Relevant document: 21st Report from the Joint Committee on Human Rights.

Clause 100 : Power to require consideration of revision before appeal

Amendment 62ZB not moved.

Clause 103 : Recovery of benefit payments

Amendment 62ZC

Moved by Baroness Hollins

62ZC: Clause 103, page 73, line 28, at end insert-

"71ZJ Non-recoverable overpayments

The Secretary of State may not recover any amount of any benefits paid in error by officials when the claimants could not reasonably be expected to know they where being overpaid.""

Photo of Baroness Hollins

Baroness Hollins (Crossbench)

My Lords, the House will wish to know, in connection with this amendment, that I am an appointee for my disabled son's benefits.

The amendment is designed to maintain the legislative position that prevents the state recovering overpayments where the mistake is entirely the fault of officials and where the claimant could not reasonably have been expected to realise that they were being overpaid. This protection has been on the statute book for over three decades, yet it stands to be removed by this Bill. This is of great concern to churches and charities that understand the impact of sudden, unexpected and, in many cases, unaffordable debt.

During Grand Committee, the noble Baroness, Lady Lister, emphasised the importance of this protection remaining enshrined in primary legislation rather than being in a code of practice. Unfortunately, despite the Minister's assurances that the Government's draft code of practice, What happens if you are overpaid Universal Credit, Jobseeker's Allowance or Employment and Support Allowance, would,

"lead to considered, consistent decision making".-[Official Report, 23/11/11; cols. GC 467-68.]

it appears incomplete and worryingly inadequate to protect claimants. Nor is there any duty in the Bill requiring officials to comply with the code of practice. Those representing welfare claimants against whom an overpayment recovery is being enforced could prevent costly litigation if they could point to a statutory duty to follow procedure, but the statutory duty is not there.

The opening section of the code of practice encourages claimants to check their award notices and to inform the relevant authority if anything is wrong, missing or incomplete, but even the most incisive individuals may face real difficulties in identifying whether officials have made an error or an omission-perhaps especially the 20 per cent of adults who are estimated to struggle with literacy or numeracy. The principle of expecting those in receipt of benefits to check their notices is, of course, neither new nor unreasonable in itself, but under the proposed changes the consequences of failing to recognise the state's mistakes will become excessively severe. Will the Minister clarify what extra support people will be provided with in analysing their award notices, particularly in cases where they face barriers in literacy or numeracy or where English is their second language?

The second area of concern I wish to raise relates to the section in the code of practice "If you disagree with the overpayment decision". Claimants are instructed that they have a period of one month from the day that an overpayment notice is dated in which they may challenge it. This may seem an adequate time on paper, but it takes no account of the reality facing many people at home. Let us take a single mother of four young children who is attending a college course to improve her chance of getting a job receiving an overpayment notification and being threatened with her benefits being stopped. She is balancing an education with raising a young family, and one month in which to challenge the decision would not be long at all. If you add literacy problems, waiting times for advice services and even time lost through postage, there is a very realistic prospect that claimants simply will not be able to respond in time. Will the Minister reconsider what appears to be an inadequate time limit? Will he also outline what provisions will be put in place for those who do not respond within the prescribed time because of any matter out of their control, such as hospitalisation?

In the section of the code "Paying back an overpayment", claimants are informed that overpayments may be recovered through deductions from their benefits, direct debit, another regular payment method, a lump sum or through the courts. Crucially, it does not mention that an overpayment may be recovered through deductions from earnings, as outlined in the Bill, nor is there any mention of the additional administrative costs that could be imposed in such cases, an aspect that has been of particular concern to organisations such as the Zacchaeus 2000 Trust, which works on the front line with vulnerable debtors. Will the Minister clarify why these powers are not outlined in the code of practice and confirm that they will be conveyed in full to those in receipt of benefits so that those facing the recovery of overpayments in such a manner can fully understand the process and the implications?

Suitable safeguards must be put in place to ensure that the burden of official errors does not fall upon some of the poorest and most vulnerable people in our society. Profound anxiety has been expressed by a number of faith groups, including the five major Christian denominations that are backing this amendment. Noble Lords may have seen a recent letter to the Times by the Roman Catholic Archbishop of Southwark, who underscored these concerns.

In Grand Committee, the Minister stated that,

"there is no disagreement over the need for safeguards for vulnerable claimants and those in financial difficulty".-[Official Report, 23/11/11; col GC 467.]

However, replacing a tested mechanism in primary legislation with a questionably incomplete code of practice means these safeguards are being watered down. This is all the more significant in the context of the IT changes involved in the shift to universal credit. Any new system will generate official errors. Because there is no duty in the Bill for officials to abide by the code, the current legislative provision remains vitally important protection for those individuals and families at risk of what may be very large debts arising through no fault of their own.

In the past, the DWP has issued advice stating that in cases of official error overpayments should not be recoverable if the claimant could not be expected to realise the error. With the introduction of universal credit, it is not clear whether these guidelines still apply. The draft code sent on 7 December 2011 does not mention official error at all, only that a number of factors will be taken into account when considering a request for repayment, including the claimant's receipt of the overpayment in good faith. This actually represents a weakening of the advice to officials and therefore less protection for claimants.

The Government have two options to remedy this situation. They can explicitly include in the code of practice a requirement not to seek repayment in cases of official error and claimant good faith, but this would really need to be supplemented in the Bill by a requirement on officials to follow the code of practice. Alternatively, they could choose the simpler option of accepting this amendment. I beg to move.

3:45 pm
Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

My Lords, we should be grateful to the noble Baroness, Lady Hollins, for raising this issue, which comes at a point at which existing recipients of benefit may be experiencing real pressure. I hope that the Minister will be able to illuminate more fully than he has so far the Government's intentions in this field. We are exceedingly grateful to the noble Baroness.

I think we all accept that one of the big problems with our current benefits system, which I strongly hope and believe universal credit will help to rectify, is that the complexity of benefits-the fact that they overlap and there is no simple, clear or obvious way of ensuring the appropriate entitlement-has been a great cause of error by both officials and claimants, and of fraud. These are built into the system in the present way in which it is organised. One of the reasons why I welcome universal credit is that the simplicity of a single benefit-with its clarity, its monthly paper trail and so on-should, I hope, allow us to overcome some of those difficulties.

Overpayments will still happen, and there must be a presumption, as with banks, that if there has been an overpayment one should seek to recover it because it properly belongs to the taxpayer. However, many benefit claimants cannot afford it and that should be one consideration; it may in that case properly be wiped out. Secondly, the benefit claimant may be under great stress, perhaps suffering from terminal illness or caring for someone with terminal illness, which has been overlooked and it is not now possible for them to repay; or the claimant may be in a mire of debts, including for utilities or rent, and if one sought to have a speedy recovery of any overpayment one could end up leaving that claimant homeless.

I am happy to leave it to the discretion of the local offices as to whether any overpayment should be pursued, deferred or patterned slowly for repayment, only if the Minister can give us full assurances about how that discretion will be used wisely and decently. Perhaps we could, in conjunction with the relevant voluntary organisations, go over the code of practice again in the light of its need to be clarified, given universal credit, and ensure that that code of practice has a statutory basis and that, if local decision-makers do not follow it, that would be a basis for appeal to a tribunal.

As I have said, I believe that if someone can afford to repay an overpayment and it is reasonable and decent to seek to get that repayment, we should do so, but for many people on benefits that will not be the case. It would be very helpful if the Minister could explain exactly how he will ensure that local discretion is exercised wisely and decently.

Photo of Lord Bichard

Lord Bichard (Crossbench)

I support this amendment as someone who used to be responsible for delivering the benefits system. When I was in that position, I remember railing against the complexity of the system and am therefore delighted that we are doing something about that. I also railed against the complexity of some of the bureaucratic communications that were sent out. Since I am now more often on the receiving end of those kinds of communications, I fear that my railing had little impact because they are still excessively complicated and I find it quite difficult to understand some of the letters that I receive.

It is placing a very heavy burden on benefit recipients to expect them to understand fully all the communications that they receive and therefore fully to appreciate sometimes when an overpayment has been made. For those of us who had an overpayment of, say, an occupational pension that we have to repay, irritating though it is, we can probably afford to do that over a period of time. It is a very different issue for a benefit recipient to repay a large sum of money in their circumstances. Therefore, I support the amendment. It is really important to get some clarification of the situation as we move forward.

Photo of Baroness Hayter of Kentish Town

Baroness Hayter of Kentish Town (Labour)

My Lords, it seems that the HMRC's position on tax credits is to say, "If we fail to meet our responsibilities but you meet all yours, we won't ask you to pay back all of an overpayment caused by our failure". That is quite a strong statement of their side of the bargain and recognition of an error made by HMRC. Its own code of practice and guidance sets out the limitations of payments where a claimant is experiencing hardship and the circumstances in which an overpayment will be written off.

Given that we will now have a new and unfamiliar system of universal credit, once it is clear both that there has been an official error and that the recipient could not possibly have known about it, if all those overpayments were to be clawed back in those circumstances the officials would have precious little incentive to get the system right, despite the hardship that that could later cost claimants who, through no fault of their own, were overpaid.

In Committee, the noble Lord, Lord Freud, said:

"Although the starting point for overpayment recoverability will be that almost all overpayments of working-age benefits ... will be recoverable ... DWP will consider a claimant's means, income or expenditure if the debtor"-

I do not like that word because it suggests that the claimant in some way invited this-

"considers that they are in hardship".

However, that means that repayment is essentially means-tested in that the DWP will have the discretion to write off an overpayment based, in the Minister's words, "on their individual merits".

The Minister promised the Committee that the DWP,

"will ensure that deductions from benefit or earnings to repay an overpayment should not lead a debtor"-

a claimant-

"to suffer undue hardship".-[Official Report, 23/11/11; col. GC 468.]

However, it seems to me that this has two problems. First, it is discretionary and possibly means-tested but without anyone knowing the rules. HMRC's draft code, which was sent to us in December, as the noble Baroness, Lady Hollins, has said, says only that it might decide in exceptional circumstances not to seek recovery of an overpayment or part of it and that there are no prescribed circumstances for a discretionary write-off, although it hints that it would do so only in cases of immediate significant family hardship or a threat to their health, and emphasises that hardship is taken to be "other than financial hardship".

Secondly, the code relies on claimants knowing that they can appeal against a required repayment without having been informed about that. The draft leaflet really does not make it very clear, nor does it explain how to appeal. If I have understood it correctly, it says only that you can consider the amount that is being asked for, but not the fact that you have to pay it because of your own circumstances. The Minister said in Committee,

"that if the debtor considers they are in hardship, they can say that and then there is a process built on that",-[Official Report, 23/11/11; col. GC 469.]

but it is not clear how that would work. If this amendment falls and the system proceeds, will the Minister assure us, first, that anyone asked to repay to cover for official error will be told of their right to appeal; secondly, that they will be given rather more guidance than that given in the draft leaflet as to the circumstances in which any write-off will be allowed; and, thirdly, where the repayment is sought from landlords, which in certain cases it would be, that they will also have the right of appeal against a loss of income over which they will have no control?

The Minister knows that the IT problems caused significant headaches and hardship for many claimants in the early days of tax credits. Getting the position right on overpayments and ensuring that claimants do not feel that they have been unjustly made to pay for the errors of government officials will be essential to building confidence in universal credit. We look forward to the Minister's response to these and the other queries raised, and emphasise that this amendment is about the consequences of official error, not of claimant mistakes.

Photo of Lord Freud

Lord Freud (Conservative)

My Lords, as we have previously discussed, Clause 103 is based on the premise that for those benefits within its scope, most if not all overpayments will be recoverable. I think we are all in agreement that a benefit recipient should not receive any more money than they are due; nor should they receive any less. In keeping with this general principle, we believe that a benefit recipient should not be allowed to keep money that they should not have received and that this should hold true even if they were not aware of the mistake. I do not think that we can accurately compare the issue of tax credit overpayments, raised by the noble Baroness, Lady Hayter, with that of benefit overpayments. That is because awards of tax credit are based on an estimate of what someone will earn, whereas benefit entitlement is based on actual information-and of course it will not have escaped anyone's notice that the level of tax credit debt has grown significantly.

As we have discussed before, although the provision allows for all overpayments to be recoverable, this does not necessarily mean that overpayments will be recovered in all circumstances. We will endeavour to recover all overpayments where we are able to do so and where it is reasonable to do so without causing undue hardship. This remains a cornerstone of our overpayment recovery policy. The code of practice, a draft version of which has been distributed to noble Lords, will provide guidance about the circumstances in which recovery action will or will not be taken. It is intended that the code of practice will be available to the public in leaflet form and online. This will ensure that the decision-making process is transparent and that the right decisions are made about the recovery of overpayments. Where a claimant wishes to challenge a decision, they may exercise their right of appeal against it.

To pick up on the point made by the noble Baroness, Lady Hollins, on what compels decision-makers to apply the code of practice, the application will form part of the decision-making process, and failure to adhere to it would leave the DWP open to challenge and appeal on the decision itself or, indeed, judicial review for failure to apply good practice. While there may be no legal duty to comply, failure to do so renders the department more open to successful appeal by the claimants. So we have every incentive to adhere to the code of practice.

As DWP will not prescribe in legislation circumstances in which the discretionary write-off or non-recovery of an overpayment would be considered, we will be able to consider any application for non-recovery or write-off on the merits of that particular application.

Whether an overpayment was received in good faith is only one of the considerations that we will apply. We will also consider whether recovery is likely to cause the claimant or their immediate family significant hardship or be a threat to their health or welfare. We will also take into consideration any further issues that the claimant considers to be relevant.

In many cases, a claimant will not question the calculation or the constituent parts of the award. In some cases, this could be due to language or literacy problems or perhaps learning difficulties. If an error were to occur in such an instance, perhaps due to the fault of officials but perhaps not, is it reasonable for any claimant who has language, literacy or learning difficulties to avoid repayment solely because of this? Is it not reasonable that they should gain assistance in checking their award? In many cases, of course, they will have gained assistance in making their claim.

Any test of reasonableness must be subjective. This amendment would require a subjective assessment not only of the debtor's capacity to understand entitlement but of their capacity to gain assistance from others in understanding their entitlement, all before the overpayment is determined.

As I have stated previously in Committee, we do not intend that the repayment of any overpayment, whether it is the fault of the claimant or officials, should cause undue financial hardship. We will gladly discuss an alternative repayment rate if a claimant cannot afford the suggested repayments. Indeed, as I have previously placed on record, only just under half our current on-benefit debtors repay at the maximum rate of recovery. That rate is currently 10.20 per week for those individuals on income-related benefit.

We will prescribe in regulations that where official error causes an overpayment of housing credit to a pensioner, this will remain non-recoverable. This remains in line with how we treat overpayments of state pension credit and will provide greater reassurance for older people who may be on fixed incomes.

The noble Baroness, Lady Hayter, asked whether we would inform claimants of their right of appeal. Yes, we will. She asked for more details of the write-off. It is our intention to judge exceptional circumstances on a case-by-case basis. The landlord will have a right of appeal if the recovery is due from them.

