Child Support Agency

HC Deb 26 May 1994 vol 244 cc439-48

11 am

Mr. David Tredinnick (Bosworth)

If George Orwell were alive today and looking for a sequel to "1984", I suspect he would have based it on the Child Support Agency. Here we have an agency just one year old, set up with the best possible intentions to make mainly absent fathers responsible for their offspring, but something has clearly gone wrong. Is it because, as has been suggested, it seeks arrogantly to impose one social rule on millions of unconnected lives, thereby unleashing the law of unintended consequences, or is it something else?

In today's debate, for which I am very grateful, I hope to explore some of the issues and I hope to offer my hon. Friend the Minister some constructive criticism. However, it must be said that, unlike the governance imposed in Orwell's book "1984", the CSA was not imposed on a reluctant people; rather, it was introduced with widespread support both in the House and outside.

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt)

indicated assent.

Mr. Tredinnick

My hon. Friend the Under-Secretary of State nods in agreement.

The principle of the Bill had cross-party support. For example, on Second Reading, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) said: The concept behind the Bill—which is that parents should be responsible for their children's maintenance—is entirely unexceptional. It is only right and proper that we should support it. No father should escape his responsibilities."—[Official Report, 4 June 1991; Vol. 192, c. 211.] The hon. Member for Eccles (Miss Lestor), speaking for the official Opposition and summing up for the Labour party, said: Nobody has objected to the principle, which is, wherever possible, to make parents financially responsible for their children."—[Official Report, 4 June 1991; Vol. 192, c. 234.] The Bill was not opposed on Second or Third Reading, although, in fairness to the Opposition, I should say that there was a reasoned amendment.

My hon. Friend the Minister has the task of making the best of the CSA within the constraints of the current law, and, I hope, in due course of bringing before the House proposals to improve it.

My right hon. Friend the Prime Minister has stated his commitment to keep the Act under review, and that has been widely welcomed, but it is my hon. Friend who has one hand superglued to the poisoned chalice while the other fends off a multitude of complaints. I intend to be constructive, and hope to offer my hon. Friend some antidotes for his cup.

Before I proceed, I should like to welcome my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby), who will also be contributing to the debate.

There are four main areas of concern. The first is the general competence of the CSA office, and the way in which it is administering the current law. The second is the quite clearly demonstrated failure of the current assessment formula to take into consideration what it needs to take into consideration when making these assessments. The third is the CSA resources devoted to checking absent parents' returns. Are we satisfied that the CSA checks returns that are sent, properly to ensure that the minimum amount of fraud and disinformation is absorbed? Fourthly, are we happy with the review procedure?

Half my advice bureau cases relate to the CSA. I currently have 65 cases under review. The general competence of the CSA has been called into question before. It is with some regret that I say that the agency, despite no doubt some very fair efforts to do the right thing, is failing in some respects.

In one case, the details of an absent parent's pay and income were sent to his ex-wife. Confidential details of the absent parent's pay and finance should not be revealed in that way. It is for the agency to make the assessment.

Secondly, there is the failure of the agency to liaise properly with the courts. I have a difficult case with a constituent, Mr. Ault. The CSA failed to inform the court that it had taken over his case, and he has received bills from both the court and the CSA. He is angry and worried about that, and I am trying to sort it out. It has been a problem for him, because he has had a poor response to his reasonable request that one of those payments should be annulled.

Thirdly, there are still problems with the application forms, due to their complexity. My constituent writes: I have an IQ of 147 and I struggled with the forms. God only knows how educationally disadvantaged people cope with them.". He has a point. They are not that simple.

Fourthly, there is the failure of the CSA to acknowledge change of address of absent parents. It should not be too difficult to sort out that administrative muddle, but it has led to the imposition of the so-called interim maintenance assessment, which is rather like a bank surcharge for having an overdraft which has not been approved. People are getting huge assessments which are very frightening. The agency has to look out for that.

Fifthly, there is the failure to make special allowance for those working abroad, on sabbaticals or even on a long holiday. Interim assessments have been issued when, for example, an insurance salesman or a salesman in industry is on a long visit overseas. The sensitivity with which the agency addresses such cases should be reviewed.

