I beg to move,
That this House has considered the performance of the Child Maintenance Service in recovering payments from absent parents.
I would hope that everyone agrees that parents should continue to take financial responsibility for their children after the break-up of a relationship. We must understand that relationship break-up can often be a disturbing and distressing time for everybody, often leaving behind a great deal of bad feeling. It is not easy in such circumstances to come to an arrangement that is fair on both partners and, most of all, fair on the children. The criticisms that I will be directing today at the Child Maintenance Service, and its predecessor the Child Support Agency, should not be taken as an indication that I do not appreciate the difficult circumstances in which it has to operate.
Many absent parents do their best to care for their children, and I do not want to give the impression that everybody whose relationship has broken up is trying to avoid their responsibilities. Sadly, however, some people see the break-up of a relationship as an opportunity to abandon all responsibilities for their children. The Child Maintenance Service owes it to those children and to the resident parent to ensure that the absent parent complies with their legal and moral responsibilities. We are not talking about forcing somebody to pay to give their children a life of luxury. Indeed, we are often talking about forcing somebody to pay money that they can well afford in order to keep their own children out of poverty. The Child Maintenance Service is sometimes not good enough at getting money from people who can afford it, and we sometimes see it pursuing people for payments that they quite clearly cannot afford.
I am grateful to several organisations that have provided me with background information not only for this debate, but to support my caseworkers in dealing with a significant number of requests for help from constituents. Fife Gingerbread does an enormous amount of good work in my constituency and elsewhere in Fife. My caseworkers also find the Child Poverty Action Group’s child support handbook indispensable, and that will be the same in every constituency across these islands.
Several individuals have also shared their experiences with me. I do not have time to go into any of them in great detail, and some of cannot be aired in public for reasons of confidentiality. In addition, some of the issues that have been raised—serious though they are—do not really fall within the remit of this debate because they relate, for example, to the regulations around exactly how somebody’s income is determined, which causes a great deal of anger, sometimes among the paying parents and sometimes for the receiving parents. I make that point because it will not be possible to go into most of these cases in any kind of detail in the time available. I have also been approached by several colleagues who want to speak in the debate or to intervene, so I want to give time for that as well.
I see too many cases in which it is obvious that a parent is determined to avoid their responsibilities and that they can get away with it—sometimes for years at a time—which is just not good enough. It is far too easy, for example, to hide income from the Child Maintenance Service, which too often leaves it to the resident parent to produce the evidence that their ex-partner is effectively committing fraud. That is bad enough at the best of times, but if the resident parent has been the victim of domestic abuse or financially coercive and controlling behaviour, it is wholly unacceptable to make them responsible for ensuring that the other parent of their children complies with their legal responsibilities.
My hon. Friend is making a powerful speech on an issue that I have raised in the past. Several constituents who are the resident parent have not received any money for years, and a common theme or trend seems to be that the paying parent claims to have given up paid work or become self-employed in order to hide their income. That totally thwarts the whole purpose of the Child Maintenance Service. Does my hon. Friend agree that the CMS must pull out all the stops to find a way to prevent that from happening, maintain its charter commitment and ensure that the child is at heart of everything?
Absolutely. I do not think we will ever have a set of regulations that everyone agrees with. If a relationship between two people has completely broken down, the one who is paying will think they are paying too much, and the one who is receiving payment will think they are not getting enough. Surely, if the rules are based on someone’s income, however, it should be no easier for them to hide their income from their children than it is to hide it from the Inland Revenue.
I have assisted constituents affected by HMRC loan charge, as well as a constituent who was pursued to a ridiculous degree for a relatively small debt that they turned out not to owe to HMRC. Many resident parents in my constituency would like a fraction of that diligence to be used by the CMS when it chases down money that is owed not to the Government but to children who often desperately need it.
I congratulate the hon. Gentleman on securing this debate. Does he agree that more must be done to reconcile reported earnings with the lifestyle of the absent father or mother? I have seen parents in my constituency who give their child £10.50 a week, yet they drive a brand-new BMW, have the newest of gear and have that kind of lifestyle. An absent father must be allowed to live, but it should be difficult for them to disregard their financial obligations. We must make that more difficult.
I congratulate my hon. Friend on securing this important debate. I have a constituent who is owed a substantial sum by an absent father, who lives very comfortably and flies in and out of the UK with no apparent difficulty. The only answer my constituent gets is that the service cannot touch him because it cannot establish a UK address for him. Does my hon. Friend agree that such cases need more than just ministerial hand-wringing, and that concrete action to seize passports or assets could be in order?
Absolutely, and I will come on to some of the new powers that have recently been given to the Child Maintenance Service. Although those powers are draconian, there will be instances when they have to be used. Deliberately concealing income from people who you know want only to provide for your children should be a criminal offence. It is not a matter for the civil courts or for civil adjudication. If someone falsifies their tax returns, they go to jail, so if they falsify returns provided to assess their financial liability for their own kids, they should also go to jail.