I am sure that we are all in agreement that, in the current financial climate, it is important to protect public money. Thus, wherever possible, while ensuring that recovery will not cause undue hardship, we should pursue the recovery of overpayments. I therefore urge the noble Baroness to withdraw the amendment.

4:00 pm
Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

My Lords, the Minister reminded the House that the current maximum weekly repayment for overpayments is some 10 a week. Will he assure the House that when a local decision-maker decides on the pattern of repayments that may be appropriate, one of the key factors to be taken into account is any other debts and debt repayments that that person may have? Under the old social security system the rule was that no more than 10 per cent of a benefit income should be top-sliced to repay debts for utilities, the Social Fund and the like. Can we have that assurance? Otherwise someone could find themselves trying to repay housing, fuel and pay check debts, and now overpayment debts. Each claim may seem reasonable, but the total may plunge the benefit recipient into total desperation.

Photo of Lord Freud

Lord Freud (Conservative)

My Lords, I think I can give that assurance on the basis that we are looking at financial hardship as the key criterion. Clearly the benefit recipient's other debts form part of that consideration, so they will clearly be considered.

Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

Does the Minister think it reasonable that no more than 10 per cent of total benefit income should go towards the repayment of any or all other debts.

Photo of Lord Freud

Lord Freud (Conservative)

My Lords, I am not sure that I am in a position to give assurance on precise figures and percentages. I am giving a general assurance that that factor will be looked at as part of the financial hardship consideration.

Photo of Baroness Hollins

Baroness Hollins (Crossbench)

My Lords, I thank the Minister for his detailed and careful reply, which contained a number of reassurances. Many of the reforms proposed in the Bill are primarily about changing behaviour rather than reducing expenditure. On the issue of overpayments, it is difficult to argue that the changes to the procedures for repayment fall into the former category. The primary motivations, I understand, are ones of principle and finance.

Until we can be sure that when things go wrong the individual judgment of officials does not subject claimants who have been overpaid to undue punishments, we need clear safeguards. The Minister has tried to reassure the House that those safeguards will be in place. I am reassured by his comments that recovery will not cause hardship and by his reminding us that the DWP would be open to challenge or to judicial review. With great power comes great responsibility, and many Members may believe, like me, that when the DWP alone is at fault the DWP alone should take the hit, and that this ought to be clear in legislation.

However, I am reassured by the Minister's comments and I beg leave to withdraw the amendment.

Amendment 62ZC withdrawn.

Amendment 62A

Moved by Lord Ramsbotham

62A: After Clause 113, insert the following new Clause-

"Guidelines to be followed by officials of jobcentres and local authorities when imposing sanctions, penalties or overpayments

(1) The Secretary of State shall issue guidelines applying to claimants which must, when imposing sanctions or penalties, be followed by officials of jobcentres and local authorities.

(2) When drafting the guidelines referred to in subsection (1) the Secretary of State will have regard to guidelines issued by the Sentencing Council covering the determination of fines.

(3) Officials of jobcentres and local authorities shall take into account all the relevant factors and circumstances of welfare claimants before deciding to impose any sanction or any penalty and before deciding to recover any overpayment.

(4) It shall be the duty of the decision makers in jobcentres or local authorities to give reasons for any decision in any case where any sanction or penalty is imposed upon a welfare claimant and where any decision is made that an overpayment is recoverable."

Photo of Lord Ramsbotham

Lord Ramsbotham (Crossbench)

My Lords, Amendment 62A is in many ways complementary to Amendment 62ZC, which we have just debated.

The purpose of the amendment is to try to ensure that the standard of evidence required of officials in local authorities or jobcentres when imposing civil penalties and recovering overpayments should be the same as that required in the courts when imposing fines and enforcing debts. I set out at length my reasoning for the amendment to the Grand Committee and I do not propose to repeat that now.

In Grand Committee I was grateful to the noble and learned Lord, Lord Mackay of Clashfern, who helpfully suggested that, as tabled, the amendment was too prescriptive. The Minister, while agreeing that it was right and proper that decision-makers gave full consideration to all the relevant facts provided by a claimant, who should also have the right of appeal, suggested that adequate protections were already in place. However, he also agreed to meet those who had drafted the amendment to go through the issues in detail. That meeting has taken place, for which all who attended-I hope that I am speaking for the noble Lords, Lord McKenzie of Luton and Lord Kirkwood, as well as myself-were extremely grateful.

Before that meeting I tabled the amendment in its current form. It proposes that, to better ensure the original intention, the guidelines recently published by the Sentencing Guidelines Council, chaired by Lord Justice Leveson, should be followed. At the conclusion of the meeting the Minister said that he wanted to work with those attending the meeting, whom he recognised as being concerned about vulnerable people, to get the guidance right and compliant with the Wednesbury principles on reasonableness.

The Minister also said that he would look again at the current guidance with the reworded amendment and see whether adjustment was appropriate, not least because of the similarity with the decision-making required, on the one hand, of the courts when imposing fines and enforcing debts, and, on the other, by officials in local authorities and jobcentres in raising civil penalties and recovering overpayments. I hope that the consistency resulting from what I propose will encourage the Minister to accept at least the spirit of the amendment. I note with interest what he said about the code of practice. I am sure that that is the way in which the guidance should be got to officials. I would welcome his reassurance that the guidelines about which this amendment speaks have been included in the working of that code of practice. I look forward to his response. I beg to move.

Photo of Baroness Hayter of Kentish Town

Baroness Hayter of Kentish Town (Labour)

My Lords, on behalf of my noble friend Lord McKenzie, I also thank the Minister and the noble Lord, Lord Ramsbotham, for that meeting. I know that he found it of considerable interest and use. The noble Lord, Lord Ramsbotham, of course knows rather a lot about penalties, sanctions and their fairness. His amendment seeks to ensure that the appropriate guidelines and procedures are in place when a jobcentre or local authority imposes sanctions, fines or penalties on claimants, and particularly that, when officials impose such penalties, they give clear reasons for doing so.

Clarity about circumstances in which a penalty, sanction or overpayment can be recovered is vital if administrative justice is to be realised but also to enable claimants to have confidence in the system. It obviously also makes the job of officials considerably easier when there is a clear set of steps to follow and a clear description of the circumstances in which they should consider possible hardship to a claimant. It is also essential that the reasons for any sanction or repayment are set out, preferably in writing, so that the claimant, any adviser or a reviewer can understand the grounds on which the decision was taken. We look forward to the Minister giving us assurances that a set of guidelines, safeguards and relevant procedures will be in place so as to meet the aspirations set out in the amendment.

Photo of Lord Freud

Lord Freud (Conservative)

My Lords, I need to start by thanking the noble Lord, Lord Ramsbotham, for arranging a really useful seminar the other week on a range of issues related to sanctions and penalties. I was equally impressed by the content of that seminar, the iron discipline with which it was conducted and how much ground we managed to cover. We are very keen to draw on the expertise of others as we develop our implementation plans. I look forward to continuing to work with interested groups in this collaborative manner. I gave a commitment in that meeting that we would work collaboratively with the groups involved. I am pleased to repeat formally here that that collaboration will happen.

Turning to the substance of the amendment, I hope I have made clear that we are really on the same page on many of these issues. We absolutely agree that clear guidance should be issued to officials making decisions on behalf of the Secretary of State where discretion is exercised. We do this now and will continue to do it under universal credit. Decision-makers will be required to follow this guidance when applying the law to the facts of the case where they consider a decision about a claim, sanctions for non-compliance with work-related requirements, a civil penalty or the recovery of overpayment. As is currently the case, we will make this guidance publicly available.

We spoke about the Wednesbury principles at our seminar, and I can reassure noble Lords that the decision-making process is and will continue to be consistent with these fundamental principles of public law. The department strives to ensure that no decision is influenced by irrelevant factors and that decision-makers act in a rational and fair manner, taking into account all relevant matters before exercising a discretion. For example, the primary legislation expressly sets out that a conditionality sanction applies only if there is no good reason for the failure. In determining whether there is such good reason, decision-makers will have to consider all relevant matters raised by the claimant within a particular time period, including information about a claimant's health condition and financial circumstances.

It is worth noting that when it comes to failures to meet work-related requirements, we get the vast majority of the decisions right. In 2010-11, just 0.2 per cent of JSA sanction and disentitlement decisions were overturned at a First-tier Tribunal. Of course, the aim must be to get every decision right. We must ensure that our training and guidance equips advisers and decisions-makers with the tools to understand the circumstances and needs of vulnerable claimants, such as homeless claimants and those with mental health conditions. We must also ensure that the notifications and explanations of decisions to impose sanctions or penalties are clear, straightforward and easy to understand. I accept that there is room for improvement here, and we will make that improvement.

I assure noble Lords that, as I have just committed, we will work with stakeholders to ensure that guidance, communication products and decision-making processes are suitably tailored to meet the needs of the range of universal credit claimants.

Despite all these points of agreement-and I think that they are agreements on substance-I urge the noble Lord to withdraw the amendment, only because we do not think there is a need to set out a general duty in primary legislation to take into account relevant considerations or to give reasons as part of the decision-making process. Decision-makers clearly have a general duty under public law to make decisions in accordance with the Wednesbury principles, to consider relevant matters raised by a claimant and to explain their decision to claimants. Our training and guidance is designed to ensure that decision-makers adhere to these duties. This amendment would not bring about a change in approach from decision-makers, nor empower claimants to challenge decisions. I therefore urge the noble Lord to withdraw it.

4:15 pm
Photo of Lord Ramsbotham

Lord Ramsbotham (Crossbench)

My Lords, I am very grateful to the Minister not just for those remarks but also for the seminar which he mentioned, where I know that his willingness to listen and what he said was hugely appreciated by the stakeholders. I am very glad that he mentioned the future collaboration because I know that it will also be appreciated by them. What this exercise has shown-the Grand Committee, the seminar and now today-is that it is essential to maintain a dialogue between the stakeholders on the ground and the people responsible to make certain that, if anything is going wrong or there are ideas for making improvements, that should be fed in to the people responsible rather than having to go through a tortuous process.

I am very grateful to the Minister for all that. Out of this exercise, the code of practice that goes down to the officials can only be the better. With that, I beg leave to withdraw the amendment.

Amendment 62A withdrawn.

Amendments 62B and 62BA not moved.

Clause 129 : Information-sharing in relation to welfare services etc

Amendment 62BB

Moved by Lord Freud

62BB: Clause 129, page 100, line 4, at end insert "or council tax"

Photo of Lord Freud

Lord Freud (Conservative)

My Lords, Clause 129 enables relevant information to be shared between DWP, local authorities and others for prescribed purposes relating to the operation and administration of welfare services and social security benefits. As thinking has developed in relation to new data-sharing arrangements, it has become apparent that we may want to supply social security benefit information to local authorities in connection with the administration of localised council tax schemes. These amendments will enable that, and will allow local authorities to share such information between and within themselves for the purposes prescribed. Making social security information available in this way will help local authorities design and deliver schemes that provide appropriate financial support to residents who are unable to meet the full cost of their council tax. I beg to move.

Photo of Lord Newton of Braintree

Lord Newton of Braintree (Conservative)

My Lords, I just want one penn'orth. I completely support these amendments, but they give me the opportunity which I missed earlier in these proceedings to record on the Floor of the House that the single silliest thing in this whole affair is the determination of the Department for Communities and Local Government to have separate council tax benefit systems in every corner of the country. That is a battle to be fought again on another day. I had devised an amendment that could have brought it up today, but I decided that discretion was the better part of valour at this stage. However, there is a local government finance Bill coming down the path. My noble friend-and, above all, his noble friends in the DCLG-should know that some of us are going to go on worrying away at this total absurdity which I know is not supported in the DWP itself. These amendments may help to mitigate the effects but they will not completely eliminate them, and I shall go on trying to eliminate them.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Labour)

My Lords, I concur completely with what the noble Lord, Lord Newton, has just said. We obviously will not oppose these amendments, but that should not be taken to mean that we are supportive of this proposition. When I say that I concur completely, I am not saying I am sure that this is the single silliest thing in this Bill-but it is certainly in the top 10. The briefing note that we had makes it clear that the support for council tax in future is likely to be based on a system of means-tested discounts. How on earth that can sit sensibly with universal credit and single tapers is a mystery to me. Maybe we will be enlightened when we get that legislation, which I think will come our way quite shortly. We could have a long debate around this today, as it is a real flaw in the universal credit, but I accept the need for this amendment, as it makes the data-sharing coherent.

Photo of Lord Wigley

Lord Wigley (Plaid Cymru)

My Lords, may I have one word of clarification about the interplay between these provisions on council tax and how they play with the devolved authorities? There are provisions lower down, on page 100, relating to the National Assembly for Wales, but this brings in a new dimension in that local government in Wales comes under the Assembly as well. Is there agreement with the Assembly Ministers on the provisions which the Minister is putting into the Bill by way of these amendments?

Photo of Lord Freud

Lord Freud (Conservative)

Yes, my Lords, I can confirm that we have agreements with the devolved Administrations on this matter. They will be receiving the information in slightly different ways, but we have sorted that out. On that basis, I will avoid the temptation to indulge in a long discussion about DCLG and council tax. Although I know that noble Lords would enjoy that, we have other things to do.

Amendment 62BB agreed.

Amendments 62BC to 62BH

Moved by Lord Freud

62BC: Clause 129, page 100, line 11, after "services" insert ", council tax"

62BD: Clause 129, page 100, line 13, after "services" insert ", council tax"

62BE: Clause 129, page 100, line 15, after "services" insert ", council tax"

62BF: Clause 129, page 101, line 13, after "services" insert "or council tax"

62BG: Clause 129, page 101, line 15, after "services" insert "or council tax"

62BH: Clause 129, page 101, line 23, at end insert-

""council tax" includes any local tax to fund local authority expenditure;"

Amendments 62BC to 62BH agreed.

Amendment 62BJ had been retabled as Amendment 62BJA.

Amendment 62BJA

Moved by Baroness Lister of Burtersett

62BJA: After Clause 132, insert the following new Clause-

"Information sharing in relation to the Social Fund

Before sharing information regarding eligibility for services under section 69(3) of this Act, the Secretary of State shall satisfy himself that the Local Authority is intending to deliver these services in accordance with the purposes set out in the settlement letter that accompanies any payments made from the Consolidated Fund under section 69 and that arrangements have been made to report on the use of these payments."

Photo of Baroness Lister of Burtersett

Baroness Lister of Burtersett (Labour)

My Lords, this amendment has the support of the noble Lords, Lord Kirkwood of Kirkhope and Lord Blair of Boughton, to whom I am grateful. The noble Lord, Lord Blair, asked me to say that he is lecturing in Oxford and, if he is unable to reach the House in time, to assure your Lordships that he means no discourtesy by his absence. He also asked me to remind the House that he has spoken twice in support of the Social Fund earlier on Report, seeking the Government's commitment to require councils to preserve this money and account for its spend on the objects of the Social Fund. I know that the noble Lord, Lord Kirkwood, is chairing a committee of the House and I am hoping that, like the cavalry, he will come over the hill-or through the Bar-to my rescue. If not, though, his strong support for an amendment along these lines is on the record both in Committee and on Report.

