Child Maintenance and Other Payments Bill

Orders of the Day – in the House of Commons at 1:33 pm on 4th July 2007.

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Photo of Alan Haselhurst Alan Haselhurst Deputy Speaker and Chairman of Ways and Means 1:33 pm, 4th July 2007

Before I call the Secretary of State, I must tell the House that the Order Paper should have included a tag referring to the Fourth Report of the Work and Pensions Committee on Child Support Reform and the Government's response.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions 1:41 pm, 4th July 2007

I beg to move, That the Bill be now read a Second time.

The Bill provides for a new system of child maintenance in Britain. At its heart is the commitment to ensure that whatever happens to the relationship between two parents, the interests of children must always be paramount. However, the Bill also learns from the lessons of the past. It makes tackling child poverty the No. 1 priority for the child maintenance system by ensuring that more of the maintenance paid goes directly to the children and by maximising the number of children living apart from one or both of their parents for whom effective child maintenance arrangements are in place.

The Bill actively promotes parental responsibility by removing the barriers that prevent parents from reaching their own voluntary agreements. Never again will mutually agreed maintenance arrangements be forcibly overturned by a compulsion for parents with care receiving benefits to use the Child Support Agency. The Bill embeds the principle of choice whereby those on benefits should have the same choice as those not on benefits to make their own arrangements or to utilise the new child maintenance and enforcement commission—CMEC—to access the statutory scheme. For the first time, the system will no longer discriminate against people simply because they are poor.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

I appreciate and support what the Secretary of State is saying. The Law Society of Scotland has pointed out that under the terms of section 4 of the Child Support Act 1991, a voluntary agreement will be restricted to a 12-month period. Is that the Government's intention? If not, will he consider the fact that many families need the assurance that an agreement will last longer than just 12 months?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

That is not the interpretation that I would put on it, but I will certainly consider the hon. Gentleman's point. We are seeking a durable, long-term basis not only for the children, but for the parents. There is no desire on my part to create, perhaps inadvertently, the situation that he describes.

Photo of David Taylor David Taylor Labour, North West Leicestershire

It is a laudable aim to encourage parents to make their own arrangements. However, is the Secretary of State confident about the position of lone parents on low incomes, perhaps where the split has not been amicable, the non-resident parent is no longer around, income cannot be determined and is opaque, or payments are not being received at all? Given that the CMEC will often be required to act as a last resort in terms of assessment and enforcement, does he have any estimate of the number of cases that might arise, and will the CMEC have the resources to deal with them?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

My hon. Friend makes a reasonable point. In these situations, people on low incomes are the most vulnerable and the children are therefore doubly the most vulnerable. The CMEC will have a very important role. However, a significant proportion—I think a third—of those involved would like to make their own voluntary arrangements, but are prevented from doing so by the current structures. We want to facilitate that, but we certainly intend to guard against the situation that he describes. There is the fall-back that the commission has a statutory obligation to act in the way provided for by the Bill, and that will happen.

Photo of Alistair Carmichael Alistair Carmichael Shadow Secretary of State for Transport, Liberal Democrat Spokesperson (Transport)

Further to the Secretary of State's answer to Mr. Weir, may I impress upon him the importance of not undermining the very effective system that we have in Scotland of minutes of agreement, which are entered into after legal advice by both parties and are then registered in the books of council and session, which means that they are summarily enforceable? If those minutes of agreement can be overturned after 12 months, as seems to be the case under the Bill, there may be less incentive for people to enter into them. Will he consider removing the 12-month limit or at least extending it to something in the region of 48 or 60 months?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

We are trying to put in place a more sensible and flexible alternative, and I think that there is widespread cross-party support for that objective. If such arguments are put persuasively in Committee we will obviously want to take account of them. We are not seeking to impose anything, but to make progress. I shall want to bear in mind the points that Scottish Members of Parliament have raised so far.

Photo of Frank Field Frank Field Labour, Birkenhead

I hope that the whole House agrees that, where possible, people should come to their own sensible arrangements that they police themselves without involving any state authority. However, is there not a danger that the taxpayer may get lost in all this? The Henshaw report said that if we almost entirely disregarded benefit income, the number of people who made private arrangements would be a mega-number, and therefore the numbers going to the commission would be very small. Fortunately, the previous Prime Minister intervened to prevent the Henshaw doctrine having force immediately. When will the right hon. Gentleman be able to tell us how much benefit income will be disregarded for people who come to private arrangements?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

We are still carefully researching incentives to work—an issue that my right hon. Friend has continually, and rightly, pressed—in order to get this right. I welcome his question, as he has been a missionary in this whole initiative from a very long way back. The commission will have a very important role. It will deal with a significant number of cases; it is not designed to be put into some kind of longstop role. However, as he says, if we can get in place private voluntary arrangements that people want to make, overwhelmingly, in many cases, that is the preferable alternative.

Photo of Frank Field Frank Field Labour, Birkenhead

I am grateful for the Secretary of State's comments. However, let us suppose that the Government decide that £100 of benefit income will be disregarded. There would then be a huge push among families to say, "We've come to a private arrangement." The carer would say, "I'm keeping £100 of taxpayers' money, so it does not really matter what else the other partner contributes." The loss to the taxpayer would be considerable, and ordinary working class families who are sticking together, and where there are two parents, would feel, "Gosh, yet again the rules are being rigged against those of us who are decent citizens."

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

My right hon. Friend makes a fair point, as always. However, balanced against that is the need for arrangements to tackle child poverty, which is what the new commission is designed to achieve. As I am about to explain—when I get a chance—that is the Bill's overriding priority, and I know that my right hon. Friend shares the ambition of pursuing that matter as a priority.

We must strike the right balance. We want to increase the disregard above the £10 that is provided for—in itself, it makes the families and children involved £10 a week better off, and that is welcome. But although we want to increase the amount, we must get the balance right and examine the impact that my right hon. Friend described and the danger of causing resentment among hard-working families, who are worried about other ways in which the benefits system works.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

I appreciate, as I am in the same position, that the Secretary of State is new to the job. None the less, the previous Secretary of State said on 24 July last year—almost 12 months ago:

"we intend significantly to increase the level of the current disregard of £10. Details will be confirmed later this year."—[ Hansard, 24 July 2006; Vol. 449, c. 598.]

Why has it not been possible to present those details, not only last year but almost 12 months later, by the time of Second Reading? Will he assure the House that the information will be provided to the Committee before its proceedings start?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

We must get the matter right, for the reasons that my right hon. Friend Mr. Field outlined. I do not want to establish an artificial timetable. [Interruption.] The Committee will be important and its proceedings will be studied carefully.

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

Clearly, creating a position whereby parents can reach an arrangement is important. Will my right hon. Friend set up measures to encourage parents to do that before the CMEC gets involved?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

Yes. One of the provisions of the measure and of the new non-departmental public body will be a strong information and advice service that reaches out and works with other stakeholders, including One Parent Families, to ensure that those matters are explained and that the process is encouraged. However, the commission will stand ready to step in vigorously, with the purpose of ensuring that the children are protected and get the entitlements that they deserve.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The Secretary of State has been generous in giving way. Let me clarify the point that he just made. Will the CMEC take responsibility for providing advice and information? Clearly, such provision is important, and several independent advice organisations, such as Citizens Advice, have expressed concerns that the plans are not clear and that, if the CMEC is to take the lead responsibility for advice provision, there could be a conflict of interest.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

There will be no conflict of interest. We want to maximise the opportunities of, for example, Citizens Advice, One Parent Families and the Child Poverty Action Group. All were involved in the extensive, cross-party consultation that took place before the Bill was drafted and following the Henshaw report. While I am about it, I welcome the hon. Gentleman to his new position; I look forward to working and sparring with him.

The arrangements in the Bill provide for a simpler, less bureaucratic assessment process, with new powers to obtain data from Her Majesty's Revenue and Customs. Never again will the system be frustrated by relying on non-resident parents to provide information on their earnings. The measure legislates for the creation of a new, non-departmental public body, with radically strengthened powers to recover maintenance from those who repeatedly fail to pay.

The new Child Maintenance and Enforcement Commission will replace the existing Child Support Agency and mark a clean break with the past. The new commission will have primary responsibility for all aspects of operational and policy delivery. The CSA was set up in 1993 to replace an inadequate system of court-administered child maintenance. Despite the best efforts of its staff, it has never fulfilled the purpose for which it was established. We all, including me, know that as constituency Members of Parliament. Its problems are well documented.

When we came to office in 1997, the agency cost more to run than it collected in maintenance. It took longer to process claims than the courts. We introduced the Child Support, Pensions and Social Security Act 2000, which made important changes, simplifying maintenance calculations and strengthening enforcement measures. The agency's performance has improved. Since 1997, it has doubled the number of children who receive maintenance payments—that is a credit to its hard-working staff, who do a good job in difficult circumstances.

The operational improvement plan is helping us to go still further in ensuring that the agency delivers for the parents and children who currently depend on it. That means that 200,000 more children will benefit from maintenance payments, with an additional 40,000 children lifted out of poverty. However, the operational improvement plan for the CSA was designed only to stabilise it and improve its performance in the short term. It cannot address the underlying structural weaknesses of the system.

For that reason, Sir David Henshaw was asked early last year to advise on a fundamental redesign of the whole system. The Bill builds on his recommendations and embeds three principled objectives in the heart of our reforms. They are to enforce children's rights and parents' responsibilities by maximising the number of cases; to provide a cost-effective and professional service, which gives the taxpayer the best value for money; and—most important—to make the greatest possible contribution to lifting families and children out of poverty. The Bill will deliver those objectives.

Together with the operational improvement plan, we expect the Bill to increase the number of parents who receive maintenance payments by 90 per cent., cut administration costs by approximately £200 million and lift a further 100,000 children out of poverty.