Sixthly, there is unacceptable delay in assessing the forms. My constituent Mrs. Hollis had to wait from September 1993 to May 1994 for her ex-husband's form to be assessed before receiving maintenance. In the meantime, she received only income support.

The helpline response is also inadequate. I had a complaint from a constituent who said that he has tried to telephone the agency in Belfast; he is put on hold and simply cannot get through. It is costing him a fortune in long-distance calls. Is it right that so few resources have been put into the helpline, when so many assessments are going out?

I am not convinced that the agency is administering itself properly at the moment. Quite an interesting, well-publicised case involving agency employees has been in the papers recently. I should have thought that the management would have done well to keep that out of the courts and in-house. It does not reflect very well on the way in which the agency looks after its employees.

The key problem at the moment is the need for a revised assessment formula.

Mr. David Nicholson (Taunton)

Hear, hear.

Mr. Tredinnick

My hon. Friend the Member for Taunton (Mr. Nicholson) agrees with me. The current formula is absolutely unacceptable.

Some 95 per cent. of the cases with which I deal concern absent fathers, and I believe that the assessments made are grossly unfair. Having seen those fathers in my advice surgeries, I am convinced that most of them want to love and care for their children by their first marriages, but they see the so-called protected income as quite unrealistic, because their essential living costs are grossly underestimated.

What are the essential living costs that the CSA does not take into consideration? They include bank loan repayments, mortgage protection and house insurance, the general debts resulting from the separation and, most important, the cost of visiting the children. I have a constituent whose children live in the Isle of Wight. He wants to visit them, but cannot afford to do so. Nor can fathers generally afford to send train tickets to the children to come to visit them. There is also the cost of telephone calls and car travel.

Many parents want to buy clothes for their children. Indeed, one of the nicest things a father or mother can do is to buy their children some clothes. That cost is not taken into account. What about gifts? A bicycle now costs more than £100; surely that should be taken into account.

There is also resentment at the fact that any reduction in maintenance liability occurs only when a child stays for two or more nights with the absent parent. Very often, children want to spend only one night, or perhaps it is possible to arrange for them to stay for only the one night.

Mr. David Nicholson

Does my hon. Friend agree that the sort of cases that come to my surgery and, I suspect, to his, tend to be the most responsible of absent parents, who have paid maintenance regularly and who very often, at the time of divorce or separation, made what is called a clean-break settlement? They made a fairly satisfactory arrangement through giving the house to the wife, for example, and taking perhaps only half the proceeds. Unfortunately, the CSA formula takes no account of such an arrangement.

Mr. Tredinnick

My hon. Friend makes very well a point that I had intended to make later. I have always opposed the overturning of clean-break settlements, because it is wrong to introduce retrospective legislation. Most, if not all, of those who come to my surgery love the children they created by their first wives. They may intently dislike their first wives, but, by and large, they love their children and want to do the best they can for them. That is an important point. However, I shall not pursue it further, other than to say that another instance of the failure of the CSA formula is that it does not take account of cash gifts. The CSA simply refuses to recognise them.

The third area of concern—in a way, it is the other side of the coin—is whether the forms returned by absent parents are correct. I have said a great deal about the problems facing absent fathers, but sometimes they wilfully falsify their returns, either out of malice towards their first wives or for some other reason.

I am aware of the case of a lady who was violently assaulted by her husband. She fled the marital home because both she and her sister had been assaulted by him and she feared for the safety of her child. Of course, she probably should not have fled the marital home. She is now in rented accommodation, and her husband is making as small a contribution as possible.

The CSA made an assessment that appears to be incorrect, because the person concerned is running a successful business, living in a luxury flat and running an expensive car. I understand that it is possible that he has put those assets in the name of his brother or some organisation in order to circumvent the CSA. Can the Minister say what steps the agency is taking to investigate false submissions?

The final area of complaint to which I wish to draw the attention of the House is the failure of the review arrangements. My perception is that the internal review mechanism, as currently constituted, is inadequate. It does not command confidence and it is too heavily centred in the agency. We need some form of independent review, and I ask my hon. Friend to consider that important point.

What are the consequences of the shortcomings within the agency for those affected? There is much resentment among fathers, which makes it hard for them to maintain good relations with their children. There is a tendency among second wives to say, "Is this marriage really worth it?" There is a feeling that many of them are being forced to pay for first wives, and that is widely resented.