I have a constituent who has not received payment for years. Their former partner has moved home and jobs, and keeps changing bank account. They also disposed of two properties, yet that money is untraceable. Surely people should not be able to open new bank accounts if they owe all that money.
Again, I entirely agree. I have had female constituents who use one name in their family and one in their professional work. They have difficulty opening two bank accounts, so it seems strange that others are able to get away with opening bank accounts all over the place.
Last year the powers available to the Child Maintenance Service were extended. I found it concerning to read the evidence submitted to the Work and Pensions Committee in 2016, because it seemed that the Department for Work and Pensions did not understood the difference between collection powers and enforcement powers. The DWP can implement collection powers immediately through the Child Maintenance Service—it does not need anybody’s permission—but enforcement powers are more severe and need the consent of the courts. If those who write the evidence for a parliamentary Select Committee are vague about the distinction between those two powers, it is no wonder than parents and children who are waiting for their money sometimes get confused about what the powers are.
Some powers that the Child Maintenance Service has should not be allowed as a form of debt enforcement, and even in certain cases I do not think that imprisoning someone for not paying their dues is acceptable. It should be an imprisonable offence if somebody falsifies information, but not if they refuse to pay money that has been established as owed. I certainly would not want any seizing of property, warrant sale or auction to happen in Scotland. One of the first private Member’s Bills put through the Scottish Parliament was to outlaw what I believe to be a barbaric practice. In a civilised country, there are other ways to carry out debt collection, without such draconian and barbaric actions. For example, we could restrict someone’s ability to open new bank accounts.
I need to make a bit of progress. If I have time later, I will give way to the hon. Lady. I am grateful for her interest in the debate.
Something that has been a major concern for many of my constituents recently is the Child Maintenance Service’s decision to write off debts that somebody has been owed for a significant time. Sometimes that is a relatively small amount of money, but it can open up all the old wounds again if the parent who is owed that money suddenly gets a letter from the CMS after 10 years, having heard nothing from it, as happened to one of my constituents recently.
Another constituent has been asked to agree to writing off a debt of £18,000 that she is owed for the children she has raised on her own. Her children are now grown up, and people could argue that they do not need the money, but the person who owes the money certainly does not need it. I do not think that is acceptable, any more than it would be acceptable for the HMRC to decide not to bother chasing somebody who owed £18,000 of tax. In the case I have referred to, the Child Maintenance Service knows where the absent parent is. It knows where he lives, it knows where he works and it knows his bank account details, so there is no excuse whatsoever not to require him to enter into some kind of arrangement to pay his children the money he owes.
On that specific point, they will have been contacted. If that information is available and they would like that £18,000 debt to be pursued, it would be, and it would be a priority.
Interestingly enough, when I contacted the Child Maintenance Service about that specific case, it promised to give us a fuller response by 3 October, so it has about 20 minutes left. If we finish a wee bit early, the Minister might be able to get on to his colleagues and ensure that they honour that. Of course, it may be that they have responded during the time that I have been on my feet.
Far too often, the parent who has the main responsibility for looking after the children physically is left to fight battle after battle with the CMS to get the money that is theirs and their children’s by right. Often, they feel as if the CMS is not working with them, but is almost acting as an obstacle to them. Far too often, when I look through the cases that have come in to my office since I was elected, the final point is that the parent has just given up and feels it is not worth chasing things up. Very often, they can no longer stand the stress of being forced to continue to contact somebody who, quite frankly, they never want to hear from again because of the way that person treated them while they were together. It is not only a tragedy, but a scandal, if somebody is forced to give up the fight for what they are legally entitled to simply because a Government agency has not supported them enough in the process.
I thank the hon. Gentleman for securing this important debate. Like him, my caseworkers and I have found it incredibly frustrating to try to get through to the CMS, both in cases where there is a claimant making a claim and where the CMS holds wrong information on a defendant. Just trying to get the CMS to look at that is very difficult. Does he agree that the fact that universal credit now takes account of maintenance income, whether or not it is received, will make recipients who are due that money even poorer if they do not receive it, and that that is a double whammy for them and often for their children as well? It just adds to the injustice of the situation.
The hon. Lady makes a valid point. Those of us who are old enough to remember it would do well to recall that the original version of the Child Support Agency was set up not to help the children, but as a way of getting somebody else to pay the children’s maintenance costs to save the DWP or its predecessor a wee bit of money. That legacy can be seen sometimes in the fact that the CMS, through the DWP, is simply not as enthusiastic about pursuing money that is owed to other people as it would be if it were pursuing money owed to itself.
I was looking through my records this afternoon, and I saw that I wrote to the Child Support Agency on behalf of one of my constituents on 30 September 1999. She finally received a first, partial payment on 1 August 2018. It took 19 years. Is the hon. Gentleman as unsurprised as I am that people, as he says, just give up?