Photo of Mary Creagh Mary Creagh PPS (Andy Burnham, Chief Secretary), HM Treasury

Has my right hon. Friend had time to talk to my right hon. Friend the Secretary of State for Justice about the Law Commission's review of reforming the law for couples who live together? It is due to be published shortly and will examine more closely what happens when cohabiting couples split. It considers not only the revenue allocation for children and child support, but—critically—the capital allocation, especially the house where the child is resident. Has my right hon. Friend has a chance to discuss that yet?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I must confess that I have not. I will ensure that I inquire into the matter and I am grateful to my hon. Friend for drawing it to my attention because it is important and we must not overlook it. The Under-Secretary of State for Work and Pensions, my hon. Friend Mr. Plaskitt, our colleague in the other place Lord McKenzie and I will consider the matter.

Photo of John Penrose John Penrose Conservative, Weston-Super-Mare

The Secretary of State mentioned the importance of cost effectiveness. Will he clarify whether couples who have a voluntary agreement that breaks down can obtain enforcement of the agreement via the CMEC or will they have to get a CMEC agreement first? If the answer is the latter, it will be much harder to be as cost effective as I believe that he would like it to be.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

As I shall explain shortly, an escape route back to the CMEC is important in the event of a voluntary agreement breaking down. We need to examine the precise way in which that will happen. It is important to ensure that the necessary safeguards are in place for the commission to play a statutory role in ensuring that the parent with care and the child or children are protected in such circumstances.

Photo of John Penrose John Penrose Conservative, Weston-Super-Mare

I thank the Secretary of State for that response, but I am trying to make the point that if one cannot enforce a voluntary agreement that breaks down other than by creating a new CMEC case, that will reduce the effectiveness of and public trust in voluntary agreements, and he will fundamentally undermine the basic principle of trying to give people an alternative to having to go to the CMEC.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I thought, at first, that I was agreeing with the hon. Gentleman, but I must flatly disagree with him—I do not say that antagonistically. The new commission will have enforcement powers and provide the necessary protection. I do not understand how it can reincarnate a voluntary agreement. Its role is to provide encouragement for voluntary agreements—that is the new feature of the system, which I know that the hon. Gentleman supports. However, its back-stop role is to ensure protection and statutory backing when necessary.

Photo of David Taylor David Taylor Labour, North West Leicestershire

The Secretary of States mentions the welcome news that 40,000 more children will be raised out of poverty—a matter linked with the raising of the disregard and making it cost-effective for the taxpayer. Is it not the case that if there were an absolute disregard of child maintenance income—in respect of jobseeker's allowance and income support, for example—the number of children lifted out of poverty could be doubled, at a cost of about £200 million, which, though substantial, is less than it would cost if the same effect were achieved through the tax credit system? Is that not worthy of further consideration?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

We obviously have to be very careful about the impact on work incentives. However, the principle behind lifting the disregard in the way the Government and I want is ensuring that those parents who are not currently paying as they should—because they believe that the money is going to the taxpayer rather than to the children—are encouraged to pay. That problem amounts to a very significant blockage in the existing system, so it is important to get the balance right, as my right hon. Friend the Member for Birkenhead quite properly said earlier, but at the same time we must not lose sight of the main objective—to lift children out of poverty. As I will explain in more detail later, that contrasts considerably with the aims and circumstances that led the original agency to be established by Margaret Thatcher's Government.

Photo of Frank Field Frank Field Labour, Birkenhead

The Secretary of State is providing an estimate of the number of children who will be lifted out of poverty as a result of the Bill. Such lifting will occur in two ways. First, maintenance payments that are not currently paid will flow to the relevant families; or secondly, the disregarded income will be changed. I would suggest to my right hon. Friend that his civil servants must have made a calculation that assumes a change in the level of disregard in order to allow him to provide the estimate that he has put before the House today. Will he place in the Library at some later stage a note providing a breakdown of the extent to which the disregard is being changed and of the extent to which increased maintenance payments are envisaged in order to justify the target of lifting so many children out of poverty?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

For a Secretary of State doing this particular job, there is always a certain wariness about accepting a question from my right hon. Friend, who knows more about it than I do and who certainly knows a lot more about it than Chris Grayling—and, indeed, more than most of the officials who are sitting over there. I will certainly look further into my right hon. Friend's point, but the question of the level of disregard has not been decided yet. A number of issues are involved, not least a discussion with the Treasury.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

May I ask the Secretary of State to approach the issue in another way? Will he set out for the House—either in the form of a note placed in the Library or more directly on the Floor of the House or in Committee—the different assumptions that his officials are making about the impact of the different levels of the disregard? That would help us to understand the impact on levels of child poverty of the different levels of disregard—whether it be £10, £20, £30, £40 or £50. We need to know about officials' assumptions in order to understand the differential impact of different levels of disregard.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

Speaking as a former Leader of the House, I am always anxious to assist the House, and the Prime Minister made it clear yesterday that he wants proper accountability of the Executive. When I am ready to do so, I will make available whatever information I can. I am not in a position to do so now and I will not promise to do something that I believe to be inappropriate at this stage. When I can make further progress and am clearer about the level of disregard that we think is feasible and appropriate to meet all the different balancing points that my right hon. Friend the Member for Birkenhead and others have suggested, I will try to assist the House.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

I would like to clarify the Secretary of State's answer to Chris Grayling on the issue of minutes of agreement. I was slightly alarmed when he said that in starting CMEC we need to go back to the beginning. I remind the right hon. Gentleman that, in Scotland, a registered minute of agreement can be used in the same way as a summary decree of court, and I urge him not to overlook that point. That often provides a quicker way of implementing a minute of agreement—usually directly by the person involved, but we could perhaps allow CMEC to do it. When a voluntary agreement breaks down, it is important that it be enforced quickly so that we do not go back to square one by making an application to CMEC and having to start all over again.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

That sounds to me like a job application to get on to the Public Bill Committee that considers the Bill, where the hon. Gentleman can put those same arguments— [Interruption.] I hear an hon. Member shouting "No" from a sedentary position, which is a little uncharitable! Clearly, there is an issue there and we will want to look further into it. If the hon. Gentleman would like to write to me or discuss his point further with me in the Department, I would be happy to facilitate that.

Parts 1 and 2 provide for the establishment of the new Child Maintenance and Enforcement Commission and the transfer of functions, staff and property from the Department. The commission will have two key areas of responsibility: first, to deliver statutory child maintenance arrangements for those who cannot make their own arrangements or who decide that it would not be appropriate to do so; and, secondly, to provide the information and support necessary to help parents make their own arrangements for child maintenance.

The Bill will give the commission the freedom and independence to run its own affairs and to deliver a professional and efficient service, but it will also provide a clear framework within which to carry out its functions. One clear objective is to maximise the number of cases where maintenance arrangements are in place and to provide essential safeguards to ensure the welfare of children and parents with care.

As such, the commission will have the flexibility to innovate and to adapt its policies in the light of developing experience. In order to maximise efficiency, it will be authorised to contract out some of its functions and charge for the use of its services. We will make regulations, for example, to ensure that if a non-resident parent wilfully takes steps to evade payments in a way that is almost deliberately costly to the commission, the charging option would be available to it.

Photo of Jo Swinson Jo Swinson Shadow Minister (Women and Equality), Shadow Secretary of State for Scotland, Liberal Democrat Spokesperson (Scotland), Liberal Democrat Spokesperson (Women and Equality)

I have dealt with cases involving the self-employed and non-resident parents. On avoiding payments, the Secretary of State's predecessor agreed with me on 27 November last year—reported in Hansard column 815—that the variations regulations were not working well and needed to be reformed. One problem is that at the moment most variations cases go to a tribunal and some non-resident parents use that as a delaying tactic—a form of bureaucratic sabotage. One of my constituents has gone through six tribunals. Can measures be included in the Bill to enable specialist teams of advisers and arbitrators at the new CMEC to scrutinise variations or exceptions cases at that early stage, in order to avoid sending everything to a tribunal, which causes delays in getting vital maintenance money to children and also costs the taxpayer?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I believe that the assessments are for 12 months and we are studying the hon. Lady's points. I know that her frustrations are shared by others, particularly in respect of individuals who in some cases are self-employed and able somehow to camouflage their true income and deny the rightful amounts to parents with care and the children who depend on them.

Similarly, if we are to give parents with care the choice over whether to use the commission or to make voluntary arrangements, we must ensure that they have the information necessary to enable them to take the decision. That is why the new commission will have the responsibility for providing an information and support service designed to help parents in establishing stable and effective maintenance arrangements.

I am aware that some stakeholders are concerned that there may be a hidden agenda to push as many people away from the statutory service as possible into private arrangements that are unstable or unfair. Nothing could be further from the truth. The whole point of the information and support service is to ensure that we protect vulnerable and low-income families by providing impartial, high-quality information and support, drawing on the best contributions from all sectors—private and voluntary—to help parents make their own decisions about what arrangements best suit them, while the commission itself provides an escape route back to the statutory scheme if voluntary arrangements do not work out.

Part 3 sets the framework within which the new commission will operate. It provides for the redesign of the system, the establishment of new enforcement powers and the transfer of existing cases to the new scheme. The Bill lays the foundations in legislation for an entirely new approach to child maintenance that will empower parents to take responsibility for making their own arrangements while providing strong, effective state support for when that does not happen.

Research published last month shows that almost two fifths of current CSA new scheme clients on benefit would prefer to make their own arrangements, but at the moment all parents with care claiming benefit are forced to use the child maintenance system, regardless of whether they would prefer to make voluntary arrangements. That is unfair. It takes away responsibility from parents and, too often, produces the wrong outcome for the children involved. The Bill will remove that requirement and restore parental responsibility, putting children first. Additionally, for those who enter into statutory rather than voluntary maintenance arrangements, the Bill will radically reduce the bureaucracy of the assessment process and speed up the gathering of information.

Receipt of child maintenance currently helps to lift 100,000 children out of poverty. International evidence shows that child maintenance contributes up to 25 per cent. of the reduction in child poverty in some countries. By contrast, in the United Kingdom, it contributes less than 3 per cent. We must turn that around, and providing active support to parents on low incomes to make maintenance arrangements will be particularly crucial to doing so. Jobcentre Plus and Her Majesty's Revenue and Customs are developing strategies to ensure that low-income families utilise the new information and support service.

