With permission, Mr. Speaker, I should like to make a statement on the Government's plans for reform of the child support system.
Parents, whether they live together or not, have a moral as well as a legal responsibility to support their children. Relationships end, but responsibilities do not. Government and society have a clear interest in ensuring that those responsibilities are honoured. That was the foundation on which the Child Support Act 1991 rested, and I believe that those are the right foundations on which to build any future system of child support. But as we know, despite the best efforts of its staff the overall performance of the Child Support Agency has fallen well short of expectations. When we came to office the agency cost more to run than it collected in maintenance, and it has been taking longer to process claims than the court arrangements that it replaced.
The Child Support, Pensions and Social Security Act 2000 made important changes, simplifying maintenance calculations and allowing parents with care on benefit to keep up to £10 of any maintenance received. Since 1997, the agency has nearly doubled the number of cases receiving maintenance payments. However, as we all know, problems have persisted. Only a minority of cases handled by the CSA receive any maintenance at all. There is a backlog of around 300,000 cases. Debts of over £3 billion have built up, with limited prospects of recovery. There is a net cost to the taxpayer of around £200 million per year. Levels of customer service, although they have improved recently, have never reached the standards of quality and consistency that the public are entitled to expect.
The need for radical overhaul is clear, but I do not believe that the continuing problems are due to a failing on the part of the staff of the agency. Rather, I believe that they are due to a failing of the policy framework, and of the system that the staff are being asked to run. That is why, in February, I asked Sir David Henshaw to redesign our system of child support. He has now presented his recommendations to me. Copies are available in the Vote Office and on my Department's website, together with the Government's response.
Sir David has recommended an entirely new system for child support that will be simpler to use and administer, will be tougher on parents who do not face up to their responsibilities and will make a bigger impact on the reduction in child poverty, while delivering value for money for the taxpayer. His recommendations have four main elements.
First, Sir David believes that the system should focus on tackling child poverty by ensuring that parents with care keep more of the maintenance owed to them. He recommends that lone parents on benefit should be allowed to keep more maintenance through a significant increase in the extent to which child maintenance is disregarded in income-related benefits.
Secondly, Sir David believes that a new system should promote greater personal responsibility by ensuring that, wherever possible, we help parents reach their own financial arrangements for the maintenance of their children. That means reconfiguring advice services to improve the quality and accessibility of information and guidance for parents. Sir David also believes that the Government should remove the requirement that parents with care on benefits make an application for child maintenance through the CSA even when a perfectly satisfactory private arrangement already exists. As a first step towards getting maintenance flowing to children, Sir David recommends that, with up to a fifth of potential child support cases not having their fathers’ names on their birth certificates, we should consider the joint registration of births.
When parents cannot reach an amicable agreement, the parents with care need to be confident that the enforcement arrangements will be effective. The third element of Sir David's recommendations is the introduction of new, tougher enforcement powers, including the withdrawal of passports. He also recommends exploring the potential to make better use of existing financial penalties.
Fourthly, Sir David proposes that there should be a clean break with the past. He believes that the delivery of child support requires a fresh start with a new organisation. He believes that there should be no automatic conversion of cases from the two existing schemes to the new redesigned system. Instead, parents wishing to use the new system should be able to reapply. He recommends that there should be a separate residuary body to “manage down” and enforce old debt, and that we should consider how best to give the new organisation power to charge clients for using the new system.
Sir David has consulted widely in producing his recommendations. I am grateful to him for his work, and grateful to all who have contributed to it. As his report shows, tougher enforcement and a substantially higher disregard could increase the number of children receiving maintenance to about 1.75 million, compared with just 1.1 million today. The changes will lift many more children out of poverty, and a smaller, more focused agency that deals with significantly fewer cases will deliver better value to the taxpayer, with administrative costs substantially lower over the long run. Although there is still a great deal of detail to be dealt with, I think it right that the Government should signal their view of the way ahead.
We have decided to accept the principal recommendations. We will therefore bring forward legislation at the earliest opportunity to remove the requirement that all parents with care claiming benefit are treated as applying for child maintenance. We agree with Sir David’s recommendation that there should be a higher disregard, but that must ensure a fair deal for taxpayers and avoid sending any signal that families might be better off apart than together, so we intend significantly to increase the level of the current disregard of £10. Details will be confirmed later this year.
Both those changes will help more families to receive more maintenance and reduce the risk of child poverty. They reflect both the rights of children to be properly maintained by their parents and the right of society to ensure that parental responsibilities are properly discharged. We also agree that the delivery of child support requires a fresh start. We will therefore create a new organisation to replace the CSA and we will strengthen enforcement powers.
We intend to go even further and seek legislation to strengthen the powers available to the agency to recover maintenance from those who repeatedly fail to pay, including through the imposition of curfews as well as the suspension of passports. We will explore publicising successful prosecutions, including the feasibility of naming those who have been prosecuted. We will continue the CSA’s current operational improvement plan, which is already improving our capacity to trace people who owe maintenance and which should see the CSA collecting a further £250 million in unpaid maintenance.
