My Lords, as ever, I am grateful to the noble Lords, Lord Skelmersdale and Lord Oakeshott of Seagrove Bay, for what I am sure they meant to be constructive comments on the Statement. I also thank the noble Lord, Lord Skelmersdale, for his tribute to my noble friend Lady Hollis. We all hope that she will be back in her place as soon as possible. I pay tribute to her for her eight years' stewardship of the Child Support Agency, which at all times was pretty challenging. I very much admire the work she did. Whether I am so fortunate in inheriting her portfolio in that respect will have to be judged over the next few months.

I agree with the noble Lord, Lord Skelmersdale, that children should be supported by both parents, even where their relationship has broken down. That must be the intent of any development and redesign of child support arrangements. It was the intent behind the new system introduced in 1993. The noble Lord referred a little to the history of child support since then. He also referred to the very complicated formula which the 2001 changes were designed to change. There have been many operational problems throughout the history of the CSA and the introduction of the 2001 changes has clearly not brought about the changes that were desired, although I think the actual assessment system has stood the test of time. Rough and ready though it might be, it has been one great asset of the changes.

On conversion, I would not wish the noble Lord to think that I said "never". It is our view that the system as it stands is not yet ready for conversion, but we will look to Sir David to advise us more on that matter in his proposals to redesign the system.

The noble Lord, Lord Skelmersdale, quoted a number of figures about performance between old and new systems. One has to be very wary about making direct comparisons because the circumstances of both systems were different. But I would not walk away from the proposition that the overall performance of the Child Support Agency has simply not been acceptable. The Statement is a clear acceptance of that fact.

The review by Stephen Geraghty was very good, but we decided that the £300 million extra public expenditure was too risky and costly for us to make such a decision. That is why we have given Mr Geraghty the green light to institute a modified review which will cost £120 million altogether. That will be focused on increasing the numbers of staff and dealing with clients at the front line and retraining the excellent staff who have had an awful lot to put up with over the past 13 years. Over the next two to three years, we expect to see significant improvements. But as the Statement made clear, it is not only the operational matters about which we are concerned. Our analysis, which I believe is confirmed by the work of Mr Stephen Geraghty, is that the whole child support system is not fit for purpose. That is why we have asked Sir David to start with a blank sheet of paper and suggest a wholesale redesign of the system.

I do not want to debate with the noble Lord, Lord Oakeshott, dictionary definitions of "redesign" and "review". Telling the House that we wish to redesign the system is an acceptance that the current system will simply not do. Therefore, we are going much further than simply having a review—we are asking Sir David to suggest to us the wholesale redesign of child support arrangements.

Anyone reading Sir David's CV would conclude that he has many qualities. He has an outstanding career in the public sector. For those who think we should look to Australia for clues about how child support should be organised in the future, Sir David is also a former Visiting Fellow of the Royal Melbourne Institute of Technology. I believe that he is an excellent choice.

The noble Lord, Lord Oakeshott, talked about having someone from the private sector. Although Mr Stephen Geraghty, the chief executive of the Child Support Agency, started life a very long time ago as an employee of the Inland Revenue, most of his highly successful career has been spent in the private sector. He has experience of banking and insurance, including running contact centres. Essentially, the CSA is a very large contact centre, albeit with very complicated matters to undertake. We have someone in post who understands the kind of operations that the CSA undertakes and has private sector experience.

On whether we should go down the route suggested by the noble Lord, Lord Oakeshott, in terms of Her Majesty's Revenue and Customs, the point my right honourable friend was making in the other place, in a somewhat robust way, is that you cannot take an agency that faces many problems and troubles and simply plonk it under the auspices of another agency. Equally, we understand that the work of the CSA is very complicated. It is dealing with adults whose lives in many cases have become very disrupted, as shown by the figures that I quoted in the Statement. In half the cases that the CSA is concerned with, the non-resident parents have no contact with their children and one in five have not had a relationship together. Those are stunning figures and they show the complexity of the situation. With the greatest respect to Her Majesty's Revenue and Customs, it does not have the experience of dealing with those types of matters. Of course we will listen to and await with great interest Sir David's work. As the Statement made clear, we will invite parliamentarians to contribute to that work.