Child Support Agency

HC Deb 20 June 1997 vol 296 cc523-43

[Relevant document: The Fifth Report from the Social Security Committee of Session 1996–97 (HC282) on Child Support.]

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Kevin Hughes.]

9.34 am

The Secretary of State for Social Security and Minister for Women (Ms Harriet Harman)

We want all children to have a good standard of living. Children whose parents are living apart are often worse off. Therefore, to tackle that, we want to help lone mothers to work and ensure that fathers pay their fair share through the Child Support Agency.

However, we must also begin to rebuild a consensus around the responsibilities of parents to support their children after relationships break down. The Government believe that children are entitled to the emotional and financial support of both parents. Every child has a right to the love, care and support of both parents. It takes two people to make a child. Both parents are responsible for conceiving a child, and both parents must fulfil their responsibility to that child as it grows up.

Parents are responsible for caring for their children as well as paying for them. That applies to fathers as well as mothers, and applies whether the parents are married, living together, separated, divorced or, indeed, have never lived together.

We in the House are familiar with talk about motherhood, but there is also the important issue of fatherhood. Fathers have much that they can—and should—provide for their children: much more than just their money. They have their time, energy, concern and attention. Fathers cannot be left to imagine that they do not matter to their children. If they feel worthless, they are all the more likely to behave irresponsibly. That is what the Government mean by children having a right to the emotional, as well as financial, support of both their parents. Our message, particularly to fathers, is: "We understand that your children need not just your money; they need you."

Today's debate will focus on the Child Support Agency and in particular will deal with how to ensure a proper system of child support, to secure a better standard of living for children after relationships break down. The Government believe that that can be achieved in two ways: by lone mothers working, and by absent fathers paying.

First, I refer to the mothers. Lone mothers in Britain are among the least likely to work and the most likely to bring up their children on benefit of lone mothers anywhere in Europe. In France, 82 per cent. of lone mothers work. That is more than their married counterparts. In Britain, the figure is only 41 per cent. Fewer lone mothers than married women work.

The Conservative Government left too many lone mothers dependent on income support. In effect, they said, "Here's your benefit. Come back when your children have left school." The result is that 1 million lone mothers are struggling to bring up 2 million children on the breadline, at a cost to the taxpayer of £10 billion a year and growing. However, research shows that 90 per cent. of lone mothers want to work. They do not want to depend on benefit. They want what all mothers want—the best for their children.

We have already set out our proposals to help lone mothers get off benefit and into work, which will include inviting them into the jobcentre, when their youngest child starts school, for advice on job search and information on training and child care. The Government believe that work is the best form of welfare for people of working age, and that includes lone mothers, but there is a connection between mothers working and fathers paying—our two objectives.

There is strong evidence that proper, regular maintenance helps lone mothers get back to work. The Policy Studies Institute, in its report on the first effects of the CSA, said: There is a clear connection between maintenance payments and the opportunity to get and keep paid work". It also says—this is important for the income of children where parents do not live together—that lone mothers who work and get family credit, and receive maintenance, have a net disposable income 60 per cent. higher than those on income support. That is an extra £56 a week. Therefore, fathers paying is also part of helping mothers to work.

That brings us to the subject of the Child Support Agency. One reason why the Government called the debate is that we want to draw on the valuable experience of right hon. and hon. Members on both sides of the House in regard to the agency and to hear their views. While the Labour party is extremely concerned about the issue, I recognise that it is not a party political issue. The Liberal Democrats have important views, which we want to hear, and we shall no doubt hear further reflections from the Conservative party, which introduced the system.

Mr. Bill O'Brien (Normanton)

I support everything that my right hon. Friend has said. However, not only is the function of the CSA important; accessibility is an important issue. A child is frequently used by the two aggrieved parents. It is important that absent parents should have access to their children, to ensure that they receive proper care and attention, especially on the emotional side. Can the Government do anything to ensure fair accessibility to children when difficulties are experienced?

Ms Harman

I very much agree with my hon. Friend. It is absolutely evident that a child's upbringing benefits from the involvement of his or her father, when the father no longer lives with the child. Obviously, that matter comes before the courts, but the Government's position is clear: wherever possible, access should be given, because it is good for the child. We want to support that and back it up.

It is important to start our debate by being clear about what went wrong with the CSA, what is still going wrong with it and what needs to be done to put things right. The reason why the Child Support Agency was introduced was that the court-based system for child maintenance was failing.

Under the pre-CSA system, too many fathers simply did not pay. That is why the previous Government introduced the CSA. Some 77 per cent. of lone mothers on income support received no regular maintenance payments. Awards were too low. The average award for one child was only 11 per cent. of the absent father's income—on average, some £15 a week. Moreover, there was no fairness. Maintenance awards were inconsistent and unpredictable: fathers earning £150 per week would not know whether they would end up with an award of £5 a week for their child or £50 a week.

The previous Government attempted to solve those problems—everybody agrees that they were substantial and needed to be dealt with—by setting up the Child Support Agency. There was all-party support for their aim to ensure that absent fathers took proper financial responsibility for their children. However, the previous Government's attempts to make absent fathers pay proper maintenance for their children were disastrous. I genuinely regret that.

Today's debate provides an opportunity to set out why the Conservatives failed, so that we can build our child support policy on solid ground. We can now see that they failed children and parents by misunderstanding the problem, failing to develop a clear objective for the agency, refusing to listen to the warnings and constructive suggestions from those who pointed out in advance the problems with their proposals, and by drastically underestimating the size of the problem.

The previous Government misunderstood the political consensus around the need to make absent fathers pay proper maintenance for their children. The belief that that meant that the solution that seemed best to them commanded general support lulled the previous Government into a false sense of security. They thought that, because everyone agreed that fathers should pay, everyone would agree with their system to make fathers pay. The Tories did not set clear objectives, and the Child Support Agency was never given a consistently clear set of targets.

