My Lords, I beg to move that this Bill be now read a second time.
The Bill implements important reforms to the way in which child maintenance is organised in this country. It breaks the link between child maintenance and the benefit system. It gives parents the power to manage child maintenance in the way that is best for them and their children. It ensures that those non-resident parents who try to avoid their responsibilities to their children can no longer do so. Above all, at the heart of this Bill lies a commitment to tackle child poverty.
The measures contained in this Bill, together with the increased disregard of £20 by the end of 2008 and £40 from April 2010, announced in another place in the Chancellor’s Pre-Budget Report, will lift 100,000 children out of poverty. And the Bill is concerned not only with children. Its “Other Payments” section makes provision for sufferers from mesothelioma, a virulent and almost invariably fatal disease caused by exposure to asbestos. Under the provisions in this Bill, anyone suffering from mesothelioma as a result of being exposed to asbestos in the UK, or their dependants, will be eligible for a lump sum payment from the state if they have not previously received compensation.
The system of child maintenance in this country has been a source of great anxiety to parents for many years. Around 2.5 million parents with care in this country could potentially receive child maintenance from a non-resident parent. However, only about 40 per cent of these parents are actually paying. This leaves a huge number of children without any maintenance, often suffering unnecessary poverty as a result.
The Child Support Agency has failed to provide an acceptable level of service to many families. This is certainly not the fault of its staff who have worked valiantly, often in very difficult circumstances, to help children. However, parents have often been left confused, frustrated and angry, while children have been disadvantaged.
The Bill makes reforms which will ensure that many more children benefit from maintenance. It will support parents to make maintenance arrangements that are right for them personally, while bearing down on those who do not comply with their responsibilities. Child maintenance can make a substantial contribution to combating child poverty; by supporting parental choice while offering the security of an improved statutory service, we can ensure that many more children receive the money that is due to them. As my honourable friends in another place have emphasised, a relationship may end, but responsibility to one’s children does not. It is not right that a child lives in poverty because a parent fails to provide adequate support.
Parts 1 and 2 of the Bill establish a new non-departmental public body, the Child Maintenance and Enforcement Commission, to take responsibility for the entire child maintenance system. As a non-departmental public body, at arm’s length from government, the commission will have greater autonomy to implement the measures in this Bill and to develop detailed policy. It will be able to define a strategy for delivery through partners and contractors, allowing it to harness the very best of private, public and voluntary-sector expertise to deliver the very best services to parents and children. The chair designate, Janet Pareskeva, is already shaping the new organisation, and we expect to announce a commissioner designate in the new year.
The commission will be fully accountable to Parliament and will be bound by its statutory objectives, as set out in Clause 2. The overarching objective for the commission is to maximise the number of effective maintenance arrangements that are in place, whether voluntary or statutory. This is supported by two subsidiary objectives. The first requires the commission to encourage and support voluntary arrangements when these are “appropriate” for the parents in question. Where they are not appropriate, the second objective requires the commission to support applications to the statutory maintenance service, thus avoiding the risk of anyone slipping through the net.
With the encouragement of voluntary arrangements, the commission is given responsibility for a long-term change in parental behaviour, tackling the root causes of child poverty while strengthening parental responsibility. This is of course backed up by the requirement to support both voluntary and statutory arrangements, whichever is the most effective and appropriate for the parents concerned. The requirement is for the arrangement to be effective.
The creation of a new commission will mark a clean break with the past. The Child Support Agency has been dogged by serious problems since its inception. As I have said, these are not due to the agency’s staff. They have not had the right tools for the job, have faced over-complex policy and processes, and have often done a very good job in very difficult circumstances. However, all noble Lords will be aware that the agency has never worked as effectively as had been intended, and it will always suffer from the legacy of the past. In these circumstances, a fresh start under a new administrative organisation is the only viable option.
As my honourable friend James Plaskitt, the Parliamentary Under-Secretary of State, announced at Third Reading in another place, we intend to bring forward amendments to give this body Crown status. This will allow the Child Support Agency’s staff to remain civil servants when they transfer to the commission. The staff are essential to the success of the reforms that we are making. As their status as civil servants is something which matters deeply to many of them, these amendments will ensure that they can look forward to, rather than worry about, the launch of the commission. After a three-year period, we will review the position.
We know that some parents feel frustrated by the fact that they are forced to use the Child Support Agency if the parent with care claims benefits. The Bill breaks the link between the benefit system and child maintenance, equalising choice between those on and off benefit and allowing all parents to make the best decisions about the maintenance arrangements for their children. However, the opportunities that can arise from the removal of compulsion will be realised in practice only if we also ensure that low-income families who separate get help to navigate the system. Such help also needs to be available in a manner that makes it accessible to all who need it.
The Bill establishes a new Information and Support Service, which is expected to be available through three main channels. A large-scale national contact centre will be backed up by a face-to-face service and web-based support. The service will identify and draw in low-income families, give them impartial information about the options that they have to secure maintenance, help them to act on their decisions and provide general information on wider separation issues. Therefore, the Bill moves us on from a system of compulsion and no choice to one which will ensure that parents are offered the help to make real choices. To be clear, this system will be all about securing maintenance for children, but of course we need to keep our broader aspirations in focus.
Separation is a difficult time, and we must plan for a joined-up approach across government, which includes but goes beyond the financial consequences and arrangements. For example, last week’s Children’s Plan made clear the DCSF’s intention to launch work on how better to support parents and their children during and after family breakdown. We are already working closely with the DCSF and will be fully engaged in this specific endeavour.
Those parents who choose to, or need to, make a statutory arrangement want to deal with a simple but effective system for assessing, collecting and, if necessary enforcing child maintenance. Part 3 of the Bill, therefore, makes significant reforms to the statutory service itself. It simplifies the assessment process, and provides new, stronger collection and enforcement powers. That will make the system easier for the many fully compliant non-resident parents, who recognise their responsibilities to their children, while allowing the commission to deal effectively with those who refuse to pay.
Currently, the Child Support Agency makes a maintenance calculation based on information provided by the non-resident parent. That can obviously lead to delay. The commission will be able to get the non-resident parent’s income data directly from HMRC, making the process much simpler and easier for everyone. The assessment will then be updated annually to reflect the changes in the non-resident parent’s tax data. That means that generally parents will not be required to provide large amounts of information to the commission, as the use of HMRC data will provide the commission with easily accessible and accurate earned income information. Money will therefore flow more quickly to more children. We also plan to introduce an amendment allowing parents to pass financial information disclosed in certain court proceedings to the commission, to help it make a fair and accurate assessment.
I know that some noble Lords have concerns about the treatment of investment and dividend income, and more generally in relation to the self employed. We are considering placing a duty on the commission actively to investigate applications for variations, so that non-resident parents pay a fair amount of maintenance whatever their financial circumstances. As the operational realities of the future scheme and the availability of unearned income information become clearer, we will continue to examine what can be taken into account in the main calculation.
The changes will make the assessment process easier and we need to do that not least in fairness to those many non-resident parents who want to provide for their children. However, it is a sad fact that no matter how easy we make it for people, some non-resident parents will attempt to avoid their responsibilities to their own children. For those cases, we are giving the commission new collection and enforcement powers. The use of administrative liability orders will make the processes of enforcing arrears considerably quicker, while the ability to collect money directly from bank accounts and other financial resources will mean that the commission can get the money moving as quickly as possible.
If a parent still refuses to comply, the commission will be able to use a variety of powerful tools, such as disqualifying a person from holding a passport, or applying to the magistrates’ court, or in Scotland to a sheriff, for the imposition of a curfew order.
We have listened to recommendations made in another place, and have introduced a clause which will make the failure to notify the commission of a change of address if required to do so an offence. Following discussion in another place, we intend to introduce an amendment allowing the commission to use its enforcement tools to collect old debt. We are also considering further enforcement powers, including opening up the types of account against which ongoing and lump-sum deduction orders can be made, and giving the commission the ability to apply to the court for an order freezing a non-resident parent’s assets where there is evidence that they are about to dissipate them in order to defeat the payment of child maintenance.
