SUBSTITUTED PART I OF SCHEDULE 1 TO THE CHILD SUPPORT ACT 1991

HC Deb 29 March 2000 vol 347 cc379-411

Mr. Pickles

I beg to move amendment No. 87, in page 83, line 7, at beginning insert— '( ) Where the amount of child support maintenance calculated exceeds such sum as may be prescribed ('the maximum sum'), the maximum sum shall be payable by the non-resident parent.'.

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments: No. 88, in page 83, line 7, at beginning insert— ' "( )(a) Following the calculation of the amount payable by the non-resident parent the Secretary of State shall determine the net weekly income of the parent with care in like manner to the determination of the net weekly income of the non-resident parent. (b) Where the net weekly income of the parent with care exceeds the net weekly income of the non-resident parent of the Secretary of State shall in such manner as may be prescribed reduce the amount of child support maintenance payable by the non-resident parent. (c) Where the non-resident parent is liable to pay child support maintenance to more than one person the provisions of (a) shall apply to each parent with care and the reductions in the amount payable provided for by (b) shall apply to the amounts payable to each of those parents with care in receipt of a net weekly income greater than that of the non-resident parent.".'. No. 2, in page 83, line 35, leave out sub-paragraph 4(1) and insert— '4.—(1) Except in a case falling within sub-paragraph (2), a flat rate of £5 is payable if the nil rate does not apply and the non-resident parent's net weekly income is £100 or less.'. No. 3, in page 84, line 2, leave out from "force;" to end of line 4.

No. 4, in page 84, line 5, leave out sub-paragraph 4(3)

No. 5, in page 84, line 11, at end insert— '; or

1. (c) he received any benefit, pension or allowance prescribed for the purposes of this paragraph; or
2. (d) The or his partner (if any) receives any benefit prescribed for the purposes of this paragraph.

(2) The benefits, pensions and allowances which may be prescribed for the purposes of paragraph 5(1)(d) include ones paid to the non-resident parent under the law of a place outside the United Kingdom.'.

Mr. Pickles

The amendments address matters of great importance. On Second Reading, we made it clear that, although we support the notion of simplified banding, we believe that the Bill makes certain injustices likely.

Three great injustices have not been addressed. The first is the issue of rough justice and the lack of variations, which you, Mr. Deputy Speaker, kindly allowed us to debate briefly in connection with new clause 27. The other two relate precisely to the amendments, especially the first two in the group. They are the injustice of not having an upper limit for the purposes of assessment and the injustice that arises when the parent with care is wealthy and the non-resident parent is poor.

The Bill is a landmark measure because it creates a new right in law: that a child shall have a share of the parent's income during the lifetime of the parent. That legal right is unique, not only in British law, but anywhere else in the world, according to the advice that I have received from learned colleagues and counsel.

Mr. Swayne

Although the right might well be unique, it does not strike me as unreasonable. My hon. Friend appears to dispute the right. Will he explain why he considers it unacceptable?

Mr. Pickles

My hon. Friend must be patient: I was about to explain, but he will have to allow me a few oratorical flourishes before reaching that climax.

I understand that a similar right exists in Germany, but only in connection with inheritance—in other words, the parent has to be dead. Britain is the only place in the world that will give that right when the person who has the money is still living. The strange aspect is that the right is given only to children of a broken marriage or relationship; in addition, the right affects only the non-resident parent's wealth. Therefore, children do not have such a right in relation to the parent with care or if their parents live together. A child of a broken marriage has no such right in connection with the parent with care, who might be wealthy, but has it in connection with the non-resident parent, who might be poor.

Under the Bill, the child has no right to claim the money itself. Therefore, although we create a brand-new right in law that one child is entitled to 15 per cent., two children to 22 per cent., and three or more children to 25 per cent. of the non-resident parent's income, the children cannot get hold of the money themselves; it is paid over to the parent with care. No wonder the arrangement has been described as spousal redistribution by stealth. It is a way of re-examining a divorce settlement.

I know that you like transparency in such matters, Mr. Deputy Speaker. It is strange that the Government are reluctant to give a reason for the arrangement. All we hear is a woolly statement that children have a right to enjoy and share in any increase in the wealth of the non-resident parent. That is all the explanation that has been given, so I hope that the Under-Secretary will provide some further explanation today.

I do not believe that a child has such a right. I believe that children have a more important right, which is to be maintained by each parent. Children have a right to maintenance and to their education, housing and other needs being met, but they do not have a right to an immediate share in their parents' wealth. There might be a presumption or an expectation that, as time passes, certain sums will be handed over to a child during its lifetime, or that it will receive some sort of inheritance after a parent's death, but the child has no right to receive such sums. The House should not be involved in carving up a person's wealth. That should be a matter for the individual parties to decide. Individuals have a right, a duty and an obligation to look after and support their children. They cannot palm their children off on to somebody else. That is the position in law.

We have been considerably helped, during the Bill's passage through the House, by the work of the Select Committee on Social Security. I shall quote from its recommendations, which I think are set out on pages xlii and xliii. The Committee states: In the final analysis, the child support formula should be seen clearly to be related to the cost of bringing up children and not as a straightforward "tax" levied on the non-resident parent. We recommend that the Government should re-examine the possibility of inserting in the legislation an upper limit on the automatic application of the revised CSA formula. That was wise advice. The wording was chosen because it reflected the evidence as it unfolded.

Select Committees sometimes fall down when the dirty hand of politics becomes involved, and that happened in this instance. There was an amendment to strike out the recommendation to which I have referred and instead to include the words continue to share in that parental wealth. However, the Committee still felt able to include the warning that there is a risk that a few high-profile cases involving payments about the maximum contribution may negatively affect public perception. I bet they will. The social security system and the CSA will be brought into disrepute.

I am sure that Mr. Bill Gates of Microsoft leads a blameless life and that he would never shirk his responsibilities. However, let us suppose that he did, and that the CSA came after him. Mr. Gates is worth £53 billion a year. According to the formula that the Government seek to impose, if he had two children they would receive £10.6 billion by way of child maintenance. The House will be aware that the gross national product of Luxembourg is £8.9 billion. That is an illustration that the formula goes beyond maintenance and that it does not make sense.

I have used Mr. Bill Gates as an example because he is the wealthiest person whom I have heard of, and to ridicule the system. However, the Government's formula will have a more perverse effect. Another example is that of two houses side by side. In house A we have a parent with care on £9,000 and a non-resident parent on £300,000. In house B there is a parent with care on £300,000 and a non-resident parent on £9,000. I have simply reversed the figures. Let us suppose that each house has one child. On the basis of 15 per cent., child A would receive about £45,000 a year in maintenance, and child B would receive £1,350. That is a difference of £43,650.

What sense is there in that? Are the Government suggesting that child B on £1,350 is adequately cared for? Presumably they are. Are they suggesting that child A on £45,000 is adequately compensated? Presumably they are. However, each child is identical, which is why the figures are so perverse.

6.15 pm

If there is no upper limit, the CSA will find itself increasingly taking over court order assessments. The Law Society and leading lawyers are warning us about that. [Interruption.] The Minister makes disparaging remarks about the legal profession, but it was not so long ago that it was suggested that the CSA should set up a counselling service under a leading judge to produce a far more judicial system. After all, the Minister is seeking to achieve a lawyer's playground. A great deal of money will be made, and we can be pretty sure that that will not be for the benefit of children.

As the Law Society and leading counsel have said, all that is required is 14 months' notice to be given by the parent with care, who can then take up to 25 per cent. of the non-resident parent's income. Even if there is a clean-break divorce, even if substantial child maintenance has been agreed, even if there have been deals with regard to the transfer of shares, pension rights, properties, the setting up of various trusts and various assets from the marriage being transferred, these events would be regarded as never having happened. It would be within the ability of the parent with care to go straight to the courts.

I know that Labour Members are reluctant to accept quotes from Mr. Mostyn. However, in his talk, to which I referred earlier, he made an interesting observation about the legal profession and about how judges would deal with these matters. He referred to substantial maintenance and said: I think you are beginning to see— He was addressing a bunch of lawyers— how this is going to be a lawyer's beanfeast for us because we are going to be very clever working out ways to get round this and I will explain some of them later on. A certain High Court Judge has said to me that if that happens— that is, if the proposed arrangements are made and are overturned by the CSA— I'm going to order spousal maintenance from the wife back to the husband to rectify the situation", but that won't work when they are unmarried.

In other words, this is about spousal maintenance. It is a back-door means of achieving precisely that. I believe that the Government's approach was regarded as being rather politically correct, it being about the rights of the child. It was armchair political correctness. It was included to make everyone feel good—"We shall do this and the added bonus is that we might be able to stick a few rich people as a bonus." However, the scheme will have an effect further down the process.

In Committee, the Minister said that, if we had an upper limit—I am speaking from memory, but I am pretty sure that the hon. Lady said this—we might be vulnerable to a challenge by the European Court of Human Rights. The hon. Lady is silent. I wish that she would give me a clue whether she said that or not.

Mr. George Stevenson (Stoke-on-Trent, South)

We are waiting to be convinced by the hon. Gentleman.

Mr. Pickles

I am grateful to the hon. Gentleman. It is good to see him in the Chamber.

I am pretty sure that the record will confirm what I believe the Minister said. However, an upper limit already exists. Is she suggesting that we are open to challenge? As leading counsel has said, we need to see that advice, because it goes against all the experts in family law. All the experts on the European convention on human rights say that that is not the case, but the hon. Lady seems to have found a lawyer to say that it is. If it flies in the face of conventional wisdom and all the advice that we have received, we should know. I look forward to hearing from her what the position is.

We are not unique in having such a system. The system in Australia has the same aim. In Committee, I quoted extensively from Mr. Justice Kay of the Australian court. I did not realise at the time how distinguished he was. Apparently, he is the senior judge in the family court of Australia, and the principal appellant judge after the chief justice, so he is a senior man.

Justice Kay was asked to give advice to the Select Committee, and stated: Placing a cap on administrative assessment of child support and factoring in some income of the carer are seen as being entirely consistent with two underlying essential bases of the scheme. The first principle is that children have their proper needs met from reasonable and adequate shares in the income, earning, property and financial resources of both of their parents. The second is that parents share equitably in the support of their children.

Justice Kay was asked whether those principles would meet with public acceptance. He commented: The success of the scheme may well depend on the extent to which the public perceive it to be fair. Assessments which throw up $550— the sums are given in Australian dollars— a week for a baby or ignore the fact that the carer is earning $100,000 per annum whilst the payer is struggling to make ends meet do little to bolster public enthusiasm for the scheme. The Government's proposal is entirely consistent with the Labour party's pre-election pledge, which stated: We are determined to establish clear principles, in the context of changing times, and to devise policies that are as fair as possible for all the parties concerned, including mothers and fathers. I anticipate what the Minister will say. She will speak about rough justice and tell us not to worry, because the system is to be simplified. She will say that some people may be disadvantaged, but too bad. She will tell us that 96 per cent. of parents with care have net weekly incomes below £100, and that only 6,000 people will be affected.