The agency was established with the intention that all absent fathers should face up to their financial responsibilities for their children. That meant that, initially at least, the CSA aimed to get at least some maintenance from all fathers—the point about responsibility—whether or not they had ever paid before. Inevitably, however, as the Conservative Government grew to see the agency's revenue-raising role as so important, more money was collected from certain groups of fathers, such as those who were already paying a small amount of maintenance. That was because it was easier for the agency to collect more money from fathers who had at least paid some maintenance before, than from fathers who had never paid before and were avoiding payment. A sense of unfairness therefore grew. Those conflicting priorities—whether or not the agency was about responsibility or getting money in—meant the agency lacked focus. That contributed significantly to the scheme's poor performance in its early years.

The Tories would not listen to criticism. When we were in opposition, we pointed out the flaws in the scheme long before it was introduced. We pointed out the damage that could be caused by an inflexible system and the need to respect existing property and capital settlements. Time and again, we presented the then Government with constructive proposals for change, but they were dismissed out of hand. Although the need for change was subsequently accepted, it was too late, and disasters had begun to happen. For example, we pointed out that, by ignoring travel-to-work and contact costs, the system was creating real hardship for some. That, too, was ignored for too long.

The previous Government also underestimated the scale of their task.

Mr. Peter Lilley (Hitchin and Harpenden)

The right hon. Lady complained that there was no clear objective for the agency. Does she intend in her speech to spell out the clear objective that she will set it?

Ms Harman

We have been in office some five weeks. As I set out at the outset of my speech, my instinct is that the clear objective should be the responsibility of parents, but we need to discuss that again. The objectives were originally set out, but became confused under the previous Government. Today, we are trying to take stock of the problem and move forward.

Mr. Dennis Skinner (Bolsover)

I agree with a lot of what my right hon. Friend has said already, but for any law to be passed and to work properly, it must appear to be fair. I have racked my brains to try to find another solution. Over the five years that the agency has been in operation, I thought that, first, it might have got rid of the backlog, and, secondly, that more people would have been brought in to make payments. I get the impression that the biggest source of grievance for my constituents—I am sure that it applies across the country, whatever the constituency—is that the fathers who are paying think that they are paying to make up for the thousands whom the agency cannot find. That is why the law is in disrepute.

I do not suggest that there is an easy answer, but the Government should be looking at a new formula to start afresh, based on the ability to get everybody in the net, and not leave some people out. It is like another poll tax: some people getting away with it and others having to pay.

Ms Harman

My hon. Friend makes a fair point. It is part of the deep sense of unfairness that people feel about how the agency has worked. However, we must not lose sight of the fact that the biggest source of grievance is not the one which I readily acknowledge—that some fathers pay while others do not—but that too many children do not have a good enough standard of living, because some fathers are determined to avoid payment while others are prepared to pay, but want to do so as and when they feel like it and at an amount that they choose. The unfairness engendered by the CSA has undermined the public support that it needs to be able to proceed with the task on which we all agree.

Mr.Bernard Jenkin (North Essex)

The Secretary of State said that the CSA was never set targets. I refer her to the fifth report of the Select Committee on Social Security, which said that the Secretary of State set six operational targets for the year 1995–96, most of which were achieved. It would be more helpful if she explained what she is proposing for the CSA, rather than carrying on this rather childish attack on the outgoing Administration. She said that this should not be a party issue. Will she now make that clear by moving to an atmosphere of consensus, instead of carrying on in this Mandelson-like way, as she has been instructed to do by the Minister without Portfolio?

Ms Harman

I stand by what I said—this is not a party political issue. I do not seek to make party political points, but I want to present the House with the Government's analysis of what went wrong. The hon. Gentleman should try to assist in the process of sorting out the CSA. If he is saying that there were no problems, he is out of touch. Targets were set, but they were unrealistic and were abandoned for other targets. He should not defend what everybody now agrees is indefensible, and he should address his mind to moving forward.

The previous Government underestimated the scale and the difficult nature of the work to be done. Relationship breakdown often creates intense bitterness and resentment. Past evidence showed that many fathers simply did not want to face up to their responsibilities for their children. It was not an easy task. To make matters worse, the previous Government failed to see that rushing through the child support legislation without thoroughly examining the details of how the CSA would work in practice would lead to serious problems.

The CSA was set up in a difficult context, without clear objectives and much too quickly, and faced numerous practical difficulties in its early years. It had a completely new team—some from outside the civil service, and some from within the civil service, but from unrelated organisations such as the Property Services Agency. They came together to do an immensely difficult job against a background of unclear objectives. They had no experience of the issues involved and had a much harder task than the Government realised. That led to misunderstandings and mistakes. The CSA had a new computer system, with all the teething troubles and operational problems that that always brings.

As a result, the CSA failed. It failed children, few of whom saw any improvement in their financial circumstances—which was what the CSA was supposed to be about. It failed lone mothers and absent fathers—lone mothers were still on the breadline, and absent fathers were angered and confused by unacceptably poor service. As my hon. Friend the Member for Normanton (Mr. O'Brien) said earlier, they could not even get through on the telephone.

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

The Secretary of State referred to improving children's standard of living in low-income households. Can I tempt her by referring to a very good device alighted upon by the Labour party last October, for making some savings? Under the heading "Maintenance Disregard", the document "Children First" says: A maintenance disregard, once introduced, will provide an incentive for co-operation which will mean consequent savings on income support. She will know that parents with care who are on income support have the benefits that they receive withdrawn pound for pound for any maintenance that they receive. That is such a good Labour scheme for saving money in the long run that I can see no reason why she is not announcing its introduction today.

Ms Harman

The hon. Gentleman makes an important point. As the collection rate of the CSA increases, we shall keep under review the option of a maintenance disregard. However, where I differ from him is in the belief that there is no point in a father paying if the mother is on income support. I do not believe that, for two reasons. First, there is a point of principle—not an airy-fairy principle, but one about children's understanding of the situation. I do not want any child to understand that their father has abandoned responsibility for them and has decided that they should rely on the state.

Secondly, another more practical matter in the Policy Studies Institute report to which I referred is that, if a father is paying maintenance—and therefore the children are dependent on maintenance rather than benefit—the mother can get a part-time job once the children reach school age, and right away she will be better off. She will be better off depending on maintenance while going out to work and improving her income, because she is not in the benefit trap.