These are strong but necessary measures. The money in such cases rightfully belongs to the children, not the non-resident parent. While I acknowledge that many non-resident parents are meeting their financial responsibilities to their children, it is both right and fair that we should use fully effective measures against those who chose to deny their children the maintenance that could make a real difference to their young lives.
Part 4 of the Bill sets out the lump sum payment scheme for sufferers from mesothelioma or their dependants. While money cannot compensate for the suffering and loss experienced, the quick and efficient payment of a lump sum will help to alleviate much anxiety and allow people to provide for their loved ones. A lump sum scheme for mesothelioma sufferers already exists. However, it does not provide for sufferers whose exposure to asbestos was not directly caused by their employment. A worker in an asbestos factory can currently claim a lump sum; a woman who washed her husband’s overalls every week after he returned home from the same factory cannot. She will have breathed in the same contaminated dust, but she cannot claim under the existing Act should she contract the disease herself, and neither can her dependants. That is unfair, and the Bill corrects it. From now on, anyone who was exposed to asbestos in this country, or their dependants, will be entitled to a lump-sum payment if they go on to contract mesothelioma.
The scheme will be funded by an amendment to the Social Security (Recovery of Benefits) Act 1997 to allow the state to recover moneys in cases of double compensation. If a person receives both a lump sum from the state and, later, a civil compensation payment from their employer, the Bill will allow the state to recover the amount of the lump sum. Currently, that amount is deducted from the civil compensation payment made by the employer or the insurance industry. That means that the state effectively subsidises civil compensation payments, allowing the polluter to pay less. Such a situation is not acceptable, as all stakeholders, including the insurance industry, have recognised. The Bill ensures that negligent employers or their insurers can no longer benefit from the state’s duty towards those who suffer from industrial diseases such as mesothelioma.
This Bill sets out a framework through primary legislation, and I know that noble Lords will be interested in the regulation-making powers arising from it. Indeed, much of the detail will be in secondary legislation. On the child maintenance provisions, that is important because the commission has the opportunity to develop its own thinking to take these reforms further and make sure that they work. However, I assure noble Lords that where we have draft regulations, I will make them available and where we do not, I will provide a dossier of information relating to the secondary legislation at the earliest opportunity once your Lordships’ House returns in January and certainly before we enter Committee.
The broad consensus and cross-party support which this Bill has enjoyed in its passage through another place is a clear sign of its importance to many people. I welcome the scrutiny which I know will ensue in the remaining stages in your Lordships’ House. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord McKenzie of Luton.)
My Lords, while I am grateful to the Minister for introducing this Bill so clearly, as he always does, and for describing the changes that it is already planned to make to it, my immediate reaction is that it is mechanistic. The reason is simple. I am sure that we would all agree that the ideal place for children to be brought up is in a two-parent family—children and parents living together in the same house, which we call a nuclear family. There is, though, no encouragement in the Bill for a nuclear family to stay together, nor to maintain any relationship once it has split up.
The Bill—at least the first three parts of it—is solely concerned with achieving a flow of money between separated parents to ensure that part of the earnings of the absent parent is donated for the support of his or, occasionally, her children who are living with his or her former partner. The Bill, like its predecessors, calls that person “the parent with care”. The first three parts of the Bill might be better described as the Child Support Agency revamp Bill and in normal circumstances would warrant a Bill of their own. However, I fully understand why the Government have used this opportunity to tack on the somewhat disparate “other payments”. So much legislation is emanating from other departments of state that, having got a legislative slot, the DWP must use the opportunity to the full—more of that anon.
I return to the subject of the CSA’s reformation, which is the Bill’s primary objective; as the Minister said, isn’t it needed? The CSA has had an ignominious history. The House will remember that it was set up by the previous Conservative Government with all-party support. As I have said, and it remains as true today as it was in 1993, children should be supported by both parents. Even low-earning or benefit-recipient parents when absent should make a contribution to the upkeep of their children according to their means. This was assessed by a formula—changed to fairly popular acclaim in 1995 and 1996—which made it considerably more acceptable, particularly by reducing the maximum level of maintenance and so making it more affordable for absent parents.
The Government inherited a system which was beginning to work well enough. The noble Baroness, Lady Hollis, to whom I pay tribute as one of the three Ministers in this Government who have struggled—I think that “struggled” is the appropriate word— with the CSA, said in May 1998 that:
“Around 80% of assessments for child maintenance are now correct to the last penny, and some 98% of maintenance is passed on to the parent with care within 10 working days”.
However, the complicated formula that was used was leading to quite large debts. The Government, therefore, came up with a new one in 2001, which was amended several times due to a new computer system which finally went live in 2003.
In passing, why is it that every time this Government commission a new computer system, it turns out to be disastrously late and over budget? The Minister will remember that I asked him the same thing the other day when we were discussing the annulment of the Social Security (National Insurance Credits) Amendment Regulations. I am grateful for the letter I received from the Minister last week which essentially validated my solution. Be that as it may, a Select Committee of another place described the CSA's £456 million IT system as defective, over-spec and overdue. On this side of the House, the jury is out on whether a computer manager will stay in post long enough to make a difference.
I mentioned the claim by the noble Baroness, Lady Hollis, in 1998. By February last year, however, the situation was very different. There was a backlog of almost 330,000 cases and more than £3 billion of debt was stated to be uncollected. Unsurprisingly, the agency received 63,678 complaints in 2004-05. Regretfully, I have been unable to discover any more recent figures. That was an increase of almost 30 per cent on the previous year. “Something”, in the words of King George VI on his visit to south Wales, “must be done”. So the Government appointed Sir David Henshaw to conduct a root and branch review. The Bill is the result of his findings. It is notable to start with that he did not recommend departure from a formulaic approach, although we have a different formula to be found in Schedule 4. He did though suggest a different approach in other areas.
First, as we have heard, the CSA is to be disbanded and a new body, CMEC, is to be created. That is all well and good, and, if it works, we will lose the stigma that has been attached for far too long to this children’s welfare support system. I welcome that. I also welcome the fact that the money going to the parent with care will be a percentage of the absent parent’s income, which can be varied if that income changes. This income, as we have heard, will be verified by HMRC through the PAYE returns. This variation is accompanied by rough justice. The Bill currently intends that once an award has been made, it should only be altered if the absent parent’s income rises or falls by 25 per cent. That percentage is far too high, especially if the income is falling. I further believe that both the absent parent and the parent with care should be treated fairly. Incidentally, I failed to find “fair” until I reached Clause 21. Is it fair that if an absent parent’s income falls by 24 per cent he should still be paying the same amount? Surely that would put him in some financial difficulty.
I welcome the fact that no longer will the parent with care be obliged to go to the new agency. Indeed, the Bill goes further and encourages people to make their own arrangements, or, in the case of divorce, accept the settlement of the court. I am worried by the fact that once these settlements have been reached, the parent with care can apply to CMEC for a new approach after only one year under this formula. This is certainly something we will want to explore in Committee, not least because there is anecdotal evidence—which I shall try to pin down before then—that divorce lawyers are advising their clients to delay settlement for as long as possible for this very reason.
I spoke about fairness just now. In its administration, CMEC should be as fair to both parents as possible. This fairness extends to the recovery of debt from the absent parent. Just because a child has turned 18, is it fair that the absent parent should get away without paying anything at all? Is it fair that CMEC should charge one parent for its services and not the other?
I have other concerns with the Bill. The stigma attached to the CSA is due in large part to the phrases “absent parents” and “parents with care”. Both sets of parents hate being referred to thus, however appropriate the phrases might be in legislation. If any of your Lordships come up with alternatives, I am sure that the Minister will consider them seriously. As the gracious Speech says:
“Other measures will be laid before you”,
However, there is one technical matter that the Minister tried to address in his opening speech. I hope that he will be able to deal with it more fully when he winds up. As he said, the Government announced something at Third Reading in another place that may or may not be a major change to the Bill, or at least to the staff of CMEC; I of course pay tribute, as did he, to the staff of the existing CSA, who presumably will be transferred on the whole to the new body. It is no longer to be a non-departmental public body, but a Crown agency. While I understand that the staff welcome this, what precisely, if anything, does it mean for the parents? What effects will it have on individual Members of Parliament, occasionally including your Lordships, who have raised parents’ problems with Ministers from time to time, as the Minister knows?