To provide an incentive for low-income parents to follow through their agreements, our intention is to increase substantially the amount of child maintenance to be disregarded when benefits are calculated. From 2008-09, we will extend to all parents with care the £10 benefit disregard that is currently available only to those on the child support scheme introduced in 2003. This means that an extra 55,000 children will benefit from up to £10 a week additional family income. I am committed to increasing that disregard significantly in 2010.

In the old days under the Tories, the CSA was created as a revenue-collecting agency. The aim was that taxpayers should not be left to pick up the pieces when an irresponsible non-resident parent failed to pay. Our reforms will change the whole basis on which the child maintenance system operates. They will put the focus, rightly, on the children, so that the money that the non-resident parent pays goes straight to the children and not to the state. Changing the benefit arrangements is central to the contribution that child maintenance makes to our fight against child poverty and to the reforms that the Bill introduces.

Opinion polls constantly report strong levels of support for the idea that non-resident parents should be financially responsible for their children—I think that we all feel that—yet, under the CSA arrangements, three out of 10 do not pay when we ask them to do so. The Bill will strengthen and streamline our compliance and enforcement powers to ensure that parents quickly comply with their responsibilities. It will also ensure that, if voluntary negotiations break down, the statutory system will be able to step in quickly and provide a mandatory arrangement that will be complied with.

D

Why bring in party politics? "In the old days under the Tories ---" That was a long time ago and there has bee plenty of time for the Labour/New Labour regime to sort it out.

Submitted by David DOYLE Read 1 more annotation

Photo of Frank Field Frank Field Labour, Birkenhead

Paying maintenance should never be a criterion for having access to a child, but many people who do pay feel that it is unfair that their good behaviour is never taken into account, in the disputes that go before the courts, as a sign that they are a good parent. Will the Secretary of State consider how, in the Bill, we might discriminate in favour of those who pay maintenance and who wish to be good parents, but who find that they are denied access as a result of the other partner's pressure in the broken relationship, in spite of all the maintenance payments that have been made?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

Obviously, I shall look at everything that my right hon. Friend suggests, because he brings unique experience and authority to the debate. However, I do not want to make the children pawns in these situations. We need to get these things right, but I will take account of what he has said.

The Bill provides for the commission to take funds from the bank accounts of non-resident parents, which will be particularly important in improving compliance for the self-employed. It also provides for the withdrawal of a non-resident parent's passport and, as an alternative to jail, the imposition of a curfew.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

May I just finish this point? Then I will give way.

Members will be aware that the White Paper also consulted on giving the commission the power to remove a non-resident parent's driving licence. We have to find the right balance between introducing powers that encourage non-resident parents to pay and depriving people of their means to live and earn the income that will support their children. After serious consideration, I have decided that this particular power is best left with the courts.

Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

The Secretary of State rightly talks about the importance of robust enforcement, but is he aware of the National Audit Office report of 2005 which pointed out that 65 per cent. of assessments that come to enforcement contain an error? Does he agree that robust enforcement needs to go hand in hand with better assessment?

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I am not sure that I agree that that 65 per cent. is a representative figure, but we obviously need to get these things right. That is why we are bringing in an entirely new organisation to replace the CSA.

We must realise that unrealistic expectations about moving from one system to another have blighted previous attempts to reform child support. We must ensure that the new commission is not held back by the failings of the old system. Equally, we must ensure that maintenance payments that are already being made can continue uninterrupted for the benefit of the children.

Parents will have three options. By the end of 2008, parents claiming benefits will no longer be compelled to use the statutory system, and will therefore be able to make their own voluntary arrangements, if they so choose, supported by the new information and support service of the commission. Secondly, from 2010, parents with a maintenance arrangement already in place, and who both agree that they are happy with it, will be able to ask the commission simply to ensure that the money keeps flowing. This will enable them to avoid the disruption of a whole new assessment that could open up old wounds. Instead, their existing payments will stay at the same rate, and the commission will ensure that the money is efficiently transferred to the parent with care.

Thirdly, for those unable to come to a voluntary arrangement, or for those without an existing arrangement in place, the commission will support an application to the new statutory system. The commission will begin talking to its clients about the new options in 2008. The actual movement of clients to the new statutory system will start in 2010 and is expected to be finalised in 2013.

There is a fourth part to the Bill which provides new support for people suffering from the asbestos-related cancer known as mesothelioma. This is now the most common cause of work-related death in Britain. Nearly 2,000 people die every year from this cancer as a result of asbestos exposure, and the number is expected to increase to a peak of 2,500 during the period from 2011 to 2015. It is estimated that one in every 100 men born between 1940 and 1950 will die of the disease.

Of course, no amount of money can ever compensate individuals and families fully for the suffering and loss caused by this terrible illness, but those who are suffering rightly deserve to receive some form of monetary compensation, and to receive payment before it is too late. No one should have to wait years before they see a penny of compensation, especially when, as in many of these cases, people do not have years left to wait. In fact, people with mesothelioma die, on average, within eight to nine months of diagnosis. It is very quick.

Although we already make some lump sum payments to employees for mesothelioma under the Pneumoconiosis etc. (Workers' Compensation) Act 1979, many sufferers miss out. These include the self-employed, those who lived with asbestos workers and inhaled dust from their clothing, those who lived near asbestos factories, and those who do not know how they got the disease. The Bill means that, once diagnosed, sufferers should receive some compensation within six weeks of making a claim. We are doing that by correcting an anomaly in how we make recoveries of state funds from civil compensation. At present, lump sum payments for mesothelioma and other dust diseases are not subject to such recoveries, which leads to a windfall for insurers and other liability holders, as they can reduce their payouts by the amount of any lump sum paid by the state. That is wrong. The Bill will allow us to recover the lump sum payments from later civil compensation so that the negligent party meets its liability in full.

By making those recoveries, we aim to fund the new payments without increasing the cost to the public purse. We intend to set the lump sum payment levels so that the overall expenditure matches the expected recoveries. That means that they will initially be lower than the existing lump sum payments, but we will increase the level each year as recoveries increase until they match the levels of our existing 1979 Act scheme payment. We must now get the money to those who need it—people with mesothelioma must receive some compensation while they are still alive to benefit from it. The Bill will allow us to get some compensation to all sufferers as early as next year. The proposals have been broadly welcomed by our stakeholders and in all parts of the House.

All Members have constituents who depend on child maintenance payments, and all of us want a system that delivers better outcomes for the children and parents with care who depend on it and which further contributes to reducing child poverty—to which our Government are committed, and which we have delivered. After almost two decades of reform, it is high time we got this right. The Bill provides the foundation for a lasting reform and a new start for child maintenance that will deliver fresh opportunity for the children who are affected by their parents splitting up. We need a new system that learns the lessons of the past; promotes parental responsibility; works with parents, rather than against them, to deliver the best outcomes for children; provides the taxpayer with true value for money; and, most importantly, ensures that no children are ever again condemned to poverty simply because their parents are not together. I commend the Bill to the House.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions 2:22 pm, 4th July 2007

There cannot be a Member of this House who has not witnessed the harsh financial consequences of relationship break-ups for all involved, particularly children. During the six years I have been in the House—and I am sure that other Members share my experience—many women have visited my surgery who were frustrated, and often desperate, about being unable to secure a proper financial settlement for themselves and their children. More often than not, their frustration has been directed at the Child Support Agency's inability to get things right—sometimes to answer the most basic inquiries and deal with the most basic issues.

It is not only women who have visited my surgery: men have also come to seek my advice on the clumsy way in which the agency has dealt with them. The agency has too often been utterly incompetent. I am sure that I am not alone in having read multiple letters that the agency sent to constituents on the same day saying entirely different things. I have had endless conversations with constituents about their experiences of the agency, such as long, fruitless telephone calls and being passed from person to person, none of whom seemed to know anything about the case in question. However, we should also remember that although not all the agency's staff have passed muster, the vast majority have done their best despite being facing with a deeply flawed system.

Every Member should share the Bill's aspirations of sorting out the problems and putting in place a better and more workable system. There has been a complete failure of public confidence in the CSA and there must be a fundamental culture change towards the entire process of child maintenance. We welcome elements of the Bill and the new direction. We want parents to take greater responsibility and children clearly to be at the heart of the process. We welcome some of the Bill's proposals, and the principles that underlie it.

Effective enforcement will play an important part in the change, but there must be a simpler and more efficient system of assessment and case management. Over the past few years, constituents have experienced problems in that regard. That is why we support the move to use income tax data as the basis of future assessment. I have come across numerous cases of women in my constituency who are frustrated because their financial fortunes have been diminished by the absence of a proper process for determining their former husband's or partner's income. I have been told time and again, "His income has been set too low," and, "He has undeclared sources of income," yet the agency's response to the complaint has been, "Well, we have to take his word for it." We understand the frustrations of the women concerned. I am glad that the Government accept that in too many cases that can lead to injustice.

It is also right to change the focus of how we handle child maintenance. I have always felt that the rules on participation are too tight. It is clearly in everybody's interests if parents can come to a voluntary agreement. Why enmesh the workings of the agency in cases where it is not needed? We support the change in that regard.

It is right to end compulsory participation in the CSA scheme by all parents with care who are on benefits. That amounts to a vital change from the previous benefit recovery focus to a much clearer focus as part of a wider child poverty strategy—again, putting children at the heart of the process. We welcome many aspects of the Bill, and its principles.

My party is clearly focused on the importance of the family as the basic building block of a healthy society and on the maintenance of the family structure. We believe that every child has a right to support, both material and emotional, from both parents, and that both parents have an obligation to deliver that support to the child. The family is created when a child is born, and that family responsibility persists regardless of what happens to the relationship between the parents. Our goal as a future Government will be to strengthen the family and to place great importance on early interventions that can help prevent family breakdown. However, relationships and families do break down. Where parents separate we should focus on supporting those separated families to ensure that they continue to provide not only material but emotional support to children.

The Bill specifically deals with financial support, but I also strongly believe that we must not allow the mechanisms for financial support to undermine other public policy objectives in respect of supporting separated families and supporting families. The comments of Mr. Field on that are apposite, and I will return to the issues he raised.

We need a change in culture so that the continued obligations of parents in separated families are understood and accepted as the norm, and so that the interests of the child are put at the heart of the process. As the Secretary of State says, the provision of good child maintenance arrangements when the family structure breaks down is one of the keys to establishing an effective child poverty strategy. Both the Prime Minister and the Leader of the Opposition have said that that is close to their hearts.

