§ 3.7 am
§ Mr. George Mudie (Leeds, East)
I am grateful for this opportunity to debate the operation of the Child Support Agency on the Floor of the House, but I am sad that the hour is such that few hon. Members are present. I hope, with other hon. Members, to impress on the Under-Secretary of State for Social Security the devastating effect of the Child Support Act 1991 on thousands of constituents throughout the country represented by right hon. and hon. Members in all parts of the House. As the hon. Gentleman is one of the most sensitive, if not more intelligent, Ministers in the Department of Social Security, I am sure that he will take the absence of right hon. and hon. Members as reflecting only the late hour and the heavy day that the House had yesterday.
I sought this debate for three reasons. First, the 1991 Act is having a fearsome effect on a large number of individuals and families.
They are not errant parents and youths, but responsible adults, most of whom have already made maintenance orders through the court and are making a contribution to their child. They are being hit out of the blue with demands that may keep some Treasury accountant happy, but make the individuals feel helpless and powerless. They see standards of life that they have rebuilt taken away from them, leaving them with no opportunity to appeal.
My second reason is that, despite the fact that the Government seem aware of the growing problems thrown up as a result of the Child Support Act 1991, there seems to be a difference of opinion on how to deal with them. In the Chamber, the Prime Minister promised a review which he seemingly forced on a reluctant Department of Social Security. But the Department is apparently hostile to the idea of changes and defensive about the agency, and gives the impression that it wants to stall for as long as possible to see whether the pressure will blow itself away.
When the agency's director came before the Select Committee on Social Security, she spoke of an even longer time scale for the review than had been mentioned in the House. She said:The Department of Social Security will deal with the evaluation of the Act, and it will probably be over an eight to 10 year period.
If that is a sign of what lies behind the Prime Minister's promise of an early review, it will be extremely bad news to thousands of people throughout the country.
My third reason involves the protests that have arisen from the first 36,000 maintenance assessments—the total number sent out by the CSA to the end of September. We have seen the pressure that has arisen from, and the response to, those assessments. But, as the Minister is aware, that figure is only the tip of the iceberg. By the end of the year's operations—April next year—the agency predicts that it will have made 1 million approaches, and 750,000 assessments will have been made by agreement or otherwise. Hon. Members have encountered such pressure after 36,000 assessments, but, by next April, 750,000 families will have received such news.
Harm is being done to people. There is apparent indecision on the part of the Government about how to respond. The numbers will explode in the next few months. Those are sensible enough reasons for bringing the subject to the Floor of the House. 1009 The basis of the Act is not contested. Neither here nor in my constituency have I heard any challenges being made to the Act's central aim—that, when a relationship ends, the father or mother, who become, in the slightly offensive terms of the Act, the "absent parent", should continue to provide financially for the well-being of the children from the relationship.
It is accepted that, for whatever reasons—Government cuts in staff have played a major part—the old system was falling into disrepute. The numbers of lone parents receiving maintenance was continuing to fall, and the amounts paid varied to such a degree as to deny adequate defence. However, the replacement of the flexibility of the court system with an administrative formula with no flexibility has, for many people, meant the exchange of one extreme for another.
When the previous Under-Secretary of State for Social Security replied to the Second Reading debate on 4 June 1991, he said:I pledge to the House that we shall continue to listen carefully to sensible ideas for improving the Bill in Committee and its remaining stages. We shall honour our obligations to consult widely on the preparation and content of the regulations that will be occasioned by the Bill.The Bill relates to complex areas of social relationships, and we recognise that it would not be an easy task to get the Bill entirely right at the first attempt.That is why many of its procedural details have been framed in the form of regulations. Should we need to change any of those regulations in the light of experience, that can be done in such a way that it will not affect the Bill's primary purpose of putting children first."—[Official Report, 4 June 1991; Vol. 192, c. 242.]
Perusal of the Committee proceedings after that speech shows that there was a feeling that the Government had not listened, but, as is customary in the Committee Corridor, saw any challenge to the details of the Bill not as a helpful response—even from an Opposition who had welcomed the principle—but as a hostile act. Therefore, the opportunity was lost as the Bill passed through the House. The question now is whether the Minister will have the humility to make changes or the Act will fall into disrepute and the fine central aim of providing for children be lost.
What must he done? For a start, hon. Members and people in the country need some assurance that the hijacking of the Act by the Treasury will be resisted in future. Because of various events over the past few months, it is clear that the primary purpose of the Act—to provide for children—has taken second place to replacing Government money to lone parents on income support and family credit by absent parents' contributions.
If any hon. Member feels that that is an exaggeration, he should consider a number of facts. It is clear that, whatever lip service is paid to providing lone parents with help, the overriding priority has been to save the Exchequer money. Some £530 million is to be extracted from absent parents this financial year, yet only £50 million will find its way to care parents. That is quite a division of the spoils—which, according to the Minister's evidence in the Select Committee, will rise to £900 million within four years.
Further evidence emerged in July, when the Child Support Agency discovered from the first quarter's figures that, on assessments and, more importantly, benefit savings, it would have a massive shortfall. The Guardian reported a July strategy meeting and outlined what was subsequently confirmed as the new strategy. That consisted of three tactics—first, concentrating on middle-class 1010 fathers; secondly, maximising maintenance yield; and thirdly, that this was not the time for cases that should receive early attention.
I shall read specific statements made at the Select Committee, which the Committee accepted as genuine. The first is:staff of the Child Support Agency were being told to concentrate on extracting maintenance payments from middle-class fathers because the agency is in danger of failing to hit its first-year target of saving the taxpayer £530 million.The second is:The name of the game is maximising the maintenance yield—don't waste a lot of time on non-profitable stuff.The third is:This is not the time for the cases we know should get early attention but which will need a lot of effort to extract money.I ask the Minister to examine those statements and tell the House where the children or children's welfare is mentioned. Do those phrases and sentiments suggest concern for children, or a desperate attempt to meet financial targets imposed by the Treasury?
Take a look at the title proudly volunteered to the Select Committee and proudly given by the CSA to its July strategy—"closing the gap". Does that refer to a delicate attempt to redistribute money between partners while keeping an already damaged relationship together? I think not. It is more a case of bridging the gap between forecast and budget outcome at the Treasury's request.