Over many years, I have had the privilege—often with long intervals—of either promoting or responding to asbestos, pneumoconiosis and other similar orders in your Lordships' House; in other words, the “other payments” part of the Bill. This concerns the horrible illness of mesothelioma, a medical complaint associated with the inhalation of asbestos which kills within months of diagnosis. The current position is that the Government make payments to the sufferers which are repaid by the employer’s insurance company at minimum cost to the taxpayer. However, up to now, there has been no payment for what one might call secondary infection. That would include a home owner who contracted the disease because a builder, for example, was careless in removing asbestos from a ceiling. That home owner will be covered, insurance-wise, for the first time, and the builder’s insurance company will ultimately pay. There was quite a debate about plural plaques in another place which, although a feature of this disease, can, I am told, arise from other causes. I am not in favour of including them per se in the Bill.
I welcome the opportunity to discuss the Bill in Grand Committee. I hope and trust that when we have finished with it we can be proud of it and say, as I can now with the mesothelioma provisions, that it is a far, far better thing to do than has been ever done.
My Lords, the House will be grateful to the noble Lord, Lord Skelmersdale, and the Minister for their comprehensive and measured speeches which started this important debate. The noble Lord, Lord Skelmersdale, is absolutely right that the Bill does not have an awful lot of party politics in it and deals with situations arising from the past. It has had, generally speaking, all-party support; although it is a little rich for the noble Lord, Lord Skelmersdale, to accuse the Government of having a duff computer system when the original EDS contract was struck in the run-up to the 1991 legislation under, the noble Lord may recall, a Conservative Administration. But I do not want to go there, because I think that he struck the right tone and I want to continue that.
I start with a contingent declaration of interest. I was reading my Sunday Times the other day and was so moved by an advert I saw soliciting applications of interest to join the CMEC board as a non-executive member that I could not resist the temptation. My colleagues think that I have lost my reason and common sense to want to spend my spare time trying to run the successor to the Child Support Agency rather than attending to my garden. This has been received with some scepticism on the part of my colleagues, but for my sins I have applied. I hope that Sir Alan Sugar is not the chairman of the appointments panel. I will report progress as the Committee stage unfolds. I have been involved in the policy of the Child Support Agency legislation, and a bit like the noble Baroness, Lady Hollis, I know more about the Child Support Agency than is good for either of us. She has had a chance to try to make it operational on the executive side of the table. If I buy her a cup of coffee later, maybe she will talk me out of it. I have made the application, and time will tell what will flow from that.
The context of the Second Reading is very important. The noble Lord, Lord Skelmersdale, is right; this is an attempt at a clean break, and I am sure that the Minister is genuinely trying to achieve that. There is a legacy that cannot be ignored: the backlog of cases and, in the view of the Public Accounts Committee last July, a culture of non-compliance which has built up over the years and is no one’s fault. That is where we are. We are in a position where people think that they can thumb their noses at this type of government organisation. That cannot be ignored. We are also inviting this new organisation to run three systems; not one system, CSCS, not two systems, CS2, but three systems for a period of years until cases can be transferred across and properly catered for.
We as policy-makers have always underestimated the determination of non-resident parents—mainly absent fathers—to pay nothing; the square root of nothing at all towards the maintenance of their children. Any idea that this organisation is failing because it has an easy client group and that all it has to do is knock on a door to get a cheque is cloud-cuckoo-land. We must recognise the difficulties that members of staff face in trying to deal with a very non-compliant client group.
Two important things have changed recently, and we should not ignore them. First, there is the extent of household debt in the United Kingdom. In 1993 when this all started, there was not anything like the residual, chronic, built-up levels of debt which make it more and more difficult for a lot of the households that we are dealing with in the 1.4 million caseload that the organisation has to get through the week, never mind pay any extra money. It is not easy for them either. On the other hand, I read in the Guardian on 7 December that the Liverpool Victoria estimates that it now costs £186,000 to raise a child from birth to 21 in the United Kingdom. That has rocketed in the past three years. There is an environment in which the legislation is being introduced that we cannot ignore.
More than anything else, we cannot ignore that the problems with the computer systems and telephony systems have still not been resolved. The Child Support Agency annual report, incidentally, was delayed for six or seven months. It was due in July and it was produced only a few weeks ago. Everyone should take 10 minutes to look at what the Auditor-General and the chief executive of the CSA, Mr Stephen Geraghty, a man for whom I have a great deal of time, are saying in the report. He is the first chief executive I have come across who is able to get on top of this, if anyone can. He talks about 600 work-arounds still being necessary to get management information. It is not just that they cannot get the assessments right; they do not have the management information to know whether they are making progress. It should surprise no one that the Comptroller and Auditor-General is qualifying the accounts of the CSA.
I am disappointed and fearful that the latest computer release, the so-called PR1 release, which was due to be in place by now, is scheduled to go into place at Easter. The undertaking was that it would be done in this financial year, and the Government may squeak that by a matter of days, but it was supposed to be in place months ago. That is another symptom of the fact that we still have not cracked the technology and telephony that provides a platform for this policy. I am worried about that.
Despite all our endeavours and people doing the best they can in good faith, there is still a high risk that this policy will fail. One of the reasons for that is that I do not know whether anyone can get to grips with the behavioural changes that will flow as a consequence of the abolition of Section 6. The regulatory framework statement suggests that we will lose 400,000 cases so that the caseload will fall from 1.4 million to 1 million. There will be a little more capacity in the system, and the theory is that that will free up the organisation. I have no idea how that can be judged when we have not seen a business plan; all of that is being left to the organisation once it has been set up. I am sure it will do its best, but this a shaky basis on which on make plans.
Further, I am sure we will discuss in Grand Committee the consequence of leaving people to their own devices: that we may end up back in the same position as in 1991. If there is no way of checking on what is going on, the Government’s child poverty targets could be challenged as people fall out of the system altogether. We will have no way of knowing what has happened to them, and so we will be back to where we started. Voluntary agreements and so on need to be looked at carefully in Grand Committee, because I am not convinced that we will not end up cutting off our noses to spite our own policy faces.
Sir David Henshaw did a very good job and we have missed an opportunity here. We have had Statements in this House about his work, which were precursors to this legislation. Taking the 1991 legislative template and using it in 2007 is a mistake. Circumstances have changed and I would have much preferred to have taken this opportunity to make changes. However, I accept that it is too late to do anything about it in the Bill. The current mood is to move towards trying to enshrine child entitlements rather than simply providing a template to ensure that the number of agreements drawn up and payments made are increased. That is all this Bill does. It is a mechanism that tries to sustain the number of payments being made. Increasing the transmission of money is all it seeks to do.
I refer the Minister to a letter in the Times today signed by representatives of serious organisations such as the chief executive of Relate, Clare Tyler, and her colleagues. They make very clear the importance of the opportunity before the Government and talk mainly about getting joined-up support for parents. The noble Lord, Lord Skelmersdale, was right to refer to that and we will return to the point in Grand Committee. Academics in other jurisdictions are looking at trying to invest in children the entitlement to pursue what is good for them rather than what is happening above their heads to the relationship between the non-resident parent and the parent with care. I hope that we will bring forward some amendments on that to test the ground. I do not want to try to delay this legislation by standing it on its head and trying to wreck it, but in the fullness of time the policy framework for this area will come round to that way of thinking.
