HC Deb 16 November 2000 vol 356 cc1167-74

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

6.51 pm
Caroline Flint (Don Valley)

I am grateful for the opportunity to initiate this short but important debate, which arises from a case that I took up on behalf of one of my constituents. I have subsequently realised that the issue at stake affects many families who have a former partner employed in the United Kingdom armed forces. Today, before I entered the Chamber, I conducted a straw poll at my table in the Tea Room, and two other hon. Members—my hon. Friends the Members for Erewash (Liz Blackman) and for Gedling (Mr. Coaker)— confirmed that they had had similar problems in their constituencies.

My hon. Friend the Minister for the Armed Forces is acquainted with the case that I shall use to illustrate the problems created by current armed forces minimum pay regulations, and I appreciate his co-operation in not mentioning the name of my constituent—to whom I shall refer as Mrs. X—to protect the identity of the children. I have made a similar request to the media.

My constituent was married for more than a decade to a serving Army non-commissioned officer, a staff sergeant. Like any Army wife, she followed her husband's career, which included postings in Europe and the far east. Unfortunately, as is the case with many married service personnel, their relationship broke down: they separated and, in December 1996, Mrs. X gained full custody of their two children.

In August 1997, the Child Support Agency imposed an interim maintenance assessment, but no payment was received. Eventually, in December 1997, a deduction of earnings order was imposed for £530 per month. The first payment was received in February 1998. After a total of four payments had been received, the CSA informed Mrs. X that the Army's minimum pay regulations prevented the withholding of more than 25 per cent. of the father's pay. An arrangement whereby Her Majesty's armed forces can use one regulation to undermine a court order imposed under other legislation must make them unique among employers nationwide. Every month that that arrangement applied, the arrears grew. That means that minimum pay regulations established in 1955 to guarantee a minimum income to a service person's family now have the perverse effect of limiting financial support for dependants.

Parliament has established in law a father's responsibility to contribute to the financial maintenance of his children, and created the Child Support Agency to uphold those rights. Her Majesty's armed forces, however, can choose to ignore the best efforts of the CSA and the courts, all in the name of family welfare. In Mrs. X's case, the result has been that, from 1998 until now, her child support payments have been paid at a lower rate than the CSA and the courts have requested. By September 2000, the arrears had reached £7,000.

In all such cases, the Ministry of Defence and the relevant commanding officers have consistently maintained that, although they are bound by the 25 per cent. ceiling on deductions, they will encourage service men to honour their CSA payments. Well, honour has not got my constituent very far. Indeed, deductions of earnings orders would not be imposed at all if honour had anything to do with the case. Deductions of earnings orders involve compulsion, because the payments are not volunteered. That compulsion is being undermined by the minimum pay regulations.

My constituent can confirm that not one voluntary additional payment has been made since the deductions of earnings order was introduced. I wonder how the Army encourages service personnel to honour such obligations. Are personnel encouraged by a stiff talking to, or by a quiet word, to open their cheque books for their children? Whatever form that encouragement takes, I can tell my hon. Friend that it has not produced tuppence extra for my constituent, and every month the millstone of underpayment grows.

What will the agency do if the deductions of earnings order fails Mrs. X and her children and other former Army, Navy and Air Force families? Baroness Hollis, the Under-Secretary of State for Social Security, informed me that a liability order or bailiff's action is the next recourse even in the case of service personnel, except that no bailiff will be allowed on to an Army base to seize the goods owned. "Join the Army and escape the CSA" is hardly a great advert for the armed forces. Morally repugnant it may be, but the financial incentive is clear.

I cannot understand why the maximum deduction in the Army is 25 per cent. I understand that that can now also be extended to 50 per cent. in certain circumstances—I shall say more about that later—yet in the Royal Navy, for example, the figures are 43 per cent. and 75 per cent. respectively. Why the difference? Are rates of pay so different between the forces that the Navy needs to allow a greater slice of pay to be deducted?—I think not; it is another historical anomaly.

I have been informed that the minimum deduction can be 50 per cent. in certain circumstances. To determine whether it is 25 per cent. or 50 per cent., we have to look at the Army's marital status categories, of which there are five. For example, marital status 4 includes service men who are divorced or separated without care of children but who are providing support under a court order, including CSA awards. Under that category, 50 per cent. can be applied, but under category 1, which includes those who are married with children, only 25 per cent. can be applied. My constituent's former husband appears in both categories, as he has since remarried and has another child.

In some respects, if category 4–50 per cent.—were applied, my constituent's problem would appear to be resolved, but the Army has chosen not to apply that category. It seems odd that CSA payments from a previous relationship do not take precedence over, or have any parity with, a second marriage and subsequent dependants. That favourable interpretation has cost my constituent dear.