I just wish that I could wait 19 years before paying the bills that come into my constituency office with more regularity. I would love to think that the example the right hon. Gentleman raises was unique, but I do not think it is. What is the point of a child maintenance system that does not pay anything to the child until they are 18 or 19 and have left school, and possibly left home and gone to university? The children need the money when they are two, three and four years old, not when they are in their 20s. In a case I mentioned earlier, the children were literally grown up and had left home. Some were married, some were at university. As a point of principle, the parent was determined to carry on fighting, but he knows perfectly well that the money will not make any difference to his children. They have had the experience of being brought up when money was desperately tight.
A completely incomprehensible aspect to the write-off scheme is that the process the Child Maintenance Service has to go through before it can write off historical arrears depends, reasonably enough, on the level and value of the arrears, but that, by its own admission,
“significant policy, operational and IT issues beset the 1993 and 2003 schemes which contributed to the build-up of considerable arrears of unpaid maintenance”.
In another document, it admitted that it cannot always be sure how much the arrears are. How can it be fair for the CMS to say that it can write off an amount of arrears because it is small enough within the scheme that it does not need the receiving parent’s permission, and at the same time to say, “We don’t really know how much the arrears are, because our record-keeping system was so appalling in the past”?
A great deal more could be said, but I know that colleagues want to speak as well, so I will bring my comments to a close. First, however, I want to add something that was not in my original speech. I decided to do that when I realised that, while we are having this debate, our colleagues in the main Chamber will, hopefully, be agreeing to the Second Reading of the Domestic Abuse Bill.
I cannot go into much detail about some of the cases I have had, because people are still under threat from ex-partners, but I hope the Minister can explain how someone whose partner has been convicted repeatedly of assault can hide their income from the Child Maintenance Service for more than three years after the CMS has been alerted to where the money was, where it was going and how it was being hidden. It was hidden in a way that, if I had the same authorisation to visit premises and to make inquiries as the CMS and HMRC, I could have found it, as any of us could, within 20 minutes. It was not an elaborate offshore scheme; it was a very simple accounting practice that HMRC and the Child Maintenance Service know about.
How can it be that someone who has been and still is a victim of coercive financial control is told that it is entirely up to her to find evidence that her ex-partner is committing fraud against her and probably against HMRC as well? How can that be acceptable? Why is the Child Maintenance Service not working more closely with HMRC, so that when they get information that points clearly to a large-scale criminal evasion of tax by somebody whose address and place of work is a matter of public record, they can take action? How can it take three years for them even to begin an investigation? When the Minister sums up, I hope he can answer that question, as well as responding to the other comments I have made.
Before I call Mr Kerr, I remind Members that I will call the Front-Bench spokespersons at 10 past five. Three Members have indicated in writing that they wish to speak, and I will call Mr Madders and Mr Pollard after Mr Kerr. If you divvy the time up among yourselves, we might be able to get more Members in.
It is a pleasure to serve under your chairmanship, Mr Owen, and I congratulate the hon. Member for Glenrothes (Peter Grant) on bringing this subject back to Westminster Hall. I shall be brief.
It is important to remind ourselves that even though we live in a world of three-letter acronyms—we talk about the CMS and the CSA—at the centre of all our thoughts and considerations in this debate is the welfare of the child and of children. Nothing ought to be more precious to us than the welfare of our children. I have no doubt that the staff at the CMS are sensitive, conscientious and aware of the impact of what they do. I pay tribute to them, because they deal day in and day out with adults, many of whom are in distress or are emotional and sometimes very angry. Behind each case is a child or children, often bewildered and dealing with complexities they are often too young to process.
I have some questions for the Minister, for whom I have immense regard—I think he knows that. I have asked these questions before because they are the issues that surface in my constituency casework and they have to do with the powers of the CMS. By the way, contrary to what the hon. Member for Glenrothes says, I wholly support the powers granted to the CMS last December to track down these reluctant, absent parents, but I ask the Minister, why is it so reluctant to use them? That is how it appears to my caseworkers and me. Why does the CMS seem not to be prepared to exercise to their full extent its powers to investigate cases, especially when it is clear cut that something is seriously amiss?
I am thinking of a case, which I will anonymise, where a non-resident parent is a clever accountant and is clearly hiding his income: you can tell that by the lifestyle he is able to maintain. It is clear what is happening. Earnings are being hidden away, squirreled away, disguised, but nothing happens. In another case, the MP contact agreed that an investigation was urgently needed, but, subsequently, someone somewhere else in the CMS flatly turned that down. Those are just two examples, but there are so many others.
Why the reluctance to press ahead? Is that reluctance to use powers based on how resource-intensive this is? The CMS has the powers, but does it have the resources it needs to enforce them? Based on my constituents’ experience, I raise a question about how the CMS works internally. Does it have the right internal systems to support the work it does and to manage its casework? I have no doubt it is a heavy case load for every single one of the people managing their clients. However, looking from the outside in, it is hard not to conclude that the systems are not functional, or that the system users are not working to a standard.
