moved Amendment No. 1:
Before Clause 1, insert the following new clause--
:TITLE3:("The basic principles")
.--(1) The Child Support Act 1991 shall be amended as follows.
(2) In section 1, for subsection (1) there shall be substituted--
"(1) For the purposes of this Act, notwithstanding any other rights of the child or duties of his parents, each parent of a qualifying child is responsible for maintaining him."").
My Lords, in Committee, I expressed concern that the narrow emphasis of the Bill and of the Child Support Act 1991 on the financial responsibilities of a non-resident parent could well be misleading, by suggesting that they were the only important obligations on a non-resident parent. In their White Paper, the Government say:
"As explained in the Green Paper, we are convinced that one of the reasons for the failure of the existing child support arrangements is that they do not work properly with other family responsibilities".
However, the Bill perpetuates that situation, not making the slightest reference to other responsibilities, such as nurture, love, care, guidance and education.
In Committee, I suggested that we should use the Bill as a vehicle to define the obligations and responsibilities of the absent parent. That suggestion was rejected by the Minister. I now accept that she was right. With the help of the Library, I have done a lot of research and I now realise that the law of parental responsibility in this country is in a state of chaos compared with even such a near neighbour as Scotland. The Minister is right to say that to attempt to define parental responsibility in the Bill would be too ambitious.
However, there remain two things that we need to do in the Bill. The first is to ensure that it is crystal clear what the word "maintenance" means in the Bill--that it means only financial maintenance, because that is what the Government want it to mean. Secondly, we should make it clear in the Bill that neither it nor the 1991 Act in any way subsumes or reduces the responsibilities of a non-resident parent, other than the financial responsibilities to the child.
Section 1(2) of the 1991 Act absolves the absent parent of any responsibility for maintenance beyond paying over the money laid down in the Act. The Bill does not change that situation; it merely alters the basis for the calculation of the sums to be paid.
That is why the definition of the word "maintenance" is very important. I have found no definition in the Bill or the 1991 Act. The Government want the word to mean no more than financial maintenance, but is that really what it means? If "maintenance" were to be held by the courts to mean more than financial maintenance, it could seriously prejudice a child's right to other forms of care from the absent parent. There are grounds for believing that the Government's assumption about the meaning of the word could be challenged.
The Oxford English Dictionary gives nine meanings or usages of the word and 16 meanings for the word "maintain". These include two usages that support the interpretation of providing financial support, but there are several others that support other interpretations. They include
"The action of giving aid, countenance or support" and
"To keep up friendly relations or correspondence with".
It would be useful to have a definition in the Bill. I have suggested one possible formulation in my Amendment No. 3.
My other two amendments address my concern that the 1991 Act does not make it explicitly clear that the Government and Parliament intend that the financial maintenance that is dealt with in the Bill is still only one part of the totality of a non-resident parent's obligations. My Amendments Nos. 1 and 2 are suggestions for achieving that objective. They would not detract from the Government's purpose or intentions for the Bill, but they would make a point that needs to be made--a point that I believe has the support of all sides of the House. I beg to move.
The House will have listened with respect to the noble Lord, Lord Northbourne, given his experience of social security matters. He has raised some broad questions that it is appropriate to address at the beginning of our debates. There is an argument for clarifying the definition of the word "maintenance". It will be of considerable relevance when we come to debate issues such as whether the absent parent's income should be taken into account. In Committee, the Minister and I had some discussion and dispute about the position of a particular parent without care and the extent to which they--and the parent with care--were contributing, other than in financial terms.
I shall listen with interest to what the Minister has to say about the other amendments. The noble Lord pointed out to me a few days ago that the preamble in the original Bill in 1991 was also deficient in a number of respects. Those of us who tried to work with the 1991 Act in another place over several years will feel that that is not the only deficiency in it. That is why we are now trying to improve it. This is a useful preamble to the discussions that we are going to have.
My Lords, I support the noble Lord, Lord Northbourne. In Committee, we had a general discussion on the noble Lord's amendment and whether or not it was a good idea to have a declaratory statement at the beginning of the Bill. I believe that Amendment No. 1 is a rather more limited declaratory statement which would be of assistance to lawyers when they are interpreting the Bill to clarify precisely what is the responsibility of both parents.
I also feel strongly that the noble Lord is right to say that it would be helpful to define what "maintenance" means. On this subject, it is extremely easy to talk round all the figures and relate them to the word "maintenance", with different ideas in our minds as to what is meant by that. Clearly, the Government mean something different for the resident parent than for the non-resident parent in terms of finance, although they believe that it will balance the whole thing out if the Bill as it stands were to be enacted.
I believe that this proposal is very helpful. I hope that the Minister will say something good about this, whether she accepts the amendments as they are worded or whether she agrees to bring back amendments which achieve the same end.
My Lords, I too support my noble friend's amendments. It should be made clear that discharging one's financial duties towards one's children is only one, and by no means all, of the duties that a parent owes a child.
My Lords, I know that the noble Lord, Lord Northbourne, met officials in the Lord Chancellor's Department yesterday and will be meeting the Lord Chancellor to discuss his longstanding concerns on the care of children and young people. His wider concern that fathers should have a role in the nurture of their children, whether or not they live in the family home, is of course being addressed in the Ministerial Group on the Family, chaired by my right honourable friend the Home Secretary. I have the pleasure to represent the DSS on that committee. Therefore, I am actively engaged in those discussions.
Amendments Nos. 1, 2 and 3 seek to clarify the scope of the Child Support Act 1991 by stating on the face of the Bill that a non-resident parent's obligations to his children go beyond the obligation to maintain children financially when the parents live apart. Amendment Nos. 1 and 2 make no difference to the effect of Section 1 of the Child Support Act 1991 but have the unfortunate consequence, I am sure unintended by the noble Lord, of obscuring the clear unambiguous language of the duty to maintain there set out. Section 1(2) of the Act states:
"For the purposes of this Act, an absent parent shall be taken to have met his responsibility to maintain any qualifying child ... by making periodical payments of maintenance ... of such amount ... as may be determined in accordance with the provisions of this Act".
That means that maintenance is clearly defined as being about money and child support. Section 1 makes it clear that that is his responsibility. The wording of the provision,
"For the purposes of this Act", makes it clear that the duties referred to are in no sense intended to override other parental duties. Amendments Nos. 1 and 2 obscure the language but do not add to it and Amendment No. 3 is unnecessary.
There are many other Acts of Parliament which set out the responsibilities of parents. As the noble Lord will be aware, the Children Act 1989 provides generally for the responsibilities of parents, as well as providing a means of determining financial support for children. I believe that those words may lead the courts to try to put a new, different and possibly more purposive construction on the wording which would not necessarily improve the operation of the Child Support Act.
We covered much of this ground when we had what was almost a Second Reading debate in Committee. It was accepted all round the House, and certainly on the Government Benches, that children have a right to emotional and financial support from both their parents. But this Bill, which amends the 1991 Act, focuses solely on the provision of financial support. While we share the noble Lord's desires to encourage wider parental responsibility, this Bill is not the place for such a provision. Although we absolutely support the noble Lord's concern that fathers should play an active part.
However, within this Bill, we are developing matters in ways which will help to meet some of the noble Lord's concerns: for example, by developing the face-to-face service, which allows local interviews with parents, including fathers; by signposting, which means our staff will be trained to refer both parents on to other organisations, including welfare agencies, Relate and so on. We are working with the National Council for One Parent Families, Parentline Plus and the Department for Education and Employment to ensure that the message gets across to young people--young men in particular--about what being a parent involves and the life-time commitment which having a child entails.
This Bill is about the child support rates which will make likely financial commitment clear to all. As I said, we shall be working across government, through the committee chaired by my right honourable friend the Home Secretary, to ensure that the wider concerns which the noble Lord has aired today are followed through. Therefore, we do not need the amendments because they will in no sense affect the wording of the Act but may cut across some of the wording in other legislation to the greater obscurity of all. With that explanation, I ask the noble Lord to withdraw his amendment.
My Lords, I am grateful to the noble Baroness for her very full reply. I cannot deny that I am disappointed that she did not feel that she could be more positive. I do not accept that Clause 1(2) of the Child Support Act 1991 adequately defines the responsibility to maintain. It suggests one item--the paying of maintenance--which could be a part of the responsibility to maintain. There are other parts.
It is difficult to follow exactly what the noble Baroness said and the legal implications of it as we listen in the Chamber. I shall read what she said but I by no means undertake not to come back to this matter on Third Reading. On that basis, I beg leave to withdraw the amendment.
I shall not move this amendment but I shall move Amendment No. 26 when we reach that point.
My Lords, Amendment No. 5 is a paving amendment. We then come to Amendment No. 6 which suggests that there should be an upper limit to child maintenance of £200 per week for each qualifying child.
We debated this at some length on 8th May in Committee. It seems to us very important indeed that there should be some limit on the extent to which the absent parent, whether it be male or female, should contribute to the provision of maintenance of each child, which we were discussing only a moment ago.
In this Bill, we are creating something, as I understand it, which does not exist at all in law generally; namely, that the child has a right to have a share of a parent's income. While we wholeheartedly support the basic objectives of the Bill and that both the parent with care and the parent without care should have responsibility for the maintenance of the child, we believe that it is appropriate that the amount which is transferred from the absent parent to the parent with care for use in providing for the children of the relationship should take into account the extent to which the absent parent of whatever sex has income and the extent to which that income should be, as of right, the child's.
If we do not do that, one would imagine that there is clearly a limit which the parent with care could spend on a particular child. In this amendment, we have suggested a precise figure of £200 per week for each child. Of course, that amounts to a considerable annual amount of transference of income from one parent to the other for looking after the child.
However, it is the case that if one goes far beyond that limit--at present the sum involved is completely unlimited--what we would get to a considerable extent is a form of espousal maintenance rather than child maintenance. That gives cause for concern.
"In the final analysis, the child support formula should be clearly seen to be related to the cost of bringing up children and not as a straightforward 'tax' levied on a non-resident parent. We recommend that the Government should re-examine the possibility of inserting in the legislation an upper limit on the automatic application of the revised CSA formula".
As I understand it, in its final report the committee did not reach that conclusion. However, I think there is a great deal to be said for it; otherwise, we would see the transfer of considerable sums from one parent to the other. When one reaches a certain limit, one is bound to have doubts as to whether it would even be possible, let alone appropriate, for the parent with care to spend that particular amount on the child.
I pointed out in Committee that the situation is even more complicated if several marriages are involved, or some marriages and different relationships between a particular individual and a series of partners, married or not. I know only too well, from my own constituency experience, that that can give rise to considerable difficulties--not least because there is often a great deal of bitterness between the first and second families. Such difficulties are sometimes exaggerated. Not infrequently, in fact nearly always, the second family finds that the main earner is earning more than he did when he was with the first family. It is rare that the reverse is true. Therefore, the second family tends to think that it should receive more, which complicates matters.
I hope that we might have a sympathetic response from the Minister on this point. Overall, we strongly believe that it is not the task of this legislation to allocate income from one partner to the other. There is the question of whether adequate maintenance is provided--we are talking here in financial terms, not in the terms in which the noble Lord, Lord Northbourne, spoke a moment ago--and of whether it is appropriate that without limit the income of the parent without care should be redistributed to the single-parent family which exists at that stage. I hope that the Minister will respond favourably.
There are other complications. My understanding is that if that is not so, particularly in situations where the parent without care has an extremely high income, there may be repercussions in terms of what the appropriate marital settlement will be and so forth, and whether that will affect that situation. On this occasion, I shall not go into that kind of complication, which can be considerable. The simple point is the one I have already made. I hope that your Lordships will be prepared to agree to it.
My Lords, I support the noble Lord, Lord Higgins, and should like to comment on an interesting and important amendment which relates to the issue of what is meant by the word "maintenance". Is it money being paid over for the maintenance of the child, or for the maintenance of the spouse who is looking after the child? Does the spouse or partner who is looking after the child have any obligation to spend the money on the child? I can think of several cases which have come to me in the context of a small charitable trust with which I am involved in which a deserted mother comes and says, "Here is my child. He is in a fee-paying school and is happy there"--he may be a child who needs special education--"but I do not have enough money to pay for his education".
One can also envisage a situation where a wealthy absent parent pays over a large sum of money. It is possible to conceive of a mother (or indeed of a father who is the resident parent) not spending it on the child. I repeat the question which I launched in connection with my own amendments: what does the word "maintenance" mean?
My Lords, perhaps I may briefly restate the position of these Benches. After a good deal of discussion we arrived at the common general principle that children should be entitled to share in the increasing wealth of their parents. That means that we cannot support the noble Lord, Lord Higgins, on this amendment. However, were he to choose to press Amendment No. 8, he might receive a different answer.
Perhaps I may raise a slight query about the statement made by the noble Lord, Lord Higgins, that there is nothing in law to say that a child is entitled to a share in the income of its parents. I know of at least one court judgment which appears to me to rest on the contrary principle. However, as I have never been able to find a lawyer willing to expound the principles of that judgment, I cannot clarify the point. Before we return to this matter, as we undoubtedly will, perhaps it would be worth while for all of us to try for a clearer understanding of the legal position than we have at present.
My Lords, I have not had time to read again exactly what was said by the noble Earl. However, I believe that he began his comments on this amendment by stating that the problem the noble Baroness has is that the Government are adopting a formula-based sense of justice. The more I contemplate it, the more it seems that the Government are saying, all through the Bill, that they have an idea of what a family should be; of what should happen when the family splits up and of the responsibilities of the non-resident parent. They are led to the conclusion that, as the noble Lord now says, the child is entitled to the growing wealth of both parents.
My Lords, I am grateful to the noble Baroness. That principle was stated by my party before the Bill left the Commons with my prior knowledge and approval. So far as I know, it has never varied.
My Lords, I thank the noble Baroness for giving way. I was not backing the statements of the noble Earl, Lord Russell. I was merely confirming his account of what he had already said.
My Lords, that is great! I believe that what the Government are doing is not at all sensible. It is extraordinary to say that if a family which has broken up is, on both sides, increasing in wealth, the child is, therefore, entitled to a transfer of wealth far beyond the maintenance of that child.
In this regard I remember the comments of the noble Lord, Lord Stoddart, from the Labour Benches. I am sorry that he is not in his place to endorse this. The noble Lord stated that he could not contemplate that a child should necessarily be entitled to the increased wealth of its parents. I believe he also said that he felt that until he was 60 he was better able to look after his own wealth than were his children who might be his heirs. He was the voice of common sense in this matter.
The Government have got this very wrong. I believe that once the public realise what can happen to an absent parent who has done very well and who loses much of his wealth to the spouse he has left at the expense of his new family, they will not think that this provision is sensible. However, I shall not go on because I think I have lost the attention of the Minister.
My Lords, I, too, support these two amendments. Amendment No. 6 is really of great importance. Indeed, I understand that those members of the legal profession, both barristers and solicitors, who have a great deal of experience in the practice of family law have made representations to the Government about this matter without any effect.
Quite frankly, I think that Amendment No. 6 is vital. Without it there would be a chaotic situation and it may cause serious injustice. The trouble is that the matter is presented in an over-simplified way in the Bill. It overlooks various factors; for example, a man may have two families or a man may be very prosperous but in declining health. One could enumerate the various factors.
Under the Bill as its stands in Schedule 1, paragraph 2, where there are three or more qualifying children, 25 per cent of the net weekly income of the non-resident parent will have to be paid for the support of the children. In the case of men who are less prosperous a similar position will arise with smaller figures, but the hardship could be greater. But in the case of a man who has an income of £100,000, he will be obliged, if he has three children to maintain, to pay £25,000; that is to say, 25 per cent of his net weekly income. In some circumstances that may not be too bad, but I should have thought that it is more than is needed for the maintenance of the children in ordinary circumstances, even in a prosperous family. Therefore, it could create a very high burden.
The amendment goes a good way in that direction but is not quite so burdensome. The amendment's suggestion of £200 a week would produce not £25,000 but a maximum of £10,400 a year per child. That is reasonable for the maintenance of the three children. If the question arises of their going to fee-paying schools that is a matter which should be dealt with separately, and I hope will be. So it seems to me that this is really one of the most important situations that arises under the Bill and I strongly support the amendment moved by my noble friend.
My Lords, I listened carefully to the points made by the noble Lord, Lord Higgins, and others. The noble Lord, Lord Higgins, explained the argument for a maximum level of maintenance liability with characteristic clarity and precision. I accept that the arguments on this point are finely balanced; that there are good arguments for and against setting a cap on the level of child support to be paid by wealthy parents.
The noble Lord argued, with support from others in your Lordships' House, that child support liability should be limited to a level which meets the needs of children, and that where maintenance exceeds a certain level it inevitably becomes spousal maintenance. Our child support rates are based on the view that non-resident parents have a duty to put their children's best interests first. This means that they, like resident parents, should pay what they can reasonably afford. Our judgment is that 15 per cent of net income for one child, 20 per cent for two children and 25 per cent for three children or more is reasonable, and reflects the level of support provided by parents in intact families for their children.
Of course, this means that children of wealthy parents will receive a higher level of child support than children of poorer parents. But that reflects the position of children living with both their parents. There is no intention that child support should provide maintenance for the parent with care, only to put children living apart from a parent in broadly the same position as they would be were they living with that parent.
However, I accept that there are difficulties with this approach where non-resident parents have very substantial assets or, indeed, as the noble Lord, Lord Renton, said, where there may be a second family and other dependants. In such cases, the parent may derive substantial income from a wide range of sources, and, equally, a regular salary may be less likely to reflect the true income available to support the child than is the case for other parents.
