asked Her Majesty's Government:

Why, and under what authority, they have pressed Premier Oil and other United Kingdom companies to give up their operations in Burma.

My Lords, the presence of reputable companies in Burma is not helping the democratic cause there. We therefore told Premier Oil, the largest UK investor, that we would welcome their moving out of Burma. We have no legal powers to force them to do so, nor do we seek any. We also tell British companies inquiring about Burma that we do not encourage trade with nor investment there.

My Lords, while we all deplore the human rights situation in Burma, how is it that the Government are pursuing this policy of economic sanctions against that country, when they encouraged Jiang Zemin of China, a country not well known for its observance of human rights, to visit this country and be received at Buckingham Palace? Why did the Government fail to support a resolution of the United Nations proposed by the United States criticising China's human rights record? What is the difference? Could it be that Burma is a small country and cannot hurt us very much, whereas China is a big country and could hurt us a lot? Is that an ethical foreign policy?

My Lords, we have said on a number of occasions, but let me repeat, that the difference between the two is clear. We are currently engaging in a critical dialogue with China. There is therefore a way forward so that we can hopefully improve the human rights situation in China, improve our relationship with the Chinese, and include China more in the international community. Burma turned her back on any such critical engagement. She refuses to engage with the international community. She refuses to recognise that there is any problem at all when it comes to human rights and will not bend her knee in any way to the lures that we put out for reasonableness. There is a clear difference between the two and therefore we have to maintain a difference in the way in which we approach the two nations.

My Lords, I thank the Minister for her forthright answer. We on these Benches wholly agree with her. Will she confirm that the government of Burma are a military government that overthrew a clearly democratically-elected regime and to this day keep its leader under effective house arrest? Does she agree that, in pursuing an ethical foreign policy, it is necessary to try to win the support of major corporations in the private sector? Will she confirm that, as in the case of De Beers in Angola and Shell in Nigeria and Indonesia, it has often been the case that the help and assistance of large multinational and other corporations has been sought on behalf of the British Government?

My Lords, I am pleased to confirm that. It is important for large, multinational companies of this nature to assist us in this regard. The discussion with them is important and we welcome every occasion when they help us.

My Lords, is my noble friend aware that it is widely known throughout the country that Burma is in a special position and that the Government's action in this matter is widely supported, generally understood and I hope will be persisted in until such time as Burma acquires, in the course of time (as one hopes it must) a government that are prepared to act as part of the international community? While it insists on putting itself outside the national community, one cannot expect, nor wish the Government to treat it as though it were the same as any other country.

My Lords, I welcome my noble friend's support. We have received support from all sides in this endeavour and welcome that support. It is a joint endeavour. We are working together with many partners and need everybody in every sphere to join with us.

My Lords, is the government of the Sudan engaging in a critical dialogue with Her Majesty's Government on human rights matters? If not, why is it correct to seek to restrain human rights abuses in Burma by impeding the exploitation of oil in that country? Would it not be correct to do the same thing in the Sudan, to which we continue to send machinery for that purpose?

My Lords, as I said earlier, we are engaging with all those who will engage with us. The noble Lord knows well that we have to look at each country and decide which sanctions or movements will most effectively deliver a better quality of human rights. It is quite wrong for us to have a "one-size-fits-all" policy; regrettably, it does not. We must fashion the sanctions that we impose to the situation that pertains in each individual country.

My Lords, is not the answer to the noble Lords, Lord Elton and Lord Blaker, that if you wait for a perfect world you will wait for ever? In the case of Burma, there is no doubt that the action against oil companies could make a difference, bearing in mind that the construction of oil pipelines requires the removal of villages and a programme of forced labour? Indeed, this has resulted in the deaths of many local people at the hands of the SLORC troops. Is my noble friend aware that the firm stand she takes certainly has strong support on this side of the House?

My Lords, I am happy to hear that echo of support from my noble friend who sits behind me. Indeed, I hope that that echo will be found in front of me, notwithstanding the comments that have been made by some noble Lords opposite.

My Lords, we can all agree that Myanmar has a brutal and undemocratic regime. It is quite understandable that HMG should want to be as distant as possible from it. However, I am advised that other countries, which take the same broad view about this repulsive team, still retain informal links with Myanmar. For example, the United States has welfare programmes in the country and, of course, Japan took part in the ASEAN meeting that was held in Myanmar. Indeed, other neighbouring countries of ours retain links with the country through private enterprise. Can the Minister say why we are different in that respect? Are we sure that we have got the balance right between isolation, which is understandable, and constructive engagement, which is our policy in other areas?

My Lords, I hope that the House will allow me the privilege of welcoming the noble Lord, Lord Howell, to the Dispatch Box. We know that he will cover his duty with great honour and expedition.

As I have already said, the difference in the situation with Burma is that the Burmese have withdrawn. If constructive engagement were possible with Burma, this would be pursued. Regrettably it has not been. That is a matter of great sadness to us all, because in other areas where we have been able to communicate that approach has yielded real benefit. Unfortunately, Burma is an exception; there are exceptions to every rule.

asked Her Majesty's Government:

What is their policy towards the closure of maternity units.

My Lords, the Government are aware of concerns over the closure of some maternity units. We commissioned a multi-disciplinary working party to consider this and make recommendations on safe and appropriate service provision.

My Lords, I thank the Minister for his thoughtful reply. In so doing, I should declare an interest as patron of the National Childbirth Trust. I am very pleased that the noble Lord understands the anxiety in this respect, but is he aware that some reports of the situation have not been published? One in particular, produced by the Royal Colleges, construes that 80 units may close. These are consultant-led units. Can the Minister please give an assurance that a thorough appraisal of the situation will be made before any units are closed? Further, where there is the remotest possibility of this happening, can he assure us that consultant-led units will be transformed into midwife-led units?

My Lords, we should be very cautious about accepting the figure of 80 at its face value. I cart certainly assure the noble Baroness that the criteria being developed as a result of the work of the three Royal Colleges will be used by the NHS to help towards assessing the future provision of services. I can well understand the popularity of midwife-led units; indeed, as far as concerns low-risk births, there is no evidence to show that such units are unsafe.

My Lords, it may be that as many as 80 smaller units are involved if press reports regarding the report of the Royal Colleges are to be believed. Is it not quite unacceptable that many of these units face closure due to lack of medical specialists when many young "obs" and "gynae" registrars in training cannot get consultant jobs because such posts have not been created? Is it not high time that the Department of Health got to grips with the problem?

My Lords, as far as concerns obstetric and gynaecological consultants, I can tell the noble Lord that Ministers met with the president of the Royal College only last week. He put forward some very interesting suggestions as to how we should move forward in tackling the issue. We shall consider his suggestions most carefully in addition to the other matters that we have taken forward for consideration in relation to the problem of "obs" and "gynae" posts.

Again, I urge caution on the noble Lord as regards the figure of 80 units. The report that we received from the Royal Colleges does not make any recommendation in relation to the closure of units. However, the colleges have provided very helpful criteria under which the NHS can make proper decisions about the future configuration of maternity services.

My Lords, today is the start of Breast-Feeding Awareness Week. Will the Minister confirm that the Government will ensure that all maternity units encourage the benefits of breast-feeding for the baby and the mother?

My Lords, I would be happy to do so. Breast-Feeding Awareness Week has been run for a number of years. I believe that it has proved to be successful. We certainly continue our support for it. I believe that the campaign launched this week will be highly effective in encouraging those who wish to do so to breast-feed and will perhaps also combat negative perceptions of breast-feeding which may be held particularly by the male partners of mothers.

My Lords, how many mothers now wish to give birth at home and are they being encouraged so to do? I had my four at home and I certainly have not suffered as a result.

My Lords, as my wife gave birth to two children at home I very much agree with what the noble Baroness says. The latest figures I have show that throughout the 1980s home deliveries accounted for 1 per cent of the total number of births. That proportion has slowly risen. In 1994–95, 1.8 per cent of total births were home births. I very much accept that the NHS should do its best to meet the legitimate wishes of women who wish to have a home birth.

My Lords, I must declare an interest as my wife expects to be using the maternity service in the next week and a half. Is the Minister aware that maternity services in London are under severe strain through lack of staff? This is apparent to those who are about to use the service.

My Lords, the Government are committed to developing policies and practices to encourage more nurses and midwives to enter the NHS. The campaigns that we have run have been successful. We have attracted more nurses and more midwives. We have increased the number of training places available. I believe that those measures, along with the other work in developing maternity services, will ensure that the noble Lord and others receive the best possible service.

asked Her Majesty's Government:

Whether the statement by the Lord Bassam of Brighton on 10th April (HL Deb, col. 9) that "prison works" is consistent with the finding of Home Office Research Study No 187 that the largest reductions in offending occur in community based programmes.

My Lords, as I said to the noble Lord on 10th April we believe that prison can be a positive experience and our aim, and that of the Prison Service, is to make it work. Although Home Office Research Study No.187 provides evidence that community-based programmes generally show better results in reducing offending, programmes which take account of "what works" principles can be successful in reducing offending in any treatment setting. There is considerable evidence that programmes in prison can be effective, as can the provision of constructive regimes. Indeed, international research shows that good programmes which are delivered well can reduce re-offending by up to 33 per cent.

My Lords, the subtle use of the English language has never failed to amuse me. If prison works, why has there been such a huge rise in serious crime in this country?

My Lords, I am sure that there are many reasons for increases in crime across the United Kingdom. However, this Government's commitment and determination to tackle all of those issues remain unaltered. We shall continue to press through and put in place effective crime reduction programmes. There is little doubt that crime reduction programmes will in the longer term have a most profound effect and impact on levels of crime.

My Lords, does the Minister agree with the oft repeated statement that prison is frequently an expensive means of making bad people worse? Does he accept that Parliament has accepted that proposition in legislation; namely, the Criminal Justice Act 1991, which makes prison the sentence of last resort?

My Lords, prison may well be a sentence of last resort, but it is an effective and necessary sentence. I would like the noble and learned Lord and others to say what is the alternative for those who are convicted of offences, particularly serious offences. Prison constitutes an expensive provision, but it is necessary.

My Lords, does my noble friend accept that, where possible, punishment in the community is preferable to punishment in prison for all kinds of reasons? Has he been able to assess, as yet, the effect of the probation programmes which are run according to the "what works" principles, and which he has said can be successful? But are they? What is the national programme to extend probation practice according to that principle?

My Lords, we believe that "what works" is an effective programme. Research evidence shows that properly conducted offender treatment programmes can have a significant impact on reconviction rates, whether those programmes are conducted in prison or in the community. The research literature reveals a broad consensus of about a 10 per cent typical reduction in reconviction rates, compared with those offenders who do not attend the programmes. The "what works" initiative that we are introducing provides better planned, targeted and delivered programmes to bring down overall conviction rates. These programmes are based on methods known to stand the best chance of reducing reoffending. It is our intention to start introducing the first of these programmes later this month.

My Lords, given that the average cost of a custodial sentence is £2,070 a month, according to government figures, will the Government spend a small percentage of the extra money that is necessary to ensure that the majority of prison sentences have the chance of proving to be the positive experience which the noble Lord tells us they are in terms of education, out of cell time and constructive work? Any money that is left over could be best spent in stopping people becoming criminals altogether.

My Lords, I entirely agree with the final point that the noble Lord made. He speaks with great wisdom on the subject. This Government's programme is all about improving the purposive nature of people's time spent in custodial sentences. Between 1997 and 1999 we have managed to add an extra 20,000 teaching hours across the prison estate. That is part of our general programme. We must invest in education and training as we can demonstrate a clear and proven track record that that has the best effect in terms of what happens to prisoners when they leave prison and try to access the world of work. We must continue that work and put more money into crime reduction in the community. Those are the important points of our programme.

My Lords, does the Minister think that short custodial sentences are a positive experience for graffiti artists, or does he consider on the contrary that it would be better to give those people community service to enable them to remove the graffiti which has been daubed on walls by other people?

My Lords, I am sure it would be much better to encourage graffiti artists to produce more mainstream art. I am not aware that a large number of graffiti artists are incarcerated within the prison estate. It is often felt that we lock up people unnecessarily. The favourite example which is given is that of fine defaulters. As of today of a prison population of some 64,000 just 56 are fine defaulters.

My Lords, notwithstanding what has been said about rehabilitation and education, does the Minister agree that there will always be prisoners who, on leaving prison, will return to society embittered against authority; or perhaps having learned new ways of committing crime from fellow prisoners; or who may have become drug addicts during their time inside, all of whom are likely to reoffend? Is not that how prison works in a rather unattractive way?

My Lords, the noble Lord contributes to an important and interesting aspect of the debate. Of course there will be prisoners who feel embittered as a result of being in prison. Our task, and that of any government, must be to try to make that experience as positive as possible. We should never give up on this issue. As regards drugs and prison, we have now had some considerable success in reducing the quantity of drugs used in prison. Over the past two years we have reduced drugs found through mandatory drugs testing from 24 per cent to 14 per cent. I believe that that will have a desirable long-term impact on reconviction rates.

My Lords, in light of the Prison Service targets for purposeful activity, will the Minister join me in congratulating Bristol prison on achieving 23.05 hours per prisoner per week during April—despite the plethora of bank holidays? More importantly, will the Government support and encourage the development of community prison chaplaincy as a contribution to a diminution in reoffending, especially among short-term prisoners and those on remand?

My Lords, the efforts of the staff at that prison are obviously to be congratulated. The more hours of purposeful activity that can be encouraged, the better for all prisoners. Of course we support the prison chaplaincy in all its work. It has a considerable and highly desirable impact on the lives of prisoners and is much appreciated by all.

My Lords, is the Minister aware and not embarrassed by the fact that I agree with his reply to the noble Lord, Lord Dholakia and others, in respect of the alternative to prison for persons who commit serious crimes? I welcome the Minister's conversion to the views of my right honourable and learned friend Michael Howard that prison works. It does, because convicted persons cannot reoffend while they are in prison.

My Lords, we have heard that response before. I congratulate the noble Lord on agreeing with me.

My Lords, is the Minister aware that the fastest increase in the prison population is accounted for by children and young people of 17 years of age and below? That is also the group with the highest reoffending rate, of 80 per cent and more. Does the Minister believe that those figures can justify the claim that prison works for that group?

My Lords, prison will always be a necessity. If people commit serious offences, they must expect that prison will be an option. However, we need to make the time they spend in prison useful and valuable, and trust that will make a meaningful contribution—so that when individuals leave prison or young offender institutions, they are better fitted to entering the world of work—which I believe makes a strong contribution to ensuring that offenders do not commit more convictable offences.

asked Her Majesty's Government:

What reductions they have proposed in the employers' national insurance contribution, when these have taken or will take effect, and by how much they will reduce the National Insurance Fund.

My Lords, as announced by the Chancellor of the Exchequer, the rate of employers' secondary Class 1 national insurance contributions will be reduced from 12.2 per cent to 11.9 per cent in April 2001, and from 11.9 per cent to 11.8 per cent in April 2002. As a result of those changes, employers' contributions to the fund will reduce by around £1 billion and £350 million respectively.

Does not the Minister think that is a scandal? It is not the Government who are giving the employers a sweetener but pensioner contributors, because the National Insurance Fund will shrink by £1.35 billion. The Government say, "We can't afford an earnings link. Look what it would cost. Contributions would have to go up". Would they? If only the Government would stop using pensioners' insurance contributions, as has happened over the years, to sweeten the taxes that they are levying on employers.

My Lords, the short answer to my noble friend is that I do not think that it is a scandal. It would be a mistake to think that such a change in a very large fund is "defrauding"—my noble friend used that word last November—pensioners. Pension entitlement has not been taken away by the changes to national insurance contributions. Neither a surplus nor a deficit in the National Insurance Fund determines how much is available for pensioners; otherwise, if there were a shortfall in the fund, as in 1993–94, it might be suggested that pensions ought to be cut. I do not think that my noble friend would agree with that being done.

My Lords, will my noble friend explain why some 81 million national insurance numbers are currently in use? Can he give some indication of how many of those numbers involve neither an employer's nor an employee's contribution? Does he agree that any reform of the national insurance system should involve the allocation of national insurance numbers—whose proliferation only seems to be of benefit to potential fraudsters?

My Lords, as Professor Joad used to say, it all depends what one means by "in use". Many more national insurance numbers have been issued than there are persons who have them for legitimate purposes. That does not necessarily mean that the other numbers are being used fraudulently. However, the availability and potential misuse of national insurance numbers is a problem that the Treasury is addressing.

My Lords, does the Minister agree that employers' national insurance contributions are a straightforward employment tax? Would it not be better to move away from taxes on employment— which we wish to encourage— to taxes on the use of non-renewable resources and on environmental pollution?

My Lords, I am glad the noble Lord asked that question. As I was responding literally to the previous question, I was not able to say that the first reduction in employers' national insurance contributions in April 2001 is to ensure that the climate change levy is neutral in its effect on industry as a whole; and that the second, smaller reduction in April 2002 will ensure that the aggregates levy is neutral in its effect on industry as a whole. Both are desirable environmental objectives. Although I do not agree with the noble Lord's wider generalisation, I hope that he agrees that those two reductions argue in support of his concern for the environment.

Does not the Minister's reply and the comments made by others opposite mean that the Government are not treating state insurance as an insurance system at all? It is thought not to matter and is to be left to wither on the vine. As Mr Michael Portillo said when he was Financial Secretary to the Treasury a short while ago, it becomes nugatory. The Labour manifesto stated that a Labour Government would make the basic state pension the foundation of their pensions provision. Now they are admitting that it does not matter: "It is expendable. A fund doesn't mean a fund. We can allow it to continue to diminish". This is not the first cut. The Tories cut it. They would. They do not believe in state insurance. I thought that this Government did. May we take it from the Minister's reply that he is giving us a guarantee today that there will be no further cuts in employers' contributions?

My Lords, I am not responsible for what the Conservative Party says in government or in opposition; I certainly do not subscribe to the views that my noble friend attributes to them. The present Government have not in any way cut the state basic pension. It has been continued on the same basis since 1980. The effect of all government policies over the whole of this Parliament will mean that an extra £6.5 billion is available to pensioners, compared with the smaller figure of £4.5 billion that would be available if my noble friend's proposal to restore earnings-related pensions had been followed.

My Lords, at a convenient moment after 3.30 p.m., my noble friend Lady Symons of Vernham Dean will, with the leave of the House, repeat a Statement that is being made in another place on Sierra Leone. The Statement is likely to be taken following discussion of Amendment No. 105 to the Child Support, Pensions and Social Security Bill.

My Lords, I beg to introduce a Bill to make provision for charges for the occupation of a maintainable highway by undertakers executing street works. I beg to move that this Bill be now read a first time.

Moved, That the Bill be now read a first time.—(Lord Peyton of Yeovil.)

On Question, Bill read a first time, and to be printed.

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(Baroness Hollis of Heigham.)

moved Amendment No. 94:

Page 20, leave out lines 12 to 15.

The noble Lord said: In moving Amendment No. 94 I shall speak also to the amendments grouped with it standing in my name and that of the noble Earl, Lord Russell.

Amendment No. 94 is concerned with "reduced benefit decisions" in relation to the payment of child support. Effectively, we on this side of the House are strongly in favour of more effective measures to ensure that those responsible for having children seek to meet the payments to finance them. Generally speaking, there are a whole series of penalties, but this particular penalty is unusual in stating that should a mother decline to provide information to the Child Support Agency on the grounds that if she were to do so she would be in danger of violence from the absent parent arrangements will be made to impose a penalty upon her. We are concerned whether that is appropriate.

The jargon used is whether she has good cause for not seeking child support—which would result in the cost of the children falling on the Exchequer or the National Insurance Fund—and, effectively, it suggests that she should not do that. As a result, the department or the Child Support Agency will seek to establish whether or not there is good cause in a particular case.

We propose the amendments because of representations we have received, for example, from the National Association of Citizens Advice Bureaux, which has many people dealing with these kinds of cases. It suggests that decisions to reduce the benefit of the parent with care because she has not co-operated with the department and has instead made excuses—for instance, that she would suffer violence—are not infrequently incorrect, unreasonable and inappropriate.

Coming from the National Association of Citizens Advice Bureaux, this is strong language. The association therefore goes along with the recommendations made by the Social Security Select Committee in another place that the application of the reduced benefit penalty should be suspended over a phasing-in period and that the operation of the present scheme should be reviewed. Perhaps the second recommendation is fairly formidable; I understand that some 28,000 decisions have been made in regard to reduced benefit.