The Bill has to get three things right. The weighting is wrong at the moment. Obviously the instructions given to parliamentary counsel seek to put a bias towards trying to filter people out of the system and into voluntary arrangements. I understand that; it is what Henshaw talked about and I make no complaint about it. But as the Bill is framed, the weighting is wrong: other priorities should be included in Section 2, right at the heart of the instructions we are giving to this new body. They are simple and straightforward, and most of them were referred to by the noble Lord, Lord Skelmersdale.
They include getting the best guidance for the client, not for the organisation. We should not show people the door, saying to them, “Walk through here and enter the rosy hinterland of a voluntary agreement because it is in our interests to get rid of 400,000 cases”. We need a cross-departmental support system that is more than a call centre and an offer of a face-to-face interview with a website. I do not think that that measures up to anything like what we need to do this job properly. Getting that right is the core of making this legislation work—but we also need to get the calculations right first time. They need to be accurate and we need to get the computer system fit for that. That is a priority. Another priority is the efficient collection and payment of maintenance and getting the flow of money. At the moment, there are still problems with getting the money out when it has been brought in.
Finally, there is the question of recouping historic debt. I did not quite catch some of the suggested amendments that the Minister discussed in his helpful speech, but we will get a chance to study them when he tables them. Expanding the types of accounts that you can attack is an obvious solution. People will think that we are stupid if we say that all that we can get to is a simple current account when someone can make a telephone call and make it a joint account with their granny, protecting it from attack from the Child Maintenance and Enforcement Commission. That makes us look stupid. I understand that there are differences in legislation on joint accounts between north and south of the border, but Stephen Geraghty says in his annual report that there is £1.5 million of debt that he believes is still collectable. That is another priority for the organisation. There is a danger that getting on to the new system and getting people organised properly will put that £1.5 million of debt on the back burner. As the House knows, nearly double that amount is listed as debt, but that £1.5 million of collectable debt needs to be seriously attacked by the new organisation.
All this will be dependent on resources. We know that the staff head count will fall to 9,000 before too long. We need reassurances that if this change gets a bit more pesky than the Minister suggested it might, that head count must be retained until we get the new system operating smoothly. That is essential. I know that the department has a very tight departmental expenditure limit and that there are no blank cheques in government, but we need to look at the Gershon proposals and the resources available and ensure that for the third time this does not fail because the staff are not sufficient to do the job. We need to recognise, as the noble Lord, Lord Skelmersdale, did, that motivation of the staff is important. The Crown agency development is very welcome, because it means that people can transfer confidently between the Civil Service and other departments. I think that that is good; I do not know why it is restricted to three years, but it is a really positive outcome.
Lastly, there is a very great deal still to know about what we should expect from this new body being set up in the Bill. One suggestion that I should like to make is that the Social Security Advisory Committee may not be capable of having formal references for these regulations that will eventually apply to CMEC. I do not know whether that is true but, if it is possible, I should like to see the SSAC’s remit stretched so that any future regulations that deal with CMEC in this important area of policy are scrutinised publicly in the accepted way by the SSAC. However, I do get boring on that subject because I am always looking for ways of mentioning it.
This is an important Bill. A lot of the problems are operational—there are not a lot of politics in it—but it is important for those whom it seeks to serve and it is important that we get it right. This will be third time lucky, I hope. We are all sentenced to doing a lot of Christmas reading of House of Commons Committee sittings on the Bill. I look forward to that and to taking part in our Grand Committee sittings—and I wish the new organisation, whoever it consists of, the best of luck.
My Lords, I am delighted about so much in this Bill. Real additional money will go to the poorest children—and I congratulate my noble friend on achieving that. CSA1 was very much about saving the taxpayer money and offered nothing additional to families. Not surprisingly, he did not pay and she did not try to make him pay as there was nothing in it for her, except possibly revenge. CSA2, the 2003 scheme, allowed a £10 disregard for the 50 per cent of families on benefit, which was useful but limited. Now all existing families in the system will keep £10 and, under the new settlements in the Bill, not £10 but up to £20 in 2008, going up to £40. First, that should attack child poverty. We have seen figures slipping, because by definition if poverty is relative, benefit must be increased faster than earnings to narrow the gap. Paid as an addition to the benefit bill, not only is that hugely costly but it has implications for work incentives. Coming through child maintenance, however, this is like an additional form of privatised tax credit and could therefore make a substantial contribution to addressing the problem of child poverty.
Secondly, the proposals are more likely to keep fathers as players in their children’s lives. If he pays and sees money going to the child, and the parent with care is in turn sufficiently appreciative to facilitate contact and access, it is a win-win situation, especially for the child. We know that the best predictor of the daughter of a lone parent doing well is the lone-parent mother in work. The best predictor of the son of a lone parent is contact with and support by his natural father, even though the parents may be living apart.
Thirdly, I suspect that the extra money coming through CSA payments will raise, not dampen, aspirations to do part-time work—the mini-jobs that are the best stepping stone into full-time work. I hope that the Government will follow through on that. At the moment, if you think about it, we have a completely absurd benefit system. If you are a lone parent, you keep payment for the first two to three hours of your work. You then lose the next 10 or 12 hours and are allowed to keep the lot after 16. That then gets topped up by tax credits. Talk about manmade stupidity. You should be able to keep a proportion of each additional hour that you work until at some point you can rely on full-time work, together with tax credits. We should have dials and not dichotomies. I hope that this will be the basis of a ladder of income and therefore a ladder of opportunity, and not the foolish polarities of the existing benefit scheme, which assumes that you are either in work or not in work, when all the evidence suggests that lone parents in particular inhabit a huge grey area between the two.
Fourthly, over and beyond child poverty, father involvement and support for part-time work, I am pleased that the automatic deductions from earnings, which were not allowed under the old system, and the tougher responses to NRPs who are wilfully absent and who fail to support their own children in the hope that other fathers—called taxpayers—will do so have been ratcheted up, and that CMEC will be the default arrangement where voluntary arrangements fail. Above all, I am delighted that, at last and for the first time, there will be an appropriate contribution from the HMRC to this effect. Again, this is something that CSA1 and CSA2 were denied. If CSA2 had had full automatic information on the previous year’s tax income from the non-resident parent, the maintenance income for thousands and thousands of children would have been very different. The compliance of HMRC at last will probably turn out to be as important as the compliance of the non-resident parent.
I go on to describe some worries in the context of my very real pleasure that more money could go to poor children. If the Bill can deliver that, most of us will cheer it along. My worries are twofold, and were touched on in the very thoughtful speeches of the noble Lords, Lord Skelmersdale and Lord Kirkwood. First, for new cases, he and she will in essence operate in a voluntary system—free bargaining. For that to be fair, there must be equity of bargaining power and knowledge. She may know what percentage of his income she may expect—15 per cent net, 12 per cent gross—but not what that income is. Obviously, if the parents have been married or she has done the books for his small business in the past, she will have a good idea. But where the child is from a more casual arrangement or relationship where the father changes jobs freely, may or may not do overtime or work on the side, or may be on to the second or third girlfriend since, how can she know? She has to have information about his income, otherwise a voluntary system is weighted far too much towards him. That is without assuming that he will bully or threaten, possibly saying, “Settle for £15 and I might manage it; go for £30 and I will see you don’t get a penny”.
The mother must have a statutory right to know his income. If she cannot see directly any of his tax return—I understand those problems—she would be wise not just to consult the support system. The noble Lord, Lord Kirkwood, was right to emphasise the need for that. She should abandon the voluntary system altogether and for at least the first year come into the statutory CMEC system, CSA3, to find out what he should pay and to make it stick. Therefore, the hope to slide people off to the voluntary system is fool’s gold.
I share some of the concerns of the noble Lord, Lord Skelmersdale, about the 25 per cent tolerance rule, but perhaps we can explore that more fully in Committee. I should just like to add that the men who are assessed to pay most are usually the best payers, because they are the men who have come out of a divorce, are attached to their children, are the higher earners and want to pay. The problem is much more the somewhat feckless fathers of casual relationships, especially the 28 per cent of those men who are on benefits themselves who would prefer to walk away if they could, or the 7 per cent of the self-employed who I always estimated were responsible for about 25 per cent of the problems in the CSA. They could not manage their own books, let alone move payments across to children.
