Welfare Reform Bill

Malcolm Wicks Excerpts

Wednesday 1st February 2012 Commons Chamber

[Maria Miller]

As Mr Speaker has indicated, Lords amendments 1, 2, 3, 4, 26 and 73 impinge on the financial privileges of the House of Commons. In disagreeing to the amendments, I will ask the Reasons Committee to ascribe financial privilege as the reason to the House of Lords. Notwithstanding that, however, the House of Commons has an opportunity to debate the substance of the amendments, and to provide the Government’s full rationale for rejecting them,

Lords amendment 1 concerns elements for disabled children. Let us be clear about the impact of the amendment. It would force the Government to reduce support for severely disabled children and, moreover, would go against our commitment to increase support for such children to £77. I believe that our original policy, as agreed in this House, is the right one, because it targets support for disabled people not on age but on need, and removes the cliff edge of financial support that is currently faced by young adults and their families.

In these difficult times, we must make tough choices about where to target our limited resources. The choice that the Government have made is to protect the money that is available to support disabled people in universal credit, and to use it more effectively to ensure that the people who face the biggest challenge are given more support. I repeat that all the money is recycled to support disabled people. What we are doing is thinking about the whole life of an individual, and removing the current artificial division between childhood and adulthood. I hope that that reassures my right hon. Friend the Member for Wokingham (Mr Redwood), who spoke earlier about the importance of supporting disabled people. We have ensured that we can protect the money that is so important to them.

As we have reiterated throughout our debates on the Bill, we are overhauling existing support. It does not really make sense to look at any one aspect of universal credit in isolation: it provides families with a new package of support to meet a range of needs, and for that reason we need to consider the overall impact of the offer rather than concentrating on any of its individual components.

A parent with a disabled child and who is working 20 hours a week on the minimum wage is likely to be £73 better off in work under universal credit, rather than only £13 better off under tax credits. About 30,000 more families with a disabled child are in work than are out of work, so it is right for us to target support in a way that helps working families. An out-of-work family with a disabled child can receive just over £8,000 a year in benefits for their child once universal credit has been introduced. That compares with just over £4,000 for an out-of-work family with a non-disabled child, and about £1,000 for a family who only receive child benefit. Our impact assessments and modelling demonstrate that, overall, families are more likely to be better off on universal credit, and that there will be no significant change for disabled children living in poverty.

As all Members know, increasing spending is not an option. We simply cannot maintain the existing rates for disabled children if we are to increase the rates for severely disabled adults. That would cost £200 million, which we simply cannot afford. This is a critical point. If the amendment were agreed to, it would not be possible to increase the addition for the most severely disabled people to £77. Let us be clear: the decision to be made is whether we should maintain rates for moderately disabled children at the expense of raising the limits for severely disabled people. We strongly believe that the fairest approach is to align support between children and adults. We take an holistic view of an individual’s life. In summary, what is fair and right is to simplify benefits within universal credit, and to focus limited resources on the basis of need, not age.

Let me now turn to the amendments that deal with child maintenance:

“we should use every lever at our disposal to make reaching a voluntary agreement more attractive than coming into the Child-Maintenance Enforcement Commission.”

Those are not my words, but those of the former Secretary of State for Work and Pensions, now Lord, Hutton, to a Select Committee of this House in 2006.

Let me make four brief points to put the debate in context. Conflict when families break down is bad for children, as we all know from our constituency casework, and we all know that all too often that conflict can be embedded and entrenched as a result of problems to do with the Child Support Agency.

The role of the Child Maintenance and Enforcement Commission has changed fundamentally. It is no longer about recovering, pound for pound, the benefits payments made to lone parents. Instead we have a benefits system that gives more than £6.5 billion in welfare payments directly to lone parents, both those in work and those not in work. In the past, change has been piecemeal. That has created the current failing system, which costs taxpayers £500 million every year; has nil-assessed more than 250,000 people, some of whom really should be receiving support; and has 100,000 clerical cases. It would not be putting it too strongly to say that we have inherited a real mess from the Labour party. The reform that we are undertaking is long overdue.

My concern is that the amendment from the other place is not about improving the situation; if anything, it would make the situation worse. It is about attempting to divide parents into those who deserve to be charged, and those who do not. Our reforms are about creating a behavioural change for the benefit of children, and about helping parents to work together. The amendment from the other place would make that approach unworkable.

[Malcolm Wicks (Croydon North) (Lab)]

I have been listening carefully to what the Minister has to say. This is complex territory that has bewildered previous Conservative Governments and, frankly, the Labour Government. Will she tell the House how many parents with care do not receive any child maintenance from the other party?

[Maria Miller]

I can tell the right hon. Gentleman how many children do not receive any maintenance from the other party. Given that we spend £500 million a year on a child maintenance system, I think that it will shock the House to learn that for half of children living in separated families, there is no support in place. It is clear for everybody to see that the present system simply does not work, and the reason why it does not work is that it does not support families in coming together.

--- Later in debate ---

[Malcolm Wicks]

It is a pleasure to follow the hon. Member for Brigg and Goole (Andrew Percy), and I shall echo some of his remarks on the child maintenance charge.