The other matter which gives cause for concern is the way in which the severity of this particular penalty has escalated over time. If we go back to 1993, the penalty was open to revision in the light of changed circumstances and the number of cases was at a comparatively low level. Since 1996, the severity of the penalty has increased considerably and there seems to be some argument for reviewing the arrangement. That is the essence of the case. We look forward to hearing the Minister's response. I beg to move.

Before the noble Lord sits down, perhaps I may ask him which government were responsible for the changes in 1996.

Certainly the previous government were responsible. That is why we can reasonably argue that, given the space of time since then, one should take into account the overall situation; the representations one has received; and, in particular, one's experience of the way in which the system is working. The more recent evidence seems to indicate that it is not working as satisfactorily as one would wish. These are essentially probing amendments. We wish to get the Government's reaction to the considerable number of recent cases put forward by the National Association of Citizens Advice Bureaux.

As Amendments Nos. 96 to 98, 101 and 102 are also being spoken to, I must point out to the Committee that if Amendment No. 96 is agreed to, I cannot call Amendments Nos. 97 and 98; and if Amendment No. 101 is agreed to, I cannot call Amendment No. 102.

Amendments to or the removal of Clause 19 would be a retrograde step. A reduction or time-limiting delay of the benefit penalty would be counter-productive.

The whole emphasis of the Bill—this was stressed during last week's proceedings and has been supported by a number of agencies which seek to help children—is to tackle child poverty. What is good for the child is of prime importance.

Clause 19 concerns benefit penalties for parents with care who are on income support or on income-based jobseeker's allowance and who, without good cause, ask the Secretary of State not to act to recover child support; or fail to provide relevant information; or refuse to take a scientific test.

Child support cannot be a voluntary option of whether or not to involve the CSA or whether to rely on benefit provided by taxpayers, many of whom are themselves parents supporting children. Many thousands of children would not receive the maintenance due to them. The only parents affected by sanctions are either those who face no risk and prefer to rely on benefits, or those who refuse to tell the DSS why they are opting out.

The penalty provision needs to be retained. It would not be fair on children if parents were allowed to prevent the recovery of child support; it would not be fair on the parents who do support their children; and it would not be fair on the taxpayer.

Of course, sanctions should be avoided wherever possible. Parents with care must be clearly told about their rights; they must not receive a benefits sanction by accident. However, low sanctions for a short time, such as those suggested, may not be enough to encourage parents with care to co-operate with the CSA. Delaying the introduction of penalties would mean that many parents with care would not seek child maintenance. Clause 19 as it stands seems to offer protection to parents and children. It should not be tampered with.

The noble Baroness, Lady Massey of Darwen, is on her first child support Bill. Welcome to the club. I am now on my third. In 1991, I succeeded in deleting the whole provision of the benefit penalty. The "good cause" provision was the sop put in by another place to keep me quiet. It may have reduced the volume of my voice somewhat; it has not kept me quiet.

I cannot help thinking, on the record of the CSA since 1991, that Clause 19 and the measures preceding it have done a great deal more to increase child poverty than to diminish it. So I ask the Minister: in the light of the Government's pledge to abolish child poverty within 20 years, how will they abolish child poverty while depriving the mother of 40 per cent of her income? There seems to me a certain Gilbertian element of paradox about that suggestion.

The noble Baroness, Lady Massey of Darwen, said that all that is needed is for the mothers to comply. That reminds me a little of the argument of the ill-fated General Stockwell, who commanded the British intervention in Port Said during the Suez campaign. When challenged on the level of casualties in Port Said, General Stockwell said it was all the fault of the Egyptians who would insist on defending themselves.

The Government here are intruding into some of the most sensitive areas of private life and into some of the strongest personal emotions which become stirred in the whole complicated history of the relations of the sexes. It is an area in which the Government, by rule of thumb, assume they must be right and that everybody has to comply. If only the world were that simple. The Government here are out of their element—and, when I say the Government, I make no political point. We have here, even more than in most other areas of policy, a situation where the Court and Treasury Party is always in office, no matter which political colours it may wear and the Country Party is always in opposition, no matter which political colours it may wear. It is my contention that the Court and Treasury Party here has it fundamentally wrong. It has overrated the limits of its competence and is attempting to tackle matters which it really cannot handle.

We have here a large group of amendments. The first ones to which the noble Lord, Lord Higgins, has spoken put forward a proposal which emanates from the Social Security Select Committee in another place—a two year deferral of the operation of the benefit penalty in order to see whether, in the light of the Minister's achievement, on which I again warmly congratulate her in introducing the maintenance disregard, a carrot might prove rather more effective than a stick. I support that approach with the sole rider that, if we had a rather bigger carrot—and I have an amendment down to that purpose—it might work a little better. If the noble Lord, Lord Higgins, should choose to go beyond probing and press those amendments, we would support them.

With regard to the other group—the noble Lord, Lord Higgins, and we have down identical amendments. That is a waste of paper that I think we should not repeat. The amendments seek to go back to the level of deductions which were originally introduced in 1991 and to go back once more to the duration of deductions. The new one is for three years and may be renewed ad infinitum. In the briefings from the CAB, we have one which had been running since 1994—five years—before the parent with care discovered what it was all about. She supposed that it was for poll tax arrears. That is the danger of an indefinite provision.

Here, too, we are of one mind and, whichever of our amendments goes forward, we would support it. My ambitions go further. I want, as I have wanted since 1991, to abolish the benefit penalty altogether. I have three reasons for wishing to do that. First, it is draconian; secondly, it is outside the area of the Government's competence and, thirdly, it is ineffective or—and in my view this is equally bad—effective in the wrong cases.

Whenever one discusses any of these policies designed to deter people, like the use of prescription charges to deter people from claiming unnecessary prescriptions, it is always the wrong people who are deterred. The genuinely ill are deterred and the hypochondriacs are not deterred by anything. So, if the penalty is producing compliance—I hope the Minister may enlighten us a little more on the extent to which it is—then we have no reason to suppose that it is producing compliance in those cases where it ought to be producing compliance. We know it is producing compliance in a number of cases where, for the mother's own safety, there ought not to be compliance.

A 40 per cent reduction in income support is a fairly draconian penalty. I shall not take us again through all the argument about the Acheson report, the Medical Research Council and the rest. The Minister knows that I have considerable doubts about the claims of income support to be even so much as a subsistence benefit. If you have only 60 per cent of income support, that is a benefit on which I think legal subsistence is extremely difficult.

We have one case here which was referred to in an article in the Independent a few weeks ago where a mother was found to be stealing nappies from the supermarket because she could not afford to buy them. I do not see what that does to reduce child poverty. We have another case which comes from the CAB of a mother who was subjected to a reduced benefit directive and was unable to buy her youngest son's school uniform with the result that he was excluded from the school.

The Minister should not so blithely assume that her policy is for the benefit of children. I know it is so intended, but the Minister knows what paves the road to hell. I think her confidence in this is entirely misplaced. My greatest concern is that, in dealing with these raw emotions, the Government are in an area where they are not a competent judge and where material penalties are not necessarily a suitable deterrent.

The emotions raised by a relationship break-up can be extremely strong. All that the Government can put in the scale against it is material penalty. In some of the cases with which we are dealing, that is a very light feather to put in the scales against the intensity of emotion which is aroused. I have never thought of the Minister as a "Material Girl" but, in this context, I think that is all that she can claim to be. There is no room in the CSA's calculations for feelings. In fact, there is practically no right to have any feelings other than those prescribed by statute.

Of course, the feelings that result from relationship break-down are not always rational. I would not for a moment attempt to pretend that they were. First, the Government are not competent to judge which feelings are rational and which are not—they do not have the evidence—and, secondly, even supposing that the feelings are not rational, those are perhaps hardest of all to deter by a mere material penalty.

In 1996, during Mr Andrew Mitchell's tenure of office, the Government undertook a survey—not a particularly good piece of research—in which, out of a sample of 38, 26 people reported that the reduced benefit directive had no impact. Mr Andrew Mitchell chose to take that finding literally and therefore argued that the penalty was not sufficient to deter. I think Mr Mitchell had failed to read between the lines and had failed to recognise language which might have been more accurately transliterated—and I cannot repeat all the words in the Chamber—as …off". People simply did not recognise the right of the state to use this penalty to make them resume a contact which they were absolutely determined to eschew. In fact, the penalty was wide of their area of concern.

Domestic violence is only the tip of that iceberg. I think all governments have been sincere in their attempts to follow the good cause provisions and I welcome that. Of course, the administration is quite another matter. I have already said in the course of this Bill that I think the culture of this country is very far from sufficiently aware of the dangers which domestic violence may pose under the need to preserve confidentiality.

We had one case which was reported recently by the CAB when a client had been threatened by the absent parent and the absent parent even threatened the CSA. Even after that, the CSA refused to recognise that she had good cause. So she suffered the benefit penalty. That is surely a wrong decision on the law as it presently stands. I am delighted to give way to the Minister.

Does the noble Earl then go on to argue, which is the crucial information, that, as a result, the woman then suffered violence?

No, I do not.

Can the noble Earl give me any instance in which, to his certain knowledge, she has?

When we discussed this matter last week I had seen many such examples. I have not succeeded in tracking them down and therefore must fail to rise to the Minister's challenge for the time being. It is one-nil to the Minister on that as it stands at present. I congratulate her on her determination in following up the points I raised last week. Some of that has come to my attention—not through her. I congratulate her very warmly on it and thank her for it. However, the noble Baroness will not challenge my contention that in this case, if the facts are as alleged, the penalty was wrongly imposed. That does happen. It is a distressingly frequent situation.

I have other cases. The case of Georgina McCarthy, about which my honourable friend Mr George is much concerned, is not an exact direct case in point. Again, it illustrates the weakness of the culture for not being sufficiency aware of the need for confidentiality. But we are in a different area, and a much more difficult one, when we deal with the woman who has fear of violence without direct experience of it. I have in my hand the report prepared by the department in April 1996 which studied a series of model cases. The passage to which I am referring may be found on page 114. It is the case of Miss Rogers. She described a man who had threatened her, often throwing things or thumping the wall in anger. The case study states:

"She got frightened that he would hurt her one day. She had decided it was time to make a complete break; to end the relationship …and make a new start. She had come to a big city in another area of the country so that 'he will never find me'".

That case was decided, having been studied in a seminar as a model case, not to be an example of good cause. I believe that that was mistaken on the law as it stands at present. She may not have offered clear evidence of harm. She had certainly offered clear evidence of undue distress and she had convinced me at least that, whether or not she was found to have good cause, she was not going to co-operate. The penalty would fall wide of its mark.

The Secretary of State here is judge and party in his own cause. That is a big weakness in the legislation. I do not think it is any good setting out to starve mothers into submission as if they were besieged towns. The Minister says that the legislation will never work on a voluntary basis. I say, what I said first on "Bill do now pass" in 1991. Nothing has yet convinced me that I am wrong. The legislation will not work unless it is on a voluntary basis. You can coerce all the people some of the time or you can coerce some of the people all the time; but you cannot coerce all the people all the time.

If this legislation is to work, someone has to be in favour of it. So if it cannot be made to work by applying it only to those mothers who see an advantage to themselves in it, the Government are simply attempting a job of coercion which is beyond their reach. Their eyes are bigger than their stomachs. They will not be the first government to make that mistake and I fear they will not be the last.

When my noble friend moved the first amendment in this group the noble Baroness seemed to think that he could not do such a thing because the previous government introduced the concept of benefit reduction. I think that, all these years later, my noble friend has every right to read what the citizens advice bureaux are telling us and what the Select Committee has told us and to respond. The noble Earl, Lord Russell, has been completely consistent. He argued against this concept last time round when we legislated for this matter. He has reminded us of that. My noble friend has been extremely sensible and is doing something with which, I am sorry to say, the noble Baroness does not feel she can go along.

It surely is absolutely reasonable to pause for a moment to study the effect of the implementation of maintenance disregard before taking this draconian action which may make it impossible for a person to feed her family. A drop of income of 40 per cent, as was pointed out when the matter was discussed last week, can have a very serious effect on the nutrition of a family. We need not go into that again.

During the remaining proceedings on the Bill I hope that the Minister will not go on accusing my noble friend of criticising something which began during the time of the Conservative government. The circumstances have now been changed by the present Government. It may be a good idea just to pause, as has been asked of us by the Select Committee in another place and by the CABs, to see what the effects will be before the draconian measures are implemented.

I should like to open my response to this group of amendments by responding to the direct challenge raised by the noble Earl, Lord Russell, as to how I think the proposals in any sense honour the commitment made by the Prime Minister and the Chancellor to reduce and then abolish child poverty. Very straightforwardly, the children in this country who are poor are disproportionately the children of lone parents and particularly the children of lone parents where, first, the mother does not go out to work and where, secondly, the father of that child does not pay maintenance. If it is asked what the Government are therefore doing about it, they are seeking to help the mother back into work through the New Deal, the working families' tax credit and the minimum wage. If she feels that it is not right for her to go back to work at this point, she will effectively have had, between April 1997 and October this year, nearly a 100 per cent increase in the income support rates for children under 11, which is a huge increase—from just over £16.80 to around £31 during the course of the first three years of this Government.

We are seeking, first, to encourage her back into work when she feels ready; secondly, to make her benefit levels more generous for children while she is out of the labour market; and, thirdly, to get the maintenance flowing. Together, those are the ways we will springboard those children out of poverty and honour the Prime Minister's commitment. I do not know whether the noble Earl wishes to intervene. No, he accepts what our policy seeks to do. In that sense, what we are seeking to do in terms of getting maintenance flowing is an integral part— not an accidental bolt-on— of seeking to redress the problem of child poverty.

As my noble friend Lady Massey said, Clause 19 is about the benefit penalty for parents with care on income support or income-based JSA who, without good cause, ask the Secretary of State not to act to recover child support or who fail to provide relevant information or refuse to take a scientific test such as DNA. The amendments seek both to reduce and time limit the benefit penalty and to delay its introduction. Amendments Nos. 94. 95, 96, 99 and 101 would make the clause unworkable. Amendments Nos. 102A and 198A seek to remove the clause from the Bill and to repeal Section 46 of the 1991 Act that relates to reduced benefit directions which Clause 19 is replacing.

As my noble friend said, the impact of removing Clause 19—Section 46 of the 1991 Act—would go much further than just removing the penalty. Effectively—the noble Earl, Lord Russell, acknowledged this point—it would make child support a voluntary option by giving the lone parent the choice of whether or not to involve the Child Support Agency or whether simply to rely on benefits provided by the taxpayers many of whom are themselves parents supporting children. I do not believe that low-earning, tax-paying fathers should be required to support the children of other fathers who can, but prefer not to, support their own children. I give way to the noble Earl.

The logic of that argument would be complete if the Minister could tell us what taxpayers are spending in supporting harm caused by the hardship inflicted on lone parents who suffer the benefit penalty. When the Minister's department monitors that, she can complete the calculation. At present, she does not possess the information, and has admitted as much.

I think that I can help the noble Earl a little. At present, 85 per cent of lone parents are co-operating with the agency in naming the father. When I took over some responsibility for this portfolio, the figure was only about 30 per cent. The difference between that 30 per cent and 85 per cent, given the premium that is being introduced, is that that number of families and their children are denied the possibility of a £10 maintenance premium. Perhaps the noble Earl will accept and respect the fact that, under the new scheme, by placing the emphasis on getting the woman to name the father and therefore comply with the procedures of the CSA, children will be the direct beneficiaries. The figure has risen from 30 per cent to 85 per cent; I hope that it will be even higher in future.

I accept the information and I thank the Minister. Before I accept the claim that they are the direct beneficiaries, will the Minister think again about the Gary Craig study of 53 families, which indicated the very high levels of stress caused to families by the operations of the CSA. How does the Minister weigh that against any increase in money? She has given no answer at all to my major question: what is the effect on mothers who suffer the benefit penalty? What hardship do they suffer, and what does that cost the taxpayer? The noble Baroness cannot complete the equation until she can answer that.

I am only a page and a half into my brief; I was hoping to return to those points. If the noble Earl thinks that I have not answered him fully, I am sure that he will wish to intervene and I shall respect his wish to do so.

I repeat: if we were to follow the noble Earl's proposal and a lone parent decided not to co-operate with the agency, that would mean that many thousands of children would not receive the maintenance due to them which could make a real difference to their lives. Equally importantly, it is more likely rather than less that they will continue to have contact with their natural fathers, which we know is in the best interest of those children.

Children are entitled to the financial as well as the emotional support of both parents. The CSA exists to ensure that non-resident parents meet their responsibility to their children. We believe that children have a right to support and that parents have a duty to provide it. That means, therefore, that child support is not an optional extra. It is right that the benefits system should step in, but only where parents are unable to support their children rather than merely prefer not to do so.

In the new scheme, where child support or income-based JSA pays for children, child support action will follow unless the parent with care refuses to allow that to happen. Those who refuse without good cause face a benefit penalty equivalent to 40 per cent, not of their income support—I should like this point to be corrected—but of the adult amount that is applicable, which is a reduction of about £21 a week; it is not a sanction on the children's element within income support.

The underlying purpose of a reduced benefit direction is to encourage parents with care to apply for child support unless they have good reason not to do so. We believe that a benefit penalty of 40 per cent of the adult applicable amount in income support is probably set at about the right level.

We are conscious of the need to protect vulnerable parents and children. If there are reasonable grounds for believing that the parent with care or any child living with her would suffer harm, no penalty would result. The noble Earl asked why we are not taking feelings into account. We are taking them into account. If we believe that there is undue distress as a result of pursuing child support, no penalty will be imposed. "Distress" does not mean violence, but feelings. Only those parents who choose not to pursue child maintenance and do not have a good reason, or do not tell the DSS why, will have their benefit reduced. But those who will be put at risk or who will suffer undue distress as a result of child support action have nothing to worry about.

I repeat: the only parents who will face a sanction will be those who either face no risk and simply prefer to rely on benefit from other fathers— I have never understood the morality of not receiving support from the particular father but being perfectly happy to have support from other fathers; that point seems morally "iffy"— or those who refuse to tell the DSS why they are opting out.

Perhaps the Minister will give way. I am seeking to follow her argument carefully. The position is, indeed, as she has stated it. As I understand it, the dispute is not over the basic argument but over decisions as to whether the adverse circumstances which would result in the benefit reduction exist. The point is whether the decisions are being correctly made, which is why they are described by the CAB as incorrect, unreasonable and inappropriate in a number of cases.

That is a wider issue. The noble Earl, Lord Russell, would like to see the reduced benefit direction removed altogether. I am seeking to reply to the entire group of amendments. It seemed to me sensible, therefore, to address the bigger issue before coming to some of the more specific points raised. The bigger issue is: what is the justification for having a reduced benefit direction at all?

Perhaps it may clarify matters if I say that my argument is that, by the nature of the case, a large proportion of the decisions will always be erroneous.

That is a second order statement. The noble Earl's basic statement is that whether or not the father is named should be optional. He will say that if we compel the mother to do so and she refuses, there will always be a percentage of error. I pressed him to give an instance where pressure by the CSA to require the woman to name the father, when she was reluctant to do so because of fear of violence, had actually resulted in violence. The noble Earl was candid enough to say that he had no such evidence.

I should not wish to say that the CSA gets it right all the time. There may be occasions on which it has applied a reduced benefit direction about which the noble Earl would have some concerns— although, of course, there is an appeals system. Where the alternative is the case— where a parent has been required to name the father even though reluctant to do so because she alleged a fear of violence which the DSS did not accept— I could be wrong, but I have not been made aware of any case, nor I believe has the noble Earl, where as a result the lone parent was subject to the violence that she predicted. That is crucial to the effectiveness of the CSA. There may be cases where the woman has refused to name the father and there may have been a benefit penalty which she or the CAB regards as inappropriately applied, but I do not know of a case where violence has resulted, and that is the test.

As a result, 85 per cent of parents with care and claiming income support now choose to seek maintenance for their children. However, the fact remains that a number of parents with care refuse to co-operate with the CSA without good reason. As I said, they may prefer the taxpayer rather than their former partner to support their children. But I do not believe—here I disagree profoundly with the noble Earl, Lord Russell—that it is a choice that they are entitled to make; namely, that some other father rather than this particular father should support their children.

