§ Order for Second Reading read.
§ 11.5 am
§ Mr. Robert Taylor (Croydon, North-West)
I beg to move, That the Bill be now read a Second time.
I apologise to right hon. and hon. Members for the fact that the Bill arrived only this week. I had prepared an earlier and much shorter Bill that was ready as long ago as July. However, that had to be changed in response to requests from interested parties. The Bill now appears somewhat complicated. I hope that it will be agreed that that is inevitable as it deals with an involved subject. I hope that if the Bill becomes an Act of Parliament it will be comparatively simple to operate.
The Bill has a single and clearly defined objective—that in a single-parent family the absentee parent should shoulder his or her responsibility towards the maintenance of the child or children. The absenteee parent may be either the mother or the father. There is no sex discrimination in the Bill. However, for the purposes of my remarks I shall refer to the absentee parent as the father.
My reason for introducing the Bill is that my constituency experience—I expect that it is experience that has been shared by other hon. Members—has frequently brought me into contact with single-parent families, single parents who are in receipt of contributions from absentee parents. In the majority of cases the scale of the contributions was fixed some years previously and is now totally inadequate, and the custodian parent turns inevitably 768 to social security. Once she is in receipt of social security payments there is no incentive for her to work to improve the welfare of herself or her child or children because her earnings would be deducted from the sum that she receives from social security payments.
Conversely, if it can be so organised that the absentee parent contributes realistically, the custodian parent is not penalised and will be able to work to improve her situation and that of her children. I hope that it will not pass unnoticed by the House that in so doing there will be an effective and substantial saving to the State by way of reduced social security payments.
There is a further defect in the present arrangement. There is a widely held belief—it has been put to me by some magistrates' clerks—that absentee parents who are recorded as being in arrears pass cash payments to the custodian parents to avoid a reduction in the social security benefits. I believe that all right hon. and hon. Members will agree that the present law is totally unsatisfactory. The Finer report, which was published five years ago, called for a thorough reform. During those five years there was no sign of Government action. Therefore this Bill is a small but, I hope, significant step to assist those hundreds of thousands of lone parents and children whose expectations were raised by the Finer report but so far have been doomed to disappointment.
The chairman of the Supplementary Benefits Commission, Professor Donnison, in a letter to me recently expressed the hope that:… your Bill, as eventually amended, will: (i) encourage consistency and comprehensible simplicity in the making of maintenance orders for women and their children—a consistency which would also guide all parties concerned with negotiating the large number of voluntary agreements which never come before the courts".My Bill purposely excludes maintenance orders for women. It is based on the concept of the "liable relative" in the terms of the Supplementary Benefits Act 1976. That definition now has a legal establishment. It may be that at some time in the future the principles of the Bill will be extended to all maintenance orders. However, at this stage I am purposely confining the Bill for the benefit of children.
769 Referring to the professor's other point, I hope that the Bill will achieve his aspiration. I hope that it will encourage "consistency and comprehensive simplicity" by the introduction in clause 3(2) of an "eligible provision", which is intended to be the amount that can reasonably be required to maintain an average child in average circumstances in an average spending week. The eligible provision should therefore become a guide to voluntary settlements outside the court.
The professor—to whom I am extremely indebted for the help and encouragement that he gave me—then expressed the hope that orders and voluntary agreements would retain their real value year by year. That is the major defect in the present situation. I hope that my Bill will achieve that objective by obliging the Secretary of State to revise annually the eligible provision. Any voluntary agreement could carry a proviso for uplifting by the same amount as the uplift in the eligible provision. Thus I hope, through having a formula, that much of the time of our courts will be saved.
Another point that was raised by me in discussions on the Bill was the need to preserve the right of parties to the order to appeal against it. That is expressly preserved in clause 9. Such applications to change orders will be greatly facilitated, as instead of the custodian parent making application for an increase, with the difficulty of establishing the financial situation of the absentee parent, the boot will be on the other foot. It will be up to the absentee parent to apply for downgrading. Therefore, there will be no difficulty in establishing the financial situation that is necessary for the courts to come to an equitable decision.
An additional important provision of the Bill is that it permits the Supplementary Benefits Commission to become a direct party to an order when the custodian parent is supported from public funds and an absentee parent is failing in his or her responsibilities. At present the Supplementary Benefits Commission must go to court to seek that objective via the custodian parent. However, in many cases the custodian parent is unwilling to assent to such an application because she will not benefit if the application is successful, as the amounts 770 recovered from the absentee parent will be deducted from the social security benefits of which she is already in receipt. Certainly, if she is receiving cash payments unknown to the court, and the court makes the order, she will be substantially worse off.