Why does there appear to be so little in the way of cohesive or comprehensive notes or records in my constituents’ cases? They will phone up and they might speak to the same person—that is an improvement. Sometimes they speak to different people, and when that happens, they have to rehearse their situation over and over again. That is deeply upsetting and distressing. It seems a very basic question to ask a Minister, but is there a standard for making notes? Is there a standard for creating follow-up items and action points? Is the system quality checked? Are the users of the system being assisted to maintain a high standard?
Then there are the letters my constituents receive when they are in the complaints process. They will often receive generic letters with phrases in them where sometimes the meaning is just not clear. That can create confusion and upset. My senior caseworker Rachel Nunn, to whom I pay tribute, and I have tried to help our constituents decipher these letters. However, they are so general—not specific enough, not personalised enough—and are confusing because they are not sufficiently personalised. Consequently, they create anxiety and stress for parents, and the last thing those parents need is more stress.
Thank you for affording me the time to make these brief comments, Mr Owen. I end with a simple home truth: there is a human cost to the breakdown of relationships. Yes, adults pay a price: an emotional price, a mental price, a wellbeing price. However, those who often—sadly and invariably—suffer the most are children. Frankly, I am aghast at how mean-spirited some adults can be when it comes to the welfare of their own children. That is why I support the new powers granted by the Government to the CMS and why I implore the Minister and the CMS to use those powers. When the Minister rises to his feet, I hope he will address at least some of the issues raised in my remarks.
Thank you for calling me, Mr Owen. It is a pleasure to see you in the Chair.
All Members here will recognise that this issue is an important matter that comes up in surgeries week after week. We know that the maintenance service is vital to ensure children do not enter poverty. One lone parent in four is vulnerable to poverty, according to the Joseph Rowntree Foundation, so it is critical that those payments are delivered on time. Simply, when the system fails, it fails the children we are trying to protect.
It saddens me that progress in improving the payments seems to be slow. I met the Minister earlier this year and I was impressed by his commitment and dedication to improving things, but we still come across issues all too frequently. Cases of non-payment are commonplace. Non-payment problems seem to arise particularly when parents switch from the collect-and-pay service to direct pay. There needs to be greater recognition of the long history of the parent’s paying record, rather than the small period when they are on direct pay. Too often, matters deteriorate again when they switch back to direct payments, which can make things worse for everyone, because arrears—sometimes of several thousand pounds—begin to accrue, which makes it even harder for commitments to be honoured.
I understand that a third of paying parents were non-compliant in the first quarter of this year, which demonstrates that my constituents’ experiences are not isolated. The level of arrears appears to be creeping up; more than £275 million of arrears was recorded in the first quarter. That suggests that some of the measures that the Government have introduced need further refinement.
In particular, there seems to be a lack of effective enforcement. My constituents tell me that the CMS appears more concerned with meeting the priorities of the paying parent than those of the receiving parent. That is probably an incorrect perception, but it is how they feel. There is also sometimes a feeling that some payment is better than no payment at all and that a hands-off approach with the parent seems to arise, which leads to greater arrears accruing.
All too often, my constituents experience unreasonably long delays in dealing with complaints, which not only cause emotional and financial stress, but leave parents without the support they are entitled to. Those payments matter. It is vital that, whatever challenges the CMS faces, it is effective in supporting children. Every organisation makes mistakes and I am not here to harangue it for those mistakes, but too often it seems that, even when an error has been identified, the culture of the organisation is too defensive, there is little candour and it takes too long to put things right.
I congratulate the hon. Member for Glenrothes (Peter Grant) on securing the debate, because it is time that we set out the concerns of our constituents—far too many of them. I have a real concern that the CMS is not fit for purpose. I say that because there are too few staff chasing too much demand, too many mistakes being made, and too many parents and too many children—as the hon. Member for Stirling (Stephen Kerr) said—not getting the support they deserve because of failings in the way the organisation works.
I wish to raise an issue that has not been discussed in detail, which is the Government’s changes to the way that historical debts are chased. I recognise that last year, the Child Support (Miscellaneous Amendments) Regulations 2018 were passed to enable the CMS to write off debts accrued when it was the CSA. There is a logic behind that in the adequate use of resources, but it means that there are far too many families in Plymouth and across the country who are legitimately owed money but who are having those debts written off. That is being done in a way that creates genuine heartbreak for the parents because of the lack of support for the children involved.
The Government have stated:
“If there is a reasonable chance of collection we will make reasonable attempts to collect the outstanding debt”,
but they are yet to articulate what “reasonable” means. I would be grateful if the Minister set out what the Department means by “reasonable attempts”, because far too many parents feel that there is no attempt to reclaim and go after those historical debts.
Consequently, it seems that if people avoid paying historical debts for long enough, they can simply get away with not paying at all. That is a deeply concerning sentiment that I have heard time and again in my surgeries. One constituent who visited me was owed £9,378.08 by her ex-husband. She was told that approximately £4,500 of that would be written off because it was accrued under the old CSA rules. After she got in touch with my office, we intervened so that did not happen. When the CMS actually investigated, it discovered that her ex-husband had more than enough money in his account to pay for the arrears, so the decision to write them off should not have been made in the first place, yet it was.