Thirdly, only good taste, for which I am famed, prevents me from exploring the disgracefully insensitive performance-related salary awarded to the agency's director. Only continuing good taste prevents me from speculating on the part that that played in the panic July measures. Were the measures foisted on the director by the Treasury or the politicians, or were they the director's measures to protect her salary? What a disgraceful situation in which to place a public servant in such a delicate and sensitive area of public service work.
Lastly, there is confusion over who is being targeted by the agency. When the measure was first raised by Baroness Thatcher, it was in the context of errant fathers, as she so quaintly phrased it. Yet the priority spelled out by the director to the Select Committee suggested that the hunt for errant fathers had been dropped in favour of those absent parents who had already agreed maintenance payments and who were easy to find because of their sense of responsibility.
Days later, the Minister sought to assure the Select Committee that that was not the policy, but the leaked memo in The Guardian and the exigencies of the Treasury targets suggest that the easy target was being selected, above all for financial reasons, and that gave rise to the rush of letters from angry constituents complaining of that strategy.
There are good reasons for believing that the entirely acceptable principle in the Act has been pragmatically corrupted for financial reasons, and that should end before it brings further anger from the targeted responsible parents.
But even if that were to happen, a number of detailed matters require urgent action. A number are dealt with in the admirable Select Committee report published last week. I say "admirable", because it has many good suggestions, but it does not detail the maximum changes required; rather, it suggests the areas requiring urgent movement. 1011 The major matter requiring attention is the inflexibility of the calculations. The different amounts awarded by the courts were a major reason for the changed system. Because of that, flexibility seems to be regarded as something to be avoided at all times. The calculation for exempt income—that is, the amount that the absent parent requires for his or her essential expenses—is so rigid and limited that it will cause genuine problems in the short term and in the future.
Interestingly enough, the Select Committee suggested that the £8 disregard might be increased to £40, and that would be a welcome step for many parents who have been hit by that inflexibility.
The Select Committee lists a number of genuine items that are not taken into account—the cost of travel to work; the expense of visiting children or vice versa; the inescapable costs of caring for stepchildren; the parent-in-care element in the maintenance requirement; and fees for collection and assessment of child maintenance. Travel-to-work costs are important and can be a vital element in keeping the absent parent in work and so able to pay the benefit. That may be important, yet it is not permitted or seen as important enough to include in the formula.
Each of the points that I have outlined can be argued away, but if they are not taken into account, they can jeopardise the ability of the absent parent to contribute to the upkeep of the child. By not allowing for expenses connected with the parent visiting the children or vice versa, the formula can damage or even destroy the continuing relationship between the child and absent parent.
Then there is the human difficulty caused by hitting the absent parent with the result of the assessment without warning, without giving the parent any opportunity to adjust his finances and without any real regard for the second family. I should like to demonstrate this by giving some details of a family in Leeds. I have sent to the Prime Minister a copy of a letter that the family sent to me. It quietly spells out what, in the name of a good idea, but one administered soullessly and with no finesse, the Act is doing to ordinary, responsible citizens.
The man's marriage broke up 11 years ago. He handed over the house and a capital sum. He has continued for the past 11 years, on request, to buy clothes and presents and to pay for holidays, as well as paying a sum agreed by the county court. All those facts have been ignored by the CSA. Three years ago, before the Act was a twinkle in the Minister's eye—before it was introduced in the House—the man extended his mortgage. It is now £189 per month. The CSA will recognise £60 a month.
This August, before the assessment landed on the man's doormat, before he was even aware that he was being assessed, his partner, who works in her own right, agreed that, with her finances as they were, she could buy a car. They got a loan and she bought a car. When couple approached the CSA to say that they would no longer be able to afford the car, the CSA's advice was, "Sell it. The loan is not considered." The endowment mortgage will not be considered either. Among his essential housing costs which the CSA and the Act refuse to acknowledge is his 1012 community charge. It is not regarded as essential. If he does not pay, he will go to gaol, but to the CSA it is not an essential housing cost.
From that one individual's case, similar to so many throughout the country, I hope that someone in government recognises what the Government are doing to hardworking individuals who simply do not understand what is hitting them and why. The calculations may be correct; they may flow from an acceptable wish to see more paid to the child; but does no one understand the need to give people time to adjust their spending so that they can cope? Can no one in government understand the bitterness which is potentially generated in the second family as a result of the assessment landing on the doormat?
I sent the man's letter to the Prime Minister, asking specifically that he should not follow his usual and acceptable practice of passing the letter to the Department of Social Security for answer. I did not want a heartless defence of an insensitive Act. I felt that the Prime Minister should read the details himself and decide whether he could defend a machine that was getting dangerously out of control.
I do not know about the Minister's experience, but my experience over a long life—too long for my happiness—is that people spend up to their income. On my Member of Parliament's salary, I cannot understand how someone survives on £15,000. When I was on £15,000, I could not understand how someone could survive on £8,000. People tend to spend to their income. In fact, nowadays people tend to spend beyond their income. Against the background of that natural fact of life, do not the Government understand what the effect is when the agency makes an assessment so devastating in its financial consequences? Do they not understand the need for some phasing in?
Another change that would increase the chances of the Act being accepted is if the parent with care received a share of the extra money. Earlier, I gave the proportions that go to the state and parent. For every £11 that is gained from absent parents, £10 goes to the state and only £1 goes to the parent with care. Any money that is taken from the absent parent will only substitute for income support, and will probably lose that parent his or her passport to other benefits, such as school dinners. The Government could sensibly allow a financial disregard, which would improve resources for the child. The Australian system divides money raised from absent parents 50:50 between state and parent, and evidence suggests that carers and absent parents accept the arrangement in much better humour.
The Government must stop the retrospective attack on clean-break settlements. There is no logical reason why they cannot be computed, so the Government should stop their attack on people who acted in good faith in the past. It must now be accepted that this highly regarded method of keeping the parent with care and children in the family home in familiar circumstances, among friends and familiar neighbours and, probably most important, permitting the child to continue at the same school with their friends while the family goes through one of the most traumatic things that can happen to a family has been destroyed by the working of the Act.
The least that the Government can do, therefore, is overcome the lazy, unfeeling, bureaucratic opposition to making such settlements a financial factor for past awards. 1013 Even if they only draw a line before which clean-break settlements will be acceptable, at least they will keep good faith with people who have acted in extremely good faith.