In addition, as your Lordships made clear, it is the case that financial arrangements for very wealthy families on divorce or separation can be substantially more complex than for other families--a point that has been put to us, as the noble Lord, Lord Renton, said, particularly by the family solicitors. I should emphasise here that we have no intention of forcing wealthy families to come to the CSA. Where maintenance arrangements for the children are such as to obviate the need for income support payments, parents will be free, as now, to make maintenance agreements and the courts will be able to make orders for child maintenance based on those agreements. In general, we expect these agreements to shadow the child support rates.
However, as your Lordships will be aware, we are providing, in Clause 2 of the Bill, for either parent to have the option of coming to the CSA if court-based arrangements are unsatisfactory. But, while the courts are able to make sophisticated judgments on the level of available income, the CSA will operate a relatively simple set of rules for determining net income. This can mean that the courts could have difficulty in shadowing the CSA rates where the parents are wealthy and have complicated financial arrangements. The noble Lord, Lord Higgins, is nodding. This is a point that he also made. If either parent can unpick complex financial arrangements where there are high levels of income by coming to the CSA, it may be that in these extremely unusual and rare cases the job of the courts becomes very difficult if not impossible.
Given that these concerns apply only to wealthy non-resident parents, I am prepared, without commitment at this stage, to consider whether setting a maximum liability at a relatively high level would assist. It may be that with a fixed limit and the ability of the parent with care to apply to the courts for a top-up--as he or she now can--the courts would find it easier to settle the other parts of the financial package. This, in turn, would mean that we were able to address many of the apparent difficulties associated with giving parents the option of using the CSA even though they have gone through the courts for their broader financial package.
If that is helpful to your Lordships, I am willing--as I say, without commitment--to take this away. Bearing in mind the arguments that have been raised today I should obviously come back to the matter at Third Reading. That being so, it may be that the noble Lord, Lord Higgins, will withdraw his amendment.
My Lords, one knows that the Minister has herself been heavily engaged in the preparation of this particularly difficult Bill, certainly so far as concerns the Child Support Agency side, and has obviously given it considerable thought. Therefore, we welcome her response. It was perhaps a little uncertain. She began by saying "without commitment" and then later said that she would return to the matter at Third Reading.
My Lords, I said I hoped to come back. Perhaps I may make my position clear. I am clear in my mind--and this has been reinforced by the points made by the noble Lord, Lord Renton, today--that this matter is embedded in wider complex issues involving the courts. What I am saying to the noble Lord, Lord Higgins, is that if there is a way in which we can make the broad arrangement satisfactory, I am happy to reflect on the matter and seek to be helpful.
My Lords, over the years one has had to assess whether or not the reply by a Minister on a specific amendment is sufficiently watertight to be accepted. On this occasion the Minister has been very helpful. There is obviously a question as to the numbers involved and that is something we shall need to consider. We shall table an appropriate amendment at Third Reading but hope it is pre-empted by a satisfactory amendment from the Minister. I thank her for giving great thought to the issue. On that basis, I beg leave to withdraw the amendment.
My Lords, Amendment No. 7 is one of the more simple amendments, certainly in relation to the wording. It suggests that, on occasion, the arrangements for maintaining the child are shared and that, in some cases, shared care ceases. It is important to be able to specify the date when that change comes into effect because, generally, it has repercussions on the financial arrangements between the parties involved.
We feel that the appropriate moment is the date when the cessation of shared care takes place. I hope that this amendment is not controversial in the general atmosphere of goodwill generated by the Minister's previous reply. I hope therefore that she is able to accept the amendment. I beg to move.
My Lords, Amendment No. 7 relates to cases where the non-resident parent has a nil rate of liability because he is receiving a social security benefit and shares the care of the child.
As noble Lords will know--we have repeated this to the level of boredom--we want to encourage parents to share the care of the child and intend to introduce provisions to support that. I shall not trouble your Lordships by going through the details again. Briefly, instead of an abatement of maintenance occurring after 104 nights of care a year, it will now kick in after 52 nights a year, thus being every other weekend and thus encouraging that support.
That is the general principle. We are saying that non-resident parents who receive social security benefits will have a nil liability where they have any element of shared care. In the interests of the children we feel it right that in those circumstances shared care should lead to the removal of maintenance liability.
Perhaps I can remind your Lordships that a non-resident parent on a benefit such as JSA would normally pay £5 in contribution to child maintenance which, under our scheme, would go to the parent with care. We believe that to be a reasonable abatement if he is sharing care of the child for part of the week. Where the shared care arrangement ceases and the NRP is on benefit, instead of flat rate liability becoming due from the date when the agency is notified of the change, the revised liability will be back-dated to the time that shared care ceased; in other words, it is a timing amendment.
We want to make sure that maintenance due becomes maintenance paid. This means that maintenance levels should be stable and predictable and that we do not needlessly create maintenance debt. As now, we intend that the agency should conduct periodic case checks to ensure that the maintenance calculation is based on up-to-date information. Those case checks should happen on average every two years, although we expect the agency to check more frequently if benefit is being paid for the children and the facts of the case appear likely to change quickly.
No change will normally be made to the maintenance calculation between case checks unless the parents report a substantial change in the facts on which the calculation is based. In those circumstances, the new maintenance calculation will normally take effect from the date when the change is reported. That means both that parents continue to be clear about how much maintenance is due and that the new liability does not carry with it substantial debt for past periods. In that way we can support our key aim of maintaining compliance with maintenance responsibilities.
Since the effect of other changes will not normally be backdated in the new scheme, we can see no case for making special provision for changes in shared care, which is what the amendment asks us to do. Such an exception would add administrative complexity and is hardly necessary as the ending of shared care arrangements in particular would normally be reported straightaway by the parent with care. Obviously she has a financial interest in reporting the change because she would then receive the £5.
Our view is that we have struck the right balance on shared care and, with that explanation, I hope the noble Lord will withdraw his amendment.
My Lords, it is perhaps rather typical of debates on this Bill that one tables a nice simple amendment and receives an unbelievably complicated reply.
I gather that the Minister is not proposing to accept the amendment. That much is clear. I partially understand her reasons for not doing so, not least because, apparently, the situation is only appraised every so often rather than continuously in relation to the shared care arrangements.
I wish to study exactly what the Minister said--as I am sure do other noble Lords--and if necessary return to the matter at Report stage. I beg leave to withdraw the amendment.
moved Amendment No. 8:
Page 100, line 32, at end insert--
("(3) The regulations shall in any event provide that the net weekly income of the non-resident parent shall be reduced in the circumstances mentioned in sub-paragraph (4) and by the method mentioned in sub-paragraph (5), but subject to the limit mentioned in sub-paragraph (6).
(4) The circumstances referred to in sub-paragraph (3) are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000.
(5) The method referred to in sub-paragraph (3) is that for every pound by which the gross annual income of the parent with care exceeds £25,000 the net weekly income of the non-resident parent shall be reduced by one penny.
(6) The limit referred to in sub-paragraph (3) is that the net weekly income of the non-resident parent shall not be reduced by more than 50 per cent.
(7) The regulations shall in any event provide that net weekly income shall include both earned and unearned income.").
My Lords, Amendment No. 8 is concerned with the income of the parent with care. This is clearly an important amendment. In our view, it is unreasonable, in the circumstances described in the Bill, for the income of the parent with care not to be taken into account. It is quite possible, and perhaps not unusual, for the income of the parent with care to be significantly in excess of that of the absent parent. Therefore, in deciding how much of the absent parent's income should be allocated to the maintenance of the child, the income of the parent with care should be taken into account.
It is absurd, if the income of the parent with care averages around £200,000, that the absent parent on a very low income should continue to pay a significant amount to the parent with care without any adjustment. We are not suggesting that he should not pay anything. But allowance should be made for the income of the parent with care.
In the other place there was a great deal of discussion on the situation in Australia and so forth. But the argument is fairly straightforward. As your Lordships will see from Amendment No. 8, we put specific figures into the provision and suggest that the circumstances where we envisage this kind of situation developing are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000, and then we add a tapering arrangement. We are going back almost to the point of the noble Lord, Lord Northbourne, that it is a question of overall equality of the contribution made by each of the parents. We feel that that situation would not be achieved if no account at all were to be taken of the income of the parent with care, which is the situation at the moment in the Bill.
I gather from what the noble Earl, Lord Russell, said earlier that he is of a similar view to my own and I look forward to hearing what he has to say. I beg to move.
My Lords, I shall not detain the House long. We are prepared to offer our support for this amendment. We did not find the Minister's arguments against it in Committee entirely convincing. We understand the principle that care is to be set against contribution. That has not at any stage been disputed. However, where there is gross inequality of wealth, which neither the Minister nor I view with any great degree of favour, the inequality may be so great that the care is not sufficient to be set in the scale against it.
These are the only circumstances to which the amendment as drafted were intended to apply. It is a very modest amendment. It is designed to deal with a principle which is big in theory but applies to only a small number of cases. We also think that acceptance of the principle is probably vital to consent being accorded the legislation outside, which I imagine the Minister wishes to see. If the noble Lord, Lord Higgins, wants to take the matter further, we will support him.
My Lords, this amendment argues the case that if the income of the parent with care, who in most cases will be the mother, is more than £25,000--only a small number of women would come into that category--the absent parent should pay a lower amount towards the maintenance of the child. It would be extremely unusual to have a situation in which the father earned less than the mother.
It has been argued that surely the needs of the child must be paramount and that the child should share in the wealth of both parents. However, the child would be penalised, and it is the child about whom we should be caring, rather than the absent parent. It is said that because the mother happens to be earning a large amount, then the absent parent should pay less. That means that the absent parent would be a beneficiary and the child would lose.
My Lords, I think the noble Baroness has misunderstood the amendment. No doubt my noble friend will confirm that when he replies. Sub-paragraph (4) of Amendment No. 8 refers to,
"a gross annual income from all sources".
It therefore includes income from savings. One has to remember that quite often a mother who is the parent with care may have inherited money from her family or married somebody with just an earned income, and the family is set up in a way which reflects the mother's circumstances as a result of inheritance. Not an enormous amount of money is required to produce such an income; it could well happen.
I believe that the Bill as it stands will result in a perception of unfairness. The concept of fairness is, of course, very important. That is because the events surrounding the break-up of a family will inevitably attract discussion. Other people will talk about them; the circumstances will be known. In my opinion, therefore, it would be a great mistake to allow the Bill to remain in its present form because, if it is seen to be very unfair, it will bring the whole measure into disrepute.
My Lords, Amendment No. 8 seeks to change the way the maintenance liability of a non-resident parent is calculated in cases where a parent with care has a gross annual income, from all sources, in excess of £25,000. I am not even sure whether, for example, "all sources" includes a new partner's income or whether it refers only to that parent's earnings.
None the less, the amendment provides for the net weekly income of the non-resident parent (upon which child support liability is based) to be reduced by a penny for each pound by which the gross annual income of a parent with care exceeds £25,000, subject to there being a limit which would prevent the non-resident parent's net income being reduced by more than 50 per cent. That would lead to a consequential reduction in the amount of maintenance payable in affected cases. The amendment also provides for the calculation of a non-resident parent's net income to include income from both earned and unearned sources. I hope that the House will not support this move.
The amendment replaces the current complex child support scheme with a radically simpler system of rates which will be easier for parents to understand. One of the main reasons for the failure of the existing scheme, and why this legislation is necessary today, is that the current scheme depends on a vast amount of information being needed to work out liability. As a result, assessments take 26 weeks to make. As a result, before he starts to pay a penny, his payments are already in arrears. As a result, an adversarial relationship develops from the start with the CSA when it seeks to collect his maintenance because he is already substantially in arrears.
We are seeking to keep it simple. One of the key simplifications is that no account will be taken of the income of the parent with care. Our position is based on two grounds. The first is the question of principle. In that connection, I dispute the contention of the noble Baroness, Lady Carnegy, that her argument is fair and that the Government's position is unfair. Our first argument is one of principle and fairness. Our second argument is one of practicability. I shall deal with both of those points.
I deal first with the argument of principle. We say that the parent with care already contributes in kind. Who else pays the bills for the child's food, housing, clothing, schooling and, if that is what they have chosen, holidays, toys and equipment? The parent with care pays the bills. If she is earning a gross income of £25,000 a year and is asked to pay cash as well, your Lordships would be saying that she should pay twice, first by providing care and, secondly, by an additional cash levy. Yet everyone in this House knows that a child living with a parent with care on an income of £7,000 a year will inevitably have at least a financially very different and lower standard of living--I am not referring to emotional support--than a child living with a parent with care on an income of £25,000 or £30,000 a year. As the income of the parent with care increases, so does the child's standard of living, irrespective of the contribution from the non-resident father. Therefore, to ask her not only to allow the child--
My Lords, yes. I shall return to that argument. I was about to say that I believe that the father's contribution of 15 per cent, irrespective of whether he is £1 above £100--which is the correct figure, not £1 above benefit income, because up to then he pays £5, as I am sure the noble Earl knows--should be independent of what the mother brings to it. That is his responsibility as a father.
The position of the noble Earl, Lord Russell, and perhaps of the noble Lord, Lord Higgins, is that the father's contribution, whether it be 15 per cent, 10 per cent, 14 per cent, 22 per cent, or whatever, according to the number of children, should fluctuate up or down, not according to his income but according to whether the mother's income goes up or down, according to whether or not she is in work, or indeed according to whether, though she is not in work, she happens to have snared a rich partner.
We believe that the father's contribution should vary only according to his income and his second family, and not hers. Otherwise, it would create a gross unfairness between two fathers, both of whom may be £1 over the benefit level, in the words of the noble Earl, Lord Russell, but one of whom, whose ex-partner may have married a rich man, pays less than the other, whose ex-partner still remains on benefit. That is deeply unfair, and I hope that the noble Earl, Lord Russell, will recognise that. It is deeply unfair between fathers with the same income and the same responsibilities, but whose contribution on this formula would vary according to what the mother has done.
Yes, my Lords. But this is a case of, "From each according to his needs"--in other words, from each person according to his ability to pay. But the needs here are those of the child. The noble Earl would construct a situation where the parent with care is contributing in kind through maintenance support and in cash, especially if it has come from a husband--she does not necessarily need to have earned it. The noble Earl seems to be espousing a situation where a non-working parent with care may be getting her money and be supported by a new partner, whose income would, therefore, allow the biological father of the child to reduce his financial responsibilities to that child. Does the noble Earl really think that that is right? I do not.
The father's obligation to his child is independent of what the parent with care may be doing--whether she is on benefit, married, in work or not in work. His should be an ongoing commitment that reflects his income and his responsibilities, not hers. She is already contributing to the well-being of the child through her support in kind.
The first argument is one of fairness. Noble Lords opposite wish to make the parent with care pay twice over, especially if she is fortunate enough to have married a wealthy man. The second argument is one of practicality. It is hard to imagine that there will be many parents with care with incomes of £25,000 within the CSA system. As far as we know, the number is about 200 out of a caseload of 1.2 million. In order for the CSA formula to work, all we take into account at present is the income of the fathers, because we are saying that the parent with care is contributing in kind through her support of the child. So the agency is making 1.2 million assessments of the income of the fathers--the non-resident parents.
If we were to accept the amendment, we would have to double the number of those assessments because we would need to assess the income of the parent with care. Therefore, instead of 1.2 million assessments, we would be assessing 2.4 million incomes. But what about the situation as regards the stepchildren in the second family? If there are stepchildren in the second family--who, in all decency, we are treating in exactly the same way as the biological children of the non-resident parent--we then have to look at the capacity of the non-resident parent's new partner to support the stepchildren. Well, half of them have remarried and one-quarter of them have stepchildren, so not only would we have 2.4 million examinations of income; we would also have something like 3 million examinations of income to consider.
Equally, the parent with care may have more children in her new relationship. So we would have to offset that against this whole formula in the same way as we are doing for the non-resident parent. This means that we would then have to look at her partner's new income and thus would have carry out up to 3.5 million, perhaps 4 million, assessments of income, instead of 1.2 million assessments, just to pick up 200 parents with care. Instead of making an assessment of one person--namely, the non-resident parent--based on his earnings in a simple ready-reckoner form, we would, under the amendment, have to assess not only that income but also her income, his new partner's income and, possibly, the income of the parent with care's new partner just to catch the income of 200 parents. Moreover, as a result of having done so, the abatement in his formula--the payment that he makes--is likely to be trivial.
We would have to assess 4 million people in order to catch 200 parents. As a result, judging from what we know of those parents' income, the total effect on the non-resident parent's payments would be trivial. Perhaps I may give your Lordships an example. The woman earns £28,000 a year. Very few non-resident parents with care have earnings of £28,000 a year. He earns £15,000 gross--that is, about £10,000 to £12,000 net and has one child. Under the Government's scheme, he would be paying £38 a week, but under the formula proposed that would be abated by just £5 a week. However, another father on similar income and living in similar circumstances with the parent with care on an income of £20,000, rather than £28,000, would pay £38 a week.
So we would have assessed the income of 3.5 million or perhaps 4 million people to pick up 200 incomes of parents with care. As a result, we would have to spend another £10 million on technology and there would probably be several weeks of delay and complexity because of possible arrears or possible errors. At the end of the process, we would get just a trivial reduction in the maintenance that the non-resident parent would pay. It is neither practicable nor fair. Therefore, if the noble Lord wishes to test the opinion of the House, I hope that noble Lords will not support these amendments.
My Lords, has it occurred to the Minister that a very rapid increase may develop in the prosperity of women as against men in earnings, as well as in income from savings? This whole argument is based on a certain formula and on the Treasury's fear of the complication of the exercise. I am concerned about fairness for individuals. People matter. Does the noble Baroness realise that the situation may change and that those figures may not remain relevant?