The Bill deals with all children affected by orders. Despite the technicalities of the title, the Bill is not confined to those who are born out of wedlock. It is a provision for children as such and not for mothers as such. The Bill is founded on the established legal definition of a liable relative.
I recognise that there are certain defects in the drafting of the Bill, especially where it refers in clause 10 to previous legislation. If the House agrees that the Bill should go to Committee, I shall be anxious to meet, by amendment, further representations from such bodies as the Supplementary Benefits Commission and the Justices' Clerks' Society, and indeed to achieve any improvements sought by the Government. In the meantime, I hope that right hon. and hon. Members will assent to the Second Reading.
§ Mr. John Loveridge (Upminster)
It gives me great pleasure to welcome the initiative of my hon. Friend the Member for Croydon, North-West (Mr. Taylor) in bringing forward this Bill with its admirable concept of helping children. If brought to fruition, it will affect a large proportion of the single-parent families, numbering three-quarters of a million.
The Bill will apply—my hon. Friend used the good phrase "custodian parent"—to both men and women. However, in the main, it is the women who are left with children to look after—sometimes single women, sometimes married women with up to four or more children—who are deserted. It is often difficult for them to get a maintenance order uplifted not only in line with inflation but in any circumstances. The men are apt to disappear and cannot be found. I well remember sitting in a magistrates' court years ago when a man against whom a maintenance order had been made shouted from the back "You will not find me—I shall move". The lone parent is left not only without money but without the facilities, if she is busy looking after her family, to find the missing 771 parent. She cannot afford to hire detectives. She is in distress. She may be ostracised by her family.
The total cost of family income benefit and supplementary benefit payments to one-parent families is now running at about £900 million a year. My hon. Friend's Bill will probably result in a substantial saving in Government funds.
There are other aspects. The Finer report aimed at a guaranteed maintenance allowance backed by a similar system for recovering maintenance for all lone mothers. Perhaps the guaranteed maintenance allowance, however desirable, is too costly for the State to undertake in full at present. However, the system for recovering maintenance for lone mothers is not too costly. An interim system was suggested, but as the Labour Government did not accept the major proposal it appeared that they did not want the interim system either. This was after a study had been made by an interdepartmental group of officials.
It was thought at that time, in 1976, that it was too costly in Civil Service manpower, that there were no matching savings in magistrates' courts, that there were no financial gains to the mother, and that there would be extra complexity between the courts and the Supplementary Benefits Commission.
The Minister, in a written answer, said:The Government recognise that the Finer committee wishes to spare lone mothers the need to take court proceedings for maintenance wherever possible, but they consider that this would not be practicable."—[Official Report, 2 December 1976; Vol 921, c. 255.]That surely is not good enough, in view of the very large scale of suffering that exists and the increasing scale of this problem, mostly for women but for some men as well.
The numbers involved are very considerable. Separated, divorced and single women in November 1977 who were in need of supplementary benefit numbered 299,000, with 550,000 children. There were as well nearly 14,000 men, with 29,000 further children, involved in similar circumstances. This represents a very substantial measure of distress. The lone-parent family is surely almost the last area of our social security system that is still without adequate real help from the Government. That help ought to be provided. The Bill would go some way towards meeting this gap.
772 The scale and measure of the problem can be seen when it is realised that the number of one-parent children exceeds that of all two-parent families who are in receipt of supplementary benefit due to unemployment or sickness. When we realise how many more two-parent families there are, we can see how great is the need of the single-parent family.
But the position is growing worse and the numbers are likely to grow larger. The latest international comparisons I have of the high rate of divorce per marriage show that the figures are 1 to 3.5 marriages in this country in 1974, in the United States 1 to 2.3, and in Sweden 1 to 1.7. We are likely in this country to get nearer to the American figures. When we add desertion, we have an even greater problem.
If the Bill is examined in Committee, as I hope it will be, I hope that two special aspects will be considered. One is the aspect of the conflict of laws. There have been many distressing cases in which courts in Scotland have overruled courts in England. I hope that the Committee will consider this aspect so that protection may be given, even though the husband or deserting spouse has gone to Scotland or abroad.