I have attempted to outline briefly the difficulties that the Act is causing. I emphasise the central point: what is at issue is not the provision of further financial assistance to children but the inflexibility of the method, the lack of notice and the Government' s refusal to share money so that children gain a direct benefit.
I am grateful for your patience, Mr. Deputy Speaker, and for this opportunity, even at this terrible hour, to state the case for so many of my constituents who find themselves singled out for such heartless treatment. Their ordeal is being shared by many throughout the land. I welcome the opportunity of speaking quietly about their predicament. They—and, I fervently hope, someone in government—are listening.
§ Mr. Thomas Graham (Renfrew, West and Inverclyde)
I congratulate my hon. Friend the Member for Leeds, East (Mr. Mudie) on an excellent, well-researched speech. By raising the subject, he has done a tremendous service to men and families outside the House who are suffering from the Government's actions.
I do not speak quietly: I make no bones about it—I have never had a quiet voice. The other week, a man and woman came into my surgery with two kids. They are trying to do their best, but the Government are ploughing them into an early grave. They both broke down in front of me. If the Minister had seen that, it would have broken his heart. He would have seen two young kids grasping at their parents's legs, not understanding what was happening but breaking their hearts crying. My hon. Friend the Member for Paisley, South (Mr. McMaster) knows a little about the case because it is partly based in his constituency. I did not know what to do because I was heartbroken myself to see a family shrivel and nearly die before me because of the Child Support Agency and the way it hounds people for extra money. In this case, it is hounding a man who has been to court and agreed a payment and thought that that was the end of the matter. He has never run away from his commitment to his previous family. There was no question of his doing that, but he was at my surgery pleading for help.
I have written to the Minister and his Department about many such cases, so they are not new to him. I shall not cite all the similar examples but I will refresh the Minister's memory. In one case, the payment was set at £57.51 per week—let us not forget the 51 p—and was due to be paid from 22 October 1993. The Government's attitude is hilarious, especially when one thinks of the previous Cabinet, with which I shall deal in a moment. The man's average wage ranged from £87 to £174. I have a list of similar cases. The Government have the list, as has the CSA.
The case that I have cited is that of a man working overtime and doing all that he can to try to make a few bob while the CSA is trying to take £57 a week from him. It is crazy. The man came to see me, at his wits' end. He does not know whether to dive into the Tay or the Clyde or to stow away on a boat to another country—perhaps Yugoslavia, where he would probably receive more care and attention than the Government have given him.
1014 I remember when the previous Prime Minister said that we should pursue absent fathers. There is no question but that there was some sympathy for that view—no one wants to see a guy deserting his family without paying—but the harrying and hounding now taking place belongs to the Dark Ages.
It is like the Spanish Inquisition and the hunting of witches who were burnt at the stake. It is unbelievable. When I think of the Cabinet, I remember a great song that we have in Scotland called "Donald, Where's your Trousers?" This lot do not know how to keep their trousers on, with the result that they spend too much time fornicating in bloody London. The country has debts of £50 billion because this mob cannot run the country and they are now going to hound everyone to get money, but they are chasing men who have made commitments through the courts.
I deal now with the case that really gets to me. It concerns a man who wrote to me but who is not my constituent, although his father is. I do not want to say a great deal tonight, but I want the opportunity to read out a series of letters from one family. The Minister's people have the letter that I am about to read. It may not be the biggest heartbreaker that I have ever heard, but it goes straight to my heart and I hope that the Minister's head can fix it.
§ Mr. Gordon McMaster (Paisley, South)
My hon. Friend has hit on a very important point. Part of the problem is that the Minister does not see these letters, because as soon as they hit his desk he refers them to the executive agency and we cannot get a reply from him.
§ Mr. Graham
I am most grateful to my hon. Friend for that intervention. As he said, letters sent to the Prime Minister are passed on to someone else. I am beginning to wonder whether the Prime Minister has difficulty reading. Perhaps he should take a wee bit of time to read some of those letters; if he did, I am sure that some ministerial proposals would never reach Government level.
I hope that the Minister will accept that our constituents' words sometimes speak more clearly than fancy words or jargon. The letter that I received reads:I am writing from the above address which is my son's house, and on his behalf I would like to explain his problem.Basically it concerns the Child Support Agency. My son"—I shall not use the man's or the family's name —has been driven to despair by the worry it"—the Child Support Agency—is bringing.My constituent's father goes on:Two years ago his wife walked out with another man taking the two children. Although she is the guilty party I realise this cuts no ice with the CSA.However only the youngest boy … is his child, so in consultation with the DSS it was decided he would pay £20 per week for the one son. About four months ago the DSS allowed him to cut this to £10 per week on the grounds of his financial situation".His rent is £46 and his community charge £9 a week. Once he has paid for his light, heating, food and travelling expenses, he is left with nothing out of his £150 take-home pay.
The letter goes on:Now the CSA will be hounding him for about £40 per week and they want £44 administration costs and £66 for arranging for the money to be paid to his wife, which at the moment costs him nothing as he has the children (two boys) for approximately three days every fortnight. It used to be weekly but he had to cut it down owing to cost. He hands the money over fortnightly and 1015 gets her to sign for it. Incidentally, my son is asthmatic and pays £9 to £10 a time for his medicine. He is also being taxed as a single man. Everyone wants blood!Sorry to be so long winded but this is a horror story.I myself am a 72-year-old pensioner".
I shall not go into all the details, but the man goes on about how his son Dennis has changed his job to a firm in Port Glasgow to try to better himself financially. His father tries to help by running him to work, and so on. He works continental shifts. As the House will be able to imagine, it is almost impossible to co-ordinate buses and trains from Erskine to Port Glasgow. I represent the constituency and know the difficulties.
The man lists a catalogue of problems that his son has, concluding:The bottom line is if we give him our car or buy him a cheap banger he will not be able to run it because this CSA only allows rent, community charge and a small amount for food set against take home pay. Nothing is allowed for travelling, medicine, etc. In other words, it is persecuting reasonable fathers who are already paying what they can and also making them pay for the missing fathers who they do not aim to trace.The tragic result of this ill thought out and wicked scheme is that my son is seriously thinking that he may give up his work altogether and come to stay"—with his mum and dad, that is. The letter points out:at least he would have food and bed and less worry. What a future. And the CSA would get nothing.I imagine there must be a lot of other people in this position but I am hoping that you can air this situation in the House of Commons.When I have finished my speech, I will pass the letter to the Minister so that he will know about the case.
