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Child Maintenance

Volume 464: debated on Monday 8 October 2007

10. What changes he plans to make to the system of calculating maintenance payments to reduce avoidance of payments by self-employed non-resident parents; and if he will make a statement. (156112)

With the compliance rate among self-employed non-resident parents at 59 per cent., it is clearly important to take further measures, which we are doing in the Child Maintenance and Other Payments Bill. For example, the use of Her Majesty’s Revenue and Customs information and fixed-term maintenance awards will speed up the process and help to prevent self-employed non-resident parents from providing delayed or misleading information.

As well as accurate assessments, enforcement of the assessments is vital. Every week, I see cases where it is obvious that the tax return information and the figures that are submitted to the CSA are quite unrelated. I have spoken to the CSA, which does not use Her Majesty’s Revenue and Customs departments as well as it might. What can be done to ensure that people do not use self-employment deliberately to delay or obstruct the enforcement of their child maintenance liability?

I thank my hon. Friend for that further point. We have all seen similar cases in our constituency surgeries. That is why we are introducing additional powers in the Child Maintenance and Other Payments Bill, which is now going through Parliament: first, the power to use gross income information from HMRC, which will give us a more robust and reliable source of information about real income than what some self-employed non-resident parents tell us; secondly, the power to use fixed-term awards; and, thirdly—and importantly for those who are still inclined not to co-operate—powers to deduct money directly from accounts that self-employed people might have with various financial institutions.

The Minister will be aware, however, that much of the problem arises when someone’s lifestyle is obviously at variance with their declared income. He said that we would use HMRC data, but one of the problems is that when there is evidence of a difference between lifestyle and declared income, the CSA often does not properly investigate it. Will the HMRC data be treated as sacrosanct or will CMEC have powers to investigate further when there is evidence that they do not equate with the lifestyle of the person involved?

The hon. Gentleman identifies a correct point. One of the problems was that the CSA was, in a sense, originally designed and set up to be an investigatory agency, but was never given the powers to be one. The difference with the new commission is that it will have the right to access HMRC data, which are far more reliable on real income levels than the evidence that self-employed non-resident parents submit to the agency. With the use of HMRC data and the other steps we are taking, especially the power to have direct access to finance accounts, we are confident that we can certainly make it far more difficult for self-employed non-resident parents to evade their responsibility to maintain their children.

What would the Minister say to the gentleman—I will call him Mr. X—who came to my surgery on Saturday, a self-employed individual who has supplied all his information to the CSA, which has lost his file on two separate occasions? He has asked for a statement of what he has paid and how the calculation has been made, only to be told that that information is not available to him or his solicitor. He is now being taken to court, on Friday, by a debt collection agency. I rang the MP hotline this morning, only to be told that I would have to put the case in writing to the CSA, which would have to contact the debt collection agency, which would then write back—a process taking four weeks. Does not the system cut MPs out of the loop? Should it not be a bit more responsive to the situation in which my constituent has found himself?

My hon. Friend highlights an extremely complex case, of which there are still a fair number in the system. The length of time that it is taking to resolve the case that he outlined is, of course, not satisfactory. I should be more than happy to meet him urgently, to see whether I can make any intervention that might speed matters up.