My first doubt is about the equity of knowledge without first going through CMEC, which therefore undermines the whole thrust of this Bill; namely, to achieve a voluntary system. The second area where I have doubts follows from that. It is about layering a voluntary system, which was again mentioned by the noble Lord, Lord Kirkwood, on top of not one but two preceding statutory systems. For some separating couples, voluntary arrangements may work. I hope that they will. Let us consider a brand new case where the baby is the first for the mother and the father, and they have equity of knowledge, a tolerable amount of good will, a steady income and steady circumstances. Perhaps all will be well. She will know what he should pay. He will pay it and the child will flourish.
That of course will not necessarily be widespread. A high proportion of cases that come to CMEC will be linked to other cases in CSA1 and CSA2. Those linked will, on average, be linked to three previous cases in the old system. I saw a chart with 29 linked cases, most of which had to have their income and payments reassessed. Folklore has it that—I think that my noble friend Lord McKenzie may have seen such a case—there was a case with 70 or 90 connections at one stage. Many—probably most—of those cases do not have financial implications and do not need to come into play in the future, but a significant minority will.
Let me explain: a man has a baby with a new partner who he then leaves. The new PWC, under CMEC, seeks a voluntary arrangement with him. Whether known to his partner or not, he is already supporting a child in the previous scheme for whom he is paying the statutory net 15 per cent, gross 12 per cent. What child support can the voluntary-arrangement PWC get from him? In theory, he should now pay 20 per cent net, 16 per cent gross; that is, 8 per cent gross to each of the two PWCs—one in the statutory system and one in the voluntary system. The old case would have to be closed down and brought into the new system. The maintenance of the existing first PWC would have to be reduced, the payments recalculated and new payment arrangements made. Of course, that would all be done by computer—except that from my experience of the computer, like that of the noble Lord, Lord Kirkwood, it may not.
If there was a single reason for failure of CSA2 over and beyond the culture of non-compliance of NRPs and, to some degree, the culture of non-compliance of HMRC, it was a failure of the computer system to cope with linked cases, requiring a recalculation of existing payment, a review and update of the man’s income, and new payments to be made with which the system could not cope. Too often, the calculation had to go off for manual processing and got stockpiled. The concept of annual reviews of income of course went by the by. Therefore, in trying to make a new recalculation, there were years of dirty data underlying, which first had to be cleaned before the new calculation could be made. This mattered less when those on CSA1 got nothing whether or not he paid, and those on CSA2 got only £10. In other words, missing moneys were relatively modest. But now, the money available—this is the flip side of the welcome increased generosity to the parents with care—could be £40 and worth fighting for.
I hope that the system will be more robust because new cases will be voluntary and the system will be increasingly complex. If the PWC and CSA2 is getting her 12 per cent gross, how are we going to ensure that PWC2 under CMEC will get a voluntary satisfactory arrangement of the 8 per cent to which she would be due under the statutory system? Either the NRP pays the 12 per cent to PWC1 plus a voluntary payment of 8 per cent to PWC2, in which case he may pay too much, although I think that is extremely unlikely; or the position of the second PWC will be less financially fair than that of the first and she has to accept too little for her child; or, because payments for both have to be readjusted, payments will falter all round.
Now let me complicate it a little more. He has a child in CSA1 and also in CSA2, and a third child in CMEC, all with different systems. Harder still, he may live with a new lady, a lone parent, who has her own children by a previous partner who is not paying maintenance—he is missing, is on benefit, or is abroad—so the new NRP is assumed to be helping to support them. Perhaps he is; he may be doing the right thing. All the children—the two that came with his new lady and the one biological child of his own—are added together and the first PWC, instead of getting 15 per cent net, 12 per cent gross, gets less than half that. All he has to do to substantially reduce his child support arrangements for his own biological children is to move in with another lone parent, as very many do.
Let me complicate it with a further twist. Both the PWC and the NRP are sharing care, although the degree to which they do so changes over time and each time the calculation has to be remade; or he may care for one child, she another, and, because their finances are unequal, payments still have to be made from him to her. Not only do any previous arrangements have to be reviewed with other PWCs but the voluntary arrangement must know about them, take account of them, and then with full knowledge negotiate a contribution for the new baby and adjust that for any shared care. It may happen.
These child support calculations will be as complicated to assess and deliver as tax credits. They will not go to as many families, obviously, and they will usually be worth far less, but their complexity—because of the interaction with linked cases and issues of shared care, of stepchildren and the like—will be far greater. After all, most tax credits go to intact families whose income may fluctuate but whose structure remains broadly stable. Child support calculations have to reflect not only fluctuating income but, by definition, fluctuating family forms as well.
I hope I am wrong; I really do. If I was going to give my noble friend a single wish for Christmas it is that the computer delivers and that, as a result, children will get the money they need. If it does not, CMEC will fail. My noble friend may instead be hoping that most parents will go for voluntary arrangements, but if NRPs were willing to pay voluntarily in the first place we would not have needed CSA1 or CSA2, let alone CMEC. Voluntary arrangements, I fear, may well short-change children. As to the statutory arrangements, I have no confidence they will necessarily yet deliver.
Can we reduce the risk somewhat? Given that we have this newfound accord with HMRC, I think we could. Perhaps two-thirds—my figures may be a little out of date here—of non-resident parents are either on benefit, on JSA or in receipt of tax credits. Someone from Mars would find it very odd that one department of government—indeed, that one division of the same department, the DWP—is paying out cash while another department or division is seeking to reclaim cash from those self-same families. Why do we not extract the money at source and pay it net, rather than seeking to churn it through the system and fail to do so?
The fear, of course, is the fragility of the tax credits system and that you should not take money away from a second family to pay to a first. I do not agree. Essentially what happens is that first families lose out financially because a man forms or, more likely, joins a second family where the ex-NRP in that family is failing to support it. I believe we need to be more even-handed between them.
Where there is good will between parents, voluntary arrangements may work. Where they come to an arrangement within the shadow of the CMEC formula, it may work, but if it does not it will not. Where there is not good will I fear for the outcome. The man is far more likely to do well out of it than the woman because he has the knowledge and the bargaining power and she is likely to be the parent caring for children. Whether or not she returns to CMEC, I hope she gets more regular payments.
As a final word, I pay tribute to the staff who are doing one of the most difficult jobs in government. They are not only trying to ensure a flow of money to children, but doing so when placed between two warring parents who seek to take their anger out on the CSA for failing to meet their completely conflictual needs. Most of those staff, I know, have been working under huge stress over many years. They have handled it robustly, professionally and courteously because they are determined—as we all are—to lift children out of poverty. If, under the Bill, what will be CMEC stops being an inefficient debt collection agency and can, for the first time, properly and thoroughly deliver money to children, I am sure we shall all rejoice.
My Lords, I wish to make only a modest contribution to the Bill on Second Reading, and I do so hesitatingly in the light of the vast knowledge and experience of the previous speakers.
It is to be regretted that so many children are affected by the separation of their parents. I pay particular tribute to the organisations, professionals, courts and individuals that work to support families around this traumatic transition, many of whom are working on shoestring budgets without any long-term funding. My colleague the right reverend Prelate the Bishop of Manchester recently chaired a meeting for Members of this House at which some of those agencies and organisations movingly and powerfully expressed their concerns about these matters. We have already heard some of those concerns expressed today. Perhaps another noble Lord present in the Chamber will elaborate further on the concerns evidenced at that meeting.
As organisations such as One Parent Families/Gingerbread and National Family Mediation have reminded us on many occasions, only one-third—one in three—of one-parent families receives any support from the non-resident parent. The Government have reaffirmed their commitment to ending child poverty by 2020, and yet receipt of maintenance has a significant impact on children’s chances of growing up poor. To achieve the Government’s targets on child poverty, it is vital that this issue of maintenance is sorted out properly, particularly for the most vulnerable in our communities. Children are a gift, but creating a child also creates positive responsibilities towards that child. I sincerely hope that the Bill creates a commission that will play its part in helping parents to live up to their responsibilities, with enforcement as a last resort.