I replied to that letter and received another, which stated:Thank you for your two letters pertaining to my son's problems. Obviously you are trying hard to help him—much appreciated although it seems likely to be falling on deaf ears at the CSA, sorry the KGB".The man has taken to calling it the KGB. The letter continues:Time is running out for Dennis, they want £41.50 weekly from him, so leaving him £11.50 a week to feed himself and buy essentials for the house.As a last resort, he will pack in his job and condemn himself to years on the dole …I received a letter from the man's son, and it is heart breaking. I shall pass those letters to the Minister.
This situation is arising because of the Government's mismanagement of the economy. They are driving folk to an early grave. Men who have made a commitment in court are easy targets and the attitude is, "Let's chase them." The Government must stop this hounding and harrowing and must direct the CSA to do its job properly. It must not take the easy option of trying to take £531 million from such people. If the Government continue in this way, it will cost much more.
What will happen if these folk go unemployed or go underground? Who will pick up the tab if that happens? It will be the ratepayer and the taxpayer. Once again, this bankrupt Government's policies will drive us into insane situations. These men and women are not hiding from the system: they have been exposed to it and it is burying them. The Minister must listen to us when we raise these cases and give us a reply that will give these folk some hope that they can live from day to day without thinking of putting their head in an oven.
If the Government do not listen, they will reap the bitter harvest of many parents abandoning all hope. I do not think 1016 that the Government's purpose was to see men and women abandoning hope and children denied loving parents, even though those parents are separated. Surely that is not what the agency is about.
§ Mr. Tim Devlin (Stockton, South)
On Saturday, I conducted one of the largest surgeries that I can remember since becoming a Member of Parliament. When I turned up with my list of people whom I had to see, I was surprised to find that fully one third of them would complain about the Child Support Agency. All those people were already paying maintenance and were in respectable occupations. They were police officers, special constables, local government officers and skilled workers in local industries —people who had a stake in society and who were working hard and doing their best to make ends meet. On the figures that they gave, they seemed to be faced with highly unreasonable demands from the CSA.
When I voted for the Child Support Act 1991, it was on the basis that we would pursue the three quarters of fathers who make no contribution whatever to the welfare of their children. I have seen the figures in the brief, but it appears that the agency is first going after those who made a contribution or are making continuing contributions. The agency is not making a distinction between cases in which a court has made a settlement of a one-off payment of equity in a house or the full value of a house or a lump sum, pension arrangement or contribution from bonuses, clothing and so on, and other types of case.
We are seeing the implementation of a purely mechanistic approach to the problem of obtaining maintenance payments from fathers. The automaticity of the mechanism is causing great concern. Some women are seriously thinking of leaving their husbands because they had a son or daughter in a previous marriage, and their children are now being prejudiced by the possible outcome of an assessment given over the telephone by a junior official in the Child Support Agency. That official may show absolutely no sympathy for the way in which current arrangements have been fixed and may say that no transitional arrangements are possible.
As the hon. Member for Leeds, East (Mr. Mudie) said, there are no transitional arrangements or allowances to help people to readjust to their circumstances. Worse, people may even be asked to contribute a lump sum in back payments from a date specified by the agency, without any reference to those concerned.
When I had seen the eight or nine people who came to see me about that problem last Saturday, I did not realise that I would have an opportunity to raise the matter in the House so soon. I must tell my hon. Friend the Minister that all the people whom I saw on Saturday professed—I believe them—to be Conservative voters. They are all people who had previously seen our party as the party which would track down the feckless and chase up the people who make no contribution. Yet they now find themselves in the peculiar position of being faced with bills that they simply cannot pay.
The formula being applied does not take account of everyday payments that we all have to make, such as council tax, telephone bills, bills for lighting and heating, and other fixed costs that we all normally have to pick up in our everyday lives. The only payments taken into account are mortgage payments. Of course, many people 1017 have taken on mortgages, thinking themselves safe in the knowledge that, having settled a one-off arrangement with their first wives, they no longer have to make a greater contribution than that fixed by the court. I was interested to hear that when one of the first cases went back to the court recently, the court, which has a much great discretion than Child Support Agency officials, refixed the original maintenance payments. That must have been possible because the court had the inherent ability to be much more flexible and to take into account the individual case. I do not say that the agency is therefore a bad thing; I believe that it is a good thing, and should be supported. But it needs to be more flexibile and to take more account of individual circumstances. That is not what it is doing at the moment.
Another aspect that we should consider is the idea of a transitional arrangement to help people to readjust. Allied to that is the £44 administration cost that one has to pay when first assessed. If the assessment is wrong and one wants to be reassessed, one has to pay another £44; if one's circumstances change again and one needs to be reassessed again, one has to pay another—
§ Mr. Devlin
That is what I have been told is being said to fathers in my constituency by the agency officials. If that is not true, I should be grateful if my hon. Friend, who knows a great deal about the subject, would put that fact on the record so that I can direct agency officials to his answer as a piece of guidance.
§ Mr. Graham
I can help the hon. Gentleman there. I have a list of all the stuff that was sent out that proves that he is right and that people do have to pay the money.
§ Mr. Devlin
That is what I am told and that certainly seemed to be what was happening to the nine or so people whom I saw on Saturday.
Finally, I shall draw the attention of the House to the mechanism for cutting the benefit of mothers who refuse to name the father of their child, if they know who the father is. Several people have told me that here have been cases in which the father refunds the cut—it is about £8 a week —to the mother on the understanding that she will not name him. I do not know what can be done to tackle that practice, but I consider it to be a straightforward social security fraud, on which we must crack down. I do not want the Child Support Agency to have to behave like the Spanish inquisition, or any of the other organisations that have been cited, but it is important that we gain some contribution from fathers who desert their children or who, for one reason or another, are separated from them.
That people should make some contribution for their children is a question of individual responsibility. An urgent review of the work of the agency should be carried out to ensure that greater flexibility is shown in individual circumstances, so that an equitable solution is arrived at in each case.