Mr. Kirkwood

The Secretary of State perhaps makes my point for me. Will she confirm that under the system of family credit, there already is a £15 disregard? Why should there not be a £10 disregard in the maintenance situation that I have just described?

Ms Harman

The hon. Gentleman makes a valuable point, and we shall continue to look at it. We shall put it on our agenda, and I thank him for raising it.

The CSA failed children, lone mothers and absent fathers, but it also failed its staff. They, too, bore the brunt of the failure because of the mishandled introduction of the scheme. Hon. Members are only too well aware of the many problems caused by the ineffectiveness of the CSA. The parliamentary ombudsman has criticised its performance, as has the Social Security Committee.

I know that many colleagues want to discuss examples of the ineffectiveness of the CSA in some detail during today's debate, and I and my ministerial team look forward to hearing their points. I am sure that we all agree that the previous Government's failure to set up an effective system of child support left an explosive cocktail which hit everyone.

The statistics about the experiences of people caught up with the CSA are well known, but no less shocking for that, and we need to take stock of what happened. People telephoning the CSA have to ring about eight times before the telephone is even answered. That is not good enough, and I have asked the CSA to ensure that it has extra services on the telephone lines. Out-of-hours telephone services are also needed, so that people do not have to try to talk to the CSA from their place of work.

When people do get through, it can take many months—if not years—to get an assessment. I have asked the CSA to make sure that by the end of this year, it completes an extra 500,000 assessments and continues to improve the accuracy rate. If people complain about the level of their assessment, their appeals can take as long again to be dealt with. In the first year, more than half of all assessments were wrong and had to be redone. Backlogs of work mounted up, so that by the end of the CSA's second year in existence, there were more than 400,000 cases. That is 400,000 absent fathers, lone mothers and children waiting for assessment, not knowing what is going on and unable to ring up to find out.

As some absent fathers suffered hardship as a result of that catalogue of problems, many others saw the opportunity to use the CSA's administrative failings as a justification for their determination not to pay. Indeed, further operational problems resulted from deliberate attempts at disruption. Some fathers without justification denied paternity to cause delay. What message is that sending to children? Some refused to answer letters. Some flooded the CSA with time-wasting inquiries, adding to the problems. Fathers refused to pay the maintenance for which they were liable, not because paying it would cause them genuine hardship, but because they were simply not willing to face their responsibilities as fathers. It is a paradox that maintenance payment rates are only about 50 per cent., while income tax payment rates are 90 per cent. Absent fathers are meeting their responsibilities to the community through the tax system, while refusing to face their responsibilities to their own children.

Last week, a colleague sent me a letter from a man complaining about the CSA. He was really complaining about the fact that his girlfriend had got pregnant and had the baby. In the letter, he asked, "Is there no law to protect me from that?" The answer is no—but there is a law to prevent him ignoring his responsibilities to that child. Some fathers think that everyone else is responsible for their babies arriving in this world. One absent parent wrote to the agency complaining about his treatment, explaining that it was not his fault that the baby was born. In this case, it was not even the fault of the baby's mother—it was her parents' fault. The father said that they encouraged him to stay overnight in their house three or four times. He complained: Not once did any one of them mention anything about taking precautions so I presumed she was on the pill … because obviously if her parents didn't want a baby they wouldn't have encouraged me to stay". That man was only 26. We will not accept that sort of behaviour, and we will pursue absent fathers who evade and avoid their responsibilities as parents.

As I have said, I think that the previous Government let down the staff of the CSA. I pay tribute to those staff. They work in an emotionally charged situation when family relationships have broken down and in an agency that must perform an important task, but which was beset with problems from the start. I understand the difficulties that dealing with an agency as ineffective as the CSA in its early years has caused for many of its customers. I understand the frustration and the despair that they feel. When dealing with people and such emotionally charged issues, there must be an acknowledgement of the need for an effective, efficient, polite and fair service. I make it clear that we expect all CSA staff to deal politely, fairly and promptly with their clients at all times.

However, we cannot and will not accept, condone or ignore threats and violence against CSA staff. Like all employees, CSA staff—who are carrying out the work of a democratically elected Government—have the right to work without being threatened, abused or harassed. I was horrified to hear about the offensive and threatening material that has been sent to CSA staff through the post. However, I am pleased to acknowledge that, despite the difficulties facing staff, there are clear signs that the position is about to improve.

While the agency has yet to succeed in increasing the proportion of lone mothers receiving regular maintenance, there have been clear improvements since the early days. Where maintenance is paid, lone mothers receive more maintenance—that is an important point. The level of maintenance for a child whose mother is on income support has increased from an average of £15 to £30 a week.

The agency is speeding up responses—although its response time is still too slow. The average waiting time for an assessment has decreased from nine months to six months in the past year. I have asked the agency to ensure that, by the end of this year, the overwhelming number of cases are correctly assessed and out the door within six months of their receipt. That is still a long time for people to wait, but it could be a benchmark of further progress.

The accuracy of assessments is improving. In 1995, only half of maintenance assessments were correct. That figure is now 87 per cent. It is still not good enough for those who receive wrong assessments, and there is still progress to be made, but we must acknowledge there has been at least some improvement. I have asked CSA staff to work hard in the next year to tackle the totally unacceptable backlog of work within the system and reduce it to a more reasonable level. I have had a series of meetings with the CSA chief executive, Faith Boardman—in whom I have full confidence—and I have asked her to work particularly hard in the next year on getting more maintenance paid, reducing the backlog and improving customer service.

There is still a long way to go and we shall not be complacent about the state of the agency. It is our responsibility to examine the agency' s performance closely and constantly in order to ensure that it improves. I have impressed upon the agency's chief executive and my civil servants that substantial and sustained improvements must follow, and that I shall be answerable for them.

Dr. Brian Iddon (Bolton, South-East)

Does my right hon. Friend accept that, because of the delays that she has mentioned this morning, many responsible fathers who have entered second relationships have suffered so badly that those relationships have also broken down, causing another group of children to suffer?