In my book, 6,000 is a substantial number, and that does not take account of the effect on middle England. Once the measure becomes law, there will be a rush—nay, a stampede—of people seeking to overturn court judgments and to get a larger slice by way of spousal distribution.

Is it not absurd that we may be chasing a non-resident parent with a low income—as low, say, as £9,000 a year—when the parent with care is wealthy? Is it not absurd that we are giving children a right to a share of the income of one set of two parents? The amendments are intended to make sense of the CSA reforms.

Miss Anne McIntosh (Vale of York)

I am grateful to my hon. Friend for giving way. Where the non-resident parent has formed another relationship and the other partner to that relationship is making provision, should that not be taken into consideration?

Mr. Pickles

Not in the context of the amendment, which deals with parents with care who are wealthy. It is ridiculous to suggest that the income of the parent with care should not be taken into consideration. It makes a mockery of the system to chase after someone for a relatively small sum, when the child is living with a parent who has considerable wealth.

Mr. Bercow

Does my hon. Friend agree that it would be an accurate summary of his position to say that he was arguing on the strength of the principle, "From each according to his ability, to each according to his need."?

Mr. Pickles

My hon. Friend is probably a keen fly-fisherman. I shall take no more interventions, as I want to make progress.

We should stop making the CSA a laughing stock. Without the amendments, we will create injustice and a new concept in law which has not been thought out. We will undermine the successful introduction of a set of measures which we sincerely hope will succeed. I commend the amendment to the House.

Mr. Field

I shall speak to amendment No. 87. I confess that, so far, Bill Gates has not come to my surgery to discuss the sort of issues raised in the debate. [Interruption.] Of course, I live in hope.

I shall describe a real-life situation for some, but not many, constituents. I pose this as a question to the Minister, which she may answer now or in a letter later, about how the new Act will operate and the safeguards that it will contain.

As I understand it, the safeguard is that people will be required to pay only a certain proportion of their income in maintenance. I have had a number of constituency cases in which people had their first child when they were, let us say, 16. They have a court order for the payment of maintenance for that child. They have then married and had a second family. That marriage has broken up. It is on that second family that the CSA calculations will be undertaken.

I seek an assurance that, under the new system, the maintenance paid for the first child will be taken into account when the proportion of income taken in maintenance is levied—in other words, that that maintenance payment will be taken into account when the safeguard which I understand is in the Bill comes into operation. That is the opposite extreme of how a cap operates, but more people in Britain may be interested in the answer to that question than in the answer to the question of how to treat those families who are lucky enough to have an annual income greater than some continental European countries.

6.30 pm

Mr. Webb

Amendments Nos. 87 and 88 raise two interesting issues. Amendment No. 87 provides that the absent parent, no matter how rich, continues to pay a percentage in child maintenance. Amendment No. 88—to which the hon. Member for Brentwood and Ongar (Mr. Pickles) referred, but not in as much detail as I expected—deals with the situation where the mother is better off than the absent father.

In considering the amendments, we were struck by the fact that they represent opposite logics. Our guiding principle in deciding which way to vote on an amendment is whether it would help to maintain what a child would have experienced had the parents stayed together. That seemed a reasonable way to evaluate the amendments. On amendment No. 87, the answer is no, and on amendment No. 88, yes. Let me explain what I mean.

Had the rich dad—for simplicity's sake—stayed with the family, the child would have benefited. Maintenance is not just about food and clothing; it is about living standards and quality of life. If a child loses the presence of the dad, is it reasonable to expect them to lose the living standard provided by a well-off dad, or a dad who becomes well off? Had the dad remained and earned a bonus or a good salary, the family might have gone to Disneyland, or wherever.

Mr. Pickles

Is the hon. Gentleman concerned that the Bill provides no way of ensuring that such money is transferred to the child?

Mr. Webb

Short of putting the money in trust, which would be a possibility, we have to assume that the parents will want to act in the child's best interest, so I have no particular problem with the lack of a mechanism for benefiting the child.

Different issues arise if the dad becomes rich after the break up, but if he was rich while the family were together, the child will have had a high material standard of living. Therefore, after a break up, not only does the child lose the dad but there is a slump in the standard of living, which is something else to adjust to.

Mr. Robertson

The hon. Gentleman is right to question whether a child who loses a father also loses a certain standard of living, but the father loses the child, so should there not be some recognition of that?

Mr. Webb

Obviously, the father does lose the child. We all encounter fathers in our surgeries who feel that pain greatly and have great concerns about access and other issues, but I am not convinced that a monetary adjustment is the right way to deal with that problem. Court decisions on welfare and access are important in that regard, but I am not convinced that tweaking the formula can compensate. I do not suggest that we compensate the child for the loss of the father through money either; I am simply trying to avoid further pain for the child.

Therefore, I am not convinced that a cap would make sense. There may be a few headline cases, although, as has been suggested, the Bill Gates of this world will have good lawyers and, just as they will probably avoid paying much tax, they will probably find a way round provisions such as this, so they may never be affected.

We have more sympathy with the rich mum, poor dad situation, where there is more obviously a potential sense of injustice when a dad with a modest income pays maintenance when the mother is well able to provide the child with all that it needs. The loss of money from the dad leaving may be small and there will be one less mouth to feed. I am aware that research shows that, after a split, the family with the children is usually the worst off, but we are dealing here with the opposite case, where the mother is relatively well off, where, after the split, there is one less mouth to feed and the loss of only a modest income, so the family may be better off. It is not unreasonable that that may be taken into account in the maintenance assessment. Therefore, we have some sympathy with amendment No. 88 but not with amendment No. 87.

Amendments Nos. 2 to 5, tabled by the Liberal Democrats, relate to one issue and touch on the different set of circumstances of the absent parent, typically the dad, who is on benefits. Schedule 1 says that dads on benefit would probably pay a fiver, which they would not presently be paying. If I am wrong, I hope that the Minister will stop me, otherwise I shall assume that that is the case.

Is it right to take that fiver a week from an absent parent on benefits? The Government's approach is to say that pretty well everyone should pay something, as much for the symbolism of it as anything else. It is a point of principle, but my problem is that the Government, in so many things that they do, cause people to live below the poverty line by digging away at their basic benefit level.

I would argue that the £50 a week received on income-based jobseeker's allowance is an extraordinarily minimal sum on which to live. It is certainly not enough to save with, so lump sum purchases require a social fund loan, or something like that. A fiver may not sound much to us, but it could be 10 per cent. of a weekly income. I am not convinced that the symbolism of saying that everyone must pay something justifies the poverty that will be created for absent parents in such a situation.

The effect of amendment Nos. 2 to 5, on which we shall divide the House because they represent an important and distinct issue, is to move absent parents on benefit from the category of those who have to pay a fiver into the category of those who are subject to the nil rate.

I give the House an illustration of why we are particularly concerned about deductions from benefits. The "Income Support Statistics Quarterly Enquiry February 1999"—perhaps not the latest, but the latest that I have to hand—gives the number of people on benefits who already have something deducted at source. In other words, they are already getting by on a weekly income below basic benefit levels.

The astonishing figure here is that more than 1 million income support claimants are already living below basic income support levels because something has been taken away at source. Various categories of money are taken away at source, some of which tell one something about the standard of living. For example, in some cases mortgage interest comes from income support at source, and that is just an accounting feature. The money goes direct to the lender instead of it going to the claimant and the claimant paying it out, so that does not directly mean that they are living below the poverty line. About 600,000 people on income support have social fund loan repayments deducted from their basic benefits. One might say that they have had the money with which they bought the bed, cooker, fridge or whatever, but that money has gone on those purchases, so it is not then available for buying food, clothing and basic necessities. The basic income support level is minimal enough as it is, with no slack in it, so many people on income support end up going to money lenders and loan sharks. Pushing them further below income support by schedule 1 is a cause for concern.

Categories are always being added to such deductions, which take people below the income support line, and the social fund line in the table has been shooting up. In his Budget statement, the Chancellor told the House that there has been year after year of continuous economic growth. One would therefore assume that the numbers would start to drop as jobs were created. Unemployment decreased substantially over that period.

Yet, according to the table, in the past four years, the number of people who live below the poverty line because of social fund loan repayments has increased from approximately 450,000 to 600,000. The number has increased in each of the past four years. There is an underlying serious problem: more and more of our fellow citizens live below the poverty line because of deductions from benefit. Without our amendments, schedule 1 will exacerbate the problem. That is the kernel of our argument.

We have reached a position in which people cannot get social fund loans because they are deemed too poor to repay them. That is extraordinary, yet the system works in that way. People are becoming deeply indebted to the social fund and to loan sharks, yet we are considering a schedule that will deduct another fiver. I accept that not many of the dads whom we are considering are in those categories. However, many are lone parents who are repaying social fund loans, and some are pensioners or disabled. Some dads will be on incapacity benefit and repaying social fund loans.

I hope that the Minister will explain how those people are supposed to live. I presume that the fiver a week will be paid indefinitely. The problem with inadequate benefits is not living on them for a week. Members of Parliament often do a stunt and live on benefit for a week. Lo and behold, they can do it for that time. The problems arise when, for example, a consumer durable has to be replaced. The deduction of a fiver a week will make matters even worse.

I hope that the Minister can clarify a further point. When an absent parent has a child in a new benefit unit, will the deduction of a fiver continue? The Government talk about eliminating child poverty completely in 20 years. They envisage a time when the Secretary of State for Social Security will say that no child in this country lives in poverty. Yet children who are in benefit units and live below income support levels because of deductions for social fund loans or child support maintenance premiums will suffer. Even a fiver means that those children will live in poverty.

I hope that the Minister will reconsider the £5 deduction and answer the specific question of whether the Government intend to take £5 from absent parents with dependant children.

Mr. Edward Leigh (Gainsborough)

I have listened to the hon. Member for Northavon (Mr. Webb), and as always he presents a good and cogent argument. I do not agree with him although I accept his point that we are considering many fathers who are on income support and for whom £5, although it seems a small amount of money to care for a child, may be a severe imposition. I understand those points.

However, I am sure that the hon. Gentleman recognises the counter argument. We are using the Bill to try to create a society in which people get the message that they have rights and responsibilities. If one fathers a child, surely it is not too much to ask for £5 a week, whatever one's circumstances? I support the Government on that point, whatever the difficulties that may accrue from it.

Mr. Webb

The hon. Gentleman uses the phrase "father a child". Let us consider the following sequence of events: a happily married couple have a child and they split up, with no blame attached—or perhaps with no blame attached to the absent parent, who is unemployed through no fault of his own and has to live on £50 a week. Is it right that he should pay 10 per cent. of his income, which he cannot afford, because he needs that money on which to live? In those circumstances, the father has done nothing wrong.