Equally, there may be other reasons. The woman may have a new partner and fear that if the CSA is involved that may come to light and affect their benefit entitlement; or perhaps in the past she may have done an informal deal with her ex-partner; he may have arranged with the woman that if she refuses to name him and therefore he does not have to pay any maintenance, he, in turn, will recycle back to her some of the maintenance that he has saved. We believe that we need the benefit of penalty provision. It is not fair on children or on taxpayers if we allow parents to prevent the recovery of child support on their behalf. We want to ensure their co-operation, above all for the sake of the children.

The noble Earl was gracious enough to admit that we are trying to strengthen the grounds for reasons for compliance. Under the new scheme, the man's average maintenance payment falls. It is likely to be reduced from about £38 on average to about £31 on average. Therefore, under the new scheme, if the woman failed to name him, she would not only suffer a reduced benefit direction of £21 but would also lose her £10 premium—a loss in total of £31. That means that if it were worth her while doing an informal deal with him, he would have to pay her at least £31 so that she was no worse off, or, in other words, the level of maintenance that he would probably have to pay anyway.

With the best will in the world, we hope that we have constructed a system where financially it is not worth the while of either party to manipulate the system and women will find it attractive to co-operate with the CSA in the best interests of the child. Where we can we wish to avoid imposing a benefit penalty. The number of RBDs in place has fallen, and we hope that that decline will continue. In 1996 the figure was 17,500. The latest figure as of November 1999 was 13,700. That is a significant reduction, and represents only 1.5 per cent of the total number of parents with care on income support.

The noble Lord pressed me to say whether we knew what happened to women who accepted reduced benefit directions. I asked for research to be done not only for my information but because I suspected, quite rightly, that the noble Lord would want to know. The department's research suggests that 70 per cent of those with reduced benefit directions come off the benefits sanction within a month or so. Of those, one-third go into work and are no longer dependent on benefit and therefore it is not a matter for the CSA. One-third re-partner—which many of them may already be doing— and, as a result, decide to take themselves off the books rather than have the matter explored further and possibly lay themselves open to further action. One-third decide to co-operate. Of the remaining 30 per cent, almost all come off sanction within the year.

The noble Earl, Lord Russell, said that the Government were not a competent judge as to whether or not a woman wanted to name the man. I do not see it as a battle between the lone parent and the CSA. Sometimes the lone parent makes the judgment, in my view inadvisedly, not to co-operate and that is not in the best interests of the child. Somebody must decide the matter when there are conflicting interests.

What makes the Minister believe that she is a better judge than the parent of the interests of the child?

All the research available to us suggests that, for example, where lone parents thwart contact— that happens in 42 per cent of cases—that is not in the best interests of the child. Surely, the noble Earl accepts that there will be occasions when, for example, the lone parent has a new partner who wants her to cut all her ties with the former partner, even though the child needs those ties. In those cases her interests as she perceives them and the best interests of the child will be at odds. We believe that where that happens it is the responsibility of government to side with the child, which is what we are doing here. We hope that that does not happen very often, but the noble Earl will accept that that can and does occur. In my experience such cases arise.

I am confident that we are doing all that we can to ensure that there are sufficient safeguards in place so that parents at risk do not suffer accidentally. No one should suffer such a penalty through ignorance. If the woman's circumstances change and she forms a new relationship she may not fully understand the financial implications, for example that she must still seek child maintenance if her new partner is on benefit. For that reason, not only do we seek to set up the system so that financially it is attractive to her, and in her interest, to co-operate; we attempt to back it by improving the quality of advice through the development of the face-to-face service and the opportunities and contacts that she has.

Those who claim good cause are, we believe, treated in an understanding way by staff who are specially trained in the procedures. The training and procedural instructions were designed following considerable consultation with clients and key groups representing lone parents. Therefore, the staff who work with lone parents and seek to determine whether or not good cause is appropriate have been trained in part by the organisations that represent lone parents. We have done everything we possibly can to ensure that that training is professional and that there is an incentive.

It may shock the Committee to learn—this may put noble Lords into the mindset of the issues with which we must deal—that the Government seriously considered the removal of the provision of good cause altogether and making it mandatory for everyone to name, as happens in many European countries and in broad terms in the United States and New Zealand. Those countries have decided that by making it mandatory they can better protect the lone parent and they are more likely to discourage bad behaviour by non-resident parents because they know that they will not avoid maintenance by threatening violence. The NACSA website remains on my mind. I have seen for myself the advice given to men by a men's group:

"Break a window, send a photo, and you'll avoid maintenance".

That advice was given on a website to all men who wished to avoid maintenance. That threat can work precisely because the lone parent normally has a choice and, therefore, can be blackmailed or pressured by her partner not to name him. The man knows that whatever despicable behaviour he engages in will make no difference, as is the case in New Zealand, many other European countries and in part in the United States. In Europe some of that bad behaviour can be checked and is referred to the police.

We seriously considered whether that offered better protection to the lone parent than the policies that we had pursued. However, as a result of the consultation exercise on the Green Paper, I was persuaded that that would send out a wrong signal about domestic violence and that, although it might stop some men, where the man was under the influence of drugs or alcohol the risk might continue and we did not want that.

It is important to bear in mind that parents who do not receive child maintenance will lose any chance of receiving the child maintenance premium. In all, 600,000 children in the poorest families stand to gain over £150 million a year through the maintenance premium, and individual families will be up to £10 a week better off. We hope that that will be real money which goes to children.

Amendment No. 102 would also result in children losing out in child maintenance. This amendment would decrease and time-limit the reduced benefit decisions. Here, what is proposed is a 10 per cent, instead of a 40 per cent, sanction for six months. Before October 1996 when the current sanction of 40 per cent was introduced, there was a sanction of 20 per cent for six months and then 10 per cent for a year. However, at that time around 70 per cent of parents with care initially claimed that they had good cause not to co-operate with the CSA, and of those only about 8 per cent were found to have good cause. No one of whom I am aware whose good cause has been rejected has subsequently gone on to experience violence. I have no evidence to suggest that the CSA has ever made a wrong decision on that.

These figures were a cause for concern and the subject of a report by the Social Security Select Committee in June 1996 which recommended a strengthening of the sanctions. We want a meaningful penalty. Amendment No. 102 would reduce the sanction and time-limit it to six months. The effect would be to reduce the benefit of a parent with care by about £ 5, instead of £20, per week. I do not believe that that would be effective in encouraging the lone parent to co-Operate or that it would be high enough to discourage the manipulation of the benefit system that I have just described.

Amendments Nos. 97 and 98 would delay the introduction of a reduced benefit penalty for two years from the introduction of the child maintenance premium. The underlying purpose of a reduced benefit direction is to encourage parents with care to apply for child support, unless they have good cause for failing to do so. To delay the introduction of this penalty would reduce the incentive and mean that many parents with care would not seek child maintenance. It would also mean that many fathers would be exempt for a period of up to two years from paying maintenance if the woman chose not to name him and, as a result, would not get into the habit of paying. The hope and expectation that after two years' grace he would go on to pay maintenance with willingness seems to be Utopian. I do not know why the figure was chosen. The Social Security Select Committee believed that during the five-year phasing-in period the new incentives should be given a chance to work before the provisions of Clause 19 were brought into effect. We do not believe that that is reasonable.

Amendments Nos. 94, 95, 96, 99 and 101 remove a number of subsections from Clause 19. Their effect is to retain Clause 19 but to make it unworkable. I should like to quote to the noble Lord, Lord Higgins, the words of Mr Pickles in another place at Committee stage on 3rd February. When dealing with a similar amendment moved by the Liberal Democrat Party, he said:

"I support the Minister".

although one would not believe that tonight. He went on:

"Legislation is about the support of children, and one cannot opt out of that unless there is an adequate reason"—

for example, good cause—

"why the taxpayer should bear that burden. People have occasionally been content to accept both benefit and a little extra money. It is important to ensure that the CSA is respected. I have never come across a case in which the CSA has gone too far".

Amendments Nos. 102A and 198A seek to remove Clause 19 from the Bill. They also repeal the existing legislation on reduced benefit directions and take them out of the child support system.

I think that it would be deeply unfair, to taxpayers, other fathers and, above all, to children, to make child support voluntary, which is what the removal of RBDs would do, and to transfer the responsibility to other fathers—not that particular father, but generalised other fathers—to take on the care of those children. Why should some non-resident parents walk away from their responsibilities without good cause and, frankly, place those same responsibilities on other people who, because they are taxpayers, cannot protest about it? I do not believe that child support should be voluntary. The cluster of these amendments, subject to the provisions I have made with the noble Lord opposite, would make it voluntary. We know that the failure to pay child maintenance is bad for the financial and the emotional health of the child. Therefore, if Members of the Committee are on the side of the child, they will join me today in urging the noble Lord to withdraw the amendment.

If the noble Lord, Lord Higgins, will forgive me, perhaps I may say that I understand the Minister's concern about non-resident parents walking away from their responsibilities. I suggest that in many cases the Minister is pursuing that concern at the expense of the child. The Minister thinks in categories. She thinks in averages. I ask the noble Baroness to read Hansard tomorrow and to ask herself how many times she has used the phrase "the child". One child is not like another. The average child is quite a rare animal. The Minister has great confidence that she is able to judge the interests of this mythical child better than the parent.

Can the noble Earl cite me any child who would not be better off if the family were not receiving maintenance? I think that it is perfectly proper to generalise in that respect.

Perhaps the Minister could consider the possibility that although material matters are important, a child's interests may not be a matter of material factors alone. The happiness of the environment, the sense of safety and peace, and the avoidance of being in the middle of a game of battledore and shuttlecock may matter to a child. Money matters, but it is not the only factor. Until we take that on board, we cannot have a serious debate.

I ask the Minister one final question. She will not think it material, but I shall ask her before answering it to pause for one deep breath long enough to wonder why I think that it is material. Let us suppose that the Minister is on benefit and is threatened with a benefit penalty of this size if she does not join the Conservative Party. Would she do so?

I would have considerable difficulty in doing so. If I may say so, that is not a helpful analogy. Normally, I am full of admiration for the stories the noble Earl brings. But to suggest that if I fail to pay I could expect to suffer violence from the Conservative Party seems unlikely; undue distress, maybe, but violence—surely not.

Does the Minister understand that a single parent may believe that it is contrary to her conscience to do what the Government require of her?

No. The noble Earl will have to help me. We may have different understandings of the word "conscience". I can understand, as I said, that many lone parents would prefer a clean break, with nothing to do with the individual father and, in particular if there is a new partner on the scene, would like him out of her life and to have another father support the child. I do not think that that is a choice she is entitled to make. It is not in the best interests of the child, of taxpayers and, sometimes, of the non-resident parent father.

I do not accept the word "conscience". All that I understand by the word "conscience" means that I support those who are not autonomous adults against the often perverse will of autonomous adults; that is, I support children.

Perhaps I may follow on from the noble Earl, Lord Russell. I understand the argument he advances in respect of the interests of the child. I do not think that any of us would depart from that interest.

However, we also have to recognise that there are conflicting interests. We are addressing the interests of the child, the parent who looks after the child, the parent who is absent, the question of the responsibility under the Child Support Agency and the benefit provided by the state. Those are conflicting interests which have to be addressed.

Clause 19 gives a degree of flexibility which enables each and every circumstance to be addressed in accordance with the way in which they are presented and have to be considered. In putting forward these amendments to Clause 19, we are placing too much emphasis on a particular interest when they all have to be, and will be, addressed under Clause 19 by the people involved at the time the circumstances present themselves. That degree of flexibility is necessary to make the provision work; otherwise it becomes totally inflexible and will never work.

As I said, this is essentially a probing amendment. It has revealed clearly that the position of the Liberal Party is not the same as that of noble Lords on these Benches. We are primarily concerned with ensuring that the absent parent makes a contribution to the child's maintenance. We believe that there is a case for penalties. But it is important for a specific penalty to be administered in a way which does not result in the bodies which deal with the problem at the front end saying that the decisions are not infrequently incorrect, unreasonable or inappropriate. It is in marked contrast with the view put forward by the noble Earl, Lord Russell.

Before Report stage, I wish to consider carefully what the noble Baroness said. I do not find wholly convincing the argument that because no one who said that she was threatened with violence has been subjected to violence, that removes the fear of it.

I did not say that. I said that I was not aware of any case where a parent has had fears of violence and has been, so to speak, over-ruled and required by the CSA to co-operate. Women have decided to co-operate rather than receive reduced benefit. In other words, they have named the father. I simply asked: in that case, to noble Lords' knowledge, has the judgment of the CSA been at fault? I did not suggest the reverse: that sometimes there may have been a reduced benefit direction where, as the CAB suggested, there may have been grounds for a different response.

The important issue is, where a parent who is reluctant to co-operate did co-operate because of the reduced benefit direction, was she, as a result, subject to the violence she originally feared? That would have suggested that the CSA was wrong to require her to co-operate. I have not heard a single piece of evidence today.

I understand that, but the reason that she did not co-operate in the first place may have been that she was afraid she would be subjected to violence. However, I shall consider the noble Baroness's point.

The Minister was somewhat dismissive of the recommendation of the Select Committee in another place that there should be a delay before the new sanctions were fully operative. The Minister pointed out—it had not been clear previously—that the reduction of benefit applies to the benefit of the parent with care rather than the child's benefit. None the less if the, parent with care was existing on the level of support which the Government regard as the minimum, and for a period of perhaps three or more years she has to live at substantially below that level, it is not clear how she will survive. There may be an argument for examining to what extent that has been a problem in individual cases.

The lone parent makes a voluntary choice not to co-operate with the CSA where there is no evidence that there is good cause or undue risk of distress. That penalty is £20 on an income of, say, £90 or so where there is one child plus housing benefit, council tax benefit and the like. In order to receive back the full amount, she has only to co-operate with the CSA. As I said, there is no case in which a lone parent has subsequently co-operated with a CSA where, to my knowledge, violence has been validated. Therefore, it is up to her.

One could argue equally well that it is unreasonable, for example, that people in receipt of the jobseeker's allowance who fail to be available for work should be sanctioned, because they cannot live on a reduced benefit. One either accepts that benefits have conditions attached or one believes that benefit is a birthright. I happen to believe that it is perfectly proper for society to attach conditions that are appropriate to a benefit, as in this case, and that it is up to the lone parent to remedy the situation.

We know that 70 per cent of those who have taken a reduced benefit come off that reduced benefit, if I can express it in that way, within a matter of a month or a couple of weeks. A third do so in order to go into work; some do so because, presumably, they are already re-partnering or have started to re-partner and therefore do not claim benefit at all; and a third decide to co-operate with the CSA. Therefore, many possibilities exist under which the lone parent may return to enjoy the full benefit. I agree that she should have it and it is in the best interests of her child to have it.

That does not cover the point that I raised: that, apparently, someone who is on the absolute minimum on which the Government believe anyone can reasonably exist then goes for some time—in some cases perhaps for three years—while being subject to a 40 per cent cut in that minimum level.

As I said, it is her choice. She simply has to name the father.

I understand that it is her choice. I ask simply how she manages to do it. Is there not a case for looking into that matter?

The problem arises from a failure to return the forms on time. How does she manage to live? It is a two-way process. If she wishes to receive the full benefit, there are conditions with which she must comply. She must return the forms, renew them appropriately, and she must attend a ONE interview, or whatever. That is essentially the case. I take the simple point that anyone who has an income which is less than income support is below the income support level. That is true by definition. The questions are: was it her own activity that put her into that situation; and, can she remedy it reasonably? The answer to both those questions is: yes.

I believe that there is no point in my continuing to make the same point over and over again. I still remain completely unconvinced by what the noble Baroness has said. However, having said that, I want to raise one final point. Perhaps we may then consider coming back to it on Report. Apparently, in a number of cases this situation has been continuing for three years and sometimes has been extended by three years. Of course, as the noble Baroness just said, it is true that in a number of cases results are produced in a matter of days, weeks or months. However, it seems that if nothing has happened by the end of three years, the person concerned is not likely to change his or her mind. Again, that is a point to which we should perhaps return.

Having said that, there is a significant difference of opinion on these issues between the noble Earl and myself, and we shall need to read very carefully what the noble Baroness said. Subject to that, I beg leave to withdraw the amendment which has, I believe, given rise to a useful debate.

moved Amendment No. 103:

After Clause 21, insert the following new clause—

COLLECTION AND ENFORCEMENT: PRIORITIES

("…After section 43 of the 1991 Act there shall be inserted—

"Collection and enforcement: priorities.

43A. In exercising his powers under sections 29 to 43 of this Act the Secretary of State shall ensure that such powers are exercised with a view to securing the collection and enforcement of child support maintenance from those non-resident parents who have failed to pay any amount of child support maintenance and that this duty is accorded priority over the collection and enforcement of child support maintenance from those non-resident parents who have made some payments of child support maintenance.".").

The noble Lord said: I believe that we can dispose of this amendment very briefly. The amendment seeks to establish the Government's priorities: whether, given the huge backlog within the Child Support Agency, they are going to concentrate on the collection of maintenance from the 30 per cent of cases where parents have made no payments rather than the 23 per cent where parents are partially compliant but not making full payments. Given the extent of the backlog, presumably some degree of priority will be established as to how the department proceeds. I merely inquire what instructions have been given to the department and its officials for the Child Support Agency and its officials.

Amendment No. 103 would require the CSA to set a priority order for the operation of its collection and enforcement activities. It proposes that they take action against non-resident parents who have made no payments regarding child support before turning to those who have paid some, however little. It may be of interest to the noble Lord to know that 47 per cent of non-resident parents who now pay through the CSA are fully compliant. In 1997 that figure was 30 per cent. Therefore, we have already gone a long way. Twenty-three per cent are partially compliant; 30 per cent pay nothing at all.

Non-resident parents would be able to work out that if they made a token payment, that would move them to the back of the list of cases which the agency would be obliged to pursue. We all know that the complexities of the current formula leave the agency with little time for collecting maintenance. Too often, people have been able to avoid payment. Even where the assessment is completed, many NRPs fail to pay all that is due.

When I visited a child support centre in Hastings, I was struck by the fact that approximately 90 per cent of the non-resident parents asked for a review of the amount that they were liable to pay because their circumstances had changed. The review was carried out and they still do not pay. Their requests were intended simply as a means of stretching out the process. Non-resident parents must not and will not be able to escape meeting their full responsibility by making an occasional payment. Therefore, I hope that the noble Lord will accept that the amendment is unnecessary.

Under the new system, instead of 26 weeks, we expect an assessment to be made within four to five days, and the non-resident parent to pay within five to six weeks. Given that, the staff resource will be in compliance for all cases. It will not be the case, as the noble Lord feared may have happened in the past, that one simply adds to the payments required by those who are paying rather than chases those who fail to pay it all. Therefore, I believe that the amendment is unnecessary.

Enforcement action will now be taken against all non-resident parents who do not meet their responsibilities because such a simplified formula will free the resource for such action. I do not believe that a legislative priority for collecting enforcement payments provides the best way to ensure that parents receive the maintenance which is theirs by right.

Given that, I invite the noble Lord to withdraw his amendment. If he requires further information, I shall be very happy to try to provide it for him. However, by virtue of a simplified formula, the speed of assessment and the fact that we should be able to get money flowing from everyone, our whole push is that it should no longer be necessary to go after what some may have alleged in the past were the easy targets. As I said, we hope that we should not need to discriminate in a way that the noble Lord may fear has sometimes occurred in the past.

What are the priorities so far as concerns those who are on the old system?

We seek to obtain the money from all fathers. In the past, the priority has been to do so in private cases where the money is enjoyed by the family as opposed to cases where, for example, the father and mother are on benefit and where there is very little money involved. Therefore, in the past the priority has tended to be cost-effective: that is, to go for maintenance actions which are most likely to produce most money for children. If one must prioritise, it seems to me that that is the most decent way to do so.

It is not a matter of saving the Treasury money. In so far as public cases have had a degree of priority, it has been a question of what money will benefit the children. That has been the situation in the past. However, in future, with a simplified system, we hope that those choices—I am not trying to suggest that it has been widespread—would not have to be made.

Does the Minister consider that the parents with care will believe that it is fair if the absent parent who has paid some money is traced just as quickly as one who has not paid any?