Ms Harman

I certainly do. When public policy that affects people's personal relationships is wrong, it causes a great deal of personal and emotional suffering. That is why it was so wrong for the previous Government to assume that the task would be easy and that, because everyone agreed about the principle, it would somehow be simple to sort out the arrangements on the ground. As my hon. Friend points out correctly, we are talking not just about the lone mother, the absent father and their children, but about a father's relationship with a second partner and subsequent children from that relationship. They are very important considerations.

Making child support work is crucial to improving the standard of living of children in Britain. We shall help lone mothers into work and we shall ensure that absent fathers pay. If the previous Government had listened at the outset to the concerns that we and others expressed, they could have avoided many of these problems. We understand the complexities of the current situation and, in the coming months, we shall examine closely all areas of the child support system to ensure that improvements are made. Today's debate presents an opportunity for all hon. Members to support the Government's determination to improve the performance of the Child Support Agency and to seek much greater improvement in future.

10.6 am

Mr. Peter Lilley (Hitchin and Harpenden)

I welcome the opportunity to debate this subject for the first time with the Secretary of State for Social Security. Depending on what my right hon. Friend the Leader of the Opposition decides over the weekend, it may be the last time that I address this important policy area in which I have enjoyed being involved. I welcome also the chance to debate the Child Support Agency—so long as the debate is constructive rather than disruptive and so long as we search for practical ways of improving the system rather than proposing digging it up by the roots, thereby making further improvements impossible.

The Secretary of State claimed that this is not a party political issue—nor should it be. However, like most Government spokespersons, she continued to operate in Opposition rather than Government mode: we have an Opposition in charge of a propaganda machine rather than a Government in charge of governing, although doubtless the latter will come in due course.

The right hon. Lady began by referring to the general policy towards lone parents. I am sure that was a legitimate reference—otherwise you would have ruled it out of order, Mr. Deputy Speaker—which is relevant to the Child Support Agency. I am sorry that the right hon. Lady did not enlighten the House as to whether she intends to continue the parent plus scheme which would help lone parents back into work and is based on an examination of all such schemes worldwide. It would improve upon those schemes and provide the best possible system for this country. Will that scheme go ahead? People have been invited to tender for the scheme. Does the Secretary of State intend to pursue that process or is she so inured in the Opposition process that she cannot tell us how she intends to govern, even when she agrees with the objectives of this important policy? Will she pursue the policy of equalising benefits for lone parents with those available to married couples—or is that matter in perpetual review like most other issues that the Labour party addressed in its 18 years in opposition?

It is worth considering briefly the history of the Child Support Agency. As the right hon. Lady said, it was introduced on the basis of all-party consent. The Child Support Act 1991 had the support of all parties and there was not one dissenting vote. The rationale behind it, which was widely accepted, was based on a moral principle and on practical considerations. The moral principle was that parents are responsible for their children. That applies to both parents, and that responsibility continues even if, sadly, the parents split up or never marry or form a commitment to bring up children together. Parents have an obligation to contribute to the upbringing and maintenance of their children according to their means. The taxpayer has an obligation to contribute only if the parents do not have sufficient means between them to support their children.

The 1991 Act was based also on a practical examination of the old system's failures and a recognition that the courts had increasingly put parents' responsibility for their children below other responsibilities rather than at the top of the list. The courts had increasingly acquiesced in the transfer of responsibilities to the taxpayer and away from the parents. Lawyers had thought up devices to achieve that. Fewer parents were receiving maintenance payments and more were relying on income support and other benefits. The amounts that the courts awarded were often low, even derisory. Payments were set as low as £10 a week, or certainly less than £20 a week, even when the parents had the means to pay more. There was inconsistency in setting payments. Parents in apparently similar situations with an income of £150 a week, for example, were required to pay in one instance £5 a week and in another £50. Payments were either not enforced or enforced with great difficulty and delay.

The conclusions reached—with the consent of right hon. and hon. Members on both sides of the House—were threefold. First, it was accepted that parents, not taxpayers, should pay if they had the means to do so. Secondly, it was agreed that an agency rather than the courts should be responsible for tracing the responsible parents, assessing their liability and enforcing payment. Thirdly, it was accepted that the obligation to pay should be according to a formula and not a discretionary system. Those were the three bases of the Child Support Act, which had the overwhelming support of the House.

Once established, however, the system ran into immense problems. Administrative problems were compounded by the lack of co-operation of some parents. There was a perfectly understandable lack of co-operation when honest and honourable parents, as the majority are, were incensed by administrative delays. The problems were compounded also by deliberate non-compliance by some parents who were reluctant ever to accept responsibility for the children they had helped bring into the world. The two elements combined to make matters much worse.

The right hon. Lady suggests that all of that was foreseen. It was not. Her predecessor, the right hon. Member for Glasgow, Anniesland (Mr. Dewar), now Secretary of State for Scotland, told the House: Everyone in the House has been taken aback by the system's unpopularity and I agree that none of us anticipated that at the beginning."— [Official Report, 20 March 1995; Vol. 257, c. 32.] The right hon. Lady is indulging in historical revisionism if she suggests otherwise. I would go so far as to say that the only two Members—when the Act took its place on the statute book, I had the responsibility for implementing it—whom I heard voicing doubts about it were the present Minister for Welfare Reform, the right hon. Member for Birkenhead (Mr. Field), then Chairman of the Select Committee on Social Security, and myself. I took the precaution of inviting all Conservative Members to my office in groups of 10 to warn them of the problems that would arise. I made the mistake, however, of doing that before the agency had been set up, and the problems did not arise until seven or eight months later, by which time my hon. Friends had largely forgotten my warnings.

It seemed to me self-evident that there would be problems. It was clear that there would be inevitable problems because we were trying to enforce a responsibility that previously people had not had to bear. It is worth considering why problems were not foreseen. I offer my analysis because I had to think about these matters long and hard when I was the Secretary of State responsible for them. I offer it to the right hon. Lady in the hope that it may be of help to her in avoiding similar problems in future. If she wishes, this is my parting gift to her. It is a genuinely objective analysis.