6.45 pm

Mr. Leigh

I make it clear that I do not want to be involved in a blame game, in which we assume that the father is always in the wrong. In many circumstances, the father is not to blame. I cannot give a definite answer to the hon. Gentleman's question. It may not be entirely right to make a father in the circumstances that the hon. Gentleman described pay £5 a week. However, we cannot make provisions that are always right; we simply have to make a stab at a problem. The Government are trying to send a message that even though the father is not to blame for the family splitting up, and his income has fallen below a low level, he should pay something.

If the parent pays nothing, not even £5 a week, it is difficult to maintain real control of what is happening. At least a parent who pays £5 a week is involved in the family finances of the absent child. It could therefore be in the father's interest to pay that sum. However severe a financial penalty it may be in the short term, in the long run, the father's continuing involvement in the child's financial maintenance may be best for child and father.

The debate is interesting, because on the one hand I have been having one sort of argument with the hon. Member for Northavon for the past four minutes, and on the other, we have talked about Bill Gates. The debate is about the child's rights to a share of his parent's income and whether that should be calculated on a percentage basis or whether there should be a cap.

The debate on the cap is interesting because I suspect that the Government were genuinely divided about whether to provide for it. Baroness Hollis's reply to me in the Select Committee on Social Security has already been mentioned. She was obviously debating with herself as a Minister about whether there should be a cap. She said: I think this is a question on which we thought long and hard and I think there are good, strong arguments on both sides. There is one argument saying that you should cap it because it is child maintenance and if it goes all the way up the income scale, it becomes spousal maintenance … My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) made that point. The Minister is aware of it, and I hope that she will share her thoughts with us.

It would be dangerous if the payment were regarded as spousal maintenance. Absurd circumstances could arise. We have considered the Bill Gates position, in which someone of considerable resources hands over enormous sums of money. Let us consider the circumstances of two families that split up: in one case, there are children; in the other, there are no children, and there is a grotesque difference in the amount of spousal maintenance. If the proposal is accepted and there is no cap, the husband in the first case will pay 15 per cent. of his income, whatever it is. In the second, normal divorce law and procedures of the courts apply. There is no rule that provides that if there are no children, one of the partners is entitled to 15 per cent. of the other's wages. Extraordinary discrepancies could arise. We are getting into a muddle.

Although I appreciate the debate within government, Ministers should consider carefully before they reject the arguments that my hon. Friend the Member for Brentwood and Ongar presented. I do not want to give the impression that Baroness Hollis simply agreed with me. However, she continued with the argument that she had with herself by saying: and the other argument is that if that family were intact, the child would enjoy the living standard of that father whatever his income, whether he was earning £200 a week or £2,000 a week, and at the end of the day in response after listening to the consultation exercise and talking with people and meeting the 40 groups and organisations, we came out on the side of saying that we should not have a cap, but obviously it is the sort of issue that Parliament will want to explore and take a view on. That is precisely what we are doing, and what we tried to do in the Select Committee and in the Standing Committee.

The problem revolves around the issue of whether the child has the right to his father's income. However, in a way Baroness Hollis was wrong when she said if that family were intact, the child would enjoy the living standard of that father whatever his income … As we all know—indeed, there is hardly any need to say it—there is no right to any percentage or share of the father's income, which can go up or down, if the family is intact. It is not necessarily shared with the child, and I am not sure that it is right that children should always enjoy a share of a parent's income if the family remains intact. It would be a strange legal system if that happened.

Families Need Fathers put the case well in its evidence to us, which is on page 135 of the Select Committee report: Why should the state determine how much fathers should pay for their non-resident child when it does not involve the taxpayer? It would be considered an intolerable assault on personal liberty if it happened in a couple family. That is a powerful argument.

In a way, my hon. Friend the Member for Brentwood and Ongar did us a disservice by mentioning Bill Gates as his story, although good and amusing, gave the impression that few people will be affected by the proposal. However, quite a few people who in no sense rely on state benefits and pursue normal lives could be affected, because they have suffered the misfortune of a marriage or relationship break-up. Now the state comes in, uniquely in this area, to say, "We must determine how much fathers should pay their non-resident child."

Mr. Pickles

My hon. Friend is right to castigate me. I used the Bill Gates story to illustrate a point and make the proposal look ridiculous, but it will bite significantly at about £45,000 a year and people on moderate to medium earnings will be affected.

Mr. Leigh

I am pleased that my hon. Friend has intervened, because we are beginning to have a real debate. Incomes of £40,000 or £45,000 are middle management incomes in many areas. [Interruption.] Needless to say, Members of Parliament earn such a sum. Large numbers of people will be affected. The public have not cottoned on, but there will be a great deal of resentment if people suddenly find that, irrespective of what happened in their marriage or irrespective of a former partner's position, they have to hand over £10,000, £15,000 or £20,000, which they might consider a very large sum, to maintain a child. They will think that the money will not all go to the child—there is a limit—and they would be right.

If people send their children to expensive public schools and give them everything they want, which may not be good for them anyway, perhaps they can spend £15,000, £20,000 or £25,000 a year on a child. However, many people will think that the money will not go to the child, but will simply reinforce the life style of the former spouse. Of course the money will not go to the child; nor will it be put in trust. If it were, that might be fairer. There will be enormous resentment. As Families Need Fathers said in evidence, people consider the proposal a grotesque intrusion on personal liberty and it would never be tolerated if a couple were still together. The evidence was moderately put and sensible.

I hope that hon. Members will not groan if I mention Mr. Mostyn, although they often do so when we pray him in aid of our arguments. [HON. MEMBERS: "Him again."] He practices in the divorce courts and we might think that he knows what he is talking about. He does not practice in cases such as those to which the hon. Member for Northavon referred and he did not talk about people on lower incomes, but he did mention parents earning £40,000, £50,000, £60,000 or £70,000 a year. There are a lot of them around. They may be a minority and they may not be the Government's first concern, but the fact that they are a minority and the fact that there are far fewer of them than people in the lower income brackets does not mean that they do not have rights. They, too, have rights. They have the right to talk about their problems and to speak up about them.

On page 83 of the evidence, Mr. Nicholas Mostyn told us: In terms of English law and social experience it would be a change of massive social profundity. It will go beyond, for example, the Roman law idea of legitim, which is your guaranteed right of inheritance. It will go beyond that because it would be inter vivos It seems to me that you have got to understand the profundity of what you are suggesting. Perhaps he overstated his case, but not in this sense: the proposal represents an enormous change in respect of anything that we have instituted previously. Before we finish the debate, we must be clear about what we are putting on the statute book. We are saying that, leaving aside inheritance, children in certain circumstances will have an absolute right under statute law to a proportion of a parent's income.

That is an interesting departure and we know precisely what will happen. The proposal does not concern only CSA cases because the courts will follow the CSA—there can be no doubt about that—and very soon people will wake up to what is happening under the Bill. They will immediately try to reopen settlements. People who received a court settlement of £3,000 or £4,000 a year, supposedly for a child, after their relationship broke down will rush to the court straight away when they realise that their former spouse earns £100,000 or £150,000 a year and that they can get a 15 per cent. share of that. That will happen, and it will be impossible for the courts to resist. A lot of cases will be reopened.

On a philosophical rather than a practical point, does the House of Commons want to create an absurd situation in which children will think that they have a statutory right to a certain proportion of a parent's income? Conceivably, that could lead to absurd cases in which children sue their parents for that share. We are creating a politically correct notion that most of us in the Chamber would regard as absurd, but the Government will defend themselves by saying, "That is not what we propose. We are not trying to create a new situation in which children have that right." Very reasonably, they say that children will still have a right to share in the income of an absent parent when the parents' relationship breaks down. Everybody thinks, "Oh, that is very sensible," but when we dig down and consider the proposal in more detail we see that it will produce the absurd situations that my hon. Friend the Member for Brentwood and Ongar described.

I hope that the Government will not think that our arguments are partisan or motivated by party politics. They are perfectly sensible and reasonable points and, as the Bill continues its passage, I hope that they will come to consider some sort of cap sensible and necessary.

7 pm

Mr. Swayne

My hon. Friends the Members for Gainsborough (Mr. Leigh) and for Brentwood and Ongar (Mr. Pickles) seem to be most put out by the creation of the new right to a proportion of a parent's income. I am not sure whether my hon. Friend the Member for Brentwood and Ongar is more excised over the creation of that right in itself—I am not disposed to the creation of new rights in respect of the rights of the child, that whole area of political correctness, but we must meet people's legitimate expectations—or over the fact that it is available only to those children whose families are no longer intact. That does not strike me as such a reprehensible state of affairs. Children have a legitimate expectation of a childhood of a certain standard, and of parenthood during that childhood. That legitimate expectation has been denied, and I do not think it entirely inappropriate for compensation to be provided in the form of a new right—the right to a proportion of one parent's income in lieu of the legitimate expectation that has been denied.

Before my hon. Friend begins to fear that I shall enter the other Lobby, let me say that I thought he was on stronger ground when he said that there was no mechanism for the delivery of payment to the child. That, I think, is the nub of the problem, and the strength of the amendments. There is a view, or a perception, on the part of those making the payments that they will be subsidising the living standards of the parent with care. That has created a burning sense of grievance, which is compounded when the income of the parent with care is higher than that of the non-resident parent.

I believe that the feeling of injustice created by the forces to which I have referred will lead to a reduction in compliance, which, after all, is one of the great targets of the Bill. For that reason alone, I support the amendment.

Angela Eagle

We have rehearsed many of the arguments that were presented at length in Committee, but Bill Gates has now been prayed in aid. I assume that the £53 billion assessment made by the hon. Member for Brentwood and Ongar (Mr. Pickles) related to Bill Gates's entire wealth, rather than his annual income. We must remember that the child support mechanism deals with net taxable income, rather than the wealth that could be deemed to have accrued over an individual's lifetime.

Mr. Pickles

At £53 billion, who cares?

Angela Eagle

That is probably fair comment, but I thought I should point out that we are discussing net taxable income rather than the amount that a person is worth overall.

We should also bear in mind that there is a cap, in that a non-resident parent will in no circumstances have to contribute more than 25 per cent. of his or her net taxable income. The Government concentrated on that in trying to simplify the system. Lady Hollis shared some of her thoughts with the Select Committee, and the hon. Member for Gainsborough (Mr. Leigh) has cited them here, owing to their relevance to the Government's thinking. We have engaged in various debates, but we still believe that we are doing the right thing, and that introducing an upper limit would lead to an inconsistency between the treatment of non-resident parents with relatively high incomes and that of parents receiving more modest sums.

I think that the hon. Member for Northavon (Mr. Webb), who wrestled publicly with the difficulties with which we are all trying to deal, was right to concentrate on living standards rather than incomes for children. We are not talking merely about set incomes, and what goes to particular children. We are not talking just about food and clothing.