The second aspect is that the custodian parent should surely be encouraged to work, but if a husband fails to pay maintenance under a court order the mother ought not to be sued by the Commission for the refund of money that she earns if she bravely goes out to work when she has been deserted by her husband. I know that the Government may not be able to meet the guarantee of maintenance, but at least her position could be protected, under the Bill, by giving the Commission the power to act through the courts against the errant husband, or against the spouse of whatever sex.
It is right that the missing parent should be called upon to make payment where able to do so. I hope that the Government will take up the Bill and give it a fair wind. It will be helpful in saving money, as it will put the responsibility where it should lie, namely, on the parent who has deserted the home and children. It will be helpful to mothers—and to husbands at times—who will not have to seek fresh court orders against the missing spouse so that the payment may 773 be kept in line with inflation. The Bill concentrates the matter where it ought to be and where my hon. Friend has said it should lie—on the welfare of the children. For reasons of compassion and economy, I am very glad to support the Bill.
§ Mr. Tony Durant (Reading, North)
I congratulate my hon. Friend the Member for Croydon, North-West (Mr. Taylor) on bringing forward the Bill. It is an attempt to do something about a problem with which many of us are well acquainted in our daily work in our constituencies and in our surgeries. People frequently come to us for help with problems of family maintenance. I speak as the chairman of the single-parent family group in the House and therefore I am very happy to support the Bill, which is a step in the right direction.
We have heard from my hon. Friend the Member for Upminster (Mr. Loveridge) that there are 750,000 single-parent families in this country. He also mentioned the rapid increase in divorce in this country. It is regrettable, and it creates a great social problem. We have to recognise it and try to help. The problem is now accelerated by divorce among much younger people than used to be the case in the past. This results in maintenance arrangements being made for children at a very early age. Unless the mother is able to return to the court to get the amount of maintenance increased, naturally the value of the maintenance decreases with inflation. This has very serious results for the young children involved. Clearly, wives suffer badly under the present maintenance arrangements.
Those who have been through divorce tell me that it is a very humiliating and lonely business. Women suffer particularly when they are left with the full responsibilities for the home and the children. The problems arising from maintenance payments and from going to court are part of the anxiety, embarrassment and suffering. On an increasing scale, husbands are avoiding the payment of maintenance. They do this by going on to social security and then joining the black economy and working on building sites.
774 There is a gentleman in my constituency who moves very rapidly from one building site to another so that the authorities can never catch up with him. He owes a considerable amount of maintenance to his wife. The emphasis placed on the children in the Bill is a very important aspect of it. When the Finer committee studied other economies, it found that in the Scandinavian countries and in Germany in particular the emphasis in giving maintenance and help to the single-parent family was towards the child. It is right that it should be so, and I therefore welcome the emphasis placed on the child in my hon. Friend's Bill.
I hope, however, that the Government will continue to keep the Finer report constantly in mind. It is a very worthwhile document and much time and energy went into it. It was produced in 1974 but very little has been done about its recommendations concerning the single-parent family. I favour the payment of a guaranteed maintenance allowance, which is one of the proposals of the Finer report. I should like the Government to consider this. It would avoid women having to be involved in the court proceedings. Instead, the State would be chasing the man and making sure that he paid his maintenance. Whatever happened, the woman would get her maintenance.
A great deal has been said in the House about tax credits. I hope that the Government have not abandoned their thoughts in this direction. The whole question of a guaranteed maintenance allowance would be expensive to set up. However, the savings on social security could be quite large when the system was implemented and working fully.
I support the Bill. I merely came to make a short intervention to show that the group of which I have the honour to be chairman welcomes the Bill. Of course, the Bill has defective parts, as my hon. Friend said, and perhaps in Committee they can be examined. I wish the Bill good luck. It is a useful, helpful step. I congratulate my hon. Friend on bringing it forward.
§ The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker)
First, I warmly welcome the comments made by my hon. Friend the 775 Member for Croydon, North-West (Mr. Taylor) and extend my best wishes to him for the future of the Bill. I hope that nothing I say will deviate from the total consistency that we have had about the objectives of the Bill. We wish to help children in lone-parent families where there are maintenance orders.
I shall have to make certain comments about the Bill because, as my hon. Friend understands, we would welcome some modification of its current clauses in Committee if the House gives the Bill a fair wind today.