Problems are most likely to occur in government when there is the greatest measure of cross-party agreement and the greatest degree of enthusiasm among both officials and Ministers for a policy. The common belief is that politicians in the position that the right hon. Lady now holds, and which I previously held, face the greatest difficulty from "Yes, Minister" type civil servants who try to frustrate what we do. The right hon. Lady will find that they never try to frustrate. She has a wonderful team of officials who will loyally support and try to implement whatever she decides to do. I suspect that the greatest problems will arise when her officials have the greatest enthusiasm for her policy rather than when they have the natural reservations that they are there to articulate about the difficulties and problems in the real world on which the grand ideas of politicians will bear.

I warn the right hon. Lady against any attempt to politicise the civil service. Officials will create problems for her the more the Mandelson scheme of making the entire civil service an extension of the Labour party succeeds.

The second reason why we failed collectively to foresee problems was that the opposition that was voiced was based on a false hypothesis. It was said that problems would arise from women and not men. I was amazed when I first took responsibility as Secretary of State when the agency was about to come into being: in all the media interviews, I was asked exclusively about the opposition that was expected to result from women who would not co-operate or who would be disadvantaged in some way by the system—there was not one question about the potential hostility and opposition from men who would be asked to pay. The simple perception that if we ask men to pay several hundred million pounds some of them will resist was recognised by the right hon. Member for Birkenhead. He stated in a report, when the agency was already established, that a system that is, after all, designed to impose a more realistic burden on absent parents will result in protests from that group. We have already stated our view that it is right to increase the amount of financial support paid by parents for their children and to reduce the costs to the social security budget that are caused by parents not meeting their responsibilities. The right hon. Gentleman clearly recognised that people do not always willingly accept their responsibilities. It was perhaps naive of the House to assume that they would do so.

A third factor that can give rise to a failure on the part of Government to foresee problems is a failure properly to appreciate the experience of other countries. I certainly advise the right hon. Lady to encourage her officials, and herself, to examine experience elsewhere. Every other country that has introduced a similar agency faced similar problems. None found any easy ways to get over those starting problems. At least we should have realised the scale of the problems that would hit us.

We promised to keep the system under review and to respond rapidly to problems, which began to emerge in the autumn or early winter of 1993, when the right hon. Member for Birkenhead made his statement. In February 1994 I introduced the earliest changes to the system. There were improvements in five areas, giving more absent parents extra time to adjust to their new liabilities by extending the groups covered by phasing arrangements, offering added protection to those on low incomes by improving the protected income arrangements, reducing the large amount of maintenance that some better-off absent parents had to pay, recognising that as children grow older the amount of attention that they need from the parent who cares for them reduces, and relaxing the rules on collection of fees rather than maintenance itself.

I also promised to keep the system under review and published a White Paper called "Improving child support" a year later. The White Paper introduced major changes which were implemented in two stages. First, in April 1995, we set a cap on the level of maintenance, so that no absent parent now has to pay more than 30 per cent. of his or her net income in current child maintenance. We also introduced new allowances into the maintenance formula—a broad brush allowance for property transfers made before April 1993, an allowance for travel to work costs for those living more than 15 miles from their place of work, and allowing absent parents to deduct all reasonable costs of housing for their new partner or stepchildren.

Those changes dealt with two of the features of CSA assessments that had given rise to most concern: the treatment of past property settlements, and the inability to take account of special factors, which were not reflected in the formula.

Secondly, we introduced in primary legislation an element of discretion in the formula—the departure system. That seemed to be the only satisfactory way of allowing for individuals with exceptional expenses or past property settlements that were not correctly reflected in the broad brush formula changes. In short, we recognised that there would be a small minority of cases where the relevant circumstances could not be adequately reflected.

After being successfully piloted, the departure scheme was implemented in December last year. To qualify for a departure, parents must meet two conditions. They must show that, because of special circumstances, they face additional expenses not taken into account by the formula, and they must demonstrate that they would be unable to support themselves if they were to pay maintenance at the level required by the formula.

As a result of those changes, the protests and difficulties have considerably diminished. The administrative performance of the agency has undoubtedly improved, and I pay tribute to the efforts of staff and the past and newly appointed chief executive of the agency in securing those improvements.

The Minister in the Lords, Baroness Hollis of Heigham, recognised only last month that the CSA has made enormous progress in the last year. Around 80 per cent. of assessments for child maintenance are now correct to the last penny, and some 98 per cent. of maintenance is passed on to the parent with care within ten working days. This improvement owes much to the expertise and diligence of CSA staff, and I am grateful to them for their continuing efforts in often difficult circumstances. The Baroness continued: I have been impressed by the determination of CSA staff to build on recent successes, and am confident they will continue to provide an increasingly efficient, accurate service. I agree with her, and believe that we should do nothing to prevent that continuing improvement, while recognising that there is a distinct need for that process of improvement to continue.

Mr. Bernard Jenkin

As a former member of the Select Committee on Social Security in the previous Parliament, may I assure my right hon. Friend that we were increasingly impressed and amazed at the prowess of the former chief executive, Ann Chant? Will he take this opportunity to pay tribute to her for all the work that she did for the agency? She brought it back on track at a time when it looked in danger of collapse, and she deserves a tribute from my right hon. Friend.

Mr. Lilley

I endorse my hon. Friend's remarks. Indeed, my previous remarks when I mentioned the present and previous chief executive were intended to convey my personal great gratitude to Ann Chant for the effort that she put in, and for her willingness to stay longer than her original commitment when I asked her to take on that bed of nails, as it undoubtedly was. I am grateful also to her successor for taking on one of the most difficult tasks in the public sector in this or any other country with a similar agency. We are fortunate in the calibre of the people who work for us.

What have we learnt today about the Opposition—I am sorry—the Government's approach to—

Mr. Bill O'Brien

I refer to the right hon. Gentleman's comment that during his stewardship, before the general election, a large proportion of the assessments were on target, to the last penny. I draw his attention to a letter that I received on 5 March 1997, just before the right hon. Gentleman lost his position. My constituent, a mother who was being chased for maintenance, received a letter stating that on 13 December 1993 her assessment was £118 a week. On 4 February it was changed to £115 a week, and on 11 April it was put back up to £117 a week. Is the agency now achieving targets by harassing claimants and advising them of three changes in five months? Is that how the right hon. Gentleman wanted assessments to be improved—by changing them every other week?

