Clause 15
Child Maintenance and Other Payments
10:30 am
Andrew Selous (Shadow Minister, Work & Pensions; South West Bedfordshire, Conservative)
I am glad that my hon. Friend has raised that point, and he is absolutely right to do so. It is worth putting on the record that the change is major, because one of the original objectives was to ensure that the public purse did not lose out—he will have sat through those earlier debates with my hon. Friend the Member for North-East Bedfordshire (Alistair Burt) and others who were Ministers at that time. We have to say that that intention has had a chequered history, as some of the statistics that I have read out have shown. That point is worth making, so that we are all conscious of the change that we are bringing about.
Above all, we need to focus on a system that works and that gets money to parents who are looking after children. We must ensure that there is a focus on lifting those children out of poverty and on ensuring that they have the income to which they are entitled. My hon. Friend the Member for Daventry—indeed, the whole Committee—could regale you for some time with endless statistics about how things have gone wrong in the past, but you would not allow it, Mr. Chope. There is agreement on that issue, which is why the Government have introduced the legislation. However, my hon. Friend has made an important point and I am grateful to him for putting it on the record.
The Child Maintenance and Enforcement Commission will be able to focus on applications from parents who actively want to use its services, which should make a difference. It will not be plain sailing, because there is often severe antagonism between the parents, and there may be recalcitrant non-resident parents who do not want to pay. Part of the challenge for the Bill, and for the changed culture that we hope will go with it, is whether there will be a change of heart as far as those non-resident parents are concerned.
Section 6 of the 1991 Act provided a mechanism to bring parents with care who are on benefit into the child maintenance system. There is a worry that there may be parents with care who will not pursue a voluntary arrangement when, perhaps, they should. My hon. Friends and I have tabled an amendment that will allow us to debate that very point later. However, there is an issue about the decision to delay the introduction of a higher maintenance disregard until 2010. With the Bill likely to gain Royal Assent and come into effect next year, there is a worry that there will be problems between the later implementation of the maintenance disregard and the Bill coming into effect. That is a timing issue, and it is possible that the number of lone parents on benefit seeking maintenance will decrease, because the current £10 disregard is not a great incentive as far as they are concerned.
I do not know when the Government will announce the level of disregard for child maintenance income, but I hope that it will be sooner rather than later—I understand that discussions are ongoing with the Treasury and others on that point. Projections have been made about higher levels of disregard, the number of children that would be lifted out of poverty and the cost that would result from a higher level of disregard. One Parent Families and other groups maintain that this is a cost-effective means of lifting children out of child poverty. However, we also need to look across the piece to see what the effect will be as far as parents are concerned, and I will say more about that later. A full maintenance disregard would cost about £230 million. According to some analyses, that would be cost-effective in terms of lifting children out of poverty, compared with an increase in tax credits, for example.
On the notification by Jobcentre Plus of the current £10 disregard, Jobcentre Plus must notify the agency, which must then split the maintenance payments made by non-resident parents, so that only £10 goes to the parent with care and the rest is diverted to the Secretary of State. When the parent with care goes back into work, Jobcentre Plus must notify the agency again to redivert all child maintenance to them. Those are some of the practical problems that amendments Nos. 18, 19 and 20 seek to address.
Empirical evidence from the United States, which can be found in the Department’s own research report No. 402 of 2007, shows that increasing the level of the disregard has not had an adverse effect on the employment rate. I would be grateful if the Minister would comment on that and let us know when we are likely to have that key information, which is critical to the future successful transfer of child maintenance, because, in a sense, we are discussing this part of the Bill with a big hole in front of us. I will be interested to hear the Minister’s response to this debate.