My hon. Friend has given a broad outline of the objectives which his Bill is aimed at achieving. Though the Bill's title suggests the simple idea of uprating court orders annually, its scope is in fact wider and covers two distinct areas. The first of these is the index-linking of court orders made for the maintenance of children. The second area is the aspect of supplementary benefits work, for which my Department, via the Supplementary Benefits Commission, is responsible, known as liability of relatives. The provisions of the Bill have the effect of giving statutory backing for various existing procedures used in our local offices by people known as liable relative officers and of extending their responsibilities, and those of the Commission, to a wider area involving persons—usually women, but not exclusively—who are not entitled to receive supplementary benefit.
While most of the second area is purely the preserve of my Department, the index-linking concept has extensive ramifications for the Home Office, the Lord Chancellor's Department, the Inland Revenue and the Treasury.
There are two principles behind this Bill with which the Government, and I am sure many members of the Opposition, agree. The first is the effort to find a way to help financially many one-parent families. I am thinking particularly, for example, of those mothers with children who depend on the regular receipt of maintenance as their main source of income. While wages may rise and State benefit rates may be increased, a maintenance order can too easily lose some of its real value as the cost of living increases, and it is often not easy, for a variety of reasons, for the mother to apply to the court for an upward variation of her order. It is not always realised that it 776 is a minority of one-parent families who reply on supplementary benefit for all, or part, of their income and who therefore have the protection against rising costs that the increases in supplementary benefit bring—in fact, fewer than 350,000 out of about 800,000 one-parent families.
As my hon. Friend the Member for Upminster (Mr. Loveridge) said, the number has gone up dramatically. We are well aware of the problems that this is likely to cause in future, particularly if, as my hon. Friend said, our divorce figures get nearer to those of other countries which he quoted.
Of the other 450,000 one-parent families, about 125,000 have a widow's pension of some kind but no supplementary benefit. That leaves roughly 325,000 who rely on maintenance payments and what they can earn—often from part-time work. The second principle I have in mind is that of safeguarding the payment of public funds via the supplementary benefit scheme. It is, of course, quite proper that single parents should receive such benefits to the fullness of their entitlement, but it is equally right that effective steps should be taken to ensure that the liable relatives—or absentee parents as my hon. Friend calls them—should regularly maintain their dependent children as far as they are able to do so. To illustrate the scale of what is involved, it is estimated that, as at November last year, supplementary benefit was being paid to 342,000 families in which there was a liability to maintain aspect against another person. But that is not the full story, because the turnover in such cases is considerable. Approximately 233,000 claims for supplementary benefit are made each year by one-parent families.
I should like to turn now to some of the specific ideas in the Bill and to give my reactions and those of my ministerial colleagues in the other Departments that I mentioned. Let me start with the first four clauses of the Bill, which are concerned with the index-linking of court orders. As my hon. Friend explained, the Bill is concerned only with court orders for children, but it is not limited to those children who are the subject of affiliation orders. Any maintenance order would count. It applies only to orders in respect of children in England and Wales and hence does not extend 777 to any maintenance decrees in Scotland. My hon Friend the Member for Upminster mentioned that sometimes a Scottish court will overrule an English court. Therefore, we foresee that there might be some difficulty there.
The intention is to uprate these orders annually to take account of any increase in the cost of living. The responsibility for determining the amount of any percentage increase to be applied rests with the Minister, who is defined as being normally the Secretary of State for Social Services. That Minister is also required to supply the court with a statement giving the old and new rates for any periodic payments due under each order covered by the scope of the Bill. In other words, this requirement is not limited merely to those orders payable to recipients of supplementary benefit.
I am sure that the initial reaction of many people to the idea of index linking maintenance orders to the retail price index must be favourable. They would, I am sure, argue that the Government have a duty to protect those who are particularly vulnerable to the effects of inflation, and that certainly includes children who are dependent on fixed maintenance payments.
But we must recognise the fundamental change of direction implied by index linking in this respect. In awarding maintenance orders, the courts in this country are required to consider the individual financial circumstances of both parties. Likewise, in considering the upward variation of an order, the court will decide whether, in the light of the facts available concerning the payer's income and commitments, it is reasonable to expect him to pay the order at a higher rate.
Index linking assumes that, because the cost of living has gone up, the absentee parent—normally the father of the child—has increased income from which to meet a higher order. I know that the Bill ensures in clause 9 that the manor the woman—has an existing right to seek a downward variation so that he could apply for this if he could not pay the increased amount. Nevertheless, the concept of index linking removes the onus from the woman of having to seek an upward variation if she wants to 778 update the real value of the order and places it on the man. He would then have to show why he could not comply with the automatically increased order, and some men would be nervous of going to the courts for such a reason. We must be fair to both sides in this difficult problem.