In Committee, the hon. Member for Gainsborough said that no children, even those living in well-off households, would, in a mathematical sense, have exactly equal shares of the income involved. I hope that the hon. Gentleman does not keep his children in the garage: I trust that they live in the house, and share in the general standard of income.

Mr. Leigh

My kids are probably in the garage.

Angela Eagle

They may prefer to play in the garage to get out of the hon. Gentleman's way, but I presume and hope that he does not keep them there permanently.

Amendment No. 88 seeks to reduce the amount of maintenance payable under the maintenance calculation when the net income of the parent with care exceeds that of the non-resident parent. Let me explain the basic structure of the incomes of parents with care in the current CSA case load. Of those parents, 677,000 have no earned income; 84,000 earn less than £100 a week; 6,900 earn more than £200 a week; only 580 earn more than £350 a week, and only 200 earn more than £500 a week.

The vast majority of parents with care have only a modest income, and have been left to look after the children. According to the CSA structure, the non-resident parent has a duty to ensure that the children whom he has fathered are looked after properly, and to be financially responsible for their continued maintenance—to the extent that he can be, given the test applied to his income. It is almost always women with low incomes who are left to look after the children.

Amendment No. 88 would require a huge increase in means testing, and the Conservatives have already told us that they are opposed to that. In seeking to simplify the CSA formula, we aim to abolish means-testing of the parent with care and, perhaps, the means-testing of her partner, the non-resident parent's new partner and so forth. If amendment No. 88 were adopted, the CSA would have nearly 1 million cases on its books by the time that the reform was introduced. The amendment requires the CSA, instead of applying one simple, quick means test to the non-resident parent, to apply four means tests per case to establish the income of the new partner of the non-resident parent, as well as that of the new partner of the parent with care if such a person exists.

The amendment would reintroduce a huge amount of means testing in a very few cases, and would destroy all the simplicity that has been introduced. It would return us to the problem that we face now: the problem of ensuring that the right balance exists between the need to make a maintenance assessment quickly and simply, and the need to spend time enforcing it.

The Liberal Democrat proposals deal with the basic payment of £5 that the Bill introduces for all non-resident parents, regardless of whether they are receiving benefit. I understand the worries expressed by the hon. Member for Northavon about people on low incomes: that is why the Bill introduces different levels of payments, including a minimum payment for those whose incomes are below £100 a week. It does not specify percentages, but it provides for that £5 minimum. We think that all fathers, except in a few circumstances—when they are still at school or in prison—should make some payments.

Amendments Nos. 2, 3, 4 and 5 seek to introduce a radical change. They require a nil rate of liability when a non-resident parent or his partner receives a benefit prescribed for the purposes of the legislation. They also provide for the flat rate to be specified in regulations when a non-resident parent has income of £100 a week or less and has a partner who is also liable for child support.

I can reassure Members that special provision will be made for the flat rate when a non-resident parent on an income-related benefit has a partner who is also liable for child support. The intention is for the flat rate payable by each member of a couple receiving income support, or income-based jobseeker's allowance, to be half the standard flat rate. The £5 minimum is a maximum as well: it can be split equally and £2.50 can go to each child. However, it cannot become £10. I hope that that offers some reassurance.

The exemptions in respect of payment of contributions for maintenance have been removed. The current scheme exempts some people with quite high incomes. All fathers, whether on benefit or in work, have a responsibility to contribute to their child's upkeep, but we recognise that a simple percentage calculation does not adequately reflect the difficulties that are faced by those on low incomes—hence the £5.

It is important to keep in mind another key part of our child support reforms: the introduction of the child maintenance premium, ensuring that the money that is paid—all £5 of it—goes directly to the child. It is not, in that sense, a Treasury support agency, which has been one of the major objections and reasons why people on benefits do not pay.

The hon. Member for Brentwood and Ongar mentioned social fund users. He was gracious enough to admit that the vast majority—in fact, it is not the vast majority, but a large proportion—of social fund users are women on income support, who will benefit from the £10 maintenance disregard when benefit is paid. Under his amendments, they would not: they would not receive the maintenance disregard because they would not receive any maintenance. There is an evening out.

I hope that Members will oppose all the amendments.

Mr. Pickles

I beg to ask leave to withdraw amendment No. 87, but with your permission, Mr. Deputy Speaker, to divide the House on amendment No. 88.

Amendment, by leave, withdrawn.

Amendment proposed: No. 88, in page 83, line 7, at beginning insert—

' "( )(a) Following the calculation of the amount payable by the non-resident parent the Secretary of State shall determine the net weekly income of the parent with care in like manner to the determination of the net weekly income of the non-resident parent. (b) Where the net weekly income of the parent with care exceeds the net weekly income of the non-resident parent of the Secretary of State shall in such manner as may be prescribed reduce the amount of child support maintenance payable by the non-resident parent. (c) Where the non-resident parent is liable to pay child support maintenance to more than one person the provisions of (a) shall apply to each parent with care and the reductions in the amount payable provided for by (b) shall apply to the amounts payable to each of those parents with care in receipt of a net weekly income greater than that of the non-resident parent.".'.—[Mr. Pickles.]

Question put, That the amendment be made:—

The House divided: Ayes 165, Noes 271.

Division No. 130]	[7.11 pm
AYES
Allan, Richard	Baldry, Tony
Amess, David	Ballard, Jackie
Arbuthnot, Rt Hon James	Beggs, Roy
Ashdown, Rt Hon Paddy	Beith, Rt Hon A J
Atkinson, David (Bour'mth E)	Bell, Martin (Tatton)
Atkinson, Peter (Hexham)	Bercow, John

Beresford, Sir Paul	Jenkin, Bernard
Blunt, Crispin	Johnson Smith, Rt Hon Sir Geoffrey
Body, Sir Richard
Boswell, Tim	Keetch, Paul
Bottomley, Peter (Worthing W)	Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Bottomley, Rt Hon Mrs Virginia
Brady, Graham	Key, Robert
Brand, Dr Peter	Kirkwood, Archy
Brazier, Julian	Lait, Mrs Jacqui
Brooke, Rt Hon Peter	Lansley, Andrew
Browning, Mrs Angela	Leigh, Edward
Bruce, Ian (S Dorset)	Letwin, Oliver
Bruce, Malcolm (Gordon)	Lewis, Dr Julian (New Forest E)
	Lidington, David
Burnett, John	Lilley, Rt Hon Peter
Burns, Simon	Livsey, Richard
Burstow, Paul	Lloyd, Rt Hon Sir Peter (Fareham)
Butterfill, John	Loughton, Tim
Cable, Dr Vincent	Luff, Peter
Campbell, Rt Hon Menzies (NE Fife)	Lyell, Rt Hon Sir Nicholas
	MacGregor, Rt Hon John
Chapman, Sir Sydney (Chipping Barnet)	McIntosh, Miss Anne
	MacKay, Rt Hon Andrew
Chidgey, David	Maclean, Rt Hon David
Chope, Christopher	Maclennan, Rt Hon Robert
Clark, Dr Michael (Rayleigh)	McLoughlin, Patrick
Clarke, Rt Hon Kenneth (Rushcliffe)	Malins, Humfrey
	Mates, Michael
Clifton-Brown, Geoffrey	Mawhinney, Rt Hon Sir Brian
Collins, Tim	May, Mrs Theresa
Cotter, Brian	Moore, Michael
Cran, James	Morgan, Alasdair (Galloway)
Curry, Rt Hon David	Moss, Malcolm
Davey, Edward (Kingston)	Nicholls, Patrick
Davies, Quentin (Grantham)	Norman, Archie
Davis, Rt Hon David (Haltemprice)	O'Brien, Stephen (Eddisbury)
Day, Stephen	Ottaway, Richard
Dorrell, Rt Hon Stephen	Page, Richard
Duncan, Alan	Paice, James
Duncan Smith, Iain	Paterson, Owen
Evans, Nigel	Pickles, Eric
Faber, David	Portillo, Rt Hon Michael
Fabricant, Michael	Prior, David
Fallon, Michael	Randall, John
Flight, Howard	Redwood, Rt Hon John
Forsythe, Clifford	Rendel, David
Forth, Rt Hon Eric	Robathan, Andrew
Foster, Don (Bath)	Robertson, Laurence
Fox, Dr Liam	Robinson, Peter (Belfast E)
Gale, Roger	Roe, Mrs Marion (Broxbourne)
Garnier, Edward	Ruffley, David
George, Andrew (St Ives)	Russell, Bob (Colchester)
Gibb, Nick	St Aubyn, Nick
	Sanders, Adrian
Gill, Christopher	Shephard, Rt Hon Mrs Gillian
Gillan, Mrs Cheryl	Shepherd, Richard
Gray, James	Smith, Sir Robert (W Ab'd'ns)
Green, Damian	Soames, Nicholas
Greenway, John	Spelman, Mrs Caroline
Grieve, Dominic	Spring, Richard
Gummer, Rt Hon John	Stanley, Rt Hon Sir John
Hamilton, Rt Hon Sir Archie	Stunell, Andrew
Hammond, Philip	Swayne, Desmond
Harris, Dr Evan	Syms, Robert
Hawkins, Nick	Tapsell, Sir Peter
Hayes, John	Taylor, Ian (Esher & Walton)
Heald, Oliver	Taylor, John M (Solihull)
Heath, David (Somerton & Frome)	Taylor, Matthew (Truro)
Heathcoat-Amory, Rt Hon David	Tonge, Dr Jenny
Hogg, Rt Hon Douglas	Townend, John
Horam, John	Tredinnick, David
Howarth, Gerald (Aldershot)	Tyler, Paul
Hughes, Simon (Southwark N)	Tyrie, Andrew
Hunter, Andrew	Walter, Robert
Jack, Rt Hon Michael	Wardle, Charles
Jackson, Robert (Wantage)	Waterson, Nigel

Webb, Steve	Winterton, Mrs Ann (Congleton)
Wells, Bowen	Yeo, Tim
Whitney, Sir Raymond
Whittingdale, John	Tellers for the Ayes:
Willetts, David	Mrs. Eleanor Laing and
Wilshire, David	Mr. Keith Simpson.

