HL Deb 25 February 1991 vol 526 cc769-80

3.7 p.m.

The Lord Chancellor (Lord Mackay of Clashfern)

My Lords, I beg to move, that the Bill be now read a second time.

Your Lordships are aware that the Government are committed to a radical reform of the system by which child maintenance payments are assessed, collected and enforced. The White Paper Children Come First set out our proposals, and the Bill which I now bring before your Lordships is the fruit of that. It is the result of much collaborative work involving many departments of state. The Bill covers Great Britain, and it is hoped to extend its provisions to Northern Ireland by Order in Council. I particularly hope that your Lordships will allow me, in explaining the Bill's provisions, to concentrate on the main thrust of its proposals. The detail is different in some respects in England, Wales and Scotland, to take account of the distinctive nature of the legal systems in the United Kingdom law districts. There will of course be an opportunity to debate the Bill's detailed provisions when it moves into Committee.

To set the Bill in context, your Lordships will recall that the Government are embarked on a wide-ranging review of all aspects of family law and the way family business is dealt with in the courts. Its first achievement, to which your Lordships gave much time and close attention in the Session before last, is the Children Act 1989, which is to be implemented in October this year. That Act brings together into a single coherent code the law on the physical care and upbringing of children. This Bill, in achieving a similar result for the duty to maintain children, is a natural adjunct to it. Like the Children Act and the rest of the review of family law, it is informed by two central principles or objectives, namely, the giving of priority to the welfare of the child and the primary responsibility of parents for securing that welfare even where the parents' own relationship has broken down.

In many cases the present system of child maintenance does not achieve these objectives. It is operated through the courts under various regimes of statutory discretion as well as through the offices of the Department of Social Security. The effect is that decisions are uncertain and, arguably, inconsistent.

Only 30 per cent. of lone mothers receive regular maintenance for their children. More than 750,000 lone parents depend on income support. Many lone mothers want to go to work, but cannot.

In a great many cases, the maintenance awarded is not paid, or payments fall into arrears and take weeks to re-establish. As part of our strategy for improving the collection and enforcement of maintenance, the Maintenance Enforcement Bill, which your Lordships have been considering, will give the courts new powers to direct that, from the first, maintenance payments may be made by standing order direct to the creditor's bank account, or by attachment of earnings if the debtor is in work. As the reformed system inaugurated by the Child Support Bill will not be fully in place for several years, the Maintenance Enforcement Bill is an important means, within the present system, of quickly addressing one major problem.

Those are some of the problems which our new system is designed to address. There are three key features of the reforms, two of which are implemented by the Child Support Bill. First, child maintenance will be assessed by means of a formula which will produce consistent results. It is based on a maintenance requirement representing the amount needed for the care and maintenance of children, and on the means and circumstances of the parents. A further departure here from the existing system is that a single award will be made covering all qualifying children in a family, rather than there being separate orders for each child, as at present.

Secondly, a child support agency will be established as a next steps agency under the authority of my right honourable friend the Secretary of State for Social Security. The agency will trace absent parents, investigate the parents' means and assess, collect and enforce payments of child maintenance. Your Lordships should know that as a next steps agency the agency will have no independent existence in statute. The powers that it will need to do its work are, therefore, expressed as powers of my right honourable friend the Secretary of State for Social Security.

Thirdly, as part of this package, though not covered by the Bill, my right honourable friend the Secretary of State for Social Security will introduce measures coinciding with the introduction of the maintenance formula to make it easier for lone parents to combine work with the responsibilities of caring for their children. The first £15 of maintenance paid will be ignored for parents receiving family credit, community charge benefit and housing benefit. At the same time, we shall reduce the number of hours of work which qualify for family credit from 24 to 16 hours per week. This will apply to all claimants from April 1992 and it will be of particular value to lone parents. These measures will make it easier for parents to gain independence by their own efforts. The choice must be theirs; but we now that many of them want to work and it is right that we should help them to realise their ambitions.

The thrust of the policy of the Child Support Bill is clear. I now propose to turn to a rather fuller account of the main features of that policy as set out in more detail in the Bill.