However, this cannot and should not be just one of those days when Ministers simply sit back and bask in consensus. I am glad that they are putting in place some of the building blocks for improvement, but after 10 years in government, Ministers cannot divorce themselves from the failings of those years. Although the Secretary of State is new to his job and is therefore grappling with the joys of trying to deal with complicated questions on the Floor of the House after only a few days of getting up to speed on his brief, the fact is that his boss, the new Prime Minister, has for the entire past decade micro-managed domestic policy from No. 11 Downing street. In that time, he has sat back and watched the CSA go from bad to worse, thereby failing many families and children under his watch.

It is no defence simply to say that the CSA was established under a Conservative Government—I am surprised that I have not been intervened on yet to make that point. It is a matter of fact that that was the case, and it was established with the best of intentions—to support those in separated families and to protect the welfare of children. I am not ashamed of that. As we have learned since, however, the best intentions do not always work out in the detail of practice, and never has that been clearer than in the case of the CSA.

Photo of David Evennett David Evennett Opposition Whip (Commons)

My hon. Friend has been speaking pearls of wisdom.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

Does the hon. Gentleman mean by that that I "ain't heard nothing yet" from his hon. Friend?

May I draw attention to the operational improvement plan that has been put in place for the CSA? I am grateful for what the hon. Gentleman says about its staff, because they deserve a great deal of praise for the tremendous improvement in performance. Let us take a look at what all this means. In March 2006, 591,000 children benefited from the agency's collecting or arranging maintenance. The target for March 2008 is 720,000 children—a significant rise—and the total is already rising beyond the 2006 figure. The target for 2009 is some 791,000 children. That means an increase of roughly 200,000 over the period concerned, which is a significant increase, as the hon. Gentleman ought to acknowledge.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

As the right hon. Gentleman knows, the Government first started addressing this issue in 2000, before I became a Member of this House. I wish that I could have sat him down with some of the women let down by the CSA with whom I have had conversations in the years since then, and allowed him to explain to them the statistical information that he has just given. I think that they would have given him pretty short shrift.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I am grateful to the hon. Gentleman for giving way again. His assuming a monopoly of moral wisdom on this issue does not encourage progress. We have all had problems with CSA cases. I remember being one of the earliest MPs to identify—in the early 1990s—the problems with the original CSA. It was clear that the whole construct brought in by the previous Government, although they were trying to achieve an honourable objective, was extremely destructive, ineffective, discriminatory and inefficient, and penalised people across the piece. We have all dealt with such cases for well over a decade. We are trying to get things right, so making the points that the hon. Gentleman is making does not help.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

In the past few years, the Government have spent more than £500 million sorting out this problem, and still we are back in the House today, setting up the system again, so the Secretary of State does not have much of a record to defend. The truth is that—

Photo of David Evennett David Evennett Opposition Whip (Commons)

My hon. Friend is making a very good point. Although we accept that there have been improvements over the years, my constituents, for example, are still facing new and increasing problems because of the agency's ethos and the IT systems, which have continued to fail. So although we accept that what the Secretary of State says about improvements is right, new cases involving considerable failures are still arising.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

Indeed, and it is a shame that it has taken so long to make some of the proposed changes. As I have said to the Secretary of State, we approve of some of the principles in the Bill, but a lot of detail still needs to be addressed.

The truth is that this Government have been bedevilled by their inability to deliver. This is not the first time that they have tried to get to grips with this problem. The Secretary of State himself referred to interim improvements made three or four years ago in an effort to sort things out. The Government have made some progress, but many of the people whom we deal with daily—I appreciate that this point applies to Members in all parts of the House—are still getting nowhere. The National Audit Office has said that overall, the vastly expensive system that has been put in place to make the CSA work has proved no more effective than its predecessor. So let us hope that the latest attempt to sort out the situation can make a difference. Given the Government's track record to date, it would hardly be surprising if people waiting for the agency and its successor to sort out their problems were frustrated again.

Photo of Jeremy Wright Jeremy Wright Opposition Whip (Commons)

Does my hon. Friend agree that one reason why Members in all parts of the House have so many such cases of concern is that the CSA does not use effectively some of the powers that it already has? Many constituency cases are based on the argument that, despite information being presented to the agency by the parent with care, it does not take appropriate action. It is therefore not enough simply to provide extra powers; such powers have to be used.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

My hon. Friend makes an extremely good point. We can only hope that the successor body—I will return to the issue of how much of a successor it really is—can make a difference and deal with the problems itself. My hon. Friend is absolutely right—the truth is that in few policy areas can we find a clearer case of big promises from the Government, followed by failure to deliver.

The Government claim that the Bill will help to tackle child poverty. That is to be lauded, but the truth is that the Prime Minister moved next door last week after 10 years of rhetoric about child poverty in which the figures actually increased, rather than decreased. The real picture today is that child poverty rose by 100,000 before housing costs last year, and by 200,000 after housing costs. After those 10 years, the total figure for child poverty now stands at 2.8 million before housing costs and 3.8 million after housing costs.

The Bill will go only a small part of the way in dealing with a problem of this scale, but for that part we welcome it, even though, as we agree, it is overdue. And even though it is overdue and the Government have had so much time to prepare it, they have still managed yet again to present Parliament with legislation that is praiseworthy in intent, but which leaves many questions still to answer, many details still to be addressed and a lot of information—although long promised—not yet available to the House. Ironically, the Bill, rather than being flawed in detail, contains very little detail. It is another of those measures that contain little substance and create a loose framework, leaving it to the Secretary of State to work out the details. Many of the Bill's clauses are built around phrases such as "arrangements will be made" and "the Secretary of State may".

Let me put the Secretary of State on notice that before we step aside to allow him to act, we will expect a lot more detail from him in Committee on how he intends to deal with the small print. It would help the Committee if he published draft regulations before it discusses these issues, so that we could understand the detail behind his intentions.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman is making a very important point about the need to publish regulations in draft. As the Secretary of State knows, a large volume of draft regulations relating to the Welfare Reform Bill—on whose Standing Committee I served—were published in advance, so that the Committee could scrutinise them. I hope that that practice will be followed by this Department on this Bill when the Committee stage starts.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

The hon. Gentleman makes a good point; let us hope that the Secretary of State picks up on it and publishes the relevant details.

As the hon. Gentleman knows—and as we learned yesterday on hearing the details of the statement on constitutional reform—we have to study the small print extremely carefully under this Government, since the advent of the new Prime Minister and his new appointments.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

Absolutely. Having waited so long for these essential reforms on such an important subject, which affect the lives of so many families in the UK, it is essential that we get them right.

Let me return to the question of how much is really changing—the point that I made a moment ago in response to my hon. Friend Jeremy Wright. The creation of a new child maintenance and enforcement commission sounds like a brave new departure in this important area: a new body, a new location, a new team, new systems to improve on what we had before—a completely fresh approach to the service that will change the frustrations of the past few years. I have no doubt that that is what people will be expecting from this Government and this Bill, but if I am not mistaken, that is not necessarily what is happening.

It appears that the organisational side of the Bill involves unscrewing the CSA name-plate from the front of its building and replacing it with one saying "Child Maintenance and Enforcement Commission". The Government are pretty good at changing name-plates. We have not forgotten the £600 bill for replacing the name-plate of the Office of the Deputy Prime Minister with one saying, "Deputy Prime Minister's Office". Of course, inside the new agency's building, there will be the same team of people in the same offices using the same computer system—the one that has caused the Government so many headaches over the past few years.

Perhaps the Minister will be able to tell us in his winding-up speech what is being done internally to ensure that this is much more than just a re-branding exercise for the CSA. What is actually being done to ensure a real culture change within the organisation? Are the Government really planning to maintain the same internal systems, or will they need to spend yet more large sums of taxpayers' money on yet another new computer system? And why is it taking so long for the transition to the new system to take place? The new approach, we understand, will not be fully operational until 2013—most of the way through the next Parliament. Why is the change to a system in which assessments are based on information from Revenue and Customs not being fast-tracked? After all, it will be dealing with one of the biggest sources of current frustration with the present system. If Ministers can accelerate that change, they will have our support in doing so.

When the Bill is in Committee, my hon. Friends will want to probe the Government in detail about whether they intend that there should be support for couples seeking to enter into voluntary agreements. Many interest groups, for example, would like a formal structure whereby the new agency can provide back-up support for couples as they negotiate with each other. In particular, we expect to discuss in detail in Committee whether the new agency should be able to offer women information about the income levels of their former husbands or partners, in order to help inform those voluntary agreements. Given that these negotiations will be taking place at a very emotional, sensitive and difficult time for those involved, it is absolutely right that the Committee look carefully at the level of support given to those embarking on the task of reaching a voluntary agreement.

Likewise, there is an issue about how equipped the voluntary sector will be to cope with the advice that undoubtedly it will be asked to give. I know how hard pressed many such groups are at the moment. The citizens advice bureau in my constituency is facing more and more demands for its services, particularly with the worrying growth in consumer debt. I have no doubt that the welcome change to greater use of voluntary agreements will place an extra burden on such organisations in my constituency and around the country. What steps are the Government planning to take to ensure that the voluntary sector can cope?

Photo of John Penrose John Penrose Conservative, Weston-Super-Mare

It seems sensible that the advice functions should be outsourced, as CMEC will be focusing on enforcement. If so, and if it is to be an organisation with teeth, it is unlikely to have the right approach and atmosphere for people wanting a consensual advice service as well. If the services are to be outsourced, it is essential that the right organisations are chosen, and that the commissioning operation is sensitive to that. It must come equipped with sufficient money to fund these advice organisations even if they are not provided in-house.

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

My hon. Friend makes a number of important points, and we will look forward with interest to seeing what information the Government give us in Committee on that subject. This is another example of an area in which we have precious little detail about what the Government envisage for an important part of the Bill.

At the top of that list is the question of the benefits disregard. We understand the theory of what the Government are trying to do but we will need to discuss in Committee with Ministers the potential consequences of their plans—if they are prepared to provide details by then.