There is still a great deal of detail in Sir David’s report that should now properly be the subject of fuller consultation and debate. In particular, we want to consult on the best way to allow existing claimants either to move to private arrangements or to make a claim to the new system. We must ensure that, where people currently receive maintenance through the CSA, they continue to do so, if they wish, under the new system, without disrupting the payment of child maintenance.
We should consult on how best to deal with the legacy of debt that is left, while protecting the interests of both families and the taxpayer. We should also consult on the appropriate role for the courts in the new approach, how to improve parental responsibility from birth—including the possibility of compulsory registration for fathers—and how we can further simplify and improve the current assessment, collection and enforcement processes. We will also consult on the details of any new charging regime.
In advance of legislation, I intend to publish a White Paper later this year, which will set out in greater detail the way forward in all of these areas. In the meantime, I have asked Sir David to report to me on the policy and implementation issues that arise from his first report. During the process of change, agency staff are entitled to expect the full support of my Department, and they will have it. In particular, we will do all we can to help and support staff through the transition to the new organisation and in their efforts to ensure that children and families receive the maintenance to which they are properly entitled.
The original proposals for child support had a wide and broad measure of support in the House, but the consensus on aims was never translated into a consensus on means: we must not repeat the same mistake. That is why I want the new arrangements now be established to command the broadest possible measure of agreement. I believe that there is a clear sense, both in the House and outside it, that our system of child support needs radical change. It must offer better value for money for the taxpayer, enforce the rights of children and the responsibilities of parents more successfully and ensure that families and children in particular do not slide into poverty when parents split up.
I believe that the proposals I have set out today can help us better to achieve those vital objectives, which is why I commend the statement to the House.
I thank the Secretary of State for his courtesy in letting me have a copy of the statement in advance, although he will understand that we have not yet had a chance to absorb the details of Sir David’s report.
I am sorry to tell the Secretary of State that his statement will be a disappointment to the 1.5 million families trapped in the shambles of the Child Support Agency, particularly the 900,000 who are trapped in the old system. The statistics are familiar to the House and the Secretary of State recited them again today, so I shall not repeat them, but what those people wanted to hear today was, above all, a timetable for moving them on to a new system of assessment. What they have got is yet another delay for further reports and more consultation, so they will feel let down once again.
The Government have invested half a billion pounds of taxpayers’ money in their redesign of the CSA system and now propose to turn their back on that investment and start again. The headline in press releases this morning is “CSA to be scrapped”, but the reality is that the existing, failing CSA will be rebranded and left with its difficult case load while the political spotlight will be shifted to a new body with low costs, no legacy and a carefully controlled onflow of suitable new cases.
We share the Government’s stated determination to maintain the obligation on both parents to contribute to the upbringing and support of a child. We also share the view that, where those arrangements can be made voluntarily, they should be. But in the real world, that will often not be the case, and it is not obvious what the incentive of a high benefit disregard will achieve in those cases that are not settled voluntarily. If a CSA application is made, we are back in exactly the position that we are now. If a CSA application is not made, we are back in exactly the position that we are now, with the difference that there will not even be a theoretical accrual of liability by the absent parent to offset the state’s payments to support the lone parent and her children. The absent parent will be totally off the hook, so what price the Government’s commitment to both parents contributing to their children’s support?
Any advantage that the proposed change will bring lies solely in the cases where voluntary arrangements are made. Does the Secretary of State have any evidence about the proportion of benefit cases that that might involve? I note that, when he first referred to Sir David’s recommendation to remove the requirement that parents on benefits with care must make a CSA application, he used the phrase,
“when there is a perfectly satisfactory private arrangement already in place”.
But when he went on to announce that the Government would legislate to remove the requirement, there was no reference to the qualifying condition. So perhaps he can clarify whether the requirement will be removed in all cases, or only in cases where there is evidence that a satisfactory voluntary private agreement exists.
I also assume that the higher level of disregard will apply to all payments, not just those made voluntarily. If that is the case, while that disregard may have a significant impact on tackling child poverty in lone parent families, it will not operate as an incentive to agree voluntary arrangements, which I understood to be the Secretary of State’s original motivation for using the higher disregard in those cases only.
We have heard nothing of how parents not on benefit will be encouraged to make voluntary arrangements—other than vague reference to a threat to charge for the new agency’s services. I suspect that on an otherwise rather dismal day that may be the only thought that raises some merriment in single parent households that are trapped in the CSA bureaucracy at the moment.
Most importantly, the Secretary of State failed to deal with the key issue: the robustness of the assessment process, which was the focus of the 2000 Act reforms—sacrificing precision for simplicity—that are now acknowledged to have failed. Is the right hon. Gentleman really proposing to set up a new body attempting to assess and constantly reassess a payment that is due on the basis of fluctuating or uncertain in-year income? Unless the assessment process is made robust for those difficult cases, no system of collection will be effective. If the value of the claim cannot be accurately assessed on a real-time basis, no enforcement system, however draconian, will work.