I apologise for returning once more to the Social Fund, and I will not rehearse all the arguments again. The reason why I have tabled yet a further amendment is that I felt in our previous debate that Members of your Lordships' House were disappointed with the Minister's response to the concerns raised around the House-disappointed because the Minister clearly agrees with the central underlying objective of these amendments. As the noble Lord, Lord De Mauley, assured your Lordships' House, we are equally committed to ensuring that this money is targeted on and reaches the most vulnerable people. Previously, the Minister said that it was quite clear that we need to ensure, if we are putting money out for vulnerable people, that it goes to vulnerable people and is not diverted elsewhere.

The money that we are talking about is that which is currently paid out in community care grants and crisis loans under the discretionary Social Fund to provide vital cash assistance at times of acute need. I note that in today's Guardian the Minister, Steve Webb, writes:

"To say the social fund is set to be abolished is completely false".

However, in response to a Written Question from Karen Buck MP on 5 May 2011, he stated:

"The Social Fund is not being devolved to local councils. The Welfare Reform Bill includes proposals to abolish the discretionary Social Fund"-[Hansard, Commons, 5/5/11; col. 898W]-

in other words, the part of the Social Fund that we are debating here today.

The vulnerable people to whom the Minister referred include women who have fled domestic violence, young people who have left care and people with chronic health conditions or disabilities who need help with household items in order to live independently in the community. Family Action, to which I am grateful for all its hard work on this issue, has provided noble Lords with a number of examples of the value of the Social Fund to people in such circumstances. I shall quote just one:

"Lisa was awarded a Community Care Grant after being forced to leave her furniture and most of her possessions behind when she fled a violent partner with her three sons. She lived in a refuge and then temporary accommodation. When she moved into permanent accommodation, she had hardly any belongings and no money to furnish the partially-furnished house. Lisa's fear of being isolated and lonely in her unfurnished, unpainted room was exacerbating her mental health problems, making her unable to unpack any of the items from her move. She slept in the bed of her middle son and her social worker emphasised how important it was to furnish her room, so she could sleep alone and move towards an independent and organised life. Lisa was awarded a grant for a bed, bedding and drawers, which helped her feel more at home, gave her the emotional strength to start unpacking her boxes, and meant her and her middle son were able to sleep comfortably, alone. She said 'I've been waiting for this flat for six-and-a-half years, and for once in my life I can call a place home for the first time. For once in my life, my kids and I have a home... I just want to get myself better'".

Family Action says that thanks to this help,

"Lisa was able to start rebuilding her shattered confidence".

The noble Lord, Lord De Mauley, tried to convince your Lordships' House that the safeguards that he had offered in response to an earlier amendment would,

"ensure that the money intended for vulnerable people goes to vulnerable people"-[Hansard, 11/1/12; col. 215.]

But there are no real safeguards. There will simply be a detailed settlement letter-and I thank the noble Lord for clarifying the contents of it-a specific revenue grant, and a review of a cross-section of local authorities in 2014-15 to see how they have spent the money. While these are all welcome, they are not by any stretch of the imagination genuine safeguards. There is nothing to prevent hard-pressed local authorities spending the money on other pressing demands-and authorities admitted as much in their responses to a DWP survey. It could be to make up the shortfall from the money being devolved for council tax benefit or even, as the noble Lord, Lord Newton of Braintree-now officially crowned hero on this matter-suggested, be spent on a swimming pool. I note that the noble Lord, Lord Fowler, is now in his seat. The irony of my standing on this side of the House, defending the Social Fund, which I attacked when the noble Lords, Lord Fowler and Lord Newton, introduced it, is not lost on either of us.

The Minister's final word on the subject in our previous debate was to state categorically that a local authority will not spend the money on a swimming pool, as suggested by the noble Lord, Lord Newton. How can he know that? Even if he does know it, how can he prevent it? I am afraid that the noble Lord simply cannot give such an assurance, however much we all wish he could.

The Supporting People grant provides a salutary lesson. Within a year of the ring-fence being removed by the previous Government, it was absorbed into the general area base grant. Despite the present Government emphasising its importance and giving it a degree of protection in public spending cuts, which I welcome, the evidence suggests that many local authorities are cutting Supporting People services disproportionately. Only this month, the Minister Grant Shapps lamented in a letter to the noble Baroness, Lady Eaton, in her capacity as chair of the Local Government Association:

"It is disappointing to see several councils are indicating significant cuts in Supporting People services, particularly for the homeless. It is difficult to understand why some councils appear to be targeting any disproportionate spending reductions on programmes that support the most vulnerable people in their communities".

However, he is powerless to do anything.

This amendment is devised to help prevent a similar situation arising with the money devolved to local authorities from the Social Fund. It does not formally ring-fence the money, as the previous amendment that we debated did. It simply requires that the Secretary of State satisfies himself that the local authority will use the money for the purposes set out in the settlement letter. This addresses the Minister's concerns about local authorities that might want to pool their Social Fund allocation. Provided that the Secretary of State is satisfied that the money is being pooled for the purposes specified, there will not be a problem. If it is not being pooled for those purposes, the authorities will not be complying with the settlement letter anyway.

The amendment will also require local authorities to report on the use of these arrangements. As a number of Peers emphasised in our previous debates, this represents a bottom line in accountability for money voted by Parliament. I know the Minister fears that this will create a disproportionate burden on smaller authorities, but I simply cannot believe that it is not possible to devise a light-touch reporting system that addresses his fears while achieving a degree of accountability.

This is a cost-free amendment. Any minor administrative costs associated with it are surely worth it if they ensure that the money voted by Parliament to assist some of the most vulnerable groups in society is channelled to those groups for the purposes intended. I believe that the Minister genuinely wants to meet us half way on this issue, and I hope that this amendment provides him with the means of doing so; or, if there are problems with the drafting, that he will bring forward a similar amendment at Third Reading. I beg to move.

4:30 pm
Photo of Lord Newton of Braintree

Lord Newton of Braintree (Conservative)

My Lords, I can hope only that my noble friends on the Front Bench have already realised that Newton on Wednesday will not necessarily be the same as Newton on Monday. After Monday, I am amazed that the noble Baroness, Lady Lister, is still prepared to accord me hero status. I give her full credit for that. I do not know whether she regards me as adequate cavalry in substitute for the noble Lord, Lord Kirkwood, or, indeed, the noble Lord, Lord Blair, but here I am on my charger doing the best I can.

I indicated in the earlier debate that I was a heretical supporter of ring-fencing and that I did not want to see this Social Fund money frittered away on other things. All I am going to say now is that I agreed with every word that the noble Baroness said. I had better say straightforwardly to the Minister that if this amendment is pressed and we have not had what I regard as a satisfactory reply, I shall be strongly tempted to vote with the noble Baroness, should she press the matter. In saying this, I am linking it back with my earlier remarks. I have no doubt whatever that the obstacle here is not my noble friend-he cannot comment on this-but the DCLG. I do not think that the localism agenda should stand in the way of making sure that money spent for the purpose of these vulnerable people is spent on these vulnerable people. I therefore strongly support the thrust of the amendment.

Photo of Lord Skelmersdale

Lord Skelmersdale (Conservative)

My Lords, the key to this amendment-I go a long way with my noble friend Lord Newton on what he has just said-is the settlement letter. What I think the House will need to know is what happens when the local government organisation in question does not abide by the settlement letter. On the answer to that, I suspect, will depend the decision of the noble Baroness on whether or not to call a Division.

Photo of Lord Fowler

Lord Fowler (Conservative)

My Lords, there is an amazing coincidence here. I remember back in 1985-86 being strongly opposed on the introduction of the Social Fund by someone with the same name as the noble Baroness, Lady Lister, who proposed this amendment. I have to say that she was not alone. It was one of the most controversial changes that we made at that time. We were strongly opposed by the welfare groups and the party opposite. From memory, we were strongly opposed by the noble Lord, Lord Kirkwood, as well-I do not think that he is in his place. Another group who strongly opposed us-I am not sure that even my noble friend knows this-comprised my social security successors at DHSS who also did not want to introduce the measure. They said that it was far too radical. They put it to a meeting held after the 1987 election and around the table at No. 10, with Margaret Thatcher in the chair, that it should be dropped. Happily, they were defeated. Now I see that 20 voluntary organisations have signed up to it being retained.

The Public and Commercial Services Union, with more than 80,000 members in the Department for Work and Pensions, also regrets its passing. Therefore, I hope that it will be of some comfort to the Minister when he is attacked from the other side that sometimes you find after 10 or 20 years that positions change, as has the attitude taken on this measure. It is not altogether surprising that I have a lot of sympathy with the view taken on the Social Fund. I think it is common ground that we need a system for dealing with emergency payments of one kind or another. I think it is also common ground that some of the 67,000 families who will be affected by the cap will need such help. I think that is common ground all round.

As regards the mechanism, I have to say that I still rather support the Social Fund. That is not surprising as my noble friend Lord Newton and I invented it in the first place. It did have, and does have, a number of advantages. The department has experience of how such a scheme works and has local offices with local knowledge which are, however, kept within a national programme with a national budget. Therefore, I should have thought that from the Government's point of view as well as from the claimant's point of view it had substantial advantages. There is a risk that different local authorities will pursue different policies with regard to it.

My view is slightly unlike that of my noble friend, to whom I pay the usual tribute. We worked together for a long time. I made the popular announcements and he did the unpopular ones. I see that he agrees with that. The Government have decided to go this particular way and, as I said on Monday, I do not intend to trample over my successors' proposals. However, I give just one warning, which is the warning of the noble Baroness, Lady Lister, who knows so much. I pay tribute to her for all the work that she has done on social security over the years. If money is to be made available to local authorities for what I shall call Social Fund purposes, we must do everything that we can to ensure that that money reaches the proper destination-otherwise the exercise is all slightly pointless.

We have seen in the health service where this has not happened. Money intended by the previous Government for prevention of ill-health was siphoned off and used for other more general purposes. Whether my noble friend accepts this amendment -it seems unlikely that he will accept it-the House will wish to be assured that we have some way of checking that the money reaches its proper destination. That seems to me to be the crucial point and that is the assurance that the House seeks.

Photo of The Bishop of Manchester

The Bishop of Manchester (Bishop)

My Lords, it is clear that the nub of this issue is the accountability required to make sure that the Social Fund is used in the manner for which it is intended. I doubt that any noble Lord does not see the significance of that and it has been argued for eloquently and cogently by the noble Baroness, Lady Lister. My ears have suggested to me that there is a deep measure of agreement around the House on this issue. I hope that in his response the Minister will not only recognise that but give some clear way of assuring us that, if he is not going to accept the amendment, the Government have in mind a way forward that will match what the noble Baroness has most properly put before the House.

Photo of Lord Brooke of Sutton Mandeville

Lord Brooke of Sutton Mandeville (Conservative)

My Lords, I am not sure that I was entirely helpful to the Government when in Grand Committee I referred to a Liverpudlian case where dirty, if not illegal, work was at the crossroads in terms of the expenditure of money that had been provided by a different department for another purpose. Swimming pools have been quoted as a possible diversionary target for resources in our debates on this issue.

I again make a brief personal note. My late noble relative, who was a councillor for 17 years-the last Conservative councillor for Kilburn in history-had Welsh blood and a Welsh title. When seconding the Loyal Address during the 1970 Parliament in your Lordships' House, he told a story that I shall tell again to indicate that local authorities are not entirely sound on swimming pools. He described the inquest that was conducted in a Welsh borough where someone had drowned while using the municipal swimming pool. At the inquest, the coroner asked the swimming pool attendant in charge of the pool why he had not attempted to assist the lady who unfortunately was deceased. The attendant said in reply, "I can't swim". The coroner said, "But surely you were asked whether you could swim when you were interviewed to come and work in this role for the local authority". The swimming pool attendant said, "I can't swim. The only question I was asked at the interview was, 'Are you bilingual?'". On that note, I indicate that local government behaviour on swimming pools is not wholly reliable and that it was therefore prudent to raise this matter in the debate.

4:45 pm
Photo of Lord German

Lord German (Liberal Democrat)

My Lords, I should like to follow that because it is an interesting perspective. I come to this issue as one who has been an ardent devolutionist and as someone who believes in power being passed-obviously, in my case-to Wales and to local government. So, although I come with a different historical perspective, I understand the historical perspectives of the noble Lord, Lord Fowler, and the noble Baroness, Lady Lister, because I read all about it in an article that I am afraid I have lost. It quotes her at the front about how the money would be used in Wales.

I hope that for once the Minister can tell me the mechanism by which the money will be transferred to Wales and Scotland. I understand that it will be part of the local government settlement in England and in Wales part of the Barnett formula. If that is the case, we are transferring the power to deal with those matters to Wales and Scotland. Why should I not argue for that sense of purpose? I am arguing for it and am also arguing for local government to have responsibility. After all, would you expect the swimming pool attendant to have his case heard in London for a swimming pool somewhere in the valleys of Wales? Of course not. The people closest to this-colleagues and decision-makers-will know the local circumstances. This is only a very small part of the Social Fund that is being devolved.

There is accountability because there are elections for local government. Local government is held to account, and the Scottish Parliament and the Welsh Assembly are both held to account by their electors. Clearly, there is a role for those who are receiving the money to be accountable to their electorates. I cannot believe that if there is a purpose to deliver something locally it should not be passed on to local government. We do ourselves a disservice by not accepting that there is a democratic right for local government to exercise this ability. I say to the noble Baroness, Lady Lister, that where I live in my country, her party supports no ring-fencing whatever for local government. It trusts local government to make those decisions. That is a form of devolution that is the right way.

We have to consider what functions are being transferred, whether to Wales or local government. I know that the noble Lord, Lord Brooke, in his usual manner of creating an environment, is absolutely right. If these are very small decisions about loans to people with whom the local council will already be in contact, surely it is right to trust local government to do it. I know that local government in England is ready, willing and able to do the job, and I know that there is an opportunity for their electorates to hold them to account. Sometimes it is important to let go and have the decision-making closer to the people whom it most affects.

Photo of Baroness Hollis of Heigham

Baroness Hollis of Heigham (Labour)

Perhaps I may challenge the noble Lord, Lord German. What he is saying is entirely applicable to Wales, where every local authority is a unitary authority and therefore has responsibility for both housing and social services and can read across, for example, from the help that will come from the discretionary housing allowance to the Social Fund. Often the same families need support in a crisis if, for example, a house has been flooded, has caught fire, or if someone is coming out of care, and so on. They will need both housing and social services help, and a unitary authority is rightly placed to give that, provided that it spends the money as it should.

However, the noble Lord has not mentioned that most local authorities in England do not want this because they are lower-tier authorities, and the social services which handle the Social Fund are upper-tier authorities. In the county Norfolk, which is some 60 miles long and 40 miles wide, yellow lines are put on roads that you do not even drive down, and schools that you have never even visited are closed, which happened when I was a county councillor, because it was too large to be called local government. None the less, that social services authority will be determining the Social Fund for seven district councils, including one wholly urban authority, two semi-urban authorities and three or four rural authorities. As a result, there will be a postcode lottery within Norfolk because a county council of one political complexion will be dealing with half a dozen different authorities below it, responsible for housing and trying to manage the discretionary housing allowance at the same time.

