MAINTENANCE ORDERS BILL

HL Deb 20 May 1968 vol 292 cc450-6

2.46 p.m.

BARONESS EMMET OF AMBERLEY

My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.

Moved, That the House do now resolve itself into Committee.—(Baroness Emmet of Amberley.)

On Question, Motion agreed to.

House in Committee accordingly.

[The Lord DOUGLAS OF BARLOCH in the Chair.]

Clause 1 [Increase of Maximum Payments for children]:

THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM) moved to leave out subsections (1) and (2), and insert: () The enactments described in Schedule 1 to this Act shall have effect subject to the amendments specified in the second column of that Schedule, being amendments removing the limits of fifty shillings and seven pounds ten shillings imposed by those enactments upon the weekly rate of the payments for the maintenance of a child, and for the maintenance of a party to a marriage, which may be required by order of a magistrates' court thereunder.

The noble Lord said: I beg to move Amendment No. 1. When I spoke on the debate on the Second Reading of this Bill I made two promises. The first was that I would move some Amendments to give effect to the main recommendation of the Departmental Committee on Statutory Maintenance Limits; namely, that the financial limits prescribed by Statute for orders which may be made in magistrates courts for the maintenance of wives and children should be abolished". The second promise was that I would say something about the question of tax on small maintenance payments. I should like now to fulfil both those promises.

May I first deal with the Amendment which I now move, Amendment No. 1; and if it would suit your Lordships' convenience, may I speak at the same time to Amendments Nos. 3, 4, 5, 6 and 7, which are all designed to give effect to the main recommendation of the Graham-Hall Committee that limits should be abolished? Amendments Nos. 3, 4, 5 and 6 are purely drafting changes which are necessary to take account of the change in the character of the Bill which would be brought about by acceptance of Amendments Nos. 1 and 7. I say "change in character" advisedly, since I think it right to admit that by moving these Amendments the Government are seeking to change the character of the Bill.

In the form in which it was introduced by the noble Baroness—and that is the same form in which it was introduced in another place by Mr. Quintin Hogg last year—the Bill was intended to increase the existing limits on the amounts which magistrates' courts may order to be paid in respect of a child, and to allow the Home Secretary to increase the limit on the amount which may be paid in respect both of a child and of its parent. The Amendments are to change the character of the Bill so that its purpose is to abolish all limits on amounts which may be ordered by magistrates' courts in the circumstances detailed in the Bill. Such a fundamental change was deliberately allowed for when the Long Title of this Bill was drafted, because although the Committee had not then reported, the possibility of a recommendation to abolish the limits was envisaged and provided for. Noble Lords will remember that I summarised the Committee's reasons for their recommendation in my speech during Second Reading.

The most important reason, and the only one which I wish to repeat now, was the Committee's desire to ensure that no child should be allowed to suffer hardship through the existence of statutory maintenance limits. That is a wholly laudable intention which I feel sure all noble Lords will support. At present, in cases where there is no entitlement for a woman to receive maintenance on her own account (and this is so in guardianship and affiliation proceedings) the present limit of £2 10s. on the amount which may be paid in respect of a child is quite insufficient. The Committee thought that as much as £10 might be necessary, and pointed out that in the case of a large family this would amount to virtually no limit at all. They could find no rational criteria for a new higher limit and concluded that abolition was the only sensible and defensible recommendation. The Committee received unsolicited arguments in favour of abolition from such bodies as the Association of Children's Officers, the Justices Clerks' Society, the Magistrates' Association, the National Association of Justices' Clerks Assistants, the National Association of Probation Officers and the National Council for the Unmarried Mother and her Child.

The recommendation for abolition of limits is put into effect by Amendment No. 1, which must be read in conjunction with Amendment No. 7, which introduces a Schedule into the Bill. It deletes from the Bill the provisions which would have increased to £5 the existing limit of 50s. on the amount of weekly payment which may be ordered by a magistrates' court for the maintenance of a child and also a provision which would have allowed the Home Secretary to increase the new limit of £5 to a higher figure. The new Schedule 1 specifies all the enactments in which such limits are prescribed, and the effect of the new subsection (1) of Clause 1 and the new Schedule 1 is to delete all references to limits in the legislation specified in the Schedule. I beg to move.

Amendment moved— Page 1, line 5, leave out subsections (1) and (2) and insert the said new subsection.—(Lord Stonham.)

BARONESS EMMET OF AMBERLEY

I think there is no need for me to delay your Lordships on this Amendment. You would like to know, I am sure, that I have consulted with my right honourable friend in another place. This Bill passed through another place before the Graham-Hall Committee had reported. My right honourable friend entirely supports the Amendment and I am sure that the Committee will do so. The suggestion with regard to the limit placed on small maintenance payments seems to be a reasonable one, and I would suggest that we accept the Amendment on the lines explained by the Minister.

BARONESS SUMMERSKILL

I wish merely to say how many people will welcome the Amendment that my noble friend has moved. We have all been waiting very impatiently, month after month, for the Final Report of the Graham-Hall Committee. We realise that the Bill introduced in the other place merely anticipated that Report. Therefore, I am delighted to learn that the Minister has accepted it in toto.