There is no reason to suppose that the new agency will be any more successful than the old if it is constantly struggling to establish and maintain an accurate basis of assessment. When the right hon. Gentleman described Sir David’s remit as a redesign of the system, I understood that he was prepared to tackle this issue, but there is nothing in the statement on it—nothing, as the product of the past six months’ work, except a reference to it as something that requires further consultation and debate. There is no recognition of the fundamental importance of the assessment tool to a robust system of child maintenance.
We will look carefully at Sir David’s report and its implications. In the meantime, I have a couple of specific questions for the right hon. Gentleman. Can he give the House an estimate of the cost of the proposals? Obviously, the £200 million that the CSA is collecting for the Exchequer as a contribution to the agency’s costs will be lost. In fact, far from scrapping the agency, there will be the cost of maintaining two separate bodies, so can he tell us what the overall cost will be?
Can the Secretary of State also tell us what the programme will be for migration from the existing system to the new system, and over what period that will take place? Presumably, some people will have to remain with the residual agency, as access to the new system will have to be rationed at the outset in order to prevent it from being swamped. How will the Secretary of State deliver a perception of fairness in that migration process, as being on the new system will bring a huge financial benefit but it seems inevitable that that will have to be rationed over a number of years?
Can the Secretary of State give us a bit more of a feel about the level of the disregard? If he cannot give the exact amount of that, can he at least give some indication of it, because it is very difficult to understand the proposals without that? In his comments, he recognised that there is a risk that introducing a large disregard might create a perverse incentive for struggling families to give up and split up. What work has he done to establish to his own satisfaction that that will not result from the changes that he has announced today? Finally, can he tell us who will run this new body? Will they be the same people who run and staff the existing CSA?
We are disappointed by this statement, as will be hundreds of thousands of lone parents. It is mightily thin on substance. It consists of a rebranding exercise with no change to the substantive arrangements in, I suspect, a majority of cases, and that is not a solution for the families involved. We recognise that there is a need to make the system more effective, and to be more pragmatic about ways to increase the flow of maintenance, without losing sight of the underlying principles. Unfortunately however, it is not clear that the proposals address the fundamental flaws in the system. Having just poured half a billion pounds down the drain in respect of the CS2 system, the Government cannot safely move on and start again without being 100 per cent. sure that the real underlying causes of the problem have been identified and fixed.
It is unclear to me—and I suspect to most of my hon. Friends—what the hon. Gentleman’s view is of Sir David Henshaw’s report, and whether the hon. Gentleman will be able to give any indication today as to whether any of the proposals in it attract his interest or support. I find it bizarre in the extreme that he seems to want us to continue with the existing arrangements, as most of us, irrespective of which party we belong to, know that that would serve only to trap people inside a failing system that is not delivering for parents. [Hon. Members: “That is what the Government are doing.”] I note the comments from Conservative Members, so I think that I should send a copy of the statement to the hon. Gentleman again so that he can have another look at it, along with Sir David’s report.
These are undoubtedly the most radical reforms to the child support system that any Minister has brought before this House since the establishment of the Child Support Agency. I ask the hon. Gentleman to take a little more time to study the detail of the statement and of Sir David’s report. These reforms will address the fundamental flaws in the current system. We are encouraging parents to reach their own agreements—I would have thought, given all the ideological baggage that the Conservative party is keen to lose at the moment, that that at least would be one thing that they would want to support today. But, sadly, we did not hear such words of support.
Well, I do not think any Labour Members heard such words of support for that fundamental change.
We will remove the obligation on all cases; the hon. Gentleman asked about that, and we certainly intend to do that. The maintenance disregard will of course apply only in relation to benefit cases—obviously, it will not apply to other cases. The hon. Gentleman also asked about the assessment process. I think that there is broad support for that; Sir David Henshaw certainly found broad support for the reforms introduced in the 2000 Act, and we do not intend to revisit the issue.
The hon. Gentleman asked four specific questions. He asked about the estimate of long-term operating costs. Sir David has estimated that the changes to the administration of child support will probably save us 50 per cent. of the current operating costs of the agency. Of course, there will be other costs associated with making the changes, but they will depend on the detail of the proposals that we bring forward in the White Paper in the autumn.
On migration, Sir David recognised that more work will need to be done on that. I felt that it was important that Members could see the outlines of the new system as soon as possible; that is why I asked Sir David to bring his initial recommendations forward as quickly as possible. He himself recognised that a significant amount of work still needs to be done in that regard. It will be done as a matter of urgency, and I will take it as my responsibility to ensure that Members in all parts of the House have full sight of, and full involvement in, the development of that important work.