I know that some see the income disregard as an essential tool to motivate parents on benefits to participate in the system and to make sure that money actually gets to the child rather than the state. It has also been seen as a way of targeting funding on children to ensure that we can lift them out of poverty. But as the Secretary of State rightly said, there is a counter-argument, which is that the disregard could end up providing a perverse incentive to separate. Although I do not for a moment believe that money is the prime motivator for people to stay together or to separate, the harsh reality is that in some cases it does make a difference, and we should not use either our tax or our benefits system in a way that encourages family break-up.

I am disappointed that the new Secretary of State does not have more information for the House today, and that he was not able to offer to provide the information sought by the right hon. Member for Birkenhead and myself. I appreciate that it is early days, but will he look at the issue again and come back with information as quickly as possible, as it is central to the viability, the cost and the working of the scheme? The Government are asking the House to debate the fundamentals of the Bill—in the Chamber today, and in Committee—without that information. That suggests that the Government are not being as full, open and collaborative with Members as they should be, given the supposed change of tone in the Government.

It is also important that the Committee examine in detail the issue of self-employment. We think that the previous-year assessment basis and the disregard of income changes of up to 25 per cent. are logical for people in normal PAYE employment. But we need to understand how the Government intend to handle self-employment. I have lost count of the number of times that women have come to see me with the complaint that their former husband or partner is declaring a very low income to the CSA, but is self-employed and clearly hiding a much higher income; he may have a big house and a big car. The frustration of those women is clear; they say, "I know he's better off than he says. He's telling the CSA that he's only earning £17,000, and the CSA says it will take his word for it." That is obviously wrong and unfair.

The Secretary of State will know that while it is difficult to dodge factual information within the conventional PAYE system, there is greater flexibility for self-employed individuals to avoid the full force of the system. Will the Government explain in Committee in more detail how they intend to address the issue and tackle the potential problems that self-employment can create?

The one part of the Bill that is long on detail is the section about enforcement. I am all in favour of strong enforcement. Too many men have been able to get away without meeting payments, knowing that there is little prospect of real enforcement. The message that this sends beyond the families is potentially damaging as well. Fatherhood is, and should always be, a big personal obligation. One of the reasons for the original establishment of the Child Support Agency was to ensure that fathers lived up to their obligations, and that they understood that there was an organisation that would ensure that they could not walk away from those obligations, leaving mothers and children dependent on benefits.

That was not just for fathers at the end of a relationship, but for those who never really got into the relationship in the first place and regarded fatherhood as something transitory. Sadly, that does happen in our society. We still get high-profile cases that undermine confidence. Last year the Metro newspaper reported the case of a 21-year-old, Keith Macdonald, who had already fathered seven children with seven different women, running up a benefit cost of an estimated million pounds a year. Cases like that make the need for a range of sanctions to deal with the issues contained in the Bill desirable and necessary, and we support that principle.

There are issues about enforcement and the curfews. How does one enforce a curfew? The idea of withdrawing passports is a good one, but it worries me that the one bit of the Bill about which we have detail—by contrast with the other areas that we have addressed today, where there is precious little detail—is enforcement. This comes from a Government who have dined out on spin for the last decade. It is noticeable that the detail is all about things that might make a headline in the newspapers, while the important detail remains unresolved. Too many questions remain unanswered—which would of course be in no way typical of what we have experienced for the past decade under the Government. I hope that the new Secretary of State will be able to do things a little better.

I have no doubt that change is necessary. Too many women in my own constituency, and millions around the country, have been left stranded by the incompetence of the CSA in the past few years and by the Government's failure to get to grips with the problem. It is not just the women. Men, too, have found themselves caught up in the failings of the agency; not knowing quite where they stand or what they have to pay. When Ministers spend £500 million of taxpayers' money and the NAO says that things have got no better, they really have cause to be ashamed.

Photo of Frank Field Frank Field Labour, Birkenhead

Before the hon. Gentleman finishes, will he give the House one piece of information? He has criticised the Government for making errors for 10 years, but he then says that they are bringing forward proposals for change. To what extent does he support these changes? He has made some valid points, particularly about the disregard, which is at the heart of the Bill, and about which do not have information. But will he divide the House on Second Reading? Or does he think that, on balance, the House should support the Bill, although he may come back on Report and divide the House then, if we still do not have the information?

Photo of Chris Grayling Chris Grayling Shadow Secretary of State for Work and Pensions

I can assure the right hon. Gentleman and the Secretary of State that we have no intention of dividing the House this afternoon. The principles behind the Bill are worth while and it deserves to go into Committee. The right hon. Gentleman, my hon. Friend Mrs. Miller and I will have many questions to put to Ministers as the Bill goes through the House. But we all hope that this time, they have got it right, and that the change can make a difference so that in future, mothers and fathers will be able to resolve their affairs through a system that is fair, transparent and effective, and that those who step outside the rules will face proper sanctions.

The truth is that the Bill is short on detail. The changes to be made may be the ones that are needed, but too many questions remain unanswered. A lot of work needs to be done in Committee; the Government still have a lot to do. This time, they cannot afford to get it wrong. Too much rides on the Bill: the financial well-being of women around the country, and a fair deal for the men—but above all, the interests of the children, the innocent victims of relationships gone wrong. For their interests, more than any others, the Bill and the Government need to get it right.

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone 2:49 pm, 4th July 2007

I welcome the new DWP team to their positions and I am sure that my right hon. Friend the Secretary of State and the Under-Secretary, my hon. Friend Mr. Plaskitt, will make sure that the DWP continues to play the part that it has done previously. The Bill is extremely important. The CSA became operative in 1993 following the Child Support Act 1991. By 1995, we had had the first reform, under the Conservative Government, because the system was not working as expected.

Then we had the second reform in 2000, which introduced a new calculation, but that was not implemented until 2003. Nevertheless, we did see improvements. Chris Grayling mentioned the costs, but in 1995, £1.05 was spent for every £1 recouped for families. After the second reform, that changed dramatically, so there was a clear improvement in efficiency after that reform. Mrs. Miller looks a little bemused at that, but the document produced by the Library includes that figure.

Photo of John Barrett John Barrett Shadow Minister, Scotland, Shadow Minister, International Development

Does the hon. Gentleman agree that collecting £1.85 for every £1 spent in doing so is not good enough?

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

I accept that it is not good enough, but we have seen gradual improvements. When the process was examined further, it was recognised that fundamental change was needed. The former Secretary of State, now Secretary of State for Business, Enterprise and Regulatory Reform, made the point in February 2006 that the failures in the scheme clearly showed that it was not fit for purpose. He then called on Sir David Henshaw to provide a report after analysing how the scheme was operating. That was done and became the basis of the White Paper. It was recognised that a clear break with the CSA and the previous management system was necessary, and Sir David Henshaw's report made that plain.

The recommendations of the Henshaw report, together with the recommendations in the White Paper, form the basis for the Bill, which should be welcomed.

Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

Is the hon. Gentleman happy that the clear break that he mentions will be achieved if, as is detailed in the Bill, there is a complete transfer of CSA staff, IT system and even buildings? Is that the clear break that Sir David Henshaw talked of and will the new organisation be rid of any taint of failure in the past?

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

In talking about a clear break, Sir David Henshaw realised that the staff, who have worked hard—as has been recognised on both sides of the House—would continue to be used. Some of the IT systems will continue in use, but what is important is that CMEC has a role to play in advising people about consensual arrangements. Such arrangements, which will flow from the advice that CMEC gives, will considerably reduce the burden on the new organisation, which will allow it to foster a culture of efficiency, care and understanding that will result in a much improved system.

Central to CMEC will be the way in which it is able to advise people to enter into consensual arrangements. It will deal with people who previously could not enter into arrangements because of the benefits that they were drawing down. The new Bill proposes that people on benefits should be able to enter into arrangements. Some two fifths of people who receive benefit would like to enter into a consensual arrangement on maintenance with their absent partner, so we will see many more such arrangements, which will relieve the burden on the organisation. So although it will use the same IT systems and the same—experienced and hard working—staff, the new culture will ensure that the organisation can focus and deliver, in a way that the CSA did not.

Photo of Frank Field Frank Field Labour, Birkenhead

I wish to emphasise the importance of the point that my hon. Friend makes. In the past 10 years, we have had two big experiments, one of which was tax credits, which were sparkly and new, and taken into a different Department. However, a fair amount of chaos resulted and continues to result. Another benefit called pension credit was run by the DWP and on the old IT system and with the existing staff, but I have never had a complaint about it. While it sounds good to say that we should have a spanking new system, there can be dangers in starting from scratch, so I agree with my hon. Friend. There is a huge amount of goodwill with the staff already in the system and it would be foolish to destroy that for the sake of a press release on the creation of the new agency.

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

I am grateful to my right hon. Friend for that comment, which will have been heard by the Opposition. They will be able to take from that the point that taking older systems and driving them with a new culture can actually deliver.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

I am grateful to my hon. Friend for the interest that he is taking, and I agree with him and my right hon. Friend Mr. Field. Just setting up a shiny new organisation with a new building and a new set of people will not achieve what we want to achieve. I wish to reassure my hon. Friend—who rightly takes a great interest in such matters, as do I—that the new staff will have full trade union rights and retain their pension rights and conditions of service. That will enhance confidence among the staff that they can deliver the challenging task that the Bill sets them.

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

I am grateful to my right hon. Friend for that information. The very fact that trade union rights will be underpinned will, alongside continuity of salaries and no redundancies, contribute to a staff who are committed to ensuring that they deliver a service of the standard that their clients wish to see.

The main aim of the Bill is to tackle child poverty, and the disregard makes that a possibility. My right hon. Friend the Secretary of State suggested that the change to the disregard could mean that 100,000 children would be lifted out of poverty, and that would be a major step forward. People will enter into consensual arrangements, but we should bear in mind that that could cause difficulties. Women who have parted from their husbands or partners because of domestic violence could find that pressure is put on them to come to an arrangement that is not as suitable for them as it might be. We need to keep an eye on that. I hope that the Secretary of State and his staff will do that, as it is an important matter.