Is the noble Baroness asking me to change the situation for the future Bill or to change the situation as it is now? In future, there should be no question of prioritising. At the moment, in order to obtain an assessment of child maintenance it is necessary to acquire approximately 100 pieces of information from the non-resident parent. If he holds back only one of those, the money will be delayed. In future, only three pieces of information will be required from the non-resident parent: the name of his employer, details of his take-home pay and the number of children that he has.

As a result, the assessment should be made within four to five days and the money should be flowing from him to the parent with care within four to five weeks, compared with the six months plus that it now takes. If it takes a long time at present, it is understandable that officials will go after the money which most benefits the child. That dilemma should not occur in the future under the new system. We have tried to construct a system in which precisely those difficulties do not arise. I hope that the noble Baroness will be content with that assurance.

In the light of the Minister's reply, I beg leave to withdraw the amendment.

moved Amendment No. 103A:

Page 23, line 30, after ("section") insert ("6(1),")

The noble Baroness said: This amendment gives effect to a commitment we made in Committee last week. During the debate on Clause 3 noble Lords expressed some concern about delegated powers set out in new Section 6 (1), which has been inserted in the Child Support Act by Clause 3. Concern was expressed in this House about how the power might be used and some Lords queried whether such a power was needed at all. As I explained to the House, we wish to be able to retain a power to add other benefits to those already in the Act should the need arise though we have no present plans to add to the list. It mirrors the formula we have in the Child Support Act 1991.

I also explained that delegated powers are a feature of social security legislation, and that approach has been endorsed by the Delegated Powers Scrutiny Committee. However, in response to the concerns of your Lordships' House I gave a commitment that in future any regulations made under this power will be subject to the affirmative procedure even though that was not recommended by the Delegated Powers Scrutiny Committee.

The amendment before us now places a reference to new Section 6 (1) and Section 52 of the Act as amended by Clause 25, that adds to the list of affirmative provisions. I hope that noble Lords will accept that we have responded positively to your Lordships' wishes.

During a previous debate the noble Lord, Lord Higgins, asked me to consider whether we would amend the subsection so that any other means-tested benefit of a prescribed kind could be substituted for the current wording. I promised to reflect on this. Having done so, I do not think that wording would be appropriate because the benefits we define as means tested or income related are a narrow group of benefits such as IS or income-based CSM. Those two benefits are contained in new Section 6 (1) on the face of the Bill before us. We may want to add some benefits in future that are similar in nature to income related benefits but are not strictly defined as such, for example, WFTC which is not means tested but did replace a means-tested benefit called family credit. We do not intend to add WFTC, but there are a number of tax credit type benefits that are being considered. It is possible that more may be developed in the future. Therefore, a future government may wish to add it, but I must emphasise strongly that we have no such plans in mind.

Secondly, and more importantly, not all income-related benefits currently in existence require a person to seek child maintenance, for example, HB or council tax benefits, and IRBs which are not expected to apply for child support. The noble Lord's definition might well bring in groups of people to whom we had not intended it to apply.

I hope that on the first' part, by making the regulation subject to the affirmative procedure, noble Lords will be satisfied that Parliament will be able to scrutinise any regulations made under this power and on the second part that we might actually be widening the scope beyond perhaps what the noble Lord intended. I hope that noble Lords will be able to accept this amendment and will accept the Government's response to the House.

We are grateful for that explanation. We will study what the Minister said very carefully.

I, too, would like to thank the Minister warmly for that amendment and also for her further reflections. The Government say what I was afraid they would say, but a fact is a fact.

moved Amendment No 104:

Page 99, line 17, at end insert (";and

(b) in subsection (1)(b), after "made" there shall be inserted "or, as the case may be, treated as made".").

On Question, amendment agreed to.

moved Amendment No 105:

Page 100, line 19, at end insert—

("( ) In section 33 (liability orders), after subsection (5) there shall be inserted—

"(6) Where regulations have been made under section 29(3)(a)—

(a) the liable person fails to make a payment (for the purposes of subsection (1)(a) of this section); and

(b) a payment is not paid (for the purposes of subsection (3)),

unless the payment is made to, or through, the person specified in or by virtue of those regulations for the case of the liable person in question."").

The noble Baroness said: This is the last of the amendments to the Child Support Act.

Amendment No. 105 is a technical amendment to put beyond doubt the intentions when maintenance remains due if payment has not been made in the way that the regulations require it to be made. When the CSA is arranging the collection of child support maintenance, it will notify the non-resident parent of the amount, how and when the payments are to be made and who should receive them. The notification which imposes a legal obligation on the non-resident parent will state that the payments should either be made direct to the parent with care to or through the Secretary of State to any other such persons that the Secretary of State may specify.

If the CSA is unable to obtain regular payments of maintenance, for example, where the non-resident parent is self-employed or where a deduction from earnings order is ineffective, enforcement action will be considered. The agency must, as a first step, obtain a liability order from magistrates' courts in England and Wales or sheriff courts in Scotland. Where such a liability order is considered being made the magistrates' or the sheriff's office have to be satisfied that the payments are due and have not been paid. The intention has always been that this means maintenance payments as directed by the CSA. However, some non-resident parents may claim that they have met their maintenance liability by making payment in a variety of other ways, for example, by giving pocket money direct to the child or paying for treats. To take such payments into account would be operationally difficult to manage and run counter to the objectives underlying the child support scheme. For example, the CSA might have to become involved in resolving disputes between the parents as to whether the payments had actually been made and, at the extreme, fathers could give all the maintenance to their children as pocket money and leave the mother unable to buy basics such as food and clothing.

This amendment will ensure that it is absolutely clear to everyone, both parents and the courts, that maintenance payments must be made to the person specified.

I would, therefore, ask your Lordships to accept this amendment.

On Question, amendment agreed to.

moved Amendments Nos 106 to 108:

I beg to move that the House be now resumed.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

My Lords, with the leave of the House, I shall now repeat a Statement on Sierra Leone which has been made in another place by my right honourable friend the Secretary of State for Defence. The Statement is as follows.

"With permission, I would like to make a statement about Sierra Leone. In his statement last week my right honourable friend the Foreign Secretary informed the House about the serious security situation in Sierra Leone and the implications for British citizens and others for whom we have consular responsibility. He said that the British Government had taken the precautionary measure of deploying military assets to the region. British forces were deployed to allow for the safe evacuation of British nationals and other entitled personnel.

"Essential to this task has been the securing of Lungi Airport which, as the Foreign Secretary said, will be extremely valuable in allowing UN forces to build up to their mandated strength over the next month. We have seen evidence of this in the recent arrival of two additional Jordanian companies, numbering some 300 personnel. This remains the clear and unambiguous position on the deployment of British forces. It was re-affirmed by the Prime Minister on 11th May, and it remains our position today.

"I am confident that the House would agree that the deployment of UK forces to Sierra Leone has been an outstanding success. Faced with a rapidly deteriorating security situation, UK forces have evacuated almost 450 people. The airport was secured quickly and effectively. Although we have consistently made it clear that UK forces will not be deployed in a combat role in support of UNAMSIL, the presence of UK troops on the ground has helped stabilise the situation in Sierra Leone. We are providing technical advice to the UN as to how matters might be further improved. I would like to take this opportunity to congratulate the Armed Forces on the work they have done so far. It is a remarkable demonstration of their flexibility and speed of deployment identified as key requirements in the Strategic Defence Review. Both President Kabbah and Kofi Annan have welcomed the contribution that British forces are making.

"The situation in Sierra Leone remains volatile and we must all be concerned about the situation, in particular, for the detainees. We have received reports that a number of UN personnel have been released, and I understand that the British officer, Major Andrew Harrison, is fit and well under the protection of the Indian battalion in the east of Sierra Leone. While this is welcome news, we continue to work for the safe release of all those currently being detained by the RUF.

"Freetown remains calm but tense. Outside Freetown, clashes between government troops and the rebels continue. For the moment, the rebels appear to be on the back foot. The government of Sierra Leone and UN forces have retaken the initiative. The arrival of Jordanian reinforcements at the weekend has been a significant boost to the UN mission. Reports to me this morning from the Chief of the Defence Staff have been encouraging.

"The forces we have deployed are those we consider necessary to carry out their primary task effectively. The First Battalion of the Parachute Regiment is currently shouldering the main burden in Lungi. But the maritime forces we have deployed—including our amphibious capability—provide vital flexibility for the Joint Force Commander in what remains a volatile and potentially dangerous situation. If attacked, our forces have the rules of engagement and firepower to allow them to respond robustly.

"In that context, while our forces remain, we shall do what we can to assist the UN mission. Its success is essential to enuring long-term peace and stability in Sierra Leone. UN forces have been doing a difficult job under uncertain and dangerous circumstances, disarming large numbers of ex-combatants despite not being up to full strength in terms of numbers of personnel and equipment. Our presence has helped to increase confidence and has contributed to the stabilisation of the situation.

"As a result of our force's presence we have been able to give significant assistance. British officers are providing advice to UNAMSIL. They are giving technical military advice to the government of Sierra Leone, and to the UN in New York. We have assisted the UN with the transport of vehicles into theatre by air. We have airlifted 230 Jordanians by helicopter from the airport at Lungi to Hastings, where the Jordanian battalion is strengthening its position.

"I recognise that there have been questions about the length of our commitment. The UN plans to build up its forces to the authorised level of about 11,000 over the next month. We are in contact with those countries that are contributing troops to the UN force, particularly with India, Jordan, Bangladesh and Nigeria, urging them to bring in troops as soon as possible in order to reinforce UNAMSIL. We would expect that once the UN mission has been reinforced by these troops, our role at the airport would no longer be required. I can assure the House that UK forces will stay no longer than is necessary.

"However, even when our forces do withdraw, we will not be ending our political or diplomatic support for the UN and for Sierra Leone. When it is safe to do so, we will continue with our programme of assistance to help train and build effective, democratically accountable Sierra Leonean armed forces., which we announced in April.

"We will also continue to contribute military observers to the UN mission, and if required, technical advice to UNAMSIL and other support.

"I have made it clear that we are committed to the safe evacuation and protection of our nationals and to supporting the UN in its mission to restore stability in Sierra Leone. The deployment of British forces for a limited period on these tasks is a model of the rapid deployment concept that was at the heart of the Strategic Defence Review. It has been much admired and acknowledged by all concerned. Our Armed Forces are doing an excellent job, which is acknowledged around the world. But there is no question of the UK taking over the UN mission or of being drawn into the civil war".

My Lords, that concludes the Statement.

My Lords, I thank the Minister most warmly for repeating the Statement made by her right honourable friend in another place.

On Friday, while the noble Baroness did not answer many of the questions we asked, she gave us a very good sketch of what was going on in Sierra Leone. I am afraid that what the right honourable Member has said today has really not added anything to that.

My noble friends and I asked the noble Baroness a number of questions which I must now press. The first can be dealt with quickly. Who is to pay for all this? Will it come out of the Ministry of Defence budget or the Foreign Office contingency reserve? I hope most sincerely that the Ministry of Defence will not have to pay for it.

Secondly, I must return to what was a decent little skirmish between the noble Baroness and my noble friend Lord Attlee on the rules of engagement. Without intruding on private grief as to how it went, my noble friend did not press the matter but I am afraid that I must now do so. What are the rules of engagement in Sierra Leone? The Statement is less than clear about that. In what circumstances will British troops become involved? What if United Nations troops are attacked? That was a point which I raised on Friday, mentioning Zambians. I cannot remember whether Zambians are actually there. If a unit of the UN is attacked but the British forces are not, do they stand back and do nothing or do they become involved in the conflict?

Those British forces have now done what they set out to do. British citizens have been evacuated and Lungi airport has been secured. Why, therefore, will they remain? What is the purpose of that? Reports show that British troops are patrolling in Freetown itself and in the countryside in support of the United Nations. That does not seem to be limited solely to the aims for which they have gone there.

With those units has come a very large task force. Will Sea Harriers be involved and in what capacity? I am rather worried about the thought of keeping 1,800 Royal Marines on HMS "Ocean" for a month. I think there will not be very much left of the inside of HMS "Ocean".

The period of deployment for which the British troops are there needs to be clarified. Is it to be four weeks, as we are told? What are they to do in that time? Will they then withdraw, regardless of the conditions? If they stay, what will be the effect on other countries planning to send troops as part of the United Nations force? It is inevitable, and always has been, that the British are carrying the bulk of the burden. That will not encourage other countries to send their people out at once. When we come to the end of the four weeks, how will the British troops get out? All those are vital questions to which I hope we shall have some replies.

I must remind the Government of what happened in Bosnia. There, UN troops stood by while local inhabitants were massacred. Do British forces have a mandate to prevent that?

In 1993, after the Somalia conflict, the Commons Foreign Affairs Select Committee produced a report in which it said that before the United Nations became involved in an area of conflict, that should be tested by the Security Council against the following key considerations: first, whether the UN has a role for itself in the conflict in question; secondly, whether the objectives of the proposed military intervention are realistic; thirdly, given the likelihood of escalation into more and more intervention of a political and military kind, whether the Security Council is prepared to recognised the full consequences. It then went on to state:

"Finally, and most crucially, if the Security Council is so committed, are Member States prepared to mobilise the resources, manpower cash and equipment",

and so on. Have the Government considered all those matters, as they should have done?

I have one or two other small questions. What is General Guthrie doing there? The noble Baroness told me on Friday that his visit is coincidental and that he is travelling round the countryside. But it does seem a bit of a coincidence.

Even Brigadier Richards seems to present a problem. He is in Sierra Leone primarily as adviser to the lawful government and to help the United Nations forces to get things right. Command of British forces was given to him as an add-on. He must be suffering from wearing too many hats. It is not easy for him.

I suspect a lack of total co-operation between the Foreign Office and the Ministry of Defence. Can the Minister reassure noble Lords that those two departments are singing the same tune?

I must and do pay great tribute to what British forces are doing. However, we have not been told what it is. I wonder whether the Government know.

My Lords, I, too, thank the Minister for kindly repeating the Statement made in another place. We, on these Benches, fully support the actions taken by the Government. The collapse of the UN mission in Sierra Leone would have the most disastrous consequences for the whole of central Africa and for the United Nations.

Those of us with long memories may recall what happened between the wars with regard to the situation in Abyssinia which heralded the end of the League of Nations. I believe that most of us would hate to see any such parallel drawn in the period after the Second World War. However, there are questions which need to be asked.

The increase in morale among government troops and United Nations troops as a result of the appearance of the British Parachute Regiment and supporting naval and military forces has been remarkable. It is clear that both government forces and UN forces are fighting with a degree of commitment they simply did not show before. That, by itself, is an astonishing tribute to the organisation, effectiveness and efficiency of British troops, which I am sure all in this House profoundly welcome.

Can the Minister confirm the most recent indications that, as a result of the intervention of Charles Taylor of Liberia, 150 hostage UN troops have now been released, or have the figures increased in the past few hours? Does the Minister agree that perhaps one of the less fortunate aspects of this welcome release of hostages is that Mr Taylor is a close ally of Foday Sankoh, who was the leader of the rebel movement? Can the Minister tell us whether she has any more up-to-date information about the whereabouts of Mr Sankoh? Perhaps I may suggest that it would be better to stop calling him "the leader of a rebel group" and call him what he is; namely, a bandit who has helped to betray his own government.

I strongly agree with the question posed by the Opposition spokesman on defence, the noble Lord, Lord Burnham; we need to press a little further on the issue of the rules of engagement and on whether the UN mandate might be strengthened. Given the breaking of the peace agreement by one of its major protagonists, it becomes more and more clear that we are looking not at a peacekeeping effort but at a peacemaking effort.

My final question is lengthy. It seems that the strategy of Her Majesty's Government—I may be misinterpreting it, but it seems a sensible strategy—is to hold Lungi airport and the surrounding area in order to ensure that reinforcements to the UN troops already in Sierra Leone can be made over the next few weeks. I understand that the governments of India, Bangladesh and Jordan have all confirmed their willingness to send additional troops. That is good news. If the UN can be built up to force, it may be able to re-establish an element of law and order and end the terrible atrocities occurring in Sierra Leone.

However, as I understand it, there is one serious problem. To get to the airport, those countries will require heavy lift equipment which is not available to them. From reports which I have not yet been able to confirm, I understand that that equipment would be available from the United States but that the price being asked is beyond the means of those poor governments to meet. Is it not an essential element in the strategy of United Nations peacemaking and peacekeeping that the wealthy member states of the UN begin to understand that their responsibility must be to provide essential equipment to enable the poor member states of the UN to do what they are doing; that is, to offer their soldiers who are risking their lives? It would be absurd and wrong for the wealthy member states of the UN not to do what they can do; that is, to ensure that those troops get to Sierra Leone within the next month in time to rescue the situation.

My Lords, I thank both the noble Lord and the noble Baroness for the welcome they gave the Statement. Having just listened to his right honourable colleague in another place, I am bound to say that I was not tremendously surprised by the comments of the noble Lord, Lord Burnham. None the less, I was disappointed in the tone he took.

It is not surprising that the Statement did not particularly add anything to what I announced to your Lordships on Friday. Another place did not have the benefit of a defence debate. I was therefore able to bring your Lordships more up to date than those in another place. I thought that that was the right thing to do. If that was a judgment with which noble Lords wish to quarrel, I hope that they will say so. I thought it was correct and what your Lordships would have expected.

The noble Lord, Lord Burnham, asked who would pay for the operation. We are recording the costs involved. I can tell your Lordships that to date it looks as if about £3 million in extra costs have been identified. However, I am certain that further consequential costs will be identified. We have agreed with colleagues in Her Majesty's Treasury and the FCO to monitor such costs and shall decide attribution later.

A great deal has been said about rules of engagement. The noble Earl, Lord Attlee, told me on Friday that he would not press that question. I am surprised that the noble Lord, Lord Burnham, decided that now is the time to do so. I informed your Lordships that there are robust rules of engagement. In my period in your Lordships' House—I am, of course, relatively inexperienced compared to the noble Lord, Lord Burnham—I have never heard your Lordships discuss rules of engagement in any detail. The reason for that is always that we do not want to undermine the operational effectiveness of our troops in theatre. If that has been true on previous occasions, it is equally true today. However, perhaps I can try to help the noble Lord a little further.

I repeat that there is no question of UK forces being deployed in a combat role in support of UNAMSIL. I repeat that, if attacked, United Kingdom forces have the rules of engagement and the fire power to allow them to respond robustly, and they will do so. The rules of engagement allow our troops to defend themselves in the way we would expect. I hope that the noble Lord is content with that answer. Although I may be willing to trust the noble Lord with more information, I am bound to tell him that I would not be willing to trust the RUF with further information on that issue.

Our troops remain at Lungi airport. I believe it was clear from the comments made last week by my right honourable friend the Foreign Secretary that not only are they there to secure the egress of British and other nationals, for whom we have consular responsibility; they are also there to secure the access of UN forces. That was made clear last Monday as it has been on every occasion on which Government Ministers have addressed these issues.

The noble Lord asked about the presence of the Navy. The task force is there to secure flexibility for British troops. Let us not forget that when British troops went to Sierra Leone, we had little accurate information on what was happening on the ground. It was judged essential that we had the support of the British Navy offshore. That was the unanimous recommendation of the Chiefs of Staff. I believe that noble Lords would be extraordinarily disappointed and anxious had Ministers not taken that entirely sensible, right and proper advice.

The noble Lord asked about the period of deployment. General Sir Charles Guthrie has said that United Kingdom forces would remain in place for around a month. In interviews yesterday I believe that my right honourable friend the Foreign Secretary said much the same. It is reasonable to suppose at this stage that the Government believe that it is important to have British troops in place in Sierra Leone for about that length of time. Of course we hope to see the imminent arrival of Jordanian, Indian, Bangladeshi and Nigerian forces. I do not believe that because we have gone in, others who have committed themselves in international fora to sending their troops will now decide that it is no longer necessary to go. I simply do not believe that that will be the case. We are urging those troops to move into Sierra Leone and it is for that purpose that we have secured the position at the airport.

I believe that from the beginning the British role has been entirely clear. I am sorry that the noble Lord is worried about the position on HMS "Ocean". As I have said, the presence of the ship in the area is precautionary and the move has been made on clear military advice.

I believe that I can be a little more welcoming in response to the remarks of the noble Baroness, Lady Williams. I agree with the noble Baroness that this has been a remarkable and effective operation by our British troops. I feel extraordinarily proud of them and I know that all my colleagues share those feelings. However, I have to say that I am sorry that the Official Opposition have perhaps decided to use this situation for political argument. I feel that that is inappropriate.