The hon. Gentleman asked whether I can give further details today on the maintenance disregard. All that I can say to him and to Members in all parts of the House is that it will not be 100 per cent., because such a figure would send the wrong signal about the balance of responsibilities between parents and taxpayers. Some interesting American evidence shows that, if one focuses more on dealing with child poverty as the principal objective in child support systems, there is, in particular, no discernible impact on incentives to work. That is a very important lesson that we need to reflect on. The hon. Gentleman also asked who is going to run the new arrangements and with the greatest of respect to him, it is just a little too early to name any names in that regard.
May I congratulate the Secretary of State on today’s statement? This has been a sorry 15 years of the CSA’s history that we have had to bear. Does he agree that the two principal factors that we need to consider are parental responsibility for maintaining their own children and attacking the child poverty target? Does he further agree that the full compliance of parents would have a significant impact on the child poverty figure?
I agree strongly with what my hon. Friend has said. He and the other Members of the Work and Pensions Select Committee made it very clear in their most recent report on the CSA that it really was time for the Government to consider setting up a new organisation that could pursue the very important objectives set out in it. I can confirm to him and to the House that those will be the principal objectives of the new system, and I am confident that, in the light of the arrangements that I have set out today, we can make those responsibilities stick.
May I thank the Secretary of State for his typical courtesy in making available a copy of the statement and of the documents so far in advance of today’s oral statement? May I also congratulate Sir David Henshaw and his team on completing this work in such a short time? Does not the speed of Sir David’s work contrast with the Government’s own tardiness in dealing with this issue since 1997 and, indeed, since the 2005 general election? I remind the Secretary of State that since that election, we have had a review of the CSA’s future, followed by a redesign of the policy on the CSA. We are now being offered today a consultation on the CSA’s future, to be followed by a White Paper on the CSA’s future. If the Secretary of State’s own document is to be believed, that will followed merely by
“an ambition…to see some aspects of the new system in place from 2008”.
In other words, what he is offering us today is that, 11 years after his Government came to power,
“some aspects of the new system”
will be in place. Does he think that that is really good enough, and does he acknowledge that his Government have wasted 10 years in dealing with this issue?
Is that point not also reinforced by what Sir David says at the beginning of his own document? He says that he had a very demanding timetable that was
“not sufficient to allow for a full redesign”,
but which allowed him to indicate only “the direction” of his new policy.
The Secretary of State said today that the CSA is going to be scrapped, which is what we have heard according to all the spin outside this place. He had previously said that he would not scrap it until he was clear what it was going to be replaced with. What is it going to be replaced with? Is it not astonishing that all that he can say today, in paragraph 55 of his own document, about the CSA’s future replacement is that there are a range of approaches that could be taken to the structure of the governance of such an organisation, and that an intensive programme of work will be undertaken, including full consultation with staff, to figure out a way forward? Is it really acceptable that, after 11 years in power—that is how long this Government will have been in power when these measures will, so the Secretary of State says, be implemented—he still does not know what he intends to replace the CSA with?
Is the agency going to remain under the DWP? Is it still going to be run by the existing chief executive, and is it going to be based at the existing locations? If so, is this not going to end up being a re-badging, rather than a fundamental replacement of the existing agency? The Secretary of State indicated that he intends to reinforce enforcement powers. Why has he proposed to introduce curfews for non-resident parents who are not adhering to their child support obligations when that proposal was not made by Sir David Henshaw? Will he tell us how effective that is likely to be? Is it likely to be as ineffective as previous Government gimmicks, such as withdrawing driving licences? That measure was used only 11 times in four and a half years.
We welcome the new emphasis on people making their own arrangements and the higher disregard that Sir David recommended and that the Secretary of State has undertaken to consider, but will he assure us that he will not use a charging mechanism for resident parents who have to use the agency and have had to deal with an incompetent service over the previous 13 years of the agency’s life, and who would be astonished to have to pay for the use of this incompetent agency in the future? Have the Government gone far enough in giving the new CSA access to the sort of income details that it would be able to get if it were part of Her Majesty’s Revenue and Customs, and the ability to deduct money directly at source?
Today’s statement, which was made almost 10 years after the Labour party came to power, contained a set of proposals that seem to amount to no more than re-badging with additional lengthy delay and more gimmicks. Should we not have expected more after 10 years?
I say to the hon. Gentleman what I said to the hon. Member for Runnymede and Weybridge (Mr. Hammond): this is not a re-badging exercise, but a fundamental change to every aspect—root and branch—of the child support system. The hon. Member for Yeovil (Mr. Laws) did not have the courage of his previous convictions and did not repeat his support for the transfer of responsibilities to HMRC. As he will know, that was considered on page 50 of Sir David Henshaw’s report and rejected for perfectly sensible reasons. He and his hon. Friends could usefully go away and study that. We cannot solve the problem of the administration by simply relocating it to a different part of Government. That is not the right way to deal with the problems of the CSA, because those problems are not just organisational or administrative. They are much more fundamental than that. That is why Sir David has come to his view that transferring the CSA to HMRC, which I understand is the hon. Gentleman’s policy, would not be right. We have no intention whatsoever of taking that course.