The opening clauses set out the basic principles; they reflect in law what the Government see as the clear moral duty of parents to maintain their children until they are old enough to look after themselves. Events may change the relationship of the parents to each other but they cannot change the responsibility which parents owe to their children. The child support agency is to be available as a service to nearly all parents and children for tracing the absent parent, investigating the parents' means and for assessing, collecting and enforcing maintenance.

Where the taxpayer is involved—and the cost of income related benefit payments to lone parents has risen from £1.4 billion in 1981–82 to £3.2 billion in 1988–89 at today's prices—we have thought it right that the parent claiming benefit should be under a obligation to make effective use of the services of the child support agency to seek maintenance from an absent parent. Therefore, where a caring parent refuses, without good reason, to fulfil that obligation it will be possible for the amount of her own personal benefit entitlement to be reduced for a specific period. Just as we do not think it right for an absent parent to walk out on his responsibilities—and we are providing that, even if he is on benefit, he will normally be expected to make a small contribution to his maintenance liability—so it is not right that a caring parent should simply choose to pass on the financial responsibility for maintaining her children to taxpayers, many of whom are raising families themselves.

We are of course aware that there will be circumstances in which it would not be reasonable or humane to force the caring parent to seek maintenance; for example, in cases of incest or rape. We are looking very carefully at the circumstances where it would be wrong to impose any sanction and we shall ensure that a range of exceptions will be available to cover such circumstances and that the powers are exercised sensitively.

Your Lordships may be particularly interested in two clauses which provide for the ways in which the new child support agency is to fit in with the existing system of child maintenance. The majority of child maintenance cases will in the end go to the child support agency. But the agency will have a very large number of potential customers—around 2 million—and it would obviously not be possible to take on such a volume of work all at once. The agency should become operational early in 1993, but we shall phase in its jurisdiction and the formula over cases, or classes of cases, over a period of years. We are still considering exactly what the best and fairest approach will be for these arrangements. But one principle is clear; the courts will retain their existing jurisdiction under the existing law over groups of cases until the agency is ready to take them on. Nobody will be deprived of a forum to resolve questions about child maintenance. And we shall do our best to bring cases within the jurisdiction of the agency as quickly as is consistent with providing the quality of service which its customers are entitled to expect.

I have already sought to reassure your Lordships that we are pursuing this initiative because we believe that the majority of child maintenance cases can be assessed fairly and effectively by means of a formula. There are some special cases where modifications will be needed to the precise working of the formula; for example, where a child has a home with both parents. But there are other cases where the courts will still have an important role to play and it may help your Lordships if I briefly explain the relationship between the existing statutory regime and the Bill.

We intend to deal with that relationship by providing, in effect, that periodical maintenance payments for a child may not be sought from an absent parent in the courts under the existing law if such maintenance can be sought through the agency, unless the Bill itself allows for an application to the court. This rule of exclusivity will mean, for example, that stepchildren and other children who for technical reasons are not covered by the Bill will continue to be able to seek maintenance under the law as it now stands. Further, the Bill itself will allow the courts to exercise their existing powers to top up formula awards either to meet educational expenses or in high income cases which are above the upper limit of the formula's operation. For the sake of completeness I should make it clear that the courts' existing powers to order lump sums and to make orders about property for the benefit of the child will remain generally available. The courts will of course continue to exercise all their powers in respect of financial and property arrangements between spouses, including periodical maintenance payments for the spouse.

The Bill provides for the work of the child support agency in assessing maintenance payable and in gathering the information that it needs to do this, and for the making of reassessments and the conduct of reviews and appeals. Assessments of maintenance will be made by officers of the child support agency, to be called child support officers. In making assessments they will be independent of my right honourable friend the Secretary of State for Social Security. This will ensure that decisions made about the sums of money to which a person is entitled are separate from the political process and cannot be influenced by it. A chief child support officer will be appointed to advise child support officers on the carrying out of their duties.

Assessments will in general be made on the basis of the full facts. But there will be times when for one reason or another insufficient information is available, perhaps because one of the parties is refusing to supply it. That must not stand in the way of some provision being made for the needs of the children. For that reason the Bill allows for interim assessments to be made. We shall set out in regulations the exact procedures to be followed. However, we envisage that in most cases it will be possible to calculate the amount of the maintenance requirement based on the numbers and ages of the children involved and use that as the basis for the interim assessment until more information is forthcoming.