My Lords, I do not want to be discourteous to the noble Baroness, but this is the Report stage. We had a very full debate on the issue in Committee. I am trying to keep my remarks tight because there are many amendments to deal with tonight. I very much hope that the noble Baroness is right; indeed, I expect it to be the case that women's prosperity will grow. But any woman who is not on benefit does not need to contact the CSA. I hope that the noble Baroness understands that. As far as we are concerned, women who are not on benefit are private cases and do not need to approach the CSA. The more women's prosperity grows, the less likely they are to turn to the CSA. Therefore, the issue raised by the noble Baroness simply does not apply.
My Lords, I listened with great care to the comments made by the Minister. What the Government now propose is a very major simplification. But throughout this matter, which goes back to 1991, it has been a question of balancing simplicity against fairness. The same is true as regards our tax system: we have developed a tax system that has become increasingly complicated in order to achieve a greater degree of fairness. However, the point made by my noble friend Lady Carnegy--namely, that what is important here is the perception of whether it is fair--is also of some significance. Great difficulty will be experienced in getting people to accept that it is fair to take into account the income of the absent parent only and not that of the parent with care.
There has, I believe, been some difficulty in making contact--if I may put it that way--on part of the argument, which was also true of the Committee stage. At the beginning of her remarks, the Minister said that the parent with care is the one who is paying the bills. Yes, that is true. But the question is: who is providing the money to pay those bills? In this case, it is, generally speaking and to a significant degree, the absent parent--
No, my Lords. I am sorry--I am breaking my own conventions here--but what the noble Lord says is not true. The average contribution of a man in full-time employment will be £31 per week under our scheme. Perhaps I may tease your Lordships and say that only a bloke could think that you can bring up a child and pay for clothes, food, housing, heating, utilities, cleaning, toys, holidays and school expenses on £31 a week.
My Lords, those parents are quite clearly making a contribution. But, given their relative circumstances, the question is whether it is an appropriate contribution for one to make as against the other. We accept that there is a relatively small number of parents with care in these circumstances, but we are saying that it is appropriate to take into account both sets of income, even though that may involve a greater degree of complexity. The Minister referred to adversarial relationships. Our amendment would not increase the degree of an adversarial situation between the CSA and the absent parent. The latter will obviously feel that it is fairer if the income of the parent with care is taken into account.
It is also true to say that the parent with care with an income over the levels we have specified may feel that that results in a degree of conflict between her and the CSA. We are not asking the CSA to assess anything extraordinarily difficult--certainly not at these levels of income where, presumably, the figures are already prepared by the individual concerned for other purposes.
I have listened with great care to what the Minister said. However, I feel that this is a matter on which we should test the opinion of the House, given the arguments which have been put forward on both sides.
My Lords, in moving Amendment No. 10, I shall speak also to Amendments Nos. 11 to 20.
Perhaps I may begin by reaffirming that our overriding interest--which I believe is shared by all Members of the House--is the welfare of children. With that priority in mind, we are very concerned to see significant improvements in the CSA. We listened with care to what the Minister had to say in Committee and, notwithstanding her very clear and full reply, we have felt it nevertheless necessary to revisit the issues at Report stage. It is necessary because we believe that the provisions in Clause 2 will have an enormous impact upon the system--an impact that will not necessarily improve the CSA.
The provisions in the Bill as currently drafted mean that any party, whether or not on benefit, in receipt of a court order after the commencement of the Act will be able to approach the Child Support Agency to have their child maintenance reassessed after 14 months. This may and will cause many problems.
It will see the end of clean-break settlements between husband and wife which provide certainty to both parties and, vitally, to the children of the relationship. It will tie the hands of the courts, which will be forced to assume child maintenance in line with the CSA's formula, even when it is totally inappropriate and unjust to do so. It will make the negotiation of a package of measures almost impossible, as each party will refuse to agree terms knowing that this sword of Damocles will be hanging over their heads with the potential to undermine completely an agreement made in or out of court. It will result in a more confrontational process, with the risk of domestic violence.
The Bill will limit the ability to achieve resolution through mediation, or orders by consent through the new ancillary relief scheme. It will also increase spending on legal aid. It will skew maintenance agreements, with the non-resident parent likely to want to pay spousal maintenance purely as a bargaining mechanism, to be traded off against an increase in child maintenance brought about by a referral to the CSA. It will increase the use of sales and charge back and other arrangements relating to the family home, which will be detrimental to children and ex-wives.
The provision runs counter to the fundamental principles of mediation and negotiation that have guided family law reform for more than a generation--principles that complement the general direction of European law and practice.
How do we respond? It is widely felt that, at present, the jurisdiction of non-benefit cases, including top-up, should remain with the courts. Parties must be able to make their own binding agreements. Subsequent referral to the CSA, as now, should be possible only if one of the parties claims benefit or if the parent with care wishes to use the powers of the agency to enforce collection. In the latter case, the agency should be able to collect the maintenance level agreed by the court.
Our amendments seek to respond to these proposals. In our efforts to allay some of the concerns I have raised, I should like to draw the Minister's attention to Amendment No. 15, which was tabled only a few days ago prior to Report stage. It is a probing amendment designed to gain clarification of the Minister's statement in Committee on 8th May regarding the provisions in Clause 2, which are recorded in Hansard at cols. 1301 to 1309. The Minister indicated that,
"Very simply, no private cases need ever come to the CSA...Only those cases where the parent with care is on a prescribed benefit--normally, income support--would come to the CSA".--[Official Report, 8/5/00; col. 1305.]
Amendment No. 15 is designed to confirm that cases in these circumstances will be accepted by the CSA, as well as cases where maintenance payments are not being paid reliably and the parent with care wishes to approach the CSA.
If cases need only come before the CSA 12 months after a court order is made where the parent with care goes on to a prescribed benefit, couples who agree financial arrangements that are subsequently converted into court orders will continue to be able to do so in the future. The courts will be able to regulate and vary where necessary the maintenance agreement over the following years.
Parents will also have a wide ability to make agreements between themselves. They could, for example, trade off capital or spousal maintenance in return for differing levels of maintenance for the children. The freedom to do this would be lost if either party were able to renege on an agreement by approaching the CSA after 12 months in the belief that they could better an agreement that was fairly made between them previously. Neither party would be prepared to make concessions or a trade off if they thought it could be overridden in a year's time by the CSA, which would make a completely fresh assessment and completely ignore the concession or trade-off which was made 12 months previously.
Clause 2 would also undermine government policy on family matters--which is, wherever possible, that parents should be encouraged to enter into mediation and discussions in order to settle spousal maintenance. There are circumstances where parents may wish to make agreements without involvement from the CSA, and these could include the following.
First, the parents could agree that the payments for the children will be greater than the CSA would assess. The most common reason for this is likely to be in return for a trade-off--for example, the mother will agree to make no maintenance claims for herself (known as a clean break) in return for a better level of maintenance for the children. This can have benefits all round. The non-resident parent is happier to pay the money because it is deemed to be going to the children, and it gives a definite length to the maintenance obligation. In turn, the mother no longer has to concern herself about forming new relationships and the effect that that could have on the maintenance.
Secondly, parents could agree to a lesser sum than the CSA would assess. Again, this will often be as a result of financial trade-off. For example, the non-resident parent may transfer capital or the house to enable the mother and child to remain housed, with the mother accepting a lesser level of maintenance for the children in return. The scope for this kind of settlement is likely to increase under the new CSA where the resident parent's income is no longer taken into account. One could have situations where the resident parent works and has sufficient income, but there is a need for capital to secure accommodation for the children.
To benefit from these exemptions the parents need to have their agreements approved by the courts. This provides an important protection against a parent being pressurised into unsuitable agreements, while, at the same time, providing a straightforward and established procedure. It is a procedure that is frequently used when divorcing parents have been able to reach agreement on general financial aspects, because it enables them to ask the courts to confirm the terms of an overall settlement that may well include spousal maintenance and capital at the same time as child maintenance.
The effect of allowing the CSA to consider cases that were decided in the courts 12 months previously would mean that either parent could call upon the state to intervene and override an agreement that they had reached, even if that agreement had been reached after full advice and after a court had approved the terms. On the other hand, one can see many benefits in allowing the current situation to continue, which enables separating parents to agree their own financial arrangements, subject to the protection of court approval, which will ensure that those arrangements are both reasonable and realistic.
Finally, I should like to turn in particular to Amendment No. 20, where the court is to consider a variation. Briefly, the new arrangements will allow a court order to be assessed after it has been in force for 12 months, although the assessment will in fact take place after 14 months--12 months plus two months' notice. At present, this assessment cannot take place, but a court can vary an existing order. Under the new arrangements, it will not be possible to apply for a variation, even if both parents wish so to do. If they can agree, they will have to go through the rigmarole of discharging the old order and making a new one, which is all grist to the lawyers' mill. If they cannot agree, they will be forced to go to the CSA. I beg to move.
My Lords, I rise to support what has been said by the noble Baroness, Lady Buscombe. We have always held the position that the child support system is basically crude and formulaic. It is far less effective in reaching fair and balanced arrangements than maintenance orders made by the court on the basis of the facts of the individual case or, even better, agreements reached between the parties and approved by the court.
The only advantage offered by the child support system is its cheapness, although even that seems to be a matter of considerable doubt. Our view, therefore, is that it is both wrong and counter-productive, where it is possible for orders to be made by the court or by agreement between the parties, for the result which will have been worked out based on the individual circumstances to be capable of being overridden on application to the CSA by whichever party feels that they would do better out of it, thus applying this very crude child support formula. For that reason, we feel that these amendments are plainly a move in the right direction and we support them.
My Lords, this group of amendments, so clearly and ably spoken to by the noble Baroness, Lady Buscombe, concerns the relationship between the courts and the CSA and their relative jurisdictions in the context of child maintenance. It is important that the reforms we are proposing provide a service for all parents and children who need to settle child maintenance issues. The new relationship between the CSA and the courts provided by Clause 2 ensures that this will be a reality.
The simple and predictable rates of child support liability will help parents, regardless of whether they are on benefit, earning modest wages or are extremely wealthy. We are determined to ensure that there is no "two-tier" child maintenance system--namely, one for the rich and one for the poor--in which wealthy non-resident parents would be able to impose child maintenance arrangements that would not be in the interests of their children and would take no account of the child support rates.
Too often in the past--this is the precise reason why the party opposite established the CSA under the 1991 Act, with our support--that is exactly what happened in the courts. Inconsistent and unpredictable rates of child maintenance were imposed. There was an increasing trend for "clean-break" settlements where regular maintenance payments were traded for property or capital transfers. But the central point of our position is that non-resident parents cannot make a "clean break" from their children.
We accept entirely that there are conflicting principles in this area, but the result of those arrangements was that, too often, non-resident parents were able to avoid any ongoing responsibility for their children because once they had made over capital in the form of the matrimonial home, the taxpayer then had to pick up the benefit bill. It is for this reason that we propose to change the system.
Provisions in the Child Support Act 1991--which, as I have said, we supported--established an administrative mechanism for setting levels of child maintenance and, where required, for collecting maintenance payments on behalf of the children concerned. When the previous government introduced that Act, they clearly envisaged a time when all child support matters would be settled by the agency; that is, the agency would oversee all child support decisions and impose that figure on the courts. However, it quickly became clear to the Conservatives that the CSA was struggling to keep up with its caseload. As a result, in 1995 the then government deferred indefinitely the take-on of court cases, but the long-term aim was still that the CSA should eventually take away from the courts all jurisdiction for child maintenance matters.
Whether we should return to that principle--namely, that the CSA could present a fait accompli to the courts--was something that was raised during the consultation process on the child support Green Paper. Some respondents feared that this would create one law for the rich and another for the poor. Furthermore, we had our own concerns. While it is right that, in cases where arrangements for supporting the children do not involve the taxpayer--so-called "private" cases--the parents should be able to choose whether to apply for child support, equally, we could not allow parents with care on income support to regard child support as voluntary; otherwise the taxpayer would be supporting reluctant and irresponsible fathers. But--this is the key point here--every year at least 10 per cent of private cases move on to benefit and something of that percentage on benefit become private cases. It is clear that it is impossible to run parallel jurisdictions.
There is a great deal of movement in this area. Given our proposal that low earners--those on working families' tax credit--will in future be private cases, we must anticipate that during each summer holiday, some of those parents will need to move back on to income support because they cannot sustain their jobs. As a result, we are likely to see the movement between private and benefit cases increase rather than decrease. That would mean that in many cases--although obviously it will be less likely as regards the low paid--maintenance arranged by the courts would have to be overturned by the CSA as benefit became payable for the children.
We also listened carefully to the views of lawyers, judges and others who wanted court jurisdiction in this area to remain as now. Some wanted more powers to be given to the courts. Many others wanted the courts to operate the child support rates, but to have the discretion to move away from them. In the end, we came to the conclusion that giving back to the courts some of the jurisdiction that they had lost, or alternatively the total removal of court jurisdiction (imposing a flat-rate CSA system on them), would be unsatisfactory as regards what we are seeking to do.
Following the original Conservative line and removing all power to set child maintenance from the courts would deny parents the right to agree to depart from the child support rate if that is in the children's best interests (where benefit is not involved) and to have the agreement converted to a court order, perhaps along with other financial arrangements. Parents could well propose to pay above or below the figure, for example, in order to meet school fees and so forth, which would be in everyone's best interests. Alternatively, they may wish to accept other financial responsibilities in lieu. If such arrangements can be agreed amicably so that neither side feels, so to speak, hard done by, that would, of course, be a proper way forward and the state would have no interest at stake as regards the taxpayer. We did not want to undermine the capacity of parents to come to a different arrangement where consent for that different arrangement remains in place because both sides see it as in the best interests of the children. That is why we are not seeking to impose CSA rates a priori directly on to the courts.
However, while consent remains, either parent will be able to apply to the CSA to calculate and collect child maintenance if court-based arrangements prove to be unsatisfactory. They can return to the CSA and accept instead the CSA-calculated formula. Crucially, Clause 2 will not apply to existing court orders and use of the CSA's child maintenance service by such parents will not be available until after a new court order has been in place for at least a year. Parents who wish to transfer to child support will have to give at least two months' notice. Picking up the point identified by the noble Baroness, Lady Buscombe, we want to allow parents and their lawyers time to mediate and renegotiate new voluntary agreements which are satisfactory to all involved.
The trigger might be that one partner or the other has new family arrangements and as a result agreements are no longer satisfactory. They may want to return to the CSA being unable to resolve the matter by mediation. Knowing that either party can go to the CSA, the additional two months' grace might allow them to go to mediation and not involve the CSA. That is the point of the provision.
We believe that it is a sensible proposal which will encourage parents, lawyers and the courts to come to child maintenance arrangements in the shadow of the CSA. All parties will know that either parent, having been to court, can turn to the CSA in future and that it would therefore be sensible to determine child maintenance broadly in line with the simple and predictable child support rates.
In response to the noble Baroness, Lady Buscombe, perhaps I may ask what the lawyers would advise their clients to do in such a case. The lawyer of a non-resident father would say to him, "Don't go below the CSA rate and reduce your property or spousal maintenance because if she becomes greedy"--and I use that word advisedly--"she will up the child maintenance by going to the CSA". He will advise the father not to go below the CSA rate because if he does the settlement may be revisited. What will the mother's lawyer say to her, the parent with care? He will say, "Don't go for more than the CSA rate and reduce your spousal maintenance or property accordingly because if he becomes greedy he will go back to the CSA".
So what have we done? Instead of arguing between the two of them about child maintenance, it will become "forgiven" because both lawyers will know that, unless they can be absolutely confident that their clients will continue to agree into the far distant future, they protect their clients' best interest by adopting the CSA rates and debating all the other elements; for example, the property, the pension, spousal maintenance, the savings, the PEPs and the TESSAs. They will depart from the child support arrangement only when both parties agree and when both lawyers are confident that they will remain in agreement. The result will not be more conflict, as the noble Baroness, Lady Buscombe, suggested, but less. There will be more mediation rather than less; more negotiation rather than less.
In Committee, I said that we were trying to set up a Mexican stand-off. Yesterday, I was talking to some senior family lawyers who gave--I was going to say "support", but that might be too strong; they accepted the basis for the provision and made it clear to us that with certain conditions they could make it work. They said to me, "You said that you were setting up a Mexican stand-off. We have decided that you are setting up a Mexican wave!" I thought that was rather nice and I agreed entirely. All parties will agree a common basis.
Clause 2 will ensure that a two-tier system between the courts and the CSA will not develop. It will encourage courts in the future to make consent orders in the shadow of our rates because after a year either parent will have the option of turning to the CSA. I am sure that as a result their lawyers will agree to stick with it. Amendments Nos. 10 to 14 would take us back to the past and therefore I hope that the noble Baroness will accept our arguments.
The noble Baroness went on to explain Amendment No. 15. It appears to be designed to remove a non-resident parent's ability to apply for a child support calculation if there is a court order, made after the reforms are introduced, in force. Parents with care would still be able to apply to the CSA, but only where the non-resident parent was not complying with the court order in terms of regular, reliable maintenance. It cannot be right to give access to child support solely to a parent with care; and why should she be prevented from seeking a child support calculation when the non-resident parent continues to make payments under a court order which she now thinks is unfair?
