Clause 15
Child Maintenance and Other Payments
10:30 am
Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)
I, too, welcome you back, Mr. Chope, after what has been an unusual break. Some of us did not know whether we would be completing this process today.
I want to discuss amendments Nos. 18, 19 and 45. We are considering the repeal or abolition of sections 6 and 46 of the 1991 Child Support Act. Although that move might be welcome, we have tabled the amendments, because we are concerned that the it may have some adverse effects, as has been mentioned by the hon. Member for South-West Bedfordshire, and not necessarily be of overall benefit. We are also concerned about the delay announced by the Government to the point at which an increased child maintenance disregard can come into place.
The abolition of child poverty is something that all three political parties can sign up to. I shall quote the Prime Minister in July 2004:
“the great and unacceptable concentration of poverty amongst households with young children—is the greatest indictment of our country in this generation and the greatest challenge of all.”
That sums up what we all perceive to be an important target. If the Government are to meet their 2010 target of halving child poverty, child maintenance and its payment has a part to play. We are concerned that the £10 disregard, which will be introduced next year, will only affect some 47,000 parents. We know already from this year that the number of children in poverty has grown. We also know, as has been mentioned, that only 31 per cent. of parents with care on benefit have received child maintenance. If section 6 is abolished without the increased child maintenance disregard, the number of children who receive child maintenance will fall. The figure of £10 that has been quoted may be the maximum amount paid by the non-resident parent.
We must accept that section 6 has not been good value in terms of the amount of money recouped. Last year, £110 million was recouped, yet the administrative costs of the agency were around £425 million. Section 6 has not been successful in its original purpose, and it has acted as a disincentive for the formation of voluntary arrangements. That point was acknowledged in the Government White Paper:
“reclaiming most of the money for the State, rather than passing it through to children, still means that neither parent has a strong enough incentive to co-operate. This undermines the extent to which child maintenance can contribute to the eradication of child poverty.”
That is a key point. If we are serious about eradicating child poverty, we must use the child maintenance system as a tool.
Consider the comparison between the tax credits system and the child maintenance system. If the Government were, for example, to introduce a total higher maintenance disregard, it would cost in the region of £230 million. That is what we would like to see, and I know that the Chancellor has received a letter requesting that he announces such a change in today’s pre-Budget statement. Using the child maintenance system, it costs £2,875 to lift a child out of poverty. Using the tax credits system, however, the cost to the taxpayer is £4,300. Whichever way one looks at it, if the Government are serious about eradicating child poverty and meeting their 2010 target, they should consider the rapid introduction of the full maintenance disregard.