Parents will get advice, but how will it be made available? We must make sure that there are people who can explain the advice being given to couples thinking about entering into an arrangement. The service must be cost-effective and professional, and seen to be so.

Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

I thank the hon. Gentleman for giving way again. He is right to say that private agreements will play an important part in driving the culture change, but does he share my disappointment that the Bill does not contain more detail about how CMEC will fulfil its role?

Photo of Michael Clapham Michael Clapham Labour, Barnsley West and Penistone

I hope that we will be able to get the details of how CMEC will do its work when we discuss the Bill in Committee. I have no doubt that the hon. Lady will play her part in ensuring that we do.

This is a Bill for families. It is focused on children, and I think that it will bring many improvements. It is due to be in full operation by 2013, and I expect it to give families a chance to ensure that they have an income that will support their lifestyles.

The Government deserve congratulation on part 4 of the Bill, which deals with the payments made to sufferers of mesothelioma cancer. At present, they can claim industrial injuries disablement benefit, and the Government should be praised for ending the dual system that used to be in force. Under it, a person diagnosed with mesothelioma cancer by a hospital consultant then had to see the DWP doctor for an endorsement of that diagnosis before being able to draw the benefit. Now, the consultant's report on a person diagnosed with mesothelioma cancer is used as the basis for the payment of industrial injuries disablement benefit, which is paid at 100 per cent. That has been a great step forward.

Alternatively, the benefit could be claimed as a result of an action for civil damages under the common law. Where such an action has not been possible, a sufferer has been able to make a claim for payment under the Pneumoconiosis Etc. (Workers' Compensation) Act 1979. That legislation was brought in originally to deal with problems suffered by slate quarrymen, but up to now payments have been limited by the fact that they had to be decided in the industrial sphere. That meant, for example, that a woman who developed mesothelioma cancer from the fibre on her husband's clothing was not able to claim payment under the industrial injuries disablement benefit scheme.

The Bill is a great step forward because it allows a woman in that position to make a claim under the 1979 Act. The Government have in effect provided a no-fault liability scheme for mesothelioma sufferers. Moreover, the Bill also means that another category of people—those who live near a factory where asbestos is used—will now be able to make a claim.

As I have said, the Government deserve to be congratulated, but it is important that we understand the size of the problem. The document provided by the Library makes some astounding assumptions about death rates. For example, Robin Howie, an industrial hygienist, has suggested that in the 91 years between 1929 and 2020, there are likely to be between 663,000 and 803,000 deaths in the UK caused by problems with asbestos. Mesothelioma sufferers will be part of that total, and we know that the number of diagnoses of the disease is rising. At present, there are some 1,800 or 1,900 a year, but the total is likely to continue to increase until 2015, after which it will plateau and fall away by 2050. It is clear, therefore, that an enormous number of people will die as a result of exposure to the fatal fibre that is asbestos.

We must not forget that the TUC has argued that other cancers as well as mesothelioma are caused by asbestos. We can be sure that asbestos fibre causes mesothelioma but, although the evidence is not quite as strong for other cancers, we know that 4,500 people die each year as a result of exposure to asbestos. The TUC is worried that the number of such deaths between 2000 and 2050 will be extremely high.

Peter Martin wrote an article that appeared in The Sunday Times magazine of 17 May 2004, in which he predicted that, in the UK alone, there would be 186,000 deaths between 2000 and 2020 as a result of exposure to asbestos. It is therefore extremely important to have a no-fault compensation scheme for people who develop mesothelioma cancer.

I look forward to the time when the compensation recovery unit is able to secure payments as a result of successful civil actions brought by people who previously claimed under the 1979 Act, as that will help us to ensure that payments under the Act will equal the payments made as a result of civil claims. They may be lower in the beginning, but I am sure that we will catch up. The average payment made under the scheme is between £6,000 and £14,000—not a lot of money, but people in the last months of their lives can use that resource to make their lives a little easier.

I very much welcome the Bill. I appreciate the changes that it makes to the system of maintenance payments, but I am most pleased by the introduction of the no-fault liability scheme for sufferers of mesothelioma cancer.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster 3:09 pm, 4th July 2007

It is a pleasure to follow Mr. Clapham and I want to associate myself with his remarks about mesothelioma. He has worked very hard on behalf of the disease's many sufferers and he pioneered the all-party group, so he deserves great credit for the fact that the Government have brought forward the measures in part 4 of the Bill, which my party also intends to support.

I welcome the new Secretary of State to his position. He has made a good start over the past two days with two debates on two complicated issues. His predecessor is a hard act to follow. I welcome Chris Grayling to his position, too. We are all new in these roles. Our predecessors formed consensus when appropriate, but their exchanges were robust when that was appropriate, so I hope that both elements will continue during our periods in these positions.

I am particularly pleased that the Under-Secretary of State for Work and Pensions, Mr. Plaskitt, retains his place in the ministerial team. He has been an assiduous Minister and, as he knows, I have had cause to be grateful to him in relation to a Child Support Agency case. His work in showing what can be achieved adds to the disappointment in the many cases where such progress is not made, but I am grateful to him for what he has done. I pay tribute to my hon. Friend Mr. Laws into whose enormous shoes I step with some trepidation. His hard work and assiduousness in this portfolio mean that he is a hard act for me to follow.

There has been a particular moment of trepidation for me in relation to the debate, although it is not so much to do with the debate as with the fact that I imminently expect to receive a message that my wife is on her way to hospital to give birth to our first child, due on Saturday. If that message arrives, my hon. Friend John Barrett has offered to step in to replace me.

Photo of Peter Hain Peter Hain The Secretary of State for Wales, The Secretary of State for Work and Pensions

The hon. Gentleman has my congratulations and those of the whole House on that big event. If he feels like giving me his speech and trotting off to help his wife, I shall be happy to read it afterwards. He could then get on with more important things.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

I am grateful to the Secretary of State, but my wife is not yet on her way to hospital. He can rest assured that if she were I should certainly not be here—important though the debate is.

As the Secretary of State said earlier, the interests of children must be at the forefront of our minds. Whatever disadvantages they may face because of their circumstances, it is important that financial disadvantage is not added to the list. That is the context for our debate on the Bill.

The Liberal Democrats have some deep concerns about the Bill, but we welcome some of its core principles—certainly, the idea of encouraging more private arrangements in all classes of case where that is appropriate and where it can be ensured that the arrangements can be carried out consistently, especially where benefit payments are involved. The Bill frees people to make private arrangements and that is welcome. The increased focus on tackling child poverty is an important aspect—the measures are no longer simply about reducing public expenditure on claims for child maintenance.

The Liberal Democrats and the Conservatives have signed up to the Government's aspiration to abolish child poverty by 2020 and it is good that the presentation of the Bill took that aim into account. The provisions on greater effectiveness in the collection of maintenance and the enforcement of maintenance orders are important, but that approach should also apply to the Government's attitude to the £3.5 billion of outstanding arrears. That point has not yet been made today, so I hope that when the Minister winds up he will make clear the Government's plans for recovering that huge amount of historical debt. The Government's figures suggest that they regard £1.9 billion as possibly uncollectable, which is a worrying statistic. We have not yet heard from Ministers what they anticipate the CMEC's attitude will be to that debt.

The debate is not just about principles; it is, importantly, about practice. As we have seen, since the CSA was established the devil is in the detail, in particular the administration. Perhaps unlike the hon. Member for Epsom and Ewell, I approach the Bill with a certain pessimism, which is shared by at least some outside organisations. The citizens advice bureau briefing for the debate said that

"there must be major doubts about whether the Bill's proposals will in practice resolve the seemingly intransigent problems afflicting child support, which mean that only one in three children who should be benefiting from some child support are actually receiving anything".

The CAB also pointed out that the pace of reform was "disappointingly slow". As has been said, we need to consider the proposed reforms against the background of administrative failure and the huge backlog of uncleared cases in two systems—shortly to become three. The backlog is getting longer and the average time for an assessment is now 500 days.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

I agree entirely. The fact that two or three systems are operating in the agency undermines confidence. Does the hon. Gentleman agree that the Government should have cut the Gordian knot and put everybody into the same system to show that there was a new fairness in child maintenance?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

I thank the hon. Gentleman for that intervention. He makes an important point. The continuation of three systems will be a ball and chain on the new agency. We have heard from the Secretary of State and from the hon. Member for Barnsley, West and Penistone about the aspirations for a change of culture, but the ball and chain effect of those old systems will be a serious problem for the new agency to tackle.

There are IT problems and questions about the administrative competence of the organisation. Furthermore, when the CSA was established and again when the 2001 reforms were implemented in 2003, there was over-optimism about how quickly things could change. We have to counter those problems, especially given the fact that in the 1.4 million cases being handled by the CSA, only 455,000 of the 750,000 non-resident parents liable for maintenance actually pay anything. I am deeply concerned that the mistakes may be repeated in the new system, so I counsel the House that the reforms are doomed to failure in meeting the aspirations that have been set out unless there is a rapid change of course to address some of the administrative problems.

Both the Government and the Conservatives made the point that many of the CSA staff are hard working and have a sense of commitment. I associate myself with those remarks. A large number of the staff are trying their best in incredibly difficult circumstances, not least those imposed on them by the system—for example, the phone and IT systems. However, the Secretary of State's justified praise for many CSA staff needs to be put into the context of the Government's plans for significant staffing reductions at the agency. By March 2008, over an 18-month period, there will be a staff reduction of 20 per cent. About 2,000 staff will be taken away from the CSA at a time when I and, I hope, the whole House, would have expected a real effort to be made. To refer to the point made by Mr. Weir, if we are to clear the backlog of cases and get the new agency off to a good start, such a dramatic cut in staff is completely the wrong approach.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

To emphasise that point, another problem is that when people phone the CSA, they never speak to the same person twice. If we are to tackle the problems, the same officer should deal with the case from start to finish, which will not happen if staff numbers are being cut to the extent proposed for the existing CSA. I suspect the situation will be the same for the CMEC.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman may have had the same experience as I have—of the most difficult cases being referred to the office in Bolton, which I believe does not take incoming calls. There may be good reasons for that. However, it adds to the sense of frustration, particularly for Members of Parliament who are pursuing cases —[Interruption.] I see that Mr. Evennett is echoing that sentiment.