A second question of principle concerning index linking relates to its proposed limitation to children's orders only. The Home Office points out that the Bill will not help wives and former wives who have no dependent children, and they also suffer the effects of inflation. I point out to my hon. Friend that, under the Supplementary Benefits Act, a man is liable to maintain both his wife and children and a woman is liable to maintain her husband and children. There is a slight difficulty here which I am sure my hon. Friend will understand.
Even in the case of orders for children, the Bill will not benefit those whose orders are for an amount above the level of amount that my hon. Friend has called the "elegible provision". I shall return to that definition later. The Bill does not help those children, because it specifically provides in clause 6(a) that the balance of any amount in payment above the level of "eligible provision" should be proportionally reduced. This means that overall the order will not go up.
In our view, a further grave difficulty is that the Bill takes no account of any variation in the amount of the order which may have been ordered by the court. The court could have decided to increase or reduce the amount of an order at a hearing only a week or so before the date fixed for index linking in the Bill. So far as one can see, the order as varied would be increased by the full amount of the index. The Bill provides that if an order has been made in the immediately preceding period it should not be indexed that year, but has nothing to say about orders which have just been varied—in other words, continuing orders. That is a further difficulty.
One of the key concepts of index linking as envisaged is that of the "eligible provision". Clause 3(2) provides:The Minister shall determine annually the amount of the eligible provision by reference to the level of supplementary benefit entitlement in similar circumstances.779 This appears to me to limit the part of any order for a child which should be considered for index linking to the level of supplementary benefit payable for a child of the same age—in other words, in supplementary benefit jargon, to the scale rate for that child. The scale rates for children are age related. For example, following the uprating of benefits as from next week, these rates will range from £5.20 weekly for a child under five years of age to £11.25 weekly for a young person of 16.
At least three implications follow from the "eligible provision". First, it introduces tremendous complications both to operate and, perhaps more important from the point of view of both parties, to understand—and that at a time when we are trying to simplify things generally. Secondly, the advantage of any index linking to the mother—or if she is in receipt of supplementary benefit to public funds—is limited. Thirdly, the majority of women with court orders for themselves and/or children are not actually in receipt of supplementary benefit.
The exact figures are not known, but it is likely that there are three or four times as many women with such orders not in receipt of regular supplementary benefit as are in fact receiving it. This majority of persons rely on the full amount of the court order to maintain their standard of living. Why should only one part of the order for their child or children be index linked if they are fortunate enough already to have an order for a weekly rate in excess of the eligible provision? This is a problem, but I am sure it can be overcome in discussion in Committee.
As I have mentioned, the Bill places a requirement on my Department to uprate and notify the court of the relevant information in respect of all qualifying orders. An estimate by the Home Office puts this at 290,000 orders. I am not convinced that if such a scheme were introduced the responsibility for its operation should become that of my Department.
Clearly the concept envisages centralised facilities to handle the administrative aspect, probably involving computer usage. However handled, a major liaison difficulty is inevitable between all the courts in the country and this centralised 780 point. For example, there would be a need to keep the information up to date in respect of age changes of the children, or when orders for particular children are extended or cease.
I turn now to the effect on payment of supplementary benefit which my hon. Friend the Member for Croydon, North-West mentioned. The initial apparent effect of index linking on the payment of supplementary benefit ought to be favourable. In other words, to the extent that "absentee parents" increase maintenance payments for their children who are otherwise supported by public funds, there should be a saving in benefit outlay. But, before assuming that this will be so, consideration must be given to the effect of the Bill on the courts.
The Home Office advises me that the Bill will add to the work of the courts. Clause 4 aims to reduce the burden placed on the courts by requiring the Secretary of State for Social Services to supply them with the old and revised amounts of maintenance orders. Even then, it seems, the court will have to request this information; it will not be supplied automatically. However, many maintenance beneficiaries are not in receipt of supplementary benefit. The Department will not have details of their maintenance orders and will not be able to supply recalculations to the court.
But I am afraid that the work of the courts only begins with the recalculation of the order. Magistrates' courts are responsible by law for collecting maintenance and keeping proper accounts. Each court will have to update all its records each year. It will have to inform both parties of the change in the order. Where an attachment of earnings order is in force, the court will have to notify the man's employer.