I am also advised that the Department of Social Security and the CSA were under the impression that only up to 25 per cent. could be removed. There needs to be discussion between the Ministry of Defence and the DSS to ensure that everyone is clear about which payments can be applied and which amounts can be deducted.

What are the Government going to do about all this? In March 1999, the Minister for the Armed Forces informed me that Parliament would review armed forces legislation by 2001; that there would be full consultation with other Departments; and that the need to amend the legislation would be considered in the light of any concerns expressed. In April this year, the Minister confirmed that those matters were under review. In July 1999, my right hon. Friend the Secretary of State for Social Security stated that he was keen to amend the position where there are limitations on the amounts that can be withheld from service personnel's pay. He promised to keep me informed of progress. In October this year, a letter reaffirmed the Department's desire to amend the position and stated that the matter was still under consideration.

Are the minimum pay regulations included in the review of forces legislation? What stage has that review reached? What is the outcome of discussions with the DSS, among others, to bring the child support legislation and Army, RAF and Navy regulations into line? Does my hon. Friend agree that minimum pay regulations were never contrived to thwart obligations for child support payments? Indeed, they make specific reference to them, but they are in need of an overhaul.

This is a modernising Government. I have welcomed their willingness to take a new path and their ability to act across Whitehall Departments to ensure joined-up thinking. I welcome their family policies, which represent a radical improvement on the past. However, the Ministry of Defence has something to prove in that respect. I have no doubt that, with application, the Ministry can honour the moral obligation to parents with custody who are the former partners of service personnel. Given the rates of family breakdown in the armed forces, it is too great a problem to be overlooked. It is also too great a problem to hide behind red tape—or, even worse, behind Army red tape, exempt as it is from the full legal redress of the courts, which can be applied to almost any other employer in the land.

It being Seven o'clock, the motion for the Adjournment of the House lapsed, without Question put.

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

Caroline Flint

For Mrs. X—a hard-working constituent of mine trying to raise a family and move on—there is a £7,000 millstone around her neck that cannot be collected while the Army protects the salaries of those with such liabilities to their offspring.

The Ministry of Defence says that only 1 per cent. of child support payments are not made in full, and I welcome that. It is not too great a hope that the Department will not provide the camouflage for the 1 per cent. who wish to avoid being fully accountable for their children's welfare. For Mrs. X—someone with no place to hide and nowhere else to turn—the burden of underpayment grows by more than £77 for every month that the Army underpays her ex-husband's deduction of earnings order.

I have raised the case of Mrs. X in detail with my hon. Friend's ministerial colleague, the Under-Secretary of State. In his last letter to me, the Under-Secretary suggested that owing to changes in the Child Support, Pensions and Social Security Act 2000, the problem will go away. But that is the case for new cases coming on-stream and it may be the case for when those concerned eventually get round to reviewing existing cases. But that does not help my constituent—and many other people around the country—who find themselves within the present procedures.

I am concerned that the marital status categories have been used to disadvantage the children of my constituent, and that Ministers are being advised on the basis of inaccurate and sometimes inappropriate comments about my constituent and the lead-up to the family breakdown.

More pertinently, I do not believe that it is the role of the Ministry, the Army or Members of Parliament to be moral arbiters or judge and jury in distressing cases of family breakdown. This is not just about Mrs. X's children; in fact, she has been determined to pursue the matter because it is her desire to protect other former Army wives and their children.

It is our moral obligation to see that the CSA's and the courts' wishes are upheld on behalf of the welfare of children. Our obligations to service personnel and their dependants do not exist in some separate moral universe: they are part of the same equation. If, to accord with the judgments of the CSA and the courts on behalf of children, out-of-date minimum pay regulations have to be revised in the name of modern sensible family policy, so be it. This is a matter that I intend to raise with the Select Committee on Defence as part of its review of personnel procedures in the services.

Laura Moffatt (Crawley)

The Select Committee has been examining the issue of a review of personnel matters. We have had senior officers before us who take family matters seriously. Can there possibly be a difference between the children of serving officers in our armed forces and children of officers who are now not together with their partners? Surely there should be no distinction.

Caroline Flint

I agree and I would not like to suggest that the Ministry and the various branches of the services do not take family matters seriously. However, this is one of the areas where they are found wanting and an area they must address. In the present day, people can have families in which they live with their children, but they also have responsibilities to the families and children with whom they are not living. As a responsible employer, the Ministry of Defence should attend to that and make sure that its systems do not discriminate against those children.

