HC Deb 11 January 2000 vol 342 cc150-247

[Relevant documents: The Tenth Report from the Social Security Committee of Session 1998–99 on The 1999 Child Support White Paper (HC 798) and the Government's Response thereto (Cm 4536).]

Order for Second Reading read.

Madam Speaker

I should inform the House that I have selected the amendment in the name of the Leader of the House—I am sorry, in the name of the Leader of the Opposition. I regret to say that Back-Bench speeches are limited to 15 minutes today, as demand to speak is so great.

3.41 pm
The Secretary of State for Social Security (Mr. Alistair Darling)

I beg to move, That the Bill be now read a Second time.

It gives me great comfort to know that my right hon. Friend the Leader of the House has not tabled an amendment to the Bill.

The Bill takes welfare reform a stage further by introducing reforms in three key areas. First, it tackles the inherited mess of child support and will help more than 1 million children who miss out on the help that they should get. Secondly, the Bill strengthens the links between the benefits that people receive and their debts to society, and provides for new action to reinforce community sentences. Thirdly, it introduces the second stage of our pension reforms, which will help more than 14 million people—the low paid, carers and others who have lost out in the past.

The Bill contains several other measures, including changes that will bring the war pensions appeals system up to date and toughen fraud inspectors' powers. They all build on reforms that have been made since the election, and promote opportunity, reduce dependency and provide greater security—in short, everything that a modern welfare state should do.

We are determined to ensure that children get the best possible start in life. We are the first Government to be committed to eradicating child poverty in a generation and to halving it in 10 years. We are determined to end the scandal of child poverty, which wrote off a whole generation of children who were born at the wrong time in the wrong place under a Tory Government. Reforming the Child Support Agency will help to achieve that.

We are also committed to making work pay, getting more than 125,000 young people off dependency and into work through the new deal and tightening the benefit system to stop abuse. The Bill takes that a step further. We are also tackling another Tory legacy—pensioner poverty—today and in future with long-term reforms to the pension system.

I want to focus on the three main reforms: child support, community punishments and pensions. However, I shall, of course, be happy to answer questions on other measure in the Bill. First I shall speak about our reforms in part I of the Bill to sort out the CSA. Our starting point is that the primary responsibility for looking after children lies squarely with both parents, whether they live together or apart. The Government have to ensure that, when parents live apart there is an effective system of child support in place. That is not the case at the moment. We must ensure that the child support system makes sure that children get the support to which they are entitled and on which they depend.

The current system has failed children. The agency spends 90 per cent. of its time chasing information and only 10 per cent. ensuring that money gets through. Consequently, only 300,000 of the 1.5 million children on the agency's books gain from maintenance paid; only 100,000 receive all the money that is due to them. It is worth bearing in mind that by 2004 we reckon that 2 million children will be on the CSA books.

Under the new system that we propose, mothers and their children—it is usually mothers, though not exclusively so—will get what they are due, and quickly. The system that we inherited is also failing those parents who live apart from their children but want to support them. As hon. Members will know, the agency often needs so much information to work out how much is due that it can take months before a decision is made. As a result, parents can face huge debts through no fault of their own. Our reforms will change all that and, as a result, more than 1 million children who miss out today will receive help.

Mr. Eric Illsley (Barnsley, Central)

I am most grateful to my right hon. Friend for giving way so early in his speech. During consideration of the Bill, and particularly in Committee, will he look at perhaps giving the CSA powers to investigate fraud, which could improve its decision-making process? As I understand it, the agency has no such powers and investigations have to be passed to the Benefits Agency, which leads to breakdowns in communication and certain delays. I am sure that the agency's situation would improve if it were given those powers.

Mr. Darling

I am well aware of that problem and we shall introduce through the Bill the power to appoint inspectors to investigate cases in general. Under the present system, if there are complaints about a case, uncertainties or suspected wrongdoing we have to appoint an inspector who is designated to a particular case. That takes time. We propose to designate inspectors who shall have general powers to investigate suspected wrongdoing and see whether anything needs to be done. With regard to fraud, it should be borne in mind that the Department of Social Security and its agencies ought to operate far more closely together, which I have been encouraging. I want to avoid having several different fraud arms, because fraud is a specialist field, but I am mindful of the point made by my hon. Friend. The whole system will depend on us being able to fix and pay the right amount quickly, so we do not want delays involving papers being passed from office to office. The new powers to appoint inspectors to look at individual cases will go some way to dealing with that.

Before I deal with our proposals, I want to deal with the Liberals and the lawyers, if I may put it that way, who want us to go back to the courts. I speak as someone who practised in the courts and has some experience in this area. It is important to dispose of this matter once and for all. Those of us who have worked in the divorce courts know that going back to the courts is not the answer. It is worth bearing in mind that in 1979—to take a date at random—slightly more than half lone parents on income support received maintenance. The rest did not. By 1990, the courts were getting money to less than half that figure. Those of us who have worked in the courts will know that decisions are often unpredictable, unreliable and unfair.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

They still are.

Mr. Darling

The hon. Gentleman says that they still are, but it is Liberal policy to go back to the courts, which is absolute nonsense. Certainly in my experience, income support, like rock bands, was something that judges did not know much about. The result was that those who were arguing on behalf of a client on income support were frequently met with a completely blank expression from the person on the Bench, who had not a clue what they were talking about because the numbers were so small. He did not recognise that such numbers could possibly exist.

Dr. Norman A. Godman (Greenock and Inverclyde)

My right hon. Friend is looking for a temporary sheriff's job.

Mr. Darling

I do not think that I want to be a temporary sheriff. The important point is that going back to the courts would not only resurrect unfairness and all those uncertainties, but would cost £800 million a year—a fourfold increase in the cost of running the CSA. I do not know whether the Liberals have thought about that policy, but I should point out to them that the cost of going back to the courts would eat up almost half the extra penny on income tax that they want to raise, allegedly for improving education. I understand the lawyers' interest in the point, but if the Liberals seriously want to go back to the courts they have to reflect on the fact that putting 1 million cases into the court system would not only involve a cost, but would completely jam the system. That would prejudice the interests of not only children, but the whole civil and criminal justice system. I do not believe that their policy has any credibility whatever.

Dr. Godman


Miss Anne McIntosh (Vale of York)


Mr. Darling

I shall give way to my hon. Friend the Member for Greenock and Inverclyde (Dr. Godman) and then to the hon. Member for Vale of York (Miss McIntosh).

Dr. Godman

I welcome the provisions of clause 10, but may I ask whether the Government intend to extend legal aid to child support appeal tribunals? What is the point of an appeals system if adequate representation is not possible?

Mr. Darling

My hon. Friend will not be surprised to learn that the Government do not intend to extend legal aid to the tribunals. The tribunal system is there, and it works. When it was established, the idea was to try to keep lawyers out of it. We hope that, by simplifying the system, we can substantially reduce the number of people who want to go to tribunals, and thus make the system fairer.

I shall stop knocking lawyers now, as one day I may wish to practise in the courts again.

Miss McIntosh

I come from the same legal system as the Secretary of State, although I may not have the same breadth of experience. Does he agree that, before 1979, the courts often found solutions to the problems involved in further settlements following divorce faster than the CSA, and that, moreover, the CSA has failed in its first duty to find lost parents who are not known to it?

Mr. Darling

The hon. Lady has raised a number of points. I do not agree that the courts always found a solution faster; it is true that an interim solution could be found, but it was not always satisfactory.

The hon. Lady is right—and this lies at the heart of what is currently wrong with the CSA—in saying that, in too many instances, it takes months to calculate the money that is due. That causes arrears to build up—often through no fault of their own—for parents living away from home, and meanwhile the children do not receive any money. The problem of absent parents can be a problem in the courts as well as the CSA, although I hope that the additional powers that we are giving the CSA will help.

The hon. Lady brings me to the central point of the Bill. It will abolish the existing complex formula, and introduce a much simpler rate and far more predictable decisions. There is already a reckoner on the back of the White Paper enabling people to calculate easily how much will be due to them. Decisions will be made within days rather than months of an application. The idea is that, once the amount has been fixed, the absent parent can be told how much is due. The money will start flowing faster, and everyone will know where they stand.

Mr. Ian Bruce (South Dorset)

I favour the prescribing of a fixed amount, but is not the Secretary of State misdirecting himself? The current problem with the CSA is not the arithmetic, but establishing an individual's income, along with that individual's willingness to be constantly reassessed and his unwillingness to pay what strikes him as an unreasonable amount.

Mr. Darling

The arithmetic is certainly part of the problem. At present, it is necessary to take into account not just income but a number of allowances and disregards, and several other factors, before deciding on a figure. Because about 100 items of information are needed, two things can happen. Even in the case of the most willing parent, circumstances can change before the calculation is made. Moreover, a parent who is simply stringing the agency—and, more important, the child—along can delay, or refuse to hand over certain bits of information.

I do not know exactly what the hon. Gentleman is proposing with regard to fixed charges. If I misunderstood him, my right hon. Friend the Minister of State will deal with his point when he winds up the debate; but I think that a fixed amount would be grossly unfair. Children are entitled to share in their parents' income, and it would be wrong to allow those who are earning a good deal of money to pay a flat rate when they could well afford to pay more.

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)


Mr. Nicholas Winterton (Macclesfield)


Mr. Darling

I seem to have got one or two hon. Members excited. I shall give way first to the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd).

Mr. Llwyd

I have no brief to defend the lawyers, although I am a lawyer myself, but may I ask a simple question? What measures does the Bill contain to tie down the unscrupulous absent parent who is self-employed and does not want to play ball?

Mr. Darling

The hon. Gentleman will be aware that we are taking powers to get access to the Inland Revenue records of a self-employed person who refuses to tell us how much he is earning. Clearly, we will not want to do that routinely, but we all have constituents who tell us that they are getting absolutely nothing while the self-employed absent parent can be seen driving around the town and living an opulent life. That will stop under the new system.

As the House is more than just a gathering of lawyers, I give way to the hon. Member for Macclesfield (Mr. Winterton).

Mr. Nicholas Winterton

I am not a lawyer, but I want to ask a straightforward question. The Secretary of State has talked about most parents being interested in their children. How many parents who divorce or separate are not prepared to work out together what is in the best interests of their child by way of maintenance? We are setting up a new panoply of bureaucracy when quite a large percentage of people would be prepared to enter into an arrangement to support their children.

Mr. Darling

The answer to the hon. Gentleman's straight question is that just under one third of absent parents refuse to co-operate with the agency; usually, they are fathers. In an ideal world, all separating couples would come to an agreement because that is in the best interests of their children. With regard to the rest of the case load, Members will be familiar with the phenomenon where people, because of other things that are going on, will not co-operate at the start, but gradually co-operate later.

I disagree with the hon. Member for Macclesfield on one point: far from creating a great bureaucracy, we are simplifying the present bureaucracy, so that the agency will need to know only who is the absent parent and how much that person earns. It will do the calculation—the amount will be 15, 20 or 25 per cent. of income, depending on the number of children and whether those children are in a second family. Then it can say that that is the amount that the absent parent is due to pay. Absent parents should enter into the agreement immediately. If they do not stick to it, one strike and they are out. We will deduct the money from their wages.

The system will be much simpler. If we can get rid of all the hassle and opportunities for ducking and dodging, many people who are fighting a completely different fight with their former husband or wife will have their minds concentrated on the fact that the CSA can now fix the amount due quickly and get that money paid.

Mrs. Gwyneth Dunwoody (Crewe and Nantwich)

That is good news to many people who are concerned, but one thing still concerns me. Will the agency have powers physically to trace someone who is consciously trying to evade being found? I know that the Department says frequently that that is not the agency's function, but there is nothing worse than one parent spending a lot of time finding out where the ex-partner is, only to be told that the agency does not have the power to follow that up. It happens far too often.

Mr. Darling

I am aware of the problems. I have a constituency case where that has happened. I am not sure that the agency needs additional powers to find someone. In that case and others that have been raised in right hon. and hon. Members' correspondence with me, the mother has said where the absent father lives and where the bank account is. Several months elapse before anything happens, by which time he has cleaned out the bank account or pushed off.

The key is to get things moving quickly. If a bank is after someone because that person owes it money, it does not hang about. One of the things that we have done with the CSA is to bring in the private sector to give it far more experience in debt management and collection of money. The CSA was bad at collecting debts.

If in Committee—I make the point generally; it is important that we as a whole House get it right—right hon. and hon. Members have suggestions, or amendments that would make things better, and if there is a gap in the CSA's powers, we will be prepared to look at the matter. The problem with the CSA has been that, from the start, it was swamped with a work load that it could not deal with and a system that was pretty unworkable. It is a great tribute to the CSA chief executive and the staff that, over the past few years, they have made improvements despite the odds, but the key is to work quickly with a simple formula.

Mr. Michael Connarty (Falkirk, East)

Currently, the CSA often says to the parent with care, "If you think that there is fraud, prove it", and asks that parent to produce evidence. Will the system be changed so that, when there is an allegation of fraud and some evidence is produced, the CSA will follow up the matter, find the necessary evidence and ensure that the correct money goes to the child, who is the one who deserves it?

Mr. Darling

All I shall say about fraud—this applies right across the system—is that the CSA and other agencies have to have some prima facie evidence of it. In the Department of Social Security generally, we are also aware that accusations of fraud are often made as part of wider disputes. We therefore have to be careful that the agency has some credible information before it proceeds. My hon. Friend's point is that we must end the days when the agency is given information, but, months later, although it is common ground that it had that information, it has done nothing about it. We are taking action to ensure that such delays are being cut out. In the new system, it will also be very much easier to pursue such cases than it was in the past.

The second important change that we are making is to ensure that people on income support realise the benefit of the maintenance that they receive. Consequently, we have introduced the £10 disregard. It is important not only that people should have an incentive to co-operate with the agency, but that they should realise some benefit for it.

If the mother goes into work, she will not only receive working families tax credit, but keep every penny of it as well as the maintenance disregard. A typical person on working families tax credit should therefore receive about £24 a week extra, plus their £10 disregard, so that they will be considerably better off. It is all part of the Government's twin strategy of not only tackling child poverty, but ensuring that work pays, to encourage people to get into work.

Mr. Vernon Coaker (Gedling)

My right hon. Friend's statement will be welcomed across the country, and by all hon. Members, who constantly deal with the type of cases that he has been describing. Occasionally, however, we introduce disregards that have unforeseen impacts. Will he therefore examine possible interactions between maintenance payments and housing benefit, council tax benefit and all the other benefits?

Mr. Darling

As my hon. Friend knows, we are on the case. The working families tax credit went a long way towards reducing the tapers and disincentives that we inherited. We have already announced that we are examining the way in which housing benefit operates; it is a separate matter in itself, and affects not only maintenance but other benefits and many incentives.

A few moments ago, hon. Members were asking about parents who do not pay. In reply to the hon. Member for Macclesfield, I noted that 30 per cent. of parents on the CSA's books pay nothing at all. I should take this opportunity to outline some of the actions that we are proposing and that I believe will help.

First, when parents wilfully withhold information or lie to the CSA, they will face fines of up to £1,000. That is not a first resort, and they will be given a chance to co-operate. However, we cannot put up with a situation in which people are withholding information and we cannot process their claims. We should remember that, ultimately, the children—not the mother or the father—are the ones who are losing out. We shall therefore take those new powers.

As I said earlier, we shall also take new powers to appoint new specialist inspectors, not only to obtain information from individuals, but—if necessary, when we cannot obtain information voluntarily—to obtain information from employers and the self-employed. As I said, we shall also take powers to gain access to the Inland Revenue.

We can introduce those powers before the establishment of the new system, about which I shall say something shortly. The Government believe that if Parliament gives us those powers, we should take them now to tackle some of the problems that we are all too familiar with.

Miss Julie Kirkbride (Bromsgrove)

Yesterday, I spoke with a constituent who is owed £28,000 by her former husband, who is almost certainly a millionaire, but who has absconded to America. She has been told by the CSA that she cannot claim that money against any assets—which she believes are still in his name—that he might hold in the United Kingdom. Will the Government consider ensuring that, once they have been established, the debts of those who have left the country are chargeable against assets that they hold in the United Kingdom?

Mr. Darling

If the hon. Lady writes to me with the details of the case, I shall be happy to reply. Clearly, the points of principle that she raised can be explored in Committee, although we would not divulge the name of her constituent. The rules on recovering someone's assets are part of the general law on the recovery of debts. Nothing in the Bill directly impacts on that. As I said to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody), I am prepared to look at any suggestions that would tighten things up. However, we need to be realistic. Changing the CSA will not resolve all the problems, although I hope that we can address a substantial number of them.

Mr. John Bercow (Buckingham)

Will the Secretary of State give way?

Mr. Darling

I suppose so.

Mr. Bercow

I am very grateful to the Secretary of State for giving way in his characteristically gracious manner. Does he recall that I raised previously with the Under-Secretary of State for Social Security, the hon. Member for Wallasey (Angela Eagle), in the context of a constituent, the important issue of establishing parentage? I have perused clauses 14 and 61. Can the right hon. Gentleman guarantee that from now on, in every case where an individual is willing to have a DNA test to prove parentage—or more particularly to prove non-parentage—he will be able to do so? It is a matter of the utmost importance to a constituent of mine.

Mr. Darling

I do not see why anyone who is willing to undergo a DNA test should have any difficulty in doing so, as that would put beyond doubt whether or not he was the father of a particular child. Another change in the Bill is that if two people were married to each other when a child was born, the husband is presumed to be the father of that child. That simply extends the provision that applies to Scotland, but for some reason did not apply to the rest of the United Kingdom. Where there is any doubt—

Mr. Bercow

Can such people insist on a DNA test?

Mr. Darling

Yes. The whole point of DNA testing is to put the matter beyond doubt once and for all.

We are taking powers that can be applied earlier to ensure that we can deal with people who insist on being difficult. When someone deliberately delays paying money to their children, we will impose a new penalty of up to 25 per cent. of the money due until they pay. We are also taking powers to make a temporary arrangement when there is difficulty in getting information from people. As a last resort, if someone will not co-operate, the courts will be given the power to imprison them and, at the court's discretion, to remove their driving licences.

The measures that we are proposing will double the number of families on income support getting maintenance. As a result, some 600,000 children in the poorest families will benefit from maintenance for the first time.

Sir Robert Smith (West Aberdeenshire and Kincardine)

Will the powers in relation to establishing parentage be used by the CSA even if there is no money to be collected? One obvious concern is to make it quite clear for future planning who the two parents responsible are, but the CSA seems to be saying that if there is no likelihood of gaining money from the suspected father, it is not interested in making the case a priority.

Mr. Darling

There will be money to collect unless the father is a student or a prisoner. Under the new system, everyone has to pay something to their children, so it will be worthwhile on a point of principle for the CSA to pursue these people.

Let me say a brief word about timing, which is a matter of concern to all hon. Members. We all agree that the need for reform is urgent. The CSA is already making progress within the constraints of the present system, but there is also widespread agreement across the House that we do not want to repeat the mistakes that were made in the 1990s. When the CSA was set up, it took on the entire case load and collapsed under the weight. To do that again would be absolutely disastrous. It is worth bearing in mind that the CSA has nearly 1 million cases on its books and deals with some 400,000 new cases a year. We are determined not to introduce the reforms before everything is in place. It is a large task. It is not just about new legislation but involves new information technology and significant changes to the way in which the agency works.

The agency's case load increased by some 80 per cent. over the past few years, so I want to ensure that we get the reforms right. I want them in place as quickly as possible, but no one would want us to introduce the new system if we were not satisfied that it would work from the start. If we did, we would revisit all the problems that arose in the past.

In the meantime, we have invested an additional £28 million in the system. As I said, we brought in the private sector to help to improve debt recovery, we are making more use of the telephone, the CSA is open longer, including at the weekends and in the evenings, and staff will meet people in the privacy of their own homes. We are now providing a nationwide framework of nearly 500 staff who can see people in face-to-face interviews. Shortly, the agency will also introduce statements that set out what has been paid and what is still due, which many people will find useful—not least hon. Members.

Mr. Andrew Rowe (Faversham and Mid-Kent)

One of the more chilling aspects of the explanatory notes to the Bill is the information that the CSA will shortly have a new computer system. I sat on the Public Accounts Committee long enough to understand that the installation of new computer systems in Departments has been an almost unmitigated disaster. May we have the Secretary of State's absolute assurance that he will ensure that the new computer system improves matters rather than making them worse?

Mr. Darling

I certainly did not regard the information that we will have a new computer system as chilling, because I was more optimistic about it. Having been Secretary of State for Social Security for some 18 months, I assure the hon. Gentleman that I regard computers in much the same way as he does. Given the experience of Government procurement of computers, in my Department and elsewhere, I am determined that we should replace the entire Department computing system—it is antiquated and, in the middle of the next decade, spare parts for it will no longer be available—in manageable bits and so that one part of the system does not depend on another part to work. The problem with the plans that we inherited was that if one part of the system collapsed, it would bring down the rest. Such attitudes led to all the problems with NIRS2 and the benefit payment card.

We are negotiating with EDS and the consortium that it leads to procure a new computer system for the CSA. We have spent some time doing so, because we want to ensure that the contract is right. It is due to be delivered towards the end of 2001, but I want to ensure that it actually works before we switch it on and transfer the new cases, let alone the old ones, to it. The hon. Member for Faversham and Mid-Kent (Mr. Rowe) can take it from me that I have had enough experience of NIRS2 and the failed benefit payment card to be very wary of the procurement of computers.

Mr. David Chaytor (Bury, North)

My predecessor as Member for Bury, North was the Minister in the former regime who was responsible for implementing the CSA, so I have followed the issue carefully over the past three or four years. Under the new system, will my right hon. Friend be able to ensure that people who approach the CSA are given a named official who will progress their cases? We all know of the terrible bureaucracy that dogged the agency under the old regime, but one of the most frequent complaints from constituents is that they never know to whom they are talking. Can a named official be guaranteed under the new system? It is not a point that can be easily pursued through primary legislation, but I hope that he can ensure that the CSA will give the highest priority to projecting a human face to those who contact them. Many improvements have been made in the past two years, but there is still some way to go.

Mr. Darling

My hon. Friend makes a good point and we wish to encourage such an approach now, as well as in the future. It is much better for everyone concerned if people can speak to someone who knows their case and they do not have to go over old ground time and again. When we have the new computer system, it will be much easier because staff will be able to call up on screen everything that they need to know about an individual. Anyone who has ever inspected bank or building society computer systems will know how a good system can work. Everything about a customer is on the screen and it is much easier to give advice. If a member of staff goes on holiday, his or her replacement knows to whom the caller spoke the previous week, and what the position is with the case. I do not want to be too optimistic about the time scale, but we are trying to start the process now, even within the constraints of the present system.

Mr. Tim Boswell (Daventry)

Will the Secretary of State give way?

Mr. Darling

Yes, but then I must make some progress. I am conscious that Madam Speaker is frowning even now. This is the last intervention that I shall take for 15 minutes.

Mr. Boswell

I am very grateful, but my question follows on from the previous one. Will the right hon. Gentleman bear in mind the importance of ensuring that the same named official deals with both sides of a particular case? Many hon. Members will be familiar with instances when, although both parties live in the same constituency, the CSA appears not to have integrated its consideration of the circumstances of the case. The result is that two CSA officials do not talk to each other about the same information.

Mr. Darling

If it is possible to do what the hon. Gentleman suggests, I shall, and his proposal is certainly worth considering.

Before I leave the child support system, I reiterate the general point that I think that this is the last chance for the CSA. It is important that we get this matter right, and so the Government will listen to suggestions, in Committee and on Report, from hon. Members in all parties. I do not know the Conservative party's attitude to this part of the Bill, but no doubt I shall find out. However, if improvements can be made to the Bill or to procedures, we are open to considering them.

I turn now to community punishments, and to the state second pension. I shall deal first with community punishments, which are covered in part III.

The first, brief, point to be made is that there is no unconditional right to benefit. Rights are matched by responsibilities. At present, one in five offenders given community sentences is brought before the courts for failing to comply with the requirements of the sentence. We simply cannot allow that to continue, as those people break their side of the bargain but still claim benefits. I do not believe it right that a community punishment should be regarded as a one-way bet, in which people can do what they want while expecting everyone else to pay for their benefit.

We propose that benefit will be either withdrawn or reduced for offenders referred back to court by the probation service for breaching their community sentences. People will be told about what will happen, and will be able to remedy the difficulty immediately, simply by complying with the probation order. The remedy will lie in the hands of offenders: those who want their benefits restored will have to do no more than comply with the conditions imposed by the courts.

The Bill provides the means to implement such a system. We shall start by piloting it in a small number of areas, and we will evaluate the pilot schemes before coming to firm conclusions. However, I believe that the measure will send the clear message to offenders that benefits bring obligations that they must meet.

Mr. John Swinney (North Tayside)

In those pilot exercises, will tests be applied to determine how the removal of benefits affects the poverty faced by the people involved? Also, should not there be ways to discover whether removing benefits encourages rehabilitation, or whether it leads to reoffending because people's circumstances have been made more difficult?

Mr. Darling

There are provisions for hardship, but the remedy in cases such as the hon. Gentleman described lies in the hands of the person who breaks a probation order. People are not required to live in poverty or to lose their benefit. They are required only to do what the court tells them to do. If they are not willing to do that, they can have no cause for complaint.

I turn now to what I regard as an extremely important part of the Bill, the second stage of the reform of pensions. Part II provides for the reform of SERPS and its replacement with the state second pension.

The reforms being put in place, together with those in the Welfare Reform and Pensions Act 1999, will put pensions on a sound, sustainable and affordable footing for the future. Our plans have been welcomed almost universally.

If we did nothing, by 2050, one person in three would risk depending on means-tested benefits in retirement. Under the pension system that we inherited, nearly a third of people working were headed for retirement on benefits. We believe that everyone who can save, should save. That is why we have legislated for stakeholder pensions, which will help the 5 million people unable to get an occupational scheme to get a funded pension. Stakeholder pensions are on track for delivery from April next year.

Today, we are going further. We are helping 4.5 million low-paid people, 6 million moderate earners, 2 million carers and 2 million disabled people with broken work records by reforming SERPS and making it better through the introduction of the state second pension. The current system—SERPS—was designed to supplement the basic state pension, but it does not do enough for the low paid, and it does nothing for many carers or disabled people with broken work records.

SERPS is earnings-related—so, by definition, if people do not earn very much, they do not contribute very much, and do not get very much back when they retire. We are determined to improve SERPS, and the state second pension will, in some cases, triple the amount of additional pension to which low earners will be entitled. For example, under SERPS, someone earning £6,000 a year—after a lifetime of employment—gets £14 a week on top of their basic state pension. Under the state second pension, that sum will rise to £54 a week. That is £40 extra for that low earner.

Mr. Steve Webb (Northavon)


Mr. Darling

No one—not even the Liberals—can say that that is not a substantial improvement on the present situation.

Mr. Webb

Will the Secretary of State confirm that the statement he has just made will not be true before 2047?

Mr. Darling

No. Over the past few months, the hon. Gentleman has been complaining about the state second pension.

Mr. Bercow

Answer the question.

Mr. Darling

I was answering—I would have thought that the hon. Gentleman might be interested.

The hon. Member for Northavon (Mr. Webb) keeps saying that the state second pension will take a long time to mature, and he is right to the extent that pensions, by their very nature, take some years to build up. However, because of the way in which the state second pension is structured, people will begin to see improvements from very shortly after it is introduced—probably in 2002. Many people will see a substantial difference in the amount of pension they will receive as a result of the changes that we are making.

For example, a couple, one of whom is on low earnings, while the other spends half their time caring, will, as a result of our changes, get £30 more because of the operation of the state second pension. That is by 2025. [HON. MEMBERS: "Oh!"] I make no apology for that. For heaven's sake—no wonder the Tories mis-sold pensions. What sort of pension can someone take out where they get a vast increase in money the day after they take it out?

Mr. Eric Pickles (Brentwood and Ongar)

The right hon. Gentleman said 2002.

Mr. Darling

The hon. Gentleman, who spends a great deal of time grunting and snorting from the Opposition Front Bench, has misheard me. I said that the state second pension will start to be introduced from 2002. I went on to say that it will take time for people to see the full benefit of the state second pension. The point I was making to the hon. Member for Northavon was that even in 25 years' time—not long in pension planning terms—the couple I described will be £30 a week better off than they would otherwise have been if we did not reform SERPS.

I believe that the changes in the state second pension will greatly increase the amount of money going, for example, to someone on £6,000 a year, who will be £40 a week better off. However, even someone on £15,000 a year will be £17 a week better off, and it will take 14 years before their income falls to the level of the minimum income guarantee. Any fair-minded person looking at the system will see that the state second pension and the reforms that we are making to SERPS are infinitely better than the present system because they allow people on low earnings, carers and disabled people to build up substantial pensions. That would not otherwise be the case.

Dr. Lynne Jones (Birmingham, Selly Oak)

Is not the problem that the state second pension will be extremely complex? My right hon. Friend says that it was been welcomed, but an analysis of responses—particularly from the pensions industry—shows that many respondents recoiled in horror at the complexity of the scheme. As a result of what the Tories did to the basic state pension, people have lost out by £27 a week. By introducing the state second pension, we are only replacing what was a good basic state pension. Would not it have been simpler to increase the basic state pension?

Mr. Darling

If I were my hon. Friend, I would be very careful about taking at face value what some respondents said about the state second pension. The complaint of many of them is that it exists at all. If there were no enhanced state earnings-related pension—the state second pension—people would be better off in an occupational pension scheme because otherwise they would receive very little.

The Tories make the same complaint. They do not like the state second pension; their answer to its complexity is not to have such a scheme at all, leaving SERPS to give people precious little. In fact, they are not terribly keen on SERPS either. Their proposal was to privatise the entire pensions system at a cost of some £150 billion. It is not surprising that, three years after they announced that proposal, they have still to find any serious commentator prepared to buy it.

I believe that the system that we are introducing is not complex. It recognises that people earning less than about £9,500 a year will never earn enough to go into a funded pension on their own. They might do better in a company scheme, with the company contributing as well. We are determined to ensure that the state gives them far more than they would otherwise get.