As I am sure other noble Lords will agree, it would be good if the Bill marked a new era for parents who seek help from an agency to gain their maintenance. As has been said, it is often the parents with the most care responsibilities who tend to be financially worst off after separation or divorce and who find themselves in great personal distress and financial hardship. They need the best available advice and support to work out with their ex-partners how best to provide for the children. Although the Bill only outlines the duties of the commission and does not go into specific details, I hope that the information and services which the new commission gives will be of the highest order and quality. Now that applying for maintenance through the commission will be voluntary, it is important that there are incentives to apply for those parents with care who are unable to get an agreement with the non-resident partner.
I am glad that the Government have increased the maintenance disregard for those on benefits and have recognised that the commission’s main purpose is to promote the welfare of the child rather than to claw back benefits. That should directly affect child poverty. However, there is a strong argument for increasing the disregard still further if we wish to move more children out of poverty. We on these Benches wish the Minister success as he pilots this Bill through the House for the good of all the children in our nation.
My Lords, I welcome the Bill as far as it goes, but it is totally inadequate to address the serious problems that face our society today: dysfunctional families, poorly socialised and undereducated teenagers, and the general lack of appropriate family life. The vast majority of mothers and fathers in this country give priority to their children and do their best for them, but, alas, a small minority do not. There are men who walk away from their responsibilities to form another family or to play the field. There are women who choose to have an unstable family fathered by a series of changing partners. There are families which are torn apart by violence, addiction, poverty, poor housing, mental ill-health or poverty of aspiration.
Money is only a small part of the problem. In so far as the Bill helps the resident carer to have more money for their child, it will help, but in so far as it simply reduces the amount of benefits that the Government have to pay to the mother, it will help only the Treasury and not the child. The Bill cannot deliver the social change that our society desperately needs. There is a need for a change of heart. If non-resident parents understand their responsibilities fully, child maintenance will be easier to collect. Unless they understand and accept their obligations to the children whom they brought into the world, the collection of child maintenance may be destabilised, and it may destabilise our society further by seeming to some parents to be totally unreasonable. The right reverend Prelate the Bishop of Southwell and Nottingham referred to that problem.
Ministers often refer to the responsibilities of parenthood. In his opening remarks today, the Minister quoted one of his colleagues in another place who said that although a relationship may end, responsibility to children does not. But where is a clear definition of the responsibilities of parents to their children set out in English law? I do not believe that one is. The definition in the Children Act 1989 does not give any useful guidance on those responsibilities.
There is increasing awareness that all children and young people need help to achieve appropriate social and emotional development and communication skills. That process starts at or before birth and goes on throughout childhood. If the appropriate building blocks are not in place by the time the child is 30 months old, he or she will start life with a disadvantage that may grow as he or she grows up. From the first day of his or her life or before, a child needs stability and security based on a loving attachment to at least one committed, stable and caring adult. Secure attachment to an appropriate committed adult, usually the mother, is essential. It makes it much easier for the mother to give the commitment and the time necessary to do the job if she has a decent and committed partner to help and work with her. The child can then also benefit from the secondary attachment to that partner. Committed grandparents, committed kin and a committed community, where it exists, can also be important. To enable more of our young people to succeed in their lives we should address their need for a strong and supportive family group in which to grow up.
The most important first step in this direction must be for our society to agree on what part of the responsibility for parenting a child belongs to the parents and what help and support parents should be entitled to expect from the state, their neighbours and their extended family respectively. Both parents, in so far as they are able, and as long as they are alive, must share the responsibilities of parenthood. Is that the Government’s view?
As we very properly place a financial maintenance burden on the absent parent, are we, and they, not entitled to know whether the resident parent is doing his or her part of the maintenance job properly? It may seem politically incorrect to suggest that a mother would not be doing her job properly while the father was absent, but let us reverse the scenario and suppose the courts have given care of the child to the father. Surely the mother will not only want to be sure that the money she is providing is being used properly, she will want to know that the child is being looked after properly. The noble Lord, Lord Kirkwood of Kirkhope, referred to the entitlement to maintenance which should attach to the child. That is another interesting thought in the context of what I have just said.
Any solution to our present problems will inevitably involve focusing most support from the Government, the state or the taxpayer on that minority of families who are struggling. As we do so, however, it is important not to create a perverse incentive. The parenting behaviour of those who give their children the care they need must be rewarded and encouraged so as to encourage others to do the same. That may be difficult to build into the system but we need to think about it. The Bill rightly provides a douche of cold water on the heads of some of those parents who shirk their responsibilities, but it fails to look at the problem in the round. It does not set its proposals in the wider context.
The Bill would have been more acceptable and workable, in an ideal world, if it had been part of a Children Bill that clearly set out the responsibilities of parenthood in our society as we understand them today. One way to do that would have been to adopt the neat and sensitive definition of parental responsibility that already exists in the Children (Scotland) Act 1995. In summary, the definition is: the making of a long-term commitment to safeguard and promote the child’s health, development and welfare, and to provide direction and guidance to the child in a manner that is appropriate to its age and development. The Bill should have had that definition as its first clause. Although the Short Title of the Bill makes it impossible for me to table a first-clause amendment, I shall introduce amendments to the text of the Bill that will test the Government’s commitment on this issue.
My Lords, I give a general welcome to the Bill: any improvement on the present system has to be welcomed. When I was a Member of the other place, most of my mailbag and certainly most of my surgery cases involved dealing with the Child Support Act 1991. Most of the debate this morning has been about the Child Support Agency, but I want to confine my remarks to Part 4 of the Bill, which deals with lump-sum payments for mesothelioma.
I worked in a shipyard and the ship-repairing industry for 37 years before I was elected to the other place in 1979. Many of my colleagues unfortunately died of asbestos-related diseases and I have seen first hand what a terrible death that is. I only wish that my honourable friend Mick Clapham next door had pressed his amendment regarding pleural plaques. The noble Lord, Lord Skelmersdale, is the only one this morning who has referred to pleural plaques.
For almost 20 years compensation was paid to those who were diagnosed with pleural plaques. There is no way that a person can get them other than through exposure to asbestos. Pleural plaques are a result of penetration of the lungs by asbestos fibres and often cause breathlessness. They occur as a result of asbestos fibres passing through to the back of the lung, causing hardening of the pleura that protect the lungs. When someone is diagnosed with pleural plaques it often causes stress and anxiety both to them and to their families, who are well aware that a proportion of those so diagnosed will go on to develop a more serious asbestos-related disease.
Since the Law Lords’ ruling on pleural plaques on 17 October there has been a great deal of anger and concern, especially in areas such as the one where I live in south Tyneside, a great ship-building area where most of the male employment was in ship building and repairing—as it is no longer because the industry was destroyed during the 1980s. A report in the Shields Gazette by Kaye Hendry from the British Lung Foundation found that chronic obstructive pulmonary disease, which includes conditions such as chronic bronchitis and emphysema, was prevalent in the Tyne and Wear area. South Tyneside has the highest proportion of people at risk of future hospital admission from chronic obstructive pulmonary disease, 62 per cent above the national average.
After the Law Lords’ ruling I received a petition which reads:
“For the attention of Lord Don Dixon.
“This is a heartfelt appeal from workers in Jarrow and surrounding areas and their families. We would be very grateful for a few moments of your time to consider our circumstances. We have been diagnosed with pleural plaques described to us as scarring of the lung caused by exposure to asbestos. At this time, there is no evidence to show that it is harmful in itself. However, any soft tissue damage, especially to a vital organ, cannot be considered as a positive thing. Furthermore, this scarring proves exposure to asbestos and we are well aware that this exposure can result in asbestosis. Many of us have close family or friends who have suffered from asbestosis and have seen the devastating effects of that disease”.