Hear, hear!

My Lords, the most recent reports indicate that around 150 hostages—perhaps, more suitably, I should call them "detainees"—have been released. However, I must stress to the noble Baroness that that figure is unconfirmed. She will have seen press reports, but I am afraid that we do not have any confirmation on that point.

The noble Baroness also asked me a question about Mr Sankoh. I shall choose my words carefully. At this stage I can communicate nothing to the House as regards the whereabouts of Mr Sankoh. I hope that what I have said in relation to the rules of engagement has given some assurance to the noble Baroness. The strategy she outlined in her remarks is indeed the strategy that we have put in place. Furthermore, as regards her comments about the need for heavy lifting equipment, this issue is covered by the logistics element of the role Her Majesty's Government have undertaken. The noble Baroness is quite right here. When a mandate is being pursued on behalf of the United Nations, it behoves all countries that belong to the United Nations to do what they can to support such a mandate. The United Kingdom has willingly shouldered that burden.

Before I sit down, perhaps I may respond to the noble Lord, Lord Burnham, on the point he made about General Sir Charles Guthrie. Last Friday I told the House that a visit to the region had been planned by the Chief of the Defence Staff some time ago. I think it would be unthinkable that the Chief of the Defence Staff should not go to the region and visit British troops engaged in operations. After all, he is their head of profession. Those troops would expect to see him and we are very pleased that he is there. Furthermore, we are glad to see that he is lifting the morale of the troops in the way that only Sir Charles can. I for one was delighted to learn that he was broadcasting from Sierra Leone over the weekend.

On the question of relations between the Foreign Office and the Ministry of Defence, I can assure noble Lords that there is in place a strong, good and worthwhile working relationship. I hope that the presence of my noble friend Lady Scotland on the Front Bench with me today demonstrates that.

My Lords, can the noble Baroness—

My Lords, I believe that it is the turn of noble Lords on this side to speak.

My Lords, why?

My Lords, we have heard the spokesman from this side, but we have not heard from the Back Benches.

My Lords, perhaps we should first hear from my noble friend Lord Shore.

My Lords, I wished only to offer my congratulations and encouragement to my noble friend. She has made an excellent Statement. We have done our duty to safeguard our fellow citizens and others, but there is a wider duty that we must perform. My noble friend has made that very clear.

We cannot afford to allow the United Nations to be humiliated and rebuffed in the mission it has undertaken. If we need to commit more forces in order to safeguard the position of the United Nations, I for one would be prepared to support that.

However, I should like to make one point to my noble friend. I am not worried about our terms of engagement, but I am a little concerned about those of the forces of the United Nations. The entire situation has changed over recent weeks as regards the government of Sierra Leone, which previously were supposed to be a government of coalition and reconciliation. The second principal member has turned out once again to be an arch rebel and destabiliser. Frankly, I think that it would be most sensible if we could put out feelers for an early recall of the Security Council to see what other measures, both in its own interests and those of us all, might now be undertaken.

My Lords, I thank my noble friend Lord Shore of Stepney for those remarks. On the question of United Nations troops, the fact is that troop numbers did not build up as quickly as had been originally anticipated. Now that the security of the airport is assured, we hope that it will be possible to see the pace of deployment accelerated, in particular by those countries which have already committed themselves; namely, India, Bangladesh and Jordan. As I indicated in the Statement, over the weekend we saw the deployment of some 230 Jordanese troops precisely because the United Kingdom had already taken steps to secure the airport.

As regards the position of the Security Council, this is of course a matter in which the UN will take the lead. It is the responsibility of the UN to ensure that this matter is kept under constant review. I am happy to say once again to noble Lords that the Secretary-General of the UN, Kofi Annan, has expressed his great pleasure as regards the United Kingdom role and deployment in Sierra Leone.

My Lords, perhaps I may put a question to the noble Baroness. The Statement announces the intention to "cover the withdrawal" and to "support the United Nations". Those two declarations are in fact mutually exclusive. We have just heard a plea from the noble Lord, Lord Shore, for imperial rule, more or less. The idea of Mr Cook as Secretary of State for India is something that would amuse me if it were not so sad.

Can the Minister explain what would happen if we were to allow Mr Sankoh, who was forced back into power by ourselves—that was surely the equivalent of making Dr Shipman Minister of Health or Kenneth Noye Chancellor of the Exchequer—back into power again? Forcing him back into power would be a great mistake. What Sandline did to keep the old democratic government in proper order went by the board. Everything collapsed and Sankoh came back.

Please can we have a definition of the Government's aims? Do they intend to go in to get British people out or do they aim a reimposition of an element of the imperialism so eloquently advocated by the noble Lord, Lord Shore?

My Lords, the noble Earl has stated that it is mutually exclusive to hold to the twin aims of evacuating British and other nationals for whom we have responsibility and supporting the United Nations. I simply do not know how the noble Earl has come to draw that conclusion. The fact is that we needed to secure the airport in order to facilitate the egress of our citizens and others for whom we had responsibility. Having secured the airport, it would be unthinkable not to keep it secure for the access necessary to the UN. Those two seem to me to be mutually supportive objectives and aims, and no matter how much the noble Earl may shake his head and assert the contrary, I am afraid that in logic, for once, the noble Earl is wrong.

To turn to the question in relation to imperial rule, as we all know, the noble Earl has an excellent turn of phrase and can often be extremely amusing. But this is not a joke; it is a serious issue. It is not a question of the return of imperial rule; it is a question of doing what we can in the limited context. I described of upholding the United Nation's mandate. We are a responsible member of the United Nations and are doing what we can in the circumstances.

The noble Earl will know that Mr Sankoh's appointment was part of the Lomé agreement; it was a part into which Mr Sankoh entered. Of course it is outrageous and appalling that he did not uphold the agreement and has effectively plunged the country back into civil war. But the noble Earl asks me to go on and speculate what may happen in various eventualities if Mr Sankoh were to do various things. It cannot be right for us to discuss such eventualities and I repeat what I said to the noble Lord, Lord Burnham. This is not a play in which we have a script and know to what end we are all going. This is military action on the ground. People's lives are at stake and I for one will not do anything that speculates in such a way that makes it less effective in operational terms to secure the safe return of all our British troops.

My Lords, I fully support the stance that both the noble Baroness and her right honourable friend the Secretary of State have taken over the rules of engagement; let the other side find out first.

However, I take slight issue with the remarks of the noble Lord, Lord Burnham—I know he did not mean them—in relation to the Royal Marines on board HMS "Ocean". They will not be causing any problems; they will be training, keeping fit and getting as much sleep as possible because, if they are landed, they will get no sleep. They will also be planning for eventualities that may come. I say that because, when we read Hansard tomorrow, the noble Lord, Lord Burnham, may feel that his remarks make it appear as though matters of little consequence are happening on board that vessel. But it is right, when we do not know the end, to be flexible and to prepare for any eventualities that may come.

To repeat something I said on Friday, involvement in a city or a town eats up soldiers. Fighting in built-up areas and in streets requires plenty of reinforcements. We hope at does not come to that. But the Statement is about right for what is happening in Sierra Leone today.

My Lords, I thank the noble Lord for those wise words. Like him, I am sure that the noble Lord, Lord Burnham, did not mean to imply anything that he will regret when he reads Hansard tomorrow in relation to the Royal Marines.

My Lords, I withdraw those remarks and apologise for my flippancy.

My Lords, I am sure that the noble Lord did not mean anything untoward. I know that he has the greatest respect for our troops and I am sure that, like us, he understands that they are doing an important job. They are training and keeping fit, but they are also providing for any additional flexibility that may be needed should the occasion arise. Of course, we hope that that does not happen, but the flexibility is available on advice.

Perhaps I can assure the noble Lord that we will only fight in self-defence; that is, if we are attacked. I hope that the rules of engagement are absolutely clear to your Lordships. Of course, there are a lot of troops in place. Some noble Lords remarked on that on Friday. When one is securing the airport, it is necessary not only to have troops in the airport, but also to secure the access and egress of the airport and to secure communications between the airport and Freetown, which, as I explained, is difficult because of the geography of Sierra Leone. But I thank the noble Lord for his support.

My Lords, did the noble Baroness see the statement made by Solomon Berewa, the Attorney-General of Sierra Leone that, according to documents found in Foday Sankoh's house, he himself took 442 carats of diamonds between August 1999 and January 2000 worth around £150,000? Is not that the key to the situation? The RUF still controls the diamond-producing areas and as long as it derives revenue from that source it will continue to import arms illicitly from places like Burkina Faso, stemming from eastern Europe. We must deal with that question if Sierra Leone is ever to have permanent peace.

Will the noble Baroness therefore answer my noble friend's question in relation to the terms of reference of the UN mission? Is it there to enforce the peace, as it has started doing already? If so, will it assist the Sierra Leonean armed forces to recapture the diamond-producing areas and thus cut off the sources of revenue from which Foday Sankoh continues this war? Will the British commander also assist in the rapprochement between Hinga Norman and his commodores and Johnny Paul Karoma of the AFRC, which again are instrumental to the success of the government armed forces, since they should present a unified front against the RUF instead of being divided into three parts as they have been up until now? Can the noble Baroness also reply to the question of my noble friend regarding the heavy lift equipment? How did the Jordanians who arrived over the weekend get to Lungi? What heavy lift equipment is available for bringing the other troops which have been promised and which she says will arrive in the near future?

My Lords, I would prefer to write to the noble Lord on the question of heavy lift. I do not feel able to tell your Lordships what heavy lift is available because I am not sure how much of our operational hand that will expose. I hope to be able to give the noble Lord details and put a copy of my letter into your Lordships' Library. But the situation being what it is, I prefer to take advice about any security implications that may arise on that question.

I agree with the fundamental premise of the noble Lord. We have in the past had exchanges on Sierra Leone where the noble Lord centred his remarks on what happened in the diamond trade. I agree that the whole issue of diamonds has fuelled this appalling conflict for many years. I am sure it is the issue of diamonds that led to the disgraceful, rapacious greed demonstrated by certain members of the RUF in particular but no doubt others as well.

To turn to the specific question, the UN troops are present to provide for the implementation of the Lomé agreement, which provides for the permanent cessation of hostilities, disarmament, demobilisation and reintegration of all ex-combatants. As part of that, the creation of democratically accountable armed forces to protect the country is necessary. Of course, when trying to reintegrate members of the armed forces into society, we have to look at the ways in which that can be done, and that will mean diverting people's attention away from the disgraceful trade we have seen in diamonds to things which benefit the country as a whole. But that is a long process.

The noble Lord and I have been exchanging comments over these issues for some two and a half years or so. But that does not detract from the wisdom of what he said; namely, that some solution to the problem has to be found. I believe that it is well understood in the United Nations that the diamond situation—I hesitate to use the word "trade" because that is a respectable word—and the disgraceful intercourse that exists in that respect must be addressed so as to bring peace to that unhappy country.

My Lords, I congratulate my noble friend the Minister on her strong presentation of the UK role. However, perhaps I may ask her a question about the evacuation process which, in general, has been carried out with exemplary speed by UK personnel. I have in mind the evacuation in relation to British nationals who are black. Complaints were expressed today on BBC radio that black UK people had been held back while white people were processed. There were also two examples in press reports of black people being held up when returning to the United Kingdom. Can my noble friend the Minister tell us what guidance is given to our authorities on the range of UK ethnicities?

My Lords, I can say, unequivocally, to my noble friend that I, too, heard that claim made on a radio broadcast this morning and was appalled by it. Naturally, I have requested information about the validity of that claim from my colleagues in the Foreign Office. I am assured that there was no discrimination of any kind during the evacuation. I believe that; I believe that there was no discrimination of any kind. Some 442 people have so far been safely evacuated to Dakar by official means—that is to say, the means provided by British troops. But, of course, other people may have evacuated under their own steam and may have travelled by civilian means.

Our responsibility was to evacuate people for whom we have the consular responsibility—not just British people, but others as well—to a place of safety. Once in Dakar, it was for evacuees to make their own onward travel arrangements. Many did so and arrived in the UK soon after reaching Dakar, but many evacuees had little or no money. Those people were provided with hotel accommodation, while arrangements were made by our consular staff in Dakar for their onward travel to the United Kingdom. Foreign Office staff in Paris and London met those who were evacuated on Thursday and Friday. I can give my noble friend the assurance that there is no question whatever of any racial discrimination over evacuation.

My Lords, I have had the strong impression in recent days that there are more reports than there used to be about the activities of the SAS, its equipment and even its intentions. This seems to me to be undesirable. Can the Minister assure us that there has been no change of policy as regards the release of information on that sort of subject?

Yes, my Lords, I can. I, too, have been rather disturbed by some of these reports. I was most disturbed to hear a reference to special forces from the noble Lord's right honourable friend the shadow Secretary of State on a radio programme this morning. I thought that that was an astonishing reference for a responsible member of the Opposition to make. I should tell the noble Lord that such reports are not "reports" in the accepted sense of being official reports from the MoD, the Foreign Office, or anywhere else. There is a great deal of speculation about what is happening. In line with our predecessor administrations—and, I hope, our successor administrations—we do not comment on the activities of special forces.

My Lords, I welcome the Statement. It seems to demonstrate that the expeditionary capacity, which is part of SDR, is being maintained. Can my noble friend say whether there is sufficient flexibility in policy to allow the UK to contribute significantly to the maintenance of training and the enhancement of the strength of the regular forces in Sierra Leone so that, when we have gone, people are not left in reliance upon the irregular forces, which seem to be very irregular indeed? Would not that role be particularly appropriate for our European partners; indeed, could we not ask them to take a more generous interest in the matter?

My Lords, I believe that my noble friend Lord Hardy of Wath is quite right. Recent events have clearly demonstrated the need for properly trained, effective and democratically accountable armed forces in Sierra Leone. We still have plans to send a UK military advisory and training team to the country, whose remit will he to deliver what the armed forces of Sierra Leone need to ensure a lasting peace. As I reported when repeating the Statement and as was announced in April of this year, we remain committed to that aim. But the team's arrival in Sierra Leone is likely to be delayed if the security situation is deemed to be too volatile. I am sure that my noble friend will not be surprised—indeed, I hope that he is reassured to know—that no firm decisions have been taken on when the bulk of those personnel will arrive in Sierra Leone.

I agree with my noble friend. All those who wish Sierra Leone well ought to be thinking about ways in which they can contribute to the civil well-being of the country. We must ensure that the armed forces, many of whom will have to be deployed in different ways in the future, are properly trained so as to secure a peaceful and democratic society in that country for the future.

My Lords, in line with the recommendations set out in the Companion, I have to tell noble Lords that the time limit of 20 minutes allowed for Back-Bench contributions has now been reached. We must move on.

moved Amendment No. 109:

Before Clause 30 insert the following new Clause—

("Age addition

AGE ADDITION

. For section 79 of the Social Security Contributions and Benefits Act 1992 there shall be substituted—

"Age addition.

79.—(1) A person who is above the specified age and who is entitled lo a retirement pension of any category shall be entitled to an increase of the pension, to be known as "age addition".

(2) Where a person is in receipt of a pension or allowance payable by the Secretary of State by virtue of any enactment or instrument (whether passed or made before or after this Act) and—

(a) he is above the specified age; and

(b) he fulfils such other conditions as may be prescribed,

he shall be entitled to an increase of that pension or allowance, also known as age addition.

(3) In this section "specified age" means an age specified by the Secretary of State in regulations.

(4) Age addition shall be payable for the life of the person entitled, at weekly rates to be determined by the Secretary of State in regulations.

(5) Regulations under this section may—

(a) specify one or more specified ages at which age addition shall be payable;

(b) provide for different rates of age addition to be payable for persons of different specified ages.".").

The noble Lord said: I rise to make what is positively my first, but not my last, appearance in the debates in Committee on this Bill. The proposed new clause provides for age additions—that is, additional payments—that are to be paid to older pensioners as an addition to their basic state pension. It would be paid to everyone who is entitled to a basic state pension.

The amendment is the same as one introduced by my honourable friend Mr Steve Webb in the other place. Formally, it does not specify the age at which the additions will be paid or the amount of such additions. Of course, the amounts will need to be flexible and will have to be varied from year to year. I should say that the current proposals of my party are that there should be an extra payment of £5 to single pensioners aged 75 or more. That £5 should become £7 when they reach the age of 80.

We recognise the problems with financing earnings-linked increases in the basic pension, but we also recognise—and do so acutely—the serious problems of elderly pensioners. The present "age addition" of 25p per week payable at the age of 80 is obviously completely farcical and I believe has not been increased at all since 1971. Elderly pensioners are undoubtedly those who are most in need. If they have an occupational pension, they are likely to have the lowest. They are very unlikely to have a personal pension; certainly not one of any significant amount. Moreover, those in their 80s will not even have SERPS (or not SERPS of any significant amount) because in many cases they will have retired before that was introduced in 1978.

In some respects, elderly pensioners have greater expenses, especially when it comes to heating and perhaps to some extent clothing. Therefore an additional pension for pensioners who are aged 75 and over will target those most in need without having to require them to submit to means testing. It will also greatly reduce the need for older pensioners to have to claim the minimum income guarantee.

As pensioners get older, it becomes more difficult for them to get hold of forms, to understand them and to fill them in. I believe that much of the failure to claim MIG is due to difficulties with form filling which may deter people, particularly the more elderly pensioners, from claiming what are often relatively small sums which are payable.

I should, however, add that, strong as the case is for age additions in any case, that case is made vastly stronger by the proposed introduction of the state second pension. There are two reasons why that is so. First, the state second pension will be earnings-related up to pension age by the revaluation of the earnings factors but will be price-linked thereafter. Once the state second pension comes into payment, it will increase annually only in accordance with prices and not in accordance with earnings. The minimum income guarantee, however, is likely to be earnings-linked. The result of that will be that people who start with a pension above MIG level will find that their pensions fall below MIG after a few years. The estimate is that this could happen after some 10 to 15 years, even for people with full contribution records who rely on the basic pension and the state second pension.

I do not believe that that result is acceptable. The age addition should be fixed at levels which will prevent pensioners with full contribution records for the state second pension falling below MIG level. There is, I believe, also another reason why the state second pension makes the age addition particularly necessary; that is, that the state second pension, at stage 2, will cease to be an earnings-related pension, or a pension which has an earnings-related element in it, because the amount of pension at stage 2 will be linked solely to the notional lower earnings threshold—a figure which is currently £9,500.

As I understand it, the lower earnings threshold will increase in line with earnings. The result of that will be, for example, that people who retire in the year 2020 will receive a higher state second pension than those who retire in the year 2010 and are still living in the year 2020. Of course, to some extent this problem already arises with SERPS but it is much less obvious because SERPS is earnings-related—as its name suggests—and therefore the spread of pension amounts among those retiring in any one year is wide. However, this problem does not arise with the basic pension because it is the same for all pensioners with full contribution records whenever they retire. Therefore someone who retires this year will receive the same basic pension as someone who retired 10 years ago.

At stage 2, the state second pension will become, in effect, an additional basic pension. If those who retire this year were to get a higher basic pension than those who retired in 1985, I believe, frankly, that there would be hell to pay. If the Government are to stop short of a full earnings link for the state second pension while it is in payment, I believe that they must find some other way of providing larger pensions for older pensioners. I believe that this can, and should, be done by a substantial age addition.

As we know, the Government face outrage over their 75p per week increase in the basic pension.

Did the noble Lord refer to the earnings-related state second pension, or did he mean the state pension? Will he clarify what he said in his previous one or two sentences? I believe that he referred to the state second pension; I think that he may have meant to refer to the state pension.

I am not quite sure to which passage the noble Baroness refers. I said that in effect at stage 2 the state second pension will become an additional basic pension and will cease to have any earnings-related element.

I believe that, particularly after the state second pension has ceased to be an earnings-related pension or have an earnings-related element, there will be serious problems because someone who retires in 2020 will receive a higher state second pension than someone who retires in 2010, even though in neither case is the pension earnings-related.

Even if the present system was maintained, I believe that age additions are essential if the Government are unwilling to return to the earnings link for the basic pension. I also believe that the introduction of the state second pension makes age additions doubly important. Without them the unfairness to older pensioners will be built into the system and the state second pension simply will not work. I beg to move.