However, I should like some elucidation from the noble Baroness. Is she suggesting that the CSA must collect whatever formula the courts have determined for child support? If that is what she is proposing--and I believe that it is--every person who comes to the CSA from a court settlement will have applied to him or her, not the CSA rate, but an individually determined CSA figure which the CSA will have to chase. Arrears must be calculated, as must any other considerations which come into play; for instance, another child. I believe the noble Baroness is saying that for a raft of cases manual transactions must be done. Whereas everyone else will receive 15, 20 or 25 per cent, this person will receive 8 per cent, this person 10 per cent, this person 16¼ per cent and that person 18¾ per cent, according to whatever the courts have decided. The staff of the CSA would have to chase those percentages on the basis of an income which may continue to change because of the court agreement. That would totally undermine the simplicity of the CSA in collecting its rate; the 15, 20 or 25 per cent.
The amendment seeks to limit the role of the CSA to a collection agency, including collecting amounts which we do not believe are adequate and which the parent with care may not believe to be adequate, resulting perhaps in unreliable payment.
My Lords, I thank the Minister for giving way. My understanding of the amendment is that if the parent with care is dissatisfied with the court arrangements because payments are not being reliably made, he or she can have the option of going to the CSA to have the court order overturned. That is the meaning behind Amendment No. 15.
My Lords, is the noble Baroness saying that the court order would be overturned and the CSA order would replace it?
My Lords, it would also mean that no matter how inadequate the level of maintenance, the parent with care would always be prevented from applying to the CSA if the non-resident parent paid up. The noble Baroness appears to be saying that if the non-resident parent paid maintenance, but at a level which the parent with care later thought was inadequate, the latter would have no right to go to the CSA. It is precisely in such cases, where the maintenance is inadequate because it is low, where the non-resident parent is most likely to be paying in full.
Given all of that--we are getting into further complexities and I do not want to rely too heavily on them--the amendment is defective. It achieves the opposite effect. It prevents parents with care, with a court order with which the non-resident parent is not complying, applying for child support. Even if the noble Baroness's arguments were persuasive, the amendment does not achieve that result.
Amendment No. 16 seeks to change the 12-month waiting period to six months instead. We know that new court orders for child maintenance can be made only where the parents have previously consented to a written maintenance agreement. With that in mind, we have decided that any new "consent" order should be in place for at least 12 months to give it time to bed in. We believe that six months, which the amendment proposes, is too short. We do not want to encourage a knee-jerk reaction; we want time for reflection and mediation and not possibly vindictive behaviour. We want fairness between the parties in that if one party can go to the CSA, so can the other.
Amendment No. 17 seeks to address a particular problem which was a feature of court-based maintenance in the past; the risk that parents with care were forced to accept lower maintenance under duress, causing the children to lose out. But the CSA would be placed in an impossible position in trying to decide whether a court order, perhaps made several years previously, should fall within this provision. The CSA would inevitably have to take the parent with care's word for it, leading to endless litigation. I really do not think that we should go down that path.
Amendments Nos. 18 and 19 would, if enacted, give back to the courts the power to set levels of child maintenance in any case where they were making other financial arrangements, such as a property settlement or an order for spousal maintenance. These amendments give the courts an increased jurisdiction by allowing county courts to change a court order where an application for financial relief, such as spousal maintenance, is already before them. This means that both the courts and the CSA could potentially be involved in assessing child maintenance for the same child. That form of parallel jurisdiction is confusing, unhelpful and, we believe, not in the best interests of the child.
All of these amendments fly in the face of our plans to reform the child support scheme. We have moved a long way from the starting point of the Conservative government, which was that the CSA figures should apply to all arrangements, including those of the court, without any discretion at all. We have listened to the lawyers and Members opposite. As a result, we have decided that where the parties agree they need never come to the CSA. The CSA is there as a fallback. Both lawyers know that if either party is unhappy he or she can return to the CSA. Therefore, each lawyer knows that it is not in his client's interests to seek to exploit the other--whichever way it goes--on the issue of child maintenance because ultimately the aggrieved party can have recourse to the CSA. Therefore, that issue will no longer be subject to conflict and the whole debate will be on the other elements.
Finally, the noble Baroness addressed at some length Amendment No. 20 which seeks to ensure that the courts retain the power to vary new court orders which are made after the reforms have been introduced and have been in place for at least a year. As drafted the amendment does not achieve that aim. However, having listened to the arguments of the noble Baroness, I understand the case for such a provision. If it was clear that any order which had been in place for at least a year and then varied would not preclude either parent at any time from applying to the CSA for a child support calculation because of dissatisfaction with the varied order, I would not be unsympathetic to tabling a government amendment to achieve that at Third Reading. We have talked to family lawyers about it and listened to the noble Baroness today. I should like to be helpful because I believe that the noble Baroness has put forward some good arguments. If the rest of the package gains the approval of the House at Third Reading, the Government will table an amendment to that effect. Given what we have said, it would make the scheme work better. Of course, if we ended up with a different scheme I would not be so helpful.
The protection of children is at the heart of our child support scheme. We believe it is right that maintenance proposals should be as simple as possible and that parents should have discretion to make alternative arrangements as private cases if they wish. If those arrangements come unstuck, they can turn to the CSA. Because they have recourse to the CSA those arrangements are less likely to come unstuck. Therefore, we hope that child maintenance will become less adversarial and flow more regularly, which is in the best interests of the child. With that, I hope that the noble Baroness will withdraw her amendment.
My Lords, I thank the Minister for her very full response to my plea in relation to these amendments. We have had a full debate. The Minister has been made aware of the concerns in your Lordships' House, in another place and among a number of different organisations. We understand the intention of the Government to improve the CSA and its working. However, I am still unable to understand how that will assist with caseload. The caseload has been one of the reasons for the problems with the CSA in terms of breakdowns, delays and lack of communication. The noble Baroness called it "the Mexican wave"; I call it "forced mediation", but I take her point, sexist though it sounded.
As to the two-month period, that is for mediation and the proverbial wet towel on the head. I hope that in practice that will be enough time for the parties to reconsider any disagreement or breakdown in the court arrangements. I am grateful to the noble Lord, Lord Goodhart, for his support for these amendments. There is no question but that most of the arrangements executed by the courts are good, effective, and stem from the involvement of people of experience and expertise who are very flexible in their approach.
I also thank the Minister for her response to Amendment No. 15. I apologise for my suggested confusion in that case. The effect of the amendment is that, in private cases where the parties are not on benefit, they will be able to reach an agreement and have that incorporated in a court order. That agreement will remain binding unless the receiving party goes on benefit or the paying party does not make the payments in a reliable way, in which case the court order can be overturned by the CSA. I accept the other points made by the Minister which I shall read with care in Hansard.
Finally, I thank the Minister for her response to Amendment No. 20. I understand that, as currently drafted, it is not acceptable to the Government. Nevertheless, I thank the Minister for her positive response and look forward to the proposed amendment to be tabled at Third Reading. On that basis, I beg leave to withdraw the amendment.
My Lords, in moving Amendment No. 21, I should like to speak also to Amendments Nos. 22 to 24. These are probing amendments. I begin by confirming our support for the Government's proposals in Clause 3. The purpose of the amendments is to extend further the provisions in the clause by providing that the Secretary of State should not be constrained or controlled as currently proposed. With regard to applications by those who claim or receive benefit, the proposed new Section 6(5) provides that,
"The Secretary of State may not act under subsection (3) if the parent asks him not to".
In tabling these amendments we seek to highlight a difficult area; namely, those cases in which there is a history of violence. On the face of it, these amendments may be surprising. It may appear to make sense that, as currently drafted, the Bill should not exert any pressure on a claimant to produce information where that may hurt a former partner. But we believe that it is important for an aggrieved parent to be secure in the knowledge that a non-resident parent, who may be overbearing and aggressive, cannot benefit by physical intimidation or unpleasant or unreasonable behaviour and so, by persuasion, prevent the agency from gathering the necessary information. I beg to move.
My Lords, at the beginning of this process we faced a basic dilemma. We did not at any stage want to endanger the safety or mental or emotional health of women and children. Clearly, we could have gone down one of two paths. One was to say that good cause should be extended. As to that, our fear was that as a result maintenance could be a voluntary payment. Alternatively, to a degree we could have followed the path described by the noble Baroness and tightened up the procedures dramatically so that no non-resident parent who was abusive, emotionally or physically, could be rewarded for that bad behaviour by being able to apply duress to the parent with care. We were tempted by that second path. The reason we did not go down it was that we thought that it would, understandably, be misunderstood in today's climate. It might be thought that we were not being sufficiently protective of women at risk. There was a real and difficult debate as to what behavioural consequences there would be.
As a result we tightened up the administrative procedures. Instead of the parent with care having to opt into the collection of child maintenance--to begin with we had only a 30 per cent co-operation rate--we established a system where she had to opt out, and with a tighter timetable. Already that, together with our other changes in procedure, is establishing greater compliance.
Under the scheme a lone parent who claims income support or income-based JSA must make an application for child maintenance but is not required to do so if there is good cause: that there is risk to her or any child living with her suffering harm or undue stress as a result.
The changes to be introduced in the new scheme will mean that parents with care who make a claim for income support or income-based JSA will be treated as having applied for child support unless they specifically request that child support should not be pursued.
We then have the definition of "good cause". We are doing that not only to speed up procedures but because we do not want to increase the risk of parents with care having to be seen to seek child support which might give signals to an abusive partner that he can bully her out of so doing. Our new approach makes it clear that child support action is linked to the benefit claim and that it is not a separate process for which the parent with care must apply. We think that that process will be not only more streamlined but safer for her because it leaves her less vulnerable to harassment and bullying. We are sending a clear signal to the parent with care and the non-resident parent that maintenance is not an optional extra. They must pay unless there is good cause or good reason why they cannot.
Amendment No. 21 seeks to toughen up the good cause provisions by removing the Secretary of State's powers not to treat the benefit claim as an application to child support in certain circumstances. This amendment would have the effect of delaying the process of deciding whether or not to take child support by not allowing the CSA to make the judgment that the parent with care is clearly at risk. As well as causing unnecessary distress to vulnerable parents with care, this amendment does not help children.
Amendment No. 22 similarly requires that the Secretary of State will act to recover child maintenance unless the parent with care asks him not to do so. This has the effect of placing more onus on the parent with care to opt out of claiming child support. We believe that it is important that we should not pursue maintenance at the outset if we know that the parent with care would then be at risk.
It would be wrong to assume that all parents with care who do not opt out will want to claim child support. In some circumstances the parent with care may be in emotional turmoil or under threat and unable to take the necessary action to opt out. Amendment No. 22 would have the effect of forcing the Secretary of State to recover child maintenance in these cases where she did not opt out and would put pressure on the parent with care to have to opt out in what may be difficult circumstances.
I am aware that the noble Baroness is concerned that we might not be doing enough to discourage fraud; or that we might encourage aggressive behaviour against the parent with care. In the usual Ministers' phrase, we think that we have got the balance about right.
We are satisfied that the policy has already gone a long way to discourage fraud and collusion and to encourage parents with care to co-operate with the CSA. About 85 per cent of parents with care choose now to apply for child support which compares with only 30 per cent a few years ago. But there will always be a small minority of parents who do not want to co-operate with the CSA--for example, women who have done an informal deal with their ex-partner so that he gives cash but pays less than if he had been assessed by the CSA. To some extent the previous system encouraged this. By having the maintenance disregard, and so on, we hope that we have a system which builds out that type of fraud and collusion.
On top of that, the new scheme will mean that the CSA provides a more streamlined service better able to meet customers' needs. As a result, we hope that a parent with care who has maintenance collected through the CSA will benefit from being able to use the CSA and will receive the money to which she is entitled.
Amendment No. 23 requires the parent with care to opt out within 14 days of being notified of her right to do so. This amendment has the effect of adding a further 14 days to the initial stage. Setting a formal time-scale of 14 days to respond will build unnecessary delays into the process. In the new scheme, benefit claims are treated as a claim for child support unless the parent with care decides to opt out. This provides the Secretary of State with the power to start the recovery of child maintenance as soon as it is feasibly possible.
Normally when a parent with care makes a claim for benefit, an interview will take place. If she is happy to receive child maintenance, her claim will be processed straightaway. If the parent with care wants to opt out, she may give her reasons immediately and, if they are accepted, the case will be closed and reviewed at a later date. So in many cases child maintenance can be processed immediately.
However, there may be times when the parent with care may be unsure about claiming child support and may want extra time to consider her options. We want this discretion and flexibility to continue in the new scheme. We think that a period of two weeks is normally sufficient. But we would not want a statutory waiting period to be built into every case, in particular where the parent with care has already made up her mind and given her reasons; nor do we want to prescribe on the face of the Bill how long that period should be. It will depend on the circumstances of the case and in some cases no extra time will be given. This amendment would only act to slow down the recovery of maintenance as it would give all parents with care up to 14 days to decide whether to make a claim for child support. At present 85 per cent of parents with care are content to make a child support claim immediately. We do not need to build in that 14-day delay with the slippage that would result.
I turn now to Amendment No. 24 which relates to subsection (7) of Clause 3. This requires the parent with care to provide information for a child support assessment even if she has opted out. The amendment would have the effect of forcing all parents with care and claiming benefit to provide details of the non-resident parent, regardless of whether they had opted out of child support. In practice, the CSA would have to obtain information about non-resident parents, even though in some cases the information could not be acted upon. This amendment would have the effect of forcing the CSA to waste vital resources in collecting and chasing information in cases where it was not going to collect maintenance. This would not be sensible. The information would not be used; it would soon become out-of-date; and the efforts by the CSA would have been pointless.
The amendment could also cause some distress to those parents with care who have good cause, who would be asked to give information even it were not necessarily followed up--for example, where the child was conceived after a case of rape--at a sensitive and difficult time.
I am sorry to have taken so long but these are technical issues. It is right to probe them. All the amendments in this group would introduce more complications and delay in the recovery of child maintenance. We are trying to eliminate that; we are trying to get the balance right between protecting the parent with care, without at the same time giving perverse signals to an abusive non-resident parent. We have taken a great deal of advice. All the advice given throughout our consultation period--we have had a Green Paper and a White Paper--suggests that we have now got the balance about right. I hope that my answer may have persuaded the noble Baroness of that.
My Lords, I thank the Minister for her full and clear response to these probing amendments. I am glad that the noble Baroness agrees that it is right to probe these arrangements which have caused concern among many in different organisations. All of us have been consulted on these issues.
In tabling these amendments, safety of the aggrieved parent with care and the children is our primary, overriding concern. I hope, therefore, that the Government have got the balance right. It is a difficult issue. It is difficult to get it right. I hear what the Minister says with regard to the proposed time-scales which could mean more delays and problems. I shall read with care in Hansard what the Minister said. On that basis, I beg leave to withdraw the amendment.
moved Amendment No. 25:
Page 4, line 38, at end insert--
("(6) The regulations shall make provision for the calculation of the difference between the amount of child support maintenance paid by the non-resident parent pursuant to any default or interim maintenance decision and the amount of child support maintenance which would have been payable by the non-resident parent had the Secretary of State completed a maintenance calculation at the time of that default or interim maintenance decision."").
My Lords, this amendment relates to default and interim maintenance decisions under Clause 4. As drafted, the Bill lays down a penalty while proposing that where a non-resident parent has been overpaying, that payment should not be returned. The Explanatory Notes state that this is necessary because it will encourage people to fill in the forms expediently. On the face of it that might seem a good idea. However, is it fair? Is it reasonable?
Perhaps I may use an analogy. If one overpays one's taxes, for whatever reason, that overpayment is returned--eventually and without interest! We are concerned that the approach in Clause 4 is too draconian and will not help in the Government's real efforts to build the credibility and esteem of the Child Support Agency. I beg to move.
My Lords, currently we have a system of punitive interim maintenance assessments which are imposed where full information cannot be obtained or the non-resident parent fails to co-operate with the Child Support Agency. However, this scheme does work. Assessments are generally very high (averaging nearly £90 a week) and the vast majority of non-resident parents due to pay an interim maintenance assessment pay nothing at all (almost 90 per cent). This allows large arrears to build up, making enforcement difficult. This is a particular problem where the non-resident parent is self-employed. It was a scheme introduced by the previous administration in the hope of being punitive and therefore encouraging people to apply. But it had the reverse consequence of arranging such high levels of maintenance that none of it could ever be collected. As a result, arrears mounted.
We believe that the key factor in the low level of compliance is that non-resident parents know that they will often have to pay substantially less when a full maintenance assessment is completed. That is because, when the required information is finally provided, the interim maintenance assessment is replaced by a back-dated full assessment--usually at a substantially lower rate. So the incentive effect of the interim maintenance assessment is lost and those irresponsible parents who wish to delay meeting their responsibilities to their children are free to do so at no cost to themselves. It is a mess.
The new, simpler scheme will mean that in most cases we shall be able to make decisions about maintenance in a matter of days. Where a non-resident parent refuses to provide information about his income, we shall be able to obtain it either direct from his employer or, in self-employed cases, via the Inland Revenue. Parents who refuse to provide information can face fines of up to £1,000.
It is important to get maintenance flowing quickly, so where a final decision on liability cannot be reached straightaway, and where the non-resident parent refuses to provide enough information to allow his earnings to be estimated, we are introducing a simple system of default rates to get maintenance flowing.
Default rates of maintenance will allow the CSA, as a last resort, to get maintenance flowing at a "safe rate". Rates will be set at a level broadly reflecting the average income of the non-resident parent, with rates of £30, £40 or £50 a week according to whether one, two, three or more children are to be maintained. This will prevent large amounts of arrears building up and, because default rates will be put in place quickly, they will be easier to enforce.
If I understand its purpose correctly, Amendment No. 25 would provide that, when a final assessment is made following a default or interim maintenance decision, and the assessment is lower, the non-resident parent would be able to recover the overpayment. Where the final assessment is higher, and there is an underpayment, the parent with care would be able to recover the underpayment. We do not believe that it is appropriate to provide this retrospective supersession of all decisions made under Section 12 of the Act.