The petition was signed by more than 200 people in south Tyneside who were ex-shipyard workers or the relatives of workers who had been diagnosed as having pleural plaques. They do not need to be told that they are safe and that only a small proportion of those diagnosed with pleural plaques go on to get asbestos-related diseases.
Listening to the debate next door, I was concerned that the Scottish Cabinet Secretary for Justice, Kenny MacAskill said:
“Following careful consideration of the 17 October 2007 House of Lords Judgment on pleural plaques and having listened to the views of representatives of asbestos campaign groups and of the insurance industry, the Scottish Government has decided to introduce a Bill to reverse the Judgment so that those negligently exposed to asbestos who have been diagnosed with pleural plaques will … be able to raise and pursue actions for damages in Scotland. We will prepare a Bill which would take effect from the date of the Judgment”.
Will my noble friend say whether it is possible for such a Bill to be introduced by the Scottish Parliament, as I have been informed that civic law and law on damages are devolved matters? If it succeeds, and I hope it does, we will have another anomaly on this side of the border.
A great and late colleague of mine, Harry Cowans, former MP for Newcastle upon Tyne Central—in his maiden speech in the 1974-79 Labour Government, when devolution was being debated—said:
“If Scotland gets devolution and nothing is done about the north-east of England, that would be like waking up one morning to find your next-door neighbour has won the pools”.
His words will be true if ex-shipyard workers on the Clyde get compensation for pleural plaques but ex-shipyard workers on the Tyne do not. When you add this issue to prescription charges, student fees and care for the elderly, I am afraid that there will be further resentment in the north of England about devolution in Scotland.
There was an article by Terry Kelly in the local paper—the Shields Gazette—headed “Asbestos Ruling to be Challenged”. It refers to what I have just said about the Scottish Parliament and states:
“Former shipyard worker Fred Hewitt, of Fellside, South Shields, who has lived for years with the fear and anxiety of pleural plaques, or scarring of the lung tissue, welcomed the latest development in the compensation saga. Mr Hewitt, 73, who has seen friends die of … asbestos-related disease …said ‘This news is champion, and I hope they are successful. But there should not be different laws on either side of the border”.
The Government have the opportunity in Part 4 to rectify that anomaly. I sincerely hope that, when the Bill goes to Committee, the Government will seriously consider what was said next door by my honourable friend Mick Clapham and what has been said today on Second Reading.
My Lords, I have felt more and more superfluous as I have listened to this debate, because of the level of expertise and command of certain Members of this House. I say to my noble friend Lord Kirkwood, that if the board are foolish enough to reject him from that role, that would be our loss. Someone with that degree of expertise is required.
As the noble Baroness, Lady Hollis, went through the levels of complication required in this area, I wondered whether she was constructing a maze or spider's web of difficulty for people to fall into. Her grasp of the realities of the social concepts was obvious. Anyone who has had anything to do with the CSA will recognise this. My first connection was when I received what in parliamentary slang are called green ink letters relating to the CSA addressed to me. I remember one individual who was convinced that the CSA was out to get him because it was run by Freemasons. That was the primary objective. How he had so offended Freemasons never became clear.
But the CSA has not worked. It has been heavy-handed. As has been said, it has become an excuse for non-compliance. We have devalued the currency of legislation and government action. Indeed, we should have all stood around and welcomed a Bill that simply got rid of the name. That would have been a step forward. We have created something that does not work. The Government are effectively putting their hands up and saying that we have got to get on and do something else. Congratulations to them for that. Those who tried were always well intentioned.
I remember that my right honourable friend Charles Kennedy was once asked which vote he most regretted having cast. He said that the vote he most regretted not having cast was against the creation of the CSA. It sounded a good idea—to do something, get behind it and go forward. However, the fact of the matter is that it has failed and has created resentment. Thus, any step forward may almost have negative implications.
Then we encouraged the voluntary agreements. As I read it, the Government’s main intention is that the freed-up man hours gained from this will enable us to deal more efficiently with the new system or adaptation to make sure that maintenance is paid via enforcement. As the noble Baroness, Lady Hollis, pointed out, those who will take advantage of this are probably those who will be the best payers anyway and those who have most to lose from court action. Those who simply abscond will probably not be affected. Those who have the most complicated and messy social and family backgrounds will not pay. There is our problem. When we go through the Bill in Committee and on Report, can we get a structure together which will enable us to deliver better? Nothing else really can be said on that, but that is what we are confronted with here. Computer systems are beyond us. Indeed, many of the systems on my own computer are beyond me. We must try to get an administrative structure, guidance and a will to help.
Everybody wishes this measure well because it is not something for which any politician can take great credit. We have got to make sure we can get the detail right. I will not go into the detail now because others have done so more eloquently than I and because I have discovered that the list of details is so long that I would never finish. However, the attitude which I mentioned must be carried forward into Committee. If it is, we may plug holes and do so with experience—we can refer to previous experience on this of a similar system that failed.
On mesothelioma— all day I have been dreading pronouncing that; have I got it right?
My Lords, who says that chance will always let you down?
This is one of those things that you can say yes to. The noble Lord, Lord Dixon, raised one or two problems round it but its basic thrust must be encouraged. The secondary nature of this infection should have been dealt with and is now being dealt with. We can say yes to that. If there is some fine tuning to be done, I will certainly listen to it with interest.
In conclusion, we wish this measure well but we are cautious. We have gone wrong before when dealing with this problem. It is a complicated matter and 100 per cent success with it is almost guaranteed not to happen. It is a case of seeing whether the measure results in slightly less failure. I hope that it at least achieves that.
My Lords, I am very grateful to all noble Lords who participated in this debate. This Bill deals with very important matters and that has been reflected in the style and manner of everybody who has spoken. I will seek to address each of the points raised. The general support that has been given to the Bill is appreciated by the Government but I recognise that in some respects it comes with qualifications and, to use the term used by the noble Lord, Lord Addington, is qualified with caution.
The noble Lord, Lord Skelmersdale, said that the Bill was very mechanistic and did nothing to encourage the nuclear family to stay together. That mirrors contributions about the breadth of the proposal. I say to the noble Lord that it is focused overwhelmingly on getting child maintenance moving. Of course, there is a wider issue and I touched on how, through the information and support service, we would engage in that wider agenda but I do not believe that we should lose sight of that. The noble Lord said that the CSA has an ignominious history. However, as my noble friend Lady Hollis pointed out, it was originally set up to claw back benefit and was not focused on the contribution that child maintenance could make to tackling child poverty. I will not challenge him on the assertion that this Government inherited a system that was beginning to work because we should focus on the future.
My Lords, I would like to know the context of that if I am to deal further with it. The noble Lord also said that things are not getting better but we should acknowledge the progress that has been made since the operational improvement plan was put in place. Maintenance has been collected and arranged for 674,000 children, which is an increase of 77,000 since the OIP was introduced. For example, uncleared new scheme applications continue to decrease and the figure is now 128,000—the lowest figure since December 2003. In the first six months of 2007-08, £475 million of maintenance was arranged or collected—an increase on the equivalent figure last year of £441 million, so there has been progress.
The noble Lord asked about the change to Crown status. I should stress that the commission will still be an NDPB and this has no material effect on customers or relationships with Parliament. It will still be an autonomous body with responsibilities to the Secretary of State and to Parliament, as set out in the Bill.
The noble Lord raised the 12-month rule, which I am sure we shall debate in more detail in Committee. If parents are happy with the arrangements made through the court, we would want them to continue. However, without the 12-month rule parents would be irrevocably locked into arrangements that further down the line may no longer work or meet the needs of the children concerned, but I am sure that we shall debate that issue in more detail.
The noble Lord referred to the income threshold of 25 per cent being too high, as did my noble friend Lady Hollis. Twenty-five per cent allows serious changes in income, such as the loss of a job or a substantial change in wages, to be taken into consideration while ensuring that minor changes do not hamper the efficiency of the new system. I stress that under the new system there will be annual changes to the assessment so eventually a change in circumstances will be reflected.