Another task for the court, which is not mentioned in the Bill, is the need to inform the Inland Revenue. This is because the amount of a maintenance order affects the individual's tax liability. Where the order was made by the divorce court and registered in the magistrates' court for enforcement, the divorce court will have to be informed. These new duties, as I am sure the House will readily appreciate, would place a substantial extra burden on magistrates' courts, which are already hard pressed.
781 The Home Office estimates that to carry out these tasks at least 50 extra staff will be needed in magistrates' courts alone, at a cost of over £300,000 a year. This estimate is based on my hon. Friend's scheme for index linking, which, of course, applies only to maintenance orders for children and which also has the effect that orders for an amount above the level of "eligible provision" will not actually increase. If index linking were applied to all orders, the cost would be greater. Again, solely for magistrates' courts, it is estimated that over 80 extra staff would be needed at a cost of more than £500,000 a year.
In addition to the extra administrative tasks that would fall on the courts as a result of the Bill, it is likely that there would be an increase in applications by men for a reduction in the amounts of their orders. It is reasonable to assume that, if the amount is automatically increased without regard to the man's ability to pay, some will be genuinely unable to afford the new amount while others may object to the basic inequity of a system which takes no account of their own financial situation.
Against this there will be fewer applications by payees seeking an increase, as my hon. Friend pointed out. But research has indicated that twice as many orders are reduced as are increased. Overall, therefore, there is likely to be a net increase in proceedings. At present is it impossible to say how many applications there will be, but if only one man in 20 applied for a reduction as a result of index linking, even allowing for a substantial drop in applications by payees, there could be as many as 11,000 extra applications to magistrates' courts. These would take an estimated 220 weeks of court sittings to clear. Again, this estimate is based only on the Bill as it stands. If all orders were index linked, the corresponding figures would be 18,000 applications and 360 weeks of court sittings.
Unfortunately, it is a fact of life that not all maintenance orders are paid in full. Those who try to avoid paying now are even more likely to seek to avoid paying an amount which increases each year. Inevitably this would lead to more court proceedings to enforce payment. Without incurring substantial extra costs, there is 782 little scope for increasing the number of hearings per week. This can only lead to considerable delays in hearing cases, with consequent hardship for those women seeking to obtain or enforce a maintenance order.
As I have indicated, despite my hon. Friend's intentions, there is no doubt that this Bill would place a substantial extra burden on the courts. The bodies representing the magistrates' courts service which have been consulted by the Home Office are all opposed to the Bill on the grounds that it would produce inequitable results and that it would add greatly to their work. They include the Chief Magistrate, the Justices' Clerks' Society, the Magistrates' Association, the Inner London Magistrates' Courts Service, the Association of Magisterial Officers and the chairman and secretary of the Central Council of Magistrates' Courts Committees.
Whatever personal views hon. Members may hold about the aims of the Bill, the House will understand that we cannot ignore the views of those who are most closely involved with the administration of maintenance orders in magistrates' courts, and on whom most of the work arising from the index linking would probably fall.
§ Mr. Durant
Does my hon. Friend agree that she has, in fact, made a very good case for introducing the guaranteed maintenance allowance? She has really made the whole case, which is laid out in Finer in great detail, in what she has said. Perhaps she ought to consider that.
§ Mrs. Chalker
My hon. Friend is very much on top of all the Finer arguments which he can possibly display to the House. He knows that many of us who have worked with the problem of one-parent families and all their difficulties for many years are sympathetic. However, I must remind my hon. Friend that in the present economic circumstances there is no way in which we, as with the previous Government, could accept the proposal for a guaranteed maintenance allowance at present. Whilst there are many things which we would happily wish to do when we have controlled inflation and improved the economy, I think that my hon. Friend realises that his suggestion, however necessary and however much it would answer the points 783 I have just made on behalf of the Home Office, is not a possibility at present.
I turn now to the effect on county courts. The Lord Chancellor's Department is also certain that the Bill would lead to a large number of applications to the courts on the part of fathers for downward variation of orders which have been automatically increased through index linking. Several additional county court registrars may well be needed to deal with such applications. Extra civil servants would almost certainly be necessary to handle the administration. Without the extra judicial strength, there could well be greater delays in hearing all county court cases, including small claims, proceedings for the possession of property and other family matters.
It also has to be remembered that our judicial strength has to be considered as a whole. New work for registrars makes them less available to relieve circuit judges of simpler cases, and that in turn limits the capacity of the circuit judiciary to turn over civil work in the county court, and criminal cases in the Crown court.