Furthermore, second wives now wonder whether they can afford to have children, and so question the whole basis of their relationship. I need hardly tell the House about the stories of abortions and worse connected with that problem.

I believe that the system encourages first wives with care not to work, especially if their partners are out of work. That can be used as a weapon against the second wife and as a tool to damage that relationship. I am not suggesting that those circumstances always exist, but I am convinced that, on occasions, the agency's system is being used as a way to get at ex-husbands.

Another consequence, especially among blue-collar workers, is that they simply say, "I am not going to put up with this; I am going to give up my job." I tell them that they must not do that, and that the way forward is to talk through the problem carefully, but they just say—I shall not use the word in the Chamber, Madam Deputy Speaker, especially with you in the Chair, but it is a short word. They leave my surgery saying, "I am not going to pay; I am going to pack in my job." That has a negative impact.

Earlier, I told the Minister that I had not come here today to hit him over the head; I am here to be constructive. I tremendously respect—I mean this most sincerely—all the effort that my hon. Friend has put into making the CSA work. In fairness to him, he was handed the package; he did not create it. He may have an opportunity to change it; that is why we are here today. During the next few months, we hope to hear about some specific changes.

The solutions that my hon. Friend should consider obviously include examining the formula used by the CSA. It is perceived as grossly unfair and against natural justice. We must get it right. My hon. Friend should also examine the cost effectiveness of the agency. There has been a great deal of dispute about the benefits it brings, compared with what some suggest is a cost of £600 million. I wonder whether we are getting value for money. My hon. Friend must also think about some of the administrative problems that have occurred.

I should like my hon. Friend to consider making available local rate telephone lines between the agency's offices and the people calling them. It is possible to do that; indeed, we know that such a service exists. Why should my constituent make umpteen calls to Belfast at the higher rate, when, with just a little generosity from the Department, he could make those calls at local rates?

I think that we are going to have to eat a little humble pie over the way in which the agency has been set up. We need to look at the system in Australia. Why has Australia managed to set up a similar agency, but one that is widely respected and has not caused half the problems that we have experienced here? There are two answers.

The first is that Australia did not rush into doing everything at once and combine all the stages with, perhaps, limited resources. It is rather like soldering the lid on the kettle and turning up the gas. Secondly, their review procedures were perceived to be fair. We must ensure that the CSA is also perceived to be fair: if my hon. Friend the Minister can achieve that, he will have done us all a great favour and made many people's lives much happier.

11.19 am

Mr. David Ashby (Leicestershire, North-West)

I thank my hon. Friend the Member for Bosworth (Mr. Tredinnick) and the Minister for allowing me time to speak.

I entirely agree with everything said by my hon. Friend the Member for Bosworth about this important matter. Five to 10 fathers at a time regularly visit my surgery; I expect about 150 to attend a meeting that will take place the week after next. All those fathers have been paying maintenance for a long time, and they are all very angry. They are not absent fathers. When they ask me for help, support and guidance, I can only say, "What help can I give?" As my hon. Friend said, the problem is the sheer inflexibility of the system.

My hon. Friend the Minister is trying to replace a system based on justice and the judgments of wise people following argument and discussion, with a system that is perceived as authoritarian He will say that he is trying to bring about justice, and I accept that the Child Support Act 1991 is not really his baby; he had to take over the Bill. If we are to have justice, however, the system must not be merely authoritarian. There must be mercy and understanding, and both sides of the argument must be heard.

There cannot be justice in an authoritarian world and there cannot be justice without any agreements for review or appeal. The system is fundamentally flawed, as is the Act. We should do away with it and start again; there is no point in reviewing a system that is transparently authoritarian and has inflexibility built into it.

Hon. Members are annoyed by the fact that, when they write to the Minister about aspects of the Act that concern them—normally matters of policy—they receive no reply from him. Their letters are sent on to the agency and Mrs. Hepplewhite replies to them. Hon. Members who want change think that very wrong.

Mr. Simon Burns (Chelmsford)

May I say in the Minister's defence that, when I have written to him about principles of the policy, I have received a very full response—although it is true that letters drawing attention to specific cases are referred to the agency's chief executive?

Mr. Ashby

That is not my experience, although it is probably the Department's fault. I hope that the Minister will do something to cure that fault.