We will therefore have two sets of officials, one at district level and one at county council level, dealing with the same vulnerable family, each of them focusing discretionary money with no mutual interlocking, decision-making or accountability. It is a bloody silly system that is being proposed and I hope that my noble friend presses the amendment to a vote and that, as a result, we give the other place a chance to think again.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Labour)

My Lords, we support the amendment moved with the great passion and inescapable logic which we have come to associate with my noble friend Lady Lister. I say to the noble Lord, Lord Newton, that I prefer the noble Lord of Wednesday to the one of Monday. As my noble friend said, this is light-touch and effectively cost-free, so we should not have the usual argument about what this would do to the deficit reduction programme. Most noble Lords, with the possible exception of the noble Lord, Lord German, were pretty much on the same page, as the right reverend Prelate the Bishop of Manchester said. To the noble Lord, Lord Fowler, I say that this is not about trying to roll back the decision and retain the Social Fund as it is; it is simply trying to ensure that the money allocated through this process will be spent as it was meant to be. I should have thought that, in these times of austerity, the Government would feel it particularly incumbent on them to ensure that.

The amendment is intended to build on the useful reassurances we had from the noble Lord, Lord De Mauley, at earlier stages in response to concerns we raised about the localisation of the discretionary Social Fund. Those concerns primarily centred on the lack of a ring fence for the money that is to be transferred to local authorities to allow them to provide services that replace those that the Social Fund currently provides to some of the most vulnerable people when they are facing a particularly difficult situation.

Those concerns about the lack of a ring fence were raised by more than 40 per cent of respondents to the Government consultation on reform of the Social Fund. They have been raised by a wide range of charities, including Scope, Crisis, and Family Action, which state that they are seriously concerned that the abolition of the discretionary Social Fund and its replacement with a patchwork of local arrangements will remove one of the final safety nets for some of the most vulnerable and needy members of society.

Those concerns are so acute because of the degree of vulnerability of those to whom the Social Fund community care grant scheme provides support. Thirty-two per cent of those receiving a community care grant in 2009 were disabled, 26 per cent were lone parents and 10 per cent were pensioners. Many women fleeing domestic violence see community care grants as a vital lifeline when setting up a new home on exit from a refuge. The fear is that, without some way to ensure that local authorities use the money for the purposes for which it has been allocated, the needs of those groups will go unmet and the money will be diverted to other purposes-a lesson we learnt the hard way, as my noble friend Lady Lister pointed out, when we were responsible for removing the ring fence for the supporting people grant when we were in government. Crisis points out that councils are, on average, cutting supporting people services by 13 per cent, despite the overall supporting people budget being cut by only 2.7 per cent.

Local authorities themselves are worried about that possibility. DWP research published in December 2011 into local authorities' plans to replace the Social Fund found that a number of authorities were concerned that without a ring fence and some level of reporting, funding would quickly become amalgamated into existing budgets and that, as a result, its identity, visibility and purpose would be lost. A second concern was that councillors or directorate heads would redirect the funding to plug gaps in other budgets. The most common example mentioned was the social care budget.

The amendment would not place a ring fence around the funding, which the Minister argued would be restrictive. He also argued that the settlement letter which accompanies the transfer of moneys to the local authority will be sufficient to ensure that those funds are used for the purpose for which they are intended-the meeting of often urgent need. If this is the case and local authorities intend as a matter of course to use the funds for this purpose, there should be no barrier to the Minister accepting the amendment, which merely puts in place a checking mechanism to ensure that what he is confident will happen takes place. We support the amendment.

Photo of Lord de Mauley

Lord de Mauley (Conservative)

My Lords, during the passage of the Bill there has been much discussion of the reform of the discretionary Social Fund, and how we can ensure that the money intended for vulnerable people goes to them-an aim with which, as the noble Baroness, Lady Lister, generously acknowledged, I am completely in agreement. However, imposing restrictions on local authorities through data sharing, as the amendment seeks to do, would take us a little away from the central issue of how best to ensure that the funding achieves its intended purpose.

The noble Baroness's Amendment 62BJA would mean that the Secretary of State would have to ensure that he was satisfied that a local authority planned to use the funding, which will replace community care grants and crisis loans for general living expenses, for the purposes set out in the settlement letter, before he could share information with a local authority about eligibility for assistance under the new local provision. The Secretary of State would also have to be satisfied that arrangements had been made to report on the use of the funding.

I appreciate the noble Baroness's intentions in moving the amendment. Despite its drafting, and despite what the noble Lord, Lord McKenzie, said, I read it as another approach to the issue of ring-fencing the funding that will go to local authorities. Although I do not think that it will achieve that, I will say, as I said before, that a ring-fence is not the best way to ensure that the money reaches vulnerable people. Ring-fencing would mean that local authorities could be constrained, for example, from investing in existing services, or pooling the money with funding from pre-existing services to provide a comprehensive and effective support system for the most vulnerable people in their communities.

The Government fully agree that it is very important to have adequate controls in place to ensure that the funds are used in the way intended. We have clear agreement on that point. However, I will explain why the amendment is unnecessary. Other controls are in place to provide checks and balances before, accompanying and following the initial allocation under the new provision. Perhaps I have not been adequately clear about these so far.

First, I turn to the current element of the steps that we are taking-what I might call the "before" steps. Departmental officials have already conducted a great number of meetings and workshops with local authorities to support them in preparing to deliver the new local provision. We will continue with this support by holding a series of workshops with all upper-tier local authorities over the coming months. The workshops will consider in detail how transferred funds could be used to maximum effect from April 2013. Through the sharing of ideas and best practice, they will assist the development of new services and will help local authorities identify how the funds can be used to best effect to support the most vulnerable. The participants and outcomes of the workshops will be published on the DWP website as part of our ongoing package of advice and information for all local authorities.

The settlement letter-what I might call the "accompanying" step, because it will accompany the funding that local authorities receive for delivering the new provision-will set out, as we discussed at some length last week, what the funding is to be used for and the underlying principles, and will describe the outcome that must be achieved. On 17 January this year, having further considered our debate of the week before, I laid out exactly what the settlement letter would contain. My noble friend Lord German made the point that local people and communities can hold their local authorities to account. The detailed settlement letter will help them do that. Furthermore, as I explained, in order to underline its purpose the funding will be distributed to local authorities through a specific revenue grant rather than being included with the rest of their general expenditure in the main revenue support grant.

I shall move on to the "following" steps. Following the introduction of localised assistance, the department has already made plans to conduct a review in 2014-15 to obtain appropriate information from a representative cross-section of at least 50 local authorities, which represents one-third of the total, in order to help inform future funding levels. We have committed to using this opportunity to gather further information about the way in which local authorities have used the funding. I contend that this review will be more valuable than the information required under this amendment. It will tell us about how the provision is working and what the funding is being used for, whereas this amendment would require a judgment to be made about the intention of a local authority before it delivers the new scheme. In addition-and this is critical-as local authorities will not know in advance which of them will be involved in the review, the risk of scrutiny and exposure from the review work will also help to drive their behaviours and, in theory, they may otherwise have been tempted not to comply in full.

Turning to the amendment itself, I suggest that it would be unreasonably burdensome to expect the Secretary of State to make a case-by-case check on every local authority that requires information about eligibility from the Department for Work and Pensions. As I said a moment ago, we estimate it would be approximately 150 local authorities. Indeed, the amendment presumes that local authorities will approach the department about eligibility for their local schemes, but this may not happen in every case. It will be for each local authority to decide which vulnerable people in its area would most benefit from the new local provision. This is the point. This is about trusting local authorities. They are best placed to make these decisions, as they will already be working with vulnerable people in their area through the other services that they provide. This local knowledge will help them to decide how to tailor support, and they may not feel that they need to approach the department for any information in order to do this.

Even if the obligation contemplated by the amendment were necessary, which, as I have explained, we contend it is not, primary legislation would not be the place for it. Regulations under Clause 129 will prescribe the purposes for which the department can share benefit information with local authorities, and the agreements reached with local authorities will make clear that the information is to be supplied only if it is for a prescribed purpose-in this case, determining eligibility for the new local provision.

We are already working with local authorities to make sure that they are ready to deliver this support. The settlement letter will make explicit that the funding is to provide a replacement provision for community care grants and general living expenses crisis loans. It will be clear that the funding is meant for vulnerable people and about the outcomes that should be achieved. The review will offer a check on what local authorities have done with the funding they received and will provide accountability.

The noble Baroness, Lady Lister, asked why a light-touch reporting system cannot be set up. Local authorities will be using money in a variety of ways, all directed towards meeting the needs of vulnerable people. Any system, no matter how straightforward, would, by its very nature, have to be complex to capture and assimilate all the money and the varied information.

The noble Lord, Lord McKenzie, and other noble Lords raised Supporting People as a demonstration, in their eyes, of how non-ring-fencing produces a risk. The Supporting People funding was deliberately incorporated into the main formula grant in order to provide local authorities with maximum flexibility. Our funding will not be included in the overall grant. It will be part of a special revenue grant. In addition, we are working and will continue to work with local authorities before the funding is allocated to devise plans for using and targeting the money and, as I have said before, we will review over one-third of them to ensure that the money has been spent appropriately.

My noble friend Lord German, who must have no idea how grateful I am to him for his very helpful words, asked the important question about Wales and Scotland. The funding will not be transferred under the Barnett formula; it will be allocated through a special grant. The funding will be based on the equivalent Social Fund spend for 2012-13, and it should be noted that Scottish policy is also not to impose a ring-fence.

The noble Baroness, Lady Hollis, asked about the tension between upper-tier and lower-tier authorities. The funding is allocated to upper-tier local authorities in order to provide the greatest possible flexibility to local areas. From our discussions with local authorities, we know that a range of delivery models are being considered, some of which will result in some funding being devolved to lower-tier services such as housing. Decisions about the ultimate funding for each area will be determined by a range of local factors, including the location and nature of existing services, and how these align with areas of deprivation and need and the level of funding that will be devolved. In some less deprived areas it may not be necessary or practical to operate a number of services.

Local authorities have been enthusiastic and engaged with this process and I am confident that, given what I have said, they will continue to act in a responsible and fair way to protect the most vulnerable in their communities. I hope I have addressed the issues noble Lords have raised, and I ask the noble Baroness to withdraw her amendment.

Photo of Baroness Lister of Burtersett

Baroness Lister of Burtersett (Labour)

My Lords, I am very grateful to all noble Lords who have spoken. I have to say, when I was calling for the cavalry, I had not expected its generals to be two former social security Secretaries, the noble Lords, Lord Newton and Lord Fowler. I am very grateful to them for what they have said. I particularly thank my new hero, the noble Lord, Lord Newton, for his strong words in favour of the amendment.

The noble Lord, Lord Skelmersdale, rightly said that the key is the settlement letter and what happens if a local authority does not abide by it. I do not know about the noble Lord, but I have not heard an answer to that question. In Committee, the noble Lord, Lord Kirkwood of Kirkhope, and I came to a great defence of the principle of the Social Fund. I would not say that we had been wrong at the time, but we accepted that the Social Fund had worked out better than we had expected. We all agree that it needed reforming. The problem is that reform is not the same as the partial abolition that is taking place now. I would still have preferred the old system of statutory single payments, but that is history and that is not what we are here to discuss.

I am very grateful to the right reverend Prelate the Bishop of Manchester for the point he made about accountability. It is interesting that the noble Lord, Lord German, made the same point in Committee, where I felt that he was not convinced that accountability would be achieved. I know a letter was written to him, and I was not convinced by that letter that accountability would be achieved. The noble Lord, Lord German, raised a question about the local electorate holding local authorities to account. The people for whom the Social Fund is so vital are the people who are least likely to vote in local elections and be on the electoral register. As much as I would like to think that other members of the community will put the interests of potential Social Fund users at the top of their concerns when voting, I am afraid that it is simply not going to happen. Local organisations should not have to prise the information out of local authorities to try to make them accountable at the ballot box.

Yes, we do trust local authorities. This amendment is not about bashing local authorities. This is not an amendment that says, "I do not trust local authorities". However, local authorities are under huge pressure in terms of spending. We trusted them with the Supporting People grant, but, as I have said, they are making disproportionate cuts in it-not because they want to hurt vulnerable people but because it is easier to make cuts in the money that goes to marginalised groups than it is in, say, weekly bin collection.

I am very grateful to the Minister. I get the sense that his heart is not really in what he is saying today.

Noble Lords:

Oh!

Photo of Baroness Lister of Burtersett

Baroness Lister of Burtersett (Labour)

He has put up a very noble defence of the Government's position. But the noble Lord, Lord Newton, put his finger on it. I did not like to say this myself as a member of the Opposition. The resistance to an amendment on these lines is not coming from the Department for Work and Pensions; it is coming from the Department for Communities and Local Government. As the noble Lord said, we should not allow the localism agenda to trump the needs of some of the most vulnerable people in our society.

I very much welcome the full and strong steps that the department is taking to try to engage local authorities in seminars and so forth. That is all very valuable. But ultimately there will be no come-back if local authorities do not use the money for the purposes voted for by Parliament.

I have listened carefully to noble Lords on three or four occasions and each time we inch a little further towards where we are trying to get. But on none of these occasions have I been satisfied that we will achieve genuine accountability and that any mechanisms are in place to ensure that the money voted for vulnerable people will be spent on them. As my noble friend Lord McKenzie said, at a time when we are all being told about public spending being under such pressure, surely it is that much more important that the money is spent on the purposes for which it is intended.

Given that nearly everyone who has spoken has spoken in favour of the amendment and that I do not feel that the Minister has addressed questions put by his own side of the House, I wish to test the opinion of the House.

Division on Amendment 62BJA

Contents 216; Not-Contents 256.

Amendment 62BJA disagreed.

Division number 1

See full list of votes (From The Public Whip)

Clause 133 : Functions of registration service

Amendment 62BK

Moved by Lord De Mauley

62BK: Clause 133, page 104, line 16, after "information" insert "contained in a declaration made under section 9(1) of the Births and Deaths Registration Act 1953 or"

5:26 pm
Photo of Lord de Mauley

Lord de Mauley (Conservative)

My Lords, Tell Us Once is a cross-government programme developed so that people should be required to inform the Government only once of a change of circumstances, such as birth or death. Government Amendment 62BK allows the Registrar-General, superintendent registrars and registrars of births and deaths to transmit information from a birth declaration, as well as information entered in a birth register which is already covered by Clause 133, to the Secretary of State and to verify such information for the Secretary of State.

Birth declarations in England and Wales account for approximately 10 per cent of registrations. The impact can be considerably higher in certain local authorities where the location of the hospital where most births take place falls within a neighbouring borough. In some areas the local authority will be unable to provide the service to up to 80 per cent of customers unless the customer makes two separate visits to the local authority-one to make a declaration of the birth and another when they have received the birth certificate to use the Tell Us Once service.