The noble Lord, Lord Goodhart, put his case eloquently. We on these Benches share his concern for older pensioners. However, reluctantly, we are unable to support the insertion of the new clause. As he explained, it proposes that pensioners of a certain age should be entitled to a pensions increase. However, as the noble Lord said, the age and amount are unspecified.

Furthermore, it is open-ended and would commit future governments to expenditure that might not be sustainable in the long run. The oldest pensioners are an important priority for these Benches. In the years 1997–98 the previous Conservative government targeted the oldest pensioners by increasing premiums for income support, housing benefit and council tax benefit. We feel that there are more effective ways to help older pensioners than this new clause.

I find the amendment in the names of the noble Lord, Lord Goodhart, and the noble Earl, Lord Russell, superficially attractive, particularly as regards the desire to help poorer older pensioners. However, I question whether the age addition—whatever amount is suggested—would achieve that as well as the Government's current policy. Over the past two years the Government have tried to eradicate pensioner poverty by aiming policies at less well off pensioners, whether that be through reductions in VAT on fuel, the increase in winter fuel payments or the lop rate of tax.

The amendment, which contains elements which concern the Conservative Front Bench, does not target the poorest pensioners. Those on income-related benefits would not benefit at all from the provision that is proposed. Perhaps the simplest and the wisest policy is to try to do everything possible to overcome elderly pensioners' fear of filling in forms. Perhaps the Government should make an extra special effort to ensure that pensioners who qualify for the minimum income guarantee are given every assistance to enable them to claim it. I believe that the minimum income guarantee will be in the gift of governments in years to come. It can be made more effective provided we ensure that people understand the role it plays and their rights to it. I hope that the Minister will explain what plans the Government have to ensure absolute take-up of that benefit rather than go down the route of added payments at the age of 75 or 80.

As an 89 year-old it is obvious that this amendment has superficial attractions for me, if I understood what it committed the Government to do. As has been pointed out, it is totally vague and gives the Government a blank cheque to do nothing. However, I am sure they would seize on that avidly.

The mover made it clear that he considers the amendment to be an alternative to restoring the earnings link, but it seems to me that it is a device for distracting attention from the division in the Liberal ranks. As I said on Second Reading, a large contingent of Liberal Democrat Members in the other place joined Labour rebels in supporting an amendment to restore the earnings link. I do not think this amendment would satisfy them as an alternative and it certainly does not satisfy me, so I would not dream of voting for it.

The noble Baroness has taken most of the words out of my mouth and said them very much better than I would have done. I hope that the problems of older pensions will not be discussed in terms of gimmicks. The amendment, with its free television licences and a heating allowance of £150, would help me every bit as much as pensioners who are much poorer. The benefits are not targeted. Perhaps the noble Earl could tell the Committee how it would be funded and how older pensioners could plan their retirement, when they would have no idea of the amount decided by the Secretary of State and at what age; otherwise, one cannot take the amendment seriously.

The problems of older, poorer pensioners are great, as I know from a number who live near me. They are extremely grateful for a free TV licence and a heating allowance but wish to plan—and they will always want to watch television and it will always be cold in Angus. I do not believe that the amendment is the right way to assist pensioners. The public may regard its provisions as somewhat cynical. Pensioners want certain, targeted help so that they know what is ahead. I am sure that any serious government will have to think about that—including the present Government. If the Liberal Democrats really aspire to govern us, I do not think that they should table such an amendment. I am really quite shocked by it.

There is a strong argument for any increases in state pensions to be for all older people, rather than targeting particular age groups. However, the benefits system already recognises the greater needs of the oldest, which is why income support is more for older pensioners and why rates of attendance allowance are higher according to need, which is often age-related. The Government have recognised that greater need in their provision of free TV licences for the over-75s, and that is what was behind the original 25p age addition on the state pension at age 80. That has been allowed to wither to such an extent that it has become an insult. Older people point out regularly to me and others that one cannot even buy a first-class stamp for 25p. It would be better either to resurrect the addition meaningfully or to get rid of it altogether.

Today's oldest pensioners, especially women, are the poorest and would benefit particularly from the amendment. My concern is where to draw the line and at what level to pitch any extra help. More research is required into what is needed by older people at different ages. I shall return to that aspect when we debate Amendments Nos. 132 and 133.

I shall respond briefly to the noble Baroness, Lady Castle. The amendment as drafted allows for regular uprating. I am sure that the noble Baroness would be the last person to query the importance of that opportunity. In Committee on the Welfare Reform and Pensions Bill last year, it was said that while we were not going to adopt the earnings link, it would be necessary in good years for earnings to be above the level of prices. Nobody knows how much above that level we might be able to uprate in future years. We would like to leave available the option of generosity where that is financially permissible.

As to what was done by my right honourable and honourable friends on Report, I do not think that the noble Baroness understands the difficulties of being a third party in the other place, where there is no guarantee, as there is here, of being able to table amendments and vote on them. Our amendment in another place was not selected, so voting for the earnings link was the only way we could vote in favour of an increase in pensions. We thought that principle so important that it justified departing from our normal practice and policy. That may have been an unusual way of deciding the issue but in view of the concerns that we share, I hope that the noble Baroness will forgive us.

I am sorry that the noble Baroness, Lady Carnegy of Lour, is so easily shocked. I shall not advert to incidents in past Parliaments. The noble Baroness knows that I could, but I shall not bother.

My noble friend Lady Castle is being a little hard on the Government in accusing them of doing nothing. They have uprated pensions, introduced a minimum income guarantee, and given better heating allowances and free TV licences.

I share the concern of my noble friend Lord Brett. Although I welcome the Government's improvements to reduce pensioner poverty, my concern is that pensioners should claim the benefits to which they are entitled and that they should not be made to feel that they are receiving charity. Recent figures show that there is much variation in poverty within each group of pensioners. Offering the same benefits to all will not eliminate poverty. The only way to do that is to target the poorest pensioners and to make sure that they claim the benefits to which they are entitled.

The amendment relates to the increase in the basic retirement pension, known as the age addition, paid to people over the age of 80. The practical effect would be to remove the specified age from primary legislation and allow it to be specified by the Secretary of State in regulations. The amendment would also permit regulations to specify different rates of age addition.

As the noble Baroness, Lady Greengross, said, it is difficult to defend the current level of age addition. The sum of 25p a week is nonsensical by anyone's reckoning. However, although I appreciate the desire to help the oldest in society, the amendment presents real difficulties. Our mixed strategy is more effective. The noble Earl's amendment overlooks the cohort effect, and the method of paying for it would undermine longer-term policies.

My noble friends Lord Brett and Lord Haskel referred to the minimum income guarantee. We already have age-related premiums in the MIG and believe that that is the quickest and most effective way to help those in need. Through MIG, we increased income support for pensioners last year by three times the rate of inflation. This April it was increased in line with earnings. So, for example, a couple over 75 are getting through MIG nearly £18 more than they would under the retirement pension; and a single person over 80 is getting through MIG nearly £20 more than the retirement pension—and, incidentally, £9 more than a 65 year-old would get on MIG. We again expect to increase this by earnings next year. We shall further enhance the amount of the premium that older pensioners receive through MIG over other pensioners.

We have invested much in the minimum income guarantee, but, as my noble friend Lord Brett rightly said, it is not worth a jot unless people claim it. So through the late spring and all summer we shall be writing to more than 2 million pensioners to tell them about MIG. The campaign will be supported by TV advertising and, for the first time, pensioners will be able to claim MIG over the phone by ringing the new MIG Telecentre in Newcastle. They do not need to go into a benefits office; they can claim it from the comfort of their home.

We believe that providing help through MIG is the most effective way to help those most in need immediately. In the longer term, our radical pension reforms—in particular the introduction of stakeholder pension schemes and the state second pension—will ensure that everyone with a lifetime of work behind them will build up rights to a pension on retirement which will take them above MIG and ensure that they have an income above that level for longer.

Over and beyond that, we have introduced other benefits—for example, the winter fuel payments, which are tax free and worth £150 to eligible householders from next winter; the introduction of concessionary bus fares; the free eye tests for the over 60s; the reduction of VAT on fuel; the tax changes which have cut the starting rate of tax to lop; and the free television licence. As a result, we are spending an extra £6.5 billion on pensioner income this Parliament. Put broadly, half of that money is going on the poorest 3 million pensioners.

Against this, I should like now to engage, as seriously as I can, with the propositions in the amendment of the noble Lord, Lord Goodhart. I take them very seriously. The noble Lord should consider that extending the payment of the age addition in this way would have a net annual cost of around £660 million. That is not my problem. My problem is, as was hinted at by my noble friend Lord Haskel, that the noble Lord—by repeating some of the proposals spelt out in much greater detail by his honourable friend, Mr Steven Webb, from another place, which were based on statistics produced by the last two pensioner surveys of the DSS—is assuming that age cohorts are an appropriate proxy for picking up the poverty of pensioners.

It is true that older pensioners are poorer than younger pensioners—for example, they become poorer over time because they are less likely to be earning, as 65 to 70 year-olds often do; they are likely to have spent more of their capital; and it is likely that their occupational pension will have not kept pace with the general wealth of the country. But the offset against that is that we have seen across the country a huge increase in the number of occupational pensions over the past 20 years, as well as the higher state pension benefits and better housing. But it is true that older pensioners are poorer than younger pensioners.

However, it is also true that women pensioners are poorer than men pensioners; and it is also true that single pensioners are poorer than couples. By using only the age proxy—which is what the noble Lord seeks to do—we will have exactly the same problems as we had with City Challenge and urban regeneration projects.

I am most grateful to the noble Baroness. As to the use of age as a cohort, is it not the case that, because of women's greater life expectancy, a much higher proportion of the oldest pensioners are women and, therefore, an age addition helps not only the older pensioners but helps women disproportionately to men?

That is perfectly true. But the opposite is also true: we would probably do more to help poverty by giving all women pensioners, of whatever age, an increase of, say, £10, than to concentrate on the age cohort targets. It is arguable.

I have some serious information for the noble Lord. I respect the fact that the diagnosis is connected with age and with gender, and I accept the fact that because women live longer than men they are more likely to be single. I do not disagree at all with that diagnosis; the noble Lord, Lord Goodhart, and his honourable friend, Mr Webb, are correct. However, whenever one goes for a broad-brush approach such as a cohort—as we have found, for example, in urban renewal projects and the like—if one seeks to concentrate money on poor areas to overcome the problem of individuals claiming it, the difficulty arises that more than half of all people live outside poor areas. Exactly the same is true of the noble Lord's amendment and age additions.

Perhaps I may give him some figures on which he might care to reflect. The gap between age cohorts is far smaller than the income disparities within each age cohort. Let me give the facts. Let us take, for example, a single pensioner. The quintile—the bottom fifth of income—for single pensioners under the age of 75 is £70; for those over 80, it is £65. That is the gap for single pensioners. For couples the figures are similar: £133 for under 75s; £113 for those over 80. That is medium, quintile income; the net income before housing costs of pensioner units. So, by age, a gap between £133 and £113 in the bottom quintile for couples; and a gap between £70 and £65 for the under 75s and over 80s for single pensioners. That is the only difference one would pick up through age cohorts.

But when one looks within each age cohort, one sees that for couples under 75—the ones that are getting £133 —the top fifth would be getting £457. Extend that to the over 80s: for the bottom quintile couples it is £113, the figure I have given, but, for the top fifth, £348 is the median income. It is the same for singles. As I said, the bottom fifth of under 75s would have a median income of £70; but the top fifth would have £224. As to the over 80s, the bottom fifth would get £65; the top fifth £195. In other words, the inequalities within each age cohort approximate to a ratio of three to one, but the gap in median incomes between each age cohort is 20 per cent, 40 per cent or 60 per cent, according to how one calculates the figures.

The policy of the noble Lord will not work. All it does is to pay some money to older pensioners who need it; it gives a lot of money to older pensioners who, given the figures, do not need it; and it ignores the poverty in younger pensioners, who need it but who will get nothing at all. There is more poverty within each age group than there is between age groups; therefore, as a result, any measure designed to tackle the poverty of pensioners by attaching more money to age will not be enough to help lift the poorest out of poverty; it will give a lot of money to those who do not need it; and it will neglect the poverty among poor pensioners, who will still need to claim MIG. The statistics do not sustain the noble Lord's argument.

I shall be very happy to send him a copy of the statistics—I am sure that the noble Lord and his honourable friends will want to look at them—hut, given my explanation, I am afraid that his amendment will not work.

Perhaps I may give another example. Only 40 per cent of those over 80 are entitled to claim MIG; 60 per cent are not. Under the noble Lord's proposal, he would give them all a hefty lift. In other words, the greater inequality is within each age group rather than between age groups. I would suggest that the noble Lord's basic assumption is, therefore, invalid.

It would still be the case that the majority of those over 75 and over 80 would be above the poverty line as measured by access to MIG. Equally, even given these proposals, four-fifths of over 75s and over 80s who were previously on MIG, would still need to remain on it because the noble Lord's allowance would not be sufficient to float them off. I suggest that that is not the right way to help.

As I said, it could equally be argued that the money should be added for women. One would then have exactly the same problem; there would be greater discrepancies within genders than between genders age for age, quintile for quintile.

I accept that this is a generational problem; I accept that 75 and 80 year-olds will always be relatively poorer than 65 year-olds. But this will not be so much because of disparities in income but because they are more likely to be widows and, as the noble Lord rightly described, given their greater frailty, they are more likely to have higher expenditure. That gap is closing and will continue to close given our proposals for the state second pension.

Thus, my first criticism of the noble Lord's proposals is that they will not address poverty in the way he thinks that they will. The bulk of poor people will remain unhelped by his proposals—for example, those poor people who are aged under 75—and equally, in his method, he will be giving still more money to those who do not need it as opposed to those who do and, as a result, the poorest will still need a top-up.

My second criticism of his proposals is that he has identified what I believe to be a temporary problem which will be overcome by the state second pension and our proposals for that and for stakeholder pensions. However, to my dismay, he is proposing to fund those schemes—at least in the Steve Webb paper—by abolishing the state second pension and SERPS. That means of solving a temporary problem—and inadequately—removes the possibility of a permanent and proper solution. I have the paper here and I shall happily quote it to the noble Lord.

I never said anything about the abolition of the state second pension; it is not part of our proposal.

On the contrary, I have Mr Webb's proposals here and that is how he proposes to fund it. I am very happy to give the noble Lord a copy of his honourable friend's document on which his amendment was based, but let him be in no doubt that that is how it is proposed to be funded. Therefore, to solve a temporary problem, the noble Lord is proposing to remove the possibility of a permanent solution. Indeed, to solve the problem of pensioner poverty at ages 75 and 80, he will add to it at 65. Under these proposals, far more pensioners (both younger and older) will come on to the MIG and then, of course, will have to be lifted off it again. That is not to mention that the natural consequence will be that if you abolish SERPS and the state second pension, you will have to remove contracted-out rebates, which is the equivalent of SERPS for private pensions, which will have a devastating effect on private pension provision. Stakeholder pensions will flop, additional private pensions would stop and many occupational pensions would be scaled back. I just wonder whether the noble Lord and his honourable friend Mr Webb have considered the read-across and what it would mean to occupational pensions, many of which are funded, as he will know, by the contracted-out rebates which bear the read-across from SERPS, which would be abolished under his proposals to fund schemes which would not address poverty as he believes they would.

Although I accept the noble Lord's diagnosis of who the poor are, I would suggest that the MIG approach, which identifies poverty wherever it occurs—at 65, at 75, at 80, among women, among men, in London, in Lancaster—is a more decent way of responding to it than are any of the proxy poverty solutions, such as age-related rebates which, as I say, will not help the poorest but will give a lot of money to those who do not need it because income discrepancies are wider within each age band than between age bands. As a result, I hope that, on reflection, he will not wish to pursue this. What my noble friends have made clear tonight—and they are right—is that MIG is the right and decent way to identify poverty wherever it occurs, but we have an obligation to ensure it is claimed easily, transparently and simply so that every pensioner who is entitled to it receives it. In addition, we have a responsibility to those just above the MIG lines, whether through savings or modest earnings or income. That situation will be taken on board in our future proposals for pensioner credit. In that way, we will target poverty where it is, without stigma, without difficulty and without damage while not subverting the possibility of lifting future generations out of poverty, which is what our state second pension and our stakeholder pensions will do.

In the light of that additional information, I hope that the noble Lord will feel able not to pursue his amendments.

The Minister has always been extremely eloquent on this matter. I welcome the support which the noble Baroness, Lady Greengross, gave to this amendment. I am disappointed, but not altogether surprised, at the lack of support from other Benches. I entirely understand the position that the noble Baroness, Lady Castle, has taken. That is entirely consistent with the viewpoint which she has expressed throughout. So far as the position of my party is concerned, if the Government are unwilling to give any assistance on this particular point, it is very likely that we would—

I want to respect the courtesies of the House, but does the noble Lord accept anything that I have said tonight about the problems inherent in his amendment which show that his amendment will not do what he thinks it might do, which is tackle pensioner poverty? Does he accept that?

I shall take this in order. The position that has been taken by the Minister is of course entirely consistent with the line that the Government have been running.

I did not say that I supported the amendment. I said that it had a number of attractive elements and that some of those are already part of the Government's policy, but I do have concerns about it.

What I meant to say in reference to the noble Baroness, Lady Greengross, was that support meant support in principle rather than for the ideas behind these amendments, in particular for an age-related addition rather than for the specific details of this amendment. I understand, as I said, the position of the noble Baroness, Lady Castle, and have, as we may find when we reach later stages, some sympathy for it.

The position of the Government is that everything must be concentrated as much as possible on the minimum income guarantee as an attack on poverty among pensioners. I quite accept that—I think it is a matter of common sense—but the differences within the age cohorts is indeed wider than the differences between them, that is perfectly true. If the argument put forward by the Minister is taken to its logical extreme, you begin saying that you must rule out free television licences for all pensioners at the age of 75 and restrict them to those in receipt of the minimum income guarantee; you also have to say that you rule out the winter fuel allowance for all pensioners and restrict it to those in receipt of the minimum income guarantee; and indeed you go beyond that because ultimately that particular argument leads you to say that there will be no state pension at all and that all pensioner benefits will be provided through income support (under the minimum income guarantee) and will be limited to those pensioners who satisfy its income requirements. I believe that that would not be acceptable in this House.

Perhaps I may make it clear that the Government have no such intention. The Prime Minister has repeatedly made it clear that the basic state pension is a building block within the overall prosperity of pensioners and will remain so.

Of course I accept that. I was merely pointing out that this is the logical conclusion to which that particular argument leads. The question surely is: what is the right balance between means-tested benefit for pensioners through the minimum income guarantee and non-means-tested benefits? The Government have put forward what I certainly regard as being an interesting and in many ways excellent proposal for the state second pension, but surely the aim must be, among others, to provide people who have full contribution records with a pension that will enable them to get to the end of their lives without having to rely at some point on means-tested benefits. Means-tested benefits may be necessary and will be necessary no doubt for those without full contribution records, but the state second pension is designed—and, I think, designed quite effectively, at the beginning—to take people outside the need for MIGs. The problem is that as people get towards the end of their lives and find it more difficult to claim means-tested benefits, they will have to fall back on them. When the Minister says that only 40 per cent of those over 80 are in receipt of the minimum income guarantee, my reaction is that 40 per cent is an enormous figure. It is far larger than the proportion of people in the population as a whole who are reliant on income-related benefits. It seems to me that the case—

I also gave the noble Lord the figure that, for a single person over 80, the difference between MIG and the retirement pension was nearly £20. Under the noble Lord's proposals, that single person would get only £7, so he would still need to be topped up between £7 and £20. Anyone who would currently qualify for most of MIG would still need to qualify even under the noble Lord's proposals.

The triggers I have in mind take into account the fact that people will be better off under the state second pension. That will mean that the difference should diminish. We need to ensure that pensions are set at a level which will make it unnecessary for people who have paid full contributions, including the contributions to the second pension, to rely on the minimum income guarantee. That is important. The Minister's argument, taken to its logical conclusion, means that all benefits for pensioners should be provided by the minimum income guarantee.

I shall take the amendment away and look at it again.

How will the plan be funded?

It will require only a relatively small addition. It is much less expensive than providing an earnings link for the whole of the pension.

That would make it cheap.

Of course it makes it cheap. We regard this as being targeted on those who are in particular need. It will help a much higher proportion of those who are in particular need.