Mr. Lilley

No, that is certainly not the case. We are all aware of problems relating to constituency cases that we must look into, and we know that when we do so, we find that the complexity often arises from the complex and changing circumstances of the individuals involved. I cannot possibly comment—least of all, from the Opposition Front Bench—on the individual case that the hon. Gentleman is rightly pursuing on behalf of his constituent.

In similar cases in my own experience, the changes have reflected changes in circumstances or changes in information made available by one or other parent. The agency is charged by Parliament to reflect the circumstances of the parents, and to bring about reviews and changes when parents seek them and are entitled to have the findings of such reviews implemented. That has nothing to do with some artificial way of meeting targets.

Mr. Tony McWalter (Hemel Hempstead)

I should be reluctant for the right hon. Gentleman to leave this potted history without some mention of the punitive levels of settlement that have occurred in so many cases. I have a constituent who earns less than £14,000 a year, but he is being asked to pay £500 a month. In addition, he had left his ex-wife the house that was their residence. The levels have been punitive and unfair, and the accessibility of the agency remains gruesome. Will the right hon. Gentleman add that to his history?

Mr. Lilley

The hon. Gentleman is now part of a governing party. There is little evidence that Labour has yet grasped the reins of government, but it has grasped the reins of the communications system in Whitehall. The hon. Gentleman should ask the Secretary of State for Social Security and Minister for Women, the right hon. Member for Camberwell and Peckham (Ms Harman), how she intends to change the formula to make it—in his view—equitable

The hon. Gentleman's remarks chime with what I was about to say. The Government published a policy document on the Child Support Agency and undertook to make it fairer. When the Government initiate a debate in the House, one would expect them to tell us in what ways the CSA was to be made fairer. Will they place a lesser burden on absent parents and thereby reduce the amount of money received by the parent with care? That seems to be what the hon. Member for Hemel Hempstead (Mr. McWalter) wants and how he defines fairness. Or will the Government give more help to the parent with care and relieve further the taxpayers' contribution when the absent parent has the means to pay?

The Government were elected with a clear pledge to make child support fairer, but they did not specify what that pledge meant. We shall demand of them specifications of what they mean. Do they propose to change the formula, or will they now say, "Actually, when we said fairer, we were not referring to the formula at all: we intend to leave it unchanged"? I have no doubt that we shall have great support from Labour Back-Bench Members, to the extent that they are not muzzled by the hon. Member for Hartlepool (Mr. Mandelson), in demanding from the Government some clarification of the pledges on which they were elected and for which Labour Members are responsible to their constituents.

The Labour party pledged in its document that it would undertake fundamental reform of the CSA. There are three fundamentals of the CSA. The first is the principle of responsibility; that parents are responsible according to their means. I am sure that the Government do not intend to overthrow that principle; the Secretary of State for Social Security and Minister for Women rightly repeated it today. The second is that an agency rather than the courts should deal with child maintenance. Is that principle to be reassessed, reformed or changed? The third is that maintenance should be determined by a formula rather than the limited discretion that we allow in the departure system. Does the Secretary of State propose to cease to rely on a formula and to give much greater discretion? If there is a commitment to fundamental reform, which of the fundamentals do the Government intend to reform and in what ways?

It is an insult to the House to initiate a debate on a subject on which one has clear election pledges and not give us an inkling how the pledges will be implemented or even mention them. That is an extraordinary thing to do.

Mr. Oliver Heald (North-East Hertfordshire)

The only thing that the Government have announced is an improvement in the telephone service.

Mr. Lilley

As my hon. Friend says, the only thing that the Government have said is that they will seek an improvement in the telephone service. Whether that improvement was already in the pipeline we shall undoubtedly elicit in due course.

The Labour party's most substantive pre-election commitment was to introduce a maintenance disregard so that people could keep some of the income support—[Interruption.] The Secretary of State says that it was not a commitment, but it was contained in a document entitled "Children First" published by her party which was pretty clear. It said: A disregard will be a powerful tool in our welfare-to-work strategy. The document was published less than a year before the election. Are we now to understand that all that the Labour party told the electorate in the months ahead of the election was not a commitment, a promise, or anything on which we could trust it—that the "Trust me" Government cannot be trusted an inch?

What about the maintenance disregard? We heard nothing in the Secretary of State's speech about it except in response to a question from the Liberal Democract Benches. That is pretty extraordinary for a Government who have made a major potential spending pledge. The smallest disregard of which they have talked would cost £110 million a year. The Labour party made it clear that it hoped to finance the disregard by increasing the amount of maintenance paid into the Treasury by absent parents. We had no talk today of how the Government intended to increase the amount of maintenance paid into the Treasury.

I should like to hear a clear statement in the reply to the debate. Will the Government promise that if the revenues accruing to the CSA exceed those for which we budgeted in our spending plans, they will be used to finance a maintenance disregard? Will that disregard replace the maintenance credit that I introduced? We said that if people received maintenance while on income support, they would build up a credit which they could encash if they subsequently returned to work. That provided an enhanced incentive to return to work.

We believe that maintenance is often one of the best platforms from which to enable lone parents to return to work, and it was enhanced by maintenance credit. By contrast, a maintenance disregard increases the disincentive to work. It makes lone parents better off if they do not work. Like most policies that the Opposition—I am sorry, the Government, who still behave as an Opposition—have put before us and which they give the label welfare-to-work, their policy would make people move from work to welfare or stay on welfare longer.

We have heard little of anything concrete from the Government today. They said that there was no clear objective when they were asked what the clear objective was. They could not tell us. They said that we had failed to listen to warnings. They failed to point out any warnings that they made. We have shown that they were wrong about that.

The Government have announced a better telephone service, although we have not been told how it is to be achieved and whether extra resources will be made available for it. They have announced that 500,000 more assessments will be made by the end of the year. I can inform the House that the target that I set for the CSA was 500,000 more assessments by the end of the year. The Secretary of State is trying to take credit for something that I already announced in the business plan published and submitted to the House. I am flattered that she should think that what I have done is worthy of purloining, and that she is wearing my clothes.

Ms Harman

The right hon. Gentleman simply wrote it down.

Mr. Lilley

And the right hon. Lady simply reads it out.