To ensure that all new parents are able to access the service and to avoid the need for them to inform several government organisations separately of a birth at what is often a busy time for families, I ask noble Lords to accept the amendment.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Labour)

My Lords, I understand the amendment is to overcome a lack of vires on behalf of the Registrar-General in respect of birth declarations, and we are happy to support it.

Amendment 62BK agreed.

Clause 134 : Supporting maintenance agreements

Amendment 62BL

Moved by Lord De Mauley

62BL: Clause 134, page 105, leave out lines 1 to 3 and insert-

"(b) in particular, before accepting an application under those sections, invite the applicant to consider with the Commission whether it is possible to make such an agreement."

Photo of Lord de Mauley

Lord de Mauley (Conservative)

My Lords, I shall speak also to government Amendments 62BM and 62CA. In doing so, I wish to put these amendments in the context of the reforms they relate to.

The Government are committed to supporting lone parents. We spend over 6.5 billion on income-related benefits for some of the poorest lone parents alone. Significant financial support is also offered through the tax credit system and child benefit. Our reforms to child maintenance build on this support that the Government already provide directly to lone parents. Our key aim when reforming child maintenance is to ensure that both parents take responsibility. That includes taking responsibility for paying maintenance and for making the right choices about maintenance. This should be seen in the context of our wider ambition to make it the norm that parents work together in the interests of their children, especially when they no longer live together.

Every family is different and the child maintenance system in Great Britain should reflect this. The truth is that the statutory scheme cannot be so detailed and individualised as to be able to deal with every possible circumstance. For too long, parents have been implicitly or explicitly told that the Child Support Agency is the default option. That approach has entrenched conflict and led to an overreliance on the Government providing enforcement action.

The CSA-based system has failed, with the statutory schemes costing around 450 million each year. That could be seen against funding for relationship support for separating parents of 30 million over four years. Furthermore, taxpayers support costs of up to 25,000 for some typical CSA cases and up to 40,000 where we need to take substantial enforcement action. That is money spent by the state chasing maintenance from one parent to give to another. This has led to a system where, overall, it costs about 40p to move 1 between parents. The system must change because it is not working properly for parents or children. It does not represent value for money for the taxpayer.

The reformed system of child maintenance will be based on the principle that collaboration between parents is best for children. We firmly believe that collaborative child maintenance agreements are longer lasting and parents are more likely to be happy with them. Furthermore, we know wider collaboration between parents is clearly associated with better outcomes for children.

I hope that noble Lords will also acknowledge that we cannot be overly simplistic as to where fault lies when it comes to problems establishing maintenance arrangements. In reality, one-third of parents in the CSA identified that they had a friendly relationship with their ex-partners and said there was frequent contact by non-resident parents with their children. Furthermore, these parents reported that their maintenance arrangements were not really a source of tension. The CSA said that it was fairly easy for these parents to discuss financial matters. Our reforms also reflect the fact that over 50 per cent of parents using the CSA told us that, with the right support, they were likely to be able to make a collaborative agreement. Groups working with parents also tell us this. Karen Woodall, director of the Centre for Separated Families, said that,

"the campaign around the proposed changes to the child maintenance system has been largely based on outdated stereotypes around parental behaviour. By offering support to both parents and to the wider family, we believe that the changes will bring about much better outcomes for children".

However, it is surely not the state's role to intervene and arbitrate in personal relationships between two adults. Instead we wish to support parents to make an informed decision. That was always the intention of the gateway we provide for under Clause 134. It has become apparent that Clause 134 as drafted, referring to reasonable steps, has been interpreted more stringently than we intended. We do not wish to require parents to take multiple steps determined by us before being able to make an application. That would risk establishing a new quasi-judicial function. It would require us to decide whether a parent had taken reasonable steps and is an impediment to making a collaborative agreement. This would be akin to the complex and intrusive bureaucracy that dogged the early days of the CSA. That is the antithesis of our approach and why we have brought forward Amendments 62BL and 62BM. I hope this clarifies our intentions.

The amendments make clear that our role is to inform the parent approaching us and invite them to consider whether they can make a collaborative arrangement outside the state scheme. This will normally take place when the parent telephones to discuss their options. Where parents wish to pursue it, we will direct them towards wider sources of support. To further make sure support is available for parents, we have announced today 20 million of additional funding. This will be spent working with voluntary and community groups on streamlining existing support and looking at what additional help is needed. This amounts to doubling government spending on relationship support in 2012-13. I hope that, on that basis, noble Lords will be prepared to support Amendments 62BL and 62BM.

Organisations as diverse as the Centre for Separated Families, Families Need Fathers and Relate have all welcomed this announcement. Sarah Caulkin, interim chief executive of Relate, has said that her organisation hopes that,

"this funding will not only allow parents to access support before problems become serious, but also enable as many parents as possible to make their own arrangements to become effective co-parents, which in turn will benefit the whole family".

I can confirm to the House that this is indeed the Government's ambition.

These reforms to support parents in collaborating are coupled with reforms to the state-run CSA system. Perhaps I should make it clear that under our reforms the system will still continue to be heavily state-subsidised. However, we want the state-run system to be smaller, enabling us to free up these resources to help separating families who really need that help.

We absolutely recognise that some parents will need to continue to use the state-run service, and we need to do better for them as well. Our starting point for reform is the review by Sir David Henshaw, which was commissioned by the last Government in 2006. The key reform is based around a new scheme recommended by Sir David to replace the Child Support Agency scheme. At the heart of the new scheme will be tough enforcement and collection measures when parents fail to pay maintenance. The Government have developed new processes for identifying those who might not pay and addressing non-payment when it first occurs. The new scheme will also ensure that non-resident parents cannot escape their true responsibilities by refusing to provide us with details on their income. Instead, we will generally access this information from HMRC, which will enable a smoother and faster flow of maintenance to parents with care.

The Government are also committed to ensuring that the most vulnerable parents continue to benefit fully from child maintenance. To this end, we are ensuring that child maintenance payments remain tax-free. In addition, we will guarantee that parents keep all the maintenance, even when they are on universal credit. When money is in payment, child maintenance averages around 32 per week, tax-free, under the CSA. This is a significant financial benefit to the most vulnerable mothers.

Sir David Henshaw also recommended that,

"charging is introduced for users of the administrative system".

He went on to say that charging would,

"contribute to the objectives of the new system by incentivising private arrangements which can be more successful".

We agree with Sir David's findings. The then Secretary of State-now the noble Lord, Lord Hutton-told the Work and Pensions Select Committee at the time of the report that he thought that,

"in general and in principle",

charging should form part and parcel of the commission's approach. Subsequently, the then Government took a wide-ranging power to charge as part of the Child Maintenance and Other Payments Act 2008. It is Amendment 62C to that Act from my noble and learned friend Lord Mackay that we will deal with in the next debate. Let me not prejudge that debate, but I shall say something on the principle of charging before flagging an amendment that we propose to make to our powers.

As I said earlier, the Government cannot fairly and should not try to apportion blame between parents. Therefore we firmly believe that, to reform the system and maximise the number of effective child maintenance arrangements, we need to have an affordable but clear financial incentive on both parents to collaborate. With such high numbers of parents who use the CSA saying that it is likely they could collaborate, an affordable financial incentive for both parents is a necessity. The application charge and collection charges proposed by the Government meet these criteria. However, noble Lords will remember that when an application is made and maintenance payments are subsequently made directly, no collection charges are applied. This is the option to pay that is often called often called maintenance direct and is dealt with under Clause 135.

The Government are convinced this approach to charging is the right one and wish to formalise a requirement for us to review based on an evaluation. This would be achieved through Amendment 62CA. We will review charging within 30 months of its introduction. Thirty months will allow a proper sample to be evaluated, including the impacts of collection charges. Within that timescale we will lay a report on the review and the Government's conclusions on charging before Parliament. I ask noble Lords to support this amendment and the commitment to review.

Child maintenance needs major reform. Fifty per cent of children of separated families have no maintenance arrangement in place at all. We will provide improved statutory child maintenance for those who really need it, and we will of course continue to support lone parents directly through benefits and tax credits. However, we need a fundamental change so that wherever possible parents think twice, take responsibility and do not depend on the state. I beg to move.

Photo of Baroness Sherlock

Baroness Sherlock (Labour)

My Lords, I will speak briefly to Amendments 62BL and 62BM, and in doing so I draw the attention of the House to my interests, which are in the register. I am a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of the National Council for One Parent Families.

I want to ask a specific point about these government amendments, which seem to be producing a new formulation that would require an applicant wanting to apply for child maintenance through the CSA to consider with the commission whether it is possible for them to make a private arrangement before being allowed to make such an application. Can the Minister please make it clear to the House just what the applicant would have to do? If I am making an application and I simply say, "I wish to make an application", and the agency says, "Have you considered making a private application?", and I say, "Yes, but there is no way that he is ever going to agree to it", is that enough? Am I then allowed to proceed, or is it intended to be a bigger hurdle than that?

Photo of Baroness Tyler of Enfield

Baroness Tyler of Enfield (Liberal Democrat)

My Lords, I welcome the announcement of the additional 20 million for family support services for separating families, which is part of this package of reforms, and in doing so I must of course immediately declare a very direct interest as departing chief executive-this week-of the charity Relate. We provide help and support to separating families, to mothers, fathers and children and to wider family members. I recognise also that this is less contentious than the issues surrounding the reform of the statutory system, which we will be debating a little later, but it is worth a quick comment-not least because of the fact that each year around 350,000 children are directly affected by parental separation.

I am sure that all noble Lords across the House will agree that it is better, wherever possible, to encourage separating parents to make voluntary maintenance arrangements and to provide them with all the necessary practical help and support to do so. I am equally sure that all noble Lords recognise that this avenue will never be possible or appropriate, or even desirable, for all parents, particularly when issues of domestic violence are involved. That is what the statutory service is there to do, quite rightly, but it must be in everyone's interest that as many separating families as possible are encouraged and actively supported to make their own arrangement, not least so as not to clog up the statutory system for those who really need it most. The fact that some 50 per cent of children living in separated families have no effective child maintenance arrangements in place is surely evidence that the current system needs an overhaul. It is self-evident that any new system should be based as far as possible on reducing conflict and encouraging collaboration.

The fact that the funding announced today will allow parents to access more consistent support services as soon as possible across the country, and that it responds very directly to concerns raised by the DWP Select Committee a number of months ago, will be in everyone's interests, particularly those of children. This form of earlier intervention must be a wiser use of resources than waiting for problems to become so intractable, and for conflict to become so entrenched, that voluntary-based arrangements, frankly, become quite impossible.

As a former chair of the Kids in the Middle coalition of charities, I know that high levels of conflict in family relationships are bad for the well-being of everyone involved, particularly the children. Research makes it clear that the two most damaging issues for children when parents separate, which often make effective and enduring co-parenting far more difficult, are high levels of conflict and a lack of contact between both parents after separation. It will hardly be a surprise that the two often go hand in hand and, crucially to the debate today, that where there is contact between the child and the non-resident parent then often financial support arrangements flow as well. There is good evidence for the impact that co-ordinated services can have in this area, addressing financial, legal, housing and practical advice but also emotional support, mediation and a range of other things. I will not detain the House any longer by going through the research evidence that exists in this area, but I find it persuasive.

I stress, as I did in Committee, how detrimental it is to any child to grow up not simply without enough income and financial support but without any role model of a father-as generally the non-resident parent is-as a key figure in that child's life, providing practical, emotional and financial support.

5:45 pm
Photo of Baroness Howarth of Breckland

Baroness Howarth of Breckland (Crossbench)

My Lords, I shall speak briefly, following the noble Baroness, Lady Tyler, who is about to follow me as chair of the Children and Family Court Advisory and Support Service. I speak as someone who has dealt over many years with some of the families who are in greatest conflict and need. The Minister will know that, of the families who separate, 10 per cent go to court. Those 10 per cent are the most difficult families. Often they are very close to families who come through public law, which are the families who really have child protection issues. However, we find in assessment that many of the families who come through private law divorce proceedings may well have these issues.

I agree that there is some need for reform. I welcome the money being put into relationship work and hope that some of that will find its way to CAFCASS, which does a great deal of that work with those difficult families. There is a proportion of families, though, where it is clear that the level of conflict between the families is detrimental so continued contact with both parents-judges have said this-may well not be the answer for those few children.

I am interested, as the noble Baroness is, in who is going to make that assessment and at what point the mother-it is usually a mother, although occasionally it is a father-will know that she is not going to have to continue to engage with an extremely aggressive and often destructive person who has damaged not only her own relationship but that of her children, and when she will be able to bypass all those procedures and be sure that she can actually get maintenance. The likelihood of the man giving her maintenance is slim, but she needs to be able to get by the procedures.

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Lord Mackay of Clashfern (Conservative)

My Lords, it will be fairly obvious to most of your Lordships that these amendments are not entirely unrelated to the amendment that I am going to move in a little while. I am not certain of this, of course, but I have a feeling that the proposed amendments regarding the test for the discretion to be used have arisen out of discussions that I have had, which my noble friend Lord De Mauley has been at too, about the effect of the test in relation to charging. I will not elaborate on that now.

I would just be interested to know on what basis this test was originally put into the Bill. It must have been the subject of instruction; parliamentary counsel are extremely creative, but only on the basis of what they are asked to do. They are very good at finding words to express what you want. I wonder, and my noble friend may know the answer to this, what they were asked to do in the first instance. Does this reflect a change in the underlying request or not?

The third amendment concerns the review. That was certainly mentioned to me by the Secretary of State when I met him a week yesterday. I am entirely in favour of that. However, I suggested to him that it would be fair to do it on my basis and that that would be a real test of how good my suggestion was. However, it was suggested, "No, we will test it on my basis"-that is, on his basis. Therefore, from my point of view there is not much of an improvement as yet, but who knows what may happen? At present, the amendment is very welcome but, so far as I am concerned, it does not help me at all.

Photo of Lord McKenzie of Luton

Lord McKenzie of Luton (Labour)

My Lords, when the noble Lord, Lord De Mauley, introduced these fairly specific amendments, we had a bit of a broad sweep about the background to where the Government were going on child maintenance. I start by welcoming the 20 million of additional funding that has been announced. The noble Lord said that the Government were seeking to introduce tough enforcement and collection, with non-resident parents not being able to escape their obligations, and with HMRC gross data being used for the relevant calculations. We can sign up to that. In fact, we dealt with that in the 2004 child maintenance legislation, so that is in place; it is not new.

The noble Lord referred to the cost of the scheme-450 million a year. One of the problems is that three schemes are operating side by side through a transition. I think it was originally planned that by 2012-this year-we should be down to one scheme based on gross data, which should significantly reduce costs. However, I think that has been somewhat delayed by the Government.

As regards tough enforcement and collection, following a question that I raised in Committee, the noble Lord wrote to me indicating that not all the powers included in the 2008 Act had been brought into force. If I am wrong on that, he may take the opportunity to correct me.