§ Mr. Gordon McMaster (Paisley, South)
I congratulate all the hon. Members who have spoken in this important debate. They have all said much the same thing and I do not apologise for the fact that I will do the same. 1018 We have all identified the problems that have been revealed to us daily at our surgeries, constituency offices and in messages sent to the House.
In common with those who have spoken, I nail my colours to the mast in support of the good principle behind the Child Support Agency. If the 1991 Act was designed to make parents who have separated take joint responsibility for their children, it has singularly failed in that objective. More and more people have reached the conclusion that that is not the purpose of the Act. They believe that it is Treasury driven.
The Child Support Agency is not closing the gap between separated families but widening the gulf between them. It is common for people to tell hon. Members that, prior to the establishment of the agency, they had enjoyed quite amicable relations with their estranged partners. Now those estranged partners are at each other's throats and are contemplating all sorts of legal actions against one and another—all because of that agency.
I wrote to the Minister about the policy behind the Child Support Agency. I resent the fact that he referred my letter to a paid official of an executive agency, who then wrote to tell me about that policy. I knew what that policy was when I wrote to the Minister in the first place. I wanted to get the Minister to listen and to change it. When I intervened earlier, I said that I was worried that letters that hit the Minister's desk were transferred immediately to those in the executive agency. If that is not the case, I should like the Minister to reply to a specific question. How do I get to him? How do I get a constituency case to him, so that he intervenes rather than merely refers it to the chief executive of the agency?
I could highlight many cases that reveal the problems caused by the Child Support Agency, but I will quote just two that happen to spring to mind. A consultant who lives near me, and who works in a hospital in the constituency of my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham), has married for the second time. He and his second wife have reasonably good incomes. They had planned to have a second family, but he now finds that his first wife, who had never made contact with the agency, is now challenging the support that he provides. That support is the subject of an assessment. That consultant, who uses his great expertise and skills in a hospital, has told me that if he took into account housing benefit and all the other benefits to which he might be entitled were he out of work, he might be marginally better off it he gave up the ghost. I will tell the House why in a moment.
The second case concerns a man whom I happen to have known for a long time. He and his wife became estranged because his wife suffers from an alcohol-related problem, which she is trying to overcome. When they separated, his wife moved into a home that she had inherited from a relative, so it was paid for. The husband paid the mortgage and has discharged, or is discharging, all the other debts. Now, he is worrying whether, by paying so much money to his wife, he is giving her the most appropriate support, given her alcohol problem. That is also the advice that he is getting from the clinic that she attends. I know that such cases are hard to regulate, and that is why all hon. Members have spoken of the need for flexibility and a bit of common sense.
I am already spoken of my concern about the referrals of our letters to the executive agency. If the Minister saw the volume of cases that come across all our desks—I 1019 assume that it is all 651 desks—he would see the common thread of that demand for flexibility. We could all quote dozens of agencies, all mirror images of each other, and all the tales of misery and woe. This should not be overstated or said glibly, but, in letters and face to face, people tell us that they have never been so distraught and despondent and they feel like giving up jobs. They even talk about suicide. The reason for all this misery is not financial but the children, and the emotional link with them.
All hon. Members who have spoken have referred to those who are being chased. I heard the Minister say on television some weeks ago—he may have changed his view now, and I hope that he has—that there was no truth in the allegation that the CSA was chasing those most easily chased. I should like an answer on that because it seems that those most easily fingered are the ones getting fingered. That is fairly common; it is not unique to the CSA. For example, I know that the only performance measurement for the new PACT teams in the Department of Employment, which assist in the employment of disabled people, is volume of cases. Therefore, they tend to go for cases that are most easily chased. The same principle is being applied here.
There are several common threads, of which the first is inflexibility. Property and discharged debts are not taken into account when an assessment is made. The second problem is access, when estranged couples live many miles apart. If this policy is about building family ties and making parents take responsibility for their children, why deny fathers or mothers the money that it takes to give them access to children who live many miles away? That is happening in many cases.
Another factor that has not been taken into account is second families. Many people who have come to my surgery have said that they cannot provide properly for their second families. The hon. Member for Stockton, South (Mr. Devlin) made a valid point for his constituency, although not for mine, when he said that the people coming to him are Conservative voters. If I were sitting in the Minister's position, I would think that it was bad politics to pursue the policy in that way, because the people whom he is most likely to damage are those who are most likely to support him. Not only is the whole scheme fundamentally flawed but the Minister is targeting his own people. Let me assure him that they are fast moving over to our side of the argument.
We have all pleaded not for the principle to be done away with but for an amendment to the Act to make it work more sensibly. The Government have taken a very good principle and discredited it.
§ 4.4 am
§ Mr. Adam Ingram (East Kilbride)
I congratulate my hon. Friend the Member for Leeds, East (Mr. Mudie) on obtaining this debate. I also congratulate him on his appointment to the Public Accounts Committee. His speech tonight showed why he was given that appointment and I am sure that he will prove to be a valuable member of the Committee.
We cannot doubt the importance of the issue raised by my hon. Friend. It is unlikely that any hon. Member—even the Prime Minister—has not received representations on the subject. It is probable that all those representations 1020 have been critical of the Child Support Act, and, in opening the debate, my hon. Friend articulated those criticisms accurately.
In his inimitable way, my hon. Friend the Member for Renfrew, West and Inverclyde (Mr. Graham) spelt out what he knew to be happening to his constituents, from his experience. My hon. Friend the Member for Paisley, South (Mr. McMaster) re-emphasised many of the points made by my hon. Friend the Member for Leeds, East. I am almost inclined to call the hon. Member for Stockton, South (Mr. Devlin) an hon. Friend tonight, but if I were to go through the litany of all the Conservative Members who have criticised the Act, we should be short of time—even with an hour and a half. I shall confine myself to saying that all the Back-Bench contributions have restated many of the trenchant criticisms made of the legislation since its enactment.
I am sure that the nation will not be listening now, in the wee small hours; however, what has been said in the debate so far—and, more important, what the Minister will say later—will be scrutinised carefully by all the families and individuals who have been adversely affected by the Act. We must all remember the people—many of them on low incomes, with high outgoings—who have been asked to pay under the provisions of the Act.