We have therefore had little of substance today on the CSA. We know that it will always be a sensitive issue. In every country which has such an agency, even those which have had one for five or eight years longer than we have, it remains an issue which generates more correspondence for Members of Parliament than almost any other. That is because it deals with one of the most sensitive issues in people's lives at one of the most difficult and traumatic times in their lives. We have to ensure that we minimise the difficulties that the agency creates, keep it under review, reform it and improve it. I have no doubt that there will be a collective and constructive contribution from the whole House to achieving those objectives. It is only unfortunate that we have heard little that is constructive today from the Government.

10.36 am

Mr. Bill O'Brien (Normanton)

The problems involving the Child Support Agency are serious. All that I can say to the Opposition spokesman on social security is that, in relation to the CSA, the Department that he left was a smoking gun. I support all that my right hon. Friend the Secretary of State said at the beginning of her speech. Parents should maintain their children. There should be love, affection and compassion for children from both parents. That is why it is my strong view that, where children are used by one parent and denied access to the other parent, we have an obligation to improve the situation.

This is a significant debate. It affects thousands of men, women and children. My work as a Member of Parliament is fraught with exchanges of letters, telephone calls and faxes with the CSA. I spend more time on cases involving the CSA than on any other issue, and the position is not improving but getting worse. The Opposition spokesman placed on record the work that he did to improve the service, but he and his party have let a lot of people down because, rather than improving under his stewardship, the work of the Child Support Agency deteriorated.

Mr. Heald

The hon. Gentleman may not have realised that the words that my right hon. Friend used were those of Baroness Hollis, who said: the CSA has made enormous progress in the last year. She went on to congratulate the staff on their determination and their recent successes and said how confident she was that they were building an increasingly efficient and accurate service. Does the hon. Gentleman disagree with that?

Mr. O'Brien

I speak on the basis of my constituency experience and from what hon. Members tell me about the extra work load generated for them by exchanging letters and telephone calls with the CSA on behalf of constituents. I have not witnessed any increase in the CSA's efficiency; the opposite applies. The fact that service has deteriorated is supported by the report of the ombudsman, who cannot attend to all the referrals to him and by the fact that a new agency, the independent case examiner, had to be set up to deal with complaints of maladministration by the CSA. Surely the fact that the ombudsman has received so many justifiable complaints that he cannot deal with them confirms that the CSA's operations are not in people's best interests. That is the result of the work of Opposition Members and, in particular, of the former Secretary of State for Social Security.

The record of the CSA since it started in 1993 is abysmal. It is costing a great deal in compensation to victims. The report of the ombudsman notes the number of cases where compensation for maladministration is being approved. It costs taxpayers a lot of money: the computer system had to be replaced at a cost of some £750,000. Above all, there is the cost of a great deal of suffering and stress caused to many people who cannot understand how the CSA operates. The last Adjournment debate before the general election campaign was on the Child Support Agency. I said that, in view of its record, and the hardship and hurt that it was causing, it should be wound up and we should put in place a more honest system that will treat people fairly. The CSA is not doing that.

Letters have been lost. I have had to resubmit letters to the CSA because it had lost letters from Members of Parliament. One would have thought the identification on our envelopes and letterheads would inspire the CSA to ensure that such letters do not go astray. If letters from Members of Parliament are being lost, letters from applicants are being lost. When applicants draw attention to the loss of letters or applications, the CSA denies that its system allows letters to go astray. I have witnessed the loss of letters that I have sent to the CSA.

I have a constituent who is in dispute with the CSA over a lost application. The sin is that it is for the applicant to prove that the application was submitted. The CSA takes no responsibility for lost applications or correspondence. I have hard evidence that it is responsible for the lost correspondence. The benefit of the doubt in respect of lost letters should go to applicants.

I can recite a litany of events involving the CSA. I have witnessed grown men and women weeping at my advice sessions because they do not understand how the CSA works. I pointed out to the then Minister that one person had received a notice that within three months her maintenance assessment had been amended. How can people understand a system that operates in such a way?

A constituent of mine received a statement of arrears of maintenance payments, giving the date when payments were made. He checked it out and found from his receipts that the agency was demanding £400 more than he owed. That shows that some of his payments had not been recorded in its records. If he had not retained his receipts, he would have been charged £400 more than he owed. Such situations cannot be allowed to continue.

Another constituent was advised that the review of his assessment was due in November 1996. In a letter dated 19 August 1996, he was asked to submit wage slips and housing costs for June and July. He received an acknowledgment letter dated 28 August 1996 saying that his returns had been received. In February 1997, six months after submitting his earlier statement, he was asked for pay slips and housing costs for August and September 1996. The reassessment that should have taken place in November will not take place until the middle of 1997. His first evidence was accepted but the agency asked for further evidence. That can be interpreted only as a delaying tactic. How can that be allowed to happen? What credibility has the CSA when it takes such an approach?

A young mother was deserted by her husband, who left her with two young children. She applied to the CSA for help in February 1996. In July, it approached the absent parent for maintenance, a delay of six months. In the Adjournment debate, the Minister accepted that the CSA was guilty of maladministration. That case is before the independent case examiner. The young mother is still waiting for maintenance payments from the CSA.

A young couple parted and were divorced. The CSA became involved. The absent parent had £100 a week deducted from his earnings. Fortune brought the couple back together and they were remarried. The CSA was notified of the reconciliation. Nine months later, it is still deducting money from the husband's wages. A few weeks ago, it sent a cheque for £1,300 to the couple to cover what it had been retaining of the couple's money. It still owes them more than £1,000. When the couple asked for compensation for lost interest and the numerous telephone calls and approaches to the CSA to rectify the situation, it asked them to provide a statement of losses, telephone accounts and so on. In other words, it does not accept responsibility for the hardship and problems that it caused that young couple. That case was reported to me only last week. I could go on outlining the problems that I have witnessed and am witnessing because of the CSA, but many other hon. Members wish to speak.