The staff cuts are taking place against a background of poor performance and uncollected arrears. Given that, the CMEC does not look like the clean break recommended by Sir David Henshaw; it seems to be much more like a rebadging of the existing operation. It will have to manage three maintenance systems simultaneously, as well as collect past arrears. I accept the Minister's good intentions, but despite them the staffing cuts mean that the new agency risks being crippled by the problems of the old one. I hope that the Minister will address that serious point in his closing remarks.

Heroic assumptions have been made about the extent to which the Government believe that large numbers of people will shift towards making private agreements. I support the objective of making them. However, there is the context of the staff reductions and if the aspiration for a large number of new private agreements is not met, either the CMEC will be overloaded and unable to cope or huge numbers will opt out of the system, not make a private agreement and therefore have no maintenance at all. That is a serious potential backward step.

Furthermore, the CMEC will have to process up to 600,000 benefit cases, which will automatically fall off the system next year. On top of even that, there will be an extra administrative burden if large numbers of people choose to withdraw their cases under the old system and reapply under the new—and the hon. Member for Angus suggested that many would. That is the context that leaves me pessimistic.

I come to some of the specific elements of the Bill. I have said that the Liberal Democrats support the aspiration for private arrangements. However, the Bill does not make obvious how the Government expect large numbers of people to come to their own private arrangements. As I said, there is a risk that many will end up with no maintenance arrangement at all. Meanwhile, the Government assume that there will be an enormous decline in CMEC cases; an assumption is being made that there will be large numbers of private arrangements, and administrative costs are planned to fall by £200 million a year from the current £570 million. That would be a huge contraction in the budget. Clearly, if the reforms were successful both sides of the House would expect a reduction in the amount of money needed to run the system. However, to plan ahead to cut the budget before we have seen how the new system is performing seems to put the cart before the horse—or perhaps that should be the other way round.

Photo of Maria Miller Maria Miller Shadow Minister (Children, Young People and Families)

Does the hon. Gentleman share my slight concern about the difference between the numbers that we were given by the former Secretary of State on how many people the Government expect to use the new system, and the numbers that appear in the regulatory impact assessment? I recall the former Secretary of State talking about a halving of the numbers of people using the CMEC—in other words, half the number of people currently using the CSA would use the CMEC—yet the regulatory impact assessment says that there would merely be a 400,000 decline. Does the hon. Gentleman share my concern about that discrepancy?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

I certainly do. I hope that that matter will be teased out in Committee. To a large extent, the underlying assumptions and the factual basis on which they are generated will determine how successful or otherwise the reforms will be.

The point about the 12-month rule has been made—particularly in the Scottish context—by my hon. Friends, who are no longer in their places. There is a concern about the rule, which means that after 12 months of a private arrangement, the people concerned will be free to opt back into the CMEC system. In some cases, that is a disincentive to private arrangements. That is especially the case in the Scottish context, where, as the Minister will know, Scots law provides for a system—not found in English law—of the registered minute of agreement, described perfectly by my hon. Friend Mr. Carmichael. There is a need to protect that, at least in Scotland, perhaps by extending the 12-month rule to a 48-month rule, for example. I hope that the Minister will be willing to consider that. Perhaps he could also consider the benefits of the Scottish system of registered minutes of agreement and whether that wisdom of Scots law could benefit people in England and Wales.

Photo of Michael Weir Michael Weir Shadow Spokesperson (Work and Pensions), Shadow Spokesperson (Trade and Industry), Shadow Spokesperson (Environment, Food and Rural Affairs)

I thank the hon. Gentleman, who is very generous. There is also the point that if there were a problem, the CMEC, rather than sheriff officers or the courts, could be given the power to enforce the minute of agreement. That would short-circuit the process, and that is where we are all trying to get to.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman makes a good point. In the current legal position, I suspect that empowering the CMEC to enforce the agreements would involve a provision in each individual agreement. However, there are plenty of solicitors around who could make such an arrangement work.

The basis of the Government's approach to private agreements is the advice system that will be put in place. It is essential that there should be good quality advice, particularly face-to-face advice. Earlier, the Secretary of State said that he expected the CMEC to be the principal dispensary of such advice, although he said that function would not be exclusive to the new organisation. I note that in its excellent report, the Select Committee recommended a degree of separation between the CMEC and the advice function, not least because if the CMEC takes tough powers, people might be dissuaded from going to it for advice. Going to a neutral third party, such as a citizens advice bureau or another organisation of the sort mentioned by the Secretary of State, might be much better. It is important to ensure that the advice networks used for that purpose are properly funded and set up. Again, we need a clear statement from the Government about how they wish to establish such advice networks.

There has already been a debate about the maintenance disregard. I share the Government's view that the £10 figure is too low and should be raised. I do not accept the objections to that, which have been raised in this debate. Clearly, there has to be a cap at some level and I hope that, before the Committee stage, the Minister will be able to make that level clear. It has to be there to prevent abuse. However, there is also a question of timing. The current plan is that the higher disregard will not be introduced until 2011, but existing benefit claimants will be expected to reapply under the new system, or opt out with a private arrangement, in 2008. That means that the existing £10 disregard will apply in those circumstances. I am concerned that not applying the higher disregard at the same time as benefit claimants are told to reapply will result in a disincentive for those who need to reapply, because they will not feel that they will get any major financial benefit. The timings should be the same.

The new assessment process will be based on income from the previous year. I welcome that fact that the Minister has taken on board the view that data from Revenue and Customs should be used for that purpose. That is a good start. The Liberal Democrats are of the view that that agency should also be responsible for collection, and I shall return to that point later. I hope that that point will be investigated before anything is settled on. None the less, the information will still be one or two years out of date and there will be an administrative burden of annual reassessment.

There is also a real concern about the percentage figures that the Government are recommending in respect of fluctuations of income before a reassessment is made—they are talking about a 25 per cent. fall in income or a 25 per cent. rise. The organisation Resolution, which specialises in such matters, has pointed out an example of a case in which a 24 per cent. fall in the income of the non-resident parent could lead to a rise in the amount of maintenance that they pay, from 29.2 per cent. of their income to 42.4 per cent., without, at the moment, any right of appeal.

I hope that the Minister will consider having an asymmetric rule to ensure that the figure that would trigger reassessment would be lower for a fall than a rise. Perhaps we could be talking about cases in which the non-resident parent has a fall in income of, say, 10 per cent., but there could be discussion of the figure. Clearly, the smaller the figure, the greater the administrative burden. However, in the case of a fall in NRP income, there is a strong case for having a lower figure and therefore an asymmetric rule.

The Government also propose to raise the minimum weekly payment in benefit cases from £5 a week to £7—a 40 per cent. rise. I have some doubts about the fairness of that proposal against the general background of the low level of benefits and the upratings that we have seen in recent years. If such a change is to be introduced, it should be done only in the context of a wholesale review of the adequacy of the benefits system. We have to bear in mind that a young person on jobseeker's allowance may be on only £45 a week, so that increase could well have a substantial impact on their standard of living. I hope that the Minister can deal with that important point of detail.

We are deeply sceptical about the proposals to allow the new agency to charge for its services. Previous powers that have been available have not been used and they should not be used now. They will be a disincentive to use the system. There may well be a case in future for charging in cases of non-compliance as an incentive for the non-compliant person—usually the non-resident parent—to pay. However, in the general run-of-the-mill cases, charging for the services of the CMEC sends a bad signal.

We would prefer HMRC to be responsible for collection. The use of HMRC data raises the question of why a new agency is needed at all. HMRC already collects our taxes and has systems for making calculations—for example, those used in tax credits. We need to know why the Government feel the need for an additional layer of bureaucracy. Why not let HMRC collect the money that absent parents should be paying for their children? That would be quicker, fairer and simpler. [ Interruption. ] Judging from the expectoration on the Labour Benches, I think that Mr. Todd wishes to intervene, and I am happy to give him his opportunity.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

That resounding vote of confidence in HMRC's abilities to handle the collection and sharing out of money to our citizens is deeply encouraging. Obviously, the hon. Gentleman's experience of tax credits is far more positive than mine. Would he care to set out the context of his recommendation?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

I am grateful for that intervention. My experience of HMRC in relation to the paying out of money under the tax credit system is not good, but my experience of HMRC in relation to the collection of money through the tax system is very good.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

It is ruthless, as the hon. Gentleman says. On that basis, the idea has serious merit and should be considered and debated.

Photo of Jeremy Wright Jeremy Wright Opposition Whip (Commons)

Does the hon. Gentleman agree that another concern about the involvement of HMRC is that expressed by a number of voluntary bodies, who have no doubt been in contact with him as well—namely, that HMRC will store its information in several different places? It is important that that information is co-ordinated so that it can be passed on to the CMEC and used for the purposes set out in the Bill. Does he share that concern?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman makes an interesting and important point. It might help to support the argument that I have just made, despite the objections of the hon. Member for South Derbyshire.

It is also important to make sure that the maintenance, once collected by the CMEC, is passed on. In my constituency—I am sure that other hon. Members have had this experience—there are a large number of cases in which maintenance is collected by the Child Support Agency, as it currently is, but little or nothing is received by the parent with care. Sometimes the money seems to sit with the CSA and is not passed on. We need to make sure that there are mechanisms for passing the money on.

There is no question in my mind but that enforcement needs to be stronger and much more of a priority. I know that the Minister is taking that seriously. He has expressed that view to me in private. The lack of commitment to enforcement has been one of the great failures of the Child Support Agency. In that respect, the Bill is a mixture of good ideas and gimmicks. The proposal to name and shame on the internet is an utterly pointless gimmick.

When the Secretary of State raised the question of curfews, I was not sure whether he was rowing back slightly from what was previously proposed. I am dubious about the effectiveness of the measures. On the other hand, there is quite a lot of international experience to suggest that the proposals on passports and, in particular, driving licences can be highly effective. Having those powers in important. There is anecdotal evidence from the United States, for example, that when driving licences are threatened, long queues form the following day at the office where maintenance is paid. That is an important point.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

The hon. Gentleman is being generous with his time, but the Chamber is fairly empty. Perhaps his speech is a vehicle for hon. Members to make a few points.