As I have said, hon. Members have made trenchant criticisms of the Act and it has been subject to many detailed criticisms in the House and elsewhere. No one is arguing that its underlying principles are unsound. No one is arguing that there is no need for absent parents—to use the terminology used by the agency—to contribute to the upkeep of their children. No one is arguing that those absent parents should be allowed to walk away from their responsibilities.
What is being said—the Government appear not to be listening—is that the application of the Child Support Act is too inflexible and rigid. It does not take proper account of the impact of the high assessments on absent parents, many of whom care deeply about the children from whom they are separated. Perhaps we could change the terminology to "separated parents" rather than "absent parents"—the current language deeply hurts many parents who contribute to families with whom they are no longer involved. The term "absent parent" is a form of criticism which is not justified.
During Social Security questions on 6 December, the Under-Secretary of State, replying to one of his hon. Friends—incidentally another who was critical of the Act —said:Today has been a good day for the Child Support Agency". —[Official Report, 6 December 1993; Vol. 234, c. 12.]
Clearly, he thought that the agency had been given an early Christmas present. I ask him, in his reply, to elaborate on what he meant by that statement. Why was 6 December a good day for the Child Support Agency?
One interpretation placed on his statement was that he was overjoyed by the conclusions and recommendations of the Select Committee on Social Security and that somehow he had been let off the hook. Was he really implying that nothing substantial needed to be done to amend the working of the Act? If that is what he was saying, it will be a great disappointment to his hon. Friends who are looking for quick action from the Government.
I am sure that the many thousands of complainants who have been subjected to the workings of the Act will not share his joy, either on 6 December or subsequently. They 1021 will not claim that it was a good day for them. It will not do for the Minister to seek to sweep away the many criticisms of the Act in such a flippant and complacent way.
It is interesting to note that in a written answer, also on 6 December, the Minister said:The Child Support Agency is still very new, but it has made a determined start on its important task of ensuring that more children receive more maintenance, more reliably."—[Official Report, 6 December 1993; Vol. 234, c. 108.]I am sure that everyone agrees that the agency has made a determined start. If it had not made such a determined start, I do not think that the debate would be taking place. Is the Minister really claiming that more children receive more maintenance, more reliably, because of the Act? Where is the evidence for that? Surely it would have been more honest for the Minister to say that it will be the Treasury that will receive more money more quickly, not the children.
Mention has been made of the findings and recommendations of the Select Committee. Time does not permit me to go into the details of those recommendations. I have no doubt that the House will return to that report at a later stage. The debate will not go away after tonight. The Committee's recommendations are to be welcomed. They are a useful beginning on which to base subsequent amendments to the Act. I do not think that I will offend my hon. Friends who served on the Committee if I say that although the report is a useful beginning, it does not go far enough. More needs to be done if we are to bring about meaningful and acceptable changes to the legislation. What must be recognised is that the responsibility for change lies with the Government, not the Select Committee. It will not do for the Government to pick up and implement only the less radical options in the Select Committee report. They must look beyond the report.
If the Minister really believes that children will receive more maintenance, more reliably, he must change the Act to introduce a disregard for parents with care so that the children of parents on income support receive some of the cash from the increased maintenance obtained from the separated parent.
Do the Government mean to take account of the fundamental criticisms that have been made of the Act on both sides of the House about, for example the need for transitional payment arrangements and clean break settlements? I want to draw the attention of the House to the Government's Green Paper on the new divorce procedures. Paragraph 7.31, under the heading "How would the Child Support Agency and mediation fit together?" says:The Child Support Act will considerably simplify the calculation of child maintenance because the same formula for assessment is used in all cases. The formula takes account of each parent's income and essential outgoings at the time of assessment and, because it deals with the financial consequences of any property transfer, takes account of the practical outcome of 'clean break' settlements.I am not sure that the Government know what is going on. One document says that clean break settlements are taken into account, whereas the Minister welcomed the fact that the Select Committee said that an easy solution could not be found to clean break settlements. Will the Minister explain that contradiction?
I was going through a list of the fundamental criticisms that have been made of the Act. Other areas that hon. Members have asked to be taken into account, on the basis of representations from constituents, include travel to work 1022 costs, travel for access to children costs, costs of looking after children during holidays and at weekends and, at this time of the year, the additional cost of Christmas and presents for the children.
If the Government are serious about taking those issues on board, they must build into the assessment process a more flexible approach by introducing a new system that allows discretion to review decisions by officers and, within a reformed appeals system, to grant a departure from the standard financial formula. I am sure that the Minister is only too well aware that the Child Support Agency has been re-christened the "Treasury Support Agency". That phrase will continue to haunt him and the Government until something substantial is done about it.
As we are at Christmas time, when financial pressures are at their greatest on all families, the best Christmas present that the Minister can give to children in families affected by the Act is a commitment to their parents to undertake serious consideration of the points so eloquently argued by my hon. Friend the Member for Leeds, East. Nothing less will do.
§ The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt)
I begin by echoing the congratulations of all Members who have spoken to the hon. Member for Leeds, East (Mr. Mudie) on securing this debate and I thank him for the way in which he put his points. No lack of concern was shown by him or by any of the hon. Members who have spoken, and I appreciate how they have all put their cases in a variety of different styles, reflecting the worries that they have experienced. I also thank my hon. Friend the Member for Stockton, South (Mr. Devlin) for his contribution.
All hon. Members have made a number of valuable comments, to which I shall come shortly. First, I will say a few words about some of the fundamental principles of the scheme, to which everyone who has spoken in the debate has signed up, although what they have said has sometimes belied that. Those principles also have the unequivocal support of the Select Committee on Social Security. The hon. Member for East Kilbride (Mr. Ingram) is right. The day in question was devoted to social security questions; it was also the day of the report's publication. The significance of that was simply that a number of the criticisms directed at the Child Support Agency, which have been specifically raised again tonight, were dealt with by the Select Committee. I note what the hon. Gentleman said, but, because the Select Committee did not back some of those criticisms, he seems to want to pick and choose what the Select Committee said and did. I shall deal with all the Select Committee's criticisms and recommendations. I accept what it said it terms of showing us some of the directions in which it would like to go in the future, but some specific points of principle must then be carried through into action and legislation to see the consequences, to which the Committee also referred.
Some of the issues mentioned tonight and the criticisms made outside do not take that step. They pay lip service to the principles, but where the principles bite it is a different matter. That is a hard issue and I shall try to deal with its nub as best I can.