Under our proposals, someone on £6,000 a year would be £40 a week better off because of the rebalancing of SERPS under the new state second pension. I should have thought that anyone—especially my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones), considering where she stands in our party—would have considered that particular piece of redistribution a good thing, to be supported rather than criticised.

Mr. Ian Bruce

Will the right hon. Gentleman give way?

Mr. Darling

No, I have not finished my point yet.

Although a number of respondents were concerned about the existence of the state second pension, the industry as a whole welcomes the fact that the state second pension will help not only low earners but moderate earners because they will have an enhanced rebate that they can take into their occupational pension, their stakeholder pension or, in some cases, a personal private pension.

Mr. Bruce

On advance corporation tax and the £5 billion that is being taken away from pension schemes, how does that compare with what the Government claim to be putting into the second pension? I am sure that a balancing act has been done somewhere in the Treasury or the Department of Social Security to work out how much extra the Government are getting out of future pensioners, rather than providing extra for them.

Mr. Darling

I wondered whether any Tory would be daft enough to raise that question today. Yesterday, the hon. Member for Havant (Mr. Willetts) made a great song and dance, with much synthetic anger, about the Government's changes to the ACT system. Let me give him an answer. As I was perusing the reviews for our pension changes announced yesterday, my eye was caught by an article in the Financial Times headed Pension funds show second best results in 10 years. He said yesterday that our changes to ACT had denuded pension funds of all their money. Yet the article quoted the company that compiled the figures as saying: This was an incredible year, with an end-result beyond most people's expectations. So much for all the accusations that we were damaging pension funds—they have had a very good year.

As I said yesterday, I do not want to go into too much detail on ACT. The changes simplify the corporation tax system. We now have the lowest corporation tax this country has ever seen—something the Tories could never achieve. We have a stable economic background and a healthy economy, which is helping pension funds and pensioners. To cap it all, I bet that the Tories have no intention of going back to the old system, so I discount all their synthetic anger.

The state second pension gives disabled people and carers a pension that they would not otherwise get. The pensions proposals that we announced last year, together with the proposals in the Bill, mean that all who can save now have the opportunity to do so. The changes that we are making as a result of the state second pension will help some 14 million people. That is a substantial amendment.

Finally, the Bill provides additional powers to deal with suspected fraud. We are giving inspectors substantial powers that they do not have at present. We are also continuing to align tax and national insurance contributions with new measures to extend national insurance contributions to benefits in kind.

Mr. Tony Baldry (Banbury)

I have listened carefully to the Secretary of State's speech. Could he help the House by telling us to what extent the Bill increases or decreases overall public spending? Will he tell us the amount? It is not clear whether the Treasury will be better or worse off as a consequence of the Bill.

Mr. Darling

On the state second pension, the answer is that the Bill increases expenditure by about £5 billion. [HON. MEMBERS: "Ah."] It is all in the financial memorandum. If hon. Members care to read that document, they will find out what the position is.

The Bill contains a radical package of measures to build a welfare state fit for the needs of the 21st century. It will be a welfare state founded on fairness and opportunity—two concepts that Opposition Members would not begin to understand. The measure will be fair for those who meet their responsibilities, but will be tougher on those who are not prepared to face up to their responsibilities. It links the right to benefit with the responsibility to comply with obligations. It is fairer for low-paid people, for carers and for disabled people with broken work records. It will help more than 14 million people on pensions.

We are reforming the Child Support Agency; something that is long overdue and that it falls to a Labour Government to deliver. We are making better pension provision at present and in the future—something that only a Labour Government can do. We are making changes to the benefit system so that it is far tighter and far more affordable, and will be far more sustainable in the future.

We are building a welfare state that will be supported. Step by step, we are delivering: we are ending child poverty; we are providing opportunity and we are building a fair society. I commend the Bill to the House.

4.31 pm
Mr. David Willetts (Havant)

I beg to move, To leave out from "That" to the end of the Question, and to add instead thereof: this House notes that the Child Support, Pensions and Social Security Bill will make the social security system yet more complicated; regrets that the child support formula will reduce the entitlement to child maintenance of many parents with care; believes that the transitional period risks causing further resentment amongst people caught between two child support regimes; deplores the complexity of the Government's proposals for the state second pension; believes that the lower earnings threshold will act as a barrier to people moving into private provision; regrets that important features of the state second pension are being left for later regulation; and accordingly declines to give the Bill a Second Reading because it represents a missed opportunity on the part of the Government to reform social security. I begin with the same part of the Bill to which the Secretary of State referred—child support. I confirm that we agree with him on the fundamental principles of reform; indeed, they go back to our Child Support Acts 1991 and 1995. We believe that biological parents have an inescapable financial obligation to the children whom they bring into the world. Furthermore, unlike the Liberal Democrats, we believe that we cannot simply go back to the courts—on that we are with the Government. We need an effective administrative system in order to secure the financial support that all parents should give to their children. That was common ground when we introduced the original legislation, and it remains so.

The Opposition also accept the need for reform. Every Member is aware—not least from our constituency surgeries—that the Child Support Agency is not working. We accept that the formula is too complicated and that more emphasis should be placed on enforcement. That is common ground and we support the Government's proposals on those matters.

However, we have serious concerns about how the Government's proposals will work in practice. In that regard, I learned much from the work of the Select Committee on Social Security. I greatly appreciate its work. The Committee undertook a thorough investigation of this subject last year. The Opposition think that it is wrong that, under the Government's proposals, no account will be taken of the income of the parent with care. For example, the parent with care—often, but not necessarily, a woman—may remarry. He or she might then be in favourable financial circumstances, perhaps much more favourable than those of their ex-spouse, and there will be widespread resentment if the system fails to take into account the new income of the parent with care. We shall hear of such cases in all our surgeries; people will regard that as unacceptable and contrary to natural justice.

Mrs. Dunwoody

I am a little confused. Is the hon. Gentleman really saying that, although it is very important that one should pay for one's own children, if, for any reason, one's ex-partner is able to get money from a wholly different source, that automatically absolves one of any responsibility for continuing to pay for one's children at the existing rate? If that is what the hon. Gentleman is saying, it seems to be a somewhat complex—even unacceptable—set of mores.

Mr. Willetts

I am not saying that that should be automatic, but that—as the Select Committee said—if the parent with care remarries and finds herself or himself with an affluent new spouse, there will come a point when it is simply unacceptable to fail to take those new financial circumstances into account. Labour Members will find that their constituents will come to their surgeries to make that very point.

Mr. Connarty

Is not the hon. Gentleman saying that he is going to play this issue for politics and not the moral right of the child?

Mr. Willetts

I am talking about what seems to me to be a clear and simple principle. The hon. Gentleman will find that his constituents and others throughout the country are simply unable to understand why no account whatsoever should be taken of the financial circumstances of the parent with care if he or she remarries.

Mrs. Joan Humble (Blackpool, North and Fleetwood)

Will the hon. Gentleman give way?

Mr. Willetts

I am sorry, but I would like to make a second point about the formula. I do not intend to take quite as long as the Secretary of State.

We also oppose the fact that, at the moment, there is no upper limit on the liability of the non-resident parent. Again, as the non-resident parent's income rises—perhaps that is long after the relationship with the other parent of the child has broken up—there must come a point when one cannot indefinitely extract 20 or 25 per cent. of the income of the non-resident parent. We need to have an upper limit somewhere in the system.

Trying to take account of the income of the parent with care and setting an upper limit on the liability of the non-resident parent would bring our system of child support much more into line with the common-sense instincts of the average constituent whom we are trying to represent. I will now give way to the hon. Lady.

Mrs. Humble

As a member of the Select Committee, I have tried to refresh my memory about some of our recommendations. On the point about the income and resources of the parent with care, I draw the hon. Gentleman's attention to the fact that the recommendations of the Select Committee were to do with the earnings of the parent with care. Perhaps the hon. Gentleman will reconsider his remarks about remarriage and income from other sources.

Mr. Willetts

No. This is an important matter, which we will find is one of the sticking points that we shall all face in our surgeries if these proposals, as currently formulated, are passed into law.

Mr. Andrew Dismore (Hendon)

Will the hon. Gentleman give way?

Mr. Willetts

Yes, but very briefly because I want to move on to other points about child support.

Mr. Dismore

The hon. Gentleman seems to want to pick and choose between the recommendations of the Select Committee, of which I am also a member. It accepted the Government's proposal that there should not be a limit on the income of wealthier parents because we believe that children have the right to share in the income of wealthy parents and share their standard of living.

Mr. Willetts

The hon. Gentleman is a member of the Select Committee and I am not. However, from my recollection, a proposal in the original draft was changed after a vote of five votes to two. I agree with the two members of the Select Committee who thought that such income should be taken into account. I do not accept everything that the Committee said, but I think that its report is valuable and that some of its proposals should be reflected in the Bill. I regret the fact that they are not.

I shall move on to another feature of the Bill—something that loomed very large when the Secretary of State was spinning and briefing on his proposals, but which he strangely passed over today. I refer, of course, to the tough new penalty, which we were told about several months ago, of taking away people's driving licences if they fell into bad odour with the Child Support Agency. We were told at the time that that was an example of a Government getting tough with people who did not comply with the Child Support Agency. The Government managed to get a lot of coverage for its tough new approach of taking away driving licences. There was even a suggestion at one stage that they would take away passports as well, but they allowed the Passport Agency to do that through its own devices.

Now what do we find? This tough new measure is not an extra penalty, it is an alternative to a jail sentence. It is not, in other words, a toughening of the regime at all. It is a bold new initiative in which the Government are saying, "If you don't fancy going to jail, you can always hand in your driving licence instead."

That is a bizarre new approach to enforcing benefit penalties, and I should be interested to know whether the Secretary of State believes that it will have wide application. If so, he has certainly created an incentive for people to try to get a driving licence, if they have not already done so, because they can trade it in against the alternative punishment of a custodial sentence. That measure is exactly the opposite of the spin that the Secretary of State put on it months ago: it is not a toughening of the regime, but a weakening of it.

Mr. Andrew Mackinlay (Thurrock)

That is trivial.

Mr. Willetts

The hon. Gentleman says that it is trivial, but the Government's briefing on these proposals focused on the driving licence measure. It was about all that they could say about the proposals. Inches and inches of newspaper comment focused entirely on that bold new approach—and we now discover that it is not an extra penalty but an alternative to a custodial sentence, as the Bill makes clear.

The transitional phase will be one of the biggest single problems that we shall face if and when the legislation is implemented. It will be very difficult to run two systems and it will be very difficult to maintain any legitimacy in the current arrangements if, at the same time, a new and more simple formula is being passed into law by the House. The Secretary of State did not properly address the problem of how he believes that he will be able to carry on collecting child support under the old formula while at the same time introducing the new system. He will be trying to run both systems in parallel, and that is where his problems will arise.

We want to hear from the Secretary of State today—he gave no figures on this in his lengthy speech—whether he thinks that he will have to write off a large amount of the debts accruing under the old formula, and how he seriously expects us to explain to our constituents that they still have substantial financial obligations under the old formula, long after the House has passed a new formula into law. It will be very difficult to explain to people in new cases in the coming year that even they will be treated under the old formula. As we all know, there is a serious enough crisis of legitimacy in child support at the moment. Trying to run two systems in parallel will make an already difficult problem far worse.

Mr. Coaker

Is the hon. Gentleman seriously saying that there should be a big bang and that everything should change at once? Is he seriously suggesting that there should be no transitional phase? If there were not, we would experience again the problems that occurred six or seven years ago when the CSA was established. Is not it far better to accept the suggestion of my right hon. Friend the Secretary of State that, despite the difficulties, we should have a transitional phase because without it we will simply recreate the chaos of the past?

Mr. Willetts

I accept that we will need a transitional phase, but I want to hear from the Secretary of State, who will be responsible for running both systems during that phase, how in practice he expects to collect child support under the old formula and what scope there is for trying to introduce the new formula more rapidly, at least for new cases.

The hon. Member for Gedling (Mr. Coaker) will find it very difficult to explain to people who come to his surgery with a new child support case that despite everything that they have read in the newspapers about the new formula coming into force, they will still be judged under the old formula. That is a legitimate question for the Opposition to raise because it is a problem that hon. Members on both sides of the House will have to face. That is why we say that the new formula for new cases needs to come into force as quickly as possible.

Ministers have not yet revealed as much as we need to know about the regulations that will enforce the detail of many of the proposals. We are not even sure what the measure of income will be. That is not in the Bill. There is very little detail in the Bill and only a little more in the White Paper. We do not know, for example, how so-called unearned income—perhaps it is better to call it income from savings and investments—will be treated. It appears that it will be completely ignored in the new formula. If it is ignored, there will be many cases—we used to call them departures but they will now be called variations—where people will say, "It is unfair. A substantial income from investment and savings will not be taken account of in the formula. We want an individual investigation to ascertain how this will affect us."

The proposed legislation fails to provide the necessary information to enable the House to reach a view on how the new systems will work. Given the admitted problems of child support over many years, it is our experience that above all we need clarity. Unfortunately, the Bill does not bring with it the clarity and information that the House is entitled to expect if it is to reach a full view on the Government's proposals.

It is a great pity that the Government have not responded to the Select Committee's proposal of a Special Standing Committee. It would have been helpful if Ministers had accepted the suggestion of a scrutiny role for the Social Security Advisory Committee. I speak as a former member of that committee. The Secretary of State's rather cavalier dismissal of a possible role for the SSAC in his response to the Select Committee's report was mistaken. There must be careful scrutiny of the detailed regulations that will implement the meat that is lacking in the Bill, and we are not persuaded that the Government are offering us the information that will be necessary for that scrutiny. We are not persuaded that there will be sufficient scope for scrutinising and debating the regulations. We have substantial concerns about the way in which the Government are going forward on child support reform, but we accept that the current system cannot be allowed to continue in its current form.

As for a second state pension if the child support measures in the Bill are an example of a problem that must be tackled, the second state pension is an example of the Government creating entirely unnecessary muddle and confusion. It is a gratuitous set of measures which, in so far as it takes welfare in any direction, takes it in the wrong direction. The second state pension is just more paper promises. We have more promises of state pensions being financed from the generality of taxpayers and further discouragement to funded pension provision, which we believe in and want to encourage.

We want to encourage people to save for themselves. Once again, the Labour party is looking to the state as a source of alternative pension provision. I remind Ministers of the pledge that appeared in the Labour party's manifesto, on which every Labour Member was elected when they fought the 1997 general election. It stated: Labour will retain Serps as an option for those who wish to remain within it. The Bill represents a failure to adhere to a simple pledge in Labour's manifesto to retain SERPS.

The Secretary of State says, "Our proposal is even better than SERPS." The right hon. Gentleman is trying to get the best of all possible worlds. He says, "We may be abolishing SERPS, but we are introducing something that is even better." One of the reasons for the extraordinary complexity of the proposals that he has put before the House is that he is trying to introduce a new system while replicating the distribution of benefits under the old regime. He is trying to ensure that no one will be worse off than he or she would have been under SERPS, while claiming that he is introducing a bold new system. One is reminded of the old child support formula. The sole purpose of the extremely complicated formula that is before us is to enable the right hon. Gentleman to try to do the job that the previous SERPS regime was doing.

We have an example of the point at which welfare reform disappears in its own ingenuity. The only purpose of the complicated formulae is to try to replicate the same distribution of benefits under SERPS, as though the Secretary of State had not decided to abolish it. The right hon. Gentleman has not succeeded. Despite all his claims that no one will be worse off under the new system, there will be a significant group of losers. I refer to the 150,000 people who have earnings from employment and from self-employment. Under SERPS, their earnings from self-employment were taken into account, but the Bill contains no provision to ensure that any earnings from self-employment are taken into account. Therefore, contrary to the Secretary of State's assurances, there will be a significant group of losers—people who do worse under his formula than they would have done under SERPS.

In his desperate attempt to protect the same distribution of benefit as would have occurred under SERPS, the Secretary of State has set up a complicated structure with, for example, different rates of accrual of benefit in different earnings bands. I agree with the hon. Member for Northavon (Mr. Webb) that it will take 25 or 50 years to deliver even a tiny increase in pension entitlements—that is, paper pension entitlements, not backed by a real fund. It will be a sight worth seeing when Labour Members in their surgeries, facing pensioners complaining that they are to receive only a 75p increase in their basic pension in the coming year, explain that those pensioners should not worry because they will get an extra £1.50 in 2025.

The proposed system delivers not jam tomorrow, but jam in the distant future. The Government have failed to understand that people want genuine funded provision for their future, not vague paper promises that in 2025 or 2050 they will have a theoretical paper pension that is worth £1.50, £2.50 or £3.00—if they are lucky—more than they would have had under SERPS. At the same time as those tiny and distant paper promises are delivered, the means-testing of current pensioners continues apace with the spread of the minimum income guarantee, which imposes yet another penalty on pensioners with modest incomes who saved for their retirement. Hundreds of thousands of pensioners find themselves trapped in a means test that results in their efforts to save not being rewarded.

The provisions to establish the second state pension contain one of the most outrageous examples of apartheid in pensions provision that the House has seen for a long time: an explicit set of regulations creating entirely different pensions regimes for people in different earnings categories. There is to be a three-class model of pensions, with one regime for low earners, one for moderate earners and one for high earners—with nice high barriers to keep the different groups apart. That is not a Conservative vision of pensions provision; we believe that there should be funded pension provision for everyone. There should not be a £9,500 barrier, with sheep on one side and goats on the other. That is how tickets for the millennium dome should be allocated, not the way in which pensions provision in this country should develop.

Mr. Terry Rooney (Bradford, North)

Does the hon. Gentleman accept that people in different earnings bands have different pension requirements and opportunities, and that the responsible section of the insurance industry, not the cowboys, accepts that people earning £9,500 or less should not be in a personal pension scheme?

Mr. Willetts

The point is that we believe in a mobile society, in which people earning less than £9,500 one year can have legitimate hopes that their earnings will be well above that the next. The system the Government propose has high barriers that will trap people in the second state pension and make it extremely difficult for them to move into funded provision. The problem is that the system lacks the flexibility needed to accommodate people's mobility.

Maria Eagle (Liverpool, Garston)

How do the Conservatives suggest that those who throughout their working lives have caring responsibilities or receive low pay—the Conservatives oppose the national minimum wage, which would increase pay levels—can be assured of receiving good funded pensions that will keep them in their old age?

Mr. Willetts

We believe that it is possible to encourage many more people than currently do so to take out funded pensions. The primary reason we oppose the Government's proposals is that, at the same time as quite gratuitously messing around with SERPS, they are creating complexity and additional burdens that will deter those who want to take out funded pension provision.

Contrary to what the Secretary of State said in his speech, that has been the widespread reaction of representatives of funded pensions across the country. The National Association of Pension Funds complains: Contracting-out procedures are already excessively complex. The two-stage introduction of the S2P"— the second state pension— will add considerably to the complexity. Neither of the alternatives proposed seem likely to encourage employers to set up or continue to support"— that is important— contracted-out pension schemes. The National Association of Pension Funds is saying that existing contracted-out pension schemes will become more onerous for employers to operate, because of the provisions introduced by the Government in the Bill and in previous legislation. There is a complacent assumption among Labour Members that the Government can continue to rely on the success of funded pensions as in our years in office. They assume that there will be an ever-wider spread of occupational pension provision. If they carry on in the way that they are going, that marvellous development over the past 20 years will go into reverse, and it will be the fault of Ministers.

Kali Mountford (Colne Valley)

Is not the hon. Gentleman missing the point? What realistic prospect can there be of someone who has been a carer for 20 years getting private pension provision? Does not the Bill give something to someone who has no hope of anything in the current circumstances?

Mr. Willetts

As the hon. Lady knows, there was already home responsibility protection under the basic state pension, and we also intended to introduce wider home responsibility protection at the same time as other changes to SERPS. That would have addressed the issue that concerns the hon. Lady.

Mr. Boswell

Has my hon. Friend also considered the administrative aspects of a structure that is set up in national insurance terms, whereby earnings are assessed on a weekly basis and contributions calculated appropriately, and the proposed superimposition of annual limits, which may well create further anomalies and turbulence within the system?

Mr. Willetts

My hon. Friend is right to raise that point; indeed, I was about to deal with it. The interaction of the provisions with the national insurance system is one of the important aspects that the Government have so far failed to address.

Mr. Bercow

In the light of the chutzpah of the hon. Member for Liverpool, Garston (Maria Eagle) in talking about people with caring responsibilities, does my hon. Friend agree that it would be extremely wise to abolish the age restriction of 65 for claimants of invalid care allowance and the carers premium, thereby assisting 55,000 of the poorest carers throughout the land?

Mr. Willetts

My hon. Friend is right. That policy proposal, which was put forward by my right hon. Friend the Leader of the Opposition, would do far more to deal with a practical problem than all the empty paper promises contained in an unnecessarily complicated set of proposals.

The Secretary of State could have achieved his objectives—his own, not ours—simply by making relatively technical adjustments to SERPS. Instead of going down the straightforward route, rescinding some of our changes to SERPS and changing some of the factors whereby future pension entitlement was attained, which would have been a better way of meeting his own objectives, he proudly announces that he is abolishing SERPs, introducing something completely different in its place, and imposing a new set of administrative burdens and complexities on private pension providers, thereby threatening the funded pension arrangements that are one of this country's great economic successes.

Mr. Jim Cousins (Newcastle upon Tyne, Central)

Does the hon. Gentleman recognise that the pension system that his Government left in 1997 meant that more than two thirds of women workers earning less than £10,000 a year had no second pension provision whatever? If he proposes to get those women to enter a funded pension system in the private sector, what sort of structure of coercion or incentives will be necessary to achieve that?

Mr. Willetts

I believe that it would be possible to encourage far more funded pension provision through a suitable contracting-out regime. One of our objections to the proposals is that the contracting-out regime will become so complicated that it will impose a significant extra burden on employers who run funded schemes. Labour Members are far too complacent about the implications of the proposals for existing and new funded pension arrangements. They will regret the way in which they have ignored significant objections, not only from the National Association of Pension Funds, but from others. I could quote many other pensions experts who say that the Bill's proposals for a second state pension will impose unacceptable burdens on them. That is one way in which the proposals will threaten the funded pension provision that Conservative Members want to encourage.

I want briefly to make a point about NIRS2, which lay behind the intervention of my hon. Friend the Member for Daventry (Mr. Boswell). The Secretary of State had the good grace to speak with some humility about computer problems. However, given the Government's record of managing computer problems—they are their own millennium bug—it is not feasible that the system will be ready in the time scale that the Secretary of State outlined. It is ludicrous to claim that people who run pensions will face tough new proposals on winding up pensions when their biggest problem is their inability to get accurate information from NIRS2. It is simply not good enough to pass legislation that imposes new burdens on them when NIRS2 problems remain far from resolved despite Ministers' assurances.

I shall refer briefly to other measures in the Bill, because some of them merit careful scrutiny. We have heard a little from the right hon. Gentleman about loss of benefit for breach of a community order. Conservative Members believe that there should be tougher benefit sanctions to ensure the integrity of the social security system. We are always keen to examine ways in which benefit sanctions can be made more effective. However, when we considered proposals such as those in the Bill, we were told that we could not get away with them and that they would not be legally watertight.

Let us consider the idea of imposing a similar community order on two offenders, one of whom has earnings and one of whom is on benefit. Both fail to meet the terms of the order and are thus in breach of it. The Bill proposes that the offender who receives benefit should receive an extra punishment—withdrawal of benefit—which will not be imposed on the offender with earnings. That may sound attractive, or be one of the gimmicks that the Secretary of State's spin doctors devise to make him sound tough, but I doubt whether he will get the provision through the courts.

I shall be interested to read the legal advice on which the right hon. Gentleman bases his claim that the provisions will be compatible with the obligations that the Government assumed when they incorporated the European convention on human rights into British law. I do not believe that he will succeed in implementing the proposal, because it will face significant problems in the courts. It is a gimmick like curfews, which the Home Secretary introduced. Such gimmicks are spun to get Ministers on to the front pages, but they fail to make an impact in the real world. They are the empty pledges and claims for which the Government have become notorious.

I shall have a modest bet with the Secretary of State that he will be unable to take away benefits from people who breach community orders any more than the Home Secretary is able to impose curfews on people who are responsible for anti-social behaviour. I look forward to the day when he is hauled before the courts and told that he simply cannot get away with it.

Mr. Coaker

Will the hon. Gentleman give way?

Mr. Willetts

No, because I want to conclude, and I said that I would not speak for as long as the Secretary of State.

Finally, we need a little more information about the national insurance contributions on benefits in kind. They are a new stealth tax, raising no less than £225 million. One of the benefits in kind under attack in the Bill—how ironic, in a week when the national health service is once more in crisis—is private health insurance. People take a burden off the health service by using private health cover, but that will be hit by national insurance contributions for the first time. I suppose we should be relieved that we are told that at least stress counselling will not, as a benefit, be subject to national insurance contributions, so there are small mercies.

Virtually all benefits in kind will be subject to national insurance contributions, which will put a significant extra burden on employers and be a significant extra cost for employees. Those P111D forms will become even more complicated to fill in. The Government's approach is quite simple: if it is taxable it is NICable, and they are nicking another £225 million through that provision.

The right hon. Gentleman said, "I don't want to be remembered as another Secretary of State who tinkered with the system." The fact is that the Bill does just tinker with the system; it is not serious welfare reform. Most of that tinkering is unnecessary and many of the proposals, particularly on pensions, are actively damaging. That is why we invite the House to vote for our reasoned amendment.

5.6 pm

Mr. Terry Rooney (Bradford, North)

I am a veteran, or perhaps a casualty, of—

Mr. Deputy Speaker (Sir Alan Haslehurst)

Order. I should perhaps remind the hon. Gentleman and the House that there is a 15-minute limit on Back-Bench speeches.

Mr. Rooney

I am a veteran, or perhaps a casualty, of previous Child Support Agency legislation, having served on each of the Committees considering child support Bills, and I was reminded of Alice in Wonderland when the Opposition spokesman, the hon. Member for Havant (Mr. Willetts), was speaking. He has obviously learned nothing from the operation of that legislation over the past six or seven years. I am grateful that amendments have been tabled by the Opposition and the Liberal party because I would have been worried and suspicious if there had been as much agreement on the Bill as there was on the Child Support Act 1991. That legislation was widely welcomed in principle but, sadly, the detail was very much neglected. We can learn a lesson from that: when complex algebraic formulas are included in a Bill, and extensive and detailed regulations are promised, it is helpful if hon. Members see what those formulas really mean during their consideration of that Bill.

This may be rare from a Labour Member, but I should like to praise the right hon. Member for Maidstone and The Weald (Miss Widdecombe) because, when the Jobseekers Act 1995 was in Committee—she was the Minister responsible for it—she tabled draft regulations and provided specimen forms that were to be used to implement it. Perhaps my right hon. Friends might consider that: where the Bill promises regulations, draft regulations should be put before the Committee so that it understands exactly what is being implemented. Nevertheless, the Government should be congratulated on the widespread and genuine consultation that took place via the Green Paper and the White Paper, and also because comments made in that consultation have been reflected in the Bill. I am also grateful that the views of Members of Parliament have been taken into account in arriving at the legislation, including some opinions—unbelievably—that were expressed from those on the Opposition Benches.

In taking the legislation forward, we need to be careful that we do not fall into the trap that was generated by a significant media campaign about the victims being the absent parents. For too long, publicity in both the House and the media focused on the problems experienced by absent parents in meeting their responsibilities. Little was said in support of the real victims—children who were receiving no maintenance. The paralysing effects of the chaos and inertia that featured in the early years of the CSA built a platform for the media campaign; moreover, the changes made in 1993 and 1995 were made entirely for the benefit of absent parents. Not one legislative change was made with the children in mind.

Notwithstanding what was said by the hon. Member for Havant, the advantage that this Bill has over earlier legislation lies in its transparency, and in the simplicity of the formula that it proposes. In future, no one will have an excuse for claiming that they did not understand what was required of them, or the amount that they had to pay. Under the current system, 70 per cent, of children receive no maintenance at all, and there are millions of pounds of uncollected and probably uncollectable arrears—money that should be supporting children, usually the poorest.

Owing to the inadequacy of the computers, no one can say with certainty at any given time what the position is in any given case. Those who contact the CSA's regional offices usually find that they are speaking to someone whose brain is befuddled, who is probably living in the dark ages, knowing nothing of what goes on in the real world, and who can answer no Member of Parliament or member of the public with conviction.

The present system generates mountains of paper. The agency may issue as many as seven communications on the same day, running to six or seven pages, each telling a different story and featuring incredible calculations that bear no relation to people's circumstances. The simplicity of the proposed 15, 20, or 25 per cent, formula will restore the agency's credibility, which is the first thing that is needed if parents are to have a genuine desire to co-operate with it. It is no wonder that so few wish to do so now: they rightly feel that the agency lies on the road to ruin and destruction, and that there is nothing in it for them.

The advantages of the Bill are the simplicity and transparency of the proposed formula, the speed of assessment and the introduction for the first time of the maintenance disregard for those on income support. At last we shall have a child support Act, rather than a Treasury support Act. I welcome the disregard of maintenance in the calculation of working families tax credit, which will make a huge contribution to welfare to work. I am told by my local Employment Service office that single parents are much more willing to take work, especially part-time work, now that they know that they will keep all the maintenance paid to them.

The Bill provides people with incentives to co-operate. It delivers a clear message to absent parents that they must get off the gravy train, because the easy ride is over. All the escape routes have been closed—it will no longer be possible to engage in little ruses in order to delay payment for three, four or five years—and, at last, attention will rightly be focused on the child rather than the absent parent.

The hidden benefit will, I hope, be the abolition of the independent case examiner. Let us hope that there is no need for that person to continue in that role within six months or a year of the new system coming into effect. [Interruption.] I see the professor, the hon. Member for Northavon (Mr. Webb), is doubtful, but, there again, we are used to that.

