Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

I beg to move amendment No. 136, in schedule 7, page 69, line 16, at end insert—

‘(1A) In section 4 (child support maintenance), in subsection (10)(a), after “written maintenance agreement” insert “or a registered minute of agreement”’.

David Taylor (North West Leicestershire, Labour)

With this it will be convenient to discuss the following amendments: No. 137, in schedule 7, page 69, line 16, at end insert—

‘(1A) In that section, in subsection (10)(aa) (which refers to maintenance orders)—

(a) insert at beginning “a registered minute of agreement made after 5th April 1993 or”

(b) for “one year” substitute “48 months”’.

No. 138, in schedule 7, page 69, line 16, at end insert—

‘(1A) In section 7 (right of child in Scotland to apply for assessment), in subsection (10), after “written maintenance agreement” insert “or a registered minute of agreement”’.

No. 139, in schedule 7, page 69, line 19, at end insert—

‘(2A) In section 9 (agreements about maintenance), for subsection 1, substitute—

“(1) In this section—

“maintenance agreement” means any agreement for the making, or for securing the making, of periodical payments by way of maintenance, or in Scotland aliment, to or for the benefit of any child.

“registered minute of agreement” means any agreement containing provisions relating wholly or partly to maintenance, or in Scotland aliment, to or for the benefit of any child which has been registered for execution in the Books of Council and Session or the sheriff court books.”’.

No. 140, in schedule 7, page 69, line 19, at end insert—

‘(2A) In that section, in subsection (2), at end add “or a registered minute of agreement”’.

No. 141, in schedule 7, page 69, line 19, at end insert—

‘(2A) In that section, in subsection (3)—

(a) after “section 4(10)(a)” insert “and (aa)”

(b) after “written maintenance agreement” insert “or a registered minute of agreement.”’.

No. 142, in schedule 7, page 72, line 9, at end insert—

‘“registered minute of agreement” has the meaning given in section 9(1) of the Child Support Act 1991.’.

Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

I want to refer in particular to the provisions dealing with the Child Support Act 1991. The purpose of the amendments to parts 1 and 2 of that Act is to ensure that it refers not only to written maintenance agreements but to a

“a registered minute of agreement”.

The amendments apply to the systems in England and Wales and in Scotland. A maintenance agreement may have gone before the courts, where an agreement may have been reached. By seeking to insert the words:

“a registered minute of agreement”,

we want to ensure that any decision made by the courts and then recorded in a minute of agreement is accepted as part of the arrangement for child maintenance.

I hope that the Minister will agree to the amendment. I will press it to a vote because I think that it is important for us to recognise and accept that the courts have a role. Where a decision is made in the courts and registered as a minute of agreement, it must have legal standing and take precedence over any of the commission’s other arrangements.

Michael Weir (Spokesperson (Business, Enterprise and Regulatory Reform; Energy; Work and Pensions); Angus, Scottish National Party)

We have returned to our earlier debate on my amendment relating to minutes of agreement. I do not intend to repeat all I said. However, it is important that minutes of agreement are recognised, and also that the one-year time scale will seriously undermine the take-up of such agreements. That is a shame because it is a way for many couples, although not all couples, to deal with their difficulties. I will support the amendment if it is pressed to a Division.

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

As hon. Members said, we are in danger of returning to previously visited ground. However, in view of the indication that the amendment might get pressed to a vote, I will respond in some detail. It is important that the matter is understood as there may still be some misapprehensions about it.

I am going to reiterate the points that I made on 9 October. The existing 12-month rule applies in cases where parents have a consent order or a registered minute of agreement made on or after 3 March 2003. It prevents parents from applying for a maintenance calculation for the first 12 months that a consent order or minute of agreement is in place. Variations to that agreement during its first 12 months can only be secured by a return to court. Once a year has expired, either parent may apply for a maintenance calculation, thus overturning the order for the minute.