The main aim of the Child Support Agency is to obtain more maintenance more reliably for more children and improve on a discretionary court-based system that had 1023 failed to stem a decline in the payment of maintenance. The scheme is designed to ensure that, where they can afford to do so, parents take responsibility for maintaining their own children. It is not right that taxpayers, many of whom are bringing up children of their own, should be asked to foot the bill.
The principle, which is not new, was strongly endorsed by the Select Committee, and widely welcomed by Members of all parties and by the relevant lobby groups when the child support proposals were first discussed in 1990. The need for a change from the previous system was adequately illustrated by the fact that, before 1991, fewer than one third of lone parents received maintenance from the absent parent. By 1997, our aim is to have increased that proportion to half.
That is how more children will receive more maintenance, more reliably. Research shows that many lone parents currently receiving income support want to enter employment.
§ Mr. Burt
I will deal with the Treasury in a moment.
Recently, the CSA received much coverage in the press, as it did in the business of the House. Much of the media coverage was less than even handed, with the majority of commentators concentrating on the plight of absent parents. Little attention is paid to the substantial benefits for children derived from regular maintenance payments. I am grateful to the Social Security Select Committee for highlighting that particular point.
We always knew, and made no secret of the fact, that the new scheme was expected to increase the amount of maintenance paid by absent parents. That was made clear in the White Paper, in debates on the Child Support Act 1991 and regulations and on numerous other occasions —and that point was endorsed by the Select Committee, which concluded that it is right for the Government to increase the level of financial support paid in respect of children.
We realised that absent parents would express concern about the amounts that they would be required to pay—and we are seeing that concern as the agency's assessments begin to take effect. I emphasise, however, that although absent parents are asked to pay more, many parents with care are now receiving realistic amounts of maintenance for the first time.
A point often overlooked is that many of those absent parents, albeit often unknowingly, made settlements that involved any maintenance that they paid being supplemented by the taxpayer. It is clearly desirable that those absent parents who can afford to do so should make a more realistic contribution towards the cost of maintaining their children and relieve the taxpayer of an unnecessary burden. I hope that all right hon. and hon. Members support that 1024 view. It is only to be expected that some absent parents who in the past paid little or no child maintenance will not welcome being made to pay more.
The amount of maintenance is determined by a formula that was extensively discussed inside and outside Parliament and put into legislation. The purpose of the standard formula is to help eradicate many of the inconsistencies that prevailed under the discretionary court system. I am pleased that the Select Committee remains convinced that a formula-based approach that will produce consistent results is the right one.
An important point invariably overlooked by the media is that the formula ensures that both parents, where they can afford to do so, contribute to the maintenance of their child and that both parents are subject to the formula calculation, if they have sufficient income. To that end, the formula is redressing the balance between the relative incomes of parents with care and absent parents.
Incidentally, the terminology is not meant to be in any way critical. It has been around for five years and merely differentiates between the parent with physical care of the child the majority of the time and the parent who is physically absent the majority of the time. The word "absent" does not mean errant and should not be taken to mean that.
All too often in the past, parents with care lived. at benefit levels while absent parents were able to remain comparatively better off. It is significant that more than 96 per cent. of cases currently on the agency's books concern parents with care and children with benefit. Not one hon. Member who spoke tonight mentioned that in almost every absent parent case cited it is highly likely that the parent with care is on benefit. It is worth emphasising that the majority of absent parents will be left with 70 to 85 per cent. of their net income after paying maintenance, and those with low incomes will usually be left with an even higher percentage.
I am glad to say that we are now seeing some sections of the media beginning to explore the other side of the equation and present a more balanced picture so that the public can see some of the true benefits to children that are being derived from the scheme. I hope that others will follow suit.
I recognise that, despite support for the principle, people have genuine concerns about how the detail of the scheme has affected them. I have undertaken to examine those concerns—as have my right hon. Friends the Prime Minister and the Secretary of State—and I am closely examining the specific recommendations of the Select Committee. However, I share the Committee's concerns and in my deliberations I shall be weighing carefully the potential gains to absent parents against any adverse effects on parents with care. I will not delay in my considerations. I am treating the matter with urgency, but I will not allow myself to be railroaded into hasty decisions.
I shall deal with some of the specific issues that have been raised and start at the heart of the matter. It is important that I refer to the Select Committee's work. Paragraphs 16 and 17 of the Committee's report deal with basic issues. I shall read from the report because the issues are important. The report states:In our previous reports we stated our belief that the system of maintenance for children was long overdue for improvement. We continue to take the view that it is right that parents of children should provide realistic financial support for their children wherever possible, and we also consider it right that the 1025 costs to the taxpayer, which may be caused when families split leaving one partner to bring up children on a low income, should be reduced where possible.That is the view, not of the Government, but of the Select Committee. It recognised the taxpayer's position. The report continued:The aim of the Child Support Act was to increase the level of child maintenance paid by parents, and it is to a degree inevitable that there will be protests from those who are asked to contribute more. While we place on record our immediate concerns about certain aspects of the operation of the new child support arrangements in this report, it is notable that a very large group has been left almost unheard in the present debate"—
and in tonight's. The report continued:A small proportion of the letters we received came from women who supported the objectives of the Act. One woman wrote:'As a single mother who receives no maintenance from the father of her child I was pleased and relieved when the Child Support Agency was set up. I am at present living on Income Support after having to give up work when my son was born because I could not afford child care. I thought the CSA would ensure that I received enough maintenance to enable me to afford the child care I need for my pre-school child so that I could return to work'.Another woman asked us not to be unduly influenced by the representations of one group:'Please don't allow the well-orchestrated babble of complaints from aggrieved men to persuade you that the parent who leaves his (or her) children is entitled to turn his (or her) back on them.'.We have kept these views in mind during our short inquiry.
We have talked at length about real people and I accept that hon. Members have made their points firmly and raised real cases, but there is another side to the coin to which they have rarely turned their minds tonight. The members of the Select Committee did not turn their minds from that side of the argument, and the Government have not done so either.
§ Mr. Mudie
Does the Minister agree that the Select Committee positively recommended changes to everything but the clean-break settlement? Despite the fact that the Minister has plucked those two paragraphs from the report, the Select Committee—with the exception of one Labour Member—voted solidly for changes in everything other than the clean-break settlement.