I have tabled parliamentary questions many times to find out how much money has been paid through the special payments unit to people who have been abused by the agency, but, for some reason, I can never get an accurate figure. However, tens of millions of pounds of compensation must have been paid for maladministration and abuse by the agency. Again, it will be a bonus when such payments go.

Every week, I and my office spend many hours—I am sure that other hon. Members do the same thing—speaking with the parliamentary business unit of the CSA, at Belfast. The people there are helpful, useful and sympathetic. They do not often come up with answers, but they are always sympathetic. That dedicated unit is there to assist and to serve purely Members of Parliament. The public do not get that service. Again, it is an incredible resource that, in one sense, is a waste: it is there only because of previous chaos. I hope that the new system will mean that we do not need that special privilege and facility any more, and that such work will disappear.

Most important, it is crystal clear, from the Green and White Papers and from the Bill, that children will now benefit from the CSA's actions. That cannot be said to have been the case in the past. Far too many parents with care and children have been let down by inadequate legislation, inadequate administrative systems and inadequate ways of dealing with the business.

I did not intend to, but I should like to speak on the second pension issue because of the points that were raised by the hon. Member for Havant. It is a fact that, post-1988, roughly 6 million people opted out of occupational pension schemes into personal pensions, enticed by a life assurance industry which, he is trying to tell us, will help those on low earnings to take out an appropriate product. That is dreamland stuff.

Responsible sectors of the life assurance industry say that no one on less than £9,000 a year should be in a personal pension scheme, full stop. There is no argument about that. There is an argument as to whether those on between £9,000 and £12,000 should be, but, undeniably, those on less than £9,000 should not.

Other sectors of the industry think that anyone earning. £1 a week or more should be in a personal pension. The same sector is writing to people to tell them that their endowment-linked mortgage is not high enough and that they need to put more money in it. It is levying 50 per cent, charges on the extra money that people are having to put in because the company got it wrong in the first place. We need to recognise that those sectors have a vested interest in knocking anything that, in effect, takes them out of the equation, but no one should be in any doubt that the state second pension is the best thing going for anyone on £9,000 or less.

Like many other Members, I have a significant number of extremely poor pensioners in my constituency. Most of them are women, who are poor in retirement because of broken work records and because they were persuaded to stick with paying the married women's stamp, which was the biggest con trick of all time. That denied them the basic retirement pension. Generally speaking, they were on low earnings, so their second pension entitlement is very small.

My late mother worked for 30 years, as well as spending 16 years raising children full time. At 60, her pension entitlement was nil, and her second pension entitlement was nil. That is the world that the hon. Member for Havant seems to want to return to.

The hon. Gentleman seems to think that, when my mother was working, on low wages, she should have toddled down to the local life assurance office and bought a personal pension—although, for the first two years, 50 per cent, of premiums would have disappeared in charges. It is dreamland stuff.

In comparison, my father, who worked for 50 years, has an income above the retirement pension of a mere £24 a week. He receives that amount because, until the 1960s, there was no provision for a second pension.

We then had the other scam—no one seems to mention it nowadays—of the graduating pension, for which one had to live for 14 years beyond retirement age simply to make back what one had paid into it, before receiving any benefit from it.

The state earnings-related pension scheme was introduced in 1978. It seemed like a good scheme at the time, but—notwithstanding the changes made to it in the 1980s—it has not turned out to be as good as we thought that it would be.

The fact is that the state second pension is a guarantee to people that they will be rewarded in retirement, as they have never been before. It has also, for the first time, embraced the issue of carers, people with disabilities, people on low earnings and people with broken work records. In time, we shall see the destruction of the poverty in old age that is a blight on our society.

5.22 pm
Mr. Steve Webb (Northavon)

Towards the end of his speech, the hon. Member for Bradford, North (Mr. Rooney) used a critical phrase—that "in time" we shall see those changes. I should like to start my speech by focusing specifically on the Bill's pension proposals. It seems incredible that, despite Liberal Democrat Members' opposition, and with virtually no parliamentary scrutiny, the House will abolish one of the two principal state pension schemes and introduce a new scheme. I make no apology for emphasising the Bill's pension aspects, which—shockingly, unlike the Bill's child support provisions—the Secretary of State almost skated over in his speech.

The time scale in which the new pension scheme will be introduced would make a glacier look positively dynamic. Based on the Department's figures, by 2025, the poorest fifth of pensioners—who, presumably, are the pension scheme's target audience—will be £1.30 a week better off. The Minister of State is already shaking his head. I assume that he does so because he cannot refute the argument, and not because the figure is wrong. I should be delighted to give way to him if he wants to challenge the fact that, in 25 years, they will be £1.30 better off.

Miss Kirkbride

Is that figure adjusted for inflation?

Mr. Webb

It is in today's prices, and is therefore a real £1.30 over 25 years—or about 5p or 6p a year. There is much to look forward to.

It is a shame that the Secretary of State is unable to remain with us in the Chamber; the first point was so crushing that he had to leave.

The Secretary of State said that, by 2047, there will be major increases in state pension entitlements. When I raised the issue of time scales with the Minister with responsibility for pensions, the right hon. Member for Birmingham, Perry Barr (Mr. Rooker)—who generously and helpfully briefed hon. Members before Christmas—he said, "When SERPS was introduced, everyone said that it would take a long time. Look at it now—it's giving people decent pensions." Unfortunately, it is about to be abolished. Nevertheless, the point is that, whereas it took 20 years to build up a full SERPS pension, it will take over 40-plus years to build up a state second pension.

The hon. Member for Bradford, North is shaking his head. Does he believe that that is not the position?

Mr. Rooney

SERPS took the 20 best earning years, but one did not receive the maximum pension after 20 years. If one worked for only 20 years, one did not receive the maximum.

Mr. Webb

The hon. Gentleman is quite right. There is no contradiction. The first people started to get full SERPS pensions within 20 years of the scheme being introduced. No one will get a full state second pension until 2040-odd. That is the difference. The critical point about state pension regimes—apart from the basic pension—is that they tend to last only 10 or 15 years. The hon. Gentleman mentioned the graduated pension, which was abolished. He mentioned SERPS, which is about to be abolished. We have had a succession of state pension regimes that do not last very long. We need sustainability. The state second pension will not exist in 2047. All these promises about what will happen 40 years down the line are not worth the paper that they are printed on.

Mr. Laurence Robertson (Tewkesbury)

Does the hon. Gentleman agree that the schemes are changed because of their huge cost to the Exchequer and the fact that the ratio between those drawing pensions and those paying into the schemes changes? Is that not their weakness, and does it not point to the fact that the funds to which my hon. Friend the Member for Havant (Mr. Willetts) referred are a far better option?

Mr. Webb

Our view is that there must be an appropriate balance between funded and unfunded schemes because there is a risk attached to both. Unfunded promises get ripped up by Governments and entirely funded income is much more subject to the volatility of the stock market. There must be a balance between the two.

The main reason why pensions schemes get ripped up is that no one understands them. No one has a clue how their entitlements are worked out. The previous Government halved widows' SERPS entitlements and only now—14 years later—have people realised that. These matters are so complicated.

Professor David Piachaud, an adviser to previous Labour Governments, said of the Labour Government's second pension proposals: It is the long-term sustainability … that seems most doubtful. The plans of Crossman, Joseph, Castle, Fowler and Lilley that were to last for a generation are all no more … the odds are that the name Darling will be remembered longer in association with Never-Never land than with pension reform". That is true. Pension schemes have to be made to last.

The state second pension will be the preserve of the low paid. It will be a second pension only for the low paid and for carers. If it is a scheme just for the poor, what is to stop future Governments doing away with it altogether because the majority of people will have no stake in it?

The current proposal is in breach of a manifesto promise. It is a promise that the Government should never have made but, having made it, they will bring us all into dishonour if they breach it. As we heard from the hon. Member for Havant, the Labour manifesto explicitly pledged to retain SERPS for those who want it. The state second pension will not be an earnings-related pension; it will be a flat rate pension. So, no matter how much the Government try to twist the wording of their manifesto, this is a direct contradiction.

The Government's annual report, which lists their manifesto pledges and whether they have been fulfilled, marks "done" against retaining SERPS. It has certainly been done for.

We do not know a great deal about the state second pension. When will it start? Will it be 2002 or 2003? We do not know for sure. When will it go flat rate? That depends on the success of the stakeholder scheme. What will the rebate structure be? Guess what—a consultation paper has been produced with two alternatives, neither of which are penetrable.

Mr. Cousins

Is it the hon. Gentleman's view that the state second pension is better when it is flat rate or in its initial phase—which, as he said, we do not know the end of—when it is earnings related?

Mr. Webb

I would prefer the first phase, as the second phase represents back-door compulsion. Essentially, it pulls the rug out from everyone on middle incomes and commits them to stakeholder pensions without being honest about it. As a result, the badly advised will stay in the poor-value state scheme and the well advised will probably opt out. We do not want that sort of regime.

The critical factor in pension arrangements is certainty. People need to be able to plan with certainty and these arrangements do not provide for that. No one knows when the scheme will start, when it will go flat rate or what the rebates will be. People hardly know anything about it, so how can they plan their pensions?

It is more complex still. I am grateful to the Minister for allowing his officials to track down this point for me. Page 62 of the explanatory memorandum states that the state second pension will apply only to people who have a good chunk of their working lives ahead of them. People just short of retirement age will not suddenly be switched to the flat-rate scheme. So one group of people close to retirement age will be on one structure, another group will be on the flat-rate structure and others will be in stakeholder, occupational or personal schemes. The whole system will be so complex that it will be a mess. We need simplicity and clarity.

The final and fundamental point about the pensions aspect of the Bill is that, even after 30 or 40 years of reform, the pension will be inadequate. The hon. Member for Bradford, North talked about adequacy and giving people a decent pension in old age. He mentioned the poor return that people may get on private pensions, but a poor return would be to spend 40 years making contributions to the state second pension but to be on income support within five years of retiring. That would be absurd and a waste of time, but that is the Bill's approach to pensions.

Mr. Frank Field (Birkenhead)

The hon. Gentleman referred to what a future Government might do with the state second pension. Is it not a danger that the state second pension will be uprated only in line with prices, but the minimum income guarantee pension will be uprated in line with earnings? It would be open to a future Government to argue that it would be a far better deal to put people on to the minimum income guarantee pension compulsorily instead of leaving them on the state second pension. That is a worry to those of us who wonder how long the scheme will last.

Mr. Webb

As so often, the right hon. Gentleman puts his finger on the crucial point. A future Secretary of State, when asked to improve the state second pension, will give the same response that the present Secretary of State gives when we say that 75p is not enough—"Oh well, we'll just put it on the means test." Soon the state second pension will do nothing except fill the gap between the basic pension, which will hardly be worth having, and the means test. What is the point of that?

We also object to the child support proposals. The hon. Member for Bradford, North highlighted some of the ostensibly desirable aspects of child support reform, such as the maintenance disregard, which I support. Indeed, I called for it in my maiden speech, so I have again had a major influence on Government thinking. However, support for the maintenance disregard does not presume support for a particular method of working out maintenance liabilities. In other words, we can agree that, however the figure for maintenance is reached, some of it should be then disregarded. To oppose the Government's method for calculating maintenance is not to oppose the disregard—it is the method of calculation that is the problem.

How can I put it? Ministers have made no attempt to build flexibility into an inflexible financial formula. Those are not my words, but those of the First Minister of Scotland commenting on the Conservatives' reforms of the CSA in the mid-1990s. The Labour party used to think that the system should take account of individual circumstances. It used to think that flexibility mattered because it would add to the justice of the scheme, but it no longer thinks so.

The Government recognise that the new system will be unfair and create onerous duties on individual absent parents. The giveaway is that they have lowered the average maintenance figure. The Government know that there would be a storm of protest if they tried to collect the same amount of maintenance on average in the rough and ready way described in the Bill. Parents with care and children will lose out, because the Government have had to set lower maintenance assessments to overcome the injustice of a crude formula.

The trade-off for the simple formula that everyone is lauding today is that some children will lose out. How many? That is a subject on which the Government have been astonishingly silent. I tabled a written question just before Christmas asking which categories of people would lose from the reforms and how many people would be affected. The short answer is that the Government have not got a clue. The reply stated: to forecast which individual families are likely to be better or worse off … we would need to establish the extent to which the non-resident parent is compliant now"— in other words, whether maintenance is already being paid— and estimate future compliance. We have not made such estimates".—[Official Report, 10 January 2000; Vol. 342, c. 77W.] Is not that irresponsible? How can the Government introduce a far-reaching reform to family support without knowing how many gainers and losers will be created and who they are? That is the action of a Government who are irresponsible on child support.

Mr. Rooney

Is the hon. Gentleman telling us that it would be responsible to retain the present system, under which more than 1 million children get nothing? Does not he accept that there has to be a trade-off between fairness and simplicity? [HON. MEMBERS: "Oh!"] We have to accept that the simpler the system, the fewer escape routes there are for non-resident parents.

Mr. Webb

The hon. Gentleman seems to want to object to a point different from the one that I was making. I asked how it could be responsible for a Government to introduce a reform without knowing who gains and loses, but the hon. Gentleman spoke about a trade-off between fairness and simplicity. Reform is necessary, but if I were the Secretary of State—as I hope to be one day—and if I were introducing such reforms, I would make an estimate of gainers and losers and make that estimate public. This Government are afraid to do that.

Is the CSA capable of being reformed? The hon. Gentleman said that people who ring the CSA often get a poor quality of service. How can that be changed when, although the numbers are fiddled with, exactly the same personnel are left in the relevant offices?

Mr. Dismore


Mrs. Humble


Mr. Webb

I shall give way in a moment. The issue has to do with the culture of an organisation. What has happened is that the technocrats and anoraks in the Department of Social Security have done the sums and drawn the lines on the graphs, but they have lost the human touch. The culture of the CSA is beyond reform. That is why we believe that the agency should be abolished.

Mrs. Humble

I refer the hon. Gentleman to the section in the report from the Select Committee on Social Security that covers this matter, and concentrates on the need for training staff. The hon. Gentleman will know that the Committee was given reassurances about the importance of training and of ensuring that staff are aware of the needs of people who telephone the agency. Will he accept the reassurances given by the chief executive of the CSA, who told the Committee that she was looking positively at such matters and that she was aware of the problems that the hon. Gentleman has mentioned?

Mr. Webb

Obviously, any improvement in training is entirely welcome, but how often have such assurances been given in the past? How many times have heads of the CSA, past and present, said that the agency would perform better in the future? The culture of inefficiency and backlog, of excuse and cover-up is endemic to the CSA, and it has to go.

Mr. Dismore


Maria Eagle


Mr. Webb

I want to make some progress.

There has to be an alternative to the CSA. I was flattered that the Secretary of State began his speech by setting up a parody of the Liberal Democrat approach to the matter, and then attempted to knock it down.

The alternative that we advocate is a system based on family courts. In marked contrast with what happened in the past, under our new system, such courts would be given guidelines but, if those guidelines create an injustice for a person, that person will have the opportunity to have his or her individual circumstances taken into consideration. What leaves people most aggrieved with the CSA is the feeling that the formula does not fit their circumstances.

Maria Eagle

I thank the hon. Gentleman for giving way to me at long last. I am trying to work out whether the hon. Gentleman is advocating adopting a simplified formula or retaining a complex one. Will he say whether he is in favour of simplifying the formula?

Mr. Webb

Yes, I am indeed in favour of simplifying the formula, which should be the benchmark around which there is scope for discretion in individual circumstances.

In the past, the court process has been rightly criticised for its failings. It was often quicker than the CSA has turned out to be, but there was a problem of inconsistency arising from the lack of guidelines on plausible maintenance assessments. Courts are always given ranges in the sentences that they can impose, so that the right sentence can be chosen to fit the circumstances of each case. They are good at making such choices: why should they not do so in relation to matters of child support?

We are told that the Child Support Agency will move over to the new regime at the end of next year, and that that will require a new computer system. However, the process of securing that new system has not begun. The system has not yet been tendered for. The Under-secretary, the hon. Member for Wallasey (Angela Eagle), said yesterday that the Government had not even asked Parliament for the necessary money yet. Given the chaos of the national insurance recording system, NIRS2—which the Government told me last summer would be sorted out by the autumn, but which I note from a written answer this morning is not to be sorted out for another year—how can we have any confidence that this reform will be brought in on time? How can we have any confidence that the new computer system will be ready? What have the Government been doing for all this time? Why have they not got the new system commissioned and ready for when the legislation and the new formula are in place?

People who work at the CSA have told the Select Committee on Social Security that the management are making preparations to run the new formula on the old computer. That is incredible. Are we to have new cases on the old computer? If so, why do we need a new computer system? If the old computer is not up to it, what chaos will we have? The whole thing has all the makings of another fiasco, and the Government would do well to learn the lessons of the previous ones.

The final section of the Bill contains the obligatory illiberal clauses in any "new Labour" Bill. In this one, we have the benefit sanctions for people who breach community service orders. People on the ground dealing with offenders are united in saying that this is gesture politics. The people who deal with the resettlement of offenders say that it makes no sense as a way of tackling crime. Probation officers—who, presumably, are not all "woolly liberals"; the phrase of the moment—say that it is extremely difficult to envisage that the withdrawal of benefits from those who breach orders will enhance public protection or reduce crime. However, that is not what the measure is about. It is all about tabloid headlines. It is another case where the substance of the policy does not matter—it is about the next morning's headlines.

Any one of these sections would be enough for the House to reject the Bill. Put them together and we have a bad Bill, which we are prepared and proud to oppose.

5.42 pm
Dr. Lynne Jones (Birmingham, Selly Oak)

There has been much interest lately in the reform of the other place. Looking at this Bill reminds me of the need to reform our Chamber, and especially of the need for better scrutiny. Time and again, Governments have introduced legislation aimed at achieving laudable objectives on which there is much agreement; time and again, the measures they have put in place have failed to meet those objectives.

The example of that, par excellence, is the legislation that created the Child Support Agency. There was genuine agreement on both sides of the House that it was right that absent parents should support their children. However, the net result was the absolute shambles of the CSA, which we know about from our casework.

It is interesting that in the Bill the Government will introduce measures to simplify drastically the complex formula that has come about over the years as the previous Government tried to grapple with complaints about the unfairness and lack of flexibility of the original formula. In contrast, the Government are now proposing reforms to pensions that will make the system horrendously complicated. There seems to be no joined-up thinking in the approach to these matters in the Bill.

I wish to concentrate most of my remarks on pensions, although that does not mean that I do not have views on other parts of the Bill. However, time is short. I wish to examine the objectives that the Government have set for pensions reform, which are not entirely covered in the Bill. First, the Government say that they want to reduce dependence on means-tested benefits for pensioners, and that it is quite wrong that, after years of working, people must retire and depend on means-tested benefits. I am sure that everybody agrees with that.

The second objective is to encourage those who can afford it to top up state provision by joining a good private pension scheme. Again, I think that we can all agree with that objective. Not explicitly stated is a third aim that these measures should be rigorous and stand the test of time. That is implied in the proposals, because of course the measures will not come into full effect, as the hon. Member for Northavon (Mr. Webb) pointed out, for about 50 years.

Do the provisions meet the objectives? Unfortunately, I do not think so. Why do we need reform? If we want to achieve these objectives, the best way would be to ensure that the basic state retirement pension was set at a rate above the income support level for pensioners—the guaranteed minimum pension. That would, at a stroke, remove means-testing for all pensioners.

Private pension schemes have grown as a result of the undermining of the basic state pension and SERPS. I submit that the best way of encouraging more private pension provision for those who can afford it would be to restore a type of SERPS provision, although not exactly the same. I take the point made by my right hon. Friend the Member for Birkenhead (Mr. Field) that it would be too easy for future Governments to raid such schemes, which should perhaps be administered at arm's length by a trustee body. However, some type of SERPS provision could be reinvigorated.

People have difficulty in understanding SERPS, but once it is explained it is reasonably easy to understand the fundamentals. The same cannot be said for the proposals before us. It is not just because of the need to introduce changes in the original proposals to take on board concerns from private pensions schemes and employers that it will not be viable for people earning less than £9,500 to be in occupational pension schemes. The original proposals will have to be tinkered with to do something about those concerns. That will create horrendous complexity. In addition, there are three different accrual rates for the state second pension. People can go in and out of those rates according to how much they earn. It is a very complex scheme.

Pension providers such as the National Westminster Group and the Legal and General Group plc have, along with the Confederation of British Industry, pointed out that the reforms are likely to lead to less private pension provision, not more. In addition, good employers with good occupational pension schemes could decide to stop providing them because it would be easier and cheaper to recommend a stakeholder pension scheme.

There is a belief that stakeholder pensions will be like manna from heaven for people on low incomes, but they are simply personal pension schemes that require people to purchase an annuity on retirement. They are by no means secure. The Government have kitemarked personal pensions to limit charges, and that is welcome; but even a 1 per cent, charging regime eats up 25 per cent, of any fund. That can be a significant amount to someone on a low income.

It is not surprising that the Government have accepted the view that to encourage more stakeholder pensions would not provide low earners with a decent pension—hence the need to invent the state second pension. The state second pension has been praised for its redistributive effects and for the fact that it treats people earning less than £9,500—or the threshold set by the Government—as though they earned that amount. That is most welcome, but a simpler way to achieve that aim would be to uprate the basic state pension.

I remind hon. Members that had the basic state pension been linked to earnings, it would now be worth about £27 more a week to a single pensioner. The state second pension will not deliver as good a deal to people in such income brackets. Labour Members should not delude themselves into thinking that the state second pension is a replacement for SERPS. It is not; it is a replacement for the proper uprating of the basic retirement pension. We should do far better to consider that uprating. At the very least, we should increase the state retirement pension to the rate of the guaranteed minimum pension.

People will ask, "How will you afford that?" When people like me propose measures that will cost money, the costs are thrown back in our face, but when the Government propose even more expensive measures, that is okay. We must be aware that the proposals for the state second pension and for the rebates for those with incomes above the earnings threshold will result in a cost of £16 billion. That is the Government's projection when the scheme is fully operational. The Government's proposals will be quite costly—the Secretary of State mentioned a figure of £5 billion. I suggest that we should do better to divert such resources into boosting the state retirement pension.

The need for reform arose because of grave concerns about pay-as-you-go schemes to finance pensions. However, funded systems are not necessarily better than pay-as-you-go systems. I do not have time to go into the reasons for that. The effects on the economy of drawing down a pension from a funded or an unfunded scheme are much the same.

I refer hon. Members to a helpful brief produced for the all-party group on occupational pensions by the Association of Consulting Actuaries. It includes an article by Benjamin Meuli, managing director of J. P. Morgan. He makes the fundamental point that whether the system is funded or unfunded, we need to consider its impact on the economy. There is no evidence that the economies of countries with largely unfunded schemes perform less well than those of countries where most of the pension schemes are funded. On balance, we probably need both. In order to limit the risk in equities, it is necessary for private funded schemes to hold part of their investments in gilts. That is much the same as the Government using the investment from national insurance contributions.

We shall do the country a grave disservice if we continue to undermine the social insurance principle. Despite the attempts of successive Governments to undermine national insurance and the social insurance principle, there is still a great deal of support for both. If people knew that they would receive a good pension, they would be willing to pay into a state system, especially if it were managed in a way that prevented future Governments from raiding it.

It makes no difference to individual citizens whether they pay through national insurance, through a hypothecated tax or into a private pension scheme—they still have to pay. The question is: what gives them the best value? Probably—as in all matters—it is not a good idea to keep all one's eggs in one basket. However, the state has a role to play for poorer people and for those who do not have the opportunity to save for their retirement. The state's role should not be restricted to those people; it should also underpin the private sector, for more affluent people.

I shall support the measure in the Lobby today, but much work remains to be done to make it acceptable. It is necessary to consider the role of the basic retirement pension. We must examine that, and we must receive assurances about it if the Bill is to have any chance of working. I hope that the Bill will be much improved when it returns to this place. I offer my services to the Committee and hope to prove myself wrong in suggesting that the scrutiny process will be inadequate.

5.56 pm
Mr. Tim Boswell (Daventry)

I begin with the Child Support Agency because it is central to the concerns of my constituents and to my constituency work load, as is the case for every Member of the House. That casework has evolved over time, from simple dysfunction—when no one could get an answer from the CSA at all, whether they were the parent with care or the absent parent, and came to their MP just to have some response—to a more developed state.

At present, there are problems with arrears for parents with care. Those problems reflect past dysfunction and are largely behind us. Arrears have built up; people claim that they did not know and that they cannot cope with the repayments quickly. There is some uncertainty. Once something has got out of hand, it is difficult to bring it back to a manageable state, even with good will from all parties.

Other Members who have spoken in this interesting debate have made the point that the absent parent dodges responsibility—although not always. The parent or new family with care of the child often come to me with problems because that is happening. Therefore, I support the principle that the enforcement of orders should be made more effective. However, as my hon. Friend the Member for Havant (Mr. Willetts) has pointed out, there are considerable doubts about whether that will be delivered in practice.

I have several reservations. The first is a gloss on the Opposition's excellent reasoned amendment, in which we talk about the parallel operation of two systems. In fact, there will be three systems that will run together—if not precisely in parallel—because there will also be private arrangements or maintenance orders that have not previously been touched by the CSA system. In principle, such arrangements might continue. One of my concerns, to which my hon. Friend the Member for Havant referred, is that as there is no top limit on the new formula by percentage, the stakes are raised for moving to the new style of assessment at the earliest possible moment. A parent with care who has anything other than an excellent relationship with the other parent is likely to want to move to the new formula if the absent parent is comparatively affluent. That would destroy court orders or private arrangements altogether.

I have a second reservation. Whereas the old formula was at least, in principle, based on an assessment of need and was tempered or refined even if made more complex by the departures procedure, the new system will function as a tax. It will be a tax with a rather high marginal rate, even allowing for the fact that it will be imposed on net rather than gross income. Page 10 of the explanatory notes provides the helpful example of a mythical person named Neil. He has earnings that range from £150 a week to £170 a week—I take it that those are net earnings on a formula not yet determined—and his liability ranges from £18 to £23 a week, which is a difference of £5. That is an uplift of 27 per cent. or more in his contribution and it amounts directly to a tax rate of 25 per cent. That represents a substantial increase.

My third point—I have written to the Secretary of State about this and not changed my view—is that the provisions in clause 15 on disqualification from driving are highly objectionable in principle. I am not a lawyer, but there is a clear distinction between the perfectly justifiable withdrawal of a driving licence for a car-related offence—whether that is dangerous or bad driving or the use of a car to commit another crime—and the withdrawal of a licence for the purely contingent matter of failure to comply with one's maintenance obligations. It will be interesting to see whether that punishment is to be applied to other offences.

The Secretary of State has certified that the Bill will comply with the European convention on human rights. Frankly, I would not give the Government a chance of winning a case in which a plaintiff said, "I was a driver, I was entitled to drive and I was a safe driver, but, because of some entirely different matter, they took away my rights."

Mr. Rowe

Does my hon. Friend agree that if the person in question lives in a rural area and cannot get to work by any means other than having a car, the principle of taking away a driving licence will be very similar to taking away the right to travel by bus or train from someone who works somewhere else?

Mr. Boswell

My hon. Friend is on to a good point. I was going to list several anomalies and he makes a worthy addition to them. If we are going to take away a car licence, why do we not, for example, take away a pilot's licence if somebody has one? What will happen to non-drivers who cannot be penalised in that way? Why take a licence away from people who do not need a car to get to work, but allow people who need to drive to work to make representations to retain their licence and then, ipso facto, be able to use it for their leisure motoring, too?

Maria Eagle

Does the hon. Gentleman not think that the suggestion that people might lose their licence might induce a few of them who rely on their cars to pay their child support?

Mr. Boswell

I understand that argument, but I think that it is wrong to use inappropriate remedies, however bad the situation. Remedies must be appropriate to the circumstances.

Mr. Dismore

Will the hon. Gentleman give way?

Mr. Boswell

I will not give way again, because all our speeches are subject to a time limit.

My final concern about the CSA is how the Bill will impact in practice. I have already mentioned my constituency experience that non-maintaining parents are now being seen to wriggle. It is very likely that they will adopt what I call the "Cheshire cat solution" to the problem of their income. The obvious first tactic is to quit work or, to a lesser extent, to change employment and to hope that one is not caught up with, thus relying on some transitional friction to escape.

If one is self-employed, probably one of the deftest ploys is either not to declare the self-employment—I know that the Bill intends to address that point—or to evacuate the value of the self-employment by shifting the profits elsewhere. I know of a case in which somebody is said not to make any partnership profits but who is, in effect, maintained by another member of the family. Therefore, no maintenance goes to the spouse with care. The extreme expedient, which will not be fully captured by the Bill unless a British employer is involved, would be to move outside our jurisdiction altogether. Even if they are part of a Cheshire cat solution, none of those ploys by people who should be maintaining their children would leave any smile on the faces of those who actually care for and maintain the children.

I shall comment briefly on other parts of the Bill. On pensions I shall say very little, because I am as confused by the Government's proposals as, I suspect, are many people who are likely to benefit from the state second pension. The system is very complex and it will produce some potentially invidious class distinctions between low, medium and high earners. I have particular concerns for the self-employed. I have read out with the Bill that there are proposals to limit the rules on tax relief for annual contributions to private pensions, particularly as they would apply to the self-employed, so that one could not buy back into previous years when one did not have sufficient earnings. That would make such pensions less flexible—as a self-employed person, I have benefited from that flexibility in the past. My point mirrors the concerns that I referred to in an intervention about people on lower incomes whose earnings fluctuate week by week. These are points of detail, but they need to be considered.

On part III on enforcement, Conservative Members will generally back well-founded proposals to avoid fraud or the blatant avoidance of payments. We welcome the exchange of relevant information between Government agencies, but the small print requires scrutiny. I am not absolutely sure that the proposals in clause 49 on the withdrawal of benefit do not follow the pattern of the proposals for driving licences that I have already criticised. There may be the random and contingent withdrawal of benefit for offences that are not directly connected to benefit. The Secretary of State must recognise that even control freaks need to play by the rules of the game in hand and not introduce the rules of another game when they are not getting their way.