NOES
Ainger, Nick	Darling, Rt Hon Alistair
Ainsworth, Robert (Cov'try NE)	Darvill, Keith
Alexander, Douglas	Davies, Rt Hon Denzil (Llanelli)
Allen, Graham	Davis, Rt Hon Terry (B'ham Hodge H)
Anderson, Donald (Swansea E)
Armstrong, Rt Hon Ms Hilary	Dawson, Hilton
Ashton, Joe	Dean, Mrs Janet
Atherton, Ms Candy	Dismore, Andrew
Atkins, Charlotte	Donohoe, Brian H
Austin, John	Doran, Frank
Barnes, Harry	Dowd, Jim
Barron, Kevin	Drew, David
Bayley, Hugh	Dunwoody, Mrs Gwyneth
Beard, Nigel	Eagle, Angela (Wallasey)
Beckett, Rt Hon Mrs Margaret	Eagle, Maria (L'pool Garston)
Begg, Miss Anne	Edwards, Huw
Bell, Stuart (Middlesbrough)	Ellman, Mrs Louise
Benn, Hilary (Leeds C)	Ennis, Jeff
Benn, Rt Hon Tony (Chesterfield)	Etherington, Bill
Bennett, Andrew F	Field, Rt Hon Frank
Benton, Joe	Fisher, Mark
Bermingham, Gerald	Flint, Caroline
Berry, Roger	Flynn, Paul
Betts, Clive	Foster, Rt Hon Derek
Blackman, Liz	Foster, Michael Jabez (Hastings).
Blears, Ms Hazel	Foster, Michael J (Worcester)
Blizzard, Bob	Foulkes, George
Borrow, David	Fyfe, Maria
Bradley, Keith (Withington)	Galloway, George
Bradley, Peter (The Wrekin)	Gardiner, Barry
Brinton, Mrs Helen	George, Bruce (Walsall S)
Brown, Russell (Dumfries)	Gerrard, Neil
Browne, Desmond	Gibson, Dr Ian
Buck, Ms Karen	Gilroy, Mrs Linda
Burden, Richard	Godman, Dr Norman A
Burgon, Colin	Godsiff, Roger
Butler, Mrs Christine	Goggins, Paul
Campbell, Alan (Tynemouth)	Gordon, Mrs Eileen
Campbell, Mrs Anne (C'bridge)	Griffiths, Nigel (Edinburgh S)
Campbell-Savours, Dale	Griffiths, Win (Bridgend)
Cann, Jamie	Grocott, Bruce
Casale, Roger	Grogan, John
Caton, Martin	Gunnell, John
Cawsey, Ian	Hamilton, Fabian (Leeds NE)
Chaytor, David	Hanson, David
Clark, Dr Lynda (Edinburgh Pentlands)	Heal, Mrs Sylvia
	Healey, John
Clarke, Eric (Midlothian)	Henderson, Doug (Newcastle N)
Clarke, Rt Hon Tom (Coatbridge)	Henderson, Ivan (Harwich)
Clarke, Tony (Northampton S)	Heppell, John
Clelland, David	Hewitt, Ms Patricia
Clwyd, Ann	Hill, Keith
Coaker, Vernon	Hinchliffe, David
Coffey, Ms Ann	Hope, Phil
Cohen, Harry	Hopkins, Kelvin
Coleman, Iain	Howells, Dr Kim
Colman, Tony	Hoyle, Lindsay
Cooper, Yvette	Hughes, Ms Beverley (Stretford)
Corbett, Robin	Hughes, Kevin (Doncaster N)
Corbyn, Jeremy	Humble, Mrs Joan
Cousins, Jim	Hutton, John
Cranston, Ross	Iddon, Dr Brian
Crausby, David	Illsley, Eric
Cryer, Mrs Ann (Keighley)	Jackson, Ms Glenda (Hampstead)
Cryer, John (Hornchurch)	Jackson, Helen (Hillsborough)
Cunningham, Jim (Cov'try S)	Jamieson, David
Curtis-Thomas, Mrs Claire	Jenkins, Brian
Dalyell, Tam	Johnson, Alan (Hull W & Hessle)

Jones, Rt Hon Barry (Alyn)	Ryan, Ms Joan
Jones, Helen (Warrington N)	Salter, Martin
Jones, Dr Lynne (Selly Oak)	Savidge, Malcolm
Jones, Martyn (Clwyd S)	Sawford, Phil
Keeble, Ms Sally	Sedgemore, Brian
Kelly, Ms Ruth	Shipley, Ms Debra
Khabra, Piara S	Short, Rt Hon Clare
Kidney, David	Simpson, Alan (Nottingham S)
Kilfoyle, Peter	Singh, Marsha
King, Ms Oona (Bethnal Green)	Skinner, Dennis
Laxton, Bob	Smith, Rt Hon Andrew (Oxford E)
Leslie, Christopher	Smith, Angela (Basildon)
Levitt, Tom	Smith, Miss Geraldine (Morecambe & Lunesdale)
Lewis, Ivan (Bury S)
Lewis, Terry (Worsley)	Smith, Jacqui (Redditch)
Liddell, Rt Hon Mrs Helen	Smith, Llew (Blaenau Gwent)
Linton, Martin	Snape, Peter
Lloyd, Tony (Manchester C)	Soley, Clive
Love, Andrew	Southworth, Ms Helen
McAvoy, Thomas	Squire, Ms Rachel
McCabe, Steve	Starkey, Dr Phyllis
McCafferty, Ms Chris	Steinberg, Gerry
McDonagh, Siobhain	Stevenson, George
McDonnell, John	Stewart, David (Inverness E)
McIsaac, Shona	Stewart, Ian (Eccles)
McKenna, Mrs Rosemary	Stinchcombe, Paul
Mackinlay, Andrew	Stoate, Dr Howard
McNulty, Tony	Strang, Rt Hon Dr Gavin
Mactaggart, Fiona	Straw, Rt Hon Jack
McWilliam, John	Stringer, Graham
Mahon, Mrs Alice	Stuart, Ms Gisela
Mallaber, Judy	Sutcliffe, Gerry
Marsden, Gordon (Blackpool S)	Taylor, Rt Hon Mrs Ann (Dewsbury)
Marshall, Jim (Leicester S)
Martlew, Eric	Taylor, Ms Dari (Stockton S)
Meale, Alan	Taylor, David (NW Leics)
Milburn, Rt Hon Alan	Temple-Morris, Peter
Miller, Andrew	Thomas, Gareth (Clwyd W)
Mitchell, Austin	Thomas, Simon (Ceredigion)
Morgan, Ms Julie (Cardiff N)	Tipping, Paddy
Morley, Elliot	Todd, Mark
Morris, Rt Hon Ms Estelle (B'ham Yardley)	Touhig, Don
	Trickett, Jon
Mountford, Kali	Truswell, Paul
Mullin, Chris	Turner, Dennis (Wolverh'ton SE)
	Turner, Dr Desmond (Kemptown)
Murphy, Denis (Wansbeck)	Turner, Dr George (NW Norfolk)
Naysmith, Dr Doug	Turner, Neil (Wigan)
Norris, Dan	Twigg, Derek (Halton)
O'Brien, Mike (N Warks)	Tynan, Bill
O'Hara, Eddie	Vis, Dr Rudi
Perham, Ms Linda	Walley, Ms Joan
Pickthall, Colin	Wareing, Robert N
Plaskitt, James	Watts, David
Pope, Greg	White, Brian
Pound, Stephen	Whitehead, Dr Alan
Prentice, Gordon (Pendle)	Wicks, Malcolm
Prescott, Rt Hon John	Williams, Rt Hon Alan (Swansea W)
Primarolo, Dawn
Prosser, Gwyn	Williams, Alan W (E Carmarthen)
Quinn, Lawrie	Williams, Mrs Betty (Conwy)
Radice, Rt Hon Giles	Winnick, David
Rapson, Syd	Winterton, Ms Rosie (Doncaster C)
Reed, Andrew (Loughborough)	Wood, Mike
Reid, Rt Hon Dr John (Hamilton N)	Woodward, Shaun
Roche, Mrs Barbara	Woolas, Phil
Rooker, Rt Hon Jeff	Worthington, Tony
Rooney, Terry	Wright, Anthony D (Gt Yarmouth)
Ross, Ernie (Dundee W)	Wright, Dr Tony (Cannock)
Rowlands, Ted
Roy, Frank	Tellers for the Noes:
Ruane, Chris	Mr. Mike Hall and
Ruddock, Joan	Mrs. Anne McGuire.

Question accordingly negatived.

Amendment proposed: No. 2, in page 83, line 35, leave out sub-paragraph 4(1) and insert— '4.—(1) Except in a case falling within sub-paragraph (2), a flat rate of £5 is payable if the nil rate does not apply and the non-resident parent's net weekly income is £100 or less.'.—[Mr. Webb.]

Question put, That the amendment be made:—

The House divided: Ayes 33, Noes 269.

Division No. 131]	[7.25 pm
AYES
Allan, Richard	Keetch, Paul
Ashdown, Rt Hon Paddy	Kennedy, Rt Hon Charles (Ross Skye & Inverness W)
Ballard, Jackie
Beith, Rt Hon A J	Kirkwood, Archy
Bell, Martin (Tatton)	Livsey, Richard
Brand, Dr Peter	Maclennan, Rt Hon Robert
	Moore, Michael
Bruce, Malcolm (Gordon)	Morgan, Alasdair (Galloway)
Burnett, John	Rendel, David
Burstow, Paul	Russell, Bob (Colchester)
Campbell, Rt Hon Menzies (NE Fife)	Sanders, Adrian
	Taylor, Matthew (Truro)
Chidgey, David	Thomas, Simon (Ceredigion)
Cotter, Brian	Tonge, Dr Jenny
Davey, Edward (Kingston)	Tyler, Paul
Foster, Don (Bath)	Webb, Steve
George, Andrew (St Ives)
Harris, Dr Evan	Tellers for the Ayes:
Heath, David (Somerton & Frome)	Mr. Andrew Stunell and
Hughes, Simon (Southwark N)	Sir Robert Smith.