The hon. Gentleman berated the Government for taking 11 years to come to this decision. We tried very hard. We have tried repeatedly in recent years to make the arrangements that we inherited work. We have revisited the legislation and invested heavily in support and IT systems for the CSA. It does not work. We should have the courage to say that it is time to turn over a new leaf. That is what I am trying to do. He might catch up with us at some point, but I am afraid that he is significantly behind the curve today.
Most of the changes will require primary legislation. That is why we cannot announce the detail of all of them today. We cannot implement them until both Houses of Parliament have agreed that there should be changes to the primary legislation. That is called the democratic process and the hon. Gentleman will have to take part in that, as everyone else will, and I am sure that we will hear his views in due course.
I have made it clear that the operational details in relation to the structure of the new organisation will be set out in the White Paper. In relation to the enforcement powers, Sir David Henshaw suggested that we take on board the idea of a passport disqualification power and we will certainly do that. He has also made it clear in the report—the hon. Gentleman should study it—that he wants us to consider what further measures might add to the enforcement powers of the Child Support Agency. It is important that we have the powers. They will not necessarily always be used, but they will be a deterrent. That is the point and that is the way in which we should judge the success of all these issues. I want the CSA, now and in the future, to come down like a ton of bricks on absent fathers—it is usually absent fathers, but let us say absent parents—who are not discharging their legal and moral duties to support their children.
We will look for support from both sides of the House to strengthen the enforcement powers of the Child Support Agency, and I am sure that I will have it from my hon. Friends. When it comes to making some of the hard decisions, these guys—the Liberal Democrats—are never to be found anywhere on the premises. Given that, the hon. Gentleman’s response is entirely predictable.
I welcome today’s statement and the recognition that too many children are being let down by the agency. Will the Secretary of State expand on his comments about the role of Child Support Agency staff? They are working very hard to implement both the old formula and the new formula, but they will now be dealing with phone calls about his statement and coping with uncertainty about their future in whatever the new structure will be.
I agree entirely with my hon. Friend. Those are major issues for the CSA and its staff to deal with. The Department will be providing all the support that it possibly can to help CSA staff to cope with the changes. She is right that there is likely to be immediate pressure on the staff. It is our responsibility to ensure that we provide every support that we can to them and we will certainly do that. We will consult closely with the trade unions of the CSA and work closely with CSA management and Stephen Geraghty, its excellent chief executive, to make sure that the reforms work in the way in which we intend. There will be full and proper consultation with all stakeholders, including the CSA staff themselves. Incidentally, the staff are doing a brilliant job for all of us, so it is our responsibility to support them to the fullest possible extent.
The Secretary of State said that he wants to come down like a ton of bricks on parents who do not contribute, but does he understand that the important thing is to get the infrastructure in place so that offices can talk to offices, e-mails can be answered, telephone calls can be returned and thousands of files do not just disappear as clerical files? He will recall that I wrote to him recently about a case, on which he kindly intervened. The senior resolution caseworkers have been involved, as has the hotline, but the case is stuck in Preston in a file that no one can see. Does the suggestion that there will be no automatic conversion of cases mean that my constituent will have to start again? She and her family have been deserted by a deadbeat father. How can I explain to her that the Government have now deserted her?
I will take further interest in the case that the hon. Gentleman cited, but I hope that he will make it clear that we are not deserting families. It is necessary to replace the CSA with a new organisation for reasons that are pretty widely accepted across the House, despite the comments of the hon. Member for Runnymede and Weybridge. In the intervening period, it is important that we do all that we can to support people, such as the constituent of the hon. Member for Brentwood and Ongar (Mr. Pickles), who are not getting the support to which they are entitled from the CSA.
By the way, we are investing another £120 million over the next three years in trying to deal with this and other related ongoing problems of the CSA. We are in no way walking away from the problems in the CSA that are there for us all to see. If the hon. Gentleman wants to confirm the details of the case to me again, I will certainly take a personal interest in it.
I was pleased to hear several of my right hon. Friend’s comments, but may I return to the staff? Many of my constituents and those of my hon. Friend the Member for Dudley, North (Mr. Austin) work at the Dudley call centre. Many are women, some of whom are lone parents with family responsibilities themselves. I met several over the weekend who were concerned about what was coming out in the press and worried about what might happen to their jobs. Will my right hon. Friend take this opportunity to congratulate those staff on their work and diligence up to now? They have coped with all sorts of reorganisations and their stress levels have reached the point at which many of them have become ill. They have sometimes suffered abuse from parents who have become upset on the other end of the phone. Will he not only congratulate the staff, but reassure them about their employment prospects for the future?
I am happy to do that. The staff of the CSA do an immensely difficult job, often in difficult circumstances. It is incumbent on all of us in the House to do all that we can to support them in discharging the functions that we ask them to deliver on our behalf. As I said, we will certainly be working closely with the trade unions and the management to ensure that the reforms are a success. CSA staff have coped with major change before, so I am confident that they will be able to do so again.