In the case of default decisions, we intend that when full information is available the full liability will be put in place from the date when the information was obtained. Maintenance liability for the past period will be recalculated only if the full assessment is higher than the default rate. We have adopted this approach because we want parents to provide information quickly and to pay the default rate in the meantime, but also not to gain any advantage by delaying the process. As I said earlier, this is the key reason why, currently, most interim maintenance assessments fail to result in any maintenance payment at all.
So, if someone has a default rate of £30, and it turns out that the full assessment should have been £50, we shall collect arrears for the past period. However, if the full amount turns out to be £20, we shall put that assessment in place only from the date when the full information becomes available.
The CSA will impose default rates only as a last resort--in those cases where the non-resident parent refuses to co-operate. If a non-resident parent genuinely does not know his level of income, and co-operates with the agency, we shall be able to use estimated earnings to arrive at a full calculation of liability. That is why the analogy is not exact with the system applied by the tax authorities. In proposing the amendment, the noble Baroness basically assumes that a default rate is somehow neutral, and the underpayments and overpayments should be treated in the same way as in the tax system. No, the default rate, which we expect to be a rarity, is still a rate that is set because the non-resident parent is defaulting. It is meant to focus his attention on paying his maintenance. It is not meant to be punitive; it is meant to be realistic.
My Lords, under the new system we are expecting the assessment to be made, on average, in six days and the money to be flowing in six weeks. I realise that all the noble Earl's amendments would so complicate the formulae that we should not have a hope in hell of meeting those timetables. But the rest of us believe that, providing the Government hold to their clear, simple, clean, decent, transparent and right approach, we shall have the money flowing, there will not be the errors that the noble Earl anticipates, and, as a result, questions of default will arise only where the non-resident parent wilfully fails to co-operate. If he co-operates but does not have exact information, as I say, we shall do a rough assessment of his estimated earnings.
So the default rate is a rate that is set because he is defaulting. It is not meant to be punitive. It is realistic, but it is meant to discourage what could be described colloquially as "messing the agency around". If he has paid more than he would have done had he responded promptly, that is a consequence of his delay and his failure to co-operate. If he has paid less, we shall chase up the shortfall so that he is not rewarded for delaying his maintenance payments and so that we see the children getting the money. As I say, this approach is not punitive. It is based on average earnings or average income of non-resident parents, unlike the scheme introduced by the previous administration. But there must be an incentive for non-resident parents to supply information quickly and to co-operate. Although I am sure that it is not the noble Baroness's intention, Amendment No. 25 would remove that incentive and might actually encourage the non-resident parent to play the system. I am sure that she does not want to see that happen. Given that explanation, I hope that the noble Baroness will withdraw her amendment.
My Lords, I thank the Minister for that response. Perhaps I may make it clear that there is no question of our wanting anyone to be rewarded for delay or default. However, we have already spoken about balance. I remain concerned that there is a question of balance here. I am very excited about the proposed timetable for the future. I hope that we shall soon know when that will become a reality. Obviously, it will make a big difference to the number of cases which might be termed cases of default. I shall read the Minister's response carefully in Hansard. I beg leave to withdraw the amendment.
My Lords, this amendment is concerned with applications for the variation of the usual rules for calculating maintenance. Under the Bill as presently drafted, a person who applies for a variation,
"need not make the application in writing unless the Secretary of State directs in any case that he must".
Why not? While not wishing to be bureaucratic for the sake of it, variations are important matters; they can have long-term consequences. We believe that there should be a permanent record in the form of a signature as opposed to an informal telephone conversation or meeting, where details may be misinterpreted or simply forgotten. I beg to move.
My Lords, I am now slightly baffled, and perhaps I may check this point with the noble Baroness. As I understand it, she did not move Amendment No. 4 and she is now moving Amendment No. 26. Is she speaking also to Amendments Nos. 27, 30 and 31?
No, my Lords, I shall not move those amendments.
My Lords, I shall not spend a great deal of time on this matter. What the amendment would do is require all applications to be made in writing rather than allowing straightforward applications to be taken over the telephone. Additionally, applicants would not have to specify the ground on which they are applying.
Two recurring complaints made about the existing scheme surround its complexity and the fact that it takes the agency so long to notify non-resident parents of their liability. A recent survey undertaken by the CSA indicated that use of the telephone is considerably faster: 79 per cent of the CSA's clients positively preferred it; and approximately only 2 per cent of them were hostile to it, and that may have been because we telephoned them at work, or for a similar reason. They liked the use of the telephone because it allows discussion and a better understanding of what is going on. Certainly, when I listened in on client helplines, I realised that both parents with care and non-resident parents found the personal contact over the telephone to be valuable. By virtue of use of the telephone, maintenance becomes more reliable.
Under the current departure scheme that we are proposing, it is clear that most of the applications can be dealt with satisfactorily over the telephone because the information is simple and straightforward. We do not believe that in the reformed scheme the information should be put in writing. Use of the telephone avoids unnecessary delay and use of paper, and possibly also allows us to ensure that maintenance flows more quickly.
However, an exception would be made--I believe that this point is important and may reassure the noble Baroness--where, for example, the application raised particularly difficult or complex issues. Such applications would not be dealt with by staff on a straightforward administrative basis. However, when a simple piece of information is placed on the record--for example, where the flow of earnings is different just before Christmas--the form can be adjusted and that is that.
However, a typically difficult application would be one where the parent with care alleges that the income that he has declared is inaccurate because he is living a different lifestyle and there is a considerable variance. Where there is such a dispute, if I may express it that way, the case is likely to go to a tribunal. In difficult and complex situations, we would require all applications to be made in writing in order to furnish the basis of an appeal to go to the tribunal. In such a case, we would also require the applicants to specify the grounds upon which they were applying. The system would not be effective if we ended up with a mountain of correspondence saying, "I want a variation because my liability is too high"--or too low.
In complex situations, our view is that it is only sensible to require applicants to state the grounds upon which they are applying for a variation. That will allow the CSA to distinguish applications which have been made on recognised grounds from those which, for example, are spurious in the sense that they cannot be met within the formula. That would avoid delays.
I hope that I have assured noble Lords that most cases can be dealt with by telephone but that in exceptional cases involving dispute, which are likely to go forward to a tribunal, we would want to ensure that there was a paper base. I hope that with that assurance the noble Baroness will feel able to withdraw her amendment.
My Lords, before the Minister sits down perhaps she can reassure me as to where that is stated. I do not believe it is stated on the face of the Bill that more complex cases will be written down.
My Lords, I thank the Minister for her response, which gives me some reassurance. In a way, I regret that it is not stated on the face of the Bill. I am concerned about the more complex cases which involve dispute, such as the example that she has given. I believe that it is crucially important that in those cases the written word is there for everyone to see.
My Lords, I should be very happy to write to the noble Baroness and give her what I might call a "route map" of how the matter would be dealt with. That may reassure her that the matter is being pursued properly. If she has any concerns, we could have a discussion on the matter.
My Lords, in moving Amendment No. 28, I wish to speak also to Amendment No. 29, which concerns the departure from usual rules for calculating maintenance. In our view, these amendments are straightforward. If an application for variation were made and, after preliminary assessment, the Secretary of State concluded that there was some merit in the application, the non-resident parent would still have to pay either the full or a lower rate at the discretion of the Secretary of State. Given that the new variation scheme is being introduced because the existing formula may not be fair, we believe that it is right that that parent should have to pay only the default rate until the appeal is determined. I beg to move.
My Lords, as we have heard, both the amendments relate to the intention to allow the Secretary of State in appropriate circumstances to require the non-resident parent who has applied for a variation to make regular payments of child support at a pre-agreed level as a condition of having his application considered.
In the reformed scheme, applicants will be able to apply for a variation before, as well as after, a final maintenance calculation has been made. Where a variation application is made before a decision has been reached on the original maintenance application, the Secretary of State may make either a final maintenance calculation which takes account of the outcome of the variation application or an interim maintenance decision under Section 12(2) where he is unable to deal with the variation application straight away.
The amount of child support fixed by an interim maintenance decision will be calculated in exactly the same way as a final maintenance decision, had no application for a variation been made. The interim decision will, in effect, amount to an unvaried maintenance calculation. Where an interim decision is made, new Section 28C provides that, where the applicant for the variation is the non-resident parent, the Secretary of State may require him or her to make regular payments of maintenance while the application is being considered.
Similar provisions will apply where the non-resident parent makes a variation application at any time after a maintenance calculation has been made. In either circumstance, the intention is that, where the reasonable expectation is that the application will fail, the non-resident parent will be required to continue to pay the amount previously calculated--that is, the interim amount or the final amount, as appropriate.
If, on the other hand, it appears likely that the variation application will succeed--for example, where there is agreement on both sides as to who has incurred contact costs in terms of travelling--the effect on the interim maintenance decision or the final maintenance calculation, as applicable, will be anticipated and the non-resident parent will be asked to pay the appropriate reduced amount.
Your Lordships will appreciate that on this basis no non-resident parent will ever be asked to pay more under the regular payments condition than he would otherwise be paying under the normal rules, or the amount which the Secretary of State anticipates would be payable were he to agree to the variation.
However, the amendments before us seek to ensure that the non-resident parent would be obliged to make regular payments at one of three fixed rates. We acknowledge that the proposal has merits of transparency and simplicity. However, the problem is that the fixed sum in any particular case is likely to bear little or no relationship either to the maintenance calculation which has already been made, based on the information which the non-resident parent has already provided, or to the amount which he might be expected to pay if the variation were to be agreed.
The intention of the regular payments condition is to ensure that child support continues to flow while a variation application is being examined. However, it is only right that the amount payable should be set in a way that reflects the non-resident parent's circumstances. In our view, the inflexibility of the amendments--there may be a wide gap between what the amendments lay down and what we expect a non-resident parent eventually to pay--could produce an outcome which is unfair.
It would mean that non-resident parents with existing liabilities for amounts which were lower than the suggested set amounts would be penalised unreasonably. The Secretary of State would be requiring them to pay more maintenance at a time when they were asking him to agree that in their particular circumstances they should be paying less. Perversely, it could encourage non-resident parents with higher liabilities to apply for a variation on spurious grounds simply as a means of securing a temporary reduction in the amount that they have to pay.
The whole purpose of the provision in question is to ensure that unnecessary debts are not built up during the variation process. We want children to receive their maintenance reliably. We do not want non-resident parents to use variations as a reason to delay the payment of the ultimate maintenance. However, we are concerned to ensure that the amount payable under the regular payment condition is set on a reasonable basis which bears some relation to what we expect the parents to pay.
We believe that the approach that we are taking delivers an outcome which is fair and reasonable. I hope that, on reflection, the noble Baroness will not press her amendments.
My Lords, it may be convenient to discuss with this my Amendments Nos. 33 to 46, as well as Amendment No. 47, tabled by the noble Earl, Lord Russell, and also included in the list, which appears much later in our proceedings than I had expected, given the initial grouping.
The amendments are about variations. It is common ground across the House that there is an overwhelming case for simplifying the Child Support Agency arrangements. However, the more simple one seeks to make the system, the more important become the variations, or departures, as they are also called. The amendments spell out various items that need to be considered. Our aim is to enable the House to take a view on whether each item is an appropriate one to take into account.
I am confused by the lay-out of the Bill on page 102, where,
Substituted Schedule 4B" appears above,
I presume that that is because of subsequent amendments at an earlier stage.
Amendment No. 32 deletes,
"'special expenses' means the whole, or any amount above a prescribed amount, or any prescribed part, of expenses" and replaces those words with,
"'special expenses' means any expenses".
The other amendments specify what those expenses might be. The question is what one should deduct from the income of the absent parent when deciding how much he ought to contribute towards maintenance before arriving at the percentage that he will pay for each child.
Amendment No. 33 refers to,
"exceptionally high travel costs, exceptionally high housing costs, travel to work costs, illness or disability costs."
Some of those items are reflected in later amendments, such as Amendments Nos. 34 and 35. A number of those who have been asked to contribute to the maintenance of a child under the existing legislation have stressed that to earn enough to pay for that maintenance they have to travel to work. On some occasions, that can involve considerable cost. The question is whether those costs should be taken into account. I should be grateful for the Minister's views.
Amendment No. 36 would take account of relatives such as elderly parents and Amendment No. 37 relates to payment by the absent parent towards the education of children from the first or second marriage. The Bill says that the absent parent's income can be adjusted to take account of school fees, but only for boarding school education. No doubt the Minister will comment on that.
Another important issue is whether mortgage payments should be taken into account, even if the non-resident parent keeps a less than 50 per cent. interest in the matrimonial home. Expenses relating to handicapped children or debts incurred by the parents before the relationship broke up are other items that could be taken into account.
Our aim is to list the various circumstances that could be taken into account. Obviously, if they were all taken into account, we would almost be back where we started. Some of the possible items have greater merit than others. Debts incurred during the previous relationship and the situation with regard to the matrimonial home are two important examples.
At this stage, I am merely asking for the Minister's reaction to the various items that are specified. In the light of what she says, we shall consider whether we ought to return to the matter on Third Reading. I beg to move.
My Lords, a good many years ago I had to attend a conference in the middle of Windsor Great Park. My host had obligingly provided me with a map, on which the route appeared to be easy to follow--it was a matter of first right and first left. After several hours driving round Windsor Great Park, I finally succeeded in arriving very late, very hungry and very irritated. I tackled my host about the map. He said, "Oh, but I left out all the turnings that you did not need to take for the sake of simplicity."
But most of the electorate decided that the maps produced by all the parties were not worth reading or studying.
And that is a reproach to us all, which we must all accept equally. I am sure that the Minister understands the point of my story about simplicity. I have noticed over the years that governments get into trouble whenever they set out to produce a Bill that is driven by a single, isolated purpose. I think of football spectators and dangerous dogs. The Minister has explained today and on many other occasions that the whole of the Bill is driven by the desire for simplicity. It will not achieve that.
I have put my name to this group of amendments and tabled my own Amendment No. 47, which I understand to be consequential on Amendment No. 46, tabled by the noble Lord, Lord Higgins, which authorises the taking into account of any other circumstances. It is the proverbial "some other reason why".
In Committee, the Minister said:
"We believe that parents should put children, not other expenses, first".".--[Official Report, 8/5/00; col. 1333.]
I do not think that she will dispute that that is a fair summary of her view. However, the situation is not that simple. In present law, we are legally obliged to put debts to the Crown before debts to anything else. That has been a legal principle since the reign of King John. I hear of no proposal from the Treasury that it should be changed. Frankly, I should be extremely surprised to hear of any such proposal.
If a parent owes a back payment of income tax of many thousands of pounds, they are not legally allowed to put their child's maintenance before it.
I am sure that the noble Earl will confirm that on every occasion I have said that people should pay their taxes and their national insurance first and then pay their child support from the net income. There is no difference between us on that.
The Minister certainly did not say that on the occasion that I quoted. I invite her to check it. I hope that she will repeat what she has just said on every occasion in future.
The other exception is expenditure that is necessary to earn the income out of which the maintenance shall be paid. Someone who cannot earn an income cannot pay maintenance. The Minister knows as well as I do that there were a considerable number of such cases under the 1991 Act. We hope that there may be slightly fewer under the Bill, because the level of maintenance has been set lower for everybody, regardless of whether they have special expenses, in the hope of covering any special expenses. Of course, that means less money for children in some cases where it would not have been necessary. But it will not necessarily cover the special expenses of those who have them. For example, some people who commute to work in London have to commute considerable distances. Their expenses are not necessarily on a level with those who walk to work.
There is no allowance for payment for elderly relatives, and I am extremely glad that the noble Lord, Lord Higgins, has included that in an amendment. Beyond a point, very elderly relatives may be as totally dependent as children. It is not self-evident that the children necessarily, in all cases, come above the elderly relatives. There are many people, known personally to me, on whom it would be extremely difficult to enforce any such principle because they would believe that they were being asked to do something morally wrong.
Beyond that, there is the fact that circumstances may arise, as they have done since 1991, which no one now foresees. It is in the essence of the principle of the Bill that no variation may be prescribed unless it has already been set out in regulations. Anything which has not been foreseen by those who draft regulations cannot be responded to.
I am sure that the Minister remembers a case about which we corresponded. When we last heard, the facts were in dispute. But let us assume that they were as alleged, because in some cases, they could be. This was a woman, with a daughter, who had remarried. Her daughter eloped with her second husband, or so it was alleged. She felt a conscientious objection to paying maintenance in those circumstances.
Let us take the case of the man who made a large capital settlement on his wife. She remarried. Her husband invested in property bought at the peak of the boom in 1988 and then went bankrupt. The first husband was dunned a second time. I had a long correspondence about that with the Minister who was entirely sympathetic. But the legislation allowed no discretion. It was impossible to respond to the unforeseen circumstance. That simply is not the real world. If we do not delete that provision in Schedule 2, which says that nothing may be prescribed unless it is included in regulations, the Minister will find herself in Windsor Great Park without a map.
My Lords, the amendments which we discussed earlier surrounded the more technical aspects of variations. These amendments relate to the grounds on which a variation from the normal rules may be agreed. We discussed many of them in Committee so I am rather surprised that some of the amendments have been retabled. However, I am happy to try to respond to your Lordships' queries.
We are replacing a complex formula with a simple system of rates which will lead to a better, faster, fairer and more transparent support system. A calculation will be provided in which we recognise that every parent has different kinds of commitments. But the new rates will leave most with at least 75 per cent and on average more like 80 per cent--given that the average lone-parent family consists of under 1½ children--of their net income to meet those expenses.