I wish to say a brief word about some issues that are not covered in the Bill. I welcome proposals that build naturally on the concept of home responsibility payments for mothers in receipt of child benefit that have been established for many years. Proposals to acknowledge the position of carers and of disabled people with intermittent spells of employment have been considered. How much they will amount to in practice is a separate issue, but it would be welcome if the point were conceded in principle.

However, the Bill comes after the recent scars of the Welfare Reform and Pensions Act 1999, and perhaps it is just as well that it does not specifically address disability issues. One of my criticisms of the 1999 legislation, which has now, notoriously, been passed, was that proposals for incapacity benefit signalled that incentives to save for retirement and to build up one's own pension would be clawed back by a loss of benefit or, conversely, in the payment of taxes.

Since then, I have come across two separate cases involving disabled people. One involves someone who has been employed in the media and who is probably well known to several Members present. I was appalled by the fact that, in effect, he had to hand in his job because he can no longer receive carer support from the independent living fund because of the level of his earnings.

The second case is, in a sense, related. It deals with a couple in an established relationship. One was fully able and the other was disabled, and they wanted to have a disabled facilities grant to balance their responsibilities in running their home. However, because one of them was able, they could not obtain it.

I accept that such cases, which are not new to the Government, are no longer acceptable. If we are trying to build a platform whereby people are given an incentive and opportunities to improve and provide for themselves, rather than staying in an implied dependency culture, we have to start tackling such problems. I see very little sign of that in the Bill, and I regret that. There are many missed opportunities and genuine queries about the detail, and it is for that reason that I shall be pleased to join my colleagues in the Lobby tonight.

6.10 pm
Mr. Frank Field (Birkenhead)

I am privileged to follow the comments of the hon. Member for Daventry (Mr. Boswell), but like the Secretary of State, I want to spend my few minutes commenting on the three themes of the Bill.

The first is the linking of benefits to certain conditions. I speak carefully on this matter. I have the privilege to represent a seat in which the vast, vast majority of constituents would be a source of real pride to any country. Similarly, the vast, vast majority of parents in Birkenhead are parents of whom we all can be very proud. However, there is a growing group of people, certainly in the poorest areas, who are beginning to behave in a way that is totally unacceptable, and most of their unacceptable behaviour is aimed at other poor people.

I view the Bill's proposals on this issue merely as a beginning, for we are faced, in some of our poorest areas, with a new form of barbarism that is totally unacceptable. Other, decent poor people—the majority—do not see why they should pay their taxes, and try to bring up their children to be good citizens when, sadly, a small but growing proportion of the local community can run amok and destroy those standards.

If I were prophesying, as the hon. Member for Northavon (Mr. Webb) did in his maiden speech, I would say that at the beginning of this millennium, our constituents are only beginning to make proper demands on us to use the benefits system to try to improve behaviour, particularly in the poorest areas where, as I said, there is a form of new barbarism that is totally unacceptable.

Before long in this place we shall have to debate whether it is acceptable that child benefit should be paid to those parents who are so lacking in parental instincts—the decent feeling that they should put their children before themselves—that they do not care one way or the other whether their children turn up to school. Indeed, they often plot with the children so that they will not go to school. If Labour Members believe that it is only through education that people now have a chance to get out of the rut, we will have to take seriously the view about child benefit, and follow it through.

Similarly, is it acceptable that those who cause mayhem and chaos by their behaviour in the streets should continue to draw housing benefit, whatever they do, knowing that under the present rules, because they have children they will be rehoused elsewhere? My constituents—I am more than happy to make their case here—are already demanding that those parents should lose housing benefit, their children should be taken into care and they should find out what it is like not to have a home. That is the feeling about how bad the behaviour is in a minority of areas in my constituency.

The hon. Member for Northavon may call that illiberal. I have been illiberal for 20 years in the House, and there is much illiberalism to come. If that illiberalism is along the line that I am talking about, I very much welcome it.

The second theme is the Child Support Agency. The Secretary of State said that this is our last chance to reform it and get it in working order. That is a dramatic phrase, which I have used before. He really means that if we do not get it right this time, we will not touch it again, and we will pretend that it is not an issue, although of course it will be an issue for those of our constituents who get a rough deal, or no deal from it. The Secretary of State said that he has an open mind about even the main proposals for the CSA, so I shall state at least three of the structural changes that are necessary if the reform is to get off the ground and begin to crawl, let alone to walk or run.

First, the rates that are currently talked of are too high. It is all very well for us to say what we think rates should be, but there is a political ecology outside the House that we have to understand and win over. The reason for that is not, as my hon. Friend the Member for Bradford, North (Mr. Rooney) said, that the other side had all the good stories, walloped the reform and won all the press. There was, and is, a feeling in the country that the Child Support Agency, as it is constituted, is not fair.

Until we have a set-up that people feel is fair, and people who brag in the pub that they do not pay, get more than the cold shoulder from their mates, we will not make a success of this reform. Part of the trade-off has to be to get the system to work. We can always increase the rates for new people if it works, but we must bear what the Secretary of State said in mind—if we do not win this time, the system will not succeed.

Secondly, the Department of Social Security and its agencies are not the right bodies to collect money. The body that has the culture for doing so is the Inland Revenue, and it should be given the charge of the new agency.

Thirdly, the formula must be simple. The Government have already conceded too much by saying that they will take into account travel expenses for parents who want to visit their children. Of course we all agree with that, but before it becomes a political shroud that Labour Members shake freely, no one daring to disagree with it, let me say that if that condition remains in the Bill, that will be the new scam.

We fought, quite properly, the good cause of people who were threatened with violence and said that they should be able to plead that. However, the figures for violence have risen from under 3 per cent. of cases to 40 per cent. because everybody knows that claiming violence is a good way of trying to rig the system to their advantage when they have made a private agreement.

There are secondary matters that we also need to take into account. It is not fair to have a minimum £5 levy for everyone and for there to be two rates for those on incomes between £100 and £200. The £5 rate will apply to those on benefits even if their income is between £100 and £200 a week, but a higher formula will apply to those in work on the same or lower earnings. If we add in the value of rents received by people who are already on benefit, I do not see why the same formula should not be applied to them as will be applied to people who are on a similar low income but who earn that income.

I caution against using driving licences. I fear that I may have been among the people who suggested that, but I no longer think that it is a sensible idea. If the Whips in the House want to control us, they must understand what we fear, what we worry about and what will hurt us. We must apply that rule in this case, and my guess is that what will hurt the people who we want to pay is the loss of their passport. They are the people who pay nothing but who go on fine holidays.

The inability to leave, or perhaps to re-enter, the country would be a far greater deterrent than removing people's driving licences. As the hon. Member for Faversham and Mid-Kent (Mr. Rowe) said, people will simply break the law because it is believed that it is important for people to be able to work, and we would be pushing them to break the law. I am all in favour of toughness, but when we devise the measures, we should ensure that they are ones that people fear, so that they will not be laughing at us.

To develop the point made by my hon. Friend the Member for Barnsley, Central (Mr. Illsley), there are lessons that we can learn quickly from the private sector. Why is it that it is so much better at tracing parents, generally fathers, who will not pay? I find that most of these fathers have holidays and mobile phones, for example, but the CSA cannot find them. However, within a short time the private agency will find them. We should all be interested in success. We must find where these people are, and I hope that the Government will implement the necessary changes now and not wait for the Bill to go on to the statute book.

We all need the proposed reform to be a success. If the Government are confident that it will be, as I hope it will be, why is it that in the welfare reform Green Paper one of the success measurements relates to improving the CSA, but we look in vain to find a similar inclusion in the new poverty audit? If we are confident about reform, why are we not up front in saying what we expect reform to achieve within a certain period?

The debate on pensions is so different from that on the CSA. With the CSA, we are at the end of the line; with pensions, we are at the beginning. One piece of information shows how difficult pension reform will be. My right hon. Friend the Secretary of State rightly walloped the Opposition by saying that they left office after decades in power with one pensioner in three being poor. However, when all the reforms that the Government say that they will introduce are implemented and working to the very best effect that any of us can hope, after 50 years of the reform programme, we shall reduce the number of pensioners in poverty from one in three to only one in four. Before we think that all the answers are in the Bill, it is crucial that we keep our minds open to other reforms.

If the modest reduction to one in four of our fellow citizens being poor is achieved, as my right hon. Friend defines "poor", it must be assumed that there will be a rush of providers for stakeholder pensions. I do not think that there will be, but let us assume that that will be the position. It must be assumed also that, as we read in the newspapers, the exemption that my right hon. Friend is granting to small employers will not have a significant impact on people working in small firms, who are largely on lower pay, who go for stakeholder pensions. Further, it must be assumed that with the best will in the world, our reforms, that we want so much to be a success, have no bad effects on occupational pensions, which my right hon. Friend so often rightly says is the one welfare reform of this century of which everybody can be proud.

The debate is about trying to use our huge welfare budget—the largest budget that the Government have—to ensure that we get the very best behaviour from people, and particularly from that group which is making life impossible for decent people at the bottom. Against that background, I welcome the reforms that are proposed in the Bill but see them as only the beginning.

I do not usually disagree with the hon. Member for Northavon, but he has dubbed the Bill as illiberal. Some of my constituents have been reduced to tears and to breakdowns because of anguish. They do not have our freedom or bank balances to enable them to move away from the wretched people who are causing them distress. There will be a cheer in my constituency for what the Government are doing, and there will be even louder cheers when we return to the issue of linking benefits to good behaviour.

I hope that the Government will live up to the promise that genuinely they have an open mind in accepting radical structural reforms to the CSA that will lead to a simplified formula. As the Bill stands, I do not believe that it will get up and crawl, let alone walk.

We can welcome all that the Government are doing on pensions and I emphasise that the state second pension will provide a level of redistribution that most of us thought that the Government might shy away from. Let us cheer the Government when they are doing things of which we can be so proud and can take into the country. However, we must not let ourselves be fooled by our own rhetoric. If everything goes well and if every reform works, we shall be laying down office and stewardship when we have reduced the number of people in retirement who are poor from a third to a quarter.

6.25 pm
Mr. Andrew Rowe (Faversham and Mid-Kent)

I was not quite sure to whom the Secretary of State was referring in his opening remarks. I now realise that he was referring to a significant number of his Back-Bench colleagues when he said that some people were clearly born at the wrong time and in the wrong place under a Tory Government.

I have learned today how little I know about pensions. I have worked in this place for about 20 years so far and it is becoming a matter of some urgency to learn a little more about how the pension system works. The fact is that nobody trusts Governments with his or her money. What is more, the record shows that they are absolutely right not to do so.

The reality is that the world at work changes far faster than the world in which pension schemes can operate. When I started contributing to a pension, the idea was to have a final salary pension scheme. There are many people locked into such schemes, which are entirely unsuitable to them. For example, many women are being crucified by the conflict between staying on at work to get a reasonable pension and the need, as they see it, to look after an ailing member of the family. Final pension schemes were designed usually on the basis of a lifetime's work with one employer, but that concept has been overtaken.

I shall give an example of the complexities that arise. When my wife moved down from working five days a week to four for her principal employer, no one had explained to her—I do not suppose that many people understand this—that a full-time pension is based on seven sevenths of the week. If someone moves down to working four days a week, he or she will have four sevenths of a pension. It would normally be thought that on moving down from five days a week to four there would be a pro rata effect on one's pension.

Such complexities, the length of time that pension schemes operate and, as has been well demonstrated, the fact that they become wrapped up by Governments after 10 or 20 years of trying, suggest a possible fault. People want from their pension scheme a reasonable return on the money that they have put in. Would it be unreasonable to suggest that people should have the opportunity every five years to take their pension pot and reinvest it? After every five years they would at least have some control over the scheme In which they are and where they are.

A serious issue about pensions is that they are designed to create a positive disincentive to marry. Many respectable widows and widowers in my constituency are finding it infinitely more satisfactory to live in sin. Some of these people find this distressing. [Interruption.] Some Members laugh, but they should understand that some people who were brought up with a particular set of morals find this situation very mistaken.

The Bill demonstrates yet again what an extraordinarily punitive Government we have. All my experience, whether as a schoolmaster or in any other walk of life that I have assumed, suggests to me that people respond infinitely better to incentives than to punishment. Perhaps it would be a great deal better to take, for example, what the National Association of Probation Officers has said about the disincentive effect of punishing people who break their probation conditions by destroying their benefits. The association has pointed out that if someone pays attention to his probation conditions he will win thereby a diminution of the time that he is bound by the order. Such a system would be a great deal better than one that, by punishing, either drives people back to crime, or makes life difficult for conscientious probation officers who believe that more harm than good might be done by their reporting a breach of probation conditions. That matter should be examined in Committee.

My primary focus is on the CSA and its reform. It is extremely distressing to hear the Secretary of State say that there will be more than 2 million children on the CSA's books. A major contributor to the problem of poverty in our enormously wealthy society is divorce: it is the fastest route to family poverty that one can devise. I speak as one who has been through it, so I know how damaging divorce can be to income projections and capital accrual. Divorce impoverishes everyone, regardless of income. Quite apart from that, we should be extremely disturbed by the fact that 2 million children will have experienced the distress of family break-up.

It is too readily assumed that the mother is always the victim. I have heard in my surgeries about a significant number of cases in which the husband has clearly been set up and paid a heavy price. Most distressing to me is to hear of cases in which a father tries to use his access arrangements but is prevented from doing so. If the mother no longer wants to have anything to do with the father of her children, it is easy for her to deny him access, for example, by telling social services that his visits so distress the children that he should be prevented from seeing them altogether.

We must ensure that men who conscientiously pay child maintenance have a clearly defined and properly enforced right to see their children. If that contact has to take place in neutral locations, such as the foyers run by some charities, fair enough. The anxiety that the problem has created must be addressed.

The CSA must be one of the most awful places in which to work. I can imagine no job more dreadful than one that involves being verbally attacked in every way on the telephone when trying to arrive at an objective view of someone's circumstances. I should be interested to learn what the CSA's staff turnover is. Those who come to my surgery would say it must be 100 per cent., because their case never seems to be dealt with by the same person two weeks running.

I suggest a practical way in which the Government might be able to alleviate that problem. There is no technical reason why local authorities and other centres should not provide a facility whereby those who want to discuss outstanding issues with the CSA have on-screen access to the same information as the CSA clerk. That would circumvent the need for a huge amount of correspondence and help to remove a major source of disagreement. Conditions change between someone writing to the CSA and the CSA writing back. It would be enormously valuable to exploit technology to ensure that those on both ends of the telephone conversation have sight of the same information on screen.

The Bill presents considerable difficulties in respect of the true cost of maintaining children. We greatly underestimate the cost of rearing children, but the state has a powerful incentive to try to ensure that children grow up surrounded by a reasonable income. We live in the fifth richest country in the world, and we could usefully divert far more money to enhancing child benefit. Such a measure would also help families to withstand late maintenance payments.

I have been around long enough to have seen the pendulum swing to and fro between detailed conditions being attached to various benefits, discretionary payments and simple formulae. Every time a simple formula is set up for the sake of easier administration, the number of people who feel that they are unfairly treated because their personal circumstances are not taken into account increases. After a time, an incoming Government decide that changes are needed and either give officials more discretion, or introduce a formula containing all sorts of caveats. All is fine for a while, but officials are human and they all too often give people the benefit of the doubt, with the result that the cost of such discretion outruns what was intended.

Mr. Ian Bruce

My hon. Friend raises an important point. He will recall that, when introducing the Child Support Bill, the previous Government were attacked by everyone, including their own Back Benchers, the then Opposition and the Liberals, for laying down too simple a formula. The reforms carried out made the system more complicated, but it still does not work. Should we not return to first principles, instead of creating another formula?

Mr. Rowe

The issue is a difficult one—the fact that the pendulum swings from one end of the spectrum to the other in all of our benefits debates demonstrates just how difficult. I entirely agree with the Government that what is needed is speed of decision making and resolution. That the assessment of individuals can be months behind schedule is intolerable. Why, when the CSA makes a mistake, does the client pay the price? It seems that the CSA's mistakes are never visited on the CSA. We should establish a reciprocal arrangement, whereby if a client falls behind in making payments because the CSA is behind in making its assessment, the client should not have to pay the additional costs.

6.38 pm
Mr. Andrew Mackinlay (Thurrock)

I have focused carefully on all the speeches made in this debate, especially those that have addressed the subject of pensions. I am in awe of, and admire, those hon. Members in all four quarters of the House who speak with great eloquence and knowledge about pensions. The creation of a proper system of pensions for the people of this country is like holiness: we are all in favour of it and we all have different ideas about how to achieve it, but it is extremely difficult to achieve in practice.

I am persuaded that the Bill at least attempts to ensure that those who have endured deprivation and hardship during their working years or who have experienced periods of unemployment do not have that experience reinforced in the evening of their life.

In that regard, I am pleased to support the measure, although I, like my hon. Friend the Member for Birmingham, Selly Oak (Dr. Jones), still regret that my party abandoned the policy that it reiterated in general election after general election—that it would restore the link with earnings in respect of pension upgrading. I regret that it has been abandoned. When she mentioned the matter, one or two of my colleagues, whom I hold in high personal regard, uttered from a sedentary position, "How will we pay for it?" Of course, if it were done as a big bang now, it would be enormously difficult. We must recognise that much water has gone under the bridge, but we should not have abandoned the principle or the objective.

To the extent that there is a marginal difference between me and the Government, I believe that we should have been more ambitious in our redistributive policies, and that we probably should not have accepted for two years the Conservatives' budget in terms of overall expenditure.

We should have been bold and brave, as some were a score of years ago with the Rooker-Wise amendment. It was an ambitious move, which Government Front Benchers then resisted because of costs. Sometimes parliamentarians prevail, to their eternal credit. They will be remembered for that, and perhaps not for what they do later. I still say to the Government that we should be more ambitious in our desire to redistribute wealth.

With reference to the Child Support Agency, I listened carefully to what hon. Members said. The hon. Member for Daventry (Mr. Boswell) has a point on the narrow issue of driving licences. All too readily, legislation is certified as complying with the European convention, and there is a danger of our draftspersons devaluing that certificate. They would have said that it complied, even before we signed up. We should be more cautious.

Not only will the provision be challenged if it is enacted—I hope that we will rethink the matter in Committee—but it is also illogical. Leaving aside the European convention point, one could ask why driving licences; why not bicycles, or equipment for train-spotting, bird-watching and so on? There could be a schedule of ways in which people could be penalised. This is not the best concept in this important and valuable piece of legislation.

I listened to the intervention of the hon. Member for South Dorset (Mr. Bruce), who tried to rewrite history by observing that the Conservative Government were criticised for the legislation introducing the CSA because it was simple. The criticism that should be levelled against the Conservative Government is that the concept was marketed in such a simplistic and populist way. The word was put around by the spin doctors of the day and taken up by the press that there was a vast army of men out there who were not paying maintenance but could pay, and that it could simply be collected off them.

The CSA was almost universally thought to be a good idea, and some of those who were most enthusiastic about it are now attending our surgeries. They made arrangements with their former spouses or partners or diligently endeavoured to meet their responsibilities. They have, in a sense, been contributing to the work of the CSA, and now realise that it was a big fib that there was a large group of people out there who could pay child support and from whom it could be collected. The truth has now been rumbled. Of course, we know now that it ain't that simple.

One of the lessons of the CSA legislation is that there was insufficient proper scrutiny of its effects by the House.

Mr. Jim Cunningham (Coventry, South)


Mr. Mackinlay

I shall give way to my hon. Friend, but I remind him of the time limit.

Mr. Cunningham

I am grateful to my hon. Friend for allowing me to intervene, and I shall be as quick as I can. Does he remember that originally, in 1991, the then Government, who are now the Opposition, sold the idea of the CSA on the basis that they would pursue absent fathers, and set a target of £2 billion that they would save as a result?

Mr. Mackinlay

One of the principal elements of the legislation was revenue collection by the Government, rather than the social consequences of improving the quality of life and the resources available to families and children. We must recognise that it was a bad piece of legislation.

I listened open-mindedly to the remarks of the Liberal spokesperson, the hon. Member for Northavon (Mr. Webb), which had some merit. However, we are not starting from scratch. We must deal with the system that we inherited.

The shadow Secretary of State, the hon. Member for Havant (Mr. Willetts), is not in his place, which I regret. Indeed, I regret that several Secretaries of State and principal spokespersons are not present. The shadow Secretary of State leaned on the Dispatch Box and asked how we would cope in the interim period, during the changeover, as though the situation were a cock-up created by the Labour Government.

No one suggests that the interregnum—the changeover—will be easy, but we shall have to cope. It is not ideal and there will be hiccups. The people to blame—the architects of the ill-conceived legislation—are not on the Government side of the House, but on the Opposition side. A period of silence by the shadow Secretary of State would have been appropriate.

Mr. Ian Bruce

Will the hon. Gentleman give way?

Mr. Mackinlay

No, I will not. The hon. Gentleman will have had four or five bites of the cherry. Sit down.

I stated in a letter to Madam Speaker that I wished to speak on a particular matter, which has not been mentioned this evening—the part of the Bill that amends the law relating to war pensions. We should not lose sight of that, despite the tendency to group three or four Bills together in one Bill, which is wrong.

I wrote to my right hon. Friend the Secretary of State before Christmas, reminding him of the fact that I had a ten-minute Bill supported by hon. Members from right across the political spectrum. It mirrored a Bill that had been passed by the House of Lords, with the Government spokesperson there saying that the Government were not opposed to the measure. It was introduced in the other place by Alf Morris. It is a simple measure that could be incorporated in this Bill in Committee.

Under the measure, the Secretary of State would be obliged to make a report to Parliament every year, after consultation with all interested parties, particularly the ex-service organisations, about the expenditure in the previous financial year on service pensions, war pensions and war widows' pensions. The measure is obviously sought by the Royal British Legion, the Officers Pension Society, the Royal Naval Association, the Royal Air Forces Association and the British Limbless Ex-Servicemen's Association. It would be immensely appreciated if Parliament took the opportunity to put that on the statute book.

If the Under-Secretary of State for Social Security, my hon. Friend the Member for Wallasey (Angela Eagle) has been briefed by her civil servants that I intended to raise the matter, she might remind me that there is already a statutory report on war pensions, which comes to Parliament. However, it is not subject to statutory consultation in advance, it is not required to reflect whether sufficient resources are available to meet the new needs created by the inevitable advance of age among war veterans, and it does not incorporate service pensions or war widows' pensions.

It is time that Parliament revisited the matter. I hope that my hon. Friend the Minister will say, in the spirit in which my right hon. Friend the Secretary of State dealt with other parts of the Bill, that the Government are open to suggestions and are prepared to accept amendments in Committee.

I do not want to labour the point tonight, but I hope that the issue might be an example of the popular desire for Parliament to recognise the need to tackle, through an annual report to Parliament, the interests of ex-service men and women, people who receive war pensions, war widows and their dependants. It is important to do that because, unlike other Parliaments around the world, we do not have a dedicated veterans Minister or an annual debate on veterans' issues. I regret that. The last debate on that matter was on 1 July 1996. I was fortunate enough to win the ballot for one of the last private Member's motions on a Friday and we held a well attended, full day's debate on the subject. Tony Newton, the Minister who replied, was sympathetic to the proposal of holding an annual debate. There are annual debates on other issues, and I hope that the current Minister will take up the suggestion.

We all have a view about our obligations to people who have made sacrifices on behalf of the United Kingdom in the various conflicts of the century that has just passed. I hope that my proposal for an annual report will be incorporated in the Bill in Committee or on Report, and that it will go some way towards not only tackling Parliament's deficiency in considering veterans' issues, but prompting the annual debate to which I referred. I hope that the Government will reflect on that, and that my colleagues who are fortunate enough to serve on the Committee will adopt the proposal and push it through.

6.52 pm
Mr. Tony Baldry (Banbury)

It is always a pleasure to follow the hon. Member for Thurrock (Mr. Mackinlay). I contested that constituency—alas, unsuccessfully—in 1979. I hope that hon. Members who serve on the Standing Committee will endorse his last suggestion, which is perfectly proportionate and sensible.

The Government took office claiming that they intended to reform the welfare system. The measure is their set-piece Bill for their first—and hopefully their last for some time—Parliament in government. Yet what will be the headlines in tomorrow's national newspapers? I suspect that they will simply be about taking away driving licences from those who do not pay their contributions.

We live in a society that is generally becoming wealthier. Newspaper reports this week suggest that more and more people own their homes, the value of housing is rising and an increasing number of people have savings and shares. Most people can therefore make adequate pension provision for themselves. The test for the Government, especially a Labour Government, is what the provisions achieve for the less well-off and the poorer members of our community. I have heard little that is coherent about that. Indeed, the cut-off of £9,000 and the various other provisions will make it more difficult for those who are less well-off.

Just before Christmas, the hon. Member for Witney (Mr. Woodward) crossed the Floor. The day before he did that, there was a by-election in my constituency, which is next door to his. It took place in the sort of ward that, I suspect, exists in all constituencies. It comprises a solid housing estate, including a few houses that have been bought under the right-to-buy provisions, and is the sort of ward that the right hon. Member for Birkenhead (Mr. Field) mentioned: it consists of many decent people but its unemployment rates are above average. The by-election took place in a ward that the Labour party had held for the past 27 years. On the day, 5,000 people had an opportunity of casting their votes. The Conservative party won, despite the excellent Labour candidate, who was leader of the Labour group on the district council. He has been mayor of Banbury and his wife has also been mayor. He has devoted his life to public service in the town and lives in the ward. He lost because many Labour voters no longer see a reason to vote Labour.

Mr. Lindsay Hoyle (Chorley)

What was the turnout?

Mr. Baldry

The hon. Gentleman asks for the turnout figures, but after two and a half years of a Labour Government, the people in that ward, which has been Labour for almost a generation, had no incentive to turn out and vote Labour. If one visits hospitals nowadays, one finds that nurses feel no incentive to support the Labour party.

The Bill should tackle the needs of the many poorer members of our community. If they hear about the measure, they will feel that it does little for them. I emphasise to my hon. Friends on the Front Bench that the Bill gives us an opportunity. I hope that the Opposition will make it clear—as my hon. Friend the Member for Havant (Mr. Willetts), the shadow Secretary of State, did in his opening remarks—that the measure does nothing for the worse off in our society.

The place for those who believe in one nation, and in helping those who are less well off, is the Opposition Benches, not the Government Benches. The Labour party has become so keen to appeal to the meritocracy that it has forgotten those who live in wards such as Ruscote in my constituency or many of the wards in Thurrock, where I pounded the streets in 1979.

If one knocks on doors during the local government election campaigns in the spring, and asks pensioners and the less well-off whether the Bill does anything to make them or future generations better off, very few will say that the measure is worth while. While many hon. Members will spend weeks in Committee, going through the measure line by line and clause by clause, it will achieve little for the poorer members of our society.

Mr. Hoyle

Will the hon. Gentleman give way?

Mr. Baldry

I am sorry, but I am about to finish.

The Bill is a wasted opportunity. If it is the Government's social welfare reform showpiece, I am proud to be a Conservative. I hope that, in the next Parliament, we shall have the opportunity of introducing decent pensions legislation that helps those who are less well off.

6.58 pm
Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East)

Like many Labour Members, I support the Bill. I want to speak about part I, which deals with child support. As my right hon. Friend the Member for Birkenhead (Mr. Field) said, it will enjoy positive support in our constituencies. We shall see the success of the measure in future. I agree with my right hon. Friend and many other hon. Members that it constitutes a big step in the right direction.

Like all hon. Members, Child Support Agency cases form a large part of my postbag. They include absent parents who complain about muddle, delay and, all too often, grossly incorrect assessment. They also include parents with care—mothers who are almost always alone and who complain that the fathers pay next to nothing towards the care of their offspring. Complaints are made because, in tight-knit communities such as those I represent, it is common knowledge that a father's life style is such that he could adequately support his children.

I also deal with exotic cases. Some mothers have immense difficulty in getting any cash from dads whom they suspect deliberately work in a country with which we have no reciprocal agreements for social security deductions. Also, absent fathers are assigned the bill for the wrong set of children because they have been misplaced on an information technology filing system. One man was deemed to be the absent father of a child by a woman he had never heard of, from a part of the country he had never visited in his life. It turned out that he had been placed on that file because he had the same unusual forenames and surname given by the mother.

Those cases would be laughable if such gross errors did not cause great worry and heartache at the minor end of the scale. At the serious end of the scale, they can lead almost to tragedy. The man I referred to came within a cat's whisker of having his marriage dissolved because of the strain he was under. Many others suffer greatly, such as the men who tell me that they will have to quit work, and the women who cannot get a job because the lack of parental contributions from the absent father means that they cannot afford nursery or child minding facilities.

Like many of our great social disasters, the CSA had its genesis in the former Prime Minister, Margaret Thatcher. In a speech to the Pankhurst Society in 1990, she said: We have proposals which will help lone parents … the whole process will be easier, more consistent and fairer". That hyperbole hid the real reason behind the CSA—the drive to cut social security spending. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) let the cat out of the bag at the launch of the CSA in 1993, saying: The total costs to the taxpayer of supporting lone families reached almost £5 billion last year. Many taxpayers resent paying out to support children of parents who may have incomes higher than themselves. No one will argue with that last sentence, but the net result was that, through its modus operandi, the CSA probably helped to impoverish families and create a growing lone parent underclass. Conservative Members who were Members of the House at that time cannot say that we did not warn them of what was coming.

I hope that my right hon. Friend the Minister for the Environment will not be too embarrassed if I refer to the speech that he made on behalf of the Opposition when the Child Support Act 1991 was being debated. Moving our amendment, he said that the Bill leaves lone parents on Income Support not one penny better off … allows maintenance payments to be disrupted if the absent parent defaults … and does not tackle more serious problems facing lone parents and their children".—[Official Report, 4 June 1991; Vol. 192, c. 194.] He was spot on and we all now know it, which is why we are debating how to make progress.

Yet again, we have to clear up a mess that was left by the previous Government, who ran this country for 18 years. Armed with first-hand knowledge of how the CSA has wrecked lives and the system's inherent faults, we have a Bill that will tackle those evils and those faults. We have a Bill that contains measures that will contribute to our fight against child poverty, as my right hon. Friend the Secretary of State said earlier, and help to support the lone parent family.