I listened to the Secretary of State with great care and with no little sympathy, as he would understand. Although he might have been irked to some degree by the reservations of my hon. Friend the Member for Runnymede and Weybridge (Mr. Hammond), I am sure he will recall that one of the reasons we are in the mess we are in is that the House was far too consensual during the passage of the legislation. The Secretary of State will be helped rather than hindered if careful and serious questions are asked at the earliest possible stage.
In ensuring that the levels of maintenance, even under voluntary arrangements, do not go back to the original derisory levels that caused the CSA to intervene, does the Secretary of State intend to venture into the difficult territory of the relationship between access and maintenance, or will the new agency or new arrangements maintain the rigid separation between the two? Over the years, the difficulties of those two issues coming together have led to much unhappiness in the way in which child support is handled.
I am grateful to the hon. Gentleman for his comments. I was not irked by the remarks of the hon. Member for Runnymede and Weybridge; I was just rather disappointed by them because he has not recognised the seriousness of our proposals. I hope that he will come to do so in due course.
We will keep custody and maintenance strictly separate. It is essential that we do so. I understand that in the heat of separation there are often difficulties around custody and access to children, but if we confuse the responsibility of parents to support their children financially with other issues, we will take a giant step backwards. We will not blur that distinction. As the hon. Member for North-East Bedfordshire (Alistair Burt) was one of the principal architects of the original scheme that we are trying to fix, I am sure that he will play an important role in our proceedings in the House.
In congratulating the Secretary of State on his courage in making today’s statement, may I make a plea for taxpayers? Since the Government rejected ministerial advice that the current system was not reformable, we have asked taxpayers to foot a bill of £50 billion for single-parent families. Does he accept that the more generous we are with the disregard under the new scheme, the bigger that bill will remain for individual taxpayers, and the more generous we are in the disregard, the more likely it is that some families will decide that it pays to pretend that they have split up, claim benefit and continue as they were? Are we not all wiser about the extent to which fraud can be committed from the response that we saw to the tax credit system?
Lastly, I make a plea that the Secretary of State keep together payment of maintenance and access. Many males who want to see their children and who regularly pay their maintenance feel that that is not taken into account fully in court. It is surely a sign of their good character that they have no access although every week they pay.
I accept my right hon. Friend’s caution about the level of the maintenance disregard. I assure him that we intend to proceed very carefully in that regard. It is fundamental to the reforms, however, that if we want to move to a system whereby we encourage and, yes, incentivise couples who are separating to reach their own financial arrangements on separation, we will necessarily have to look at being more generous in relation to the income support rules. That is what we intend to do. As I said clearly in my statement, we are not moving to 100 per cent. maintenance disregard, because that probably would hold out the prospect of some of the perverse consequences to which he alluded.
Is the indication in Sir David’s report of possibly reaching a maintenance figure of 1.75 million children, most of whom live in poverty, as distinct from the 1.1 million currently reached, to be a Government target? If so, when can we expect it to be reached? In addition, will there be recruitment to the new agency or new organisation that replaces the CSA? If so, will the Secretary of State ensure that the Government do their best to ensure that recruitment to those employee levels in Northern Ireland reflects the community, unlike the situation in the recent past?
We are not planning any immediate changes to the targets that we set for the CSA. The figures to which the hon. Gentleman refers, and which Sir David mentions, are the likely consequences of moving to the new arrangement once we have passed primary legislation and established the changes. It is too early for me to say whether we will then want to set a target along the lines set out in Sir David Henshaw’s report. There is an ongoing process across government whereby public agencies sign up to agreements and targets.
In relation to the hon. Gentleman’s final point about recruitment, with the greatest respect, it is too early to be clear about all the details. Clearly, if the CSA is in the business of recruiting to the new organisation, that recruitment must be ethical, legal, fair and balanced across the United Kingdom, and it will be.
I congratulate the Minister on being bold, because it is often difficult for a Government to admit that they have perhaps been throwing good money after bad and to conclude that the time has come to draw a line and start afresh. That was certainly the conclusion to which the Select Committee came: it was a failing agency and something radical and different had to be done—so well done on that. However, does my right hon. Friend have any advice for non-resident parents who on hearing the statement today and as a result of some of the headlines may think that there is no Child Support Agency and that therefore they have no responsibility for their children in the interim, and might be tempted to stop paying?
I have one very clear message: the law will be enforced. That is why we are taking new and additional powers. We are investing more in the organisational improvement programme to speed further the recovery of unpaid maintenance. I want non-resident parents to hear today the very important message that, until we make the changes, the current law will be enforced rigorously and effectively. As I said, we will throw the book at people who are holding up two fingers to society and their families in not discharging their financial responsibilities.