But we recognise that there will always be cases where it is inappropriate to apply the normal rules without some flexibility. Therefore, it may be worth reminding your Lordships what we are seeking to do.
Essentially, we are saying that there are to be two broad grounds for variations. One is where the information given to the CSA on the non-resident parent's income is incorrect and invalid and needs to be corrected. There may or may not be fraud. The second is where there are exceptional costs in supporting the children of the first family and where the maintenance payment, were that to come on top, unabated, would be unfair. There are those two simple grounds.
In other words, we are determined to keep a tight rein on the grounds on which that variation can be agreed. A shopping list of amendments has been suggested this evening--that is, to look at travel-to-work costs, housing costs, the costs of supporting elderly relatives, and other costs. It was said in the other place that,
"if they load a new set of variations on to the simplified formula, the system will quickly revert to something approximating the present highly complex system".
That was said not by my right honourable friend Mr Jeff Rooker or my honourable friend Angela Eagle, who are the Ministers, but by a Conservative Member of the Committee, Edward Leigh. The noble Lord, Lord Higgins, made the point tonight that if the Government were minded to go in that direction, we should have taken all of the complexity out of the assessment and put it back in again in the form of variations or appeals. A very high proportion of current cases would thereby go on to appeals or variations because different assessments would come into play.
What is the point? Why bother with reforms of the agency at all if all we are doing is displacing complexity from the entry, which is assessment, to an exit point, which is variation? Why bother? Why not stay with the existing complexity of the current scheme? That is what it would mean. Let us be in no doubt. If you take into account housing costs, you must also take into account travel-to-work costs. We shall be reinventing the present complexity. For example, there are 50 different mortgage systems. Every time the rate changes, all those calculations will need to be redone. As a result, delays, errors and arrears will creep into the system. Why bother? We would be chasing paper rather than chasing the parents who should be paying the maintenance.
My Lords, the noble Baroness is making it black and white. There is obviously an intermediate stage. Some variations may be desirable. They would obviously increase the complexity but would not take one back to the kind of complexity which exists at present. One cannot simply say, "Either we have no variations at all or we have masses of variations". There are intermediate stages and the particular items specified need to be considered on their merits.
My Lords, the variations explained in this shopping list of amendments take more factors into account than is currently the case. The noble Lord said that there is an interim stage. But he has made the system more complex even than that which we currently have. That is no interim or half-way house. That is 120 per cent of what we currently have. That cannot be the position which the noble Lord wants to adopt.
I am not saying that there will be no variation; there are two broad grounds on which there will be variation. There has been consultation on this proposal which has received broad support. One ground is where there is misinformation, whether deliberate or otherwise, which needs to be corrected. Therefore, there can be variation. The second ground is where the cost of maintaining the child of the first family is already being incurred in some form or other by the non-resident parent and therefore should be taken into account when the amount of maintenance is determined.
We have considered carefully what should be the nature of those exceptional cases and circumstances. We do not suggest that the expenses and costs to which the noble Earl, Lord Russell, and the noble Lord, Lord Higgins, referred are not proper items of expenditure. We are saying that they are costs and expenses which the non-resident parent should meet from his income after meeting his primary responsibility to his children, and not before. Variations must be genuinely exceptional.
What are we suggesting? We want to give more help to non-resident parents who keep in touch with their children. To that end, we are extending the nature of the contact-related expenses which we are prepared to recognise. At present, it is only the travelling costs. We shall allow overnight stays as a more reasonable estimate of the costs incurred in maintaining contact. We believe that that is positive.
But Amendments Nos. 33 and 34 would allow the non-resident parent who maintained contact with his child to claim a variation in respect of any and all his expenses, regardless of whether or not they are in any way related to the contact arrangements. That would mean that he could include his housing costs, his travel-to-work costs and, indeed, any other costs. So we should be back to complexity.
I turn to Amendments Nos. 35, 41 and 43. As I said earlier, the position here is that under the new percentage-based approach, non-resident parents will normally be left with at least 75 per cent of their disposable income out of which to meet other costs, including the costs of housing and travel to work.
If we were to introduce an allowance on the grounds of long-distance travel to work, we would also have to recognise the opposite aspect, as Amendment No. 43 suggests. Travel to work tends to be a rural problem. We would therefore have to recognise higher housing costs for those non-resident parents who live close to work but in an expensive area. As I have said, all of that reinvents the complexity of the current system.
As regards the income of the person with care, this House has already disposed of that matter in a vote tonight, so we shall not revisit it. However, the noble Lord, Lord Higgins, said that the two variations with which he was most concerned were associated, first, with debts incurred in the previous marriage and, secondly, where a parent was paying the mortgage on the matrimonial home but where, for example, there was no equity remaining to him. I would be grateful if the noble Lord would confirm that that is where his concerns are most focused. Although, for obvious reasons, I cannot touch on the rest of the concerns he identified, I think I can be helpful to the noble Lord here. Indeed, we intend to provide for both such variations. I am glad to have the opportunity to expand on that.
The amendments are unnecessary. We are already providing for debts of the relationship to be recognised as special expenses. This ground is included on the face of the Bill at paragraph 2(3)(c) of Schedule 4B to the Act, as amended. That appears at the top of page 103. As a mortgage is a debt, where the non-resident parent has retained a liability to pay the mortgage on the property where he used to live with the parent with care but is not retaining equity, we are already intending to recognise those payments as legitimate exceptional expenses.
I hope that the noble Lord, Lord Higgins, will think that we are already meeting the major variations on which he has focused tonight--his intermediate stage, let us say--and that he will be content with that reply.
The effects of Amendments Nos. 37, 44 and 45, however, would be to allow the non-resident parent to offset part of any costs he incurs in providing an education for his child against his ongoing maintenance liability for that child. We believe that it is reasonable that the costs of maintaining the child--the boarding part of school fees, for example, where a child attends a boarding school--should be taken into account because the boarding, that is, the food, housing, heating and so forth would otherwise have to be provided by the parent with care. To some degree, he is abating her outgoings. That is why we believe that it is reasonable. However, the same does not apply to school fees.
Paying educational school fees, whether for a day or boarding school, is a choice made by the parents. It comes within the same category as choices on expenses of elderly relatives and the like. They are free to make that choice but they pay for it out of their income. In our view, it is not an allowable expense or variation that should be included at this stage. Why should private education for a child take priority over, say, the care of an elderly parent? We do not believe that is right. We find ourselves unable to accept that.
Amendment No. 46 seeks to ensure that the Secretary of State may agree to a variation in any case where the income to which he has had regard in his maintenance calculation does not reflect the financial circumstances of the non-resident parent. In summary, the effect would be to allow a variation wherever there is a mismatch between the current and planned definitions of assessable income.
Again, I think we can help the noble Lord, Lord Higgins. The provisions already provide for a variation to be agreed where the lifestyle of the non-resident parent is inconsistent with the declarations made to the agency. We have every intention of allowing parents with care to apply for a variation where the rules of the new scheme, insofar as they relate to the calculation of the non-resident parent's income, have significantly short-changed them. That is covered in paragraphs 4(2)(a) to (d) of Schedule 4B to the Act, as amended, at the top of page 104.
I turn to Amendment No. 32. The position is that non-resident parents who apply on the grounds of certain of the prescribed special expenses will need to establish, as now, that the costs they are incurring exceed, either singly or in aggregate, a threshold below which a variation cannot be considered. That ensures that only unusually high costs should be considered a good enough reason for a parent to reduce his child maintenance payments. Again, I hope that your Lordships will agree that we are meeting that.
As your Lordships will recall, the threshold under the departure scheme is £15 per week. In the new scheme, however, we plan to apply a threshold on a two-tier basis: £15 per week for parents with a net income of £200 per week or more, but a lower threshold, which we think decent and fair, of only £10 per week for parents with lower net earnings; that is, below £200 per week. We think that that will positively help parents who are less well off to get more help towards their special expenses.
I turn finally to Amendment No. 47. The position is that we intend to provide in regulations that once a variation has been agreed, maintenance calculations will be varied in a consistent way. Although the exact intent behind the amendment is not fully clear, the effect will be to remove the power to provide this in regulations. That could lead to inconsistency and inequality of treatment between one case and another. We do not believe that that is right.
My Lords, as drafted, our regulations allow for two broad grounds. The first is where there has been a mis-statement of income. I have been trying to give assurances on that. The second is where a non-resident parent is contributing to the maintenance of the child in other ways than direct maintenance payments. I refer, for example, to paying for the mortgage; continuing to pay for the debts incurred in the previous relationship, and in terms also of providing maintenance. We do not conceive of any other circumstances. Therefore, we do not envisage the need for the amendment.
I re-state that we want to move to a child support system that is simple, efficient, easy to understand, of minimum complexity and with as little scope for dispute as possible. I hope that the noble Lord, Lord Higgins, will agree that we are able to address the areas he highlighted, including variation in income, debts and the matrimonial home. With that, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his amendment.
My Lords, I am grateful to the Minister for that explanation of the principles which have determined a selection of variations which the Government feel is appropriate. We shall need to consider the various possibilities against the two criteria she has outlined. I have slight doubts about some of the points made. I refer to education, for example. One does not live on bread alone. If a marriage is intact, the parents would certainly regard the provision of expense on education as leading, in the broader sense, to the maintenance of the child. That is a specific point.
As regards debts, and so forth, the Minister has largely reassured me. However, we shall need to consider the various possibilities. Clearly, one cannot be at one end of the extreme or the other with regard to no exemptions at all or some exceptions. It is a question now of striking the right balance at the margin. In the light of what the Minister has helpfully said, we shall consider whether the marginal balance is in the right place. I beg leave to withdraw the amendment.
moved Amendment No. 48:
Page 9, line 38, leave out ("an appeal tribunal") and insert ("a county court").
My Lords, in moving Amendment No. 48 I shall speak also to Amendments Nos. 49 to 55. The amendments relate to Clauses 10 and 11 and refer to appeals to appeal tribunals and the re-determination of appeals.
In tabling Amendments Nos. 48 to 52, we are highlighting our concern that the levels of maintenance are vitally important to all parties and to the children. There needs to be a system of appeal where appropriate cases can be reviewed. We believe that such appeals should be to district judges at county courts who are already experienced in dealing with maintenance and have an existing and well-used procedure. District judges are not only well experienced in this sort of work but are given a wide discretion to take into account all the circumstances, including, for example, earning capacity of an absent parent, to ensure that justice can be done.
It would be possible for the regulations to make clear that the formula would normally apply and exceptional circumstances would be needed before a court would adjust the formula. Even in criminal matters, citizens are entitled to appear before the court to ask that their individual circumstances be taken into account before a fine is imposed. Here, we are talking about assessments which may involve a person paying up to a quarter of their income for 16 years. We believe that it must be right that they have an opportunity to be heard in appropriate cases. An application to court would also enable the applicant to apply for funding by the Legal Services Commission, so that they could be assisted if that was appropriate or necessary.
Although it is suggested by the Government that this would result in a significant increase in the work of the county court, we believe that that is unlikely. Ten years ago, before the CSA started, all maintenance matters were dealt with through the courts, and the courts were quite capable of coping. We are only talking here about the courts looking at a minority of matters where there are good grounds to appeal against an unfair assessment. The absence of such a right has led to much of the resentment that has undermined the current CSA, and the Bill before us now does not address that.
I turn now to Amendment No. 53. The effect of this amendment is to provide that civil legal aid is available in certain circumstances for proceedings before the child support appeal tribunal. Briefly, while supporting the provision in relation to appeal tribunals--in speaking to this, as is suggested and made clear in the proposed amendments, I am speaking to the situation as it pertains in Scotland--we question whether a right of appeal can be considered as a substantive right if it is not accompanied by a mechanism to ensure that adequate representation can be provided. This amendment extends the provision of legal aid to child support appeal tribunals to ensure access to justice.
I now turn to Amendments Nos. 54 and 55. These amendments refer to the report on the number of appeals completed and the publication of key decisions. The Social Security Select Committee published a report on the benefit appeals system on 24th May of this year. The committee said:
"The Committee's fourth report ... reveals a disturbing culture of delay in the system of appeals to the Social Security and Child Support Commissioners. The Committee also found a chaotic and clearly unacceptable situation in the publication of decisions of the Commissioners, described by the chairman as, 'typically British, amateur, worst practice'".
The committee also said:
"On the availability of Commissioners' decisions, it was apparent long before we completed our inquiry that the Departments had acknowledged the extraordinary lack of information and agreed to improve the situation. We welcome this, but conclude that more definite plans should be made in order to assist appellants to find out what legal precedents there might be".
The report criticised the fact that only around half of the key decisions of the commissioners are selected for reporting each year, and the committee called for a new system of publicising judgments. On that matter the report said:
"We were astonished and alarmed at the chaotic and almost laughable situation which applies to the availability of Commissioners' decisions".
The committee wants its conclusions to be implemented without delay.
The Government, as we understood it, were supposed to be taking action in this area. The Social Security Act 1998 was supposed to simplify decision-making and appeals regarding social security, child support and vaccine damage payments. Many of the provisions were based on proposals made by the previous government.
"The changes we are making will enable the Benefits Agency, Child Support Agency and Employment Service to provide a more helpful and accessible service to the public".--[Official Report, Commons, 2/3/99; col. 708.]
More recently the Under-Secretary of State said that,
"improvements have been made, but we are never complacent and will continue to do what we can to improve the accessibility of the system and its effectiveness".--[Official Report, Commons, 19/6/00; Col.9.]
The amendments tabled implement the Select Committee's key recommendations on reporting and publicising, and decisions of the Social Security and Child Support Commissioner. If the Government are really committed to making the appeal system more accessible, they should give their support to these commonsense amendments that provide freedom of information about the decisions of the commissioner. I beg to move.
My Lords, I congratulate the noble Baroness, Lady Buscombe, on tabling those amendments. That Select Committee report is a powerful document. I hoped that we would do something with it. I had not worked out what; I think she probably has. We view these amendments with a great deal of sympathy, and I hope the Minister will do likewise.
My Lords, we discussed assessment earlier today. Then we discussed variations. A comment I meant but failed to make in response to Amendment No. 47 was that if unforeseen circumstances crop up in the future we can respond by making regulations under existing powers in the Bill, which I think was a point that the noble Earl, Lord Russell, thought I might clarify by placing it on the record. We now, of course, are on to the third step, which is appeals.
Amendments Nos. 48 to 52 relate to Clause 10. That clause sets out clearly the child support decisions which carry a right of appeal. Our intention is that in the reformed child support scheme liability will be established quickly. We want the agency, wherever possible, to settle disputes without the need for a formal appeal. That is why we hope to put in place an effective disputes service for parents who think a particular decision about their liability is wrong. However, we recognise the need for a right of appeal to an independent body with legal expertise to ensure that decisions are made fairly, and that parents' concerns can be given a full hearing if issues cannot be settled in discussions with the agency. The kind of issue I am referring to is where there is a dispute about whether his or her income as reported affects his or her lifestyle.
As is the case now, in the reformed scheme appeals may be made against decisions relating to child support liability; where a benefit penalty is imposed, because a parent with care claiming income support opts out of child support without good cause, a right of appeal will still arise. There will also be rights of appeal against financial penalties for late payment of maintenance and--if and when these are introduced--fees. The proposals in the Bill build on changes to the appeals system for child support introduced from June 1999. These changes were part of the move to a simpler, more streamlined decision-making and appeals process across the DSS.
Let me turn to Amendments Nos. 48, 51 and 52. These amendments would give child support clients the right of appeal to a county court, rather than an appeal tribunal. I do not accept that this is the right way forward. The court system failed parents in the past. There were real difficulties in getting maintenance orders enforced and non-resident parents were often able to avoid paying maintenance, with the result that children were left in poverty. The courts were widely perceived as having failed to protect children's rights. The court system is adversarial. I think that parents, particularly parents with care, are more likely to feel at ease in an informal tribunal setting. It could result in further delays and may cause confusion because we are crossing between jurisdictions; for example from the CSA to the courts. The courts would also be substantially more costly--around £20 million a year compared with £5.5 million for the appeals service.
The tribunal system, on the other hand, provides parents with an impartial re-examination of the decision under appeal. A tribunal reaches its decision by establishing the facts of the case and applying the law to those facts. Tribunals comprise only those people with the qualifications and expertise required properly to determine the appeal. Every tribunal will include, or be chaired by, a legally qualified person. Where individual appeals involve points of special difficulty tribunals will have access to expert advice.
I turn now to Amendments Nos. 49 and 50. These seek to place on the face of the Bill a right of appeal to a tribunal against the level of the maintenance assessed. These amendments are unnecessary. Parents already have a right of appeal against a decision about whether any child support maintenance is payable and, if so, how much.
Amendment No. 53 seeks to extend legal aid in Scotland to people with child support cases being heard by appeal tribunals. The amendment is not appropriate for inclusion in the Bill as responsibility for legal aid in Scotland has been devolved to Scottish Ministers and to the Scottish Parliament. It would be a breach of the convention agreed during the passage of the Scotland Act for this House to be involved in that debate.
The design of the appeals system, which applies throughout Great Britain, recognises that the majority of appellants do not have a detailed knowledge of the legislation. Proceedings before appeal tribunals and commissioners are, therefore, inquisitorial in nature, unlike the court-based adversarial system. Appeal tribunals and commissioners do not rely solely on the evidence presented by the parties to the appeal, nor do they expect the appellant to point to the law in support of their appeal. Therefore, they would not normally be in receipt of legal aid. Legally qualified panel members and commissioners provide the necessary legal input.