In fact, I have just written to the Minister asking him some questions. Let me repeat some of them now. Why, for instance, is the child allowance of a father caring for one of two children, while the mother has the other child, classed as income for him but not as income for the mother? There is no logic in that; I hope to hear a logical reply from the Minister.

Why, if that caring father's 13-year-old does a newspaper round, is the income considered to be the father's? That seems daft to me. If the income of the working wife of an absent father is taken into consideration, why does not the same apply to the income of the caring wife's new husband or boy friend?

It is no good the Minister's saying that that is not the case. I refer him to the CSA's operational bulletin 22/93. I hope that he will make all its operational bulletins available in the Library, so that we can see how it works. It is vital that we should be able to do that.

Why does the agency accept the caring parent's word about her income? I have encountered case after case in which the caring parent who has made the application has acted fraudulently. When I refer such cases to the agency, I am told, "We do not inquire into the circumstances of the caring wife; we inquire into those of the absent father." I have had to write to the Department of Social Security pointing out that the wife has been fraudulent. The agency should be working with the DSS, examining cases of fraud on the part of applicants.

Then there are the costs of the agency. It is currently holding a course to train managers, and has asked to use a hotel in Bewdley or Kidderminster. I have information from within the agency: I understand that there has been a great deal of phoning around to find out which hotel has the best swimming pool. I remind my hon. Friend the Minister that the agency operates with income from absent parents. It charges for its services. It is the money of those parents that it is flinging around.

In my experience and that of my constituents, the agency's staff are of a low standard. If money is to be spent on training, it would best be spent on training staff rather than management, because the staff make the decisions.

I warn my hon. Friend the Minister that if the agency is not watched, it will outstrip the DSS in size, manpower and costs. I echo the words of my hon. Friend the Member for Bosworth: we are looking at "1984". The Child Support Act is a nanny Act, which I would have expected the Opposition to introduce. I fear that, in future, the agency will take over all the maintenance work currently done by the courts, enforcing its authoritarian views and replacing justice with inflexibility.

11.29 am

The Parliamentary Under-Secretary of State for Social Security (Mr. Alistair Burt)

I congratulate my hon. Friend the Member for Bosworth (Mr. Tredinnick) on securing this Adjournment debate, and I thank him for the way in which he made his points. I also thank my hon. Friend the Member for Leicestershire, North-West (Mr. Ashby) for his remarks and my hon. Friends the Member for Chelmsford (Mr. Burns) and for Taunton (Mr. Nicholson) for taking a close interest in the debate. I shall do my best to answer as many questions as possible in the time available to me, but I may not cover them all. However, this is familiar territory to the House and hon. Members know a great deal about the subject—as they should.

The first point made by my hon. Friend the Member for Bosworth concerned the collective responsibility of the House, in that the legislation was not rushed through. It was widely consulted on. Some 270 organisations, individuals and hon. Members expressed views on the White Paper, "Children Come First", published in October 1990, so the measure was not sprung fully formed on an unsuspecting House or public. Everyone agreed that the existing system needed changing and my hon. Friend was fair to say that the legislation was the responsibility of the whole House.

It was kind of my hon. Friend to make the remarks about me that he did. I fully accept my responsibility as a Member of Parliament in supporting the Child Support Bill and the responsibilities that I have now as the Minister in charge of the legislation and of the agency, under the direction of my right hon. Friend the Secretary of State for Social Security.

In view of the tenor of my hon. Friend's remarks and those of my hon. Friend the Member for Leicestershire, North-West, I will present the other side of the coin. Anyone reading my hon. Friends' speeches would ask what the Government are doing and why they established the agency in the first place. It is important to place on record again the reasons for the CSA's existence, and also remarks made by some of the growing number, of women in particular, who see the benefit to them of the agency's work.

The White Paper "Children Come First" described the then maintenance system and presented proposals for change. I remind the House of some of the issues that it raised. The previous system was fragmented, inconsistent, slow and ineffective. The outcome was uncertain. There was no guarantee of consistency or fairness throughout the country. The average award per child was £16. In some cases, it was clear that higher awards of maintenance were affordable but not given. There was no automatic review process. Awards could take weeks or months, and half of all awards fell into arrears at least once a year.