Another person who lives in my patch came to me with a similar issue: £13,359 was written off. In this case, it seemed that the absent parent was deliberately changing bank accounts and hiding income. The CMS said that the debt was a direct result of his determination to avoid meeting his responsibilities, yet my constituent was told that there was no right of appeal against the debt being written off. She is never going to see the £13,000 she is owed.
I have spoken to children involved. The money is not just cash; it represents a connection with a parent and a value for an individual. Children who are affected in these cases have a value and a worth; the historical debts hanging over them from parents who do not pay have no consequence on their value. Those children deserve to be loved, cared for and supported responsibly.
I congratulate the hon. Member for Glenrothes (Peter Grant) on securing this important debate. It is important that the adults on both sides recognise that the money that is reclaimed through the CMS is not for the parents; it is for the child or the children. The breakdown of a relationship can be incredibly difficult; it can be rather tempestuous and emotions can run high. However, it should always be remembered that the money is not going to the other parent who is taking principal responsibility for the care of the child; it is for the child’s benefit.
There have been long-standing problems with the transfer from the CSA to the CMS. People have been chased for debt that does not exist. My office has had to contact the CMS about money that has already been paid. The CMS is wasting its time and energies chasing debts that it should not be, and it should undertake its responsibilities to investigate seriously what individuals say to them.
On non-payments, constituents raise the issue of having no communication at all from the CMS and, again, it takes the involvement of my office to get any kind of resolution. It is striking that we do get a resolution, which makes me very aware that there is something going wrong in the system.
I also want to touch on reductions in salary. It seems from the examples we have heard that if someone has the financial flexibility, clout and wherewithal, they are able to hide their money. They are able to hide their funds, and it becomes incredibly difficult. If they are self-employed, they can put all the money into a company—the company can be in the name of a new spouse, for example—in order to pay for household bills and to live a more comfortable lifestyle and not necessarily pay what is owed.
The situation is different for those who are on lower salaries, who are taking their responsibilities seriously and who want to pay for their children, in the event that they are ill and they lose money. Because they are paid on a weekly basis, their salary has to go down by 25% for them to get any kind of reduction in the amount of child maintenance they are paying.
I have had people come to see me in tears because their illness has meant that they have been unable to work or they have had a serious reduction in their salary, and they have a new life and a new family who they have to pay rent for, and then they are unable to pay the money to the CMS. They are put into debt and financial hardship and then, when they are earning again, 40% of their salary is taken off them. It leaves them in a dire situation, wondering why they are bothering to work when they could be in the benefits system. I do not think that we should have a Government-sponsored system that encourages people to look to the benefits system as a way out.
I congratulate the hon. Member for Glenrothes (Peter Grant) on securing the debate. I would like to say a little more about the case I referred to in an earlier intervention.
By the time of the letter I wrote on behalf of my constituent, Mrs A, on 30 September 1999, the father, Mr A, had been assessed as being due to pay just over £100 per week towards child maintenance. He never paid. He claimed to be on a very low income. He claimed that he had absurdly high housing costs. At one stage, confronted with incontrovertible evidence that he was working, he claimed to be doing so free of charge. He is actually a prosperous and busy builder, who owns his own large home.
I was more or less continuously in touch with the Child Support Agency, its successors and Ministers for 19 years on my constituent’s behalf. There was a short period when she was distracted because of the ill health and later the death of her mother. However, she showed extraordinary ingenuity and determination in compiling evidence of Mr A’s true circumstances. Without that evidence, I do not think that he would ever have been forced to pay at all. He was absolutely determined not to pay. He spent a fortune in legal costs. If only that money had gone to his child, things would have been very different. He made three small contributions in 2003, amounting to just over £1,000, and that was after he had lost three tribunals in succession and appealed against the decision each time. But other than those three small payments, he refused to pay any money.
By December 2013 it had been established that Mr A owed £54,000: £15,000 was due to Mrs A; and £39,000 was due to the Government, to reimburse benefits that should not have been paid. It then took another five years for that demand to be enforced. My constituent finally received the £15,000 on 1 August 2018, 19 years after she had first approached me. The system completely failed to deliver the support that she and her son were entitled to throughout his entire childhood. As a result, he grew up in much more straitened circumstances than he should have.
The point that I put to the Minister is that surely the Government must act to ensure that an absent parent can no longer use legal chicanery to avoid their responsibilities for 20 years.
Thank you, Mr Owen, for allowing me to take part in this debate. I will discuss both sides of the arguments that go on in this area. Like my hon. Friend the Member for Great Grimsby (Melanie Onn), on occasion I am on the side of people who have to defend a claim to pay child maintenance. The Child Maintenance Service is the worst organisation that my office and I have to deal with, in that we see bills for payment that come from it that pay no regard to reality or income. It can put people who were previously healthy into situations where they are so stressed and so upset with the whole situation that it literally makes them ill.