The role of departmental officers, including lawyers, in proceedings before tribunals and commissioners is to act as an amicus curiae. They inform the tribunal or commissioners of any evidence which is relevant to a decision, irrespective of whether the evidence assists the appellant or the department. They do not assume a defensive role. The use of legal aid as a matter of routine would alter the fundamental informal nature of appeal tribunal hearings.
I turn finally to Amendments Nos. 54 and 55, which seek to place obligations on the Chief Commissioner of the Office of the Social Security and Child Support Commissioners to provide, yearly, detailed statistics on the disposal of appeals and to arrange for the publication of key decisions. While it seems to be reasonable to expect such information to be provided, this Bill is not the right place to do so; its scope is not wide enough.
The Government are already considering a number of recommendations made by the Select Committee on Social Security in another place and will consider carefully the provision of statistics on disposal of appeals before the commissioners. There is no reason at all why we should wish in any sense to make that information obscure, opaque or hard to get at.
Following the recent report of that committee, an undertaking has already been given to arrange for the publication of the key decisions of commissioners. The Government will be responding to the committee's recommendations in the usual way. Given that these are quite technical amendments, and having given that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
My Lords, I thank the Minister for her response to the amendments and to our concerns with regard to what we saw as only a minority of cases that would wish to go to court where a good chance of appeal existed. We are sorry that the Minister suggested that the courts would fail. If that was so, we would not have tabled the amendments. We cannot agree that the courts have failed to the extent she suggested; quite the contrary. However, we must agree to disagree on that point.
With regard to Amendment No. 53, I thank the Minister for her explanation in relation to devolved powers to Scotland. That was extremely helpful. I am sure that those who have been in touch with us on that matter will be pleased to see that confirmed in Hansard.
Finally, I hear what the noble Baroness says in relation to Amendments Nos. 54 and 55. It may be that in some ways this Bill is not the proper place to address those issues. But the points we raised tonight were of such importance that we felt it necessary to table the amendments and I thank her for her response. On that basis, I beg leave to withdraw the amendment.
moved Amendment No. 56:
Page 12, line 5, at end insert--
("(4A) It is a defence for a person charged with an offence under subsection (3) that he has reasonably refused a scientific test to prove that the alleged parent is a parent of the child.").
My Lords, Amendment No. 56 is a probing amendment which we tabled fully to understand the implications of Clause 13. The effects of that clause may be quite far reaching in that the burden of proof upon the person charged with an offence under subsection (3)--that he has reasonably refused a scientific test--is onerous. Amendment No. 56 offers a lower burden of what is reasonable.
Clause 13 will clearly make it tough for those not wishing to have a DNA test to prove that they have a reasonable excuse. That may be a good thing in principle. However, it raises a number of important questions which we hope that the Minister will be able to answer tonight. Will DNA testing, in practice, become routine? Do the Government intend or envisage that becoming the case? Who will pay for the test? We are concerned to ensure that a responsible approach attaches to the use of DNA testing; that DNA tests will be used properly by the Child Support Agency; and that the cost, when it is material to the outcome of a case, will be met by the CSA. We believe that, whatever their circumstances, it should not be assumed that fathers should meet the cost. I beg to move.
My Lords, Amendments Nos. 56 and 58 relate to the determination of paternity by means of scientific testing. Our reforms are intended to streamline the process of determining whether or not an alleged non-resident parent is in fact the parent of the child. The noble Baroness talks of routine testing. It may be worth pointing out that around 2,000 people go all the way to the courts to dispute parentage and in all but 100 cases they are found to be the parent of the child. I doubt therefore that the test will be routine.
We seek to ensure that maintenance can be sorted out quickly and effectively. Clause 13 makes it an offence to fail to provide information or to give false information to the CSA. There is a fine of up to £1,000 on conviction. Amendment No. 56 seeks to provide that the criminal offence of failing to supply information in Clause 13 will not apply to an alleged parent who has reasonably refused to take a DNA test intended to establish parentage.
Non-resident parents must meet their obligations to their children. These new criminal sanctions will ensure that children receive the financial support due to them and make sure that money flows. We intend, through Clause 15, to allow the CSA to presume that a man is the father of a child where he has refused to take a scientific test aimed at establishing parentage. That means that a refusal to take such a test will not normally stop the child support process. This will bring to an end a way of delaying the payment of child support that is prevalent in the current scheme.
However, any man who is presumed to be the father of a child can apply to the courts for the presumption to be rebutted. That presumption will be applied only on a case-by-case basis and will not be automatic. In other words, if the Secretary of State feels that there is a reasonable reason, such as religious grounds, for an alleged parent to refuse to take a DNA test, he will not assume that the alleged parent is the child's father; instead, an application will be made to the courts for a declaration of parentage. In those circumstances the Secretary of State will not pursue information until such time as the courts have established parentage. Action under Clause 13 would not therefore be appropriate.
Clause 13 was not intended to settle parentage disputes; that is for Clause 15. Clause 13 was designed to make it a criminal offence to fail to provide information or to give the CSA misleading information required to calculate or collect child support. If a non-resident parent refuses to take a DNA test, without good reason, he will be presumed to be the parent. In that respect, no further information will be required and there will be no prospect of prosecution. The Secretary of State will, however, then take action to ensure that the information needed to complete the maintenance calculation is provided. If it is not, criminal action may be taken. It is not right that parents are able to thwart the assessment of maintenance by failing to provide information. We believe that Clause 13 provides the correct approach.
Amendment No. 58 would change the provisions of Section 20 of the Family Law Reform Act 1969, as amended by Clause 83, so as to make the Secretary of State for Social Security responsible for accrediting laboratories to carry out court-ordered tests to determine parentage, rather than the Lord Chancellor who is currently responsible for that area. The Government do not believe that that change would be appropriate. I do not know whether the noble Baroness would like me to go into why we should not change who is responsible for regulating laboratories. I shall duck that. If it is necessary, I shall write to the noble Baroness. I hope that, as a result of my explanation, that she will not move the amendment relating to the Lord Chancellor, because he has overall responsibility for the court system. In view of that, and the limits which exist to the Secretary of State's interests in the area, the Government believe that it would be appropriate for responsibility for the accreditation of laboratories under the new system to remain with the Lord Chancellor. In the circumstances, I hope that the noble Baroness will feel able to withdraw her amendment.
moved Amendment No. 57:
Page 12, line 16, after ("inspector") insert ("shall receive full training and").
My Lords, I rise to speak to Amendment No. 57, which is again a probing amendment. It responds in a practical and, we feel, helpful way to what is already set out in the Explanatory Notes regarding the necessary expertise or qualifications required by an inspector properly to fulfil his or her function in what can often be difficult and delicate circumstances.
Paragraph 152 of the Explanatory Notes states, inter alia:
"Given the substantial training, which is required to make an inspector fully effective ...".
We are asking for a reassurance that the necessary training of inspectors will be compulsory, given the nature of the task that they will have to undertake. Inspectors will regularly find themselves coping with the assessment of complex accounts, explaining their presence at a non-resident parent's place of work, a presence which often will only reluctantly be acceded to, and reassuring all concerned of the privacy of all the circumstances surrounding that particular case and the financial affairs which are examined in relation to it.
In the circumstances, we do not understand why the Government have not placed on the face of the Bill a stipulation for compulsory training to demonstrate their intention to ensure that all the workings of the CSA are approached in a professional and objective manner. I beg to move.
My Lords, I am slightly puzzled. I realise that we were under pressure at Committee stage. However, if amendments are said to be probing amendments, it would perhaps be preferable if they were dealt with at Committee stage rather than at Report stage. Secondly, although I stand to be corrected, I do not recall any Bill--
My Lords, if I may interrupt the Minister, the only reason for raising it at Report stage is because time was not with us at Committee stage, and we therefore felt that we should not move it at that stage.
My Lords, I understood that that was the purpose of Committee stage. However, we can possibly take up this argument through the usual channels. It was the choice of the Members opposite.
On the more substantive point, I am not aware that Bills usually specify the level of training for the staff employed by the Government. I can give assurances. I can give descriptions. But one does not put on the face of the Bill the fact that every CSA inspector will receive this amount of training, as the noble Baroness suggests. What would happen if one wanted to increase it, reduce it or change it? It is quite inappropriate for this kind of measure to be dealt with as an amendment on the face of the Bill.
We know that it takes about six months for CSA staff to be fully trained and become properly effective. In addition, specialist roles, such as child support inspectors, require extra training focused on specific skills and knowledge. The officers are of at least executive officer grade. They have a wealth of interviewing experience behind them. Before they undertake their duties as inspectors of the CSA, they must attend appropriate courses, including a course on conducting interviews under caution and the Police and Criminal Evidence Act 1984. This course also deals with what is considered to be "obstruction" of inspectors in the course of their duties. They will also have had experience of dealing with potentially aggressive situations and a knowledge of interviewing and negotiating skills.
We consider that the current training programme is sufficient for part-time inspectors. However, we are developing a full training needs analysis, which will be carried out as part of the preparation for and development of the new scheme. This analysis will take account of revised job design and more effective use of child support inspectors' powers and will ensure that an appropriate level of training is delivered in all cases. We are seeking to work in partnership with other departments, such as the Inland Revenue, in order to benefit from their experience and knowledge. We shall carry out training and we shall conduct a training needs analysis to ensure that our inspectors receive complete and appropriate training, because we obviously want the scheme to succeed.
As a result, I hope that the noble Baroness will recognise that this amendment is not an appropriate matter for the face of the Bill. It is appropriate to the internal organisation and training patterns of an agency in terms of its operational deployment of staff. With that explanation, I hope that the noble Baroness will feel able to withdraw her amendment.
I thank the Minister for her response. I cannot agree with her that it is not appropriate to probe such an important subject at this stage. We have tabled this amendment to demonstrate the importance that we attach to the professionalism and the function which will have to be fulfilled by these inspectors. We are very glad that we have given the Minister an opportunity to respond and, therefore, reassure us that there will be proper training for what will amount to a function which will sometimes be difficult and will have to be handled in a delicate and firm way. On that basis, I beg to withdraw the amendment.
The purpose of the amendment is to leave out of the Bill the clause which authorises a court, when people are reported to it for not paying child maintenance, to deprive them of their driving licence or deprive them of the right to apply for one. We believe that this is an inappropriate penalty. In terms of the Government's own objectives, it will prove to be counter-productive.
When this Government came into office--and I have heard this quite often from the Minister--one of their big objectives was to rearrange the social security system to remove barriers to employment. This measure creates a barrier to employment. It does so, notwithstanding subsection (3) of the clause, which asks the court to investigate whether the person concerned needs a driving licence to earn a living. The court can only investigate whether that is so at the moment of investigation. But the Minister knows as well as I do that in the flexible labour market which we now have people cannot count on remaining for a long period of time in the same job. When they lose a job and are required by the actively seeking work rules to look for another, in many parts of the country they simply cannot do so unless they are able to drive. Therefore, they will not be able to work or pay their maintenance.
The application of this clause will be an obstacle to the payment of maintenance. It will reduce the amount of maintenance paid because it cannot be paid without earnings. It will be a case of killing the gander that lays the golden eggs. This measure defeats, first, the principal object of the Government's own social security policy and, secondly, the principal object of this Bill. In terms of shooting oneself in the foot, I think that is a notable right and left.
It is not, of course, just a matter of work. For anyone living in a rural area, and for a good many people who now live in suburban areas or who need to make radial journeys across large towns, the lack of a car is a very ysignificant obstacle to a lot of the other daily necessities of living: for example, shopping, taking children to school--and, since this Bill involves provision for shared care, that may well involve those children whose maintenance we are discussing--visits to the dentist, or, if I may say so, attendance at Labour Party meetings, which, if I read today's Guardian correctly, is not as easy to bring about as it used to be.
About two weeks ago, the Chancellor of the Exchequer floated the possibility of using the employment and social security system to provide unemployed people involved in job search with the use of a car during the period of their search. That was a very interesting suggestion. It suggests that the Chancellor of the Exchequer recognises the case that I have argued for some time, namely, that there are numerous areas of this country in which one cannot actively seek work unless one can drive, but it suggests a very limited consultation between the Chancellor of the Exchequer and those involved in the drafting of this Bill. We usually hear quite the opposite story--that the Chancellor of the Exchequer is too much involved in making social security policies. Perhaps on this issue he has been too little involved. It does not sound to me like particularly joined-up government.
There are also quite considerable problems about the notion of read across from one area of penalty to another. I am sure that the Minister will have the read the warnings about this problem on the subject of Sure Start in the latest report of the Social Security Advisory Committee. I do not have it with me but, as I have quoted from it previously, I do not think that the noble Baroness needs to be reminded of it. When we get into the area of read across, we must ask: why this read across and not any other? Why is this the only offence that will lead to the deprivation of a driving licence? Indeed, is it the only offence that will carry such a penalty, or will people be deprived of driving licences for any sort of behaviour of which the Minister--the Secretary of State for the time being--does not approve?
Why only driving licences? Would it not be just as logical to deprive people of, say, the right to play cricket? The problem of which read across is appropriate applies both ways. Why should it not apply to cycling or, indeed, to walking? It leaves me with the words of Belloc:
"Is it true? It is not true.
If it were, it would not do
For people such as me and you,
Who pretty nearly all day long
Are doing something rather wrong".
If we have this sort of read across, we shall have all sorts of apparently illogical restrictions being put in many inappropriate places.
We heard a number of government arguments--
My Lords, I apologise for interrupting the noble Earl, but there is rather a nasty symmetry about what is now happening. First, we have a penalty affecting the Department of Social Security that has nothing to do with it; and, secondly, the deprivation of social security benefits is being considered in other areas that have nothing to do with the department.
My Lords, I am most grateful to the noble Lord for raising that point, which is entirely valid.
I turn now to some of the Government's arguments. To begin with, they say, "All they need to do is to pay". If I were not a generous person, I would let them go ahead and say it--because every time they did, they would put extra votes into my lobby. But that is the argument of the Mafia godfather, "You'll comply if you know what is good for your health"--
My Lords, the noble Earl, Lord Russell, ought to withdraw that remark. We are not talking about examining people's souls or about putting fires under their consciences in order to bring them to one form of faith rather than another; we are talking about ensuring that children in this country receive the maintenance to which they are entitled--a million of them do not. If fathers can but will not pay, we shall ensure that we have the penalties available to make sure that they do, without sending them to prison which, in turn, may damage the child.
My Lords, in some cultures and religions that are represented in this country, the point I mentioned earlier about the comparative respect for elderly relatives and for children is a matter of faith. I did not intend to argue that the Minister was actually a persecutor. If I made any such innuendo, I withdraw it. However, in turn, the Minister should allow that there may be consciences involved: people may occasionally believe that they have reason for doing something other than what the Minister requires of them.
My Lords, can the noble Earl give me an example of any occasion where it would be in someone's conscience that he should not support his child? I can believe that people may feel that they should also support an elderly parent, but are we saying that someone's entire income would be taken up in supporting a child and an elderly parent? No. We are saying only that 15 per cent, 20 per cent or 25 per cent will go on the children, leaving ample to support an elderly parent and to meet any of the other moral obligations illustrated by the noble Earl.
My Lords, until the Government take action on the report of the Royal Commission on long-term care, I believe that I can make those comments. The costs of keeping an elderly relative in a residential home may be considerable. Yes, I can imagine people saying that, in conscience, they cannot turn their parents out of a place where they are receiving care in order to provide a better standard of maintenance for their children. The Minister may say that that is wrong; but she cannot tell me that no one will ever have a conscience to that effect, because many people do.
My Lords, this is not really appropriate for a Report stage. None the less, the noble Earl is not describing either fairly or decently the present system for supporting people in residential care. If an elderly person has no resources, he or she will be supported through payments from the state and not necessarily from their relatives. The noble Earl may be concerned that the relatives may seek to hang on to the house and, therefore, prefer to pay the cost of residential care. In that case, they would be trading current revenue against future capital. That is their choice.
My Lords, we must leave the House to judge between us on the matter.
I shall not deal with the Minister's other arguments at any great length. However, she talked about a penalty like tagging disgracing the parent before the child and argued that the loss of a driving licence would not do so. The noble Baroness does not seem to understand that, for many children, the chief purpose of a father is to act as a magic carpet. That should not perhaps be so, but it often is in practice. I believe that this penalty will disgrace the father before the children a great deal more than a penalty like tagging.
The Minister also argued that this penalty would produce increased compliance. She used evidence from the United States, with which the noble Lord, Lord Higgins, dealt extremely effectively. In the United States, you cannot move or even do your weekly shopping without a driving licence. It is not like that in this country. As the noble Lord, Lord Higgins, also said, it is much more likely that those affected will drive without insurance. Therefore, if they have a crash, the penalties in this clause might fall upon innocent people who just happened to be travelling the other way. I declare an interest in the hope that I shall not be one of them. I beg to move.
My Lords, by a curious coincidence, the closing remarks of the noble Earl are relevant to my opening remarks. If one believes that one may have an interest that is relevant to a debate, I have always regarded it as paramount that one should declare it. During the Committee stage, I unexpectedly received a brief from the RAC Foundation, which made exactly the same points that I made on Second Reading regarding this matter. I thought that I might have some indirect connection with the foundation and, therefore, rightly drew it to the attention of noble Lords. However, it turns out that I have absolutely no connection with the foundation, which, I understand, is an independent charitable body. So I suppose that I must "undeclare" my interest, if that is possible. I apologise for detaining the House on that point, but it is curious that the noble Earl declared an interest just before my opening remarks.
