Child Support Agency (Poverty) (Hansard, 29 November 1999)

§ 1. Mr. Chris Pond (Gravesham)
What assessment he has made of the likely impact of the reform of the Child Support Agency on child poverty. [98745]

§ 9. Fiona Mactaggart (Slough)
What assessment he has made of the impact of the planned reform of the Child Support Agency on the income of the poorest lone parents. [99069]

§ The Secretary of State for Social Security (Mr. Alistair Darling)
More than 1 million children will benefit from the reforms. More non-resident parents will support their children. A total of 600,000 children in the poorest families will gain more than £150 million a year because parents will be able to keep an extra £10 a week.

§ Mr. Pond
I thank my right hon. Friend for that answer. Does he agree that the maintenance disregard on 2 working families tax credit provides a positive incentive for both parents to co-operate fully with the CSA? Non-resident parents will see that every penny they provide in maintenance will go to the child, and not a penny to the Treasury, while parents with care will see that the money will be of total benefit to them. Is not that one of the major factors in ensuring that CSA reform contributes to the Government's agenda of eliminating child poverty in two decades?

§ Mr. Darling
My hon. Friend is right. One of the weaknesses of the previous system was that many parents did not feel that the money that they paid was going into the hands of the parent with care and, therefore, into the hands of the children. We want to ensure that far more children gain. We introduced the disregard so that parents on income support can keep up to £10 a week, which will make a big difference to their children. As he says, it will go a long way towards our objective of eradicating child poverty within 20 years and halving it within 10.

§ Fiona Mactaggart
Is my right hon. Friend aware that one in three children are in poverty and that, of those, many are likely to be children of separated parents? Will he ensure that, under the new system, the delay in deciding the award for children will be ended? At present, 67 per cent. of decisions are not made within the 22-week target. What will the target be under the new system?

§ Mr. Darling
My hon. Friend makes two good points. First, of 1.5 million children on the CSA's books, only 300,000 are directly seeing the benefit of child support. Secondly, she is right to say that the children who live in families that have broken up are more likely to be poor.
The advantage of the new system, whereby we will require some three to four pieces of information, rather than nearly 100, will mean that the maintenance calculation can be made within days of an application, rather than within months, or sometimes years under the 3 present system. Not only will 1 million children gain from that, but far more children will see what is due to them far more quickly than ever before.

§ Mr. Edward Leigh (Gainsborough)
Is the Secretary of State convinced that child poverty will be relieved by his reform, which will result in absent fathers who do not pay being criminalised? The taxpayer will have to pay twice: to keep absent fathers in prison and for the children. Would it not have been better for the Government to proceed along the excellent lines suggested by the Woolf report and replace criminal with civil remedies in this difficult area?

§ Mr. Darling
The hon. Gentleman should be aware that the agency will try every possible means to ensure that fathers who will not pay do pay. A variety of sanctions can be brought to bear against a parent who will not pay. For example, if a parent enters into an agreement to look after the children and breaks it, the CSA will immediately attach that person's wages so that it can get that money into payment. Clearly, if all else fails and a parent will not co-operate, criminal sanctions might have to be brought against that person.
The problem is twofold. First, the system is complicated. Many people who want to look after their children are unable to do so because of all the red tape and bureaucracy involved. We are resolving that through the simpler formula. Secondly, a minority of fathers can pay but will not pay. That is why we are being far tougher on them. If necessary, we will take criminal sanctions against them. I would have thought that most people would support that objective. When someone who can perfectly well afford to pay for their children does not do so, that person should be made to pay in whatever way is appropriate.

§ Mr. Patrick Nicholls (Teignbridge)
Does the right hon. Gentleman agree that it must be in the interests of both the paying and receiving parent that the system works efficiently? Is his experience in constituency surgeries the same as mine—namely, that the CSA is woefully inadequate and gets the most basic calculations wrong? People who come to see us give a litany, which is always the same, of telephone calls that are not answered and letters that are not adequate. Does he agree that, in the end, the reforms will stand or fall on whether the CSA provides a service that does justice to both parents?
We know—the right hon. Gentleman is about to remind me—that the system was set up under a Conservative Government, but will he move away from that part of his script and agree that, after two and a half years, something rather better is necessary?

§ Mr. Darling
I did not think that I would ever see the day when I agreed with almost everything that the hon. Gentleman said. However, he misses the point. He sets out the difficulties that the present system has encountered. That is precisely why we are making changes to the CSA. Fundamentally, it does not work because the calculations needed to work out how much is due to a child are so complicated and convoluted that it takes far too long for the payments to be made. That is why we are introducing a simpler formula that can be easily calculated. The ready reckoners are in the back of 4 the White Paper for anybody who wants to see them. We are making payment easier for those who can pay and want to do so, but we are going to be far tougher on the minority who can pay but will not.

§ Mr. Eric Pickles (Brentwood and Ongar)
Those ready reckoners do not show the number of people who will lose out under the proposals. Some 350,000 parents will be worse off by an average of £17 a week. How is the right hon. Gentleman going to tackle child poverty in those households that are going to be worse off? The Conservatives are broadly supportive of the Government's attempts to reform the Child Support Agency, but unless the right hon. Gentleman is prepared to address the fundamental flaws in his proposals, we might not be able to support him as readily as we would like.

§ Mr. Darling
I hope that the Conservatives and others will reflect on the fact that, as a result of the changes that we are making, nearly 1 million children will be better off. Of course some people will be paying more—that is clear from the White Paper proposals—but they will be paying it to their children.

§ Mr. Pickles
Parents with care will be worse off.

§ Mr. Darling
The hon. Gentleman says that parents will be worse off. It is a parent's obligation to look after their children. The children will be better off. I remind the children—sorry, the Conservatives—[Interruption.] It is easy to confuse the two. The Tories have to work out which side they are on. I believe that we should be on the side of the children, not on the side of those who can pay but will not.

§ Ms Sally Keeble (Northampton, North)
I welcome the changes that my right hon. Friend has set out. Simplifying the system will reduce non-payment and ensure that the problem of child poverty is dealt with. However, I should like him to explain two points. First, how will the income of the self-employed be assessed? That has been a particular problem in my constituency. Secondly, when will existing claimants come into the new system, which people in my constituency have welcomed?

§ Mr. Darling
My hon. Friend has raised two points. First, we have made it clear that if a self-employed person will not co-operate with the Child Support Agency, we shall take powers to gain access to Inland Revenue records to see what they are saying to the tax authorities. We have all come across constituents who tell us that they are not getting a penny from the absent father, yet they see him driving around town enjoying a good quality of life while the children have to go without the basic necessities of life.
Secondly, my hon. Friend asked when we will switch the existing case load on to the new system. I have made the position clear time and again. I do not want to repeat the mistakes that were made when the Child Support Agency was set up in the early 1990s, when too many cases were put onto an untried system that could not cope. We want to switch the existing cases onto the new system only when we are satisfied that the new CSA can cope. I understand the frustration of those who would like us to proceed faster, but I hope my hon. Friend agrees that if 5 we repeat the mistakes of the early 1990s, the new system will not succeed. It can succeed if we ensure that it is up and running before we put the new cases on it.