On Question, Amendment agreed to.

LORD STONHAM moved to leave out subsection (3). The noble Lord said: I beg to move Amendment No. 2, to delete Clause 1(3) or the Bill. The Amendment proposes to remove from the Bill a provision which would have treated the increased payments of up to £5 for children, which the Bill originally authorised, as "small maintenance payments" for tax purposes. Under income tax law, payments within the definition of small maintenance payments are payable in full without deduction of tax. This is a great convenience to the mother whose income normally may well not be large enough to be liable to tax. Under income tax law, the recipient pays any tax which may be due on the allowances, depending on her income, and the person making the payments is given a deduction for them in computing his taxable income. The limits on the amount of small maintenance payments which are subject to these arrangements are at present the same as those on the amounts of maintenance which may be ordered by magistrates' courts; namely, 50s. for a child and £7 10s. for a spouse.

The Graham-Hall Committee considered the effects of abolishing limits on the law relating to the taxation of small maintenance payments and they concluded that there should be a limit on the amounts which could be paid without deduction of tax. They recommended that the tax limits as regards payments for a child should be raised from the current maximum of £2 10s. weekly (which the Bill as at present drafted would have raised to £5 weekly) to £7 10s. weekly. In other words, it is proposed that that should still be a small maintenance payment and that the tax should not be deducted at source before the payment is made. This would have the effect of making the amount payable for a child's maintenance which ranks as "small maintenance payment" for tax purposes the same as the amount which now qualifies as a small maintenance payment if payable to a spouse—I need to use the word "spouse" for it could be paid either to a woman or to a man, according to the circumstances. The Government agree with this recommendation and have decided to deal in the Finance Bill with all the taxation consequences of the Graham-Hall Report. Appropriate Amendments were tabled in another place on Friday to amend Clause 17 of the Finance Bill so as to bring into the category of small maintenance payments amounts up to £7 10s. a week in the case of a child.

I am sure that the Committee—and in particular my noble friend Lady Summerskill—will be pleased to know that the Finance Bill will also implement the two other tax recommendations of the Graham-Hall Committee; namely, that the small maintenance payments tax arrangements should no longer be restrioted to orders expressed to be payable at weekly intervals, and that Treasury Ministers should be given powers to make changes by Statutory Instrument in the definition of small maintenance payments.

I understand that Clause 1(3) of this Bill, which treats as small maintenance payments those payments which it would have authorised in its original form, was included in the Bill because it was expected that the Bill would become effective a considerable time before the Finance Bill. Indeed, we had all hoped that it would be so; but in the event it seems to be working out very well, because the Maintenance Orders Bill was first introduced in another place in November of last year and the Government wished to avoid the possibility of orders at the increased amount having to be paid with tax deducted. Without the changes I have just mentioned, if the child's allowance had been £7 10s., tax would have been deducted. It now seems most likely that the Finance Bill and this Bill will become law at about the same time and we have decided that it would be most convenient if all the Amendments to the taxation law which arise from the Graham-Hall Report were dealt with in the Finance Bill. This decision fortunately relieves me of the necessity of inflicting upon your Lordships further statements about complicated tax questions. I beg to move.

Amendment moved— Page 2, line 5, leave out subsection (3).—(Lord Stonham.)

BARONESS EMMET OF AMBERLEY

It is not often that one finds oneself in complete agreement with the Treasury on any matter; but in this case I am sure that your Lordships would all agree that this is a very good arrangement.

On Question, Amendment agreed to.

Clause 1, as amended, agreed to.

Clause 2 [Power to increase maximum payments to spouses]:

3.0 p.m.

On Question, Whether Clause 2 shall stand part of the Bill?

LORD STONHAM

I beg to move that Clause 2 be deleted from the Bill. From what I have said it will be obvious that as there are now to be no limits we do not require this clause which provides for limits.

Clause 2 disagreed to.

Clause 3 [Supplementary provisions]:

LORD STONHAM

I beg to move Amendment No. 3.

Amendment moved— Page 2, line 23, leave out subsections (1) and (2).—(Lord Stonham.)

On Question, Amendment agreed to.

LORD STONHAM

I beg to move Amendment No. 4.

Amendment moved— Page 2, line 31, leave out from ("Act") to ("may") in line 32.—(Lord Stonham.)

On Question, Amendment agreed to.

Clause 3, as amended, agreed to.

Clause 4 [Short title, extent and commencement]:

LORD STONHAM

I beg to move Amendment No. 5.

Amendment moved—

Page 2, line 40, at end add— ("(4) Section 15 of the Matrimonial Proceedings (Magistrates' Courts) Act 1960 is hereby repealed.").—(Lord Stonham.)

On Question, Amendment agreed to.

Clause 4, as amended, agreed to.

LORD STONHAM

I apologise to your Lordships that in my speech on the first Amendment I referred constantly to Amendment No. 7 and there is no Amendment of that number of the Marshalled List. I should have looked more carefully. I knew that I had seven Amendments to move but had momentarily forgotten that when we move to leave out a clause it is not numbered on the Marshalled List. I hope that this has not occasioned any confusion. I beg to move.

Amendment moved— After Clause 4, insert the following new schedule—