Lords inflict new defeat on Welfare Bill over child support

The Government's welfare reforms suffered a wounding blow last night as the House of Lords overwhelmingly rejected plans to charge single parents to use the Child Support Agency (CSA).

Peers voted against the move by 270 to 128 votes, a majority of 142, as former Conservative Cabinet ministers led a chorus of protest over the planned levy. It was the fifth time the Lords has inflicted a defeat on Iain Duncan Smith, the Work and Pensions Secretary, over the Welfare Reform Bill.

He is proposing that single parents should face an upfront fee of £100 (£50 for those on benefits) to use the CSA to force former partners to pay maintenance towards their children. In addition, up to 12 per cent of the money they receive would be deducted for CSA administration fees. Ministers say the moves are designed to encourage separating couples to reach their own financial agreements without resorting to an official body.

The revolt was led former Lord Chancellor Lord Mackay, one of the CSA's original architects, who denounced the measure as fundamentally unfair and warned that it would deter single mothers from seeking maintenance money to which they were entitled. He added: "The motivation for these charges is said by the Government to be to bring people to voluntary agreement. I am entirely in favour of that, but if that proves impossible where the woman is at the stage where there is nothing more she can do, the only thing she can do is pay."

Last night the Department for Work and Pensions said it would attempt to overturn the defeat when the Bill returns to the Commons next month. But given the scale of the defeat – and the size of the Tory rebellion – the Government might be forced to offer concessions to force the measure into law.

Concessions to critics, including an increase to £20m in funding for advice services for separating couples, failed to avert last night's rebellion. The Tory former social security secretary, Lord Newton of Braintree, said: "I don't think this is fair or right or productive."

Labour's former attorney-general Lord Morris of Aberavon said he was "aghast" at the move. He asked: "What is the purpose of imposing on the most vulnerable people a charge of this kind?"

The crossbench peer Baroness Butler-Sloss, a former head of the High Court family division, said there were fathers "who would simply not pay".

Fiona Weir, the chief executive of Gingerbread, a charity for single parents, said: "The Lords have sent a very strong message."