My right hon. Friend the Secretary of State referred to absent parents being men. Some absent parents are women. I have a constituent who is being chased for maintenance by the CSA because of the fact that she cares for the son of the marriage and the father cares for the daughter of the marriage. The mother was harassed for payment to the father, but the father was given time to consider the position. The CSA did not approach him until six months after the application. He denied paternity and the case was delayed further. The mother cannot understand why, with two people in identical circumstances, the CSA is harassing her and appears to be taking a relaxed attitude to the other case. Again, how can people explain that kind of situation?

I have a constituent who retired. He was having deductions of maintenance paid through his bank. He notified the CSA of a change in his circumstances: that his income had reduced by 50 per cent., so a reassessment should take place. Six months later, that person is still asking the CSA to take note of his changed circumstances. It is still deducting from his bank account the full amount, as if he were receiving a full income.

Therefore, in my experience and, I am sure, in other people's experience, the CSA is failing a substantial number of people. My right hon. Friend the Secretary of State assures us that there will be a review. The best review that we could have would be to scrap the CSA and to bring back a fairer and more just system that is honest and understandable.

The document "a guide to child support maintenance" contains a number of examples. Page 14 gives a schedule of net incomes and what the CSA takes into consideration, but nowhere in the list is it suggested that, when an absent parent remarries, the income of the new partner should be taken into consideration when calculating income into the household. However, that is what the CSA is doing. When it asks for details of income into the household, it demands also wage payment identification of what the new partner is contributing, but nowhere in the document does it say that that should happen.

Therefore, in addition to the CSA harassing people and being unfair to them, it is interpreting what Parliament wanted with regard to a fair system of maintenance assessment. The CSA is a law unto itself. It is asking for details of the income of an absent parent's new wife or husband. That is totally against the principle that was introduced when the CSA was brought about.

Therefore, from the experience that I have, I say to my good friend the Secretary of State: reconsider the position. The best way in which to do that is to scrap the CSA and to bring back a better and fairer system, which the courts can apply, which is nearer to the people—not in Belfast, Falkirk or some other remote area—and which people understand. That would be the best way forward.

10.53 am

Mr. Archy Kirkwood (Roxburgh and Berwickshire)

I am pleased to follow the hon. Member for Normanton (Mr. O'Brien), who has a reputation as a doughty fighter. As he said, his last Adjournment debate took place at the end of the previous Parliament. I have taken the opportunity to refresh my mind on the content of and exchanges in that debate, which was valuable, as was the hon. Gentleman's speech this morning. I agree with his analysis. For some time now, we Liberal Democrats have been in the vanguard of the argument. We were led to the conclusion that the CSA's lack of operational success was such that it should be wound up and started again.

I thank the Secretary of State for Social Security for staging this debate. It was absolutely right that she should come to the House. It is five years since the legislation was put on the statute book. I confess that I was one of the people who was taken in at the time. I remember making speeches about benefit penalties for non-co-operative mothers—that is still a problem—but otherwise I did not foresee the difficulties and the extent to which this would cause dislocation and disruption throughout the nation.

The Secretary of State is brave and right to come before the House not with any great plans after a week and a half in office, saying this is what she is going to do and this is what she is not going to do, but to say that there are problems. In my opinion, she has made her position absolutely clear. I strongly support the view that there is no question but that the principle of continuing duty of maintenance is sacrosanct. She is right to put that at the heart of her policy. If she keeps it there, she will certainly find strong support from the Liberal Democrats, irrespective of any differences we and the Government may have as the argument unfolds and as her reforms and review continue.

I acknowledge that it is not easy for the Secretary of State to open this subject in front of a new Parliament when she gets the kind of hard time that the hon. Member for Normanton, rightly, on behalf of his constituents, gave her. There is universal dissatisfaction with the operation of the system that the CSA was set up to achieve. It has not been working for five years; the House has a duty to attend to that. It is right that we should have this debate now. The Liberal Democrats will constructively and robustly argue for change where it is necessary.

There is a fundamental flaw at the heart of the legislation. It is not easy to know how to deal with it, but the concept of a formula is almost by definition unfair to the minority who do not fit the normal circumstances. There are always going to be people in life's rich tapestry who do not squeeze into the formula and there are always going to be casualties. What, more than anything else, encourages the disproportionately high level of non-compliance—we are a law-abiding nation at heart—is the fact that, in their heart of hearts, people do not believe that they have had justice; they think that no one has listened to their individual circumstances and they are incensed to the point of being driven into non-compliance. They are not naturally bad people or in any way untoward. They are perfectly ordinary citizens, but they do not believe that they have had a fair chance. They think that what has happened to them is contrary to natural justice so, for understandable reasons, they do not comply.

Mr. Bernard Jenkin

As the whole taxation system is a based on the principle of a formula and the whole social security system, including means-tested benefits, is based on the principle of a formula, why is it not just, in this case, to have the principle of a formula? Much of life elsewhere is based on such a principle.

Mr. Kirkwood

The analogy does not hold. Taxation rarely, if ever, takes into account second marriages, second families and all the different circumstances that individuals face.

Mr. Lilley

Is the hon. Gentleman saying that it is right to have a tax system that does not take into account the complexities of life, but that it is wrong to have a formula that does, that it is right to have a tax system that does not take into account the fact that people may have responsibilities — responsibility does not even enter the calculation of people's tax—but that it is wrong to have a formula that does take into account such responsibilities?

Mr. Kirkwood

There is some rough justice under the tax system, but I do not want to get too far into that argument.

Dr. Lynne Jones (Birmingham, Selly Oak)

May I help the hon. Gentleman? The previous Government were unable to come up with a formula and, in the Adjournment debate on the CSA on the final day of the previous Parliament, the Minister proudly said that, since he had become a Minister—that was not a very long time in my recollection—he had made 140 changes to the way in which the CSA operated. Clearly the Conservatives have not been able to come up with a formula, so they should not be criticising the hon. Member.

Mr. Kirkwood

Not only were there 140 amendments; there were 35 statutory instruments in three years. I simply cannot agree with the proposition that that gives anybody a sense of security and of a system working properly and fairly. In fact, all those changes in the last Parliament exacerbated the delays. The target time for clearing cases has improved, but not enough.

It being Eleven o'clock, MADAM SPEAKER interrupted the proceedings, pursuant to Standing Order No. 11 (Friday sittings).