Above all, we need a simple formula—and today we have one. Hon. Members and their caseworkers have become experts on the CSA formula.

Mr. Lembit Öpik (Montgomeryshire)

Will the hon. Gentleman give way?

Dr. Kumar

I shall give way briefly because I have only 15 minutes in which to speak.

Mr. Öpik

I thank the hon. Gentleman for giving way. I agree that there is a case for reform, but does he not agree that, to some extent, those reforms will replace one set of injustices with others? Some of the people he is trying to help will be harmed by the changes.

Dr. Kumar

I do not see it like that; all I see is a simple formula that will provide a clear direction for us to take. I hope that that will solve a lot of the problems and I am sure that my hon. Friends on the Front Bench will respond to them in detail. [Interruption.] It is all very well for the hon. Member for Northavon (Mr. Webb) to laugh, but I was generous enough to allow the hon. Member for Montgomeryshire (Mr. Öpik) to intervene. He has not been present for all of the debate, so, rather than laughing, perhaps hon. Members should listen and learn.

All hon. Members would happily relinquish their role in such cases. [Interruption.] I know that the hon. Member for Northavon finds this amusing, but he should listen to what we have to say; he might learn something. Above all, we need a simpler formula, and that is at the heart of the Bill. A simpler formula has to be the starting point. It would be transparent, easily understandable, easily enacted and simple to work with. In that context, I must make it clear that my complaints about the CSA system are not made against the dedicated staff who work in the agency. In my experience, the staff at the office in Falkirk, which serves my area, do their best for their customers and service users, but are defeated by having to work with bad and underfunded IT systems, and having to cope with a constant avalanche of changes to the formula and the consequent avalanche of complaints from people who feel they have been wrongly assessed.

I believe that the basic proposals in the Bill are simpler for fathers—they are more understandable, more realistic and can be more easily assessed against income—and fairer to lone mothers because they are simpler. It will be easier to collect money, and easier collection should mean that cash circulates faster in the system. Mothers will therefore have the right to expect money to be correct and paid on time. Above all, the proposals are fairer to the children.

I am also pleased that the new formula is accompanied by a tougher regime for ensuring collection and the co-operation of absent parents with the system. We all know of mothers who received almost total non-co-operation from self-employed absent fathers who knew that the chances of them having finally to put their hand in their pockets were effectively nil. The artificial blockage between the CSA and the Inland Revenue—a bureaucratic blockage that has blighted too many lives—will be bulldozed out of the way. I am pleased that such draconian measures have been included in the Bill. We should not shed too many tears over the confiscation of a passport, which was referred to by my right hon. Friend the Member for Birkenhead, or the imposition of a prison sentence because of the neglect of a man's children. I have seen too many lone mothers in tears already.

The measures should be considered with other measures to support families, such as the working families tax credit, new child care and nursery initiatives, improvements to housing benefit and other state benefits and, of course, the minimum wage—which Labour Members support, unlike the Conservatives. All that means that we now have a comprehensive and holistic structure for child and family support, but we must not assume that the Bill may not have shortcomings. Some were mentioned by my right hon. Friend.

Our experience of past child support legislation shows that we are dealing with an inherently complicated issue. It has been further complicated by the fact that CSA staff and benefit advisers were dealing with men and women who, in many cases, had already undergone agonising separation. The image of the "deadbeat dad" reflects the reality for a small minority, but in my experience—and, I suspect, that of many hon. Members—they are a very small minority. The fathers whom I meet are different. Most wanted, and want, to support their children, but have found themselves beaten by the system. They see their children as the ultimate victims of that. The real problem with the existing system is that an inherently bad mechanism has been consistently and regularly overlaid by amendments and alterations, born in this place. There have been myriad draft regulations and statutory instruments.

I want to convey a simple message to my right hon. Friend the Secretary of State: "Please do not allow your advisers or your civil servants to influence you, persuading you to make 'a little adjustment here, Minister' or 'a little tweak there, Minister'". That would be the first step towards a retreat into complexity, allowing the growth of a new byzantine structure that would be hard to understand and harder to penetrate.

The mothers and fathers whom I see at my surgeries want to get on with rebuilding their lives, confident that their children will be adequately supported whether they are living with them or with their former partners. That is a simple aim, which I hope and expect the Bill to fulfil. The aim is not to damage our future—that is, our children. The men and women who constitute the human face of the 200-odd cases with which I am currently dealing want the same. The Bill is for them, and I welcome it on their behalf.

7.11 pm
Mr. Edward Leigh (Gainsborough)

I echo what the hon. Member for Middlesbrough, South and Cleveland, East (Dr. Kumar) said about the staff at the Falkirk office, whom members of the Social Security Committee visited. I must admit that—like, perhaps, many hon. Members—I had, before my visit, entertained rather a low opinion of the staff, having listened to what all my constituents were saying. On that visit, however, I became aware of all the problems with which the staff have to deal, the enormous pressure that they are under and the low wages that they are paid. I now think that they are doing a good job in very difficult circumstances, and I am happy to pay tribute to them.

I do not know what the House considers to be the purpose of family law, but I believe that it is to create a structure in society whose aim is to keep couples together, if that is possible, and, if it is not, to ensure that absent fathers—it is usually the fathers who are absent—remain in touch with their children and support them. That is a simple aim, which I think is supported by members of all parties, but in that respect we have failed as a society. A third of non-resident parents pay nothing, and 50 per cent. of children in poverty come from single-parent families. Daughters in single-parent families, where the single parent is not working, have only a 7 per cent. chance of obtaining higher education qualifications.

The present system is clearly not working, so what we are discussing now is what we can do to improve it. I agree with my hon. Friend the Member for Banbury (Mr. Baldry) that our chief concern should be for those who are most vulnerable and have the least resources.

I was privileged to share most of last week—while I was thinking about what I would say today—with a man called Jean Vanier, who set up the L'Arche homes for people with severe learning disabilities. Small beginnings were built up into a worldwide movement. We are discussing circumstances that involve much pain and anger; he deals with circumstances involving an enormous amount of pain and anger, and disability as well. He has been extraordinarily successful in overcoming the difficulties by adopting an intensely personal approach to each case. Everyone is treated as an individual and has a personal assistant. The help that is given is not simply material—although I suppose that asking the CSA to give other than material help would be asking too much of it.

I conclude from that visit that we shall make real progress in meeting social objectives only through a personalised system. That would involve someone sitting down with the couple concerned, if possible—or with the two people separately, if they refuse to be interviewed together—working out the total income involved, and encouraging the father to adopt a system of payments and visiting. Some may say that they accept all that, but it is not possible. Let us look at the present system, which has become unbearably complex. Because it must deal with a hundred items of information, the CSA spends 90 per cent. of its time making calculations and only 10 per cent. on enforcement. The whole thing is a mess. Society must give up on it and move to a simplistic system of crude rough justice.

The pressure imposed on the CSA by existing claims is such that we must move to such a simple system. To do that would be intensely unpopular politically, but it is the only option for the Government. The lack of a clear timetable is dangerous: the existence of two systems operating side by side will cause enormous vexation and unhappiness.

The Government, being politically acute, realise that a move to the new system for existing claimants would be unpopular. I think that it would be right, but the Government are not going to do it: they are going to introduce the new system only for new claimants. That is a shame, although it may be necessary. I understand all the difficulties. As a member of the Select Committee, I have visited the CSA and studied its work. I have listened to what my constituents have said, and I know that it is rough justice, but at the end of the day we are not being very ambitious, are we? We are giving up on so many people. We are saying that we, as a society, believe that a child is worth 15 per cent. of someone's income. A child is not worth 15 per cent. of someone's income; a child is worth 100 per cent. What right have we to say that we are so lacking in ambition—so unwilling to try to use the levers available to us—that we set arbitrary formulae such as this?

Human nature will break through, as it always does. The small print tells us that the departures will be abolished and variations will be introduced. Once variations are introduced, they will multiply, just as they did when we tried to introduce a relatively simple system. They will multiply because fairness and justice will demand it, and we shall end up with a system very similar to the present one. If the Government cannot afford to devise a personalised system, perhaps they will at least provide a named official to ensure that both parents deal with the same person throughout the process.

I want to say a little about pensions. We are creating an affluent society. Over the past two decades, 80 per cent. of richest pensioners have been better off, and a third of the poorest have been better off. We should be ambitious for society: we should encourage everyone to provide for their old age. I agree with what many have said about the complexity of the three current different systems. We need a seamless web enabling us—by means of compulsion, if necessary—to force people to make adequate funded contributions.

The Government have made the fair point that those who earn less than £9,000 a year are unlikely to be able to build up a fund sufficient to raise them above the means-tested benefit level. I do not know the answer; I simply know that a complicated system involving stakeholder pensions, second pensions, occupational pensions and personal pensions will not encourage people to accept the funded system that we all want. The only way is to have some element of compulsion but, once that is in place, let people choose the sort of system that they want. Many countries have gone down that route. I am convinced that the private sector is best placed to provide such a choice.

I have talked about society being ambitious. One ambition can be to break and to restore broken relationships. We can try to build communities. There is no point talking about building a world community, a European community or a national community if we cannot use whatever small resources we have to build community between two people.

Jean Vanier told a moving story that affected my ideas on the subject. He has a friend who is a French lady and very elderly. In the 1940s, she was very good looking and a fine pianist. Everyone liked her. She had a tremendous future. When the war started, she joined the resistance. Eventually, she was captured by the Gestapo after using her piano-playing prowess to try to infiltrate it and to warn the resistance of what was going on. The Gestapo tortured her to the extent that it destroyed her entire nervous system. She would never be free from pain for the rest of her life. She went into that prison with 20 people, but she was the only one to survive.

The person who tortured that lady was a young Nazi doctor called Leo. In 1983, she received a telephone call and she immediately recognised his voice. He said that he was about to die and wanted to come to see her. He did so. They talked for two hours and he asked for her forgiveness. She forgave him. They embraced. As he was going away, he asked what he should do. She told him and he did it: he went back to the Austrian village where he was the burgomaster—he had admitted nothing about his past; he was a distinguished man—and admitted everything in front of the whole village. Two or three weeks later, he died.

What that tells me about human beings is that they can build some relationship, but that we as a society have, in many respects, given up on people. We say that we cannot be ambitious for society, create a framework in which people stay together, forgive each other, ensure that fathers look after their children, or recreate a sense of hope in our estates. That is very sad indeed.

7.23 pm
Mr. David Crausby (Bolton, North-East)

Welfare reform is, by its nature, controversial in that it will for ever be popular to increase welfare and unpopular to propose any reduction in benefits, so it makes a pleasant change to be able to speak on a welfare reform measure with which I almost entirely agree. Interest will inevitably concentrate around the Bill's measures on the CSA and reform of the state earnings-related pension scheme, but the Bill also contains important changes to the way in which occupational pension funds are managed. I am especially concerned about those aspects, which have been almost entirely ignored in the debate.

Anyone who contemplates a future in British politics will surely support the reform of the CSA for parents who live apart. Many of us have waited with bated breath since we were elected for the delivery of an understandable system of child support rates. Most of us would agree that the principle that absent parents must be held responsible for the maintenance of their children is completely sound, but the present system of enforcement is incredibly unfair.

We must all have had constituents who have suffered injustice as a result of the present provisions. I am delighted that one of the aims of this long-awaited Bill will be to introduce lower rates for non-resident parents on very low incomes.

A simpler method for the calculation of child support has been desperately needed. At long last, legislation proposes a formula that will at least be clearly understood. Most important, we must ensure that the changes that we enact will primarily be in the interests of children, who have too often been under-represented in the years of debate on child support.

Part II deals with the state second pension. I hope only that the Government will do a better job in delivering a second pension than a series of Governments have done in the past. The sad reality is that, historically, Government have proved to be no more trustworthy when it comes to the actual payment of pensions than those who controlled the Daily Mirror pension scheme. That is not surprising as we permit a situation where we have not built up the adequate funds required to guarantee the payment of pensions.

As politicians, we would not tolerate, or consider tolerating, a private pension provider paying its pensioners out of current members' contributions, yet that is the situation. Our Government operate a pay-as-you-go scheme, expecting today's national insurance contributions to pay for today's pensions.

I hate to have to say it, because I always strongly believed in the state provision of pensions and still do, but the historical reality is that pensioners would have been much safer in the hands of a dodgy insurance company than they have been depending on the whim of some future Government either to pay or to renege on the promise of a pension. With those words of caution, I enthusiastically support the measures in the Bill concerning child support and SERPS, but we must not forget the important issue of the control of occupational pension funds. I intend to confine my remaining remarks largely to aspects of the Bill that involve occupational pensions.

I almost entirely agree with the Bill, but I nevertheless have some reservations about the clauses that deal with reforming the regulation of occupational and personal pensions. I am particularly concerned about the Bill's proposals on member-nominated trustees, which do not go nearly far enough.

The Pensions Act 1995 was an important step in the right direction. I loudly applauded it at the time. For the first time, there was a general requirement for members to have the right to nominate and to select one third of their scheme's trustees. Before that Act, we had the ridiculous situation of employers having the right to appoint trustees on behalf of their employees. It was a patronising concession in the 1978 legislation, which allowed workers to be involved in decisions concerning their pensions, but based on the precept that those workers could not be entirely trusted to decide whom their trustees would be.

The 1995 Act was a step in the right direction, but did not, of course, do enough to defend pension scheme members. Although the Bill is a further improvement, there is still some considerable way to go.

Why, for example, should member-appointed representatives amount to only one third of the trustees? If it is right for employees to be involved in the management of their pension funds, why must they always be in a minority? Clearly, proper control of pension funds should be in the hands of those who should have ownership of those funds. The most prudent managers will inevitably be those who have most to gain or to lose from a fund's good or bad administration.

It makes sense that employers who have responsibility for variable contributions to a fund—and, thus, the obligation to ensure that the pension scheme is sufficiently funded—should, quite rightly, be entitled to have authority and influence over the fund. To deny reasonable representation to responsible employers would be counter-productive in encouraging those employers' involvement in occupational pension schemes, and good employers deserve to be encouraged in the provision and management of pensions.

Unfortunately, however, all employers are not automatically responsible employers. When employers enjoy a contributions holiday for several years while members continue to pay, I start to take a different view about their in-built right to a majority of trustee appointments.

I believe that representation on a board of trustees, and control and influence over a pension fund, should be linked to the contributions paid. If, for example, an employer has paid over 50 per cent. over the lifetime of a fund, that employer should be entitled to majority control. However, when the balance shifts—as could quite easily happen in a mature fund, to which employees are making the majority contribution—the balance of power on the managing body of trustees also should shift. Therefore, should an employer wish to retain a majority of the appointed trustees, the very minimum that the employer should be prepared to do is to contribute at least as much to the scheme as the members have contributed to it.

I spent 19 frustrating years serving as an employee representative trustee on an occupational pension scheme, and much of my time was spent struggling with employer-appointed trustees who, when it came to the crunch, almost exclusively reflected the point of view of the employer who appointed them. Too often, meetings became a negotiation between employee-elected trustees and employer-appointed trustees.

I do not blame anyone for that type of behaviour, because the way in which our schemes are established in law make such conflict inevitable. In truth, it was more than their job was worth for employer-appointed trustees to act against the interests of the hand that fed them. Moreover, if they had behaved differently, the result would have been almost immediate replacement by someone who was more responsive to the company's interests.

I do not want anyone to get me wrong: I do not have any problems with the practice of pension negotiations between employers and employees. Indeed, I think that pension negotiations are a very healthy exercise, and encourage them as often being much more constructive and less inflationary than the negotiation of pay increases. My concern is that the board of trustees is not the place for negotiations, as trustees' common responsibility should be the prudent management and investment of their fund. When trustees are answerable to different masters, they will inevitably respond differently, and not always act in the interests of their pensioners and fund members.

The Bill contains clauses on winding up schemes. Winding up a pension scheme, for whatever reason, could have a devastating effect on the lives of its members. An elderly person's accumulated package of pensions is similar to a child's education in that one gets only one shot at it, and, once it starts to go wrong, it is extremely difficult to put right. When a company goes into liquidation close to the end of a man or a woman's working life, he or she may suffer incredible shock. Understandably, scheme members cannot grasp why it should take years to sort out their pension scheme.

I therefore welcome the Bill's proposal to require that regular reports be made to the Occupational Pensions Regulatory Authority, which clearly has to have a stronger role in those traumatic circumstances, so that it is able to add some impetus to the process.

Trustees should, of course, have the time to ensure that they comply with their obligations under trust law, and they must be supported in often very difficult and frustrating circumstances so that they are able to do their job properly. However, employees often have expectations of pensions that are calculated to the very last penny and plans beginning on the very day that they retire. Changes in those expectations may be devastating to those people and could make them feel extremely vulnerable. In such circumstances, the very last thing that those working men and women need is for a wound-up scheme to take years in which to resolve its liabilities. I therefore welcome the Bill's proposals to speed up the process.

My only word of caution is that schemes in difficult circumstances are rarely overfunded, and that we must ensure that the operation is as inexpensive as possible. Ultimately, we should remember that the reforms are about protecting workers who have expectations and entitlements to a pension, rather than about rewarding organisations and highly paid individuals who seem to appear and descend like vultures when a scheme is in trouble.

There is so very much more to do in the minefield of occupational pension funds, which really should be there to provide for us in old age. Nevertheless, with the reservations that I have described, I welcome the Bill's provisions as an important step in the right direction. I look forward to many more steps on the road to ensuring fairer and more accountable delivery of decent pensions.

7.36 pm
Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I am delighted to follow the hon. Member for Bolton, North-East (Mr. Crausby); the whole House is better informed because of his experience and knowledge of, and expertise in, the subject.

This has been a very good debate, in which many very good and positive points have been made. The debate will have been well worth while, if the Secretary of State is as good as his word, and if the Government are serious about taking on board some of positive points that have been made by hon. Members on both sides of the House—certainly the Under-Secretary of State for Social Security, Baroness Hollis has been at pains to consult widely, and that is much appreciated; I am chairman of the Social Security Committee, which has had the benefit of much of her time and energy, for which we thank her.

I should like to start with a procedural point, and expand a bit on the comments of the hon. Member for Thurrock (Mr. Mackinlay) on how the Bill has been constructed. Although many points have been made in the debate, no one has yet dwelt on procedural matters.

First, although the Minister of State is a seasoned hand in the legislative stakes, procedurally, the Bill is a dog's breakfast. There should have been two Bills, and the whole House would have been better informed if we had had two half-day debates, with two shorter Standing Committees—I am not asking for more Government time. Had that been done, the debate would have been much more coherent.

Secondly, it is madness to interleave new legislation into the Child Support Act 1991, as it will make the legislation—if anyone understood it in the first place—totally incomprehensible.

Thirdly, clause 27 is entirely redolent of the 1991 Act. Even the notes produced by the Government describe wide-ranging discretionary powers, all exercisable in negative procedure resolutions. None of the resolutions will use the affirmative procedure, so that they will have to be dealt with in prayers. We have been there before. In 1991, when the Child Support Agency was established, the damage was done in the secondary legislation—and here we go again.

Clause 27 is, therefore, offensive. The Government really must understand that, if they are to win the confidence of the House, never mind anyone outside it, they will have to fall over backwards to ensure particularly that the House knows what is going on and when, and that they keep us advised appropriately.

Fourthly—my hon. Friend the Member for Northavon (Mr. Webb) made passing reference to this—it is offensive to invite the House to examine on Second Reading the principle behind important and far-reaching legislation on the state second pension—the consultation period on which ends in three days—without any access to a coherent overview of the results of that consultation process.

I do not blame Ministers for that, because I know that the business managers are a pretty draconian bunch to try to win arguments over. Nevertheless, from a parliamentary point of view—I am not making any party points at all—the legislation should have been handled in an entirely different manner. Indeed, the parliamentary draftsman should be brought to book. There is an argument that the Government are introducing too much legislation and the draftsmen cannot cope with it, but I do not have time to address that. Given that the Government are introducing a large volume of legislation at such a rate, the House of Commons deserves better information and a better legislative process in respect of these important measures. However, I shall let that pass.

As Chairman of the Social Security Committee, I acknowledge that the Department helped us enormously with the three-day evidence session and that Baroness Hollis made absolutely every effort to give us all the information.

As one or two of the points that I wanted to make have already been covered, I shall turn to the ones that have not. I am sceptical about the value and the accuracy of the regulatory impact statement. It is far too optimistic about the effects on business. The point has been made that we shall have to toil through the transitional arrangements. The deduction of earnings orders and the new criminal sanctions that can be visited on business people if they actively withhold information will also produce difficulties. If the enforcement that we anticipate under the new regime is not carried out carefully, small businesses in particular will have to make a great deal of extra effort for no return. I counsel the Government to be extremely careful. I hope that I am wrong, but I think that the obligations on businesses will be onerous and that the regulatory impact statement is optimistic.

Like everyone else, I welcome the simplified formula for the child maintenance premium, the disregard and the working families tax credit exemption. I did not know until the Select Committee took evidence that people receiving working families tax credit who are on housing or council tax benefit are entitled only to a £15 disregard because housing benefit and council tax will take anything over £15. That is likely to create an awful lot of anxiety and a great deal of constituency casework, so we should examine it carefully in Committee.

My biggest worry about the Bill is that, while the Government have been assiduous about trying to work out the cost of a child—although the evidence is pretty thin and they did not manage to persuade me that their calculations were accurate—nobody has looked at the ability to pay. The right hon. Member for Birkenhead (Mr. Field) also made this point. Paragraph 17 of the Select Committee report and its first recommendation are extremely important. If that recommendation were accepted as an amendment, I would be persuaded to vote for the Bill. The Select Committee recommends that the Government should remove the set formula rates from primary legislation and put them into secondary legislation so that they can be changed if they are found not to be right.

Creating new legal liabilities does not generate new resources. When families split, no extra money is generated. Of course there are people who are swinging the lead, and I want to attack them as robustly as everyone else does, but I do not think that we understand the extent of people's debts. I am talking not about earnings or proportions, but about debts such as store cards and credit cards. Many people have a huge overhang of debt which they cannot cope with, and although, in principle, 25 per cent. of one's income does not seem too much to pay for one's children, for some it is an impossible demand.

The Bill includes draconian methods of enforcement. The chief executive of the CSA plans to reverse the balance of its work from 10 per cent. enforcement and 90 per cent. calculation and assessment so that 10 per cent. of its work will be devoted to calculation and assessment and the rest of the £230 million operation will be put into enforcement. If the CSA enforces the legislation by imposing fixed penalties and taking away people's driving licences, it will create an even bigger bogeyman. It will have to be extremely careful about how it implements some of the measures and make sure that it is not simply recycling money by taking it away from people who are very poor to give it to people who are even poorer. That would not be in anyone's interests.

I should mention two important points that the Government must take on board in Committee. First, to take £5 from people who are on benefit, income support or income-based jobseeker's allowance and to make that a flat-rate payment may be right in principle—it is a difficult judgment to make. However, hon. Members who have not studied the matter in detail may not understand that, when people on income support lose £5, another family on benefit will be even worse off.

Income support levels are not sustainable in the long term and some second families are on income support for years. To take £5 from them and to threaten them with fixed penalties, taking away their driving licences and sending them to prison is contrary to natural justice. We have to keep the position in balance. The proposals can all be justified on paper and in an ideal world they are right. Like everyone else, I want people to get the benefit to which they are entitled, but we have to be careful; otherwise, we might make the situation worse. One third of those who are supposed to be paying the CSA are hiding because the organisation is so inefficient that it cannot find them. If the new, efficient regime works, it will create great difficulties.

The transitional process will be extremely difficult. I want to leave the Government with one thought—hon. Members may be interested in this. One of the most compelling pieces of evidence to the Select Committee came from John Avery, the Deputy Parliamentary Commissioner for Administration, who has been on the receiving end of many of those difficulties. I quote from the memorandum that he submitted to the Select Committee. He wrote: Simplifying the system should make its administration more straightforward but, even with a simplified system, unless there are enough staff and the staff have the necessary support facilities, training and instruction or guidance, and the time in which to absorb that training or guidance, the problems which have characterised the Child Support Agency's first six years will continue. That is true. The CSA is facing an increasing case load at the moment. I know that the Government are introducing a new IT system. I support that, and I think that it is necessary to get it in place as fast as possible. However, if we do not put resources into the transitional process in particular and the stage-by-stage evolution of that process is not made absolutely clear to everyone early on so that we have answers to the difficult questions that will come to our surgeries, the transitional process might make the situation almost unbearable.

Finally, even if I objected to nothing else in the Bill, the benefit penalty for contravention of community service would in itself be a reason for voting against it. I cannot for the life of me understand why sensible Department of Social Security Ministers have allowed such nonsense to be included in the Bill. It will never pass the European convention on human rights. The Secretary of State's certificate on the face of the Bill is nonsense. It may be a provision that the Government plan to keep in a cupboard and never use, like the death penalty for treason. Perhaps it is some sort of gimmick, but it does not help. If local authorities started going to lay magistrates—not sheriffs but justices of the peace—and getting the power to take benefits off people who are not turning up for community service, it would be a travesty of justice. There is no other way of describing it, and I hope that the Government will have second thoughts.

7.49 pm
Mr. Jim Cousins (Newcastle upon Tyne, Central)

I intend to stick solely to the issue of pensions. Individuals have exactly the opposite problems with pensions from Governments. Governments design pension schemes that look good in 40 years' time, but individuals always discover that their pension situation is no good when it is too late to do anything about it. That means that there is a fundamental question of trust that must be resolved, as several hon. Members have pointed out. If the promise of the state second pension is to be believed, the national insurance fund must be protected by independent trustees in exactly the same way as a private pension in order to rebuild trust and to make citizens real stakeholders in their state-provided pensions.

For many years, the minimum pension income guarantee that the Government have introduced will be a more dependable and meaningful part of pensioners' income than the proposals in the Bill. If that continues for very many years, it will destroy public confidence in the proposals that the Government are rightly making. That will be the case especially if the minimum pension income guarantee increases in line with earnings but the state second pension increases only in line with prices. That would produce a gap that would postpone for many years the point at which the state second pension is worth more than the guarantee, which would undermine the whole structure of the scheme. It would also undermine private sector stakeholder schemes, because when people realise that they are saving not for themselves but so that the state may make a smaller contribution to them through the minimum pension income guarantee, they will be angry and demoralised.

The state second pension must, if it is to include carers—which is rightly one of its objectives and one of its strongest features—have at least as generous provision for them as the existing state system. In that respect, we look to the Government to ensure that the existing system of home responsibility protection in the national insurance basic pension is also reflected in the state second pension.

The state second pension has the makings of an excellent product, especially in its earnings-related initial phase. In fact, it is so good that a problem may arise. My right hon. Friend the Secretary of State said that when it ceases to be earnings related, rebates will be offered that will guarantee—to people on moderate incomes who will be forced out of the state second pension scheme structure into stakeholder schemes—that they will be no worse off. However, if we examine the Government's proposals on rebates, it appears that from the very moment the state second pension stops being earnings related the rebates start to build up enormously. By around 2040–50, those rebates will require a state expenditure of between £12 billion and £15 billion a year to support them, at today's values. When we are told that we cannot afford to increase the state pension scheme, we should consider the cost of the Government's alternatives.

The state second pension scheme is so good that many existing low-paid workers in contracted-out final salary schemes will find that they would have been better off in the state second pension than in their own schemes. The Government have to address that problem and they have two options. One is to force up the benefits of final salary schemes so that they match the benefits of the state second pension scheme for low-paid workers. I understand that the Government are thinking of doing so, and it is important that we are clear about that. The alternative is to allow low-paid workers in contracted-out final salary schemes to opt out of those schemes into the state second pension scheme to maximise their benefits. Those are intricate but important points if these proposals, which contain the basis for a good scheme, are to be credible to low-paid workers in existing final salary schemes.

The stakeholder proposals may assist in a rapid run-down of final salary schemes. We look to the Government to make some proposals that will protect the future of that structure of final salary schemes. That could be done in several ways, perhaps by mixing and matching final salary schemes and stakeholder schemes. The Government must be clear about what they will do before the Bill passes into law.

The Opposition claim that an increasing number of people will be reliant on money-purchase schemes. If that is so, the Government must address the problem of annuities. We are forcing more and more people into an annuity trap that is now acute and that is likely, with the passage of the years, to get worse. If we have low inflation and interest rates, coupled with no gilts going onto the markets because Government finances are in balance and a steady and increasing flow of more private pension pots into the market, annuity rates will be driven down even further. The Government must consider the tax treatment of annuities and whether there is an alternative to the annuity system that will protect the purposes of a long-term tax-supported saving schemes that support people's incomes in retirement.

The Government must also revise some of the tax proposals that accompany the stakeholder scheme. The present proposals allow for contributions of up to £3,600 a year with no link with earnings and net of tax. The purpose of that may be to extend the scheme to carers who have suitable funds, but people in higher income brackets will be able to take advantage of a substantial tax subsidy of up to £3,600 a year for non-earning partners and for children, because there is no lower limit on access to the stakeholder pension scheme and its tax support. From the moment a child is born, its parent could fire into the scheme £3,600 a year net of basic rate tax. It cannot have been the Government's intention to produce such a substantial element of reverse distribution in an overall pension scheme that is heavily focused—rightly—on people with low incomes.

I am unclear what proposals the Liberal Democrats have to make on these issues, but the Conservatives have made it clear that they favour coercing people into private sector money-purchase schemes. That cannot be a sensible approach until we have sorted out the problems of annuities. That is why it is so important that the state second pension scheme that the Bill will introduce is robust enough to become a permanent part of our pension arrangements. It is too dangerous to leave matters so that pensions could be rewritten at a later date. That would undermine public confidence in the whole scheme, as happened under the previous Administration, as would a shift to coercive contributions to private sector-funded schemes.

Above all, when debating pensions we must remember that we should not be trying to find complex, back-end loaded solutions to what are front-end loaded problems. In an important speech just before Christmas, my right hon. Friend the Secretary of State for Health said that the truth is that the elderly population in this country is set to grow in the next 50 years at half the rate of the last 50 years. And the pressures in Britain will be much lower than in many other industrialised countries. We should take comfort from that.