I realise that those remarks may have depressed hon. Members, just as much as they affected me when I first learnt about the problems. However, I think that it is right, at this stage of the Bill, that we should consider the full effects of the Bill. I hope that it will give us a lead to things that we may decide when, one hopes, the Bill is taken to a Committee stage.
§ Mr. J. W. Rooker (Birmingham, Perry Barr)
I am grateful to the Minister for giving way, because this is the only point that I want to make. The Minister has referred several times to the Committee stage. This is the third of the Private Members' Bill by ballot. The first two are highly controversial. Unless action is taken by the Government to set up a parallel Standing Committee for Private Members' Bills, this Bill, in the ordinary course of events, will not go into Committee until next March. That also applies to Bills which we are to discuss later today. Will the Minister and her hon. Friend the Member for Croydon, North-West (Mr. Taylor) consider making representations to the Leader of the House? Otherwise, following the Second Reading, on the nod or without dissent, 784 anyway, this Bill will lie dormant for several months. I do not think that that is the Government's intention. I hope that the Minister will make some representations to the Leader of the House.
§ Mrs. Chalker
I gladly take that point and, indeed, I shall bring the hon. Gentleman's remarks to the notice of my right hon. Friend the Leader of the House. I certainly have sympathy for Back-Bench Members whose Bills may be even further down in the queue than those that we are to discuss today. Certainly this can be a matter for discussion.
I turn back to the Bill to look at the problems it may raise concerning income tax. I have been asked to add that the Bill, in its present form, would cause considerable administrative problems and staffing costs for the Inland Revenue in dealing with the tax implications for both payer and payee of the proposed arrangements.
The rules for the taxation of maintenance are horribly complex and I cannot attempt to describe them here. I can only say that the selective nature and timing of the increases would produce problems of identification which in turn would affect such questions as the right to receive maintenance in full or under deduction of tax and would be bound to lead to imprecise PAYE codings, with all the resulting problems of overpaid or underpaid tax. Some hundreds of extra staff may be needed. This is an aspect that we must look at further.
The tax treatment of maintenance is already a most difficult area and it inevitably causes confusion about tax liability amongst many payers and payees. The proposals as they stand would, I am afraid, only add to this uncertainty. This is something that I am sure all hon. Members would want us to avoid.
I turn now to the parts of the Bill which are particularly the concern of the DHSS and the Supplementary Benefits Commission.
§ Mrs. Chalker
Hon. Members know that Foreign Office matters are not my responsibility.
The arrangements for my Department to collect court orders would be severely 785 affected by the Bill. The first major change that the Bill would bring about, by virtue of clause 5(1), is that it would give statutory force to the present administrative arrangements whereby women authorise the Department to collect court orders on their behalf, and it would make that arrangement compulsory. Thus, the Commission would have no choice about whether to seek authority and the woman would have no option but to give it. Court collecting offices would equally be compelled to accept it. That is specifically in the Bill.
It is widely known that the Commission already has a general policy of inviting a woman, whenever her order is paid through a court, to authorise the court to pay the order to the Department, and the procedures are described in the SBC handbook. Most women are only too pleased to accept this invitation because it means they get their money from one place—the post office—rather than two, and they receive an assured income without the anxiety and inconvenience that irregular payment of the court order would otherwise cause. But some women prefer to receive their court order personally, and the Commission does not insist on such authority. It may be that something like a permissive power for the SBC to insist where there are good reasons, and an obligation on the courts to accept, would be useful. I hope that we shall explore this fully.
There are difficulties about going further because many county and High Court orders are paid not through a court but direct to the beneficiary. Similarly voluntary payments usually go direct, often, for instance, paid when a father visits his child. There could be practical problems about insisting on direct payments to the Department in such cases.
The number of such cases involved is large. There are about 146,000 women receiving supplementary benefit who have court orders, and of these 116,000 are paid to the Department and the balance to the women. There are about 66,000 voluntary payments made by liable relatives and of these 17,000 come to the Department and the other 49,000 go to the claimant. But that 17,000 is not of women's payments diverted to the Department—it represents cases where our own 786 liable relative officers have contacted a husband or father and he has then agreed to pay us direct.
The second change in this aspect is in some ways an extension of the first because it would give the SBC power not only to collect an order but to "stand in the place of" the woman in all respects with regard to the order. The Bill does not amplify what this means but presumably it would mean that the SBC would have the power, and the duty, to enforce the order if not paid in full, or to seek variations in the amount payable. That is the broad principle, though it would be limited by the eligible provision concept. There are many aspects of this that need to be discussed in detail, and again I hope that we shall have the opportunity later to do so.