As I said, I shall take the amendment away and look at it again. However, it is very likely that, either in this form or in another, we will come back to it at a later stage. I beg leave to withdraw the amendment.

moved Amendment No. 111:

Page 27, leave out lines 9 and 10.

The noble Baroness said: The intention of this amendment is to extend the categories of people who will be credited with benefits in the state second tier pension despite having insufficient earnings. The proposed amendment removes the reference to earnings over the lower earnings limit. It therefore gives deemed earnings to anyone with earnings under the lower earnings threshold. As I understand it, this would benefit principally the unemployed.

The real purpose of the second tier state pension is as much to fill the gap left by the erosion of the basic state pension as to provide a replacement for SERPS. In judging the adequacy of the Bills provision in respect of granting credits for non-earners, the yardstick therefore should be the groups who would now be credited for the basis state pension. People signing on as unemployed are credited with full NT contributions each week.

The Government may feel that to give credits to the unemployed would be a disincentive to work. However, we are not talking about immediate benefits but deferred benefits in retirement. For most people who are unemployed the idea of making pensions contributions is quite out of the question. I therefore hope that the Government will see that there is justification for this small amendment and respond positively to it. I beg to move.

I have pointed out on previous occasions that the Bill is very much a package, with virtually no connection between the child support part and the pensions part. I hope therefore that the Committee will allow me just a moment or two to elaborate on the point made by the noble Baroness in explaining her amendment.

As she rightly said, it relates to the state second pension and she wishes to extend the provision for deemed contributions to a wider group than those covered by the Bill as it stands. My understanding throughout has been that the Government's strategy is effectively to have three levels of pension: a second state pension for those earning less than, in broad terms, £9,500 a year; a stakeholder pension for those earning between £9,500 and £21,600; and either personal pensions or company pensions for those above; in other words, what one might reasonably describe as the middle and upper earnings levels. I was therefore surprised by the speech of the Secretary of State, Mr Darling, to the National Association of Pension Funds. It may be helpful to quote a small passage in full and then, on the basis of what I have just said, ask the noble Baroness to clarify the position.

Mr Darling said:

"And from 2002, 18 million people will gain from the new State Second Pension … That's why we've introduced Stakeholder Pensions—to give more choice to 5 million people. We'll continue to work with you to make pension provision better".

Two points puzzle me. The first is the statement that from 2002,

"18 million people will gain from the new State Second Pension".

My understanding is that, even with the amendment we are now considering, no one will gain in the sense of receiving benefit from the state second pension in 2002, not least because we do not know when the state second pension will come in. The Government have said that it will come in when the stakeholder pension is established.

In stage 2.

In stage 2, yes. When will we know that the stakeholder pension has been established as far as concerns stage 2 of the second state pension and how are we to tell that that is so?

Another point puzzles me in Mr Darling's speech. He said:

"But we want moderate and higher earners to get into funded pensions. That's why we've introduced Stakeholder Pensions—to give more choice to 5 million people".

Apparently, Mr Darling is now saying that the stakeholder pension is for moderate and higher earners to get funded pensions. That is not what he intends.

I do not know whether the speech was accurately reported. The noble Lord's original description was correct: the state second pension is for those earning—not those not earning—up to £9,500 and stakeholder pensions from £9,500 to £21,000. The issue of the debate between us may be merely at what point is moderate to high. But there has been no change in any of that.

But as I understand it, this was the information in the press release issued by the department. Perhaps the Minister will tell the Secretary of State that her understanding, if not his, is that stakeholder pensions are not for middle and higher earners.

But they are for moderate earners. The conjunction may be where someone is regarded as a higher earner or simply above the average or median earnings line. Let me give the reassurance that nothing has changed. The noble Lord's original description was exactly right. All we may be discussing is at what point we classify someone as being a higher earner as opposed to being a moderate earner.

That reply is helpful because the matter will arise in subsequent debates.

There is another problem directly related to a point made by the noble Baroness in moving the amendment. One of the main arguments put forward by the Minister in response to the noble Baroness, Lady Castle, is that there is a huge advantage in the state second pension because people are deemed to have made contributions who were not able to do so under SERPS. The amendment seeks to extend that even further. But it still raises the question of whether, when the second state pension finally comes to fruition, we shall find that it is above the minimum income guarantee.

The state second pension will be a flat-rate pension. As I understand it, it will not be uprated in line with earnings. So the Government's apparent munificence in saying that they will give more for carers, the unemployed or whomsoever may turn out not to produce any real benefit at all at the end of the day. It could be purely a paper operation because of the interrelationship between the non-earnings related benefit and the earnings related minimum income guarantee. Some important issues arise in the context of the noble Baroness's amendment which we need to get clear in our minds. It may be that in reality her amendment costs the Government nothing, but in reality it is also the case that the people she wishes to help get nothing at the end of the day.

Perhaps I may make one other broad point. We do not know what the liability will be either of the noble Baroness's amendment or of what is proposed. I was going to say that I have been "lumbered"—I think that would be the right expression—with the Government Resources and Accounts Bill as well. The departments really ought to start working on estimates of the liabilities for the government as regards the state second pension. If we are to have a government balance sheet, it is not enough to have a marvellous document setting out the assets; we ought probably to have an equally thick document stating the liabilities which both the noble Baroness who moved the amendment and the Minister seem to be piling up for us in the future.

Amendment No. 111 seeks to exclude the requirement for low earners to have earnings at or above the annual lower earnings limit to benefit from the low earner's boost to £9,500.

But the state second pension is a contributory benefit based on earnings factors. To have an earnings factor a person must have had earnings on which national insurance contributions have been paid or treated as paid. Therefore, the effect of the amendment would be to give the low earner's boost to anyone who had as little as one week's earnings in a year over the weekly lower earnings limit (£67 from 6th April).

The Government want to help the poorest pensioners. That is why we have introduced the minimum income guarantee and the rest of the package. The basic state retirement pension is a secure foundation but it was never meant to support the lifestyle that most people want today. Most people have a second pension—60 per cent of pensioners have income from an occupational pension; others have income from savings.

The Government believe that the best way to have secure retirement is to use the basic retirement pension as a solid foundation on which to build a second pension. That is what this Government's policies will deliver for millions of pensioners.

Perhaps I may briefly explain how our proposals for the state second pension will benefit low earners. It will reform SERPS so that it refocuses help on those who need it most and who have the least opportunity to build up good second pensions themselves: 4.5 million low earners will get more than double what they would have received under SERPS; 2 million carers and a similar number of long-term disabled people will build up a second tier pension for the first time. I was pleased that the noble Lord, Lord Goodhart, felt able to welcome our proposals for the state second pension.

I should like to remind the Committee that, without our pension reforms, by 2050 around one in three pensioners would have to rely on the minimum income guarantee. Our reforms will reduce that proportion from one in three to one in five. We shall be lifting over 2 million pensioners off MIG, and people will remain above it for a considerable time.

Let us take, for example, someone who earned as little as £3,500 throughout their working life (£60 to £70 a week). That person will retire on a combined pension of £85 a week in today's earnings terms and will stay clear of the minimum income guarantee for nine years. Couples do even better. Their pension will keep them above MIG for 21 years. Most people over 65 are in couples; they are not single people. The reference will be to single people when the earnings period relates to the late 1970s and the 1980s.

Members of the Committee, and certainly my noble friend, will recognise that it is a fundamental principle that someone in an earnings related pension scheme cannot build up a pension which is more than his or her average weekly earnings. The amendment would give the low earner's boost to anyone who had as little as one week's earnings in a year over the weekly lower earnings limit (currently £67).

There would be every incentive for the economically inactive to find part-time work for a single week just to qualify for the state second pension. We should not forget that the retirement pension is a contributory benefit and that it is not possible to get a qualifying year for basic pension on the basis of one week's contributions alone. But this amendment would give a year's entitlement to the state second pension for precisely that—only one week's contributions. So someone who had only ever earned the equivalent of £67 for one week in a year (an average of £1.29 a week) would receive a state second pension of £54 a week. As well as being costly, that cannot be right in principle in an earnings related second pension scheme. Or, more typically, someone who earned £40 a week—for example, 10 hours at £4 an hour working in a café, and who worked a fortnight during the summer and received £80 a week—would under my noble friend's amendment receive a state pension of £54, higher than her average earnings of just over £40 a week. It cannot be right to have a pension scheme which produces a higher pension than a person would have earned in earnings alone, when it is meant to be an earnings-related pension.

Perversely, the amendment would not include those who had earnings of less than £67 for every week of the year. So someone earning £50 a week, or £3,000 a year, would not benefit, but someone earning only £70 in one week and nothing for the rest of year would.

If the aim of the amendment is to target the poorest employees, regardless of the contributory principle, it is likely to be wide of the mark. Many of the lowest earners are to be found in households with another higher earner, or where there are other sources of income.

Indeed, many of the poorest pensioners would not benefit from the increase to their state pension income at all, particularly where they do not have entitlement to a full basic pension. That is because it is taken fully into account in assessing entitlement to income related benefits, so their overall income would not increase.

The basis for calculating the state second pension will be the same as that for SERPS; that is, the earnings factor—it is an earnings related pension. The amounts are all based on the earnings on which someone has paid national insurance contributions in the course of a year; they are calculated on an annual basis.

So to calculate entitlement to additional pension under state second pension on a weekly basis, we should need to revise the entire way we calculate additional pension. It would mean assessing pension entitlement on a weekly basis which would hugely complicate the assessment of entitlements and place an impossible burden both on employees and on our operational systems. For employers, the collection of information would be mind-boggling in its complexity. And it would require the Inland Revenue to record that information on every person's account. That is 52 times the amount of work involved in the current annual system.

We believe that our proposals for the state second pension strike the right balance in providing extra help for those who need it most and the prudent use of resources. It has been widely welcomed. It is the building block on top of the state retirement pension which in future will take so many of our older pensioners out of poverty. On the basis of my explanations, I hope that my noble friend will withdraw her amendment.

I have listened with care to what the Minister has said. However, if I understand it correctly, she has related the amendment entirely to stage 1 of the second state pension. She has not related it at all to stage 2, when it ceases to become earnings related, and much of the argument that she has advanced becomes irrelevant. I may have failed to understand the point, but that seems to be the case.

The noble Baroness referred to the second state pension as a contributory benefit. We have often discussed what that expression means. The noble Baroness must, surely, distinguish between a contributory benefit and a deemed contributory benefit. I am not sure how to word it. The Government have already gone down that road. However, it is still far from clear whether, even if the Government deem the contribution to be made, it will cost them any money because at the end of the day it is merely offset by the minimum income guarantee; or whether carers, who are to receive the marvellous help (as everybody describes it) from SERPS and so on, will benefit.

The noble Baroness put forward a number of figures to show the proportion of people who would fall outside the minimum income guarantee. I do not have the exact figures before me. I believe that reference was made to one in five. At all events, the Minister argued that there would be far fewer people subject to the minimum income guarantee. As to stage 2 of the second state pension, that depends on what assumptions are made about prices and earnings respectively. I am not clear what assumptions the Minister makes, and perhaps she can tell the Committee.

I believe that that would entail another half-hour speech, which I am not sure the Committee would welcome. There may be some misunderstanding about what is entailed by stage 2. Under stage 1 anyone between the lower earnings limit and £9,500 will receive a state second pension as though he was earning £9,500. That is the low earnings boost. Although it is tapered, it continues for those between £9,500 and about £21,000. Therefore, there is still an incentive to remain within the scheme. We expect that under stage 2 there will be a flat rate beyond the £9,500 level which will not be earnings-related. Therefore, there will be greater attraction to move into a stakeholder pension or alternative vehicles for pension provision. It will not affect those who are under the £9,500 level. The basic thrust of the proposal, which is to use the state second pension at both stages 1 and 2 to address pensioner poverty for those with earnings of less than £9,500, remains unchanged. The change is related to what happens to those over £9,500. I hope that the noble Lord is content with that explanation.

As to the noble Lord's second point about the deemed contributory benefit, frankly, when we began to construct the contours of a pension arrangement of this kind the first option was to address only those in waged work. I recognise the work of my noble friend Lady Pitkeathley and that of the Carers National Association. The Government were persuaded that they should pay ICA precisely because they recognised that it was work, albeit unwaged. That is recognised by a substitute income. We believe that it is right, decent and proper to regard the receipt of ICA as a deemed payment, in the same way that disabled people with a fairly close connection to the recent world of work should not be disqualified because they subsequently go on to IB.

My noble friend's amendment proposes in effect that everybody should get the state second pension, because a person gets it if he is also unemployed. In a rather subtle way my noble friend seeks to ensure that everybody has a basic state pension which is at least as generous as the basic state pension and the state second pension put together. At that point the connection between earnings, the world of work and the earnings-related principle goes out of the window. Perhaps that is what my noble friend seeks to establish, but that is not a principle which features in the Government's policy. We believe that the state second pension is for those who have been in the labour market but whose earnings are so low that, if they had the older style SERPS pension, their pension would still keep them in poverty for far too long. As a result of our changes, under SERPS someone who earned £6,500 would have received about £12 or £15, whereas under our proposals he will receive £54. I hope that as a result my noble friend will not pursue her amendment; otherwise, she will destroy, possibly quite deliberately, the whole purpose and thrust of the state second pension which has been so widely welcomed outside.

The noble Baroness still has not answered the point related to stage 2 of the state second pension. At that point it becomes flat rate. We do not want to perpetuate the argument. Perhaps the noble Baroness will be kind enough to drop me a line about the assumptions on which she bases her statement that that will be of benefit to carers because at the end of the day they will get more than the minimum income guarantee.

Basically, for every year of caring a carer will receive the equivalent of £1 of basic state second pension. I do not understand the noble Lord's bafflement. Up to £9,500 the position remains unchanged between stages 1 and 2. The flat rate element after stage 2 applies to those who would otherwise have received a state second pension if they had earnings of between £9,500 and £21,000 under stage 1, which is earnings- related. We seek to make it a flat rate for that group so that they are encouraged into stakeholder and funded schemes.

I thank my noble friend for the very extensive explanation that she gives of government policy. I am not entirely persuaded by my noble friend's response. The noble Lord, Lord Higgins, has referred to some of the points that I intended to raise. When moving the amendment I said I believed that the real purpose of the state second pension was as much to fill the gap left by the erosion of the basic state pension as to provide a replacement for SERPS. That remains my belief. My noble friend refers to the basic pension as the basic building block. That building block will erode, and government policy is based on the assumption that that erosion will take place.

To continue the metaphor, it is a basic building block but the superstructure will become larger and larger.

But the superstructure is intended eventually not to be earnings-related but to be a flat rate. Having read fairly extensively the government papers on this matter, the idea of having a flat rate appears to be that that will persuade most people to look to the private market; in other words, the present 60:40 relationship between public and private provision will be reversed. In 10, 15 or 20 years the majority of the population will not look to public provision but to occupational or private pensions or stakeholder pensions; in other words, they will have recourse to the market. Therefore, I suggest that to credit people who are unemployed in the way proposed in the amendment is quite reasonable. There will not be a basic building block worth mentioning. People will already be credited in relation to the basic building block as it exists now. Since the second state pension and the basic building block are likely to develop eventually into low-grade public provision, I propose that the crediting should be against future public provision as far as concerns the unemployed. I shall not press the amendment this evening, but I am not terribly happy with the Government's response. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 112:

Page 27, line 23, leave out from ("year") to end of line 27.

The noble Baroness said: Amendment No. 112 is extremely simple. I would have thought that the point raised by the amendment would attract the sympathy of the whole Committee, perhaps even of the Minister. The amendment seeks to simplify the provisions for crediting-in. We all welcome the concept of crediting-in. We contemplated that enlargement of our policy in 1974, but we had taken such a giant leap forward in the provision of state insurance, SERPS and all the rest of it that we knew we could not do it all in one go.

If one has a provision for crediting-in carers it is only sensible to ensure that it is consistent throughout the whole area of pensions that we have been studying. Therefore, the purpose of the amendment is to provide the same criteria for crediting-in as exist in the basic state pension.

I should have thought that the Government would have been only too eager to do that; otherwise there is a grave disadvantage as between the treatment of carers in the Government's new proposals and those under the basic state pension. I refer, of course, to the definition of a "carer" as someone who is in charge of a child under six. That is whittling it down somewhat, is it not? Under the provisions of the previous Labour government, carers were defined as those looking after a child under 16.

Are the Government telling us that we shall be less humane to carers than we have been? When we discuss the great advantages of the government scheme over SERPS, for instance, we tend to forget that the Government are measuring themselves not against the original SERPS but the Thatcherite reduction of it. Under the original SERPS, the 20 best earning years was one of the greatest lifelines which could be thrown to carers and the disabled. We shall deal with the disabled a little more in the next group.

I urge the Committee to share the view of my noble friend Lady Turner and myself, and I am sure of other noble friends, that the crediting-in of carers should not be limited to those in charge of a child under six years, with the assumption that after that no real caring is needed for an older child who is probably going through some of the stormiest developments in his whole life.

It is a simple principle. I hope that the Minister will accept it. I beg to move.

I remind the Committee that if this amendment is agreed to, I cannot call Amendments Nos. 113 or 114.

As the noble Baroness said, this is a relatively simple amendment compared with many before us. There is always argument as to whether it is best for mothers to stay at home or go out to work. The government provision seems to say that carers should go out to work after the child is six; they will no longer receive their deemed benefit contributions if they do not do so. On the other hand, it is probably true that if they go out to work at that stage, it may well be part-time rather than full-time work. Carers are more likely to work full time when their children are over the age of 11. It seems to me, therefore, that the noble Baroness's amendment has something to be said for it.

Will the noble Lord accept that in part-time work someone needs to work only 18 hours at the minimum wage in order to qualify under the lower earnings limit? The assumption my noble friend Lady Castle made, echoed by the noble Lord, is that the carer either stays at home or goes into full-time work. But he or she qualifies by working 18 hours at the minimum wage and for considerably fewer hours if he or she has a higher rate of pay.

Clearly for carers with children between the lower and higher age, the work is more likely to be part time than full time. However, I am happy to listen to the Minister's reply to the amendment.

I speak to Amendment No. 114, grouped with the amendment. It differs from the noble Lord's amendment in only one respect. We propose that the crediting should extend to a carer who has care of a child under the age of 12, whereas in the noble Lord's amendment the age referred to is 11 years.

I have a great deal of sympathy with the view of the noble Baroness, Lady Castle. Any mother who decides to stay at home to look after her child makes a sacrifice in terms of the potential income that she forgoes. It is not right that on top of that she should also be asked to forgo her right to a pension. The idea of crediting as regards people with those responsibilities seems to us right. The question is where to draw the line.

The Government's view, here and elsewhere, seems to be that women should be given an incentive to go back to work as soon as possible. It seems perfectly legitimate for a woman with a child of six, seven or eight to decide to stay at home and concentrate on looking after her child or children. A child at primary school cannot be left to look after himself at home. In most cases, the child will have to be taken to school and picked up at three or half-past three in the afternoon. He will have to be looked after during the holidays. There are childcare facilities, but I do not think that mothers of primary school children should be required to make use of them or forgo their rights to the state second pension.

Once the youngest child reaches secondary school age, there seems a case for saying that a mother can take at least a part-time job without regarding herself as not handling her children properly. But up to that age it seems to me wholly legitimate for a mother to be able to say, "I wish to be a full-time mother. I do not wish to take even a part-time job, and my pension rights should not suffer because of it".

We have put the age at under 12 rather than under 11 because the child's first few weeks or months at secondary school may be a period of particular stress and difficulty for him or her, and it is appropriate that the mother, without loss of pension, should be able to stay at home as a full-time mother for that period. Nothing I have said is intended to indicate that mothers who prefer to go out to work are acting wrongly. But up to the age of 12 it should be for the mother to make the decision and she should not be put under any pressure by the threat of loss of pension rights.

Under our proposals, a person who earns less that the annual lower earnings limit (LEL) in a given year but who is looking after a child under the age of six and receiving child benefit will accrue entitlement to the state second pension in respect of that year. In effect, we are targeting extra help on people looking after children up to early primary school age. These amendments would extend that help to people looking after a child up to but less than age 11, 12 or 16 respectively.