NOES
Ainger, Nick	Campbell-Savours, Dale
Ainsworth, Robert (Cov'try NE)	Cann, Jamie
Alexander, Douglas	Casale, Roger
Allen, Graham	Caton, Martin
Anderson, Donald (Swansea E)	Cawsey, Ian
Armstrong, Rt Hon Ms Hilary	Chaytor, David
Ashton, Joe	Clark, Dr Lynda (Edinburgh Pentlands)
Atherton, Ms Candy
Atkins, Charlotte	Clarke, Eric (Midlothian)
Austin, John	Clarke, Rt Hon Tom (Coatbridge)
Barnes, Harry	Clarke, Tony (Northampton S)
Barron, Kevin	Clelland, David
Bayley, Hugh	Clwyd, Ann
Beard, Nigel	Coaker, Vernon
Beckett, Rt Hon Mrs Margaret	Coffey, Ms Ann
Begg, Miss Anne	Cohen, Harry
Beggs, Roy	Coleman, Iain
Bell, Stuart (Middlesbrough)	Cooper, Yvette
Benn, Hilary (Leeds C)	Corbett, Robin
Benn, Rt Hon Tony (Chesterfield)	Corbyn, Jeremy
Bennett, Andrew F	Corston, Jean
Benton, Joe	Cranston, Ross
Bermingham, Gerald	Crausby, David
Berry, Roger	Cryer, Mrs Ann (Keighley)
Betts, Clive	Cryer, John (Hornchurch)
Blackman, Liz	Cunningham, Jim (Cov'try S)
Blears, Ms Hazel	Curtis-Thomas, Mrs Claire
Blizzard, Bob	Darling, Rt Hon Alistair
Borrow, David	Darvill, Keith
Bradley, Keith (Withington)	Davey, Valerie (Bristol W)
Bradley, Peter (The Wrekin)	Davies, Rt Hon Denzil (Llanelli)
Brinton, Mrs Helen	Davis, Rt Hon Terry (B'ham Hodge H)
Brown, Russell (Dumfries)
Browne, Desmond	Dawson, Hilton
Buck, Ms Karen	Dean, Mrs Janet
Burden, Richard	Dismore, Andrew
Burgon, Colin	Donohoe, Brian H
Butler, Mrs Christine	Doran, Frank
Campbell, Alan (Tynemouth)	Dowd, Jim
Campbell, Mrs Anne (C'bridge)	Drew, David

Dunwoody, Mrs Gwyneth	McIsaac, Shona
Eagle, Angela (Wallasey)	McKenna, Mrs Rosemary
Eagle, Maria (L'pool Garston)	Mackinlay, Andrew
Edwards, Huw	McNulty, Tony
Ellman, Mrs Louise	Mactaggart, Fiona
Ennis, Jeff	McWilliam, John
Etherington, Bill	Mahon, Mrs Alice
Field, Rt Hon Frank	Mallaber, Judy
Fisher, Mark	Mandelson, Rt Hon Peter
Flint, Caroline	Marsden, Gordon (Blackpool S)
Flynn, Paul	Marshall, Jim (Leicester S)
Forsythe, Clifford	Marshall-Andrews, Robert
Foster, Rt Hon Derek	Martlew, Eric
Foster, Michael Jabez (Hastings)	Meale, Alan
Foster, Michael J (Worcester)	Milburn, Rt Hon Alan
Foulkes, George	Miller, Andrew
Fyfe, Maria	Mitchell, Austin
Galloway, George	Morgan, Ms Julie (Cardiff N)
Gardiner, Barry	Morley, Elliot
George, Bruce (Walsall S)	Mountford, Kali
Gerrard, Neil	Mullin, Chris
Gibson, Dr Ian	Murphy, Denis (Wansbeck)
Gilroy, Mrs Linda	Naysmith, Dr Doug
Godman, Dr Norman A	Norris, Dan
Godsiff, Roger	O'Brien, Mike (N Warks)
Goggins, Paul	O'Hara, Eddie
Gordon, Mrs Eileen	Perham, Ms Linda
Griffiths, Nigel (Edinburgh S)	Pickthall, Colin
Griffiths, Win (Bridgend)	Plaskitt, James
Grocott, Bruce	Pope, Greg
Grogan, John	Pound, Stephen
Gunnell, John	Powell, Sir Raymond
Hamilton, Fabian (Leeds NE)	Prentice, Gordon (Pendle)
Hanson, David	Prescott, Rt Hon John
Heal, Mrs Sylvia	Primarolo, Dawn
Healey, John	Prosser, Gwyn
Henderson, Doug (Newcastle N)	Quinn, Lawrie
Henderson, Ivan (Harwich)	Radice, Rt Hon Giles
Heppell, John	Rapson, Syd
Hill, Keith	Reed, Andrew (Loughborough)
Hinchliffe, David	Reid, Rt Hon Dr John (Hamilton N)
Hope, Phil	Robinson, Peter (Belfast E)
Hopkins, Kelvin	Roche, Mrs Barbara
Howells, Dr Kim	Rooker, Rt Hon Jeff
Hoyle, Lindsay	Rooney, Terry
Hughes, Ms Beverley (Stretford)	Ross, Ernie (Dundee W)
Hughes, Kevin (Doncaster N)	Rowlands, Ted
Humble, Mrs Joan	Roy, Frank
Hutton, John	Ruane, Chris
Illsley, Eric	Ruddock, Joan
Jackson, Ms Glenda (Hampstead)	Ryan, Ms Joan
Jackson, Helen (Hillsborough)	Salter, Martin
Jamieson, David	Savidge, Malcolm
Jenkins, Brian	Sawford, Phil
Johnson, Alan (Hull W & Hessle)	Sedgemore, Brian
Jones, Rt Hon Barry (Alyn)	Shaw, Jonathan
Jones, Helen (Warrington N)	Shipley, Ms Debra
Jones, Dr Lynne (Selly Oak)	Short, Rt Hon Clare
Jones, Martyn (Clwyd S)	Simpson, Alan (Nottingham S)
Keeble, Ms Sally	Singh, Marsha
Khabra, Piara S	Skinner, Dennis
Kilfoyle, Peter	Smith, Rt Hon Andrew (Oxford E)
Laxton, Bob	Smith, Angela (Basildon)
Leslie, Christopher	Smith, Miss Geraldine (Morecambe & Lunesdale)
Levitt, Tom
Lewis, Ivan (Bury S)	Smith, Jacqui (Redditch)
Lewis, Terry (Worsley)	Smith, Llew (Blaenau Gwent)
Liddell, Rt Hon Mrs Helen	Snape, Peter
Linton, Martin	Soley, Clive
Lloyd, Tony (Manchester C)	Southworth, Ms Helen
Love, Andrew	Squire, Ms Rachel
McAvoy, Thomas	Starkey, Dr Phyllis
McCabe, Steve	Steinberg, Gerry
McCafferty, Ms Chris	Stevenson, George
McDonagh, Siobhain	Stewart, David (Inverness E)
McDonnell, John	Stewart, Ian (Eccles)

Stinchcombe, Paul	Tynan, Bill
Stoate, Dr Howard	Vis, Dr Rudi
Strang, Rt Hon Dr Gavin	Walley, Ms Joan
Straw, Rt Hon Jack	Wareing, Robert N
Stringer, Graham	Watts, David
Stuart, Ms Gisela	White, Brian
Sutcliffe, Gerry	Whitehead, Dr Alan
Taylor, Rt Hon Mrs Ann (Dewsbury)	Wicks, Malcolm
	Williams, Rt Hon Alan (Swansea W)
Taylor, Ms Dari (Stockton S)
Taylor, David (NW Leics)	Williams, Alan W (E Carmarthen)
Temple-Morris, Peter	Williams, Mrs Betty (Conwy)
Thomas, Gareth (Clwyd W)	Winnick, David
Tipping, Paddy	Winterton, Ms Rosie (Doncaster C)
Todd, Mark	Wood, Mike
Touhig, Don	Woodward, Shaun
Trickett, Jon	Worthington, Tony
Truswell, Paul	Wright, Anthony D (Gt Yarmouth)
Turner, Dennis (Wolverh'ton SE)	Wright, Dr Tony (Cannock)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)	Tellers for the Noes:
Turner, Neil (Wigan)	Mr. Mike Hall and
Twigg, Derek (Halton)	Mrs. Anne McGuire.

Question accordingly negatived.

Mr. Rooker

I beg to move amendment No. 48, in page 85, line 23, leave out from "7(4)" to "or" in line 24 and insert— '(or that Table as modified pursuant to regulations made under paragraph 10A(2)(a)),'.

Mr. Deputy Speaker (Mr. Michael Lord)

With this it will be convenient to discuss Government amendments Nos. 37, 38, 44, 53, 57, 39, 41, 49 to 52, 58, 60, 61 and 45 to 47.

Mr. Rooker

This group of amendments serves two purposes. First, it improves the Bill's drafting, to ensure that the Bill does what we intended and its provisions work. Secondly, it makes some consequential amendments to other Acts. Some of the changes are more significant than others, and I shall spend a very short time describing in some detail the amendments that I think will be of interest.

Amendment No. 38 will close a loophole that allows non-resident fathers of children whose birth was registered in Northern Ireland to delay payment of child support by denying that they are the child's father. It makes changes to provisions that enable the Child Support Agency to presume paternity. Articles 14 and 18(1)(b)(ii) of the Births and Deaths Registration (Northern Ireland) Order 1976 mirror provisions in sections 10 and 10A of the Births and Deaths Registration Act 1953, which applies in England and Wales. Clause 15 of the Bill aligns English and Welsh provisions with those in Scotland. That is why we intend to allow the CSA to presume that any non-resident parent living in England and Wales is the child's father if he was registered as the father in Northern Ireland.

Amendment No. 44 replaces the existing subsection (3) of the new section 55A on declarations of status, inserted into the Family Law Act 1986 by clause 76 of the Bill, with a new provision that achieves the same effect, but in a much clearer way.

The rest of the amendments in this group fall equally into three broad groups. The first group is composed of minor drafting changes that ensure that the Bill works as we intended and picks up minor errors in the text.

The second group is composed of consequential changes that make necessary amendments to other Acts in England, Wales and Scotland, to reflect the new provisions of the child support legislation. Some other Acts refer to child support. The Army Act 1955, for example, provides for how child support will be deducted from a serviceman's pay. Changes in the child support provisions must, therefore, be reflected in that legislation.

The final group deals with legislation that is being repealed. It is usual practice to repeal provisions in other Acts that are made redundant by new child support legislation.

I hope that the House will accept that these amendments are sensible and necessary to ensure that the legislation works properly and as intended. I commend them to the House.

Amendment agreed to.

Mr. Andrew George

I beg to move amendment No. 1, in page 3, line 1, leave out Clause 2.

Mr. Deputy Speaker

With this it will be convenient to discuss amendment No. 77, in clause 2, page 3, line 9, at end insert— '(4) In section 8(3) of the 1991 Act the word "vary" shall be deleted where it appears after the words "it would otherwise have to make,".'.

Mr. George

The Minister said, perhaps correctly, that there was a possibility that amendment No. 76 was not technically up to standard. With this opportunity for sober second thought, we should ensure that, while we are trying to put right past mistakes, we do not maintain the current legislative fiasco—which is what Parliament has achieved on the past few occasions when we have addressed the issue—in child support.

The purpose of amendments Nos. 1 and 77 is to provide us with every opportunity to ensure that pressure is taken off the CSA, and that the court welfare system can be used not to replace, but to aid and support, the CSA. Use of the court welfare system should at least help in preventing the CSA from taking the full brunt and burden of child support work. Current CSA legislation allows for an agreement between the parent with care and the non-resident parent to be incorporated into a court order where the two parents are able to reach an agreement. This is a valuable and greatly used provision, which allows for negotiation between parents and relieves the CSA of work. Clause 2 would effectively remove that provision. Any agreement reached and fixed in a court order will be capable of being overturned after a year, which would make a mockery of the court order.

The new clause would allow parents who believe that they can do better out of the CSA to break the agreement in the court order. This runs counter to developments in Europe, and in matters relating to children and finances generally. The overwhelming trend is towards mediation and discussion, and the use—as far as possible—of agreement between both sides.