Amendments 62BL and 62BM appear, at first reading, to make it harder for parents with care to access the statutory maintenance service. The Bill as it stands provides for applicants to take reasonable steps to establish whether it is possible or appropriate to make maintenance agreements outside the statutory system. A key part of the Government's reform of child maintenance was supposed to be the introduction of the gateway referred to by the noble Lord, the purpose of which is to ensure that all clients consider the range of their child maintenance options so that they can be directed into the family support services where appropriate. The Government's White Paper states at paragraph 10 on page 18:

"In some cases the gateway will be a step towards an application to the statutory scheme. Where the parent wishes to pursue that and states clearly the reasons why, the conversation about other options available will be closed and they will be assisted in moving to make a full application".

There were concerns that this process would be a way of screening out parents, particularly parents with care, from the statutory scheme. These were heightened by the potential loss of the statutory requirement to maximise the number of children benefiting from effective maintenance arrangements, which is an obligation of CMEC but is not to carry over to the successor-the executive agency-when that comes into being. Just a few hours ago we received a letter that purports to provide further clarity to the Bill. The noble and learned Lord, Lord Mackay, touched pertinently on that point. I am bound to say that it is regrettable that once again this information is released so close to our Report sitting. A crucial paragraph in that states:

"Therefore, we are now in a position to provide further clarity to the Bill by making it clear that the only engagement required prior to accepting an application to the statutory scheme will be to invite the applicants to have a telephone call with an adviser to discuss their options".

Like my noble friend Lady Sherlock, I would like better to understand what that means.

If this is the interpretation that the Government put on the two amendments, it will be important to have this on the record. However, I am bound to say that such an interpretation does not flow readily from the wording, which requires the applicant to,

"consider with the Commission whether it is possible to make such an agreement".

The term "consider" at least implies a more deliberative process than just a phone call. The process being "with the Commission" suggests the two parties having to agree on some sort of basis. However, if this is not what is intended, it would be very important to have that on the record. Given the lateness of this item in our deliberations, we may have to return to this matter at Third Reading.

The cynic might say that this changed position is an attempt to undermine the amendment in the name of the noble and learned Lord, Lord Mackay of Clashfern, by removing, in relation to Section 9 of the Child Support Act 1991, a requirement for an applicant to take "reasonable steps" to establish whether it is possible to have voluntary arrangements. We would not accept that, and the noble and learned Lord's amendment continues to have our full support and stands separately from these amendments.

However, perhaps the Minister will tell us what the future of the gateway service is to be. To be fair, it was always envisaged that it would start by a telephone offering, but is that now to be its steady state? If not, and if it is to be developed into a more extensive engagement, how would that sit with the new government amendments?

To be clear, we have acknowledged the benefit of voluntary arrangements and the prospects of them being more sustainable. We support the development of family support services. We legislated to remove the requirement for benefit claimants compulsorily to use the statutory system and provide what has become the option service. Our strong concern in doing so was not that thousands would rush to use the free statutory service, but that parents with care would drift out of the system and fail to make arrangements at all.

As to Amendment 62CA, we would support a review of fees regulations. That does not mean we accept the structure of the fees proposed. We would prefer it to be done on the basis of the noble and learned Lord's amendment.

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Lord de Mauley (Conservative)

My Lords, I am grateful to all noble Lords who have spoken. Let me turn directly to the issues raised by noble Lords. The noble Baroness, Lady Sherlock, asked, under the amendment, exactly what will happen during the gateway conversation. This also addresses the point made by the noble Lord, Lord McKenzie. We want parents to pause for thought when contacting us, before deciding whether to proceed with making an application to the statutory service.

We believe that the best way to achieve this is for parents to undertake a telephone call with a specially trained adviser. The only requirement on the parents contacting us before entering the statutory scheme will be to engage in this conversation and to discuss whether they have considered their alternatives. The adviser will be able to provide advice and signpost the parent to other support available, if required. Parents can then, if they wish, take time to consider the alternatives and discuss collaboration with the other parent. However, I stress that engaging in the conversation when first contacting us is the only requirement to enter the scheme. Everything else is voluntary. There is no question of us seeking to direct parents to take any specific steps. Where a parent identifies during the conversation that they need to make an application to the statutory service, the adviser will help them to do so. I hope that that addresses the point of the noble Lord, Lord McKenzie.

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Lord Cormack (Conservative)

Can my noble friend assure the House that the telephone will be answered by a human being and that there will be a direct line to an individual, not to an automated "press this, press that" system?

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Lord de Mauley (Conservative)

I share my noble friend's horror at being asked to "press 1" and so on for different things. I cannot absolutely guarantee that the very first answering of the call will not be that, but the key point is that it will be possible to have a conversation with a human being. That is the gateway.

My noble friend Lady Tyler has much experience in this area and I am extremely grateful for her supportive comments, particular about the additional resources.

The noble Baroness, Lady Howarth, also has a lot of experience in this area. I hope that my answer to the noble Baroness, Lady Sherlock, has addressed the nub of what the noble Baroness, Lady Howarth, was asking. Our reforms will mean that maintenance flows more certainly and more quickly. If someone presented and told us that they had an aggressive partner, we would immediately help them to make a maintenance application.

My noble and learned friend Lord Mackay asked why we took a power to take reasonable steps in the first place. In bringing forward legislation, we wanted to provide reassurance to parents and parliamentarians that we envisaged a light-touch engagement from the parent as a pause for thought. It was considered at that stage that "reasonable steps" had advantages. In particular, we believed that there were parents who could be clearly identified as having no reasonable steps to take in their circumstances. For instance, for those who had just exited an abusive relationship, there would be no reasonable steps to take to consider a collaborative arrangement. However, we have received representations that made it clear that that left interpretation open as to what we would ask people to do. The amendment makes clear that that will take the form of being invited to consider different options when a parent first contacts us. I look forward to the debate in a short while on my noble and learned friend's amendment.

The Government propose to deliver two key things as part of the amendments. Amendments 62BL and 62BM will ensure that we have constrained our powers in relation to the gateway so that they meet our intended light-touch approach. That will give us the opportunity to invite a parent to consider their alternatives when they contact us, but not more. This reflects our original intention, as opposed to any question of dividing parents into two groups-those who have tried and those who have not-with us as the arbiter. Amendment 62CA ensures that we will report back to Parliament with a review and conclusions based on that review within 30 months. That reflects our belief that we have the right approach, but we will evaluate it to ensure that that is the case.

Amendment 62BL agreed.

Amendment 62BM

Moved by Lord Freud

62BM: Clause 134, page 105, line 8, leave out from "(2)(b)" to second "to" in line 9 and insert "invite the applicant to consider with the Commission whether it is possible"

Amendment 62BM agreed.

Amendment 62C

Moved by Lord Mackay of Clashfern

62C: Clause 134, page 105, line 11, at end insert-

"(3) In section 6 of the Child Maintenance and Other Payments Act 2008 (provision to allow charging of fees by the Commission), after subsection (2) there is inserted-

"(2A) Nothing in regulations under subsection (1) shall impose a liability on a parent with care for the payment of fees to the Commission where that parent has taken reasonable steps to establish whether it is possible or appropriate to make a maintenance agreement (within the meaning of section 9 of the Child Support Act 1991), and where, having taken such reasonable steps, it is either not possible or not appropriate for the parent with care to do so.""

6:00 pm
Photo of Lord Mackay of Clashfern

Lord Mackay of Clashfern (Conservative)

I move the amendment out of a sense of the need for fairness in these alterations. I should say at the beginning that I am a member of Barnardo's and I thank others in the voluntary sector who have helped me in the work of contacting your Lordships.

After I sent my letter, one of my senior colleagues said to me, "I was surprised to receive a letter from a former Lord Chancellor inviting me to be a rebel". I have thought about that. My primary motivation as Lord Chancellor was to get fairness and justice for our people, and I hope that I have not laid that motivation aside on laying down my robes for the last time.

My amendment is about a very simple matter of fairness. The government briefing dealing with the clause in its earlier form included the statement, which all of us may believe to be true, that,

"a significant proportion of parents will not be able to collaborate. For example, where an applicant has a former partner who refuses to engage or pay child maintenance voluntarily there would be no reasonable steps they could take".

That is the group I am focusing on, because I do not believe that it is fair to require them to pay charges when they are not responsible for creating the need for the use of the service.

The obligation to maintain children is an obligation between the parent and the child which subsists for so long as the child needs maintenance and the parent lives. The mere fact that there has been disturbance and breakdown between the parents is in no sense a reason for not paying maintenance. Therefore, one of the key things that my noble friend Lord Newton and I thought, when this arrangement was being made originally in 1991, was that it was important to separate consideration of things such as contact and other detailed arrangements from the obligation to pay maintenance. That is a clear obligation which, as I said, subsists whatever the relationship between the parties.

My question is simply: is it fair to charge a parent in that group? The suggestion is that the use of charging will create an incentive on both parents to enter into an agreement. I agree that in many cases that will be so, but the quotation I have just given explains that that is not true in every case. I use the example of where the man declines to pay maintenance. It is usually the man as 97 per cent of the cases under the CSA are initiated by the mother as the parent with care. There are one or two where it is the other way round, but I use the mother for illustrative purposes, as long as your Lordships understand that that is not the universal situation. In my view, the only question that arises on application to the CSA-the names have changed once or twice but the name CSA is used in the letter that was kindly circulated this morning-is whether the parent, the father, is prepared to pay maintenance: is he paying maintenance and is he prepared to pay maintenance? That is all. He is not asked anything else.

The idea that I want to have an adjudication of whose fault it was that there was a breakdown is absolute nonsense. Those of your Lordships who have been here long enough will remember that I had some trouble getting through this House a law reform Act of 1996, which introduced divorce without fault. No-fault divorce seemed to me to be the only answer. I do not believe that any tribunal on earth is able to make an absolutely just appraisal of who is responsible for a breakdown in a relationship. I certainly do not want to put that task on the CSA-not at all. I want the CSA to be concerned solely with the question of maintenance, and the obligation of maintenance clearly arises when one is a parent, nothing else. It does not matter what else has happened. As long as I am the parent and the child is still in need of maintenance, the obligation subsists. That is the only question that arises at that stage. The idea that I want to have some kind of quasi-judicial bureaucratic process that will take a great deal of money out of the system is nonsense. I have no such desire.

Those of your Lordships who were here will remember the debate about the Bill-which, as I say, is still on the statute book, not yet implemented. The time will come when it is, probably; at least, I hope so. I am also very keen on what the Government are now saying about the need to try to get voluntary agreement. I am 110 per cent behind that. I believe that voluntary agreement on all the arrangements needed on separation is vital. If we could get that in every case, there would be no need for the CSA and very little need for a good lot of the family court arrangements that we have to have. Sadly, we are in the real world and that is not always possible.

That is the simple point that I wanted to make. I suggested when I had some of these meetings how this could be handled. My idea is that when somebody applies to the CSA and is serious about it, the application should be taken into account and immediately a letter would go to the non-resident parent-the NRP as we tend to call him-to ask whether he is paying maintenance at the moment or is willing to pay, and giving him something like a fortnight or a month to reply. There is no need for any quasi-judicial function or anything of that sort. That is what I want. On that basis, if he says, "I will certainly pay and set up a direct debit tomorrow", there is no question of the CSA being involved. However, if the CSA is involved to force him to pay, he has the responsibility for bringing that about and the fees should be adjusted. The fees are still subject to discussion. There is no question at present about a strict standard of fee; the fees are subject to discussion. They should take account of the fact that this is the way the scheme operates.

The motivation of the Government for these charges is said to be to try to bring people to voluntary agreement. I am entirely in favour of that. But if that proves impossible, when the woman is at the stage of having nothing more that she can to, she has to pay. What does that do? If anything, it might make her not go to the Child Support Agency at all and the child will lose the maintenance. I cannot see that asking for that is an incentive to do anything that the Government want.

There are other considerations that I would like to mention briefly. As I say, I am entirely in favour of putting as much money and effort as possible into getting people to reach agreement when they fall out-if possible, repairing the relationship, and if not, trying to sort out the consequences of its breakdown. The Government propose an exception to this in respect of domestic violence. I believe that my amendment would take them out of the hole of trying to define domestic violence by reaching the conclusion that where there is the threat of that sort continuing at the time, any kind of agreement between the parties on maintenance is just not possible and therefore not appropriate in terms of my amendment. Your Lordships will notice that the terms of my amendment came out of the terms of the clause before the amendment that was proposed a few minutes ago. It has the full approval of parliamentary counsel obviously, and a very excellent draft it is. This would deal with the question of the exception in favour of those who have been the subject of domestic violence. I do not think that the Government have yet worked out exactly how they will establish that. I have every sympathy with them and offer them an easy way of dealing with the matter.

The statutory provision for charges came in as a result of Sir David Henshaw's report. He makes it clear that he did not want to see charges as a disincentive to the use of the system. At the stage that I am dealing with and for the group I am dealing with, that is the only possible purpose of it. This does not carry the approval of Sir David Henshaw in his advice to the then Government to bring in the power to charge. This seems to be the situation. It is simple and I am extremely sorry to find myself in a position of opposing the Government. I was anxious if possible to reach an accommodation with them but so far nothing has been offered to me that would be an explanation to your Lordships of why I withdrew from this very principled position. I beg to move.

6:15 pm
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Lord Morris of Aberavon (Labour)

My Lords, I rise in support of the noble and learned Lord. This is my first intervention in this Bill and it will be brief. I hope that my experience as a constituency MP will be of some assistance to the House. In that capacity I was, I am sure like all MPs, overwhelmed by the number of cases arising from problems of dealing with the CSA. The majority were wives. Mine was a heavily industrialised constituency and industrial workers were not overpaid. The problem was trying to get two family incomes from one pot. All the difficulties arose from that. They were mostly, in fact all in my case, people of modest means. They came to their Member of Parliament because all else had failed. The CSA had failed. It did not have a glorious record. The proposal passed through the House of Commons far too quickly, almost on the nod. It was hardly questioned. It has been relaunched more than once. People at the top were moved but to no avail. From what I heard from the Minister a few minutes ago, this is yet another relaunch. I suspect that the burden on MPs, although I am now out of touch, has not lessened in recent years.

I was aghast when I read the proposal to have a charge. How will it assist people of very modest means before they avail themselves of existing machinery-however bad and unsuccessful it was in many cases? What is the purpose of imposing such a charge on the most vulnerable people? It reeks of unfairness and I support the noble and learned Lord.

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Lord Newton of Braintree (Conservative)

My Lords, if anyone wondered why I moved from my earlier position, they would have guessed that it was to stand shoulder to shoulder with my noble and learned friend Lord Mackay. He and I were in cahoots over the attempts to tackle this problem 20 years ago. We were in cahoots with what was said in Committee on this matter, and I have made it clear that I intend to remain in cahoots with him on this amendment.