The CSA has been particularly hopeless in dealing with the cases of self-employed fathers who seem to manage to live extremely well on negligible incomes and who change some minor aspect of their affairs when they are in danger of being caught up with in order to be put back to the bottom of the heap. I am sure we all have experience of that. Is the Secretary of State confident that his new system will be able to deal with that problem?
I greatly respect the hon. Gentleman and his knowledge of these matters. Sir David Henshaw did not make any specific proposals on the treatment of self-employed people, but I have a strong feeling that we shall have to return to that matter when the primary legislation is introduced in the House at the earliest opportunity.
Will the Minister confirm that when the Tory Prime Minister of the day, John Major, introduced the scheme he was at the same time toying with the idea, which he carried through, of the traffic cone hotline? Will he also confirm that we used to have large lobbies of people outside the House of Commons? One day it was against the CSA; I went out the following day and asked the policeman on guard, “Who’s this lobby, then?” He said, “This is the police against the CSA.” It was at that point that I realised that it was time the agency was scrapped, and my friend Bob Cryer and I voted to scrap it. It is interesting to note that the Liberal leadership were not with us.
As a former solicitor, I cannot help feeling that we are going back to the system prior to the CSA. None the less, subject to the details of this step in the right direction, we welcome the statement. We are concerned that there is no automatic transfer to the new agency and fear that there may be pressure to start some cases again from scratch. Will the right hon. Gentleman assure us that there will be no delay in dealing with new cases? Who will decide what is a perfectly satisfactory private arrangement, and will it be as enforceable as an old court decree used to be?
I reassure the hon. Gentleman that we are not returning to the previous CSA arrangement, where exclusive responsibility resided with the courts to recover maintenance. That is definitely not what Sir David is recommending and not what we are proposing today. On maintenance agreements, it will be for the parents to reach their own agreement on what they feel is appropriate in the case of their separation and family situation, but if they cannot reach an agreement or the agreement breaks down, it will be the responsibility under the new arrangements of the CSA to step in and to enforce the agreement according to the proper formula in statute. We are mindful of the need to ensure that there is no abuse of women in particular and of parents with care in those arrangements, but I am grateful to the hon. Gentleman for indicating in principle his support for the direction of travel.
One or two hon. Members have talked about the new system being deluged, but I do not think that will happen. Those who were failed by the first system and then failed to migrate to the replacement system will think twice before jumping on board any new system until it has had time to prove itself and if by then they are within two or three years of finishing with the CSA, perhaps they will not even apply at all. They want proper, objective assessment and robust enforcement, and once that has been proved over a period of time there will be voluntary transfer from the old system to the new.
I am grateful to my hon. Friend. On his latter point, I can confirm that we want the system to be robust, and we want people to know that the CSA will be a serious enforcer of parental responsibilities. That is not how people view the current arrangements, and it is that fundamental perception, and indeed the reality of the present situation, that we have to change. The proposals will help us to do so.
Can the Secretary of State confirm that three systems will be used to manage child support payments? As single parents make the depressing choice to go back to square one and reapply under the new system, at what stage will the Government close down the old systems on which so few people are left? Have the Government assessed how many people will choose to go on to the new system and to go back to square one and reapply?
I know that the hon. Lady is a member of the Select Committee but, in fact, there are three systems now in operation: the old scheme, the new scheme, and the hybrid scheme for cases with which the IT cannot cope, so we have to deal with them manually. In future, there will be one scheme, not three, once we make the changes. That will significantly increase people’s understanding of the system and its clarity. She asked me for a specific figure, but I cannot give one today; we have to undertake work before the publication of the White Paper, but when we produce it in the autumn, I hope that it will deal specifically with those issues. In the meantime, Sir David Henshaw will continue to work with us to make sure that we get the operational design of the new system right, and I am very grateful to him for that. I hope that she will find the answers that she is looking for in the White Paper.
May I particularly commend the steps to encourage voluntary agreements between parents? Will my right hon. Friend set out in more detail the measures that he has in mind, including advice and other services for parents? Will he bear in mind, too, the durability of such agreements, in the face of the evidence of fractured relationships, and changed and new relationships that establish completely different household incomes, and that require a complete reassessment?
My hon. Friend makes an important point. Sir David has recommended that the CSA of the future develop more of an advisory and help and support role for couples who are splitting up and for families in those circumstances. It is important for those people to be given proper financial advice. On my hon. Friend’s latter point, the way forward that Sir David identified will be partly through the more generous maintenance disregard, which he believes—and I think that he is right—will encourage and incentivise more sustainable and durable financial agreements between separating couples. That is the direction of travel that Sir David believes it is right to follow, and he is absolutely right.
I think that members of the Select Committee on both sides of the House are pleased that the Government are finally addressing the crisis in the Child Support Agency. I am concerned about two issues: first, the extent to which the Government failed to address the amount of debt that they must write off for the CSA; and, secondly, the apparent inconsistency between increasing voluntary arrangements—I think that everybody would support that—and the proposal to start charging parents who have to use the new CSA replacement. Aside from the fact that the modest incentive of avoiding a charge might encourage voluntary arrangements—that I can understand—will the Secretary of State explain how parents who are not prepared to accept a voluntary arrangement, and their children, will benefit if the parents are charged to use the service?