There are numerous situations where parents may want to opt out of the CSA system. One might be when parents agree that the payments for the children would be greater than the CSA would assess. Often, this is as a result of a trade-off. The parent with care may make no maintenance claim for herself in return for a better payment regime for the child or children. A second example might be where parents agree to a lesser sum than the CSA would prescribe; for example, the non-resident parent may transfer capital or the house to enable the parent with care and the children to remain housed, with the mother accepting a lesser level of maintenance in return.

Approval by courts for parental agreements protects both parents from being pressurised and provides an established and straightforward system. There are no apparent benefits from building into a court system a get-out provision which can produce reasonable and realistic maintenance agreements.

In amendment No. 77, we seek to retain the court as a viable option, while not denying the powers of the CSA, by giving the court the power to vary a court order and thus giving the court order a longer shelf-life. Some families will insist that they wish to base their financial arrangements not around the hazards of the CSA system as they see it—certainly, past practice would suggest that they would be right—but around an assumption, for example, that they will look at the global costs of a child from time to time, and meet them in certain percentages.

The scheme is increasingly common, particularly as more and more settlements result from mediation; a trend which is to be welcomed. This is a way in which parents can continue to be involved in the parenting of their children after separation, and it is a child-centred scheme. Such parents will be advised that they cannot opt out of the CSA scheme. Either has the right, after one year, to approach the CSA—a process that will lead to a standard assessment and the termination of the court order. Such parents may wish to make legally binding promises to repay any sums above—or, for other parents, below—the court order, with penalties. That will be a powerful disincentive to approach the CSA.

Mr. Burns

What confidence does the hon. Gentleman have that his amendment would not lead to a return to the problems before the CSA, when courts awarded different amounts, some of which were ludicrously small and not in the interests of the mother?

Mr. George

The hon. Gentleman's intervention is fair and reasonable, and it is clear that these amendments provide an opportunity for a second thought before proceeding in the rather draconian way that is proposed. We do not propose to go back to the vagaries and failures of the past, but, rather, to go forward to a system that takes into account the failures of the CSA. If the hon. Gentleman is saying that the CSA is providing a sound basis for child support and represents a success, most hon. Members would disagree.

7.45 pm

Mr. Burns

Success is a difficult thing to assess accurately but, with all its flaws, the current CSA has been a better mechanism for calculating a more realistic level of child maintenance than the old court system was. It is not a question of going back to something that has failed. If we go back too far—to the courts—mothers would be infinitely worse off than they are even under the existing regime.

Mr. George

That is a fair point, but we are not talking about going back. Many of the criticisms of the past system are fair, but we are proposing to go forward. There is no reason why courts could not set guidelines for the settlement of arrangements between the parent with care and the non-resident parent in the same way as the court does in many other areas.

Angela Eagle

Would the hon. Gentleman share with the House how the Liberal Democrats are proposing to move forward? The hon. Member for West Chelmsford (Mr. Burns) is quite right; the court system has failed in the past to provide adequate maintenance for many children. Could he spend a little time letting us know how on earth the Liberal Democrats propose to make the courts work?

Mr. George

That is rather outside the terms and the spirit of the amendment. The Minister may like to reflect on the broad points before we simply hand too much work to an agency that has shown that it is incapable of coping with its present work load. We have tabled probing amendments, which should be welcomed if they provide a caveat to the Government to take some of the pressure off an overburdened CSA.

Mr. Dismore

Bearing in mind the hon. Gentleman's comments about the CSA's ability to cope with the volume of work, what discussions has the hon. Gentleman had with the court service about its potentially having to handle a million-plus cases? What discussions has he had with the Lord Chancellor's Department about how such cases should be financed—for example, the burden on the legal aid budget?

Mr. George

We have had discussions with a variety of organisations. I have laid out the justification for our proposals, and Conservative and Labour Members have sniped at that. The purpose of the amendments is clear and, before this House passes the Bill to another place, it is right for us to give an opportunity for reflection on whether the court welfare system might come to the support of the CSA.

Mr. Burns

I listened to the hon. Member for St. Ives (Mr. George) with great interest and care. He rightly said in his concluding remarks that he is entitled, at this stage in the Bill's proceedings, to put forward suggestions for us to consider and accept or reject. I suspect that Ministers will reject them, and I hope that they do. I have no doubt that the hon. Gentleman means well, but the amendment would turn back the clock to the bad old days.

That would not help carers of children, most of whom would be mothers on benefit. However, it would be very popular with those absent parents—usually fathers—who want to escape or to minimise their financial responsibilities. Before I say any more, I should declare an interest. I pay child maintenance. I do not do so under the auspices of the CSA, although sometimes I wish that I did.

Labour and Liberal Democrat Members may have criticisms of the CSA as it was set up before this Government reformed it, but the formula was devised with the best of intentions. It was complicated, but the intention was to secure as fair a deal for parents as was possible in the circumstances. That applied both to absent parents and to the ones who looked after the children. The self-evident problem was that, in trying to be fair, the previous Conservative Government devised a system that was so complex that it fell into disrepute almost from the beginning. That was partly because of its complexity, and partly because certain people wanted to ensure that the system did not work.

The Government's alternative is based on the principles of the CSA. Its benchmarks are simplicity and transparency. Over the coming months and years, we will find out whether that finds greater acceptance among parents of children who have to pay child maintenance through the auspices of the CSA. The jury is out, and will remain out for some time, on the question of whether the Government have got the thing right.

The hon. Member for St. Ives wants to change the Bill to reintroduce a court service. His aims and aspirations may be well intentioned, but he risks doing a great disservice to parents who care for children after a marriage or relationship breaks down. I say that because the courts were singularly inept in their calculation of child maintenance under the old court regime. That was owing to wide variations across the country in the cost of bringing up children. The extent of those variations was not proportional to distance. People ordered to pay £10 a week to bring up a child—even in those days, that was a ludicrous amount—felt aggrieved when they discovered that others in similar or better financial circumstances in terms of income were expected to pay even less. The disparities between awards were ludicrous.

Furthermore, the enforcement of the awards that were made was haphazard. Courts sometimes made realistic assessments of the amount of money that absent parents should pay towards bringing up their children, but those absent parents often paid no money at all, or only a little. As a result, mothers had to face the expense and the time-consuming problems associated with going back to court to get an order enforcing payment.

In addition, if absent parents were emphatic about dodging payment, they could string the court system along with 101 explanations of changed financial circumstances. That archaic system could easily be abused or interfered with by people determined not to pay, and it is not a good idea to return to it.

The courts have to make decisions using evidence about income and other matters that is given to them on the day of a hearing. The hon. Member for St. Ives said that guidance and guidelines could be set down, but they would not help to establish a system that most of the people involved would perceive to be fair and workable.

The hon. Gentleman then said that, after a year, parents could go to the CSA for what in effect would be justice. Why delay for a year? A year is a long time for a parent bringing up children on a low income and with all the anguish associated with the break-up of a relationship. Parents in that position would have to go to court to try to secure an income for their children, and they would also have to go through the nightmare of watching their former partners refusing to pay or front-loading their expenses to ensure that only an insultingly small amount was paid in the end.

According to the amendment, after a year of that, parents would have the option to revert to the CSA. I point out to the hon. Member for St. Ives that the Government's proposals mean that they could have turned to the CSA immediately—as they could have done under the slightly different provisions introduced by the previous Conservative Government.

When courts determine child support levels, the amounts vary significantly between families. The system put in place by the state ensures that the taxpayer does not have to foot the bill that one parent in a relationship does not want to pay. It also ensures greater consistency in the amounts being paid. That consistency will appear fairer to those who resort to the state system.

The proposal is well meaning but it does not address the difficulty. It would pose infinitely more problems for parents with care than the hon. Member for St. Ives either cares to admit or believes would be the case. Such a retrogressive step—going back to a system that was thrown out because the country would not tolerate it—would help no one.

Mr. Webb

The hon. Member for West Chelmsford (Mr. Burns) raises some important concerns about a court-based system. They need to be answered, and I hope to build my response on the contribution from my hon. Friend the Member for St. Ives (Mr. George).

This issue is central to the Bill. When we debated it first, I recall that the Secretary of State said that only lawyers and Liberals want to go back to the courts. Yet the Department of Social Security pays academics such as Professor Jonathan Bradshaw of York university to do research on lone parents and absent parents. Professor Bradshaw is probably the country's leading academic expert on the problem of absent parents. Speaking about the Bill, he said that the Government had got it wrong. He said that it was a mistake to go for a rigid approach and that a court-based system allowing flexibility in individual cases was the right option.

I have checked and I am not aware that Professor Bradshaw is either a lawyer or a Liberal. He has no party political axe to grind and the Department pays him to study these matters. His research has led him to conclude that the Bill's rigid, rough-justice system is not necessarily the best strategy for the Government to adopt. I offer that as a third-party endorsement.

8 pm

When the Secretary of State tried to rubbish our proposals on Second Reading, he put a costing on them. Given that there seems to be some uncertainty as to what our proposals are, how did the right hon. Gentleman tell his civil servants to cost them? It shows how far-fetched that exercise was. For the benefit of the House and of the hon. Member for West Chelmsford (Mr. Burns), who raised some perfectly legitimate concerns, let me flesh out our proposals.

The hon. Gentleman raised two justified criticisms about the court-based system—relating to variability and enforcement. My hon. Friend the Member for St. Ives mentioned guidelines, which the hon. Gentleman did not believe went far enough. The courts are used to deciding on the merits of an individual case within guidelines—sentencing is the relevant analogy. The courts use guidelines to decide a specific sentence for a specific case. Sentencing guidelines can be wide, and we may not want such wide parameters for child maintenance, but an absence of variability would not produce the fairness that the hon. Gentleman seeks. He said, if I remember rightly, that the system must be seen to be fair. Although wide variations do not create a sense of fairness, neither does treating unlike cases in a like manner.

Let me give the hon. Gentleman an example, which is loosely based on a constituency case. I have talked about this in the House before, and have never had a clear response from a Minister. A father in a couple enters into a commitment in anticipation of his marriage continuing. He gets a new job which he has to drive to, so he takes on a car loan. The couple then splits up. He has the continuing obligation of the car loan debt to service. If he cannot keep the car, he cannot keep the job and he cannot pay the maintenance. The formula will take no account of that burden. [Interruption.] I think that the hon. Member for Stockport (Ms Coffey) is saying from a sedentary position "Take a bus." I assume that that is a facetious remark.

That is an example of how one can take on a commitment in good faith during a partnership that continues after the partnership is over. The new, very rigid formula does not take that into account, but a court, or some other discretionary process, could, without giving carte blanche for variations, allow for people who have good reasons why 15, 20 or 25 per cent. is in nobody's interest. If the person in my example has to pay 25 per cent. after the car loan has been paid, he may have to give up his job. That would be in nobody's interests, and we all care about the interests of children here.

We do not want to return to the old court system. The proposed system would give firm guidelines about the base figure, but would leave scope for limited variation in difficult circumstances.