I have not been at the meetings, but I have had a number of conversations with Ministers and I give them credit for being willing to talk to me as well. I think that my noble friend in front of me will acknowledge that I have consistently said that if they could satisfy my noble and learned friend, I would not seek to push it, but if they could not satisfy him, I would stick with him. Essentially, I share his views. I do not think that it is fair, right or productive. The letter that presumably went to everybody in the House was mostly convincing. I have no problem with the case for reform or the desire to cut the costs. I have no problem with the desire to encourage people to collaborate voluntarily. What I have a problem with is that I do not think that those general points connect to the conclusion that my noble and learned friend's amendment is wrong. I shall vote for it if he decides to press it, following what has been said.

It is a simple position. I will not rehearse his arguments or seek to elaborate them. I shall make only one other point which relates to the 13-month review. I am in favour of a review, but the case for reviewing it after experience is stronger on the basis put by my noble and learned friend than on the basis put by my noble friend the Minister. If there is evidence that it is discouraging sensible, voluntary arrangements in the interests of children, we can look at it again then. I do not believe that it will-and this would need to be shown before we changed from the basic, fundamental proposition that it is not right, fair or just for a parent with care to have money deducted on these grounds from the money paid for her children.

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Baroness Butler-Sloss (Crossbench)

My Lords, in the family courts the welfare of children is paramount. It is particularly important to remember that in relation to the amendment that the noble and learned Lord moved, which I very strongly support. I have absolute, practical experience as a family barrister and judge, from long before the CSA came into being and took that work from judges. I have vivid recollections of a certain group of parents, principally fathers but occasionally mothers, who absolutely would not pay. There was no point in even asking them-although I understand why the Minister thinks that they should be asked. They would do everything in their power not to pay. The only way they can be got at now is through the commission. It can only do a better job than the CSA, which profoundly failed at the task it was set.

These parents will not pay, and the idea that a mother in very poor circumstances, left with young children by the father, may find herself having to seek social benefit from the state, which she may not have sought before, when the father may have money while she has nothing that the state does not provide, and may then have to pay a fee to try to get money for the welfare of her children, particularly where she has no money and the father may have some, is profoundly unfair. I respectfully and strongly support the noble and learned Lord, Lord Mackay of Clashfern, and hope that the House will support him, too.

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Lord Cormack (Conservative)

My Lords, I, too, very much hope that the House will support my noble and learned friend. I hope that those on this side of the House who are inclined to support him will not consider that they are acting as rebels against the Government. This does not knock the central plank out of the Government's Welfare Reform Bill, which I am proud to support. I listened to what my noble friend Lord Newton said on Monday and wish more noble Lords had heard it. He spoke eloquently in support of the principles of the Bill. His speech was widely and rightly commended. However, here we are dealing with something very different. We are not torpedoing the Bill. We are injecting a little bit of extra fairness into it.

The noble and learned Lord, Lord Morris of Aberavon, spoke as a former constituency Member of Parliament. I was in the other place for 40 years and saw countless women who came to me in great distress, who would have regarded a fee as a deterrent and who considered that this was further evidence that the system was against them. They often came in despair and because they were in true need; but also because the child for whom they were responsible, and for whom the father was responsible, was in need. We are talking here about children, who are not party to whatever dispute might have divided the marriage, relationship or whatever else. Saying to a woman who comes in distress and despair, "Fill in form X and pay your fee", would be nonsense. What they need is help, contact with human beings-which is why I made my brief intervention on the Minister's speech a while ago-and support.

The noble and learned Baroness, Lady Butler-Sloss, was quite right to say that some people have no intention of owning up to their responsibilities and paying. The Government's general philosophy is one that I hope that most Members of the House can support. We all know that our welfare system is in need of overhaul and reform and it is a courageous act to face up to that. However, this does not mean that everything in the Bill is right, and this clause needs amending in line with what my noble and learned friend said. He is a man of infinite wisdom and great experience, and is held in the highest respect in all quarters of the House and all parts of the country. He is no rebel; he is a man of common sense and compassion and he deserves support.

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Baroness Howarth of Breckland (Crossbench)

My Lords, I will make a simple and straightforward intervention. I will not repeat what I said earlier, but the points I made then were pertinent. I wholeheartedly support the noble and learned Lord, Lord Mackay, and will make two points. It is right that when the noble and learned Lord brought forward legislation that separated maintenance from contact, it took us forward. However, the two things are not separate. A man-it is mainly men; only 3 per cent are women-may feel that he should have contact with his children despite the fact that he has been found not to be safe, not only in relation to domestic violence but to child protection issues. He may believe that he has a right to contact. However, if the court has said, "No contact", he will definitely not feel that he has to make any payment whatever. One cannot separate the two issues.

I have one further question. Being of a practical turn of mind, I am still trying to work out how the system will proceed. There will be a telephone call with a human being. I do not know whether the human being will have any training or understanding of the issues; where they will come from; or what their background will be. These situations are extraordinarily complex. In the children and family court service, our staff make this kind of assessment when cases come through to ensure that there are no protection issues. They are our most experienced staff; not the least experienced or the clerical staff. Who will do that in future?

After the phone call, who will make a decision? What sort of assessment will be made, in cases of violent marital dispute and child protection, to determine whether someone has to pay? I have not gone into all the issues that were eloquently put forward by other noble Lords around the House about the justice of the matter. Women who may have been abandoned after horrific incidents with men will find themselves being held responsible. As the noble and learned Lord, Lord Mackay, said, this will not affect everybody but only that group. How will we identify them and who will make the assessment?

6:30 pm
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Baroness Howe of Idlicote (Crossbench)

My Lords, I remember listening to the noble and learned Lord, Lord Mackay, upstairs in Grand Committee. I immediately saw the sense in what he said and backed him. Upstairs, the situation was limited. Here, one sees a fascinating cross-section of all sides of the House thinking that this is the right way forward, and that there is no way the charge should be levied when we all know the dangers that this group of women-I am thinking of what my noble friend Lady Howarth said-may find themselves in. As we have heard, some 97 per cent of those who go to the CSA are women. Many of them are suffering and none of us should be prepared to make them suffer further.

I was sent many letters at that time. I remember particularly an extract from one of them. I will repeat a tiny bit of it because it is also to do with the CSA, which we have heard being criticised and equally we have heard is doing a good job, even though it has had to be reformed several times. She wrote:

"When the payments finally started coming in via the CSA-you cannot imagine the weight that was lifted off my shoulders. I finally felt I could plan ahead for school trips, clothes and other essentials. The relief has been immense. The truth is that the proposals will only penalise the children the CSA is meant to help. Women generally only turn to the CSA when they have exhausted all other avenues. It's an act of desperation".

She ended:

"My message to the government is this: you will be hurting the very people you are trying to help. And, I fear, partners who only receive a small payment will just give up altogether. It will be their children who suffer".

I congratulate the Government on the efforts they have made and on the 20 million that they are going to be putting aside. I am not critical of that at all and I think that their intentions are in the right direction. However, a very interesting cross-section of the House still wishes to continue to support the amendment moved by the noble and learned Lord, Lord Mackay. That is not just a good example of what this House represents and of the wisdom and sense it represents, but it is also the right thing to be doing.

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Lord Brooke of Sutton Mandeville (Conservative)

My Lords, I was sitting next to my noble friend Lord Boswell of Aynho, who was the seconder of my noble and learned friend's amendment, when my noble and learned friend moved his original amendment in Grand Committee. I rise to explain that the reason that we have not heard from my noble friend Lord Boswell is because he is on separate duty in the Council of Europe today.

I hope my noble and learned friend Lord Mackay of Clashfern will understand that I think that on our side we have an obligation to listen very carefully to what the Minister says, and I propose to do that, but the fact remains that a very powerful case has been made in the opposite direction.

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Baroness Sherlock (Labour)

I came across a quotation from the Committee stage:

"For even though marriages may break down, parenthood is for life. Legislation can't make irresponsible parents responsible. But it can and must ensure that absent parents pay maintenance for their children".

That was said by the noble Baroness, Lady Thatcher, in 1990. She went on to talk about setting up the CSA. We have heard a lot about the failings of the CSA, but more than 1 billion changed hands last year through it. Before it was set up, lone parents had only the option of going to the courts to try to enforce maintenance, and in the vast majority of cases, they could not afford to go and could not afford to enforce it if it happened.

There are two very simple reasons for backing this amendment, which is why my name is on it. The first is simple compassion. There is no good reason why a single parent should have to hand over to the state not only 100 up front but up to 12 per cent of the money that is currently going to her children simply to have what is owed to her in law paid.

The second is a question of justice. If the Government's intention is to change behaviour and to make sure that the absent parent pays up, they should charge him. What can the lone parent possibly do, other than ask, to make him pay up? Yet she will be penalised for his failure to pay. There is no behaviour change that she could possibly undertake, other than to ask nicely. She cannot do anything. That is why she has gone to the state in the first place. She has come to the state to ask for the help that the noble Baroness, Lady Thatcher, recognised all those years ago and set up an agency to give. We must not fail her today.

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The Bishop of Manchester (Bishop)

My Lords, many of my parish priests would endorse the kind of things that we have heard of this afternoon, the many cases where single parents-97 per cent of them mothers-are placed in a most cruel and unfair position. It is only recently, I think, that the Prime Minister said that our society must do more to make fathers understand and take responsibility for their paternal aspects which they have taken on by becoming fathers. What I do not think he said but, unfortunately, what this Bill does is that the mother who is left on her own without any financial backing from that father should therefore pay this huge penalty. That is what this Bill is requiring at the moment. It seems to me that what the noble and learned Lord, Lord Mackay, is putting before this House is a very sensible and compassionate way of undoing an injustice which I do not believe the Government really intended in the beginning. I hope that the Minister will see his way forward to recognising the great power of opinion that he must surely have heard this afternoon in this House.

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Lord Stoddart of Swindon (Independent Labour)

My Lords, I say right away that I have no hesitation in supporting the amendment of the noble and learned Lord, Lord Mackay of Clashfern. I remember, as I am sure he will remember, the debates we had during the day, and in the watches of the night, over the original CSA Bill. We had certain disagreements at that time, but we have no disagreements this afternoon. Time is getting on, but the point I really want to make is that the Government, in imposing charges, are, in fact, undermining what they want. If there are no charges, the Government are in a win-win situation because it will not only help them financially but it will help family life, particularly for women, and will also give encouragement, perhaps, to the absent male, the absent father, to take a greater interest in the family if he is making a contribution towards the upbringing of the child. I appeal to the Government for their own sake to accept the amendment moved by the noble and learned Lord, Lord Mackay. It is a very sensible amendment that has been supported on all sides. There has been no criticism from any part of the House. I feel sure that if the amendment is put to a vote, the Government will suffer another defeat, and I am not at all sure that politically that is very wise.

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Lord Mawhinney (Conservative)

My Lords, politicians regularly claim to have fairness on their side. It is sort of part of the trade, and it creates the impression that they are on higher moral ground than the opposition-whether that be the Opposition or the Government-who, by definition, cannot therefore have fairness on their side. In more than 30 years at both ends of this corridor, I can think of very few, if any, debates where we have debated quintessentially just the issue of fairness. It is always linked with a policy, and this is linked to a policy as well but, as has become clear during this debate, what we are really being asked to take a decision on is fairness.

I make no apologies for saying that I had the pleasure, some years ago, of working closely with my noble and learned friend Lord Mackay of Clashfern. I have no embarrassment in saying that I learned from him and benefited from his integrity, wisdom and common sense. If any noble Lords had not had this pleasure and privilege, they will have had this evening. That was as powerful an explanation in simple language of integrity, clarity and humanity as I have heard. I have seldom if ever heard someone put the Government ever so gently but firmly in their place without creating any angst, unhappiness or unpleasantness in the process.

I agree with the noble and learned Lord, Lord Morris of Aberavon, and the noble and learned Baroness, Lady Butler-Sloss: any Member of Parliament can tell stories about the failure of the CSA. The noble and learned Baroness, Lady Butler-Sloss, spoke of her experience of dealing with men who were intransigent beyond persuasion. I cannot be the only former Member of Parliament who has been physically threatened in surgeries by men because I tried to persuade them that I did not have the power to solve their problem. That threat of physical violence stemmed from an antipathy to their former partner which was time and again beyond remedy-in many cases, beyond even consideration.

I have to say to my noble friend the Minister that, just for once, I think the Government have got it wrong. I support what they are trying to do and I know of nobody in either House who would have the gall to stand up and describe the noble and learned Lord, Lord Mackay of Clashfern, as a rebel. They would get laughed out of court if they tried. I cannot stand shoulder to shoulder with him, but they would also have a certain amount of difficulty labelling me that way.

If ever there was a time for the Minister to say, "This has been a very good debate, conducted in good humour but with surprisingly impressive intellectual integrity and humanity, and I will take this back and talk to my colleagues and come forward at Third Reading with the Government's considered position, bearing in mind this debate", it is now. I hope my noble friend might take that as a constructive suggestion for the way forward.

I made it clear before I came into the House for this debate that it was not my intention or inclination ever to vote against a proposal moved by the noble and learned Lord, Lord Mackay of Clashfern, my friend, but I did not commit myself on whether to abstain or to support him. Unless the Minister says something wholly remarkable over and above what has so far been said, I will join my noble and learned friend in the Lobby.

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Lord Goodhart (Liberal Democrat)

My Lords, I do not often vote against coalition policy. I voted for the coalition on Monday, when the coalition was in fact defeated. I voted for the coalition policy then, not because I personally supported that policy but because it was something that I could and should accept as a member of my party and therefore the coalition. This occasion is entirely different. The draft that the amendment replaces has been shown to be very seriously defective. I cannot support that draft. I can and will support the amendment of my noble and learned friend Lord Mackay of Clashfern.

6:45 pm
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Baroness Berridge (Conservative)

My Lords, I have not spoken previously in your Lordships' House on this Bill, but I briefly practised as a family barrister and as such I hold the noble and learned Lord, Lord Mackay, in the greatest esteem. However, what initially looked attractive when I received his letter has given me pause for thought.

As a barrister, I witnessed how unresolved issues concerning the breakdown of a relationship get played out in matters concerning money as well as children. Although much has been said on behalf of mothers, who are in the majority in this situation, of course it is not as simple to say that just because the mother has the care of the children she is not sometimes at fault for the fact that maintenance is not paid. I would like to put on record before your Lordships the perspective of fathers, which I think is best described in the lyrics of Professor Green's "Read All About It", one of the most popular downloads last year. He was referring to his mother when he said:

"After all, you were never kin to me.Family is something you have never been to me.In fact making it harder for me to see my fatherWas the only thing you ever did for me".

It is a heart-rending rap about a child caught in the animosity of a break-up. As I am sure your Lordships will agree, avoiding conflict in the courts or in any other forum helps to limit such animosity, greatly to the benefit of the children.

Will there be rare cases where the lack of payment is entirely the mother's fault? Yes. Will there be cases where the lack of payment is entirely the father's fault? Yes. However, in the majority of cases it will be to some extent both people's fault. If I were convinced that this amendment would address only the concerns outlined by the noble and learned Baroness, Lady Butler-Sloss, I would support it. Unfortunately, I believe that the unintended consequence of this amendment would result in the adjudication of matters that would not assist or encourage amicable ongoing relationships between the parents, which are of the greatest value to the children at the end of the day.