The noble Lord said that this had to be fair to both parents. That is absolutely right. There is a risk that we always cast the non-resident parent, who is the father in the overwhelming number of cases, as a villain in this piece. We need to make sure through the information and support service and whatever emerges from charges—which is some way down the track and depends on what flows from regulations—that we are even-handed.
I shall deal with the point about pleural plaques when I address the points raised by my noble friend Lord Dixon. I am pleased that the noble Lord, Lord Kirkwood, found the DWP advertisements inviting. He referred to the attempt at a clean break because there is a culture of non-compliance. However, I believe that we are already beginning to break that. There have been some very effective media campaigns, certainly in some of the big cities, which are showing progress. He referred to the fact that we will have three systems for a time. That is absolutely right. We will have the original system, the current system and then the new system in 2010-11. But, of course, for those who choose to stay in the system, by 2013 we shall need the time to make sure that the transition can take place effectively. We will end up with one basis of assessment and one system. There will be challenges in the interim but I believe that is the right way to proceed. The noble Lord referred to the nature of some of the client group being such that they will always seek to mess up the system. That is why it is important that we use HMRC data because we would no longer need to rely on those individuals to be able to make the assessment.
References were made to the state of the agency’s telephony and IT. I shall not go into great detail on that but a great deal of work has been carried out to improve the stability of the new CS2 computer system, and operational performance has improved to the point where contracted service levels are now consistently being met. We should perhaps engage in that more fully in Committee.
The noble Lord and others referred to the importance of the information and support system. That is absolutely right. That system needs to be in place by the time the Section 6 compulsion is withdrawn; it needs to be a robust system that properly addresses the needs of the clients it seeks to serve.
There was reference to the range of bank accounts we are seeking to reach in terms of enforcement. I accept the noble Lord’s point that in some instances it may not be that difficult to avoid the sort of accounts that we are trying to reach, but further work is being done to see if we can draw more accounts into that process. The noble Lord asked whether the system would be resourced if it proved to be more “pesky”. I believe that it must—it is important that we deliver on this.
My noble friend Lady Hollis, as ever, produced a challenging contribution. She stressed the importance of the enhanced disregards and that is absolutely right, and she made interesting comments about the wider impact, how that sits together with the benefit system and how that works effectively. I know that my noble friend supports the process of automatic deductions from earnings, which was not automatically available previously. We would seek to have that process piloted to see what it entails in practice, but it will be an important addition to the enforcement armoury of the commission. It is important to include HMRC data.
My noble friend had two worries. The first concerned the uneven bargaining power of the parent with care compared with the non-resident parent, particularly if the parent with care is not aware of the non-resident parent’s income level. That point is acknowledged. In those circumstances, when it is clear that the parent with care has no realistic idea of being able to assess what the income is, the information and support service would look towards the statutory system as the safety net.
My noble friend made a second interesting point on the impact of linked cases, particularly on the complexities that they will introduce into the system. It is impossible to deal with that point at this juncture, but I know that we will consider it in Committee. The changes to the IT system mean that clients will be grouped in a different way and be NRP-led. That will particularly help some of the issue that my noble friend raised. Perhaps we can talk about the detail of that in due course.
The right reverend Prelate the Bishop of Southwell and Nottingham acknowledged that we need to sort out the child maintenance system, which is not working now. I am grateful for his support for the new era that we are trying to build. He again argued that it was important for the information and support system to be robust. That is absolutely right. As I said in my opening remarks, that system will be particularly focused on maintenance, but will engage with the wider agenda associated with all the issues of family breakdown. Yes, the information and support service will have a contact centre, a range of literature and a website, but, yes, it will have to have a face-to-face component for people who cannot readily access or make use of those other means of communication. The information and support service is being constructed on a basis that draws into the system—through their contact with Jobcentre Plus or when they claim tax credits—those who are potentially most disadvantaged, so there is a route to reach those people when they become lone parents who are potentially in need of child maintenance.
The right reverend Prelate argued for a higher disregard. Of course, the disregard will increase to £40 in April 2010; that is a significant advance. There is a 100 per cent disregard for housing benefit and council tax benefit purposes. That is another important issue.
The noble Lord, Lord Northbourne, welcomed the Bill, but said that it was inadequate because of its scope. The noble Lord, Lord Skelmersdale, made the same point. The purpose of the Bill is to focus on child maintenance, not to disregard all the other important issues that were raised. The noble Lord, Lord Northbourne, said that it was important that non-resident parents had a greater understanding of their responsibilities and that that would help to collect maintenance. Clause 4 specifically imposes an obligation to promote the importance of child maintenance. That is a powerful element of the legislation.
The noble Lord asked where the responsibility of parents to children was set down in law. I shall have to get back to the noble Lord on that, because I cannot readily answer him. He asked whether parents or the state had responsibility to children. This Bill deals with maintenance and it is clear under the Bill that parents have financial responsibility for their children, and it seeks to ensure that non-resident parents meet those responsibilities to the fullest extent. The noble Lord argued for a broader children’s Bill, but we are working across government to make sure that all of the issues, particularly those relating to family breakdowns, are dealt with in a co-ordinated way.
My noble friend Lord Dixon spoke eloquently and passionately about Part 4 on mesothelioma. The House of Lords’ decision was that pleural plaques were not compensatable and the Government have decided that they will not legislate to overturn that decision. I have met colleagues from another place, in particular Mick Clapham. We had discussions on whether setting up some register at this point might be a helpful starting point. That is under examination. On Scottish government, the civil legal systems in Scotland and England and Wales are completely separate and it would be entirely up to the Scottish Government as to whether they legislated to overturn the judgment. That might raise some interesting issues of juxtaposition. We will seek further discussions on that matter with Members of Parliament who have raised it directly with us.
We agree with the view of the noble Lord, Lord Addington, that the CSA has not worked and that we have created a climate of non-compliance. I welcome his support for the proposals for change. The noble Lord asked what we could do to tackle those who are determined to avoid paying. I believe fundamentally that the Bill will tackle that problem because of the basis of assessment that does not rely on data produced by the non-resident parent and because of the strengthened enforcement powers embedded in the Bill. I hope that the problem will be tackled in part because, if there is an obligation on the commission to promote the importance of parents financially supporting their children, the creation of that climate will put some peer pressure on at least some. We know that it will not work for all.
This Bill is a key stage in a journey towards a new, improved child maintenance service that is truly focused on tackling child poverty and helping children. If noble Lords give their consent to the Bill, the commission will assume its functions and responsibilities as a legal entity in 2008. People working for the Child Support Agency will move to the commission and the work of building the new child maintenance service will begin in earnest.
By the end of 2008, the requirement that parents with care claiming income-related benefits be treated as if they had made an application for maintenance will be repealed, giving all parents the ability to set up their own voluntary arrangements if they choose to do so. Allied with this, the information and support service will begin providing support to parents to help them to make the best possible maintenance arrangement, whether privately or through the commission.
Also by the end of 2008, the £10 per week disregard for new scheme cases will be doubled to £20 a week and will be extended to old scheme cases. As I outlined previously, a full disregard in housing benefit and council tax benefit will be introduced. From April 2010, the disregard will be doubled again to £40 a week for all parents claiming income-related benefits. The first applications to the new assessment regime set out in the Bill will be accepted in 2010. Existing clients will also begin transferring to the new scheme. By the end of 2013, the journey will be complete, as all clients will be on a single set of rules.
That journey and the Bill mark a transformation in the way in which child maintenance is organised in this country. The Bill will lift many thousands of children out of poverty, while giving parents the power to arrange the maintenance that is right for them personally. The Bill will provide help to those who accept their responsibilities, while using an effective collection and enforcement power on those who do not. It will get more money to more children.
The Bill also provides much needed support to the many victims of mesothelioma, ensuring that they receive compensation during their lifetime and are able to provide for their loved ones after death.
On Question, Bill read a second time, and committed to a Grand Committee.