Getting any sort of response from the Child Maintenance Service is almost impossible. It seems that people actually need their Member of Parliament to intervene on their behalf in order to get a response from the CMS. That is not good for MPs and our staff, and it is not good for people out there who need the child maintenance.
Having spoken to a friend in the Chamber who represents a very poor area of east London, I know that she has no child maintenance cases. We believe that is because the system is so complicated and so unresponsive that people simply do not come forward to claim the child maintenance that they are due. That is not good for them and it is certainly not good for their children.
I know that the Minister will be well aware of the situation concerning universal credit and the fact that parents with care are now deemed to be in receipt of child maintenance even if they are not actually receiving it.
That is very good to hear, although it is certainly very different from how the regulations for universal credit were set out at the time. If those regulations are changing, that is good.
However, it remains the case that women who are due to receive child maintenance are not getting the support from the CMS that they need, and it is all too easy for men in general to evade their responsibilities by hiding their money and income, and it then takes years for people to be able to claim that, and for children to receive the support they need, as has been highlighted here today.
The Minister’s team have listened to many cases from my constituency surgeries. We have yet to see decisive action taken against those defendants; I hope that it will be, but we really should not have to meet senior civil servants in the Department in order to get any action taken.
As always, Mr Owen, it is a pleasure to see you in the Chair. I just wish that we had more time to debate this hugely important topic. I congratulate my hon. Friend the Member for Glenrothes (Peter Grant) on securing the debate and on his powerful and thoughtful opening speech; he spoke for many of us, and for many of those who have been badly let down by the Child Maintenance Service. All MPs deal day in, day out with a steady stream of child maintenance cases in which a parent can and does avoid paying, simply because the current system is not robust enough.
Earlier this year a constituent from Argyll and Bute contacted me about a case that had begun in the days of the Child Support Agency, which highlights the failure of the system. Back in 2015 the father of Fiona’s children declared through Her Majesty’s Revenue and Customs that his gross annual income was just over £7,500, on which basis he was ordered to pay £20 a week to support his children. Knowing full well that that was not the case, Fiona appealed. Sure enough, the investigation that followed discovered that his true earnings were £200,000. The amount that he had to pay was increased accordingly, yet four years down the line, in a letter to my office dated May 2019, the CMS admitted that Fiona’s former partner was still in arrears to the tune of £68,000. That is unacceptable.
Fiona’s case is just one example—albeit perhaps an extreme one—of the cases that we deal with daily in which a former partner simply refuses to pay out. We have been contacted by a constituent who believes that the CMS is working on former calculated earnings; by a dad whose former partner refuses to pay out despite a CMS ruling; and by a young mother who feels that she has been sent from pillar to post, between the CMS and the Ministry of Defence, while trying to get regular payments for her eight-year-old daughter from her ex-partner in the Royal Navy. I could go on—there are numerous examples—but the fact of the matter is that the system simply is not robust enough; it is too open to abuse if one partner or the other is determined enough to avoid their parental responsibilities.
Children living in single-parent families are twice as likely to fall into poverty as children living with two parents, which makes regular maintenance payments even more important for securing their future and protecting them from falling into poverty. Charging single parents to access their right to support for their children is therefore completely wrong and unacceptable. It is grossly unfair that a receiving parent is charged £20 per application fee and a 4% deduction of maintenance when the CMS collects the payment, given that the CMS’s involvement is almost exclusively down to the fact that the payee is non-compliant with the rules. Why should children suffer at the end of that system?
There is ample evidence from stakeholder groups to show that the CMS’s charges have deterred many people from using the system. Indeed, a recent survey by the Department for Work and Pensions found that 40% of receiving parents on direct pay said that they found the application fee difficult to afford. That figure rises above 50% among those on very low incomes.
Will the Minister explain why we have a system wherein the people who need the money most—those parents whose children are recognised as most at risk of falling into poverty—are being made to pay to get something to which they are fully entitled? Is it not high time the Government heeded the call of so many people in and outside this House to remove all the hurdles that stand between single parents and the money to which they are entitled, to protect their children from poverty regardless of their situation? The primary role of the Child Maintenance Service should be to ensure that those children whose parents, for whatever reason, are no longer together, are not in any way disadvantaged because of it.
It is a pleasure to serve under your chairmanship, Mr Owen. I congratulate the hon. Member for Glenrothes (Peter Grant) on bringing the debate to Westminster Hall today, as well as the 13 Members who have contributed. When I spoke in this place a few months ago, I made the point that child maintenance does not exist in isolation. It provides essential help with the costs of raising a child—food, clothing and travel expenses. It can make a huge difference, as hon. Members on both sides of the Chamber have pointed out, to the welfare of the child and their start in life, which is crucial. Whatever the administrative challenges, and whatever the technicalities of the child maintenance system, it is important to remember that children are centre stage, as the hon. Member for Stirling (Stephen Kerr) eloquently argued.