Before I arrived in the Chamber tonight, I was able to have a conversation with my hon. Friend the Member for Wentworth (Mr. Healey) who raised his concern about the Territorial Army and its approach to CSA payments and the families of existing personnel. I will be encouraging many of my colleagues who have had similar problems to report to the Select Committee so that we can collate a larger and more diverse example of the practices which, unfortunately, are going on. I urge my hon. Friend not to close the door on reform in the vital area of pay and family responsibility and not to wait for changes in the child support legislation. I urge him to do something about the families who are affected by the present legislation and the regulations that are currently used in the services.

The moving ceremonies across the nation last weekend were a reminder that, as a nation, we owe a debt of honour that is in keeping with the ideals of those who gave their lives. We also owe a debt of honour to the injured, former prisoners of war, widows of the fallen, service personnel and their families and the children of service personnel. Let the innocents not be the casualties of those out-of-date rules.

7.5 pm

The Minister for the Armed Forces (Mr. John Spellar)

I should like to begin by congratulating my hon. Friend the Member for Don Valley (Caroline Flint) on securing a debate on this important issue. I know that she takes a great interest in the service families in her constituency and, as she said in her excellent speech, the Government came to office committed both to putting people at the centre of defence policy and planning and to family policies.

We have delivered on that commitment. The strategic defence review set in hand a wide variety of initiatives aimed at improving the lot of the men and women in our armed forces across the full spectrum of their needs and those of their families. Among those was the service families taskforce, which was set up two years ago. As I reported to the Chamber on 2 November, the taskforce has been doing excellent work in resolving issues of concern to families. It has taken a real lead in bringing the expertise of different Departments to bear on cracking problems that had been written off as insoluble.

That does not mean that we are complacent. The taskforce is continuing to work hard to resolve outstanding issues and to ensure that all the families of service personnel are treated fairly. I am sure that the House will agree that we ask a great deal of our service personnel—ultimately we may require them to sacrifice their lives—and they do not let us down. It is only right, therefore, that we take good care of them and their families.

In that context, my hon. Friend raised an important and sensitive issue. As the case that she outlined showed, the break-up of a marriage is always difficult and can be exacerbated when children are involved. It is essential that correct financial provision be made for the children, which is why the Child Support Agency can issue deduction of earnings orders to employers regarding ongoing maintenance and arrears payments. Those orders stipulate the rate of deduction that may be taken from the earnings of a non-resident parent. They also set a protected earning rate, which is the amount that the non-resident parent must be left with after the deduction has been made, to provide the non-resident parent with key living expenses. In cases in which the employer is unable to make the maintenance deduction in full because it would take the earnings below the protected earnings rate, the outstanding balance is rolled forward to the next week or month.

Child support legislation, however, does not provide for deduction of earnings orders to be imposed on personnel in the armed forces. Instead, there is a memorandum of understanding between the Ministry of Defence and the Child Support Agency to ask the Ministry of Defence to make deductions for maintenance. I am pleased that, overall, there is a very good working relationship between the Ministry of Defence and the Child Support Agency, which ensures that deductions from the pay of service personnel are made quickly and accurately—indeed, I understand, far more so than with almost all other employers. The Ministry of Defence has an exemplary record in meeting its obligations.

My hon. Friend the Member for Don Valley mentioned that the full amount is not deducted in only 1 per cent. of cases. That is my understanding as well: in over 99 per cent. of cases, the full amount awarded is deducted. That compares favourably with those outside the armed forces, where 22 per cent. are paying only a part of their assessment and 29 per cent. pay nothing at all. The Government are doing something about that, which I shall come on to later.

The very few members of the armed forces who are not meeting the full amount payable—as I said, we believe that they are fewer than 1 per cent. of all cases—are doing so as a result of the minimum rates of pay set by Ministry of Defence legislation, as my hon. Friend rightly pointed out. Minimum rates of pay were introduced around 50 years ago to ensure that service families were properly looked after. In fact, the Royal Navy regulations date from 1947, while the those for the Army and the Royal Air Force were brought into force in 1955. Those minimum rates of pay were introduced as a result of the experience of the second world war.

During the war, service personnel were encouraged to make an allotment of a fixed weekly sum to their families. Not all did, with obvious consequences. For those who did receive an allotment, the sum was not guaranteed because deductions from the pay of service personnel could mean that there was insufficient to cover the allotment—and this caused substantial hardship. To prevent those problems from recurring, new regulations were introduced. For example, two separate provisions were added to the Army Act 1955. One established a minimum rate of pay and the second gave the service authorities powers to make immediate deductions from the remaining pay for the maintenance of the spouse and children.