I should like to make two points now. The first is one that will be well understood by Labour Members. It is that obections may be raised to the State taking over from the woman in this way and that some modification of what is in the Bill may be needed for that reason alone. The second is that where a court order exceeds the eligible provision, or includes the needs of the mother as well as the child, there would be the obvious difficulty about enforcing only part of the order in the event of a default in payment.
The third big change is that by clause 5(6) the Supplementary Benefits Commission will be given extensive new duties and powers in those cases where benefit is payable and there is liability to maintain but no court order exists and no voluntary payment is being made. The Bill says that a precondition for the receipt of benefit is that the woman should authorise the Supplementary Benefits Commission to act for her. I think that that rather puts things the wrong way round. The first responsibility of the supplementary benefits scheme is to meet financial need. Liable relative action, though important, is secondary to that.
The Supplementary Benefits Commission's policy, which we fully support, and which is widely publicised, is to talk things over with the wife or the child's mother and to use its own powers, already in the Supplementary Benefits Act 1976, if the woman does not want to take proceedings herself. This procedure is 787 followed whenever a man, when approached by the Department, denies liability or refuses to maintain voluntarily, though admitting liability. In practice, a large majority of women initiate their own proceedings for maintenance, often as part of a divorce action. It would be a sweeping and drastic change to remove from a woman the right to take her own proceedings. Putting these responsibilities on the Commission would also have considerable staffing repercussions at a time when or staff resources are scarce.
The fourth point that concerns the Commission is perhaps the most significant of all. It would give the Commission additional duties to act as an intermediary to help certain custodian parents who are not entitled to supplementary benefit. It envisages that the Commission may require payment of its reasonable costs in such actions. But my first reaction is that the kind of people who would be likely to seek such help would be unlikely to be able to pay the costs, so that the service would not be paid for. We could not take on such an extra task.
Our local offices, as hon. Members will know, are already working at full stretch. We are trying to relieve them of work, not to put more there. Even without the cost, though I fear it would be high, this we must resist. We already have legal aid and legal assistance schemes through which help is available when needed. It would not be right for us to provide another channel, though I am grateful that my hon. Friend recognises and appreciates the expertise and skill of our liable relative staff.
Everything that I have said so far relates to the Bill. In respect of liable relatives, I would like to put the matter in fuller context. Hon. Members will know that a second stage of this supplementary benefits review is going on. In this review, we intend that there should be public discussion of all the aspects of liable relatives. With a helpful Bill such as this coming before the House, timing difficulties could ensue, but I do not think that discussion on the review should preclude us from taking action.
I know the difficulties that hon. Members face in drafting their own Bills. The House will probably feel that I have 788 been over-critical. I should warn the House, however, that the Bill, as it stands, is entirely unsatisfactory in the drafting of the provisions. We would have to do a great deal of rewriting, although we are sympathetic towards what my hon. Friend wishes to do. I mention one example. The title of the Bill refers to affiliation orders and aliments. Affiliation orders are specifically orders for payments for illegitimate children. The term does not include orders for legitimate children, although my hon. Friend, I know, intended to include them. So far as I can see, the word "aliments" does not occur anywhere else in the Bill, nor is it defined. "Aliments" is a word used only in Scottish law. But the Bill does not extend to Scotland. In short, it is far from clear in the drafting to which orders the Bill really applies. We would be happy to assist my hon. Firend over this matter.
We sympathise very much with the broad intentions of the Bill. Any scheme to maintain the value of court orders for one-parent families will benefit a section of the community that is vulnerable. It will also, incidentally, reduce public expenditure in the form of supplementary benefit.
I have shown that this is a complex issue. There are many difficult problems to be resolved, not least the costs incurred. I appreciate that most of the clauses affecting my Department and the Supplementary Benefits Commission are intended to be of assistance to us. I have indicated why I must have reservations about much of the Bill, but I do not want my comments to create the impression that we reject it out of hand. We do not. I look forward to detailed discussions in Committee if the House gives the Bill a Second Reading. I can assure my hon. Friend that, in the meantime, we shall be looking closely at the Bill in order to be as helpful as possible. I am most grateful to him for introducing it.
§ Question put and agreed to.
§ Bill accordingly read a Second time.
§ Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).