It is crucial that children—it is often the most vulnerable—should have access to the financial support that every one of them deserves. It is equally crucial that the system should function in their favour when that support is withheld without good reason. Research shows that child maintenance alone lifts a fifth of low-income one-parent families out of poverty. We must remember that lone-parent families are particularly vulnerable to poverty. One in four lone parents is in persistent poverty—twice as many as in any other group, according to the Joseph Rowntree Foundation. The inadequacy of social security arguably makes child maintenance even more vital as a source of income for struggling single parents. However, as we have heard from across the Chamber, it is fair to say that there is a considerable distance to go to ensure that the current system of child maintenance achieves its aim.
A recent report from the charity Gingerbread has shown major problems with the payment of child maintenance through the direct pay system, for example. The Government could and should take action to assess the accuracy of the concerns. The current situation, whereby the DWP does not even track whether payments have been made, means that it cannot report on compliance in two thirds of cases. On collect and pay, Gingerbread has consistently argued that there is no evidence that charges encourage collaboration between parents. In the second quarter of 2019, 33% of paying parents in the collect-and-pay service built up arrears owing to non-compliance. The DWP’s own figures reveal that that is nearly £19 million. Furthermore, there remain continuing problems such as those highlighted today with inconsistent casework handing and follow-up—no follow-up at all in many cases—as well as poor and non-existent communication.
In my own constituency case load, as with other hon. Members, concerns have been raised time and again, and constituents believe that they will never get any money because it is tucked away through creative accounting. Like many in the Chamber, I firmly believe that collecting unpaid child maintenance should be a priority for any Government, and that the considerable toolbox of enforcement measures—many, in all fairness, the result of the 2018 review—should be applied more consistently. There has been a significant fall in enforcement activity by the DWP to recover payments that are, by definition, owed to children. According to Gingerbread:
“The hands-off approach, compounded by poor administration, places the burden of responsibility for pushing for Direct Pay enforcement onto receiving parents”.
Where direct pay arrangements break down and arrears accumulate, the CMS can assist by moving the arrangement on to collect and pay, but to use the service paying parents are charged 20% of the child maintenance plus a £20 registration fee, and receiving parents pay 4%. That introduces additional costs for already financially stretched households. Even on collect and pay, only 67% are paying something—I stress that word “something”—towards what they owe. Indeed, some of the testimonials that have been heard in the Chamber today make it abundantly clear that the current system needs to be more robust, and that the leadership of the DWP should listen and take more robust action. This is not simply a question of processes and systems; relationships and emotions are at the heart of how this approach affects those who use it.
Having listened to the debate, I have a number of questions to ask the Minister. Will he introduce monitoring of direct pay compliance, so we can have a clear picture of its effectiveness? Will he commit to introducing improved and more transparent service standards around enforcement and late payments? Will he review the effectiveness of collect-and-pay charges for receiving parents and look at the provisions that relate to the Domestic Abuse Bill around coercive relationships?
It is a pleasure to serve under your chairmanship, Mr Owen.
I pay tribute to the hon. Member for Glenrothes (Peter Grant) for calling this debate. On the basis of all the contributions, it is clear that this is one issue that unites those in all parts of the House, and that we want to do the very best for those receiving parents who have taken on the primary responsibility of the childcare and are having to battle to get the support that they rightly should be getting.
Let us remember that the CMS is a service of last resort. We would all hope that, wherever possible, parents can make amicable arrangements that do not necessarily need our involvement and have no impact on the children. Where that cannot be the case, however, because either one parent is or both parents are in dispute about what their responsibilities should be, it is absolutely the case that the CMS is there to provide support.
I want to make it very clear that all the cases raised show why this is such an important area, where we have brought forward significant new regulations and powers. I will go through some of those processes, but I repeat: a lot of the cases raised are legacy cases that would initially have been dealt with under the old rules and show why we have brought forward the rules I am going to talk about. There is still much more to do, and we are working very closely with stakeholders, including organisations such as Gingerbread, and on the other side those such as Families Need Fathers, which can provide constructive and helpful feedback. It is about getting balance between both sides.
There are around 700,000 cases a year. We record 2,500 complaints a year, which is less than 0.5%, but we still want to go further. We are absolutely focused on improving the customer experience. I pay tribute to my hon. Friend the Member for Stirling (Stephen Kerr), who I know has been proactive in this area. I must stress that I am not actually the Minister responsible for child maintenance, although I used to be; I have a great deal of interest in this area both as a constituency MP who raises cases and having served in a different role in DWP. Everything will be passed on to the relevant Minister. I would like my hon. Friend to meet the operations team, because some concerning operational issues were raised.
Customer experiences are shared with the senior management team. We work with stakeholders, and we also work with key organisations such as Womens Aid, which have done a huge amount to improve our ability to identify either victims or potential victims of domestic abuse, so we can tailor the service accordingly.
The initial contact with the service is with child maintenance options. That is not automatic; people must have a conversation, which will explain all the options available to them. Many people do not wish to use the process; they just want to have an amicable arrangement but would like some guidance on a starting point for those discussions. We can provide that information and signpost to other organisations, and that can open the gateway to looking at options such as direct payment or click and collect.
