Child Maintenance Service — [Sir Edward Leigh in the Chair]

Part of the debate – in Westminster Hall at 3:26 pm on 23rd July 2019.

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Photo of Marion Fellows Marion Fellows SNP Whip, Shadow SNP Spokesperson (Small Business, Enterprise and Innovation) 3:26 pm, 23rd July 2019

It is a pleasure to speak under your chairmanship again, Sir Edward. I sincerely congratulate my hon. Friend Martyn Day on securing this important debate.

Children living in single-parent families are at almost twice the risk of poverty of children who live with both parents. Tory austerity cuts, coupled with the rise in living costs, mean that maintenance matters even more to protect children from poverty. Victims and survivors of domestic abuse should be protected by the UK Government, not punished financially for their inability to engage with their abusive ex-partner. We have heard from hon. Members about various issues to do with the CMS. Indeed, I suggest that almost all Members who have spoken today could have exchanged speeches and still felt that what they said was their own.

My knowledge of the CMS comes from speaking with and helping both non-resident parents and parents with care who are let down by the system; however, it is ultimately children who are being let down. I am sure that many Members taking part today who advocate more effective enforcement will no doubt have received messages from non-resident parents who think that MPs are not standing up for them. I should like to put the record straight right now: the CMS is failing all parents and there are indeed ways in which it could be reformed to be fairer to everyone.

There are many non-resident parents who meet their full responsibilities and more. Everyone involved in this debate, and those watching it, should bear in mind that the CMS is about ensuring the welfare of children. I have been campaigning for its reform for some time. Indeed, I introduced a private Member’s Bill, the Child Maintenance Bill, based on the many issues that were highlighted as I tried to help constituents. The CMS has been roundly criticised by all parties in this place, which should signal to the Minister that it is time for sweeping reforms and an urgent root-and-branch review. The Government have a clear responsibility not just to parents or Parliament, but to the children whose lives can be changed for the better.

A cultural problem with enforcement exists in the CMS, which allows parents to evade their responsibilities, and arrears to build. Between December last year and March this year, arrears under the CMS rose by £7.4 million, from £966 million to £973.4 million. During the same period, £58.5 million was owed under CMS’s collect and pay service, through which the CMS monitors and pursues collections, yet only £40.6 million was paid. Some 33% of parents referred to the collect and pay service have paid nothing, and the remaining 67% can be guaranteed only to have paid “some” maintenance.

The UK Government wrote off £2.5 billion of arrears that had built up under the former Child Support Agency—money that still rightly belongs to children. The new CMS is now going down the same path because arrears are building up. The UK Government must crack down on enforcing payments to ensure that children receive their rightful maintenance. When £973.4 million of arrears have built up and that number is increasing, it is obvious that the CMS requires a full and thorough review.

Recent powers to confiscate passports look good on paper, but passport confiscations are seen as a PR stunt designed to scare parents into payment rather than direct enforcement. The Department for Work and Pensions estimated that approximately—wait for it —20 passports would be confiscated each year. Those are token powers, as well as being costly and time consuming to pursue. Greater emphasis must be placed on collecting arrears, and I hope the Minister will commit to ensuring a cultural shift within the CMS.

In Australia, departure prohibition orders are in use for those evading maintenance payments. The UK currently uses DPOs for tax evaders and those who have been dubbed “NHS tourists”. Unlike confiscating a passport, which takes time and lasts only for two years, DPOs can prevent people with two passports from leaving until their arrears are paid. Strict criteria could be applied before triggering a DPO, and I ask the Minister to consider such a provision. In most cases it is difficult to legislate to improve maintenance collection. We need an institutional willingness, both within the CMS and from Ministers, to crack down on non-payment.

Many hon. Members have already mentioned customer service, and from my experience, parents often testify that the quality of service offered by the CMS is extremely poor. My staff and I have also experienced that. The CMS uses an extremely complex system full of caveats. More must be done to inform parents about how it works. Common themes that emerge from my casework include a lack of explanation, differing explanations, a lack of consistency between caseworkers and a lack of written communication. More must be done to lift the standard of service generally.

Parents should be encouraged to make their own maintenance arrangements, but where that is not possible, parents with care should not be subject to the 4% maintenance tax. It is not right that a child is deprived of essential support because of their parent’s persistent non-payment. The UK Government have rightly waived the £20 application fee for victims of domestic abuse or violence, and the maintenance tax must also be waived. That tax is incurred by a parent through no fault of their own and exists as another act of harm against a non-resident parent’s ex-partner and their children. Will Ministers commit to looking seriously at the fairness of the maintenance tax on families?

On one particular point—the income change threshold —the law is unfair to non-resident parents. I agree with the former Minister that there must be a balance between financial stability for both parents and the operational efficiency of the CMS, but the 25% threshold can disproportionately benefit wealthier parents and impact on poorer parents when incomes change. We should not return to the 5% threshold of the CSA; instead, we should set a more reasonable threshold of between 15% and 20%. Will the Minister consider that proposal?

Many non-resident parents keep to their maintenance calculations and make the payments required of them to support their children. We should focus on improving the situation of those who are being let down by their ex-partner, the CMS, and the UK Government. A parent with care might find it difficult to find work that is flexible enough to accommodate caring for their child, or to afford childcare without giving up something else. They could be hit by the two-child tax credit cap, and might struggle to access the personal independence payment or see their income decrease under universal credit. They might find that a family-based arrangement is not possible, but if they approach the CMS, they are charged £20 for it to provide a calculation.

A parent might move on to the direct pay scheme, but find that their ex-partner refuses to meet payments. They might frequently report that to the CMS, but have to explain their situation to a new call handler every time. It is months before any action is taken, during which time the parent is unsure about what is going on because written communication is minimal—we heard from Stephen Kerr about how difficult it can be to understand a written communication from the CMS.

The CMS may eventually use a deduction from earnings order, but perhaps the ex-partner earns much more and hides their income and fails to be properly assessed. Because the ability to request a variation for unearned income must be prompted and the parent with care might be unaware of that, maintenance calculations are frequently lower than they should be. Through no fault of their own, by having to rely on state help to force their ex-partner to pay for their child, the parent with care is charged a 4% maintenance tax when payments are eventually collected. That might be the worst-case scenario, but it is what many families experience.

We have heard from Members of all parties about the ways in which the CMS fails parents with care, non-resident parents and ultimately the children who rely on it. When discussing child maintenance, people often lose sight of why the CMS exists in the first place. We should all try our best to put party politics aside when discussing this issue—you will agree, Sir Edward, that we have achieved that today—but if there is continued inaction, then the party in government should rightly be held to account, especially if it is ignoring advice and views from its own members who have passionately advocated for reform through action.

As arrears under the CMS near £1 billion, the UK Government have been lucky that this issue has not received the public attention it deserves. People are right to criticise the Conservative party’s austerity agenda—universal credit, the two-child cap, the bedroom tax and all those other policies implemented by this Government. The growing debt owed to children in Scotland and the rest of the UK deserves to join that list. When the charity Gingerbread says that maintenance can lift one in five children out of poverty, the UK Government must sit up and listen.

Will the Minister conduct a full root-and-branch review of the Child Maintenance Service and consider the 4% maintenance tax, lowering the income change threshold, the standard of service and an institutional shift to crack down on maintenance arrears, both current and historical? Children are at the centre of this debate and they should be at the centre of CMS and UK Government priorities. I hope the Government will listen to the concerns of Members and parents, and start to take radical action to secure the support that children truly deserve.