§ Mr. Burt
I shall come to that, and I have plucked out more paragraphs from the report. The Select Committee certainly made recommendations that I have undertaken to consider. However, the Select Committee has referred not to fundamental issues of principle, but to amendments to the basic structure of the Act that they supported. I am not certain that it necessarily follows from everything that hon. Members have said tonight that they understand how the principles apply and the fact that they will cause some degree of upset as they begin to work.
I have a quote from a woman who was not interviewed for the "World in Action" programme, but who put her case well to a journalist from The Sunday Times. She said:In the past, when I was working and desperate for money, the courts used to listen to the fathers' excuses about why they couldn't afford to pay, and women got a pittance. The CSA seems like a good thing, and I just wish it had been there for me.[Interruption.] The hon. Member for Barnsley, Central (Mr. Illsley) is laughing. I did not laugh at the stories told by Labour Members tonight about the real concerns of some of their constituents. I do not expect them to laugh when they hear about the other side of the coin, which is all too rarely put. We must not be nostalgic for what the court system was—[Interruption.] The hon. Member for Barnsley, Central asks me to reveal a particular name. I 1026 will not do so, but if he looks atThe Sunday Times of 21 November he will see the article written by Liz Lightfoot about the "World in Action" programme in which she gives names.
Hon. Members tonight again raised the question of targeting payers. I have to say that it is not correct to allege that the agency is concentrating on absent parents who are already paying maintenance, to the exclusion of others. We have always made it clear that all types of case will be dealt with. In fact, in its first year the agency will have devoted considerable effort to cases where little or no maintenance has been paid in the past.
The agency has also had considerable early success in finding missing absent parents—those parents who have shirked their responsibilities and, in many cases, disappeared without trace. In the cases completed so far, there is a 90 per cent. success record in tracing those difficult cases which in the past would simply have disappeared. Again, that fact is not given much prominence.
This year the agency expects to deal with just over 1 million cases, of which almost 640,000 will involve absent parents who do not currently pay any maintenance. It is so important to get the balance right. I recognise the concern about the take-on of cases where people are already paying. However, other cases are being taken on and I hope that hon. Members recognise that.
The complaint was made again tonight that the CSA benefits only the Treasury. I see nothing wrong with the allegation that a sizeable proportion of the maintenance will relieve the burden on the taxpayer. The question that we should ask is not whether we should have introduced an Act to save the taxpayer money, but whether the taxpayer should have been involved in the first place. Where the absent parent can afford to pay, the answer must be no.
That principle was strongly endorsed in the report of the Social Security Select Committee, which reaffirmed that one of the main driving forces behind the reform of the child maintenance system was to return financial responsibility for children from the social security system to absent parents. Again, if we believe in the principle, we have to believe in the action that will put the principle into practice. I am not entirely certain that the House is, as yet, prepared to accept that.
I quote again from the Select Committee report. Paragraph 18 states:A large part of the public debate about the Child Support Agency has centred on the accusation that it was picking unfairly on 'soft targets', that is, those absent parents who were already making maintenance payments. Behind this accusation has been an allegation that the Agency's work is governed by the requirement to make substantial savings in the social security budget. We believe this objective to be an important one. The Committee believes that taxpayers have for too long been asked, in effect, to pick up maintenance bills that should have been met by absent parents.The committee read the letters sent to it and understood the feelings behind them, but it still backed the principle that this House previously endorsed—that the taxpayer has an interest and that it is legitimate for the agency to reflect that and to do something about it. I believe that hon. Members should do the same.
The hon. Member for Leeds, East referred to the closing the gap initiative. It was always expected that there would be a gradual build-up in performance as the agency is a new organisation operating new legislation and procedures with new staff. We were also aware that the level of 1027 information needed before an assessment could be completed meant that there would be a period of time between the issue of an application form and the completion of an assessment. Nevertheless, at the end of June the agency concluded that the numbers of cases being cleared were relatively low and inconsistent with the planned six to 12 weeks clearance time for straightforward cases. It therefore decided to use its locally based staff to deal with the early stages of the processing of applications where the parent with care was claiming or receiving income support.
That exercise, the transfer of work between agency centres and the field, with the resulting amendments to procedures, became known as the closing the gap project. The project was also charged with considering any procedural simplifications for the agency which would speed up the processing of cases. It should be remembered that the speeding up of the process enables the parent caring for the child to receive money earlier.
The closing the gap project has made a big impact on agency performance. In the four months to the end of October, the agency's productivity increased significantly as a result of that initiative. In the second quarter of the financial year, by comparison with the first, agency staff issued two and a half times as many application forms and more than three times as many maintenance inquiry forms to absent parents and completed eight times as many assessments.
The oft-quoted document that the hon. Gentleman mentioned refers to the view of one member of staff who was clearly unprepared for major change. The great majority of the agency's staff welcomed the changes brought about by the closing the gap project. They had always wanted to be more involved in the basic processing, 1028 and the project gave them the opportunity. They have made a significant contribution to the big increase in productivity that has been achieved as a result of the initiative.
I would need an hour to say all that I have to say, but, alas, I do not have that amount of time. A common concern raised by hon. Members tonight has been raised by others, including the Select Committee, and that relates to the assessment formula and how it takes account of specific expenses, such as existing debts or the cost of travel to work and contact with children. We believe that the formula makes provision for essential living expenses and, additionally, absent parents are left with a significant proportion of their net income after paying maintenance.
We do not think it right to allow for specific expenses in the formula, as that gives them precedence over the basic needs of the children. The Select Committee correctly realised that to make provision for a shopping list of essential expenses would push child maintenance further and further down the priority order. The ultimate result would be a return to the unrealistically low sums that were common under the previous system.
I recognise that the Select Committee, in endorsing the principles behind the agency, made recommendations on phasing and on trying to ensure that protected income would be larger to cover some of the issues raised by hon. Members tonight. We have those matters very much in mind. I cannot tell the House tonight what conclusion we have come to, but I hope that some of the things that I have said tonight will be helpful.
I recognise the pain that hon. Members experience when they speak to their constituents. I have the same experience with my own constituents. We will consider carefully what is to be done. We should not underestimate the difficulties of the previous system, the decline in the payment of maintenance and the failure to provide decent maintenance for many children—