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Child Maintenance and Other Payments Bill

moved Amendment No. 78: 78: Clause 15, page 7, line 23, at beginning insert— ““(1) Subject to subsection (2),”” The noble Lord said: We now come to what I consider to be an important part of today’s proceedings. These amendments are in concert with Conservative colleagues. I was told this morning—I think that the noble Lord, Lord Skelmersdale, received the same message—that bone fide pressure groups and specialist organisations such as Barnardo’s, the Child Poverty Action Group, Citizens Advice, National Children’s Bureau, the National Council for One Parent Families, Gingerbread and Resolution are all deeply interested in this group of amendments. It is my pleasure to move Amendment No. 78, which is about full maintenance disregards in the new set-up. Before I say anything else about the merits of the amendment, I hope that the Minister will take the opportunity for an update as to when and exactly how Sections 6 and 46 may be abolished. I know that the intention is that it will be by the end of 2008, but that is now looming. If we are to have a staged abolition of Section 6—and I am not sure about that—it is important to notify at least those organisations I have mentioned. They deal, importantly, with clients, trying to advise them and help them through the process of change. If Section 6 is rolled out just for new benefit applicants, what will happen to existing benefit claimants who want to opt out? That may still be being worked on, but we must be careful about how we do it. If it is done the wrong way, and if those clients say that they no longer want child support via the CSA, they could face a reduced benefit direction. I am sure that the Minister is alive to that, but it is the kind of pit that we could easily fall into if we do not plan this properly. If the timetable is not worked out to the nearest week or day, that would not surprise me. However, if anything can be said about the transition towards the end of 2008 to move out of Sections 6 and 46, it would be of assistance to the Committee’s proceedings today. Amendment No. 78 makes the abolition of Section 6 conditional on the introduction of a full maintenance disregard for income support or jobseeker’s allowance means-tested. Obviously, it is a probing amendment. Parliament did rather well in getting the maintenance disregards that it did. The announcements that came in the Pre-Budget Statement were very welcome. I think that 41,000 on benefit under the old scheme will receive the £10 disregard from the end of 2008. It has been increased to £20 thereafter, and £40 from 2010-11 will make a difference. It will drill into some of the more intractable parts of the campaign to eradicate child poverty. There are estimates in the Henshaw report of how many children that could take out of poverty. The case for a full maintenance disregard gets stronger as we go on. We had some important debates earlier in the Committee’s proceedings about how important child poverty is to the public debate, going forward to 2010 and the Government’s eventual abolition target of 2020. Here we have the prospect of a real, tangible, early way of maximising the number of children lifted out of poverty through the child maintenance system that is costed and targeted. Henshaw’s modelling suggested 80,000 or 90,000 children; that is 30,000 or 40,000 on top of the 50,000 in the pre-Budget announcement. That prize is really worth driving for. Even if there is no other reason for adopting a full maintenance disregard, that would be sufficient in itself to make the case. Briefly, I want to mention three or four other things that are pretty obvious but worth restating. It would be a significant incentive to the non-resident parent to pay child maintenance. However, there is a danger that if we get to £40 in 2010-11, it could become the going rate for payment to parents with care and benefit. That, as Professor Parkinson pointed out when he was over a couple of weeks ago, could have the perverse effect of leaving wealthier non-resident parents to benefit if they are making payments to parents with care on benefit, and sticking to the £40 rate when they could be paying more. An incentive effect can be realised from this policy if we seize the opportunity in the Bill. It is cost-effective. Some of the department’s modelling suggests that an extra £90 million, on top of the £140 million already committed, is a significant sum of money. I am not daft; I know this. Comparing the cost per child of lifting people out of poverty against the cost per child of doing the same thing using the tax credits system, my evidence is that child maintenance could lift a child out of poverty for £3,000; it would cost £4,300 with the tax credit system of which the Prime Minister is so enamoured. Full disregard is a cost-effective way as against child tax credits, which seem to be the Government’s favoured mechanism for making future improvements in child poverty. If the Government are thinking of doing that, this is the cost-effective way of getting the same end result. Administrative savings are not insignificant. The current notification and re-notification process within Jobcentre Plus and the Child Support Agency have obviously come across great difficulties in co-ordinating the payments and keeping them up to date as parents with care fall out of work, into benefit and back again. I cannot quantify that, but I know that there will be serious and significant administrative savings in a number of different respects, costs which Jobcentre Plus and the Child Support Agency are stuck with under the current system, complicated as it is. It is not right to use as a defence against a full maintenance disregard that it is a potential work disincentive. A learned article by Professor Alan Marsh, only a quarter of which I understand, may have been put in the Minister’s red box. If it has not, I hope that it will be this weekend; it does not make for happy reading, I can tell you. It is a learned piece of work that certainly persuaded me, as a layman, that work incentives remain strong even when maintenance is fully disregarded. That cannot be fully ignored. That is especially true in looking at the new requirements for parents with care with children aged 7 and over, where they will be expected to look for work as a condition of receiving benefit come 2010. There is a whole host of good reasons for making this case. I would not be surprised if the department was quietly making it to the Treasury itself. This would be a big hit, a real gain, and would launch this new commission with a flourish. It would give everyone a whole lot more enthusiasm in getting it to win over public hearts and minds, and would make a real difference. The Government need every lever available to them to realise the target of halving child poverty by 2010. I do not think that there is any realistic chance of that. I do not believe they can abolish child poverty by 2020, unless they use levers like full maintenance disregards. The case is very compelling. On that basis, I beg to move.