Welfare Reform Bill

Baroness Sherlock Excerpts

Tuesday 14th February 2012 Lords Chamber

[Baroness Sherlock]

My Lords, I remind the House of my interests—which are in the Register—as a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of One Parent Families. I feel that I need to place on the record, irrespective of what the amendments’ movers decide to do, a response to the argument that the Minister has made today.

This House voted decisively in favour of a previous Motion; indeed, as we left the Chamber that day, I heard a Conservative Peer express a complaint to the noble and learned Lord, Lord Mackay of Clashfern, that he just had stolen his record for the biggest ever defeat inflicted on the Government. It was a very big defeat indeed. So what has changed? The Minister has told us, first, that single parents get a lot of money from the state so it is not unreasonable to expect them to pay to use the CSA; secondly, that when the CSA was introduced, all the money went to the Treasury, whereas it now goes to the children, so the situation is different and parents should pay for it; and, finally, that charging is needed to deter parents from using the CSA when they can perfectly well make their own arrangements.

Allow me briefly to pick off each of those arguments. In the first case, yes, it is true that many lone parents get lots of money from the state. However, could the Minister tell the House what proportion of those lone parents who use the CSA are on out-of-work benefits? The briefing that I received from Gingerbread told me that the figure is 30 per cent, so 70 per cent of lone parents using the CSA are in fact in work. How does the distribution of that work? Are some people getting most of the money from the state and another in-work, poor, low-paid, low-income group making the payments? They may be a large group, but they may not be the same people.

Secondly, it is worth saying that when the CSA was introduced, the Government of the day made a decision that if somebody was on benefit, all the money would go directly to the state. However, it is my understanding that child maintenance has always been ignored for tax credits purposes and that a similar rule was introduced for out-of-work benefits in 2008. So there is a very clear, established principle that out-of-work benefit should not be treated in the same way, and the very good reason for that was that it was a dual measure to tackle poverty and encourage work.

Finally, it is argued that charging is needed to deter lone parents from using the CSA when they could perfectly well make their own arrangements. The problem is that the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, is targeted specifically at those lone parents who cannot make those arrangements because their former partner will not co-operate. It is designed precisely for those people who are not able to do the very thing that the Minister wants them to do. That leaves a position of rather rough justice. Those people must pay the price to enable the Minister to encourage other people to make their own arrangements when they can.

I am a new girl around here and do not even pretend to understand how financial privilege works—having listened to some of today’s debate, I am frankly none the wiser. But the one thing that I do know about is the amount of money involved. The Minister has said that he would expect to save only between £50 million and £100 million over a period which I am afraid I did not write down quickly enough. I would be grateful if he could explain to us what he thinks he will bring in on a recurrent basis in a year. Will he also tell us what savings the Government expect to make in their running costs as a result of deterring parents from the system in the first place? This is very important, because there is a nasty suspicion out there, as I seem to recall mentioning in Committee, that the Government’s main objective is not to raise revenue from parents but to save money by driving people out of the system. Let us suppose that that were to work; let us suppose that the effect were that far fewer people used the CSA. If a significant number of those make no arrangements at all, is there not a broader cost to society? Is there not a moral hazard question? Have we not moved into a position which the CSA was designed to address? Are we saying to people, “I’m sorry, you may leave your partner, but you may not leave your children and the state expects you to pay up”? Is there not a price to that, too?

[Baroness Anelay of St Johns]

My Lords, I hesitate to interrupt at this point and it is extremely unusual to do so. I do so with no hostile intent. There has been extremely generous use of time today on the important subject of the Welfare Reform Bill, on which some progress has been made. The generous time taken by the House on this matter, when we knew that the Scotland Bill had been programmed to start after it, has put those who have been waiting some time for the Scotland Bill in some difficulty. I know that the whole House will apologise to colleagues who have been waiting.

I have had a discussion in usual channels and it has been thought a better way of treating those who are awaiting the Scotland Bill to announce now that it would be better if the business on Scotland did not proceed this evening but continued as scheduled on Tuesday 28 February. Therefore, once the business on the Welfare Reform Bill has concluded, the House will rise. I know that, with the help of the Clerk of Parliaments, that information will be put on the annunciator. I apologise again for intervening at this stage.