his determination with the amendment and offer him my support. I will not repeat the words of the noble Lord, Lord Kirkwood of Kirkhope, but he is absolutely right when he talks about reassurance. It is so unfortunate at this stage of the Bill that many people who may find themselves in really difficult situations, perhaps through being in the wrong place, will be extremely disappointed that we cannot take this further. As we have read in the press yet again today, many disabled people are being portrayed as benefit scroungers. That causes me great concern as we make some of these changes. The review is vital if we are to ensure that our worst fears are not realised.
Welfare Reform Bill
Baroness Sherlock Excerpts(12 years, 3 months ago)
Lords ChamberRead Full debate Read Hansard Text Read Debate Ministerial Extracts
Baroness Sherlock
My Lords, I remind the House of my interests—which are in the Register—as a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of One Parent Families. I feel that I need to place on the record, irrespective of what the amendments’ movers decide to do, a response to the argument that the Minister has made today.
This House voted decisively in favour of a previous Motion; indeed, as we left the Chamber that day, I heard a Conservative Peer express a complaint to the noble and learned Lord, Lord Mackay of Clashfern, that he just had stolen his record for the biggest ever defeat inflicted on the Government. It was a very big defeat indeed. So what has changed? The Minister has told us, first, that single parents get a lot of money from the state so it is not unreasonable to expect them to pay to use the CSA; secondly, that when the CSA was introduced, all the money went to the Treasury, whereas it now goes to the children, so the situation is different and parents should pay for it; and, finally, that charging is needed to deter parents from using the CSA when they can perfectly well make their own arrangements.
Allow me briefly to pick off each of those arguments. In the first case, yes, it is true that many lone parents get lots of money from the state. However, could the Minister tell the House what proportion of those lone parents who use the CSA are on out-of-work benefits? The briefing that I received from Gingerbread told me that the figure is 30 per cent, so 70 per cent of lone parents using the CSA are in fact in work. How does the distribution of that work? Are some people getting most of the money from the state and another in-work, poor, low-paid, low-income group making the payments? They may be a large group, but they may not be the same people.
Secondly, it is worth saying that when the CSA was introduced, the Government of the day made a decision that if somebody was on benefit, all the money would go directly to the state. However, it is my understanding that child maintenance has always been ignored for tax credits purposes and that a similar rule was introduced for out-of-work benefits in 2008. So there is a very clear, established principle that out-of-work benefit should not be treated in the same way, and the very good reason for that was that it was a dual measure to tackle poverty and encourage work.
Finally, it is argued that charging is needed to deter lone parents from using the CSA when they could perfectly well make their own arrangements. The problem is that the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, is targeted specifically at those lone parents who cannot make those arrangements because their former partner will not co-operate. It is designed precisely for those people who are not able to do the very thing that the Minister wants them to do. That leaves a position of rather rough justice. Those people must pay the price to enable the Minister to encourage other people to make their own arrangements when they can.
I am a new girl around here and do not even pretend to understand how financial privilege works—having listened to some of today’s debate, I am frankly none the wiser. But the one thing that I do know about is the amount of money involved. The Minister has said that he would expect to save only between £50 million and £100 million over a period which I am afraid I did not write down quickly enough. I would be grateful if he could explain to us what he thinks he will bring in on a recurrent basis in a year. Will he also tell us what savings the Government expect to make in their running costs as a result of deterring parents from the system in the first place? This is very important, because there is a nasty suspicion out there, as I seem to recall mentioning in Committee, that the Government’s main objective is not to raise revenue from parents but to save money by driving people out of the system. Let us suppose that that were to work; let us suppose that the effect were that far fewer people used the CSA. If a significant number of those make no arrangements at all, is there not a broader cost to society? Is there not a moral hazard question? Have we not moved into a position which the CSA was designed to address? Are we saying to people, “I’m sorry, you may leave your partner, but you may not leave your children and the state expects you to pay up”? Is there not a price to that, too?
Baroness Anelay of St Johns
My Lords, I hesitate to interrupt at this point and it is extremely unusual to do so. I do so with no hostile intent. There has been extremely generous use of time today on the important subject of the Welfare Reform Bill, on which some progress has been made. The generous time taken by the House on this matter, when we knew that the Scotland Bill had been programmed to start after it, has put those who have been waiting some time for the Scotland Bill in some difficulty. I know that the whole House will apologise to colleagues who have been waiting.
I have had a discussion in usual channels and it has been thought a better way of treating those who are awaiting the Scotland Bill to announce now that it would be better if the business on Scotland did not proceed this evening but continued as scheduled on Tuesday 28 February. Therefore, once the business on the Welfare Reform Bill has concluded, the House will rise. I know that, with the help of the Clerk of Parliaments, that information will be put on the annunciator. I apologise again for intervening at this stage.