That is a fair point. I am sure the team would be very happy to meet those who are particularly interested in the operations side.
On direct payment, there are cases where we have advised what the financial contribution should be, and the parents set out to try and do that without using us. A number of people have highlighted how that can break down. The problem is then that the debts mount up, and the bigger the debts, the bigger the problem it is to get that fixed. So, we have rightly tried to be more proactive. Not only is there the annual review, but we now text the receiving parents proactively to ask whether there are any issues, and if there are issues, we ask that they should contact us immediately so we can either escalate ultimately to enforcement or move them on to the click-and-pay service. In the last quarter of last year, 9,000 people moved from direct pay to collect and pay. We are nudging that proactive level of support as quickly as possible.
The shadow Minister, the hon. Member for Weaver Vale (Mike Amesbury), talked of 33% not being collected on collect and pay. The 67% was the last published figure, in June 2019, which is up from 62% in the previous year, and the improvement has been long standing. The amount unpaid in June 2019 was £18.5 million, down from £22 million. That is £18.5 million too much, but we are heading in the right direction, through a combination of better training of our frontline staff, so that they can explain the options and potential punishments to both the receiving parent and the paying parent; better enforcement, which I am coming to; and the regulations that we passed to strengthen our ability to investigate and enforce.
Hon. Members have rightly raised areas where enforcement has not been quick enough. The right hon. Member for East Ham (Stephen Timms) set out the exact reasons that we needed the two separate sets of regulations that were brought in over the last 12 months, which we did after listening to the cases, learning the lessons and seeing what was missing and what stopped us taking the action we all support. That is underlined by the fact that action must be taken much more quickly. The sooner we act, the easier it is to remedy.
We are also now benefiting from the ability to access more real-time information from HMRC and the strengthening of our ability with deduction orders, where we take money directly from people’s salaries. We are also reminding employers. Quite often, employees will say to an employer who is their friend, “My other half is being unreasonable. It would be really helpful if you helped me fudge this.” We are now using legal powers to remind employers that they will liable and, unsurprisingly, those collections have gone up to 48,000 in the last quarter, collecting about £26 million, compared with the same quarter last year when there were 31,300 collections, collecting £19 million. We are also proactively highlighting success stories in the media, which doesn’t half focus people’s minds.
The most significant change is the introduction of the financial investigations unit. In the past, when lifestyle queries were raised, we relied on HMRC to investigate. HMRC had finite resources; if a premier league footballer was clearly defrauding it of a huge amount of tax, it was very quick to go and look at that, but, for many of the cases highlighted, while it was a significant amount of money to those children, it might not have been enough for HMRC to prioritise it.
The financial investigations unit, which is solely ours, does not look at the value of the money, because the money is as important to every single parent regardless, and it will chase each case. These are highly-trained ex-police officers and tax inspectors with fiscal investigation experience and they focus on doing a deep dive, using evidence, in these sorts of case. We initially recruited 30 in 2017 and it went up to 50 in 2018 and 80 in 2019. They are making a significant difference; about 4,000 cases are being investigated at the moment, and those numbers will increase as we gain evidence. That is a double win, because we will share that evidence with HMRC, which can chase any tax avoidance that has gone through.
The new regulations that we passed to help here include the ability to seize people’s passports. In the past, we went after driver’s licences, but when people went to court, they would say, not unreasonably, “Well, you can take my driving licence, but I then won’t be able to earn, and I won’t be able to pay any more money.” But the possibility of losing their summer holiday doesn’t half focus the mind. Having sent out more than 1,000 warning letters, there is high engagement at that point.
We now have powers to access joint and business accounts, because that is a clever trick of solely employed people for hiding money. We can also look at assets, so when self-employed people are transferring what would be wages into assets, we can now take a nominal 8% of those assets. It is now easier to access information from pension providers, and we will be doing more joint work with HMRC. I gently remind some colleagues who have been calling for those extra powers to vote for them next time, because some hon. Members voted against. We must put the receiving parents first.
I am grateful to the Minister, who has been a great deputy here today on behalf of his Department. Before I call Mr Peter Grant to wind up, I thank all hon. Members for their self-discipline and restraint about time, which has allowed us to get in all speakers, as well as a number of interventions.
I realise that I must be very brief, so I thank everybody who has contributed to today’s debate. A couple of points: first, people do not need a clever accountant to hide their money; they only need an accountant who knows how to set up a private limited company, and it then takes years to find it. Secondly, we do not need to be Sherlock Holmes to find these scams; we only need a Facebook account, and then we can see the luxury yachts, the holidays, the umpteen fancy houses and so on. If somebody on benefits was boasting about their wealth to that extent, the DWP would have them very quickly. That is the speed at which we should be chasing down money from other people as well—
Motion lapsed, and sitting adjourned without Question put (Standing Order No. 10(14)).