In 1989, some 30 per cent. of lone mothers and 3 per cent. of lone fathers received regular maintenance—that was all, and some 23 per cent. of lone parents on income support received child maintenance. Ten years previously, the figure had been 50 per cent. Clearly, the then system was wrong and needed change. My hon. Friend the Member for Leicestershire, North-West defended to some extent the previous system. When one looks back, the facts do not merit such support. The system needed changing, and changed it was.

The system established by the Child Support Act 1991 was designed to produce better maintenance support for children; clear and consistent rules so that both parties in a separation would know their responsibilities; consistency; regular yearly reviews that would not require the parties to return to court to argue; and prompt and reliable collection and enforcement—I shall return to that aspect later. There was also a determination to make sure that the taxpayer, who had unwittingly supported a growing number of settlements over the years, would get a better deal and be relieved of some responsibility, as parents should bear prime responsibility.

In view of the often hostile comments made by many people about the CSA—understandably, because people required to pay more under a new system naturally feel more strongly about it—it is important to place on record comments made by people personally involved, who view the agency differently. One lady quoted in The Times on 31 January stated: I didn't know what to do until the CSA took on the case. They have been super—really helpful. I don't want to live on state benefits if I can avoid it, and I would rather work longer hours so I can save up for my daughter's future. Whatever happens in my case, I can't fault the CSA. In a letter published in the Daily Mail on 15 February, another lady wrote: Despite being obliged to bring up by children on income support, they are all healthy, have good food, shoes, outings, Christmas presents and even holidays. I haven't whinged but budgeted carefully. Now, after the intervention of the Child Support Agency, my ex-husband must make proper maintenance payments. I am delighted and so are my children. They feel they now have a place in his life equal to his other children. We are grateful to the CSA for everything it has done, as are many other people I know. It will now be possible for me to work part-time and raise our standard of living to family credit level. A letter published in the Lancashire Evening Post on 14 February stated: I have read many criticisms of the Child Support Agency, and feel that I must put pen to paper in defence. Since 1986 we have provided a home for our granddaughter. Court appearances and solicitors visits too numerous to mention resulted in a court order, £8.33 to be paid weekly. In fact £40 some months, then no payment. On returning to the solicitor I was told a further request had to be made to Legal Aid, and could take eight weeks or more to come through, then court applications. In the years since 1986 the father has been in lucrative employment—and at the same address (owner of a large detached house). I rang the Child Support Agency—they sent me forms and letters of guidance the following day. At least we feel somebody is taking notice. I think the solicitor could have advised us. In recent weeks, a number of lone parent groups have linked to argue their side of the case. I pay tribute to the work of Lynda Sunderland, who established an organisation named Smile. It states that many lone parents are desperate for the Child Support Agency to work.

In saying all that, I do not suggest that there is not another side to the story, but emphasise that other views are held. I stand here to support the agency's work and to work through the issues raised by my hon. Friends and many others, because I believe in the principle of the CSA and can see practical benefits resulting from it. Clearly, it is part of the Government's aim and my own to make sure that acceptance of the agency's success is felt more widely.

Mr. Harry Barnes (Derbyshire, North-East)

Now that the Minister has got all that off his chest, will he answer the specific points originally raised about the agency's competence, assessments, and so on, and not avoid them?

Mr. Burt

I am sorry that that intervention lost 30 seconds.

I turn to the issues raised by my hon. Friends. My hon. Friend the Member for Bosworth described a number of operational difficulties. The agency has not worked as well as we had wished. A number of the problems that my hon. Friend mentioned should not have occurred and the agency is determined to address them. It is certainly true that a court order and a Child Support Agency order should not be in effect at the same time. My hon. Friend is right to say that the court order should be stopped. Where there has been a breakdown in communication, it must be improved.

The forms were carefully trialled and tested—not only on people with high IQs but by a range of organisations, which presented the forms to their client groups to see how well they would work. Many forms in the benefit system are complex, but people find their way through them. We try to make sure that forms are properly written and provide the right information. If one wants to obtain as much information as possible at the first attempt:, to cut costs and improve processing speed, the form must be long. The forms are constantly checked and worked through.

As to telephone help lines, attempts are being made to improve that service. We appreciate that people should not have to wait as long as they do, and we want that aspect improved. I shall take on board my hon. Friend's suggestion of calls being charged at local rates. That has not previously been considered, but I take his point. I acknowledge that the agency must improve in some areas, and I assure my hon. Friend that much work and effort is going into achieving such improvements.