The purpose of the amendment is to extend that 12-month period to 48 months. It is not the Government’s intention to disrupt arrangements agreed between parents which are working well. We want such agreements to continue and to benefit children for as long as possible.

The 12-month rule acts as a safety net for those parents and children whose arrangements are not working out. There will be occasions when things go wrong—an agreement breaks down, circumstances unexpectedly change or a parent decides that another type of arrangement would be more suitable for the children. The 12-month rule strikes a balance between giving time for agreed arrangements to bed in and work, and, when they do not work, providing a readily available route to the commission so that fair payment of maintenance can be established as soon as possible. The amendment would lock parents into agreements that are potentially no longer working for four years, and could leave children trapped in inadequate arrangements, often without the money that they need.

Michael Weir (Spokesperson (Business, Enterprise and Regulatory Reform; Energy; Work and Pensions); Angus, Scottish National Party)

Again, I do not want to go over old ground, but I am still not sure why the Minister keeps saying that people would be locked into agreements. A minute of agreement would normally have a clause for variation and, if it were not working and had clearly broken down, it could be enforced, as I explained. Once  it is registered, it has the effect of a court decree. If one parent is not following the agreement, it can be enforced against them.

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

I fear that we are going over old ground. In one sense, the hon. Gentleman is right. If the problem has arisen with the minute of agreement, then either party can go back to the court. The question is about at what point we want to give parents the right of access to the commission. Proposals such as removing the 12-month rule potentially leave the minute of agreement in place indefinitely, thereby effectively blocking off access to the commission. The only means of resolving a breakdown in the agreement is by going back to the courts. That can be both a lengthy and time-consuming process. If parents choose to go down that route—only a minority choose do so—and it becomes problematic after the agreement is initially struck, they need to have the choice to come to the commission and have things arranged by that means. However, if the 12 months were in lieu, that choice is not open to them.

Paul Rowen (Shadow Minister, Work & Pensions; Rochdale, Liberal Democrat)

Does the Minister not accept that in circumstances in which there has been a lengthy battle to reach agreement on payment, 12 months is actually quite a short period? What the parent with care and the child need is some form of stability. That 12-month agreement does not give them long. There may have been a turbulent time in the courts up until that period, but an agreement has been made and a minute of agreement is in force, yet 12 months later everything is up in the air.

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

In one sense, the hon. Gentleman almost makes my argument. As we were saying, the agreement may have been struck in court at the initial point and it may endure. It may be a fine agreement for a lengthy period. However, circumstances may change or the agreement may break down. What offer do we make to people in those circumstances? Are those people restricted solely and entirely to having to go back to the courts to deal with any breakdown, or are we giving them the option, after a time, to come to the commission? We cannot give them the option of coming to the commission immediately because there would be no point going to court. There has to be a time for the agreements that have been reached in court to bed in. That is why the 12-month rule is, in effect, a compromise between the two positions.

The 12-month rule has another valid purpose. It encourages settlements that contain fair levels of child maintenance broadly consistent with the amount calculated under the statutory scheme. It therefore discourages the old style clean-break agreements that divide up property and assets between adults but leave children without regular payments of maintenance.

The performance of the Child Support Agency has been widely and often justifiably criticised. One of the unequivocal successes of its establishment is that from the outset it has steadily raised the profile of child maintenance and helped to embed a cultural norm that parents should continue to support their children whatever the circumstances of their relationship or in the event of a breakdown.

During our debate on 9 October, hon. Members implied that they felt that the 12-month rule was unfair because it prevented clean-break child maintenance arrangements. However, that is precisely why the 12-month rule is fair and why is should stay. It is recognised in the legal establishment, and increasingly in the wider society too, that while divorce or separation in adult relationships may be arranged around a clean break, there is no clean break for children.

The Government firmly believe that children have a right at the very least to adequate and ongoing financial support from their parents. Adult relationships may end, but the commitment to children does not.