The question has been asked: could the courts cope with this burden? Our strategy is that the courts would not be dealing with nine out of 10 cases. The scope for variation would be in the hard cases. There would be a limited number of bases on which one could argue that the percentage was not fair, and those would be handled before a court. People would have their day in court and argue their specific circumstances. Most standard cases would be handled according to a formula through the CSA or the courts. It would cost the same amount of money whoever did the sums, but there would be fallback situation, in which individual circumstances would be taken into account. That is why we think that a court-based system gives a balance between fairness and consistency.

On enforcement—

Caroline Flint (Don Valley)

I want to be clear about the hon. Gentleman's example of the man with the car loan and the children. Surely if the man is in a relationship with children before his relationship breaks up, he is already contributing to their upkeep. Therefore, when he decides to take on a car loan while he is in a relationship, he will take into account the costs of maintaining his children. The children do not disappear before he takes on the car loan, and he should take that into account in his life style.

Mr. Webb

I think that the hon. Lady is missing the point. I am not sure whether she was in the Chamber for our earlier debate. In the Division on it, she voted against the proposal that the living standards of the parent with care should feature in the calculation. In the circumstances that I have just described, let us suppose that the father is stretched in paying the car loan out of his own income. The family has managed to maintain the children by using some of the mother's wages. That is how they have squared the circle. After repaying the car loan, the dad may not have much money to pay towards the children's upkeep, but the family has pooled its resources. They cannot do that when the father moves out. He does not necessarily have spare cash.

Mr. Simon Thomas (Ceredigion)

Will the hon. Gentleman explain what would happen in the sort of family situation in which I grew up? What happens when the mother is left with loans which she has no way of paying back, and the court system does not deliver an equitable solution until years down the line? Will the hon. Gentleman address that problem in the context of his comments on enforcement?

Mr. Webb

The assessment under the Bill will take no account of the factors described by the hon. Gentleman—it will be 15 per cent. The hon. Gentleman's point strengthens my case that in those circumstances the welfare of the child probably demands a higher maintenance figure, but the Bill says that that cannot be done.

Mr. Burns

Under the amendment, what happens if the mother has caused the breakdown of the relationship by going off with someone else who is reasonably well off? One does not expect the CSA or the courts to take that person's income or wealth into account in paying for the upkeep of the children, but there will be a knock-on effect in, say, the quality of housing to which the mother and children move. In the point made by the hon. Member for Don Valley (Caroline Flint), the car loan is taken into account. What impact will the third party on the mother's side have in the court's calculations under the hon. Gentleman's scheme?

Mr. Webb

The hon. Gentleman's example highlights the often complex relationships in all cases. We would need to set out in regulations what the judge was allowed to take into account in exercising discretion. I do not immediately know the right answer on whether the judge should take that into account or how far it should be taken into account. We would need to sit down in a more measured way and ask whether something was legitimate for the court to take it into account.

Mr. Burns

What happens if the mother goes off with another man, but has got divorced on the two-year basis, so the divorce is not on the grounds of adultery? Does the court take the father's word for it that the mother has committed adultery and gone off with another man?

Mr. Webb

The last thing we want to do in setting the child maintenance level, which is about the child's welfare, is to get into the blame game. There is a formula that gives a guideline for what the child maintenance should be. Variations may arise from difference in material circumstances and commitment, but not from who was at fault.

Angela Eagle

The hon. Gentleman said earlier that, under his proposal, about nine out of 10 cases would go to the CSA and not to the court. Now he has said that everything is very complicated and every case is different. Does that not mean that every case would, in effect, go before a court?

Mr. Webb

The idea is that the formula, whether it is operated by the CSA or the court system, gives a baseline figure. People will say that the figure arrived at is not fair in their circumstances only if certain tests are satisfied. One of those tests will be whether it is thought that there should be a substantial variation in maintenance which is way out of line. The family will not want to go through the hassle of the court system if the variation is minor.

The hon. Member for West Chelmsford spoke about a second family, and we all know that there are cases of third families. It is a complex matter. We are simply saying that there should be a baseline figure and individuals should have the right to say, under certain prescribed circumstances, that their case does not fit that, and there should be scope, in the name of fairness, for some variation.

Mr. Browne

The hon. Gentleman made a fascinating proposal, which is only now taking flesh as he responds to interventions—indeed, some of us feel that he may be making it up as he goes along. Will he tell us how his system would prevent what happens at present? People who do not want to pay—mostly fathers—create exceptional circumstances by changing their life style so they can get into arguments about departures from the norm and about the reduction of their income. Most of us are anxious that, if we allow too many departures, people will change their expenses regime to become an exceptional case so that they can argue about paying.

Mr. Webb

That is a fair comment. There is a balance to be struck between—

Mr. Browne

How do we do it?

Mr. Webb

The Government do it by taking only one end of the scale. They say there should be complete rigidity, with no reflection of individual circumstances. The example I cited is the case—more or less—of someone who came to my surgery. He had entered into a legitimate expense to keep a job to pay for the children. It is not in the interests of the child to adopt a rigid formula. The dad cannot pay because he has a car loan, so he gives up the job and no one gets anything. How is that fair? How is that in the interests of the child?

I do not want to prolong this matter unduly. We are only trying to point out that the Government have chosen one end of the scale. The amendments would allow scope for limited discretion—not as much as in the past—with better enforcement.

Enforcement is a problem, although I have not dwelt on that matter. However, there is a good argument that, when people have to fill in court papers, they do not respond as they would if they received papers from a Government agency. There is some—[Interruption.] Hon. Members may question that. My impression is that dealing with the courts, although not foolproof, has more cachet—because people associate courts with punishment—than dealing with a Government agency. There is no evidence that people take CSA paperwork seriously. Plenty of people ignore the CSA more readily than they would ignore the courts.

The Government have chosen one extreme; it will create rough justice. We shall have to return to these matters in future Parliaments because there will be so many cases of rough justice. We shall look back to this debate and say that perhaps we should have thought about flexibility rather than instituting a rigid system.

8.15 pm

Angela Eagle

We have heard an interesting display of busking from the hon. Member for Northavon (Mr. Webb) who made up policy as he went along—apparently from the experience of only one case.

I want to share with the House the costs—on our current estimates—of moving back to the courts system. CSA running costs are £220 million a year. The Lord Chancellor's Department advises us that the average net cost of a family proceedings application is £80; for 1 million cases, that would be £80 million.

In addition, legal aid would be available; the average legal aid cost for child maintenance proceedings was about £1,700 in 1998–99. Assuming that about 50 per cent. of CSA cases are entitled to legal aid—a generous assumption, as 75 per cent. of parents with care are on benefit—that would amount to £850 million. Assuming only one hour's work on every case—another generous assumption, as most lawyers would tell us—at £200 an hour, the court costs would be £1 billion.

The hon. Gentleman proposes that we should create a system that costs five times more than the current CSA system on generous costing assumptions. He has given us no reassurance that the system would be as good as the one that we are trying to reform to make it even more effective.

Mr. Webb

As I pointed out, the Department is now trying to cost a scheme about which it claims not to know the details. That is rather odd. I have shown that, in our model, only about 10 per cent. of cases would reach court. Does not that reduce the cost to £100 million?

Angela Eagle

I have given the House costs for basic court proceedings on generous assumptions. I suspect that the court costs would soar as the ineffectiveness of the courts became apparent.

Mr. Burns

Does the Minister agree that, if absent parents had the opportunity to go to court to try their luck at minimising their child maintenance, many of them would take it, because they would have nothing to lose by doing so?

Angela Eagle

I agree with the hon. Gentleman. Indeed, I agreed with most of his speech. It is hard to argue that the courts have a good history of dealing with such cases—even the Liberal Democrats have not tried to do that. The courts have an ignoble history in the protection of children in divorce cases. As many people know only too well, the former court system was discretionary and unfair. It left children in poverty and let non-resident parents off the hook.

That is why the House chose to move to an administrative system to deal with those issues. Since then, the number of people applying for maintenance through the CSA has continued to rise. The agency has become more effective, although we realise that there are inherent design problems in the maintenance system that the House has asked it to administer. That is why we introduced the Bill, which will radically simplify the formula.

It is ridiculous to think that we could go back to the court system and that it would be effective—I suspect that Conservative Members would agree. I remain astonished that the Liberal Democrats do not realise that basic fact.

The hon. Member for St. Ives (Mr. George) said that the amendment was a probing one. To delete the whole of clause 2 is a funny way to probe. The amendment would destroy one of the main provisions of the Bill, which would allow people access to the CSA and its services if they found themselves in difficulty with maintenance payments.

The Liberal Democrats seemed to have three concerns about our suggested system. The first was that it would allow the CSA to take on new court order cases that had been made at least 12 months after the new child support system was introduced, and that it would be swamped thereby. Last year, 8,100 new court orders involving child maintenance were made. The CSA's annual take on cases is 350,000, so if 8,000 can swamp 350,000, the Liberal Democrats have an odd view of mathematics.

The second Liberal Democrat argument was that allowing parents with court orders to use the CSA for a simple and predictable child support calculation would encourage parents to be unco-operative. That argument is difficult to follow, because, since the launch of the CSA in April 1993, courts can make orders for child maintenance only when parents have consented to a written maintenance agreement. That consent must exist before the court can make an order. If new facts subsequently come to light, or the payment arrangements break down, why should a parent not be given the choice of returning to court for the order to be varied or revoked, or of applying to the CSA for a child support maintenance calculation? There is no reason why that should not occur.

Thirdly, the Liberal Democrats argued that it would be perverse to unravel satisfactory arrangements and that to do so would be detrimental to children. However, leaving access to the CSA open would not have that effect. Only parents who were dissatisfied with existing arrangements would apply.

Our proposal would ensure that maintenance is right for children. Putting the interests of children first has led us down the road of reform of the CSA. Indeed, that created the CSA, even if the agency was not set up in the most appropriate and effective way. We learned as we went along how the administration of the system can be improved. Children will benefit from the provisions in clause 2. The provisions will give parents with court orders the choice between sticking with their existing maintenance arrangements, or asking the CSA to step in.

There is also considerable movement on and off benefit. A case that is private on one day can have a taxpayer interest on the next—10 per cent. of people a year move on and off income support and would qualify. Creating a system that deals with children more evenly must be a good way forward. That means that, when the circumstances of parents with care change, there will not be large differences in the maintenance that they can expect to receive.

The Liberal Democrats have not even remotely made a case for returning to the courts system. I hope that the House will take a sensible, realistic and hard-headed approach and vote against the amendments.

Mr. Andrew George

I guess from the Minister's response that she is not terribly enamoured of our amendment.

We have had a reasonable airing of the arguments. Although some hon. Members did not appreciate the seriousness of this very important matter, it is appropriate on Report at least to reflect on the fact that we are missing an opportunity to allow the court welfare system to operate.

Having listened to the arguments and taken all things into account, and on balance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.