Some of the agency's problems have not resulted from inefficiency. Much of its work was built on assumptions that could not be tested until it was up and running. For example, an assumption was made about how quickly people would return forms and provide information. That has taken longer than we expected and verification has proved to be more difficult. That is not a fault of the agency but one of the lessons that we learn from experience. Where the agency can improve its performance, I assure my hon. Friend that it will do so.

My hon. Friend the Member for Bosworth, supported by my hon. Friend the Member for Leicestershire North-West, raised a number of policy issues, which we have touched on before but which I am happy to comment on once again. The formula is rigid, but it cannot be any other way. The system is either discretionary or it provides some element of consistency. That is why the formula is as it is.

Requests have been made to expand the formula to take into account some of the matters that my hon. Friend raised, such as claims for travel costs, contact costs and the like. The difficulty is that the formula was designed to make the payment of maintenance to the child the priority. Indeed, the payment of maintenance was seen as a priority by the Select Committee on Social Security, which reported at the end of last year.

The danger is that, if too many costs are allowed into the formula as exempt income for assessment purposes, the payment to the child will lose its priority. I hear what my hon. Friend the Member for Bosworth said, and a number of people have said the same. The Government keep the formula and the workings of the agency under review. The principle of keeping a formula is important to us.

Mr. Donald Dewar (Glasgow, Garscadden)

I appreciate the Minister's courtesy in giving way. It is well known that much work is going on in the Department, particularly on an independent review process, which might at least introduce an element of flexibility in hard cases. Are we likely to get a statement before the House rises for the summer recess?

Mr. Burt

I am not able to give the hon. Gentleman an answer. As he knows, following consideration of the Act and the agency, we made changes in February. That was an indication of our good intent: that, where we saw the need for change, it would be made. A lot of work is going into evaluating those changes, but it is not possible to say whether changes will be made. The Government should not, therefore, be held to a timetable.

My hon. Friends asked about appeals, which we have discussed before. I know that the hon. Member for Glasgow, Garscadden (Mr. Dewar) has thought deeply about the problem of appeals and I appreciate the way in which we have been able to conduct this debate. The problem remains that introducing an open appeal system would take us back to the discretionary system of the past; the formula might well be second-guessed by an erudite person. There would then be no point in having the formula and we would be back where we were.

If that is not to be the outcome, the appeal system must be narrowed and we must have gateways for it. I am still awaiting suggestions of where those gateways might be. It is relatively easy for politicians to say to an aggrieved group of people, "We shall have an appeal system and all your problems will be solved," but it is more difficult to say, "There will be an appeal system, but you, you and you will not be included." That is the problem and I am yet to be convinced about a means of overcoming it.

My hon. Friend the Member for Bosworth mentioned the Australian system again. Distance lends enchantment. The Australian system is not without critics in its own backyard. It is much more broadly based than ours. It is a much blunter instrument and it does not make allowance for protected income.

Someone can fall below support limits in Australia, but that is not possible here. We built housing costs into our formula; they are not included in the Australian one. The Australian appeal system is being increasingly used and my hon. Friend will be aware that a major difference between our systems is that the Australians do not consider previous settlements, whereas we do; they simply look forward. Pleas are now being made by those who were excluded from the new system to be included in it.

Other systems offer no easy answer. Lessons from around the world show that any system that has tried to improve the mechanism for child support has had its difficulties and critics. I recently read an article by an Australian journalist, who spoke of problems with the Australian child support agency in almost the same terms as people speak about the problems of ours.

Mr. Tredinnick

And fraudulent returns?

Mr. Burt

Fraudulent claims on both sides are looked at. It is an important point of principle that if an allegation is made of a fraudulent claim by the parent with care or by the absent parent, the Child Support Agency should, if the information has not been passed on, take that up with the local benefits office. There is no instruction to accept the word of one side or the other where a complaint has been actmade but not verified.

I am grateful to have had the chance to answer some of the issues raised by colleagues. I am aware of the feelings of hon. Members. I hope that I have put the record straight on why we feel it is important to continue with the agency, and why I will continue to look carefully at what colleagues say.