The people who should be the focus of our deliberations are those who are pensioners now and those who will become pensioners in the next 10 years. They are the people whose years on low incomes have not been supported by any additional pension scheme, and whose few pension rights are so small that they will be caught in the minimum income guarantee system for pensioners—if that system develops in the way that the Government, rightly, intend. We must focus on today's pensioners and pensioners to be, not on those who will be pensioners in 2040 and 2050.

It is therefore extremely important that the Government's proposals for state second pensions will benefit today's pensioners-to-be. It is no use designing a scheme whose very real benefits will be felt only in many years' time. Such a scheme would cause to be forfeit the credibility of the proposals and of the belief that public sector, state-provided pensions will be our best protection, now and in the future, against forced membership of private sector-funded schemes.

I hope that the Government will consider those matters and modify some of the Bill's proposals. The state second pension proposal, especially in its earnings-related phase, is excellent. It could change permanently people's approach to their prospects in retirement and to their activity in the present-day labour market. It could also change their lives as citizens through its promotion of caring for and support of others.

The gains could be huge, but they must be supported by clear proposals to protect the scheme from some of the deficiencies that I have pointed out. If that is achieved, today's pensioners and pensioners-to-be will be able to feel properly covered by the proposals. I hope that the Government will consider some of the matters that I have raised and that we will be able to tease out some solutions in the course of our deliberations.

In constituencies such as mine, there is a restlessness among pensioners and pensioners-to-be. Because of the pensions difficulties of the past few years and the problem of pension mis-selling, they are far more aware of their pension prospects than any previous generation of pensioners-to-be. They are anxious that the Bill will not benefit them in a meaningful way. I hope that the Government are able to respond to their concerns.

8.3 pm

Mr. Elfyn Llwyd (Meirionnydd Nant Conwy)

I listened carefully to the extremely erudite speech from the hon. Member for Newcastle upon Tyne, Central (Mr. Cousins) and to the powerful speeches from the hon. Members for Northavon (Mr. Webb) and for Birmingham, Selly Oak (Dr. Jones). They concentrated on pension provision; and although I intend to speak about the Child Support Agency, I want to note that an excellent opportunity for root-and-branch reform of the pension system might have been lost.

The provisions in part III covering loss of benefit are an example of macho politics. They are the stuff of tabloids. They represent populism in extremis and they are legally highly questionable.

I am one of those who believe that the CSA is almost beyond redemption. The ill-fated poll tax was amended three times before it eventually—and deservedly—hit the buffers. Similarly, the CSA is not long for this life either. However, for the purposes of today's debate, I shall accept the second-best position and examine the latest attempts to make the agency work.

One of the basic complaints about the CSA—it is only one of many, I might add—will be familiar to all hon. Members. It is that the formula employed to determine the level of maintenance is complex and too rigid. The proposals in the Bill appear less complex and seem to be far more readily understood. That can only be good; no doubt, absent parents will be able to work out how much 15 per cent.—or 20 or 25 per cent.—of their earnings will be, but commentators in this area have grave reservations about the Bill.

It seems almost bizarre that under no circumstances will the income of the resident mother or of the parent with care be taken into account, regardless of whether that person is very wealthy or on benefit. The Government say that that provision has not been adopted in the Bill because it would be too complicated to include the financial circumstances of that person, who more often than not is female. However, the Australian model, which does take account of that income, works perfectly well. I believe that the Select Committee on Social Security urged that consideration be given to adopting that approach.

Furthermore, there appears to be no upper limit on the amount of child support that can be paid. That will probably affect rich people more than others and does not seem to me to be logical. I believe that earned income should be taken into account. For example, a self-employed father could set up a company and an account and pay himself a dividend from the money earned. Clearly, that would not be right, and proposals to prevent that should be included in the Bill.

It is possible that the Bill will have the effect of reducing child support by about 30 per cent. Would that be good or bad? I believe that it would be bad. Perhaps the Government think that reducing the levy and requiring people to pay less will mean that bad payers will be more likely to pay. I do not know whether that argument holds up or, if it does, where its logic leads us.

I am worried also about the blanket imposition of the CSA jurisdiction on all families. That will undermine and undo settlements that have been reached fairly through the courts. Family proceedings are dealt with in family and county courts. The system is not perfect, but by and large it is equipped to carry out a comprehensive assessment of the parties' respective financial positions. More to the point, it is equipped to assess financial needs after a relationship breaks down, and the needs of the children involved. It is therefore strange that courts should deal with that part of a family's finances, only for the whole process to begin again with the CSA when the level of child maintenance is assessed.

In the past, clean-break settlements have been a useful way of disposing of interlocutory application in divorce matters. They will now be brought into question again. Why should an agreement be reached, or capital given away, if that arrangement is to be torn up 12 months later and the process started all over again?

Many commentators are worried about the way in which the Bill is framed. The Child Poverty Action Group raised a considerable number of concerns. One of them is very important and has to do with families on income support or income-based jobseeker's allowance. The organisation has stated: Although the average level of assessment falls under the new scheme, some poorer 'second' families will find themselves paying more. 68 per cent. of the 150,000 non-resident parents who have increased assessments are on benefit or have incomes of less than £200 a week … Other non-resident parents on income support will be liable to pay the £5 a week minimum. This includes those responsible for children in a second family"— a point made earlier by other hon. Members and on which I shall not dwell. The briefing continues: We understand that the Government wishes to encourage compliance and to ensure that as many children as possible receive maintenance. That has to be right. It goes on: However, income support/income-based jobseekers allowance fall short of the levels of income required to meet the needs of families. The briefing then highlights points made in the debate today.

Under the present law, the parent with care is required to authorise the Secretary of State to recover moneys from the other parent if the parent with care is in receipt of income support. That is going to change—probably for the good—but there are matters that must be considered carefully. The parent who authorises—very often, if not always, that parent is female—can show good cause. It is right that the good cause provisions are included in the Bill, especially as there will now be a presumption in favour of collection by the Secretary of State. That will place a burden on a mother at an extremely stressful time, following the breakdown of a relationship. The matter must be handled with great care, and I hope that it will be; otherwise, there is a danger that a person will feel almost harassed in the circumstances.

As always, there are welcome provisions in the Bill, although they may be overshadowed by some of the points I have made. However, I welcome the provisions relating to second families to ensure that youngsters are not treated any differently from the youngsters in the other family unit. The apportionment proposals in schedule I are most welcome, as are the shared care provisions. These are important reforms which will rectify several current injustices.

On the matter of compliance and enforcement, I rang the CSA in my area last Friday. A young woman had come to see me who was £11,000 in arrears, having not been paid a single penny over the past two years. I spoke to a gentleman who said that he was sorry and that he should have dealt with the case in November. However, he had been in the Scotland Office, dealing with enforcement there. He said that he would do his best to get on with the job. I do not know him personally, and I know few people who work for the CSA. I know that it is a difficult job, and that it is not well paid. However, I urge the Government to give the staff the resources to do the work.

I wish to refer to the "self-employed dodger", of whom I have several in my constituency. Some have disappeared off the face of the earth, while some have been found but still cannot be pinned down. Unless the people are available to do the enforcing, we might be wasting our time this evening and in Committee. I am sure that the question of resources will be looked at again.

The access to income tax returns in this context is a welcome and common-sense approach. I am sure that that will be handled with care, as there must be some civil liberties questions arising from the matter. There are those who want to beat the system, but the system will take them on. That is quite right. I have seen—as have countless others—the dishonest person get away with it for far too long. On the other hand, the hard-working person in full employment who tries to make payments and who was previously assessed at a crippling level has been seen as a soft target. The emphasis may well shift to the dodgy character who is salting money away and trying to avoid responsibility.

There are some practical improvements in the Bill, but there will be thousands of appeals to tribunals. That is almost inevitable. I echo the remarks of the hon. Member for Greenock and Inverclyde (Dr. Godman), who urged Ministers to consider extending legal aid to those who wish to take matters to a tribunal. I am not pleading on behalf of lawyers. I am saying that many people are not sufficiently able to present their case as it should be presented. I am not saying that every appellant must be represented, but we must make it comfortable for those who are unable to argue their case coherently to take the case to a tribunal. If there has to be some form of legal aid in these limited circumstances, let us do it—legal aid is given for far dafter things. I hope that the Government will consider that in Committee.

The spectre of criminal sanctions for civil wrongs may well raise human rights issues. Previous speakers have mentioned that matter, and I shall not dwell on it. However, such sanctions should be used extremely sparingly, if they prove to be legal. I am extremely unhappy about depriving someone of a driving licence in this context, as other persons in the same situation will not face that penalty. Human rights legislation has been mentioned, but I shall not dwell on that point.

I believe that the system should take account, as far as possible, of all the relevant circumstances. That means taking into account each individual's circumstances. If we are talking about imposing a totally rigid, concrete system again, I am afraid that we may be looking at a further review in five years' time.

The Law Society has said that a perception of fairness in any new scheme would increase compliance, whereas inflexibility and harsh sanctions may increase the sense of injustice and lead to non-co-operation. There is some force in that argument.

The Bill appears to be a genuine attempt to right many wrongs. It is far from perfect, and I hope that the matters to which I have referred and the concerns raised in the debate will be pursued in Committee. I hope that the CSA—almost a Frankenstein's monster—can be made more human and user-friendly when the Bill emerges from Committee. However, I believe that that is a tall order.

8.16 pm
Mrs. Eileen Gordon (Romford)

I thank the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for his thoughtful remarks on the CSA, and I, too, wish to speak on that subject.

As soon as it was created, it was clear that the CSA would never work properly or achieve its aims in the form in which it was set up. I know that we are starting a new millennium and that we are looking to the future, and I think that we are doing that tonight with these proposals for welfare reform. However, we take our history with us and we should learn from the past.

I speak from my experience as a case worker for a Member of Parliament at the time the CSA was set up by the last Conservative Government. This evening, I thought I almost heard an apology from those on the Conservative Front Bench for the way in which the CSA was set up.

We should not forget how bad things were in the beginning, and the impact was immediate and distressing. I worked for seven years as a case worker, and no other issue in that time came close to the chaotic situation created by the CSA. Our phones never stopped ringing from worried constituents, yet we could not get through to the agency. If by chance we got through, we never spoke to the same person twice and we did not know who we were speaking to. There was no useful information, and the agency did not get back to us.

I do not believe in special treatment for Members of Parliament. I believe in equality—everyone should receive the same service. However, it crossed my mind that if this was how the CSA treated the offices of Members of Parliament, how was it treating the general public? I am glad that proposals for the better use of telephones and face-to-face interviews are part of the reforms.

It became clear that the parents who were already supporting their children and who could be easily identified were being targeted—the easy targets. The assessments often did not make sense at all. We had one case where deduction of earnings was threatened, where the father would have been left with a minus income. It was obvious that the formula for calculating payments was so complicated that the staff did not understand it either.

I am sure that the staff were doing their best, but with such a complex system and duff technology they did not stand a chance of getting it right. Anyone who was involved at that time knows the litany of problems, such as non-resident parents who received huge arrears demands because the form had gone in and payments were due from that day rather than from when the parent received notification of the amount. The delays caused by the system could be six months or more, yet it was the parents who were penalised. In some cases, forms were lost; in others, people received three letters on the same day saying completely different things. Unfortunately, these problems still arise.

Many people came into the advice surgery close to despair. It was awful. Some parents were no longer able to keep contact and visit their children because of the high payments demanded. My instinct at that time was that the whole system should be abolished. However, having thought about it since, I think that we would have to reinvent that wheel. I certainly do not want to adopt the Liberal Democrat solution of reinventing the wheel in favour of lawyers.

I have always believed that both parents should have responsibility for their children. A child is not a one-night stand—a child is for life, as is the responsibility for that child.

Mr. John Smith (Vale of Glamorgan)

I am very grateful to my hon. Friend for giving way, especially when time is so short. She mentioned one-night stands. Is she aware of the loophole in the current legislation whereby absent fathers who have had children as a result of one-off and clandestine relationships outside their marriage can evade paying any child support? My constituent, Mrs. Jane Jones from Llangan, has not received one penny from her former husband, a wealthy business man, even though a court order was made in her favour in 1992, because the Child Support Agency discovered that he had a child with a prior claim outside the relationship. Under the ludicrous rule of confidentiality, the CSA refused to pursue him. I hope that my hon. Friend agrees that the Bill should be used to remove that loophole.

Mr. Deputy Speaker (Mr. Michael Lord)

Order. That is far too long an intervention.

Mrs. Gordon

I do agree with my hon. Friend. Such a loophole is a disgrace, and I hope that it will be considered in Committee.

The Child Support Agency was dealing with responsible parents, rather than tracking down the irresponsible ones—the opposite of its stated intention. Changes have been made since the agency's disastrous launch, but tinkering at the edges could not solve the fatal flaw of the complicated formula for payment, which tied everyone up in bureaucracy. That is why I welcome the simplified formula. Some may say that it is too simple, but people will know where they stand. They may even be able to calculate their payments, which they could never do in the past. The proposed system is much fairer and, with the use of reliable modern technology, should result in a more streamlined service.

The Bill's first concern is the child. I am pleased that second families will be taken into account, and that stepchildren will be treated the same as second family children. I think that all children from the various relationships should be treated equally—they all have the same needs, and should have the same opportunities. I hope that that will be discussed in Committee.

Unlike my right hon. Friend the Member for Birkenhead (Mr. Field), who is not in his place at present, I welcome the good cause provision. It will ensure that parents who are genuinely in fear of their ex-partners will not be penalised if they do not disclose information. I know that it can, as my right hon. Friend said, be used as a scam. However, when I visited the local women's refuge, I met women who were in deadly fear of their ex-partners. They feared for their safety and, indeed, for their lives, and those of their children.

It is estimated that more than 1 million children will benefit from the new system. Many children live in extremely complicated family structures. The Bill, and the reform of the CSA, will stop more children slipping into poverty. A child does not choose its parents, but bringing a life into the world is an awesome responsibility.

I hope that the reforms will be put in place as soon as possible, although I recognise that they must be implemented properly if they are to work better than the original proposals. I will never forget the introduction of the CSA, the ensuing chaos and the real pain that it caused parents. Many of my hon. Friends on the Front Bench were in this place then, and they have learned from the previous Government's mistakes. I trust them to implement the reforms properly, and to ensure a fair and just system for parents and especially for children.

8.25 pm
Mr. Ian Bruce (South Dorset)

This has been an interesting and enjoyable debate, and I am pleased to have been called to speak in it.

I want to apologise for anything that I have been involved in to do with the Child Support Agency. I was for two years Parliamentary Private Secretary to Alistair Burt; I listened to what colleagues said about the CSA before it was introduced, when it was introduced, and when we amended it. I am convinced that we never got it right. Having made that admission freely, I have to say that neither has the Bill got it right. It is going down the same wrong road, and I hope in my speech to show how it may be improved.

I am sure that colleagues will acknowledge by common consent that Alistair Burt was a decent Minister, who attempted to do his best. They will also acknowledge that when the Child Support Agency was promulgated, it had all-party support. The things that we worried would go wrong never did. All our predictions were unfounded. We worried about parents with care not wanting to co-operate, but in general they did. The problem was that the amount of money individuals were asked to pay was seen to be too high. People said that the amounts were unfair and that they could not pay. They were complaining not about the formula, but about the amount of money that the Government were attempting to take from them.

My job as a PPS was to go to all the meetings protesting about the measures—my Conservative colleagues were protesting just as strongly as others—and to listen to what was said. The Government responded by making things more complicated, by taking more into account. We tried to move away from a simple formula that we thought everyone could understand—such as the one that the Labour Government want to re-introduce and to establish other disregards. That tended to lower slightly the amount that we were trying to collect. Some cases solved themselves, but the vast majority of people continued to say, "This is too much money—I cannot afford it". By trying to take that extra amount, we ended up by getting nothing for people.

If people can afford to pay £30 a week and are asked to pay £40, they do not pay anything and try to find ways of getting out of the system. They have been extraordinarily successful. According to the figures in the reports, 1.5 million children should be helped by the CSA, but only about 250,000 or 300,000 receive anything and only 100,000 receive the amount to which they are entitled. That shows that the system is not working.

I say to the Minister, with all the passion that I can muster, please, please, please consider what we shall be asking people to pay. For example, let us consider a couple who are probably living right up to their means, who break up and move to separate houses. All of a sudden a guy, who has perhaps left his home, has to find another quarter of his income to pay into the second household. If that was unacceptable and could not be done under the previous system, it will not be done in the future.

The figures are amazing. It is said that the average payment at present is £38 a week. That is derisory. Under these proposals, the amount will go down to £30 a week. What incomes are we talking about, if those are the low figures that are collected? People with an income of £20,000 a year after tax should be paying about £100 a week. Many people will apparently pay very little.

I make the same proposals that I made to my previous bosses—perhaps that is why I ceased to be a PPS—and to the Labour Government when they came to power. I admit my culpability in not realising that the Conservatives were taking the wrong direction—I certainly did not see where we were going. We can tell absent parents that there is a fair amount that they should pay to their children. That amount would probably be between £40 and £45 for the first child, about £50 for the second and about £75 for the third. I suspect that those are the amounts that absent parents would volunteer to pay if they knew that the amounts had been set and that they did not have to fill in a form. They would never have to declare their income; they would never have to tell anyone what they were doing. On the day that they broke up, they would know that they would be required to pay a certain amount. It might be uprated in line with earnings or social security benefits and so on, but that would be the amount that people would pay.

My guess is that people who said that they could not afford even those amounts would still tend to pay a higher amount than the state would allow them to get away with. My suggestion is that by implementing a fixed figure that is seen to be reasonable, we would, at a stroke, get rid of two thirds or three quarters of the CSA's load. The only people who would have to fill in a form would be those who genuinely said, "I cannot afford to pay this, I am making my bid to pay less". Perhaps the percentage of people who had to fill in a form would be the one that Ministers are expecting; I hope that it would be lower. There should be a system that is as simple as possible to assess whether people could really pay. The system should have some flexibility, because people find it difficult to work with absolute formulas.

We know already that many couples who have broken up have given some excuse to the CSA. They do not want to play; they have gone off and made their own deals outside the CSA. People have accepted that. We are about to reopen all the cases in which we bullied people into giving us information. No matter how easy the formula is, some people will always try to avoid revealing their income. It could be that, at the end of the year, the income tax collector will ask people how much their income was after tax. However, that almost begs the question whether people will try to change their income so as to pay less income tax and national insurance. They will hide the details of their income.

I understand that Ministers have been considering the possibility of people not including under income the investment income or dividends that they receive. People with a reasonably large income can generally make arrangements through their employer or switch between salary and unearned income. Thus, they could avoid their liabilities. To have a situation in which there are absolutely no limits, where everyone is to be pursued for every last penny of 25 per cent., or 20 or 15 per cent., of their income will simply add to the work load of the CSA. Surely, we are trying to avoid giving it such additional work.

I plead with the Minister to consider setting a fairly low limit so that we can start to achieve what we set out to achieve out in the first place. Parents should make a reasonable contribution towards their children. However, many people will say, "Hang on a minute. If people are terribly rich should not their children receive more money." That is absolutely right. If I were separated from my wife and my children were still of school age, I would feel duty bound to pay more money than the Government insisted I paid. However, that is what any normal human being should do for his or her children. The Government should merely be involved in setting the minimum amount of money and they should insist that people pay that sum if they can afford it. They should not say that they will continue to increase the figures.

For two years, I had to listen to complaints and interpret them for Ministers. However, I woke up one night and asked whether it would not be better to cut out the vast majority of cases by setting a simple base figure. People were committing suicide but, on average, we were getting only £20 a week from people for child support. That was nonsense, so we should create a practical system that will work.

I am sure that Alistair Burt is not too busy these days, but I suggest that Ministers pay his rail fare, buy him lunch and ask him to consider the proposals in the Bill. He has heard all these arguments in the past, so I am sure that it would be worthwhile to have lunch with him. In fact, if one gave him a £50,000 consultancy—incidentally, I am not his agent—to advise the Government, I suspect that that would mean that a lot of money would be very well spent.

I have not referred to my notes, but I have said what I wanted to say about the Child Support Agency. I now wish to refer briefly to pensions. Again, I am concerned that the Government are going down the wrong route. Governments have proven to be the most unreliable provider of pensions. If one compares what Governments have done to pensioners with what Robert Maxwell did, Robert Maxwell seems a saint. Each time Governments have offered guarantees to pensioners by telling them that they will receive certain benefits for their contributions, the promises get kicked into touch. What people put in is not in any way related to the money that they get out. We have talked about the contributory principle, but no court of law would suggest that the amount of money going into a scheme and the amount coming out reflected any sort of natural justice. We must consider the proposals for pensions very carefully.

I began work as an apprentice with a limited company and when I changed my job years ago, one had to have one's pension contributions back. We tried to amend the law so that people could transfer their money, but we left a problem for this Government to deal with. When people change their scheme, they try to take too much money and do not put enough into the next scheme. That problem needs to be tackled.

I then went into self-employment, but I am not allowed to continue the pension scheme that I started as a self-employed person. I have to make it paid up and I cannot switch it over. The Government suggested that they might start to do something about that. I also have a limited company that has a pension scheme. I do not take any income from that scheme, so I must have that as a paid-up pension scheme, too. The system is very complicated.

To my mind, personal pensions are the right way to go, but we must understand what mis-selling was about. Pension companies were telling individuals whose employers paid into their pension schemes that they should come out of such schemes and go into personal pension schemes. The companies also charged far more than they should have done. Despite that, it is better for an employer to pay into a pension fund that has the employee's name rather than that of the company on it. That is the right way to go because such a pension can go with a person if he moves from job to job. If the Government try to achieve a funded scheme along those lines, they will do everyone a favour because frankly we cannot rely on the Government scheme.

The Government have to perform a spin trick. If one tells people that they have to pay taxes into their pension, they hate it. If, however, one performs a spin trick whereby people put money into their own savings, rather than paying taxes, they are much happier. If we did that, we could also say that we had reduced taxes and increased savings, which is good from any political standpoint, and that is the trick that we must all seek to perform.

8.40 pm
Mrs. Joan Humble (Blackpool, North and Fleetwood)

I welcome the opportunity to speak in this debate, especially after so many thoughtful and interesting contributions.

I shall concentrate my remarks on the Child Support Agency, but I shall first make an observation about war pensions. Many of my constituents work for the War Pensions Agency at Norcross near Blackpool, and I know how hard they work to get assessments right in the first place. I am also aware that sometimes they do not get them right, and appeals are made. I have three constituents who have been waiting months and months to have appeals heard. They are all elderly, and they cannot afford to wait much longer. I therefore welcome the clauses that will speed up the appeals procedure. I hope that my hon. Friends will also consider speeding up the assessment procedure in the War Pensions Agency.

Turning to the proposals for the CSA, I am pleased that hon. Members on both sides of the House recognise the need for change. There is a consensus that parents have a responsibility to provide for their children. When the previous Government set up the CSA, almost everyone agreed with that underlying philosophy. The problems arose because of the practicalities of implementing the legislation. Clearly, there are lessons that we need to learn to make sure that the implementation of this Bill does not lead to the problems that we experienced last time.

The spectre of the CSA has hung over too many people for far too long. The agency has failed the children whom it was designed to help, but it has also caused anger among their parents—more anger than is necessary in the breakdown of any relationship. With the new regulations, we need to encourage parents to work together in the best interests of their children, instead of trying to avoid their responsibilities, as so many do.

We know from earlier contributions that the CSA has almost 1.5 million children on its books, but only around 250,000 are gaining financially from child support payments. As staff deal with up to 100 items of information in each case, huge delays are built into the system. As delays occur, so arrears accrue that non-resident parents cannot pay. When they cannot pay, they do not want to pay, so the whole child support system becomes discredited.

We have to remember that behind all the statistics about the CSA, there are real people whose lives have been blighted. Like many hon. Members who have contributed to the debate, I have dealt with many constituents who have suffered at the hands of the CSA and who come to me out of anger, frustration and desperation. I have met mothers who are totally unable to get any money from the fathers of their children. Some of those mothers have been married to wealthy or self-employed men who have avoided payment but continued to live an affluent life style, thereby not only causing anguish to their former partners but sending their children the message that they do not care. Something must be done about that.

Equally, there are second families where the fathers are paying their CSA assessments. Sometimes they cannot afford to make the payments because they accepted debts, often credit card or loan debts, at the breakdown of the previous relationship. They find that the CSA cannot include these payments in its calculations, but the debts still have to be paid. The CSA produces assessments that fathers want to pay but cannot. Constituents have told me how the CSA has failed them and their children. That is why I am pleased that the Government are proposing radical changes instead of tinkering with the system. Everything that could go wrong with the CSA has gone wrong.

The simplified formula that is set out in the Bill will help staff to do their job more quickly, efficiently and accurately. Soon after I was elected to this place, I obtained a copy of the CSA assessment procedures that the staff have to complete. It took me a long time to read it. I read it three or four times, and I still could not understand it. I have a deal of sympathy with the staff who were trying to make the assessments. I well understand how they made so many incorrect assessments. The new, simplified formula should help them to produce correct assessments at the first stage.

Mrs. Maria Fyfe (Glasgow, Maryhill)

My hon. Friend has made an important point. At present, the charter allows the CSA to take 22 weeks to respond to queries about an assessment. The new and simplified system should ensure that the turn-round is much faster than that. That alone will create a great deal of good will in rectifying injustices.

Mrs. Humble

I agree with my hon. Friend. The new system will help parents to have a clearer idea of how much they should be paying out and how much they are likely to receive. In many instances constituents come to me with complex assessments, not knowing how they have been arrived at. They do not understand why they should pay what they are being asked to pay.

I welcome the proposed £10 child maintenance premium, which together with the maintenance disregard for working families tax credit, will be a valuable tool in the fight against child poverty.

I listened carefully to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), who is the Chairman of the Select Committee on Social Security. As a member of the Committee, I was pleased to take part in detailed discussions. Many people gave evidence to us and many heartfelt representations were made. The majority of those who made submissions in writing or who came to give evidence to the Committee were supportive of the reforms although there were one or two problems with them.

Paradoxically, the problem that was highlighted by the Committee's report and by people who gave evidence to us was that because so many people welcomed the proposed changes, there were concerns that clients under the existing system would feel aggrieved if the transitional period leading into the new system was prolonged. As the Select Committee's report points out, it will be difficult to operate two systems over a prolonged period. That could lead to a sense of unfairness.

I think that we all realise that if we cannot bring everybody on to the new system in one big bang, there must be a period of transition. We must ensure that the new system works if we are to ensure fairness for new claimants and for the old claimants who are transferred. I hope that there will be detailed debates on the Bill and that my right hon. and hon. Friends on the Government Front Bench will offer reassurances to existing clients on the time scale that they can expect for the transitional period.

Consideration should also be given to existing claimants who want their cases to be reviewed during the transition period. Are such cases to be given new assessments that will be phased in, or will they be brought on to the new system? We must assure existing claimants that we shall examine such complexities as soon as possible, while doing all we can to ensure that the current system takes care of their best interests, and those of their children, as well as possible under the existing rules.

I recognise that, in part, the problems of the transition period will be resolved only if the information technology available proves reliable. I am no expert in computers and IT, so I listen to the advice that I am given by others. I hope that the new systems being considered by the Government for use by the CSA will be sufficient to deal with the complexities of both the current system and the new system that we propose to introduce. If they are, people will be assured of receiving a far better service than is currently provided.

The new system, new technology and the training in dealing with claimants that staff are to receive are influenced by the changing, more complex family circumstances in which many children are now brought up. The Bill takes careful consideration of shared care arrangements. I welcome its provisions in that respect, in part because I want parents to talk to each other about the care of their children; it is in the child's best interests if apportioning child maintenance helps parents to do that.

I am also aware that the Bill and the preceding White Paper refer to first and second families, but there are many first, second, third and fourth families. I listened with interest to the intervention of my hon. Friend the Member for Vale of Glamorgan (Mr. Smith). I encountered a similar case, in which a mother applied to the CSA for support, but, on making inquiries, the CSA discovered that the father of her child had fathered another child, and it could not proceed with her application because of the confidentiality of the previous application. The family were left in limbo, despite the fact that the father had a responsibility to both children. I entered into an interesting correspondence with the CSA on that matter.

The Bill refers to children of a relationship who have an entitlement to support. I hope I understand correctly that that means all the children of a father and that any assessments will take into account and apportion the percentage payments across all those children. Dealing with such complex family arrangements is difficult, not only in terms of financial assessment, but when CSA staff talk to people on the telephone. I hope that Ministers will ensure that CSA staff training covers not only the new assessment procedures, but dealing sympathetically with members of the public from extremely diverse family backgrounds. I am sure that issues of confidentiality will be taken into account, but the basic point is to ensure that all children receive their full entitlement.

When the Social Security Committee visited Falkirk, we found that CSA staff were keen to do a good job. They want us to give them the tools that they need. I am sure that we shall do so.

8.55 pm
Mr. Desmond Swayne (New Forest, West)

It has been noticeable that virtually every Back-Bench contribution has concentrated on one particular aspect of the Bill. I intend to follow that example. It is almost inevitable, because we are really dealing with three Bills. It is difficult to discern any general principle that holds the entire Bill together as a unity.

If the objective is to reduce complexity in the provisions for child support, it is utterly confounded by the complexity heaped on the arrangements for pension reform. If the objective is to reduce pensioner poverty, it is confounded by the arrangements for the minimum pension guarantee, which are almost calculated to deliver pensioner poverty in the future by their diminution of incentives.

I shall concentrate on the provisions for child support. From experience at constituency advice sessions, no hon. Member can be unaware of the magnitude of the social problem that we face. Nevertheless, we continue to have unrealistic expectations of the Child Support Agency.