Mark Harper (Shadow Minister, Work & Pensions; Forest of Dean, Conservative)

I shall be very brief because we have talked about this point at great length. Although a clean-break settlement with asset transfer takes place at a point in time, the transfer of assets leads to a flow of financial benefits, whether it is a reduction in expenses or some income coming in as a result. It is not the case to say that a clean-break settlement leaves children unprovided for. It may do, but, equally, it may not.

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

The problem is that the flow is not guaranteed. At the point of break, there may be an arrangement about the transfer of property. It is surely impossible to determine at that point unknown future circumstances that may significantly change the nature of that agreement Either of the parents taking on the property may move out of it; their circumstances may change in such a way that they have to dispose of it; or they may amass huge debts and sell the property to clear the debts, negating any flow of money to support the children. That is why we want to discourage clean-break agreements, because the one thing that needs to be done at the point of separation is to ensure that there is an ongoing flow of maintenance for the children. We cannot rely on circumstances that might pertain at the point of separation; we need to nail down an arrangement that will endure for as long as those children need it. We may be talking 10, 15 or potentially almost 20 years. That is why clean-break agreements do not do the business.

John Penrose (Weston-Super-Mare, Conservative)

The Minister seems to be implying that a maintenance arrangement based on a proportion of someone’s income is somehow much more stable than some kind of asset transfer that will have financial yields. As we all know, it is entirely possible for people to lose their jobs or to be made redundant. There may be variations in someone’s earning capacity which are at least as risky—perhaps even more so—than the yield on a financial investment. It is not fair to say that one is risk-free and the other is not. In fact, both are risky, and it is at least arguable that assets yields are substantially less risky than career earnings.

James Plaskitt (Parliamentary Under-Secretary, Department for Work and Pensions; Warwick & Leamington, Labour)

The big difference is that if we begin at the point of separation with an agreement in place, and an understanding is arrived at on the part of both parents that an agreement needs to be in place, there is at least an acceptance in principle that there is an ongoing agreement to maintenance. That will need to be varied according to varying circumstances that pertain to the parents involved, which is why, under CMEC, we are introducing the annual review system. The hon. Gentleman is right to say that there are risks in a maintenance-based agreement, but the system under CMEC builds in a process for handling that risk and underlines the principle that a flow of maintenance needs to be in place. That is different from a clean-break agreement that makes no specific provision for maintenance. There is an assumption that maintenance will flow from the nature of the clean-break agreement, but it may not. That is an important point to bear in mind.

Clean-break maintenance arrangements contain a high level of risk for children, which is one reason why they do not attract the support of any of the major stakeholders who have been involved in the discussions and consultation about securing arrangements for CMEC. A child maintenance arrangement may need to cover a long stretch of time, covering the child’s upbringing. During that time, unforeseen circumstances may arise and clean-break arrangements, although made in good faith, may become irrelevant and no longer provide support for the children concerned.

The Government’s view is that there is a clear principle that children should, throughout their childhood, continue to enjoy a share of the income and prosperity of their parents. While we believe that clean-break arrangements present a particular problem, similar concerns apply to locking parents irrevocably into any type of agreed arrangement. Circumstances for one or both parents might change dramatically. A once highly paid non-resident parent may become ill or unemployed, or gain responsibility for another child and no longer be reasonably able to meet the maintenance commitments of an original agreement.

Let us consider the opposite case—for example, where a non-resident parent makes an agreement as an unsalaried student, but then after graduation joins the civil service fast stream, secures rapid promotion and attains a grade 5 post by the age of 30. It would not be right if his offspring were still supported by a maintenance level appropriate to that of a student.

There are lots of situations and circumstances in which, without any ill-will, an agreement made in good faith no longer provides for the needs of the children concerned. The purpose of the amendments appears to be to amend various provisions of the Child Support Act 1991 that relate to written maintenance agreements and maintenance orders.