I have been privileged to be a Member for 20 years, and I have noted that the issue of child maintenance and child support has been a running controversy and a running sore through Parliament and Government during that whole period. I shall briefly remind the House of the background. While there have, of course, always been children in this and similar countries brought up by only one parent—war widows after the first world war would be an obvious example—it is nevertheless true that in the post-war period there has been a kind of social revolution whereby very significant numbers of children spend either a proportion or all of their childhoods living—usually with their mum but sometimes, in a minority of cases, with their father—in so-called one-parent families. That is about divorce, which remains at a high level; it is about separation—and cohabitation is more likely to lead to separation than marriage; it is about the fact that many children are born “out of wedlock”, to use a quaint term, and live with a single mother.

This has been a major contributory cause to what we call child poverty, which interfaces with economic insecurity. I think that Parliaments and Governments have found it more difficult to grapple with and honestly discuss family insecurity than economic insecurity caused by low wages or unemployment. As I say, Governments have found it difficult. The old maintenance system, which was run by the courts, did not work: it delivered low levels of maintenance or no maintenance to many mothers and children.

The previous Conservative Government established the Child Support Agency—I think they were right to do so—but many former Conservative Ministers bear the scars of trying to make it work. They did not make it work effectively for all children. That was not because of incompetence—there were computer problems and the rest—but because this is one of the most difficult areas of government. It is the state—perfectly properly, in my judgment—trying to mediate during the pain, anger and passions of family breakdown, when issues of access and custody are also present. Although the old Child Support Agency had some successes, it never succeeded in getting maintenance from those fathers—yes, I know, sometimes mothers, but I am going to talk about fathers—who absolutely refused to fulfil their parental obligation and support their own children.

The last Labour Government tried to improve the situation and they might have done to some extent, but if we are honest about this—I am not normally one who tries to take the politics out of politics; otherwise I would have to join the Liberal Democrat party—some humility is justified in this case. For getting on for 20 years, Governments of left and right have failed to tackle this issue adequately. We really need to point again at the sheer scandal of there being too many parents out there who refuse to support their own children financially. That is the reality.

When I intervened on the Minister—it was good of her to give me the statistics—she said that among these families half, fully half, are not receiving child maintenance. What does that mean? It means either that the children are living in relative poverty and/or that other mums and dads in the community, whom we call taxpayers, are being asked in difficult economic circumstances to support not only their own children but other people’s children as well. What I am leading up to is to ask whether the idea of a charge to be able to use the system helps or hinders that process.

I do not think I am against a charge per se. Given that taxpayers have a stake in this, as well as, usually, the mother or “the parent with care” to use the awful jargon, and the child—they are the parties that have an interest in this—I am not against the taxpayer in a sense benefiting through proper payment of maintenance. We could discuss how that might come about; but if there is to be a charge, as was argued by my right hon. Friend the Member for Birkenhead (Mr Field), why should it not be levied when the flows of maintenance are coming to the mother and benefiting the child? Why should a fee be charged immediately rather than later in the process? I think that many Members would agree with that, but perhaps the Minister would like to comment.

[Maria Miller]

I thank the right hon. Gentleman for allowing me to answer his question. Fees and charges have been inherent in the child maintenance system from the start, since 1991. As he knows, his own party advocated the use of fees when it was in government, as indeed did Sir David Henshaw. Why? Because charging fees is a way of trying to get people to take responsibility. If that is done up front before an individual gets into the system, we are more likely to effect the behavioural change that I think is so important.

[Malcolm Wicks]

In general, it is the mothers of Britain—sometimes it is the fathers with care, but it is generally the mothers—who have taken on huge responsibilities. It is the parent who does not pay who is the irresponsible party, and who reneges on his duty to care for his own children. I want a system that can be tough-minded about the fathers who refuse to pay. They are often self-employed, and have become deliberately self-employed. The mothers often know where they live. A mother will have heard about the new person in the father’s life, about the fancy car outside the house, about the foreign holidays—yet the system has failed to make those fathers pay. Let me put the question to the Minister again. Will a charge help in those circumstances?

Many mums will know that the Child Support Agency, or whatever we choose to call it, does not work. We want to make it work, but people say, “My friends didn’t get anywhere.” Only recently I discussed with the Secretary of State the case of one of my constituents who, throughout the lifetime of four children, never received any maintenance. That person thinks that the system does not work. I want it to work, but if some mothers are deterred from using the system, it will be a failure.

This should not be a big party issue, and I hope that the Department will reflect again on when the charge might be levied.

[Mr Peter Lilley (Hitchin and Harpenden) (Con)]

I support my hon. Friend the Minister on the issue of the Child Support Agency, but I want to make a brief observation on the housing benefit issue. My constituency might be wholly different from those of the Members who have spoke so far, but the overwhelming majority of the cases I deal with at my surgery involve people who want additional rooms because they have growing families or families who are becoming older. If this charge causes some people to want to downsize, that will help to strike a balance, but at present I do not encounter people who want to downsize.