When I am confronted by a child support case, I am often profoundly affected by the complete absence of any notion of contributory negligence on the part of the victims themselves when they come to complain to me about the Jezebel or fiend whom they married and about whose behaviour they now complain. The CSA finds itself in the middle, between the warring parties. It cannot satisfy one customer without of necessity dissatisfying the other, yet we continue to maintain the language of "clients" and "customer satisfaction", which is entirely inappropriate.

If the proposed reform delivers its objective by radical simplification of the formula—the objective of administrative efficiency—there will be a huge reduction in the number of complaints about delay, incompetence and maladministration, but that will be accompanied by a vast increase in complaints of another sort—complaints about the nature of the rough justice that will be meted out by the new simplified formula.

Ministers have said that rough justice is better than no justice at all, and I agree, but let us be clear about the nature of the rough justice that will be delivered by the formula. As I pointed out to the Deputy Parliamentary Commissioner for Administration when he gave evidence, complaints about rough justice are not complaints on which he will be able to adjudicate, because they are the deliberate and calculated product of the new simplified system.

I went on to say to the Deputy Parliamentary Commissioner that we should abandon any notion of customer satisfaction, and accept that the agency is never going to be loved and that we might make a virtue of the rough justice by saying that it is the proper penalty or disincentive for the condition into which the customer has delivered himself. That is pretty uncompromising language. The Deputy Parliamentary Commissioner's reply was revealing. He said: Whether you should do that I think I have to leave to your own judgment. Have you accurately summarised what I believe to be the dilemma everyone is going to have to face? Yes, I believe you have. What are we considering? We are saying that dealing with the Child Support Agency on the basis of the simplified formula—the rough justice—is the penalty for being in the condition in which one finds oneself. Other people, who are not in that condition, can afford the luxury of private arrangements and do not have to deal with the agency. In a perverse sense, family break-up and divorce has often been a luxury consumer item reserved for those who could afford it. It is now generally available and the punishment is the rough justice meted out by the Child Support Agency. That is an example of the principle of less eligibility, which was fundamental to the poor law reform in 1834, and is now central to the Bill's reform of the Child Support Agency. I have never shrunk from the principle of less eligibility, but it is extraordinary that so many Labour Members now embrace it.

9.1 pm

Kali Mountford (Colne Valley)

I want to preface my remarks by thanking the Child Support Agency staff who work in Belfast. Since the new unit was formed, its staff have greatly helped my office and me. They work under tremendous pressure and in difficult circumstances. They told me this week that my number is on their white board as that of a regular correspondent to whom they respond quickly. Other hon. Members have made the point that everybody, not only thorns in the side, should receive a quick response. Nevertheless, agency staff need our thanks because they bear no responsibility for the way in which the agency was set up.

The House should recall that it was unanimously agreed that absent parents should be responsible for their children. That principle should not be taken away. It is an important principle that fathers or mothers who no longer live with their children should continue to maintain them. It would be better if children were maintained out of love, but it is a sad fact of life that, before the Child Support Agency was created, the previous court system did not work. People who used that system encountered many other problems. Liberal Democrat Members should take note of that. They may recall that the previous system was a blunt instrument—blunter than the simplified formula that they criticise. The most crucial problem with the court system was that it provided for no automatic right of appeal, review or update. Every time a change in circumstances occurred, the individual—usually the mother—had to return to the courts. That procedure was not only lengthy, but expensive and extremely onerous for the parents.

I welcome a new, simplified formula. During the debate, we have considered human behaviour and the way in which people respond to one another. That is crucial. The way in which the current formula has been used as an instrument by warring partners against each other has not been raised often. The complexity of the current formula enables people to bat the matter backwards and forwards. The child, who is in the centre, is completely forgotten, such is the enmity of some break-ups. Such children have dreadful experiences—not only a lack of maintenance and support, but being used by their parents. Warring partners will doubtless find new instruments with which to attack each other, but the child should not be an element in that assault.

The child is crucial. The key issue is not whether that instrument is blunt, fair or finely tuned, but recognition of the fact that the child needs, and is entitled to, support. There must be a mechanism for providing swift delivery, which is absolutely essential and can be achieved only by a simplified formula. We could debate for ever whether it is fair to include this or that provision in the formula, or we could make it more complicated again, but we should guard against that because it would return us to the current system. The Government should take note of that.

I also ask the Government to give me an assurance on clause 3, about which I have grave concerns. I understand completely why they want to tighten rules. Warring partners who have parted find themselves in a position where they can abuse the system to suit themselves—not necessarily the children—by claiming that a certain situation exists so that both parties get something out of that system—and income support pays when the father ought to be paying. The problem with making such a change—and I understand why it needs to be done—is that I fear that mothers fleeing violence may not make the necessary provisions to safeguard themselves because they are not in the best mental state to do so.

It is possible to use procedures to make sure that income support application forms allow the mother to consider whether she wants to claim against the absent father, although they do not have to be included in the Bill. Many of us have experience of women fleeing violence, and anyone who has spent any time with such women will know that the violent partner will use any excuse to pursue the departing mother and inflict more damage on her. It is possible within such procedures to make sure that we protect mothers. I would like an assurance from my right hon. Friend the Minister of State—if not tonight, at another stage of our consideration of the Bill—that those women will be protected. I do not believe that the Government intend to put them in danger and I expect to receive that an assurance at some point.

We have argued about complexity and non-complexity and whether the complexity of the CSA ought to be carried through to the new system for pensions. It has been alleged that there is a dichotomy in respect of whether we are being consistent, but there is a distinct difference between the complexity that can be used by warring partners and the complexity that might be necessary in a pension system. The current pension system is already very complex, so adding another tier of legislation would create another step and naturally make it more complicated—but does that necessarily mean that the additional layer would in itself be wrong? I would argue that it would not, because there are groups of people who, without the Bill, would have nothing whatever available to them. They would be dependent on income support-related pension schemes, which we now call the minimum pension guarantee, but we must not completely disregard carers who have made a huge contribution—not only to their families, but to society as a whole—by caring for their loved ones. To put that contribution in financial terms, I saw it described as worth £31 million a year, which is a huge sum.

Carers are usually women. They are doing the country a service by caring for people, so it is right to recognise that through a properly funded pension scheme. The second state pension scheme goes some way to achieving that, but I have had a thought of my own, which I have shared with the Minister and the Secretary of State: we should look beyond the Bill and what we want to achieve through it for the future and think about whether we should be considering pensioner provision as a whole. I think we call that joined-up government these days.

An aspect of Government policy that could be readily and usefully translated into pensions law is the provision of personal advisers. Some speakers have commended the idea of a named individual, but the personal adviser could play a special role, which I think the Government should take into account in future legislation. Such advisers could deal with some of the complexities to which hon. Members have referred.

People may not need pensions advisers throughout their lives; there are times when advice should be sought elsewhere. They will receive statements about their pensions, and during their working lives there will be triggers reminding them of the state of pension provision and prompting them to consider whether they should take out further pensions on their own behalf. Shortly before retirement, however, life becomes more difficult—people realise how little time is left and reflect that they may not have made adequate provision.

At present, people are not even claiming all that they are entitled to claim. In that context, benefits advisers have a special role that they are not currently asked to undertake. When people receive their national insurance contributions read-out, about six months before retirement, someone should be saying, "Let's talk about your pension provision. Should you not be claiming minimum pension guarantee?". We are always talking about the take-up of benefits; if we provided advice on benefits at the appropriate time, we could prevent people from falling out of the system and into deeper poverty. That would also be a suitable time for the discussion of other arrangements that such people might be making for their old age.

I urge the Government to consider, for the purposes of future legislation, the tensions that exist between budgets applying to pensioners. I am thinking of the budgets of the national health service and local government social services departments, as well as those of the Benefits Agency. The tension between care and provision is often artificial: in many instances, the restrictions imposed on a call on the public purse relate to a specific aspect of provision, regardless of whether it is within the remit of the Department involved. Pensioners are whole people, and our response to how they are to live out their retirement should accordingly be holistic.

At the turn of a millennium, we must consider changes in social life. Society has changed rapidly over time, and social provision has had to respond to that change. We must now look forward to the rapid social change that we are bound to experience over the next 100 years. For instance, people will live, on average, 30 years longer. Although the Bill may well be adequate in terms of what we are debating today, it will inevitably run out of steam. We should consider how we are to provide a viable old age for people far into the future. If our pensions provisions are to be sustainable, we must have a proper debate about how a diminishing number of people in work are to pay for the increasing number who will be in retirement. At some time the strain will become immense, and the pay-as-you-go scheme may well crack.

We may have to consider other measures, such as an increased working time. I would probably welcome that as I grew older and did not want to retire. Flexibility is another option. The TUC has been considering flexible arrangements for a long time, and, indeed, the Labour party has considered the idea of a flexible decade of retirement. When the Government have completed their work on this welcome Bill, they should continue to look forward to the many social changes that we are bound to experience and reflect on how we are to respond to them.

9.14 pm
Miss Anne McIntosh (Vale of York)

I am delighted to contribute to what is an interesting debate. I shall focus most of my remarks on the CSA, but, on pensions, let me say that the real reason why the Government wish to introduce a state second pension is that they have failed miserably to deliver all the pledges on the original state pension that they made during the last general election campaign. Judging by my mailbag, pensioners in my constituency of Vale of York are hugely disappointed at the derisory increase that the Government announced this year. The Minister might consider that matter before he himself becomes a pensioner.

The challenge that faces the Government is a missed opportunity. They had the opportunity to impose proper reforms to simplify the social security system and they have blown it. Instead, they are introducing reforms that are even more complex than those that continue today. The Secretary of State said that the crux of the problem is twofold. First, calculations are too complicated and take too long to assess. Secondly, corrections are too slow for implementation to take place.

The Minister must put the House's mind at rest as to how the dual system will run in the transitional period. The Government have to satisfy us and our constituents about how the transitional period will operate.

I am hugely disappointed following my correspondence with Baroness Hollis of Heigham in the other place. She said that the Bill would put my mind at rest on the subject of overtime. Neither the comments this evening nor the Bill itself have satisfied me that the Government will take overtime out of the initial assessment. Judging by what constituents have said to me, it is wrong to count overtime—which is, by definition, not a permanent feature, particularly for employees in industries such as construction and engineering and for sales staff, who do overtime before Christmas—as part of overall permanent income. I should like the Minister to rule out the possibility of overtime being part of the overall assessment.

I am slightly concerned that the Government will resort to more telephone contact between CSA staff and constituents, particularly those in Vale of York. Judging by correspondence that I have had and meetings at my surgeries, constituents are not always left with the best impression by CSA staff. That is understandable. We all understand that CSA staff work under huge pressure and are probably understaffed, but there is no excuse for a member of the agency to be rude to constituents. Perhaps some charm school offensive could be undertaken as part of the Bill before the CSA provisions come into effect.

The Green Paper promised that the consultation results would be made public. The Under-Secretary, the hon. Member for Wallasey (Angela Eagle), will recall her reply to me at the November Social Security questions. She told me that the reason why the correspondence and results of the consultation would not be made public would become obvious when the Bill was published. Can we conclude that those show that the overwhelming majority of people, including me, other Members, outside bodies and many private individuals, such as constituents who wrote in at our suggestion, were against the proposed Government reforms? Is that why the Government are loth to publish the results of the consultation?

I mention the case of Mr. Michael Donaghy in Vale of York, who has been left in extraordinary circumstances. He is not the parent, but is in charge of a boy whom he is bringing up as his own. The absent father, has been making payments, but the CSA informs me that those will stop. Mr. Donaghy will be left with no provision other than his income, which is very modest. I plead with the Minister to reopen Mr. Donaghy's case, as the reforms that the House is considering today will offer him no consolation.

I commend the official Opposition's reasoned amendment, and hope that the House will support it.

9.20 pm
Mr. Eric Pickles (Brentwood and Ongar)

It is a great pleasure to follow my hon. Friend the Member for Vale of York (Miss McIntosh), who speaks with great knowledge on the subject. I hope that, in his reply, the Minister of State will say why the responses to the consultation have not been published. My hon. Friend has not only legitimately asked that question, but doggedly pursued an answer to it.

I also have little doubt that, when my hon. Friend talks about the need for a charm school offensive, she had me in mind as someone who might lead it.

This debate has been interesting, not least because the hon. Member for Vale of Glamorgan (Mr. Smith)—who has left the Chamber—decided to use it as an occasion on which to name one of his constituents as an adulterer. Tomorrow morning, the gentleman named will undoubtedly have something interesting to read about over his cornflakes.

Like the hon. Member for Thurrock (Mr. Mackinlay), I am humbled by the breadth of knowledge about pensions on both sides of the House. Nevertheless, what unites all hon. Members is that we are all experts on the Child Support Agency; as a result of our various constituency surgeries, advice centres, advice bureaux—whatever one calls them—we have become very familiar with the agency's internal workings. However, unlike some hon. Members who have spoken in the debate, when I have dealt with CSA staff as a constituency Member of Parliament, I have always found them to be unfailingly courteous and increasingly efficient in their deliberations.

Before I go much further in my speech, I should like to express the regrets of the official Opposition that the Minister of State, the right hon. Member for Birmingham, Perry Barr (Mr. Rooker), is planning not to stand at the next general election. Not only will he be greatly missed in the House, but he looks far too young to retire—although he may possibly go on to greater heights. We wish him well.

The Secretary of State said that this legislation is the CSA's last chance. Therefore, it is even more important that we get the legislation right. If this is the CSA's last chance, we shall have to ensure that the proposed reforms work. However, as the Minister's neighbour, the hon. Member for Birmingham, Selly Oak (Dr. Jones), said, there is much to put right in the Government's proposals.

My hon. Friend the Member for South Dorset (Mr. Bruce) reminded us that the original proposals establishing the Child Support Agency enjoyed all-party support. He also told us—it was particularly interesting—that the problems that the House envisaged when establishing the agency did not occur, but that we have encountered an entirely new set of problems. I tell Labour Members—in some friendship—that that is the risk with this legislation.

We accept the need for change, but have to ensure that we do not simply exchange one set of problems for another. Our objective surely must be to ensure that children are supported and that parents accept their duty of financial responsibility for their children.

The Committee—on which I hope to serve—will have the considerable advantage of having the Social Security Committee's report, which I have found to be extremely useful. I should like particularly to draw the House's attention to a very useful letter from Australia—from the family court of Australia and the chambers of Mr. Justice Kay, who offers us just over two and a half pages of advice. I shall quote one sentence which would serve the House well. It states: The success of the scheme may well depend on the extent to which the public perceive it to be fair. I am pleased to see Ministers nodding in agreement.

I believe that children should be treated equally. Sadly, I have to tell my neighbour, the hon. Member for Romford (Mrs. Gordon), that she is wrong and that, under the Government's proposals, children of a second marriage are treated materially differently. The hon. Lady may be forgiven for that mistake because the White Paper offered two options and the Government chose the one under which children were not on an equal footing. I hope that the hon. Lady is selected to serve on the Standing Committee, as we hope to put that right.

Mrs. Gordon

I am concerned that children should be treated equally and I hope that the Committee will consider that point.

Mr. Pickles

I am grateful for the hon. Lady's support. Let me reiterate to the Whip on duty that I hope that she is selected to serve on the Committee.

My hon. Friend the Member for New Forest, West (Mr. Swayne) warned about the consequences of rough justice. The Government made a virtue of the simplicity of the new system. We are not unsympathetic to that view. Surely everyone is in favour of a simpler system, but removing complexity has a cost. The simpler we make the system, the more we risk individual loss. The Government talk about rough justice, but for some there will be no justice.

Under the basic scheme, one would expect a number of clear exemptions. My hon. Friend the Member for Gainsborough (Mr. Leigh) warned that the number of variations will undoubtedly increase and that, in two or three years' time, it will not be dissimilar from the number of variations under the current system.

The Government refer to a new concept of rough justice. We know that 350,000 parents with care will be worse off by an average of £17 a week. I put that point to the Secretary of State on 29 November at column 4 of Hansard. The right hon. Gentleman seemed unaware of that figure. He thought that I was talking about the contributions made by parents without care. So let us assume that the figure of 350,000 is right, as it was supplied by the Under-Secretary, the hon. Member for Wallasey (Angela Eagle). Let us also assume that the Secretary of State's statement that 1 million children will be better off under the scheme is right. So, if 350,00 parents with care will be worse off, assuming that they have an average of 2.4 children, 840,000 children will be worse off by the provisions. Allowing for a margin of error, that is virtually one for one so that, for every child that will be a winner under the new system according to the Government's figures, there will also be a loser. That does not seem to be an improvement in the system. Half will lose and half will gain. The Government need to get their strategy right.

When the Under-Secretary introduced the doctrine, she said that it will be good for everyone if people receive a small sum rather than a theoretical sum. Have the Government not heard of an enforcement strategy and actually making people pay? We are prepared to take away people's driving licences and at some time we will probably take away their passports; why do we not simply make them pay? That seems much more sensible.

Who are the people who will lose? As we are fortunate enough to have Mr. Nicholas Mostyn QC's figures on page 86 of the Select Committee report, we know that those with former partners and who earn just above the national average male manual earnings or the national average male non-manual earnings will be worse off. Those are the people who are going to be receiving a lot less. The people who are going to be paying out, according to Mr. Mostyn, are those who are on well below average earnings. They will see an increase of around 170 per cent. That surely makes no sense. The Government cannot expect support for such a warped and unjust scheme. My hon. Friend the Member for Banbury (Mr. Baldry) was right when he pointed out how dissatisfied poor people are with Labour.

It is also inequitable to have no upper limit. A measure supposedly designed to help children is nothing more than social engineering. The number of children involved will damage the public's confidence in the reform. It is clearly illogical not to have an upper limit. [HON. MEMBERS: "Why?"] It is illogical because the measure is designed to ensure that children receive maintenance, not to ensure that they receive a share of the parent's wealth. That is a wholly new concept in English law.[Interruption.] Labour Members disagree, but it is a topsy-turvy world to create a new concept in English law only for children of a marriage that has broken down but not for children of a marriage that has not broken down. If a child's parents live happily together, he or she does not have a right to a share of the wealth but, if the parents break up, he or she will have that right. Furthermore, there is no way to enforce transfer of that wealth to the child. If the money is spent on luxuries that have no benefit to the child, he or she will have no recourse. It is little wonder that Mr. Alistair Henry, a practising lawyer, has said—in a letter sent to all right hon. and hon. Members, that the Bill will create a world of little Lord Fauntleroys.

Dr. Lynne Jones

Is the hon. Gentleman suggesting that wealthy parents do not transfer a proportion of their wealth to their children by giving them, for example, tax-free donations to their savings or helping them through university? He is talking nonsense.

Mr. Pickles

The hon. Lady has missed the point completely. Parents may transfer wealth to their children of their own volition, but the proposals in the Bill would introduce a mechanism by which non-resident parents had to transfer their wealth to their former spouses, not their children. Financial settlements would be turned on their heads, and that makes no sense. The original recommendation of the Social Security Committee was that there should be an upper limit. My hon. Friend the Member for Daventry (Mr. Boswell) was right to warn of the effect that the proposals will have.

I have already told the House about Mr. Justice Kay's advice that the public must perceive the scheme to be fair, but it will be unfair if the income of the parent with care is not assessed when that person has a higher income than the parent without care. That will lead to great distress and great damage to public confidence in the system. The object is to ensure fair maintenance for the children, not to offer a further means by which wealthy parents with care can damage less well-off parents who do not have care. My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) was right to say that the system should not be used to extend conflict within the family. Our surgeries are full of people with stories about parents without care, usually men, who shirk their responsibilities and have a life style that is inconsistent with their declared income—they have new Porsches and take expensive holidays—and it is right that we should pursue them. Increasingly, however, people come to our surgeries with relationship problems. Those people fit the lyrics of the American singer-songwriter Randy Newman, who described "uptown, uptempo women" and "downtown, downbeat guys." [Interruption.] The House will understand that I am a well-read product of the '70s.

When a child lives in a wealthy home, there is no justice in a policy that squeezes poor parents without care. That is oppressive and wrong, and we should do something about it. That is why, in the Australian system, if a parent with care has an above-average income, the prescribed figure is reduced dollar for dollar. As Mr. Justice Kay said, public confidence will not be bolstered if it is not recognised that a carer is earning Australian $100,000 per annum whilst the payer is struggling to make ends meet. However, there remains a glaring omission in the Bill—the question of dividend income, which was raised originally by my hon. Friend the Member for Havant (Mr. Willetts). People who receive unearned income will not be eligible to be assessed by the CSA. There is neither sense nor logic to that.

Conservative Members believe strongly in people having dividend income. We want people to invest, to put money aside and enjoy dividends, but we want them to use the money to pay for their children's upkeep. The Bill offers a Bertie Wooster escape clause. The House will recall that Bertie Wooster led a blameless life, but he had many liaisons and was engaged to no fewer than six females. He was engaged once to Madeline Bassett, Honoria Glossop, Pauline Stoker and Vanessa Cook, and twice to Lady Florence Craye and Roberta Wickham.

What would have happened if those liaisons had been consummated and there had been issue from one or more of them? Wooster was a wealthy man who received dividend income but, under the Government's current proposals, the CSA would not have been able to lay a hand on a penny piece.

Another illustration might involve a plumber who decides to form a company and to take a dividend instead of wages. Under the Government's scheme, he would not have to pay a penny piece, and that surely makes no sense. The Secretary of State has powers to prevent payment evasion and to ensure that those who deprive themselves of a source of income will be liable. However, neither Bertie Wooster nor the plumber could be considered, under the Bill, to have deprived themselves of any form of income. There is much to put right in the Bill's proposals for pensions, to ensure that the interface between the various systems are improved, as the pension industry advises.

Finally, the debate has made clear the House's universal contempt for the idea of removing people's driving licences as a way of enforcing the requirements of the Child Support Agency. It is surely the daftest and most stupid idea ever to come from a spin doctor. I believe that our first job in Committee will be to remove this ridiculous idea.

I strongly urge my right hon. and hon. Friends to support our amendment tonight.

9.40 pm
The Minister of State, Department of Social Security (Mr. Jeff Rooker)

There have been 20 Back-Bench speeches today, and I have heard every one. I missed a few minutes of the speech of the hon. Member for Gainsborough (Mr. Leigh), but I know that it was a thoughtful speech. Some Opposition speeches have been thoughtful, if not always positive. Sometimes, Opposition Members have misunderstood the purpose of the Bill. They concentrated, as did most of my hon. Friends, on the child support aspect of the Bill. No one need apologise for that. Given what has happened recently and the scale of Members' involvement with CSA cases, that is inevitable.

At the outset—this is not meant as a criticism—I wish to refer to any hon. Member who raised any individual CSA case by mentioning the names of constituents. Before I or my ministerial colleagues do anything, we want written information and letters. We are not taking throwaway names in the Chamber and then going away to look up individual cases.

Mr. John Smith

Will my right hon. Friend give way?

Mr. Rooker

No, I will not. I am making that point so that nobody expects that just because someone's name was raised tonight, we will go away and deal with that case. We will not. We will require written instructions from the Member of Parliament.

Mr. Smith

Will my right hon. Friend give way?

Mr. Rooker

No, I will not.

Mr. Smith

On a point of clarification.

Mr. Rooker

There is no need for clarification. I am asking for letters if cases need following up.

I want to respond to some of the points raised in the debate, although it is impossible for me to do justice to all of them. On child support, there were many references to the well-off being required to pay a lot of money because of the percentage assessment—we must make it clear that the percentage figures of 15, 20 and 25 per cent. for one, two and three or more children apply only to net incomes above £200 a week. There was only one oblique reference to that. Anyone earning between £100 and £200 a week will pay a lesser percentage. For anyone earning up to £100 a week, it will be almost a token payment. These are net incomes. Reference was made to a salary of £20,000 a year and a payment of £100 a week.

Mr. Ian Bruce

That is £20,000 net.

Mr. Rooker

The hon. Gentleman now says that it is net, but he did not make that clear before. The salary necessary to give a net income of £20,000 a year would be substantially more than £20,000. There are not only fixed percentages—there are built-in hurdles in the system before they are reached.

It is true that there is no upper limit, but there is a limit in terms of the percentage. The limit of 25 per cent. of net income is less than that which can be reached under the present system—under the current system, the limit can hit 30 per cent. of net income. That must be taken on board. It is not possible for us to produce a genuine assessment of losers and gainers, although we have been criticised for that. Given the fact that there is such a default in the current system, it is not possible genuinely to assess changes in people's behaviour.

To their credit, the previous Government instituted a cultural change with the introduction of the CSA. It has not worked out as expected, even with the changes. I was present when it was introduced, along with other hon. Members, and the matter was not scrutinised enough. Everyone thought that it was a good idea and that there was a problem to be addressed. There was a general consensus. However, the detail was not looked at properly in the regulations, in Committee or on the Floor of the House. I hope that the details of the Bill will be looked at in Committee.

This time we have the added advantage of greater consultation and the Select Committee report. We have learned from the errors of the past. We are not claiming perfection, but we are claiming that we will have a system that will meet public demands, that will be fair and transparent and that can be operated by our officials.

The hon. Member for Vale of York (Miss McIntosh) spoke about charm schools. It works both ways. I cannot tell my constituents when they are angry and banging on the table, and odd relatives who claim that I set it all up when I was on the Back Benches, that they must be charming when they speak to the CSA staff. One has only to be on the receiving end on the telephone for an hour in a CSA office to realise the sort of things that the public say to the staff. That is why the staff are extremely stressed and turnover is running at 27 per cent. It is not simply a question of not paying them enough—the job is extremely stressful. Part of the stress is to do with the system they have to work with. We hope that the new system will enable them to be more user-friendly, that there will be less stress because of the clarity of the calculations, and that the public reaction will also be different. It works both ways.

I should like to respond to some of the points of the hon. Member for Havant (Mr. Willetts). I shall, if time permits, deal with the points on pensions. The general thrust of the hon. Gentleman's message and his criticism of our proposals was that he wanted one law for the rich and one for everybody else. We are not prepared to countenance that. The idea of putting a fixed cap on absent parents is nonsense.

However, we agree that we want the two systems to operate together for as short a time as possible. There must be two systems—there cannot be a big bang. It will not be possible to switch off the system one Friday, to put the existing case load of more than 1 million on the system the following Monday, to accept new claimants from that date and expect the system to work effectively. That will not happen, and we would be irresponsible to suggest otherwise. We want the gap to be minimal, but we have to make it work.

It was argued in a debate on the Queen's Speech that new information technology is required and it will take some time. We regret the delay, but we will not allow the system to operate with the new formula unless we are satisfied that it will work. There is no benefit in rushing it by either three months or six months just for the sake of a headline or to meet any self-imposed dates. This is the last chance for a CSA-type operation, as I am sure all hon. Members will appreciate.

The hon. Gentleman had nothing positive to say about the state second pension which will, over a period of time, benefit more than 14 million people, including 2 million carers and 2 million long-term disabled people who have never had such provision in the past. If we do not change the system, a time will come in the next century when one in three of a much greater number of pensioners—16 million instead of 10 million—will retire straight onto the means test. We must address that now—it is not a question of thinking about 2040. The Government must operate a twin-track policy for tomorrow's pensioners and today's. The same policy will not work for both. The cost implications make that impossible. I just wish that in 1960 there had been a proper consensus regarding pension provision so that we would not now be in this mess, with millions of pensioners living in poverty.

We have to work in the long term, and I accept that Ministers will never be accountable for pension decisions. We have to try and reach a consensus in this House and outside to achieve a system that is fair and justifiable and that will work.

Miss Ann Widdecombe (Maidstone and The Weald)

On a point of order, Mr. Deputy Speaker. I apologise to the Minister for interrupting his speech. It has come over on the Press Association tapes that the Home Secretary has said that he is minded to release General Pinochet. Can I ask you, Mr. Deputy Speaker, whether you have received any request that a statement be made by the Home Secretary at 10 o'clock tonight?

Mr. Deputy Speaker (Mr. Michael Lord)

I have received no such request.

Mr. Rooker

I shall try to respond to some of the points made by hon. Members, although I cannot go into great detail. We reject returning the issue to the courts as was proposed by the hon. Member for Northavon (Mr. Webb). After reflection, I am sure that all hon. Members will also do so, although we shall debate the matter in Committee.

The hon. Member for Daventry (Mr. Boswell) said that the new system would lead to high deduction rates. I hope that I have made the point that there is a limit of 25 per cent.—not a cash limit, but a percentage limit. That is fair. However, that will not destroy private arrangements, as he suggested. Partners or parents who want to make private arrangements are free to do so, as long as they do not involve the benefits system. That was the bottom line for the institution of the CSA in the first place.

My right hon. Friend the Member for Birkenhead (Mr. Field) thought that the new scheme was already too complicated. He referred to travel costs. We think that they should be taken into account if they are exceptionally high. It is not to say that we shall not treat the Committee stage seriously that I point out to right hon. and hon. Members that we know, from internal discussions and from advice that we have received, that if we move a host of seductively simple, fair and clear amendments to a measure that is—as my right hon. Friend points out—already overly complicated, we shall never make it work.

The formula that we propose is fair; it can be made to work with the existing system and with new information technology. If we start to tweak it in Committee, the evidence, which we shall put before the Committee, suggests that we may not be able to deliver. We are intent on delivering change in the operation of the CSA. I give due warning that any amendments must be carefully drafted and supported by careful arguments.

Several hon. Members mentioned the driving licence provisions. The hon. Member for Havant said that they would not toughen the measure. Indeed, they would. Those provisions would be an alternative to a prison sentence, if the courts did not want to impose one. After all, in most cases, especially for debt, prison sentences are a ludicrous sanction, by any stretch of the imagination. The driving licence provisions would offer the courts an alternative sanction; they will not weaken the measure. Most motorists get apoplexy when their car is in service for a day—

Mr. Kirkwood


Mr. Rooker

I am sorry I cannot respond to the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood).

The threat of losing their licence will probably cause them to pay their dues. That is all we ask them to do.

My hon. Friend the Member for Blackpool, North and Fleetwood (Mrs. Humble) asked whether all children in the relationship would be covered by the child support system. Yes, they will. If the payment is necessarily split—for example, if there is a requirement to pay 20 per cent. for the children of two parents—it will be split with 10 per cent. going to each.

