Duncan Smith defends support agency charge for single parents

The Work and Pensions Secretary said the current system was “completely dysfunctional”. He added it was “very expensive”, did not work and “actually helps divide parents from each other”.

Speaking on the BBC’s Andrew Marr Show, he said: “The last government legislated for the charge and what we’ve looked at, as behavioural economics show, that if you have a relatively small charge there, what happens is people think about it.

“We know for example that 50 per cent of those who are going into the system have said to us that had they thought again, they would have actually done it outside, because they would have made a much better compromise arrangement.”

In the sixth Lords defeat for Mr Duncan Smith’s benefits shake-up, Conservatives and Liberal Democrats joined Labour peers to vote by a majority of 142 against the move on Wednesday night.

The Department for Work and Pensions said it would seek to overturn the latest amendment to the Welfare Reform Bill when it returned to the Commons.

The rebellion, on the final day of the Bill’s stormy report stage in the Lords, was led by Tory former Lord Chancellor Lord Mackay of Clashfern. He said the Government’s plans could have the effect of putting single mothers off seeking the financial support they were entitled to.

Lord Mackay’s amendment would stop an upfront charge of £100 or £50 plus a levy of up to 12 per cent on maintenance payments applying if a single parent, generally a mother, had taken “reasonable” steps to get the other parent to come to a voluntary agreement on child support.

Mr Duncan Smith said: “The key point though, what’s wrong with his amendment, is that he’s not against charging. He wants all the charge to be on the parent without care, and of course the problem with that is immediately you have no charge on the parent with care, even if there’s a slight difficulty, they’ll go straight into the system because it’s almost as though they could punish the individual twice.

He added: “We want to make sure that this is a balance, and we’re not asking for much, it’s only about nine per cent, 12 per cent of the amount that they receive. We’re still going to pick up the lion’s share of the cost.

“But we also have fairness to the taxpayer who’s paying huge sums of money to run this badly.”

The most prominent defeat on the Bill came last Monday when peers agreed an amendment proposed by the Bishop of Ripon and Leeds, the Rt Rev John Packer, to remove child benefit from the £26,000-a-year cap on household benefits.

Mr Duncan Smith said the principle of the cap was “overwhelmingly popular” among voters and based on “fairness”.

He pledged to reverse the Lords’ decision, stating: “You cannot go on as we’ve been doing, detaching children from their parents... We have to show the parents that what you do, what choices you make in life, has an effect on your children.

“You want to make positive choices and so your children get positive outcomes.”

Mr Duncan Smith added that he would not back a regional cap, saying: “I do say this to the Labour Party. If they really want a regional cap, then that must mean they want regionalising of benefits as well because you can’t have one without the other.

“I’m happy to have a debate about that with them, if that’s where they want to go, but you can’t detach one and just say we’d like a bit of this but not the other, because that would make the whole system a chaotic mess.”