I am grateful for the hon. Gentleman’s overall support. On debt, which I covered in my statement, we would need primary legislation for any debt write-off, and we are still looking into that. In the meantime, we are investing significantly more in the current operation, so that we can use more specialist debt recovery and debt enforcement agencies, mainly in the private sector, to recover more of the debt. That is beginning to produce results. On charging, I am not thinking of charging the mother but the non-resident parent who is failing to comply with the obligation to pay maintenance. It is important that we do not penalise the parent with care in those circumstances. The details of the charging regime will be set out in due course.
In the context of his welcome new proposals, can my right hon. Friend say how he foresees new family relationships being dealt with? I have often found that the objections to the CSA proposals and the pursuit of absent fathers come from mothers in a new relationship and the impact that the payments have on the family income.
That is getting us into complicated sets of issues to do with relationships between separating couples and their new families. It is work that will need to be examined in the context of the White Paper. We need to look in particular at Sir David Henshaw’s proposals to develop the new advice, guidance and support service for the CSA.
The Secretary of State rightly said that the proposals would take time, and in the meantime the law will be enforced. Has he any interim proposals to improve the operational ability of the CSA to ensure that the 300,000 claimants are dealt with much more quickly?
Yes. We published the details of those plans in February and I will happily send a copy to the hon. Gentleman.
Any of us who have struggled with the CSA will welcome my right hon. Friend’s statement. Does he agree that unless we can deal with people who can make a modicum of change in their financial arrangements—that is, if they are self-employed or if they have a sympathetic employer—the enforcement powers included in his statement will not be worth the paper they are written on? May I urge him to test his enforcement powers against some of those cases? If he would like a few case histories, I am prepared to provide some from my constituency. The CSA fell down most in that respect and we must get it right now.
We could probably all add to my hon. Friend’s list of cases where we have seen the system fail. We must develop the proposals for primary legislation at the earliest opportunity—in the next Session of Parliament, I hope. My hon. Friend and others will then be able to judge whether the strengthened enforcement powers, which I would very much like to be available to the current CSA ahead of any change, are worth the paper they are written on. I will not waste the time of the House with powers and new enforcement roles that I do not believe will make a ha’p’orth of difference. I believe the new powers will make a difference, and as I said to the hon. Member for Stratford-on-Avon (Mr. Maples) earlier, we must look again at how self-employed people are treated under the current rules.
Notwithstanding the understandable nervousness of the Secretary of State about linking contact and financial support, have the Government recognised the practical advantages of deciding issues of financial support within the same framework as issues of contact and residence when, after all, members of the family are deciding all matters in relation to the future of the family?
That sounds to me like a request that we go back to the courts having primary responsibility for dealing with these matters. I see that the hon. Gentleman is agreeing with me. That is not what Sir David Henshaw is recommending and it is not what the Government believe to be the right way forward. As the hon. Gentleman knows, there are proposals before the House to re-examine the matter of contact orders. That legislation is still progressing, and I am sure he will have the opportunity to make such comments in that regard.
I congratulate my right hon. Friend on grasping the nettle and appreciating at last that tinkering with Tory failure will seldom produce an outcome. My constituents who run the CSA in Hastings—the many hundreds there—will be worried, as my colleagues have said. When will my right hon. Friend be able to say what the alternative will be, where it will be carried out and when their jobs can be made secure?
I hope and intend to set out the details of that in the White Paper in the autumn. I have been to Hastings and met many of my hon. Friend’s constituents. They are doing a very good job in difficult circumstances. I do not want to add to the difficulties that the agency is experiencing, but we need to spend the next few weeks getting it clear with the staff, the management and others how the new arrangements will work. That will be time well spent, but there will be full and proper consultation with all the relevant trade unions.
When parents separate, it is often difficult to come to voluntary agreements because the professional organisations that they go to, such as solicitors, are confrontational, rather than helping them to come to an agreement. Will the Secretary of State consider giving some funding to organisations such as Relate and Citizens Advice to help set up volunteer but trained mediation services to help parents who might want to reach a voluntary agreement at that time to find the mechanism, skills and process by which they could come to such an agreement that would stick?
I am interested in exploring all those options. They are primarily matters for the Secretary of State for Constitutional Affairs, but we will need to look at that in more detail as we prepare the White Paper.
I congratulate my right hon. Friend on making such a bold step forward after so much of a problem, which we have all faced as constituency Members. Given the rigidity of the current system, whereby individuals who work so hard for the CSA basically operate within boxes and anything outwith the parameter of the box is a nightmare for them to cope with, can he assure the House today that the new system will have flexibility, and that common sense will prevail in running the system?
Yes, that is very much what we would like.