Under SERPS, every year that someone was out of work and looking after a child meant they got a smaller pension when they retired. That is one of the reasons why women, who are most often affected, get less from SERPS on average than men. Our proposals for the state second pension will help to address that problem. Almost 1.5 million women will benefit under these proposals. Five years out of work looking after a young child will be worth about £5 a week in state second pension when that woman comes to retire. Under SERPS, she would have got nothing for those years.

With the state second pension we are seeking to give help to those who are least able to make their own provision for a second tier pension; that is, people who either cannot work or who are in work but on low wages. The first group includes carers and often mothers of children below school age, who have the least opportunity to work and to earn above the lower earnings limit. That is why they are a key target group for our help.

As Members of the Committee will know, many mothers of school-age children—that is, children from the age of five—choose to combine their caring duties with part-time work. Many of those parents will benefit from the S2P low earner's boost, even though they earn as little as £3,500 a year. As a result of the minimum wage, someone will be required to work just over 18 hours a week in order to gain access to the state second pension boost. Those who earn above the minimum wage will, of course, gain access by working even fewer hours.

Some mothers may choose to stay at home, even when their children are older. Some may have no choice because of family or other circumstances. Our intention is certainly not to criticise or punish them for that, and we are not doing so. Indeed, we are doing a great deal to help those mothers who choose to stay at home. That help includes big increases in child benefit—£15 for the first child; £10 for the second—and income-related benefits for children under the age of 11. As I say, we shall have virtually doubled their allowances between April 1997 and October this year.

However, it is the case that three-quarters of all married women are in work and approximately two-thirds of all couple mothers are in work. My noble friend Lady Castle and other noble Lords are correct in saying that the employment rate of mothers who have a child under the age of six is lower than that of those who have children over the age of six. The employment rate of couple mothers who are in work, both part and full-time, with a youngest child below the age of six is about 54 per cent, whereas it is approximately 70 per cent when the child is aged six or older.

Therefore, leaving aside the amendment moved by my noble friend Lady Castle, who would not qualify under the government scheme? So far as I can see, women with a youngest child over the age of six may not be in the labour market for one of three reasons. First, they may be women who would like to work but who have low employment prospects or other difficulties with finding employment; for example, they may have low skills. Certainly, the evidence from our New Deal is that that is the biggest obstacle to women—particularly lone parents—who want to enter the work market. We have developed the New Deal and its training facilities precisely to help people who wish to work but who currently cannot to join the labour market.

The second group of mothers with children over the age of six who may choose or wish to stay at home when their children are older, unlike the vast majority of couple mothers, are those who have a sick or disabled child. Of course, they would be entitled to the state second pension if they claimed ICA or HRP.

The third group of mothers who would not normally be in the labour market if their child is over six may be those from an affluent family who choose for the mother to remain at home until the children are older. Of course, where that degree of resource exists in the family, she could decide to maintain her second pension by means of a stakeholder pension scheme. In the case of a stakeholder pension, it will be necessary to save approximately £9 a week—that is all—in today's earning terms to provide the equivalent of the 10 years' cover, until the child is aged 16, that would be granted under S2P.

Therefore, we are focusing the state second pension on those who care for children under school age in a way which matches the choices that most mothers make. Those who choose not to do what most mothers do—that is, they stay at home because they can afford to—can receive coverage through a stakeholder pension. If they stay at home because they need to due to disability or dependency of a child, they are entitled to receive credits for the state second pension through other routes.

Most mothers take career breaks or periods away from work when their children are very young. Most mothers—70 per cent—return to work once their child goes to school. Such a decision is always a matter of individual choice. Entitlement to the state second pension would simply be one more factor for them to consider. As a result, we believe that we have the balance about right.

As I said, there is the basic pension, which covers all contingencies; the state second pension, which is work-related; and there are alternatives for those whose children are older than six where either the child is needy by virtue of disability or where the income is such that there is no financial pressure. If mothers want to return to work but are impeded by virtue of their relatively poor employment prospects, we can help them through the New Deal. We believe that that is working with the grain of people's choices while respecting the situation for the taxpayer. In the light of that, I hope that Members of the Committee will not pursue their amendments.

Perhaps I may ask for a point of clarification. I more than likely misheard the Minister. Did she say that two-thirds of married women are working?

I actually said that three-quarters of married women are working. Overall, approximately two-thirds of mothers who are married are working. Of that amount, 54 per cent of those with a child under the age of six are working and approximately 70 per cent of mothers in a couple with a child over the age of six are working.

I do not know what the noble Lord, Lord Goodhart, intends to do with his amendment. However, when he made the point that he had worded the amendment so that it would cover children up to secondary school age, I would remind him that we are legislating for Scotland as well, where children go to secondary school a year later. Therefore, what he said did not apply to Scotland.

As always, the Minister's flow of statistics requires careful analysis. I do not know about the rest of the Committee but I find that when she speaks I am almost carried away on a flood tide of protestations which are so convincing that I am immediately suspicious of them. Therefore, I am sure that she will understand and forgive me—

I cannot resist. If my noble friend says that she is suspicious when she is almost persuaded, what happens when she is not?

"Almost persuaded"? I am sorry; I must be feeling rather stupid at this time of the day. I intend my remarks, as always, as a great compliment to the Minister. However, it means that I would like a little time to think through what she has said. Therefore, I withdraw my amendment for the time being.

Amendment, by leave, withdrawn.

moved Amendment No. 117:

Page 27, line 29, leave out ("long-term").

The noble Baroness said: In moving Amendment No. 117, which stands in my name and that of my noble friend Lady Castle, I wish to speak also to Amendments Nos. 118, 120 and 121, with which it is grouped.

Again, these amendments deal with the whole issue of credits. The Government propose that state second pension rights should be credited for a year, throughout which a person receives long-term incapacity benefit. That would exclude the first year of a spell of incapacity during which short-term incapacity benefit is paid. It would also exclude anyone who receives incapacity benefit for only part of the year. The first of the two amendments would result in the whole year of incapacity, including the first year, being taken into account. The second would mean that a person who received long-term incapacity benefit for at least 26 weeks in any year and did not have earnings above the lower earnings limit for the year as a whole would qualify for credits. It would also apply to a person who receives short- term incapacity benefit for half the year and long-term incapacity benefit for the other half.

Amendments Nos. 120 and 121 relate to subsection (3) on page 27 of the Bill. That subsection appears to introduce the labour market attachment test. People who propose to obtain state second pension credits in respect of a period of incapacity benefit will have had to pay contributions as an employee for at least one-tenth of their working life. That seems a little unnecessary and unfairly restrictive, and the amendment would remove that test. Amendment No. 121 would enable periods of self-employment to count towards the labour market attachment test. So far as concerns that particular amendment, I must say that I am not quite certain whether it works in the way that I intended. However, as I said earlier, the intention was that periods of self-employment could count towards the labour market attachment test, which is contained in subsection (3) on page 27 of the Bill. I beg to move.

Amendments Nos. 117, 118, 120 and 121 all relate to disabled people and entitlement to State second pension. Amendment No. 117 would mean that people entitled to short-term incapacity benefit were brought into State second pension, whereas under our proposals access is limited people entitled to long-term incapacity benefit, as my noble friend clearly explained.

Amendment No. 118 would mean that people would accrue a year's worth of S2P where they had been entitled to long-term incapacity benefit for as little as half a year, whereas under our proposals people must have been entitled for a whole year.

Amendment No. 120 would remove the 10 per cent work test qualifying condition whereby disabled people with broken work records must have worked and paid class 1 contributions for at least one-tenth of their working lives since 1978 to qualify for S2P.

Finally, Amendment No. 121 is again about the 10 per cent work test and would mean that years of working and paying class 2 contributions would count towards the 10 per cent requirement, thereby bringing certain self-employed people into additional pension provision.

Disabled people with broken work records are one of our most disadvantaged groups in the labour market. Under SERPS, every single year out of the labour market meant a smaller pension on retirement. Many disabled people who had worked for significant periods of their lives ended up with little or no additional pension because of their periodic absence from the labour market. I do not think that that was fair.

Under our proposals, long-term disabled people who are out of the labour market for periods of time will be protected. If they are on low wages when working, they will receive the extra help that we are directing at the low paid as well. I will give an example. Take a disabled man in employment throughout his working life, earning £9,500, apart from 10 years when he was unable to work: if he had retired in 2025 under SERPS, he would have received a total state pension of £64 a week in today's earning terms. Under S2P, he will receive £81, which is £17 a week more. That represents a real improvement for disabled people that is long overdue.

I turn to specific amendments. Clearly, disabled people who are out of work for long periods lose out most heavily under SERPS. That is why we are seeking extra help for those with long-term incapacity benefit, as they have the least opportunity to build up decent second pensions. Short-term incapacity benefit, to which this amendment applies, as the name suggests, covers short spells of illness and incapacity which are less likely to be disruptive to pension build-up.

Of course, there are some people who experience short but frequent spells of incapacity. They may have a fluctuating illness and may have a mental health illness and are therefore in and out of work. The linking rules in incapacity benefit mean that people in this position will eventually move on to long-term incapacity benefit. The spells of entitlement to short-term incapacity benefit can be added up until they reach 52 weeks, at which time long term IB becomes payable. Thereafter, a full year out of work will qualify for S2P.

Amendment No. 117 will bring people whose short-term periods of incapacity did not add up, in aggregate, to long periods out of work into S2P. I do not think that is appropriate because two-thirds of all IB claims which terminate are short term or, to put it another way, only two-thirds of those people who are on short-term IB do not go on to long-term IB. In other words, it is a natural break and there is a lot of "churning" at that point.

Amendment No. 118 raises the question of the need for a whole year's entitlement to long-term incapacity as a gateway to S2P. The principle underlying S2P is to look at someone's position over a complete tax year. SERPS operates on the same principle. I do not think that there is a compelling case for altering the whole-year principle, particularly since long-term IB is normally paid for long periods covering several years. Long-term IB is not a benefit which people move on to and off and on to and off. They do on short-term IB, but not once on IB long term.

There will be a question mark against the equity of introducing part-year rules for disabled people but not for carers, an issue to which we will return probably on the next amendment.

The remaining amendments, Amendments Nos. 120 and 121, relate to the 10 per cent work test. I will set out the principle. S2P will continue to be a contributory benefit. It is not aimed at permanently disabled people who have no contact with the labour market. They are covered by the non- contributory parts of the benefits system, both before and after retirement age.

One of our key aims is to ensure that disabled people with broken work records can still build good second pensions, saving where they can afford to do so, and receiving extra state support where they cannot. This means maintaining a link between work and entitlement to additional pension. The test in question is designed to prove some work attachment. It is a fairly modest requirement; 10 per cent is equivalent to two years of working life at the outset of S2P, gradually increasing to a maximum of five years after 2024. We think that is about the right balance between encouraging work and saving, on the one hand, while at the same time protecting disabled people who cannot work for periods during their lives.

Amendment No. 120 would remove the test altogether, which I do not think would be right, for the reasons that I have explained.

Amendment No. 121 would enable periods of self-employment to count towards the 1[0 per cent work requirement. This brings in the wider question of pensions for the self-employed. We recognise that the nature of self-employment is changing. We recognise that there are real questions about which we have consulted as to how best to encourage the self-employed to save for their retirement. For example, there are questions about the provision and how compulsory it should be. The issue of whether they were brought into S2P was indeed part of our consultation exercise and we are still considering that. I think that there are arguments fairly finely balanced as 10 whether one should compel self-employed people—whose businesses they may regard as their pension—to be required instead to pay into a pension direct, with the problems that might produce for their cash flow. We do believe that as a result it would be premature to accept an amendment on the question of S2P and the self-employed at the moment. I am sure that we shall return to it in due course.

In conclusion, our proposals on the state second pension will do a great deal for disabled people with broken work records. Indeed, it brings them into additional pension provision for the first time. Of course we could go further, but I think that we have it about right. People will receive it if they are on long-term IB; they will receive it if they are in work—over £67 a week throughout the whole of the year; they will receive it if they have fluctuating conditions that have been covered by the linking rules. Given all that, the only year when someone would normally lose that benefit entitlement is the year one moves off short-term into long-term incapacity benefit. I think that we have it about right. I hope that, as a result, the Committee will not wish to pursue these amendments.

I thank the Minister for this very comprehensive explanation of the Government's policy. Of course, she has again referred to new SERPS rather than old SERPS, SERPS as it originally was. But I will let that go. The Minister knows that I supported old SERPS and was not very happy about what happened to it.

However, everybody would want to encourage disabled people to take up employment wherever they can. The problem is, as everybody knows, that it is not easy for many. It was because of that that it was felt necessary to look again at the provisions in the Bill in relation to disabled people. I am not at all certain that I entirely accept everything that my noble friend has said, but certainly she said a lot and very fast. will look at it in detail in Hansard. If I think that I ought to return on the issue of disablement and rights for disabled people, I will do so, but in the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No 119:

Page 27, line 39, at end insert—

("(e) the pensioner—

(i) did not have an earnings factor for the year equal to one greater than the qualifying earnings factor for the year; but

(ii) would have had such an earnings factor if he had earnings equal to the lower earnings limit in each week in which paragraph (b), (c) or (d) would have applied to him if the words "throughout the year" had been omitted.").

The noble Lord said: The amendment raises an issue on the same subject as the last group of amendments, but in a somewhat different form and it is concerned with a different problem.

Under the new Section 44A of the Social Security (Contributions and Benefits) Act 1992 which is inserted by Clause 30 of this Bill, that section does two things. First, it effectively treats anyone with earnings below the lower earnings threshold, which is £9,500, but at or above the level that qualifies for contributory benefits, as having earnings equal to the lower earnings threshold. Secondly, it treats some people as having been credited with earnings that they did not actually have. Clause 44A(2)(a) deals with the former issue. Subsection (2)(b), (c) and (d) deal with the second aim—that is, the crediting.

People can apply for crediting for the state second pension if the invalid care allowance or incapacity benefit is payable or if they have home responsibilities of certain kinds which preclude them working. But in each case, that condition must be satisfied throughout the whole of the year. That may well disqualify a pensioner in respect of the year of entry and exit; that is, the year during which invalid care allowance or other benefits were first payable and the year in which they cease to be payable.

It is possible that in the year of entry or exit, someone may qualify under paragraph (a) because he has had an actual earnings factor above the qualifying earnings factor; in other words, because his earnings have been sufficient to qualify him for a pension in that year. But he is less likely to qualify under paragraph (a) if he gives up the job and transfers to, let us say, invalid care allowance or home responsibilities early in the year or if he is lower paid and, therefore, takes a longer time to reach the qualifying earnings factor. For pension rights to depend on the time of year at which the status changes from earnings to credited earnings creates wholly random anomalies.

Secondly, for pension rights to be more difficult to obtain for the poor than for those with higher earnings is plainly unjust. The purpose of this amendment is to avoid the anomaly. It allows pensioners to claim an earnings factor for the entry or exit year by combining actual earnings under paragraph (a) for the period in work with notional weekly earnings for the period when they are entitled to invalid care allowance, incapacity benefit or have home responsibilities. Those notional weekly earnings are treated as equal to the lower earnings limit.

The potential exclusion of entry and exit years is plainly unfair. An answer along the lines of this amendment seems simple and would exclude most, although not all, of the unfairness. It may well be that the wording could be improved but the principle seems to me to be obviously correct. I beg to move.

I am happy to support this amendment to which I have added my name. That is because the contribution condition requiring receipt of invalid care allowance during the whole of a year causes problems for carers.

It causes problems for two groups of carers in particular: first, those who have lost ICA because the person being cared for has had one or more periods in hospital or in respite care, which in total amount to more than 28 days in six months. The second group comprises those who have lost ICA because they have earned more than £50 occasionally but whose earnings over the year do not reach the lower earnings limit for national insurance contributions.

On Second Reading, I gave your Lordships some examples from my personal experience and that of the Carers National Association.

I am absolutely certain that it is not the Government's intention to penalise carers either for taking advantage of a respite care break or for attempting to combine paid work with caring. On the contrary, I know that the Government's aim is the opposite of that. Evidence of that is given to us in the National Strategy for Carers which is working successfully. But penalising carers is what happens, however inadvertently, because of that throughout-the-year rule. Therefore, I urge the Minister to think again about this and to think about some small changes which may be made which would be of great benefit to carers.

Amendment No. 119 would allow people with an earnings factor below the qualifying earnings factor for the year to benefit from the low earner's boost in state second pension where they were entitled to invalid care allowance, home responsibilities protection, or long-term IB for part of a year. The amendment does not cover those receiving severe disablement allowance, but I suspect that that may be an oversight which the noble Lord would rectify were he to revisit this matter.

Our proposals for a state second pension will give carers and long-term disabled people the opportunity to build up entitlement to a second pension for the first time. From the outset, some 2 million carers, including those caring for young children, and a similar number of disabled people, will begin to build up entitlement to the state second pension. Each qualifying year will be worth approximately £1 a week in additional pension in today's terms. There will be no limit to the number of years of caring which can count towards state second pension entitlement. Since the state second pension, like SERPS, is a contributory benefit, there will be a simple work attachment test for disabled people at the point of retirement.

Entitlement to the state second pension will be calculated on an annual basis on a person's surplus earnings, as is the case for SERPS. That is the amount by which someone's earnings exceed the annual lower earnings limit. That means that we need to look at someone's earnings over the whole of the tax year in question. That is consistent with the annual returns made by employers on each employee's earnings in the preceding year. For example, someone who has earnings between the annual lower earnings limit and the low earnings threshold for the year in question will benefit from the low earner's boost. Someone who has been entitled to invalid care allowance or long-term incapacity benefit throughout the year will be credited into the state second pension. We believe that in the interests of consistency, fairness and operational manageability, this is the right approach.

There are also some practical difficulties associated with the amendment. For example, HRP is not available for part years of caring activity. It would be quite difficult for employers or the department to move to a system which calculated entitlement on a weekly basis. That is why we believe that it is necessary to meet the qualifying criteria for the whole year.

It may be that this amendment confuses the two different ways of qualifying for the state second pension. It would allow someone who is entitled to ICA, HRP or long-term IB for part of a year to "top up" an earnings factor otherwise below the annual lower earnings limit, so that he could benefit from the low earner's boost. He would be mixing and matching the two qualifications which occur in the course of a year.

I understand the thinking behind this amendment. For example, someone may have six months on ICA which will qualify him and six months in work above £67 which, if it were for the whole of the year, would have qualified him. I can understand the argument that such a person should not lose a full year's entitlement. Interesting and important points have been raised. It is a very difficult issue both in terms of the read-across to other situations, particularly that of HRP, and in its practical implementation, as I have suggested. There would need to be a follow through of such a calculation for anyone with credits for a part-year. There would be a need to look at contracted-out cases and HRP. Employers would have to be asked to keep weekly records.

As the Minister handling the Bill in this House, I can say that we have already wrestled with that issue. There are very real difficulties in what the amendment seeks to achieve, even though I understand the thinking behind it, which is well intentioned. In order to give the Committee some assurance, I am willing to take the amendment away to see whether we can meet the issues raised The amendment presents almost as many anomalies as it may solve at present. But that does not mean to say that we cannot look at it again. I am sure that the Committee will understand that I make no absolutely no commitment because if we could have found an easy solution to the problem, I like to think that we should have found it already. But I understand that the Committee may want us to reflect on what has been said this evening and, in that spirit, I suggest that the Committee allows me to do so.

I am grateful to the Minister for what is at least a moderately encouraging reply. I accept that there may be technical problems and that the amendment which I drafted is not necessarily the best way forward. But there is a serious problem with entry and exit years. Let us take the obvious case of someone in receipt of invalid care allowance. Let us imagine that the person who is being cared for dies during, let us say, the month of February, so there is not a complete year; but the period between the date of death and 5th April is insufficient to enable the carer to get a job and build up an adequate earnings factor in that job.

It seems to me that there needs to be some solution to that problem. I am greatly encouraged by the fact that the Minister has accepted that there is a problem. Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

moved Amendment No. 123:

Pa c 102, line 9, at beginning insert ("Subject to paragraph 1A,").

The noble Lord said: In moving Amendment No. 123 I shall speak also to Amendment No. 124. The purpose of these two amendments, particularly Amendment No. 124, is to accelerate the maturity of the state second pension. I believe I have already made clear that the S2P has a good deal to be said for it. However, one of the problems is that it will take a long time to deliver its benefits. Indeed, by 2047, which I think will be beyond the lifetime of any of us presently in this House, it will be quite generous.