Child Support, Pensions and Social Security Bill
Baroness Hollis of Heigham (Parliamentary Under-Secretary, Department of Social Security; Labour)
My Lords, the amendments which we discussed earlier surrounded the more technical aspects of variations. These amendments relate to the grounds on which a variation from the normal rules may be agreed. We discussed many of them in Committee so I am rather surprised that some of the amendments have been retabled. However, I am happy to try to respond to your Lordships' queries.
We are replacing a complex formula with a simple system of rates which will lead to a better, faster, fairer and more transparent support system. A calculation will be provided in which we recognise that every parent has different kinds of commitments. But the new rates will leave most with at least 75 per cent and on average more like 80 per cent--given that the average lone-parent family consists of under 1½ children--of their net income to meet those expenses.
But we recognise that there will always be cases where it is inappropriate to apply the normal rules without some flexibility. Therefore, it may be worth reminding your Lordships what we are seeking to do.
Essentially, we are saying that there are to be two broad grounds for variations. One is where the information given to the CSA on the non-resident parent's income is incorrect and invalid and needs to be corrected. There may or may not be fraud. The second is where there are exceptional costs in supporting the children of the first family and where the maintenance payment, were that to come on top, unabated, would be unfair. There are those two simple grounds.
In other words, we are determined to keep a tight rein on the grounds on which that variation can be agreed. A shopping list of amendments has been suggested this evening--that is, to look at travel-to-work costs, housing costs, the costs of supporting elderly relatives, and other costs. It was said in the other place that,
"if they load a new set of variations on to the simplified formula, the system will quickly revert to something approximating the present highly complex system".
That was said not by my right honourable friend Mr Jeff Rooker or my honourable friend Angela Eagle, who are the Ministers, but by a Conservative Member of the Committee, Edward Leigh. The noble Lord, Lord Higgins, made the point tonight that if the Government were minded to go in that direction, we should have taken all of the complexity out of the assessment and put it back in again in the form of variations or appeals. A very high proportion of current cases would thereby go on to appeals or variations because different assessments would come into play.
What is the point? Why bother with reforms of the agency at all if all we are doing is displacing complexity from the entry, which is assessment, to an exit point, which is variation? Why bother? Why not stay with the existing complexity of the current scheme? That is what it would mean. Let us be in no doubt. If you take into account housing costs, you must also take into account travel-to-work costs. We shall be reinventing the present complexity. For example, there are 50 different mortgage systems. Every time the rate changes, all those calculations will need to be redone. As a result, delays, errors and arrears will creep into the system. Why bother? We would be chasing paper rather than chasing the parents who should be paying the maintenance.