The provisions were designed to protect the whole family and continue to do so today. The amount of separation experienced by service personnel means that day-to-day financial planning within service families remains very difficult compared with that within the civil community. Civilians have recourse to the courts if they are being overburdened with deductions from pay, so that the amounts that they pay can be varied to take account of their circumstances. Service personnel, particularly if they are deployed on operations, cannot easily access the courts. In addition, the application of the Discipline Acts means that service personnel may face fines for a range of military offences that do not apply to civilians.

The powers that I have outlined have been made available to the service authorities so that the families of service personnel are properly supported. For example, deductions can be made to ensure that service personnel meet their responsibility to their families. These are often used when relationships break down to ensure that service families are properly cared for prior to the CSA making an assessment. They are the key tools which enable us to respond to CSA assessments, but they are also of utility in other circumstances. For example, they were used recently to make an immediate payment to the wife of a soldier who suffered a massive stroke before he had had time to set up any method whereby she could access his bank account.

As my hon. Friend said, the minimum rates of pay calculations differ slightly between the services, but in all three the principle applied is to take account of the circumstances of the individual. For instance, it is only right that any children from a second relationship should have some protection.

Caroline Flint

The CSA also takes into account any subsequent families and their children, so why did not the Ministry of Defence find a balance between the marital status 1 category and the marital status 4 category, which would have met the needs of both families concerned?

Mr. Spellar

I understand that my hon. Friend has been in correspondence with my ministerial colleague the Under-Secretary of State for Defence on the particular details of the case in question and the circumstances surrounding it. I am outlining the general principles under which we operate, including the fact that we have responsibilities not only to the children of the first relationship, but also to the children of the second relationship.

Caroline Flint

I must press my hon. Friend on this point. When the 25 per cent. rule was applied, my understanding was that the service man in question had not remarried and did not have a child. That was when the first order was imposed. I gather that at the time the Army had the discretion to apply category 4, which would increase the deductions to 50 per cent. So there is a real issue about the judgments being made in deciding which marital status category to apply.

Mr. Spellar

I shall certainly draw my hon. Friend's comments to the attention of my hon. Friend the Under-Secretary of State.

The Army regulations allow for up to 50 per cent. deductions from pay where there are no other children or dependants. However, in circumstances where the soldier is legally married and living with his or her spouse, or where the soldier is widowed, divorced or separated and has care of the children, or the soldier does not have care of the children but is providing voluntary financial support, there is a limit of 25 per cent. deduction on pay. It is only in very rare cases that this limit is not sufficient to cover CSA maintenance awards. The statistics that I outlined earlier bear that out.

The Child Support, Pensions and Social Security Act 2000 will introduce a more efficient, customer-focused child support system built around a much simpler method of assessment. The new system will calculate maintenance based on a percentage of income after taking into account an allowance for children in a second family, and will then impose flat-rate deductions on the income that remains.

When the new system is in force, it will require there to be three or more children and the absent parent to be in arrears before there is any difference between the maximum that the CSA might impose and the maximum that the armed forces could deduct from earnings. That shortfall could be up to 5 per cent. in the worst case. It is very important to emphasize that, even if arrears occur, minimum pay regulations do not absolve the parent from meeting the CSA assessment. Accordingly, the debt remains and can be recovered subsequently and by other means.

Caroline Flint

I have highlighted an individual case, but the principle and the policy would apply regardless of who was affected. When there was recourse to the courts for a liability order, and two such orders were instigated, it led to bailiffs being sent to the barracks to retrieve goods to the amount that was owing, but they were refused access to the base. Even with a liability order, the courts do not seem to be able to pursue these matters with the individual in question. In an odd sort of way, the way in which the system is organised seems to be aiding and abetting an individual to default on payments.

Mr. Spellar

I reiterate that the debt, even then, is still not liquidated and can be recovered subsequently. Indeed, it can continue after the immediate obligation is ended. The courts have various means of trying to secure payment, of which bailiffs are but one.

We expect the number of cases in the armed forces in which the full amount imposed by the CSA cannot be met in full to be extremely small, but we realise that, in such cases, an extra strain could be added to what may already be a very stressful situation. However, as my hon. Friend knows, our armed forces give up a lot of the comforts and privileges often taken for granted in civilian life, in the service of their country, and it is only right that they and their families should be properly looked after. I assure my hon. Friend that the Ministry of Defence will continue to liaise closely with the CSA to ensure that maintenance cases involving members of the armed forces are dealt with quickly and sensitively.

Question put and agreed to.

Adjourned accordingly at eighteen minutes past Seven o'clock.