I am afraid it is not as simple as just catching the cases outlined; nor unfortunately are parents always able, in my experience as a barrister, to separate their role as a parent from the issues of the breakdown of the relationship. I would be grateful if my noble and learned friend could please outline how there will be a determination as to whether or not someone has taken reasonable steps without some kind of judicial process, and how introducing any form of fault-based assessment of the parties' conduct in relation to the payment of money is possible without inadvertently-and I accept it is inadvertently-providing a forum in many cases for the outstanding relationship issues to be unhelpfully vented. I am afraid I am not convinced by the noble and learned Lord's amendment.

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Lord Kirkwood of Kirkhope (Liberal Democrat)

My Lords, I will just take two minutes to deal with that, if I may.

First, I have encountered the break-up of marriage at a variety of levels. I was involved in consistorial legal work before I was elected in 1983, and I spent most of my time in the House of Commons as a spokesman for my parliamentary group and then as a chairman of a Select Committee which endlessly looked at the 1991 Act and all the bits and pieces that flowed from it. It has been quite clear to me as a result of all that experience that if anybody tries to take some lessons and principles from the cases that are conducted in the High Court of the land, dealing with many thousands of pounds at a very high level, where things are fought over and the big silk hanky brigade of the legal establishment makes lots of money, they are a million miles away from ordinary people whose families break up week in, week out. I do not think it is safe to start contemplating the amendment tabled by the noble and learned Lord, Lord Mackay, and its consequences, when seen from that perspective. That is not what this is about.

I mentioned Select Committees. I just want to draw noble Lords' attention to the fact that the current Select Committee in the other place recently produced a report on this which recommended that where parents with care had taken all reasonable steps to investigate a private arrangement but that was not possible or appropriate, no charges should be made. In my view, there has never been an established case made for charging either parents with care or non-resident parents.

The Henshaw report was an extremely scrappy piece of work. The noble and learned Lord, Lord Mackay, rightly pointed to the fact that even the Henshaw committee, upon which most of the Government's case is made, clearly said that it did not want any disincentive effect to be imposed as a result of charging. It made a different case altogether. Incidentally, the Henshaw committee report was as clever as to say that we should close down the CSA and have a residual body to chase debts. That is about how sensible some of the recommendations in the Henshaw committee report were. As far as I am concerned, it is true that it was discredited before the ink was dry and it went for ministerial consideration.

This issue is about whether charging will assist collaboration and co-operation between separating parties. I can see no understandable circumstances that charges would make it easier for people to stay together longer. I do not see how that case can be made or that it has been made.

The system we are setting up for 2014 will be much cheaper for a variety of reasons. From an administrative point of view, there is no need to put money into the system because the assessment process, the computer systems and so on will make the whole administration of this, if it all works, a lot easier. It is entirely affordable. The way in which some Ministers have been rubbishing the system is disgraceful. It is not a perfect system but it supports 870,000 children-I repeat, 870,000 children. This is not an insignificant institution which could be done without. Nudging 50 per cent of single parents with care get something like only 20 a week. That is the extent of the money that they derive from the system, but it is essential for those who use it.

Quite simply, collaboration between the parents who are separating will not be assisted by charging. It would inevitably result in less money flowing to the children in the charge of the parent with care. There is no case whatever for charging, so I am compromising greatly in supporting the entirely reasonable amendment moved by my noble and learned friend Lord Mackay. Speaking for myself, I would scrap the whole idea and not give it house room. I hope that the House will come quickly to a resolution and I encourage noble Lords to support the amendment in the name of the noble and learned Lord.

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Lord McKenzie of Luton (Labour)

My Lords, this has been a powerful, passionate and extremely well informed debate. If the debate has not been quite unanimous in support of the noble and learned Lord's amendment, one thing on which there has been unanimity is the esteem in which he is held. On charging and the Henshaw report-which the noble and learned Lord mentioned, as did the noble Lord, Lord Kirkwood-as the report made clear, any charging regime should not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. That was translated into a White Paper of the Labour Government, which said that charging should be based on three clear principles: it should incentivise non-resident parents to meet their responsibilities; the clear burden of charging should fall on the non-resident parent and not the parent with care; and cost recovery via CMEC should never be prioritised over payments to parents with care.

A host of points have been made. I agree with what the noble Lord, Lord Cormack, said-supporting this amendment will not torpedo the Bill. If it would, I would doubly support it. But even on the basis that it will not, it should be supported. We have heard testament from a number of noble Lords, particularly the noble and learned Baroness, Lady Butler-Sloss, about the complexity and possible difficulty of people's lives. We have to recognise that people just do not live tranquil, routine lives where you can easily come to agreement. As someone who briefly had ministerial responsibility for the CSA, I saw some horrendous cases about non-resident parents, mostly men, who would do anything to avoid meeting their obligations.

The history of the CSA/CMEC has evolved, and this is perhaps not the occasion to rehearse it. The fundamental point that the noble and learned Lord made was that this is about fairness; it is not about seeking to attribute blame to the challenges that couples find themselves in when they separate. I thoroughly agree with that. I am aware that the noble and learned Lord does not press this matter lightly. As we have heard, he has endeavoured to persuade his colleagues at the highest level in government on the proposition that he is advancing today. We should be guided by what is best for children and whether supporting this amendment would make it more likely that they will benefit from maintenance arrangements. We consider that it will, which is why we support it.

I suggest to the noble Lord, Lord De Mauley, that it would be really good if he could accept the amendment, particularly because so many noble Lords from his own Benches have spoken in favour of it. The clear and overwhelming view of the House is that the amendment should be accepted, which would be the right thing to do, without having to reinforce that with what would clearly be an overwhelming vote.

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Lord de Mauley (Conservative)

My Lords, I have enormous respect for my noble and learned friend Lord Mackay, which I know all noble Lords, including the noble Lord, Lord McKenzie, share. I am grateful to him for his amendment and to all noble Lords for their contributions. I have listened carefully-and not, I have to say, without trepidation-to the detailed points made by my noble and learned friend and all other noble Lords who have spoken. I am glad that we have also had a debate within the debate about charging.

I emphasise again that the Government's reforms and particularly charges need to be seen in the wider context. Perhaps I may start by setting out some of the historical contrast. When the Child Support Act was taken through Parliament in 1991 one of its primary aims was to recoup the money that the Government spent on benefits. This was achieved by reducing lone parents' benefits by the sum that we were able to collect from non-resident parents. Parents on benefits had to use the scheme in order to further this aim. That was a scheme of its time and was set up with the most noble of intentions, namely reforming a court-based system that was not working.

Today we start in a different place. Lone parents no longer have their benefits reduced at all when child maintenance is received and this Government have been proud to announce that we will extend this to universal credit. We have greater ambitions. We see a key part of the reforms as expanding the support for parents to collaborate. We no longer require parents to use the CSA. We do not want it to be the default option. Where they can collaborate, we believe that that is fundamentally better for parents and children. That is why we cannot accept my noble and learned friend's amendment.

The proposal would set up a system where the state would be obliged to try to arbitrate. We specifically think that that is what will happen if we use the reasonable-steps test, which surely requires some sort of judgment as to whether an applicant has done all that could be expected to reach a family-based arrangement with the ex-partner.

We cannot see any way to collect hard evidence to show that a parent with care had taken reasonable steps without an inappropriate degree of intrusiveness. We do not believe that the state should try to monitor whether a conversation has taken place about collaboration between two private individuals, the parents. We cannot see how to make this work, not least because parents could quite fairly challenge the state's discretionary decisions, leading to delays in maintenance flowing and acrimony in the system.

7:00 pm
Photo of Baroness Howarth of Breckland

Baroness Howarth of Breckland (Crossbench)

My Lords, I find that surprising when, on a daily basis, the guardian ad litem in a court case can be expected to make similar sorts of judgments between two people as to whether contact should be awarded to one parent or the other. These are the same families, so surely there must be some way in which this kind of assessment could be made. Indeed, it has to be made because the noble Lord said previously that there would be some discretion in relation to marital violence and child protection. How are those assessments going to be made if no assessment is made at all?

Photo of Lord de Mauley

Lord de Mauley (Conservative)

Perhaps the noble Baroness will permit me to come to her specific questions in a while.

My noble and learned friend proposes that this could be handled by allowing a CSA staff member to make what I am suggesting would be a subjective decision, and for that decision to be appealable. I ask your Lordships to consider whether legislation that confers on officials a subjective decision and then asks for an appeal system to police those decisions is the right way forward. It is not the Government's position that that is the case. It would add to the costs for the taxpayer and complexity for parents and staff. One lesson we have learnt since 1993 is that legislation, with the best of intentions, will not work if it is highly complex or subjective in delivery. This approach with its subjective decisions and appeals again risks conflict, and surely none of that is in the interests of the child.

However, to offer your Lordships some views on the costs involved, we have also looked at an alternative approach to delivering the amendment. This would be based on a self-declaration from the applicant that reasonable steps had been taken. This is obviously a porous test that could be open to false reporting. Even then we estimate that the amendment would increase costs in the statutory schemes by over 200 million to the end of March 2019, making these reforms unaffordable. I hope that my noble and learned friend will therefore understand that, in our view, there is a tension at the heart of the amendment. It applies either a test we cannot police or a test that everyone can pass because we are not able to police it. Further, however the amendment is applied, it undermines the core of why we want to introduce charging. To reform the system and maximise the number of effective child maintenance arrangements, we must have an affordable but clear financial incentive on both parents to collaborate. We discussed in Committee what the noble Lord, Lord McKenzie, also mentioned, which is that the concept of charging was introduced in the 2008 Act.

Parents who can collaborate outside the statutory scheme will be provided with the help and support they require. Correspondingly, an application charge for all provides a clear incentive for parents with care to consider collaboration outside the statutory service, with all the benefits that has for children. Without a financial incentive in the form of an application charge, we risk recreating the CSA caseload we currently have, with parents using it despite ultimately telling us they could collaborate. The evidence is clear that we have a system at the moment where 50 per cent of parents using the CSA believe they could make a collaborative arrangement with the right support.

The ongoing collection charges will promote collaboration both outside and within the statutory scheme, and will create a real incentive in the non-resident parent to pay the parent with care direct, in full and on time. If, under Clause 135, the non-resident parent chooses to use this option, which is known as maintenance direct, neither parent will pay collection charges. Furthermore, the parent with care can be safe in the knowledge that if payments are not made, their case will be brought straight back into the full statutory enforced collection service.

The Government also believe that following the introduction of a demonstrably better future scheme it is fair to ask for a contribution to the costs of what, as I explained in the last debate, is a heavily subsidised service. To reiterate, I mentioned that the cost of a typical CSA case is up to 25,000, and that can rise to 40,000 where we need to take substantial enforcement action. It is a system that on average costs around 40p to move every 1 between parents. Furthermore, we will not start collecting charges until the scheme has been running for at least six months to allow the new system to demonstrate that it is delivering an improved service for parents.

We have had a fairly spirited debate on the principle of charging. However, I hope that noble Lords will reflect on the principles I have described and the assurances I have given. We do not want to return to the days when the state was encouraging parents to blame each other since we know that is the worst thing for children. We have a coherent package of reforms starting from a very different place to the 1993 CSA, and charges have a role to play within it.

I turn now to the questions raised by noble Lords. I shall paraphrase what my noble and learned friend said: "I do not want an adjudication. I just want a test of whether the father will pay". I accept the intentions of my noble and learned friend, but his plan is for a letter to be sent to the father to ask if he will pay outside the scheme. That would be costly and complex. We have over 100,000 applications each year, and the most difficult element is finding the father. Mothers often do not have the father's latest address, and often that is not the father's fault, so importing the trace aspect of the application is costly and complex, and will delay us being able to start to process applications for those who need it most.

My noble and learned friend referred to Henshaw's intentions. The Government agree that we do not want to dissuade those who need it from accessing the scheme. That is why we are carefully considering the level of the charge. But Henshaw was clear in recommending that charging should be introduced to users of the administrative scheme because it,

"would contribute to the objectives of the new system by incentivising private arrangements".

The noble Baroness, Lady Howarth, asked a number of searching questions. She referred to the risk of the non-resident parent demanding contact as a condition of maintenance. That is a key part of what we have been addressing and we agree entirely with her. If a case enters the system we will use data, for example, from HMRC. There will be no need to obtain this direct from the non-resident parent. A calculation will be made based on that data and he will be required to pay, if necessary by order on his bank account or from his benefits. There will be no requirement, particularly for victims of domestic violence, to have any contact or to reveal their contact details.

The noble Baroness asked about the people who take the calls. Advisers will be using training which has been developed with the input of a large number of voluntary and community experts. Self-declaration of domestic violence will be sufficient, and no application charge will need to be paid. The noble Baroness also asks who will arbitrate on whether the non-resident parent has to pay. What I am trying to get across is that there will be no need for arbitration. The non-resident parent will have to pay based on the calculation. She intervened to ask about discretionary decisions. As I have said, there are around 100,000 applications each year and the nature and scale of the judgments are issues which, I am afraid, fundamentally flaw the amendment.

I am grateful to my noble friend Lady Berridge for her intervention, and of course I contend that she is absolutely right. I do this with trepidation, but I ask my noble and learned friend to consider withdrawing his amendment.

Photo of Lord Mackay of Clashfern

Lord Mackay of Clashfern (Conservative)

My Lords, I am grateful to all those who have supported me, as well as to those who have spoken but who have not supported me, of whom the number was fairly small. I pay as strong a tribute as I can to my noble friend Lord De Mauley, who, as I said, has been with me at all the meetings in recent times. The noble Lord, Lord Kirkwood, and I had a meeting with the Minister in the Commons, Maria Miller, way back in July. I intimated then, to the highest level of the Government, that I intended to table this amendment, so there is no question of an ambush or anything of that sort.

I re-emphasise that the question that we are debating is whether the non-resident parent will pay maintenance-that is the only question-and the simple way to find out is to ask him. I do not for a moment want to adjudicate on who is to blame for non-payment-that would be idiotic. Apart from anything else, it would be very difficult, just as it will be difficult to police agreements in domestic violence cases unless the Government kindly accept my amendment as a way of doing it. The amendment proposes a very simple, straightforward way of doing it, because, under it, a factor would be whether it was "appropriate" to make a maintenance agreement.

I thank all noble Lords who have supported me, particularly those who have put their names to my amendment. I thank also my noble friend Lord Newton of Braintree, who made it clear in our discussions with the Secretary of State that many of his views were based on constituency representation, of which I have none. Fortunately, three of my ardent supporters have a great deal of such experience.

I regret that I have no real option but to press the amendment. If one is a supporter of a coalition, as I am thoroughly of this one, one has a duty if there is a slight deviation from the norm to do one's best to bring the situation back on to the correct pathway. It is in that spirit that I invite the House to give its opinion on the amendment.

Division on Amendment 62C

Contents 270; Not-Contents 128.

Amendment 62C agreed.

Division number 2

See full list of votes (From The Public Whip)

Consideration on Report adjourned until not before 8.27 pm.