My hon. Friend the Member for Colne Valley (Kali Mountford) asked whether mothers should be able to choose to pursue maintenance. We are happy to discuss that matter in Committee, but it is right that, where income support is being paid, parents with care should co-operate, wherever possible, in seeking maintenance for their children. They will have to opt out rather than opt in. However, they will be informed of that when they make their initial claim for income support. It is right to do that.

The hon. Member for Vale of York (Miss McIntosh) deserves an answer to her question on consultation, which I know she has put on another occasion. She makes a legitimate point. I have to give her more or less the same answer that I gave her before. However, it is a fair answer—she can check it. A list of the organisations and academics who responded to the Green Paper, excluding those who asked us not to publish their responses, has been placed in the Libraries of both Houses, as has a summary of the responses to the written consultations. We have met all requests for copies of those lists, or of the summary of responses.

Of course, an enormous number of the public responses gave confidential information. We do not think that it is right and proper to make such information available in general terms. However, respondents to the Green Paper overwhelmingly accepted the case for radical change. The hon. Lady also made a point about overtime. When overtime is a regular part of income, it rightly should be taken into account.

I wish to make a couple of points about pensions. [Interruption.]

Mr. Deputy Speaker

Order. There is far too much general conversation. In a long and detailed debate, the House should listen to the Minister who is replying.

Mr. Rooker

I apologise for the fact that my speech is not full of rhetoric. I genuinely want to answer some of the points that Members have raised.

We do not think that there is apartheid in pensions. It is true that high earners have no difficulty achieving a decent pension and modest earners may or may not be in occupational pension schemes and have the opportunity to be so. Those who are not will want to choose another option, and that is why we have instituted low cost stakeholder pensions. For low earners, I must tell Conservative Members that it is not tenable to expect carers, disabled people with broken work records and people with long-term low incomes over a lifetime's work to organise funded pensions. That is not possible. By introducing the state second pension, we can virtually double—and, in some cases, more than double—the pension that such people will receive compared with the existing state earnings-related pension.

SERPS was good when it was invented. I was in the House and voted for it when it was introduced in the 1970s. However, because it is earnings related, it does not, by definition, do much for the long-term low paid. It is true that for the average male retiring today SERPS provides about £40 a week; 20 years ago, people complained that they would have to wait all that time for that sum. The time has passed, but it takes time to build up a pension pot.

Dr. Lynne Jones

Will my right hon. Friend give way?

Mr. Rooker

I was just about to answer my hon. Friend's point if she will allow me. She made the point that we could use the £4 billion to £5 billion involved in net benefit expenditure on the state second pension for the basic state retirement pension. My right hon. Friend the Secretary of State gave a figure of £5 billion for net benefit expenditure in 2050 on the state second pension. If we were to use the basic retirement pension at the minimum income guarantee level, by 2010 we would be spending £7.5 billion, by 2020 we would be spending about £20 billion, and by 2050 the estimate is that it would cost £50 billion extra in public expenditure. The idea that we could knock off introducing the state second pension in order to fund the basic pension at the MIG-level frankly does not add up. The figures multiply 10 times—from £5 billion to £50 billion—so that idea is not a runner.

Dr. Jones

Will my right hon. Friend give way?

Mr. Rooker

No, I cannot. I understand that my hon. Friend has volunteered to serve on the Committee, so we can debate these issues there.

One or two of my hon. Friends mentioned community service orders, but it is not possible to go into them now. We are dealing with the long-term issues and we are trying to get them right. We do not claim that we can do it all in two years or in five years; we are working for pension provision for the first half of this century. One only has to consider the opportunities that the Conservative party had to get the matter right. In the century that has just finished, the Conservative party ruled the United Kingdom for more years than the Communist party ruled Soviet Russia and it still could not get pensions right for the 21st century.

Question put, That the amendment be made:—

The House divided: Ayes 180, Noes 340.

Division No. 24] [9.59 pm
Ainsworth, Peter (E Surrey) Fearn, Ronnie
Allan, Richard Flight, Howard
Amess, David Forsythe, Clifford
Arbuthnot, Rt Hon James Forth, Rt Hon Eric
Ashdown, Rt Hon Paddy Fowler, Rt Hon Sir Norman
Atkinson, Peter (Hexham) Fox, Dr Liam
Baker, Norman Fraser, Christopher
Baldry, Tony Gale, Roger
Beggs, Roy Gamier, Edward
Berth, Rt Hon A J George, Andrew (St Ives)
Bercow, John Gibb, Nick
Beresford, Sir Paul Gill, Christopher
Blunt, Crispin Gillan, Mrs Cheryl
Body, Sir Richard Gorman, Mrs Teresa
Boswell, Tim Gray, James
Bottomley, Peter (Worthing W) Green, Damian
Bottomley, Rt Hon Mrs Virginia Greenway, John
Brady, Graham Grieve, Dominic
Brake, Tom Hague, Rt Hon William
Brand, Dr Peter Hamilton, Rt Hon Sir Archie
Brazier, Julian Hammond, Philip
Breed, Colin Hancock, Mike
Brooke, Rt Hon Peter Harris, Dr Evan
Browning, Mrs Angela Hawkins, Nick
Bruce, Ian (S Dorset) Hayes, John
Bruce, Malcolm (Gordon) Heath, David (Somerton & Frome)
Burnett, John Heathcoat-Amory, Rt Hon David
Bums, Simon Hogg, Rt Hon Douglas
Burstow, Paul Horam, John
Cash, William Howard, Rt Hon Michael
Chapman, Sir Sydney (Chipping Barnet) Howarth, Gerald (Aldershot)
Hughes, Simon (Southwark N)
Chidgey, David Hunter, Andrew
Chope, Christopher Jack, Rt Hon Michael
Clappison, James Jackson, Robert (Wantage)
Clark, Dr Michael (Rayleigh) Jenkin, Bernard
Collins, Tim Keetch, Paul
Colvin, Michael Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Cormack, Sir Patrick
Cotter, Brian Key, Robert
Curry, Rt Hon David King, Rt Hon Tom (Bridgwater)
Davey, Edward (Kingston) Kirkbride, Miss Julie
Davies, Quentin (Grantham) Kirkwood, Archy
Davis, Rt Hon David (Haltemprice & Howden) Laing, Mrs Eleanor
Leigh, Edward
Day, Stephen Letwin, Oliver
Dorrell, Rt Hon Stephen Lewis, Dr Julian (New Forest E)
Duncan Smith, Iain Lidington, David
Emery, Rt Hon Sir Peter Lilley, Rt Hon Peter
Evans, Nigel Livsey, Richard
Faber, David Lloyd, Rt Hon Sir Peter (Fareham)
Fabricant, Michael Llwyd, Elfyn
Fallon, Michael Loughton, Tim
Luff, Peter Simpson, Keith (Mid-Norfolk)
Lyell, Rt Hon Sir Nicholas Smith, Sir Robert (WAb'd'ns)
MacGregor, Rt Hon John Smyth, Rev Martin (Belfast S)
McIntosh, Miss Anne Soames, Nicholas
MacKay, Rt Hon Andrew Spelman, Mrs Caroline
Maclean, Rt Hon David Spicer, Sir Michael
Maclennan, Rt Hon Robert Spring, Richard
McLoughlin, Patrick Stanley, Rt Hon Sir John
Madel, Sir David Streeter, Gary
Major, Rt Hon John Stunell, Andrew
Malins, Humfrey Swayne, Desmond
Maples, John Swinney, John
Mates, Michael Syms, Robert
May, Mrs Theresa Tapsell, Sir Peter
Michie, Mrs Ray (Argyll & Bute) Taylor, John M (Solihull)
Moss, Malcolm Taylor, Matthew (Truro)
Nicholls, Patrick Taylor, Sir Teddy
Oaten, Mark Thompson, William
O'Brien, Stephen (Eddisbury) Tonge, Dr Jenny
Öpik Lembit Townend, John
Ottaway, Richard Tredinnick, David
Page, Richard Trend, Michael
Paterson, Owen Wardle, Charles
Pickles Eric Webb, Steve
Portillo, Rt Hon Michael Welsh, Andrew
Prior, David Whitney, Sir Raymond
Randall, John Whittingdale, John
Redwood, Rt Hon John Widdecombe, Rt Hon Miss Ann
Wigley, Rt Hon Dafydd
Rendel, David Wilkinson, John
Robathan, Andrew Willetts, David
Robertson, Laurence Willis, Phil
Roe, Mrs Marion (Broxboume) Wilshire, David
Rowe, Andrew (Faversham) Winterton, Mrs Ann (Congleton)
Ruffley, David Winterton, Nicholas (Macclesfield)
Russell, Bob (Colchester) Yeo, Tim
St Aubyn, Nick Young, Rt Hon Sir George
Sanders, Adrian
Sayeed, Jonathan Tellers for the Ayes:
Shephard, Rt Hon Mrs Gillian Mrs. Jacqui Lait and
Shepherd, Richard Mr. Geoffrey Clifton-Brown.
Abbott, Ms Diane Bradley, Peter (The Wrekin)
Ainger, Nick Brinton, Mrs Helen
Ainsworth, Robert (Cov'try NE) Brown, Russell (Dumfries)
Alexander, Douglas Browne, Desmond
Allen, Graham Burden, Richard
Anderson, Donald (Swansea E) Burgon, Colin
Armstrong, Rt Hon Ms Hilary Butler, Mrs Christine
Ashton, Joe Caborn, Rt Hon Richard
Atherton, Ms Candy Campbell, Alan (Tynemouth)
Atkins, Charlotte Campbell, Ronnie (Blyth V)
Austin, John Campbell-Savours, Dale
Banks, Tony Cann, Jamie
Bames, Harry Caplin, Ivor
Barron, Kevin Caton, Martin
Battle, John Cawsey, Ian
Bayley, Hugh Chapman, Ben (Wirral S)
Beard, Nigel Chaytor, David
Beckett, Rt Hon Mrs Margaret Clapham, Michael
Bell, Martin (Tatton) Clark, Rt Hon Dr David (S Shields)
Benn, Hilary (Leeds C) Clark, Dr Lynda (Edinburgh Pentlands)
Benn, Rt Hon Tony (Chesterfield)
Bennett, Andrew F Clarke, Charles (Norwich S)
Benton, Joe Clarke, Eric (Midlothian)
Bermingham, Gerald Clarke, Tony (Northampton S)
Berry, Roger Clelland, David
Best, Harold Clwyd, Ann
Betts, Clive Coaker, Vernon
Blackman, Liz Coffey, Ms Ann
Blears, Ms Hazel Cohen, Harry
Blizzard, Bob Coleman, Iain
Blunkett, Rt Hon David Colman, Tony
Borrow, David Connarty, Michael
Bradley, Keith (Withington) Cook, Frank (Stockton N)
Cook, Rt Hon Robin (Livingston) Hinchliffe, David
Cooper, Yvette Hodge, Ms Margaret
Corbett, Robin Hoey, Kate
Cousins, Jim Hood, Jimmy
Cranston, Ross Hoon, Rt Hon Geoffrey
Crausby, David Hope, Phil
Cryer, Mrs Ann (Keighley) Hopkins, Kelvin
Cryer, John (Homchurch) Howarth, Alan (Newport E)
Cummings, John Howarth, George (Knowsley N)
Cunningham, Rt Hon Dr Jack (Copeland) Howells, Dr Kim
Hoyle, Lindsay
Cunningham, Jim (Cov'try S) Hughes, Ms Beverley (Stretford)
Curtis-Thomas, Mrs Claire Hughes, Kevin (Doncaster N)
Dalyell, Tam Humble, Mrs Joan
Darling, Rt Hon Alistair Hurst, Alan
Darvill, Keith Hutton, John
Davey, Valerie (Bristol W) Iddon, Dr Brian
Davidson, Ian Illsley, Eric
Davies, Geraint (Croydon C) Jackson, Helen (Hillsborough)
Dawson, Hilton Jamieson, David
Dean, Mrs Janet Jenkins, Brian
Denham, John Johnson, Alan (Hull W & Hessle)
Dismore, Andrew Johnson, Miss Melanie (Welwyn Hatfield)
Dobbin, Jim
Donohoe, Brian H Jones, Rt Hon Barry (Alyn)
Doran, Frank Jones, Helen (Warrington N)
Drew, David Jones, Ms Jenny (Wolverh'ton SW)
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey) Jones, Dr Lynne (Selly Oak)
Eagle, Maria (L'pool Garston) Jowell, Rt Hon Ms Tessa
Edwards, Huw Keeble, Ms Sally
Efford, Clive Keen, Alan (Feltham & Heston)
Ellman, Mrs Louise Kemp, Fraser
Ennis, Jeff Kennedy, Jane (Wavertree)
Etherington, Bill Khabra, Piara S
Field, Rt Hon Frank Kidney, David
Fisher, Mark Kilfoyle, Peter
Fitzsimons, Loma King, Ms Oona (Bethnal Green)
Flint, Caroline Kumar, Dr Ashok
Flynn, Paul Ladyman, Dr Stephen
Foster, Rt Hon Derek Lawrence, Mrs Jackie
Foster, Michael Jabez (Hastings) Laxton, Bob
Foster, Michael J (Worcester) Lepper, David
Foulkes, George Leslie, Christopher
Fyfe, Maria Levitt, Tom
Galloway, George Lewis, Ivan (Bury S)
Gapes, Mike Lewis, Terry (Worsley)
Gardiner, Barry Liddell, Rt Hon Mrs Helen
George, Bruce (Walsall S) Linton, Martin
Gerrard, Neil Lloyd, Tony (Manchester C)
Gibson, Dr Ian Love, Andrew
Gilroy, Mrs Linda McAvoy, Thomas
Godman, Dr Norman A McCabe, Steve
Goggins, Paul McCafferty, Ms Chris
Golding, Mrs Llin McCartney, Rt Hon Ian (Makerfield)
Gordon, Mrs Eileen
Grant, Bernie McDonagh, Siobhain
Griffiths, Jane (Reading E) Macdonald, Calum
Griffiths, Nigel (Edinburgh S) McDonnell, John
Griffiths, Win (Bridgend) McFall, John
Grocott, Bruce McGuire, Mrs Anne
Grogan, John McIsaac, Shona
Gunnell, John Mackinlay, Andrew
Hall, Mike (Weaver Vale) McNamara, Kevin
Hall, Patrick (Bedford) McNulty, Tony
Hamilton, Fabian (Leeds NE) MacShane, Denis
Harman, Rt Hon Ms Harriet Mactaggart, Fiona
Heal, Mrs Sylvia McWalter, Tony
Healey, John Mallaber, Judy
Henderson, Doug (Newcastle N) Marsden, Gordon (Blackpool S)
Henderson, Ivan (Harwich) Marsden, Paul (Shrewsbury)
Hepburn, Stephen Marshall, David (Shettleston)
Heppell, John Marshall, Jim (Leicester S)
Hesford, Stephen Marshall-Andrews, Robert
Hewitt, Ms Patricia Martlew, Eric
Hill, Keith Maxton, John
Meacher, Rt Hon Michael Simpson, Alan (Nottingham S)
Michael, Rt Hon Alun Singh, Marsha
Michie, Bill (Shefld Heeley) Smith, Angela (Basildon)
Milburn, Rt Hon Alan Smith, Miss Geraldine (Morecambe & Lunesdale)
Miller, Andrew
Mitchell, Austin Smith, Jacqui (Redditch)
Moffatt, Laura Smith, John (Glamorgan)
Moonie, Dr Lewis Smith, Llew (Blaenau Gwent)
Moran, Ms Margaret Southworth, Ms Helen
Morgan, Ms Julie (Cardiff N) Spellar, John
Morley, Elliot Squire, Ms Rachel
Morris, Rt Hon Ms Estelle (B'ham Yardley) Starkey, Dr Phyllis
Steinberg, Gerry
Mountford, Kali Stevenson, George
Mowlam, Rt Hon Marjorie Stewart, David (Inverness E)
Mudie, George Stewart, Ian (Eccles)
Mullin, Chris Stinchcombe, Paul
Murphy, Denis (Wansbeck) Stoate, Dr Howard
Murphy, Jim (Eastwood) Strang, Rt Hon Dr Gavin
Naysmith, Dr Doug Stringer, Graham
O'Brien, Mike (N Warks) Stuart, Ms Gisela
O'Hara, Eddie Taylor, Rt Hon Mrs Ann (Dewsbury)
Olner, Bill
O'Neill, Martin Taylor, Ms Dari (Stockton S)
Organ, Mrs Diana Taylor, David (NW Leics)
Palmer, Dr Nick Temple-Morris, Peter
Pearson, Ian Thomas, Gareth (Clwyd W)
Pendry, Tom Timms, Stephen
Perham, Ms Linda Tipping, Paddy
Pickthall, Colin Todd, Mark
Pike, Peter L Touhig, Don
Pollard, Kerry Trickett, Jon
Pond, Chris Truswell, Paul
Pope, Greg Turner, Dennis (Wolverh'ton SE)
Pound, Stephen Turner, Dr Desmond (Kemptown)
Powell, Sir Raymond Turner, Dr George (NW Norfolk)
Prentice, Ms Bridget (Lewisham E) Turner, Neil (Wigan)
Prentice, Gordon (Pendle) Twigg, Derek (Halton)
Prescott, Rt Hon John Twigg, Stephen (Enfield)
Primarolo, Dawn Tynan, Bill
Vaz, Keith
Prosser, Gwyn Vis, Dr Rudi
Purchase, Ken Walley, Ms Joan
Quin, Rt Hon Ms Joyce
Quinn, Lawrie Wareing, Robert N
Watts, David
Radice, Rt Hon Giles White, Brian
Rammell, Bill Whitehead, Dr Alan
Rapson, Syd Wicks, Malcolm
Reed, Andrew (Loughborough) Williams, Rt Hon Alan (Swansea W)
Reid, Rt Hon Dr John (Hamilton N)
Roche, Mrs Barbara Williams, Alan W (E Carmarthen)
Rooker, Rt Hon Jeff Williams, Mrs Betty (Conwy)
Rooney, Terry Wills, Michael
Ross, Ernie (Dundee W) Wilson, Brian
Rowlands, Ted Winnick, David
Roy, Frank Winterton, Ms Rosie (Doncaster C)
Ruane, Chris Wise, Audrey
Ruddock, Joan Wood, Mike
Russell, Ms Christine (Chester) Woodward, Shaun
Ryan, Ms Joan Worthington, Tony
Sarwar, Mohammad Wray, James
Savidge, Malcolm Wright, Anthony D (Gt Yarmouth)
Sawford, Phil Wright, Dr Tony (Cannock)
Sedgemore, Brian Wyatt, Derek
Shaw, Jonathan
Sheerman, Barry Tellers for the Noes:
Sheldon, Rt Hon Robert Mr. Gerry Sutcliffe and
Short, Rt Hon Clare Mr. Jim Dowd.

Question accordingly negatived.

Main question put forthwith, pursuant to Standing Order NO. 62 (Amendment on Second or Third Reading):

The House divided: Ayes 338, Noes 43.

Division No. 25] [10.13 pm
Abbott, Ms Diane Cummings, John
Ainger, Nick Cunningham, Rt Hon Dr Jack (Copeland)
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas Cunningham, Jim (Cov'try S)
Allen, Graham Curtis-Thomas, Mrs Claire
Anderson, Donald (Swansea E) Dalyell, Tam
Armstrong, Rt Hon Ms Hilary Darling, Rt Hon Alistair
Ashton, Joe Darvill, Keith
Atherton, Ms Candy Davey, Valerie (Bristol W)
Atkins, Charlotte Davidson, Ian
Austin, John Davies, Geraint (Croydon C)
Banks, Tony Dawson, Hilton
Barnes, Harry Dean, Mrs Janet
Barron, Kevin Denham, John
Battle, John Dismore, Andrew
Bayley, Hugh Dobbin, Jim
Beard, Nigel Donohoe, Brian H
Beckett, Rt Hon Mrs Margaret Doran, Frank
Bell, Martin (Tatton) Drew, David
Benn, Hilary (Leeds C) Dunwoody, Mrs Gwyneth
Benn, Rt Hon Tony (Chesterfield) Eagle, Angela (Wallasey)
Bennett, Andrew F Eagle, Maria (L'pool Garston)
Benton, Joe Edwards, Huw
Bermingham, Gerald Efford, Clive
Berry, Roger Ellman, Mrs Louise
Best, Harold Ennis, Jeff
Betts, Clive Etherington, Bill
Blackman, Liz Field, Rt Hon Frank
Blears, Ms Hazel Fisher, Mark
Blizzard, Bob Fitzsimons, Loma
Borrow, David Flint, Caroline
Bradley, Keith (Withington) Flynn, Paul
Bradley, Peter (The Wrekin) Foster, Rt Hon Derek
Brinton, Mrs Helen Foster, Michael Jabez (Hastings)
Brown, Russell (Dumfries) Foster, Michael J (Worcester)
Browne, Desmond Foulkes, George
Burden, Richard Fyfe, Maria
Burgon, Colin Galloway, George
Butler, Mrs Christine Gapes, Mike
Caborn, Rt Hon Richard Gardiner, Barry
Campbell, Alan (Tynemouth) George, Bruce (Walsall S)
Campbell, Ronnie (Blyth V) Gerrard, Neil
Campbell-Savours, Dale Gibson, Dr Ian
Cann, Jamie Gilroy, Mrs Linda
Caplin, Ivor Godman, Dr Norman A
Caton, Martin Goggins, Paul
Cawsey, Ian Golding, Mrs Llin
Chapman, Ben (Wirral S) Gordon, Mrs Eileen
Chaytor, David Grant, Bemie
Clapham, Michael Griffiths, Jane (Reading E)
Clark, Rt Hon Dr David (S Shields) Griffiths, Nigel (Edinburgh S)
Clark, Dr Lynda (Edinburgh Pentlands) Griffiths, Win (Bridgend)
Grocott, Bruce
Clarke, Charles (Norwich S) Grogan, John
Clarke, Eric (Midlothian) Gunnell, John
Clarke, Tony (Northampton S) Hall, Mike (Weaver Vale)
Clelland, David Hall, Patrick (Bedford)
Clwyd, Ann Hamilton, Fabian (Leeds NE)
Coaker, Vernon Harman, Rt Hon Ms Harriet
Coffey, Ms Ann Heal, Mrs Sylvia
Cohen, Harry Healey, John
Coleman, Iain Henderson, Doug (Newcastle N)
Colman, Tony Henderson, Ivan (Harwich)
Connarty, Michael Hepburn, Stephen
Cook, Frank (Stockton N) Heppell, John
Cook, Rt Hon Robin (Livingston) Hesford, Stephen
Cooper, Yvette Hewitt, Ms Patricia
Corbett, Robin Hill, Keith
Cousins, Jim Hinchliffe, David
Cranston, Ross Hodge, Ms Margaret
Crausby, David Hoey, Kate
Cryer, Mrs Ann (Keighley) Hood, Jimmy
Cryer, John (Hornchurch) Hoon, Rt Hon Geoffrey
Hope, Phil Mitchell, Austin
Hopkins, Kelvin Moffatt, Laura
Howarth, Alan (Newport E) Moonie, Dr Lewis
Howarth, George (Knowsley N) Moran, Ms Margaret
Howells, Dr Kim Morgan, Ms Julie (Cardiff N)
Hoyle, Lindsay Morley, Elliot
Hughes, Ms Beverley (Stretford) Morris, Rt Hon Ms Estelle (B'ham Yardley)
Hughes, Kevin (Doncaster N)
Humble, Mrs Joan Mountford, Kali
Hurst, Alan Mudie, George
Hutton, John Mullin, Chris
Iddon, Dr Brian Murphy, Denis (Wansbeck)
Illsley, Eric Murphy, Jim (Eastwood)
Jackson, Helen (Hillsborough) Naysmith, Dr Doug
Jamieson, David O'Brien, Mike (N Warks)
Jenkins, Brian O'Hara, Eddie
Johnson, Alan (Hull W & Hessle) Olner, Bill
Johnson, Miss Melanie (Welwyn Hatfield) O'Neill, Martin
Organ, Mrs Diana
Jones, Rt Hon Barry (Alyn) Palmer, Dr Nick
Jones, Helen (Warrington N) Pearson, Ian
Jones, Ms Jenny (Wolverh'ton SW) Pendry, Tom
Perham, Ms Linda
Jones, Dr Lynne (Selly Oak) Pickthall, Colin
Jowell, Rt Hon Ms Tessa Pike, Peter L
Keeble, Ms Sally Pollard, Kerry
Keen, Alan (Feltham & Heston) Pond, Chris
Kemp, Fraser Pope, Greg
Kennedy, Jane (Wavertree) Pound, Stephen
Khabra, Piara S Powell, Sir Raymond
Kidney, David Prentice, Ms Bridget (Lewisham E)
Kilfoyle, Peter Prentice, Gordon (Pendle)
King, Ms Oona (Bethnal Green) Prescott, Rt Hon John
Kumar, Dr Ashok Primarolo, Dawn
Ladyman, Dr Stephen Prosser, Gwyn
Lawrence, Mrs Jackie Purchase, Ken
Laxton, Bob Quin, Rt Hon Ms Joyce
Lepper, David Quinn, Lawrie
Leslie, Christopher Radice, Rt Hon Giles
Levitt, Tom Rammell, Bill
Lewis, Ivan (Bury S) Rapson, Syd
Lewis, Terry (Worsley) Reed, Andrew (Loughborough)
Liddell, Rt Hon Mrs Helen Reid, Rt Hon Dr John (Hamilton N)
Linton, Martin Roche, Mrs Barbara
Lloyd, Tony (Manchester C) Rooker, Rt Hon Jeff
Love, Andrew Rooney, Terry
McAvoy, Thomas Ross, Ernie (Dundee W)
McCabe, Steve Rowlands, Ted
McCafferty, Ms Chris Roy, Frank
McCartney, Rt Hon Ian (Makerfield) Ruane, Chris
Ruddock, Joan
McDonagh, Siobhain Russell, Ms Christine (Chester)
Macdonald, Calum Ryan, Ms Joan
McDonnell, John Sarwar, Mohammad
McFall, John Savidge, Malcolm
McGuire, Mrs Anne Sawford, Phil
McIsaac, Shona Sedgemore, Brian
Mackinlay, Andrew Shaw, Jonathan
McNamara, Kevin Sheerman, Barry
McNulty, Tony Sheldon, Rt Hon Robert
MacShane, Denis Short, Rt Hon Clare
Mactaggart, Fiona Simpson, Alan (Nottingham S)
McWalter, Tony Singh, Marsha
Mallaber, Judy Smith, Angela (Basildon)
Marsden, Gordon (Blackpool S) Smith, Miss Geraldine (Morecambe & Lunesdale)
Marsden, Paul (Shrewsbury)
Marshall, David (Shettleston) Smith, Jacqui (Redditch)
Marshall, Jim (Leicester S) Smith, John (Glamorgan)
Marshall-Andrews, Robert Smith, Llew (Blaenau Gwent)
Martlew, Eric Southworth, Ms Helen
Maxton, John Spellar, John
Meacher, Rt Hon Michael Squire, Ms Rachel
Michael, Rt Hon Alun Starkey, Dr Phyllis
Michie, Bill (Shefld Heeley) Steinberg, Gerry
Milbum, Rt Hon Alan Stevenson, George
Miller, Andrew Stewart, David (Inverness E)
Stewart, Ian (Eccles) Vis, Dr Rudi
Stinchcombe, Paul Walley, Ms Joan
Stoate, Dr Howard Wareing, Robert N
Strang, Rt Hon Dr Gavin Watts, David
Stringer, Graham White, Brian
Stuart, Ms Gisela Whitehead, Dr Alan
Taylor, Rt Hon Mrs Ann (Dewsbury) Wicks, Malcolm
Williams, Rt Hon Alan (Swansea W)
Taylor, Ms Dari (Stockton S)
Taylor, David (NW Leics) Williams, Alan W (E Carmarthen)
Temple-Morris, Peter Williams, Mrs Betty (Conwy)
Thomas, Gareth (Clwyd W) Wills, Michael
Timms, Stephen Wilson, Brian
Tipping, Paddy Winnick, David
Todd, Mark Winterton, Ms Rosie (Doncaster C)
Touhig, Don Wise, Audrey
Trickett, Jon Wood, Mike
Truswell, Paul Woodward, Shaun
Turner, Dennis (Wolverh'ton SE) Worthington, Tony
Turner, Dr Desmond (Kemptown) Wray, James
Turner, Dr George (NW Norfolk) Wright, Anthony D (Gt Yarmouth)
Turner, Neil (Wigan) Wright, Dr Tony (Cannock)
Twigg, Derek (Halton) Wyatt, Derek
Twigg, Stephen (Enfield) Tellers for the Ayes:
Tynan, Bill Mr. Gerry Sutcliffe and
Vaz, Keith Mr. Jim Dowd.
Allan, Richard Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Ashdown, Rt Hon Paddy
Baker, Norman Kirkwood, Archy
Beggs, Roy Livsey, Richard
Beith, Rt Hon A J Llwyd, Elfyn
Brake, Tom Maclennan, Rt Hon Robert
Brand, Dr Peter Michie, Mrs Ray (Argyll & Bute)
Breed, Colin Oaten, Mark
Bruce, Malcolm (Gordon) Öpik, Lembit
Burnett, John Rendel, David
Burstow, Paul Russell, Bob (Colchester)
Cable, Dr Vincent Sanders, Adrian
Chidgey, David Smith, Sir Robert (W Ab'd'ns)
Cotter, Brian Smyth, Rev Martin (Belfast S)
Davey, Edward (Kingston) Swinney, John
Feam, Ronnie Taylor, Matthew (Truro)
Forsythe, Clifford Thompson, William
George, Andrew (St Ives) Tonge, Dr Jenny
Hancock, Mike Webb, Steve
Harris, Dr Evan Welsh, Andrew
Heath, David (Somerton & Frome) Wigley, Rt Hon Dafydd
Tellers for the Noes:
Hughes, Simon (Southwark N) Mr. Andrew Stunell and
Keetch, Paul Mr. Phil Willis.

Question accordingly agreed to.

Bill read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).