Surely one of the tests of the Bill will be whether it deals with the most obvious dodges and wheezes that people use to handle their liabilities to the CSA. Such elements as self-employment, running one's own business and operating in a small company in which one knows the proprietor extremely well are critical, as is the actual mechanism of collecting money after an assessment has been made. Does the hon. Gentleman think that the Bill will address some of the naked abuses that constituency MPs see all too often?

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman makes an important point. Some abuses are obvious, and sometimes the parent in care has evidence to show that she—it is most often she, but not always—believes that dodges or wheezes are being carried out. I do not intend to repeat the good points that have been made about self-employment. I am not completely convinced that the Bill gets the balance right on these matters, but several of its additional proposals on enforcement will help to deal with the problems that the hon. Gentleman identifies. For example, there will be a power to seize money directly from bank accounts. However, I wonder why there is no power to seize property.

A strong system of appeal is needed, whether through the courts or otherwise, that is easy to access and understand. The Bill takes a slightly inconsistent approach because there will be an administrative right of appeal in some cases, while the Government intend to use the courts for others. More consistency would be useful. I have mentioned the competence of the CSA. We will encounter problems unless the new organisation has improved competence. The greater the administrative competence of that organisation, the greater the justification for giving it administrative powers. However, the greater its incompetence and the likelihood of incorrect calculations being made, the more important it will be to have court-based legal safeguards or a clear appeals process. We will make that point strongly in Committee.

It is utterly shameful that £3.5 billion of outstanding debt remains uncollected. If that debt is written off, the people who have been treated the worst will also get the worst outcome. None of the debt should be written off unless it is specifically found to be uncollectable, rather than statistically determined to be uncollectable, or a parent with care has agreed to a lower figure. More action is needed to collect the arrears and compensation should be paid if the CSA's negligence has contributed to a non-payment.

We will need more scrutiny of the operations of the future CMEC. The Social Security Advisory Committee might well be in a position to carry out such a role, as it does for other aspects of the benefits system. I hope that such a provision will be added to the Bill. Likewise, the CMEC must account in detail in its annual report for its performance on collecting arrears and enforcing debt recovery.

We need a child support system that works for those who matter most—the children of the families affected. Despite the many serious flaws in the Bill, I hope that it will proceed to Committee and that the Government will have an open mind about improving it. If they do not, however, we will not hesitate to vote against it on Third Reading.

Photo of David Evennett David Evennett Opposition Whip (Commons) 3:38 pm, 4th July 2007

I am delighted to follow Danny Alexander. I wish him and his wife well for their forthcoming event and hope that that all goes extremely well.

I am pleased to participate in this important debate. Since I returned to the House in May 2005, hundreds of my constituents have visited my constituency surgery, or contacted me by post and e-mail, to comment on and complain about the Child Support Agency, which has been one of the biggest issues in Bexleyheath and Crayford. The problems have been many and varied, and they have often had severe consequences for the people concerned. Bureaucracy and inefficiency have caused my constituents frustration and worse. There have been many failings under the existing system, while bureaucracy and unfairness have caused considerable distress.

We are all concerned about child poverty; even today, many children in Britain suffer deprivation, and that is unacceptable. Obviously, we want to make sure that children are not deprived of the resources that are necessary if they are to develop and grow satisfactorily. Of course, we also need to consider the taxpayers' interests and the issue of fairness. I was interested to hear the Secretary of State's measured speech, and I agreed with the broad thrust of his remarks. The Bill is generally to be welcomed, and I am broadly supportive of it. My Front-Bench colleague, my hon. Friend Chris Grayling, highlighted the issues extremely well in his excellent speech. He mentioned the aspects that we support, but he also raised issues of concern. Most importantly, he and Danny Alexander, who spoke for the Liberal Democrats, asked whether the Government's aim is attainable through the Bill. Will it work, or is the new body just the CSA mark 3?

There are still real concerns about the Bill. The Secretary of State talked about change as if his party had not been responsible for the CSA for the past 10 years, and for the problems that occurred. Our concern is that the Bill has been presented as a radical reform, but as currently drafted it promises the same people, the same buildings, and—I do not know—perhaps the same computer system. There is very little detail on how the measures will deliver the culture of change that we need, and the change to child maintenance that the Government promised.

I was in the House in the 1990s when the CSA was established. I was supportive of action and hopeful of success in dealing with the problems that it was set up to solve. I was a supporter in principle, and remain a supporter of the founding principles. Regrettably, the CSA did not get off to a smooth or effective start. It suffered a loss of popular confidence at the very beginning, and it never regained the confidence of the people who depended on it. That has been a matter for regret over the years. As I said in an intervention on my hon. Friend the Member for Epsom and Ewell, there have been improvements, and we welcome that, but regrettably there are still huge areas of failure. That is not to be critical of the staff; they are working hard and are doing their very best, but that is no good as an answer to our constituents, who experience problems that include constantly getting letters that say different things, failing to get through on the telephone, and failing to get satisfaction. That is why it is so important that we discuss and debate the issue in detail this afternoon.

I want to highlight a number of problems that my constituents have experienced. The first relates to compliance. Statistics for my constituency show that partial or non-compliance seems to be going up, and that is worrying; full compliance is down considerably. Some people—men, particularly—are just not taking responsibility for their children, and that is totally unacceptable. All of us in the House are in agreement on that. It is not a party-political issue; we are just discussing how we can improve the situation. We want to be constructive. We want to make sure that the Bill is improved, and we want to make sure that when it reaches the statute book, it will determine successful outcomes for applications.

I must raise the case of one of my constituents, and I would particularly like to draw it to the attention of my hon. Friend Mrs. Miller on our Front Bench, who will wind up for us. My constituent signed over the equity in his house when his relationship broke up, and he then went on to have another family. The partner who had taken the equity had no wish to accept any more maintenance, but the CSA did not take the equity in the house into account, so the man had to continue to pay, and had considerable financial difficulties. The CSA seemed unable to deal with a situation in which there was a voluntary agreement, and in which the parties wanted no further involvement with the CSA.

The main problem has been administration. Constituents have come to my surgery with letters, sometimes written on the same date, saying completely different things. People who have the responsibility of bringing up children, which is difficult enough in today's society, do not need the additional problem of getting three letters from the same organisation which say three different things at the same time. I hope that when the new commission is set up, it will be much more robust and efficient, so that the distress and hardship caused to people who are already subject to considerable pressure is not exacerbated, and they are helped.

The principle underlying the CSA was to help children out of poverty and to help mothers with responsibility for children to fulfil their responsibility without worrying about extra money. I was fortunate—my wife and I were together, yet we found that even with two parents, children were difficult to bring up. With only one parent, it is extremely tough. We want the new system to deal with the problems effectively.

Sometimes the bureaucratic problem is the failure to get through on the phone or to get any answer at all. That causes considerable frustration.

Photo of Danny Alexander Danny Alexander Shadow Secretary of State (Cabinet Office) and Shadow Chancellor of the Duchy of Lancaster

The hon. Gentleman is making an important point. One of the problems that our constituents often have in their dealings with the CSA is its lack of responsiveness. There is a system within the CSA for allocating the most difficult cases to the clerical office in Bolton. Has he had the same experience as I have with the office not taking incoming calls? Even by contacting the excellent MP hotline at the CSA, it is impossible to get information back without hugely delaying the case further as it is being dealt with at Bolton, because we cannot get hold of staff directly ourselves.

Photo of David Evennett David Evennett Opposition Whip (Commons)

The hon. Gentleman makes a fair point. My office has had similar experience. The nub of the issue is to improve communications and get results.

As I understood it from the Secretary of State, there is to be a new ethos and better administration. I am a little concerned that that will take a long time. I follow the points made by the hon. Member for Inverness, Nairn, Badenoch and Strathspey about phasing in. We all know that IT systems are temperamental, but the IT system at the CSA has been a disaster. I have recently seen examples of payments being calculated quite unreasonably. Even when men have presented the information from their wage packets or salary, the calculations have been wrong because of IT problems. That aspect of the new set-up must be examined closely.

I welcome the income disregard. That is a positive feature of the measure because it addresses difficulties that have arisen in the past. I am very keen on private arrangements between people to fulfil their responsibilities towards their children if the relationship breaks up or has never got started. An amicable settlement must be best for everybody concerned. Regrettably, that is not always possible, as we have heard from the cases described this afternoon, and an agency is required to help out. The more private arrangements we can encourage, the better, but we will always need a failsafe, even for those who have had private arrangements, when things go wrong.

Photo of Mark Todd Mark Todd Labour, South Derbyshire

One of the tests of the legislation will undoubtedly be the proportion of cases that can be dealt with outside the state's intervention. I have found, as I am sure have other hon. Members, that the mere involvement of the state has often exacerbated the problem. The frustrations of dealing with the CSA and the antagonisms of producing detailed assessments and arguing over them make the situation worse. The further we can get the state to withdraw, except in extremis where it is required, the better it will be.

Photo of David Evennett David Evennett Opposition Whip (Commons)

I endorse that. It encapsulates my passionate belief that there is a place for the state, but where arrangements can be made privately, it is essential that we should encourage that and help to make it happen.

Child maintenance is obviously a critical factor in supporting child welfare, and our children deserve the best. I shall not go through the facts and figures, because they are well known and on the public record. Children are our future and we must do all that we can to ensure that they are helped, and child maintenance is pivotal in alleviating child poverty. We have already heard about various reports, and Lisa Harker's report "Delivering on child poverty" points out that 42 per cent. of children in poverty are living in lone-parent families, and that maintenance ought to play a major part in reducing child poverty. That is absolutely the case, and that is why we are looking at the matter so seriously this afternoon.

I welcome the Bill, and I hope that it will take the necessary steps to address the real problems of families under today's system. But as many hon. Members have said, the devil is in the detail and in the implementation. We support the two founding principles—to ensure that children receive a proper and fair maintenance payment, and that there is fairness for the taxpayer. I look forward to seeing how the Bill is developed in Committee, I hope making it a slightly better Bill. But at this stage, I think that it has qualified support and we look forward to future developments.