The issue now before us is an important one. The noble Earl outlined many of the relevant arguments. I fear that the problem of the disconnected penalty is becoming increasingly fashionable. There is no connection between the offence--namely, not paying one's child support, which we all agree should be done--and the penalty of withdrawing someone's driving licence. If anything, as the noble Earl pointed out, such a penalty may prove to be counter productive in as much as the withdrawal of the licence may make it more difficult for the individual concerned to produce the resources required. However, I accept the provision in the Bill which states that the court may consider, and take into account, whether withdrawing the licence would result in the person losing his livelihood. Indeed, the noble Earl dealt with that aspect.
A further issue arose in Committee. The noble Baroness, who is always preoccupied with the record of the previous government, pointed out that the Crime (Sentences) Act 1997 included such a provision. She also mentioned that it proposed pilot schemes, but did not tell us the results. I make one major point in that context. The proposal in that legislation related to criminals; it did not relate to those who have not paid their child allowance. While we may deplore that fact, those people are not--at any rate for the moment--defined as criminals. Therefore, there is a big difference between those two sets of people.
That Act was passed under the previous government. A Home Office press statement by the present Government was published on 1st January 1998 announcing its implementation. This made the point I have made; namely, that criminals could be deprived of their driving licences. It also mentioned pilot studies. In Committee, I asked the noble Baroness about the results of the pilot studies but she was unable to give me an answer. Subsequent research has failed to produce an answer but I am glad to note that the Minister nods and therefore it appears that at least the Government have that information. No one else appears to have it and the matter seems to be shrouded in secrecy. It would be interesting to have that information in the context of this debate.
People who do not pay their child maintenance and have their driving licence withdrawn--even though they may not be criminals--might then drive while uninsured. That matter has serious consequences and is a relevant consideration.
The Government appear to have been inspired by experience overseas, and in particular by that of Texas. We carried out a quick survey. However, I admit that it involved just one person! One does not have that many Texan friends! The results were illuminating. When asked how life would be in Texas without a driving licence, the answer was that it would be tough. We asked whether people in Texas had to carry their licence all the time when driving. The answer was "Yes". We asked whether a penalty would be imposed on someone who was stopped while driving and did not have a licence on them. We were told that one was fined in those circumstances. We asked whether the licence served as an ID card. The answer was "Yes". Driving licences there have one's picture and can be used to cash cheques and to perform many other transactions. That is not the case in this country. I shall not ask how many noble Lords have been asked to show their driving licences recently. I see that one hand has gone up. Driving licences are normally asked for in this country only if one has committed some traffic offence.
My Lords, I commiserate with the noble Baroness. However, the inconvenience of being deprived of a driving licence is nothing like as severe for someone in this country as it would be for someone in Texas.
My Lords, I am now baffled by this argument, which was also deployed by the noble Earl, Lord Russell. Is the noble Lord saying that the Government should not deprive certain people of their driving licence because that would not cause them the same degree of inconvenience as it would for people in the States? Is he saying that the loss of a driving licence is such a severe penalty for people in the States that it acts as an effective deterrent, whereas in this country it would be too mild a deterrent to be included in the shopping list of penalties given that alternative forms of transport such as buses are available and people do not have to use their driving licences as ID cards? Is the thrust of the noble Lord's argument that we should not use this deterrent as it is not tough enough for people in this country? Which argument is the noble Lord deploying?
My Lords, I hope that I may interrupt this jolly conversation between the two sides of the House. If I am correct, we are at Report stage. I believe that on the previous amendment the noble Baroness had about five chips at the cherry. We ought to follow the rule that we speak only once.
My Lords, the noble Earl has far more experience of the proceedings of the House than I.
I say to the noble Baroness that, on the whole, we think that this proposal is pretty silly and is not likely to be effective. We have mentioned the danger that people whose driving licences are withdrawn may drive while uninsured. It is not at all clear whether the Government regard this as a lesser penalty. Ministers have said that this penalty is less severe than some others. On the other hand, it was announced with a great fanfare as if it was the flagship proposal of the Bill. That no longer appears to be the case.
Other bodies have expressed concern at the proposal. The Law Society of Scotland states:
"the Society does question the proportionality of the disqualification provisions which appear in Clause 16(3) which provide that in the event that the Court is of the opinion that there has been wilful refusal or culpable neglect to pay, it may order the non-payer to be disqualified 'for such period specified in the order but not exceeding two years' ... from holding ... a driving licence.
The proportionality of this disqualification period may be out of kilter with current road traffic law. For serious contraventions of the Road Traffic Act 1988, such as Section 5(1)(a) (driving whilst under the influence of alcohol), the penalty can be disqualification for a period of only 12 months and in practice, the disqualifying period will only exceed this if there are aggregating factors".
The noble Baroness asked whether this was a severe penalty. It seems to be regarded as more severe than the penalty imposed for driving while under the influence of alcohol. We need to consider whether the proportionality of the penalty is appropriate.
As I say, we on this side of the House regard the proposal as silly in some respects. However, it has potentially dangerous consequences. In our view, it is not an appropriate penalty to impose in this area. That does not mean that we are not anxious to ensure that those who ought to pay child maintenance do so. We have generally welcomed the provisions of the Bill. However, we do not think that this proposal is appropriate. If the noble Earl seeks the opinion of the House, I believe that we on this side ought to support him.
My Lords, I have read the Committee stage debate on this issue. Having listened carefully to the comments of the noble Earl, Lord Russell, and of the noble Lord, Lord Higgins, I ask myself what sanctions we should apply, how we should apply them, and how we can support civil liberties while at the same time encouraging civil responsibilities.
Those of us who condemned the behaviour of English soccer hooligans may have wondered how we could have prevented that behaviour from happening in the first place. I should have thought that tough deterrents could have prevented it. I refer, for example, to the withdrawal of passports. I regard the threat to withdraw driving licences as a deterrent. The lack of a car can sometimes constitute an obstacle. However, that obstacle can be avoided by complying with certain rules. I suspect that more people drive than play cricket. They certainly do not play cricket in Texas. We should remember that the courts can take into account whether someone needs a driving licence to enable him or her to earn a living.
Only 66 per cent of the maintenance that is due is paid. What can we do to remedy that situation? What can we do to support children? What can we do to tackle child poverty? The payment of maintenance forms part of the solution. If the threat of removing a driving licence results in more people paying maintenance, surely that is a valid approach.
My Lords, I declare an interest as a patron of the charity, Kidscape. A prime consideration of that charity is the welfare of children.
I oppose the amendment. Recently the Chief Rabbi, Dr Jonathan Sacks, wrote that most people accept the values of honesty, of not committing crimes, of parental responsibility and fidelity. He wrote that people's general instinct is not to harm neighbours, partners or children. The noble Lord, Lord Higgins, and the noble Earl, Lord Russell, said that if the clause was retained, people would break the law through driving without insurance. If we applied that argument across the board we would not make it illegal to commit burglary because people might well commit burglary and break the law. It is a nonsense. There is, of course, the Motor Insurance Bureau, which looks after the interests of people injured by people driving without insurance. It is a non-argument. One has only to stand in a pub and listen to people talking about the football hooligans in Belgium to understand that, generally speaking, we still have decent values in this country.
As a former police officer, I was often accused of being perhaps a little hard on offenders; that I was too quick to recommend custodial measures without first trying other alternatives such as community sentences. Perhaps that is true. It has to be said that the record of prison is not good, but neither is the record of other forms of non-custodial treatment.
In my former life I always tried to achieve justice for the victim of crime. That does not always mean imprisoning the offender; it could mean paying compensation, or even a restorative justice measure such as meeting the victim and apologising for the offence. In other words, we seek to achieve the best outcome for the person wronged. That is the way we should approach this measure.
I spent many hours persuading people who were acting anti-socially of the error of their ways. I have used humour, threats, promises and, yes, deception on occasions--although I will not go into details--to deal with the myriad of situations with which a police officer is confronted. I was always told--and, indeed, always practised--never bark unless you are prepared to bite. In other words, if you threaten to arrest someone, always be prepared to carry it out in the final analysis, and have the lawful powers to do so.
The law should use every means at its disposal to ensure that decisions made by the law are enforced. It is rather like golf; we should have a range of clubs at our disposal, even if we do not use them all. I know the salutary effect that the threat of losing one's driving licence has on the vast majority of drivers. It is very important; it makes them think twice before they continue a course of conduct which they know will attract disqualification. In other words, it concentrates the mind.
If the threat of being disqualified from driving corrects driving behaviour, why should we not use it to correct social behaviour? We are talking simply of another club being used which is available to the court. I am sure the fact that such a measure is available will cause many absent parents to stand up to their social responsibilities. As an alternative to imprisonment it is a perfectly legitimate non-custodial sanction.
I remember that a few years ago the former Home Secretary, Michael Howard, used this idea as a sanction against criminal offenders under the Crime (Sentences) Act 1997--and why not if it deterred offenders and reduced the number of victims of crime? It seems to me to be perfectly legitimate.
Magistrates do what magistrates do best--that is, they apply common sense. Clearly they will not impose a ban if it means that a person's job would be affected. The ideal would be for such driving bans not to be needed at all. It is to be hoped that compliance will be achieved by simply having the ban available and the non-compliant person realising that.
This is a last resort measure. The public of this country are fed up to the back teeth with people evading their social responsibilities. It is a sanction that has worked well in other jurisdictions and we should learn from that. There is very little logic in saying that driving bans should be used only to promote safer driving. It is an effective sanction; let us use it to achieve compliance. The beneficiaries will be justice and, in the long term, children.
My Lords, Amendment No. 59 relates to the power to introduce a new civil penalty that will enable an order to be made by magistrates disqualifying a non-resident parent from holding or obtaining a driving licence as an alternative to committal proceedings. I am aware--if I was not aware before, it has been made clear to me today--that the penalty of disqualification from driving for failure to pay child support causes concern to some noble Lords on the Opposition Benches.
Clause 16 will enable an order to be made by magistrates disqualifying a non-resident parent from holding or obtaining a driving licence. As my noble friend Lord Mackenzie said, it will exist partly as an alternative to committal proceedings--that is, to imprisoning the offending person. It will be imposed--like imprisonment--very much as a last resort on those parents who have resisted every attempt over some period of time to get them to meet their responsibilities to their children. At this stage, the non-resident parent will have had every right to dispute his liability or to appeal it to an independent tribunal. The money owing will be money legally determined on the basis of child support legislation.
Our provisions require the courts--not the CSA--to consider all the circumstances of the case when deciding whether disqualification from driving or imprisonment is the appropriate penalty. To help with this decision it is only right that the court should inquire into whether the licence is needed to earn a living, as well as into the non-resident parent's financial circumstances. It does not mean that where the liable person needs a driving licence to earn a living the licence can never be removed, but it is one of the circumstances that the court must take into account--and I am sure will take into account--before imposing the penalty. So the court will have all the information before it. It will know that the person has wilfully and consistently refused to pay child maintenance, and that the CSA is now bringing that matter to court.
At the moment the courts have two broad sanctions--a fine, which usually fails to bite on someone failing to pay money, and imprisonment. To those sanctions we are adding one of removal of a driving licence. The courts will be able to impose a disqualification for a period of anything up to two years.
We are also proposing that the order disqualifying a non-resident parent from holding or obtaining a driving licence can be lifted or amended when the debt has either been cleared in full or a specified part payment has been made. So where a non-resident parent makes a genuine effort to pay off the debt, consideration will be given to giving him his licence back; it will be for the courts to decide. In other words, if the non-resident parent wishes to keep his driving licence, he pays for the support of his children; if, having lost his driving licence because he had failed to support his children, he then starts paying for his children, he will get his licence back.
Noble Lords on the Opposition Benches should make up their minds whether they object to this measure because it is too effective--which is the position of the noble Earl, Lord Russell--or it is so ineffective as to be silly--which is the word used by the noble Lord, Lord Higgins--compared to that of Texas.
We know that when somebody fails to pay it is right that society should use such sanctions as it can to ensure that fathers support their children. If they will not pay the money and not pay a fine, if they will not respond to a garnishee or a distraint order, the alternative facing the magistrates is imprisonment. We are offering the magistrates an alternative and lesser penalty than imprisonment, and one which is less likely to bite on the child.
The noble Earl, Lord Russell, asked how will this person be able to earn a living; how will he be able to do this; how will he be able to do that? The answer is quite simple: he pays his child maintenance and the situation does not arise. All that man has to do--I am assuming it to be a man for these purposes, but it could be a parent of either gender if it is the non-resident parent--to keep his licence is to pay the maintenance. Once that maintenance is paid, the licence can be restored. If a period of disqualification ensures that maintenance is paid, then the scheme will have worked.
Under the current collection enforcement arrangements, the CSA will have offered the non-resident parent every opportunity to pay. He will have had the choice of a variety of payment methods, including direct debit, standing order or a deduction from earnings. If talking to him and trying to arrange alternative methods of payment has failed, we go on to the next stage--which is to go for a liability order, and this can be followed up with bailiff action or garnishee orders. Even at that stage it is not too late for the non-resident parent to become a regular payer. He can stop enforcement action at any time by making adequate payment arrangements.
However, those non-resident parents who can pay but wilfully--I stress, wilfully--deliberately, knowingly and repeatedly refuse to support their children, but are happy for other fathers to do so, will now face an application by the CSA to the courts for the most severe sanction. In the past that meant committal to prison. The removal of the driving licence--this is the third stage--gives the courts an alternative final penalty, one that may allow the non-resident to continue working and so pay the maintenance that is due. It will be for the courts to decide whether the non-resident parent is deliberately refusing or neglecting to pay. If the magistrates decide that the penalty is appropriate, they will be able to consider all the relevant circumstances to ascertain whether that penalty is the right one.
I shall not trouble the House with the statistics from Norfolk and Manchester. I wrote to the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, about them. However, those pilots revealed that out of a total of 84,000 fines issued under the pilot scheme, 155 fine defaulters received driving disqualification: 12 in Norfolk and 143 in Manchester. The pilot schemes--introduced by the noble Baroness, Lady Blatch--showed that, where driving licence disqualification was used selectively, it appeared to be extremely effective.
At the end of the day, we believe that fathers should support their children. Children are entitled to that support. As I have said, every opportunity will be given to non-resident parents to enable them to make arrangements to pay. That is the kind of acceptable behaviour that we want to see. If they do not do so, they must be encouraged and persuaded. They have to be persuaded. Their children are entitled to support. Furthermore, that support should not be dumped on to other men and other fathers. If that means that the sanction of the loss of a driving licence as an alternative to imprisonment needs to be used, and as determined by magistrates rather than the CSA, that appears to the Government to be appropriate.
We know that it will have a severe effect, in particular on those living in rural areas. That is why we have provided that magistrates can take such considerations--in particular the ability to continue earning a living--into account. However, no non-resident parent, whether he lives in a town or in the countryside, needs to lose his driving licence. It is up to him. If he chooses to support his child--as he should--he does not need to lose his licence. If the licence is removed but the non-resident parent then starts to support his child, the licence will be restored.
However, to argue that we should knowingly not introduce a penalty which has been used effectively in the United States and which falls short of committal to prison--where the parent most certainly will not have any capacity to earn a living to support his child--is wrong. We should not knowingly put a non-resident parent's right to drive a car ahead of a child's right to support from his father. I regard that as an improper moral position.
As a result, if this amendment is pushed to a vote, I hope that noble Lords will support the Government by deciding that children must come first and the right to drive a car must come second. If a non-resident parent supports his children, then of course he may enjoy his right to hold a driving licence. It will not be under threat. I hope that your Lordships will not support this amendment.
My Lords, before I reply, I should like to express my sympathy for the noble Baroness, Lady Crawley, on the theft of her car. I hope that she has recovered from the experience.
Needless to say, the cleverest argument against this amendment was put forward by the Minister. What else would one expect? I refer to the argument about whether the sanction will be too effective or ineffective. In her academic capacity, the Minister will be familiar with the procedure of ducking witches. They used to throw the witch into the water. The innocent witch was received by the holy element, and thus sank. The guilty witch was not received by the water, and thus floated. That is what we believe will happen here. The procedure will be draconian in its effectiveness against the honest and will be totally ineffective against the dishonest. We think that that is the wrong way round. The honest, who will not be prepared to drive uninsured, will suffer severely, while the dishonest, who will drive uninsured, will cause a good deal of damage.
After the exchanges that have already taken place, I was a little surprised to note that the Minister saw fit once again to repeat the argument: "All he has to do is to comply". I do not wish to visit painful territory, but perhaps the Minister will agree that that threat--for that is what it is--can be repeated in support of any requirement, however justified or unjustified. The Minister said that: "This is what will happen if he does not support his child as he should". We agree that he should, but that he should do so as required by this Bill. That is quite another proposition.
By no means everyone in this country believes the matter to be morally, politically, practically, philosophically or in any other way right. The Minister repeated, over and over again, the words, "wilful refusal". I have reminded the Minister in the past of the problems we encountered with the poll tax; namely, "can't pay" or "won't pay". The Minister refuses to believe that there may be anyone caught under this legislation who might be genuinely unable to pay. That, I believe, demonstrates a great simplicity of mind.
The noble Lord, Lord Mackenzie of Framwellgate, said that the court uses every means at its disposal. Yes, but it begs the question which is before us now: whether these means should be at the disposal of the courts? I think it is important to keep in the minds of all those who have anything whatever to do with motor vehicles that the qualification for driving a motor vehicle is that of being safe while one handles it. As soon as we produce the sanction of disqualification for any other reason whatever, we will be diluting that principle. To me, the principle is important.
I recall that, when we discussed this matter in Committee, the noble Lord, Lord Stoddart of Swindon, said that he would call a Division even if he had to do so entirely on his own. However, it appears that the noble Lord is not in a position to do that. Perhaps, as an act of generosity, I should do it for him. I shall not ask for a show of hands; I shall ask for a show of feet. I wish to test the opinion of the House.