All of us involved in this initiative are conscious of the need to safeguard confidential personal information. But, as I am sure your Lordships' will appreciate, the agency will need access to some types of information if it is to function effectively. My right honourable friend the Secretary of State for Social Security will set out in regulations who will be expected to furnish information and under what conditions. He will have the power to use information which he has already acquired for the purpose of administering the benefit system. He will also be able to use limited categories of information held by the Inland Revenue for tracing purposes only and to verify some information about parties' incomes by checking with local authorities.

There are some circumstances in which the child support agency will need to disclose information; again the detail will be set out in regulations. But I can confirm that disclosure will not run wider than is strictly necessary for ensuring the effectiveness of the agency's work in recovering the right amount of money at the right time, providing people with an effective right of appeal and for helping the courts in exercising their continuing powers in relation to matters of finance and property on family breakdown. Your Lordships will wish to note that we are taking power to appoint inspectors to seek information from employers about parties to maintenance assessments. These powers closely follow those which my right honourable friend the Secretary of State for Social Security already has to appoint inspectors for pursuing inquiries about national insurance contributions.

We propose a comprehensive set of provisions enabling maintenance assessments to be revised, reviewed and appealed against. First, assessments will be regularly reviewed to take account of changes in the cost of living and of course of changes in the circumstances of the parties. The Bill provides for that. It also provides for the review of a decision by a child support officer where either of the parties thinks it is wrong. This is designed to offer a quick and easy way of having the decision looked at again and to allow errors to be put right with the minimum of fuss; and of course there will also be provision for further appeals where either or both of the parties is still dissatisfied.

One of the anxieties which our reforms are seeking to address is that, even when maintenance awards are made, the payment arrangements can break down. The ideal situation, where it is possible, is for the parties to agree to pay each other direct by some mutually convenient means; and we have no wish to interfere in that. But there is a range of methods which can help make payment easier or more reliable, and the agency will be able to direct parties to make payments in the most appropriate way, either direct to the caring parent, or, where it seems likely to provide greater reliability, through the agency. It will also be possible to collect payments of arrears of maintenance and in certain circumstances which will be set out in regulations to charge interest on outstanding arrears.

One way of making it more likely that payment will actually be made is to ask the liable person's employer to deduct the amount due at source from his wages (plus an allowance towards the employer's administrative expenses in doing so). The agency will be empowered to make deduction from earnings orders against liable persons both for current maintenance liability and for accumulated arrears. The provision for these orders is along the lines of those in the Attachment of Earnings Act 1971.

Sadly, however, sometimes payment methods do not work and firmer action is needed. We do not, however, think it reasonable that the agency should be able to take further enforcement action purely on its own authority. Provision is therefore made for the agency to be able to apply for a liability order to a magistrates' court and, if that order is granted, to use various enforcement methods available for enforcing civil debt. In cases of wilful refusal or culpable neglect the agency may apply for a warrant to commit the liable person to prison; such committal may be deferred to give him a final chance to come to an agreement about meeting his liability.

Although, as I have already explained, the assessment of other forms of maintenance, for example spousal awards, will stay with the courts, it may well offer a better service to the public if the child support agency can take on collection and enforcement work in these areas in some circumstances. The Bill makes the necessary provisions for this, though we shall need to think carefully about when any such work by the agency might start so as to ensure that the agency is not diverted from its main task of improving arrangements for child maintenance.

I am aware that the Bill contains many technical provisions to which I do not have time to refer in any detail. One consequence of the technical nature of much of the Bill is that it contains, as no doubt your Lordships have noticed, a rather larger than usual number of regulation-making powers. The principles and intentions of the scheme are quite clear on the face of the Bill. However, the great variety of situations to which the scheme is to be applied requires that the detailed provisions are better left to be dealt with by secondary legislation. This controlled use of regulations allows a valuable flexibility within the scheme. Adjustments can be made in the light of the experience in applying the formula and related matters, and most importantly, any unfairness which is uncovered in the operation of the system can be rectified. There will of course be extensive consultation on the content of the regulations, and the most important regulations will be subject to affirmative resolution.

In concluding this speech, I should like to return for a few moments to what I believe to be one of the absolutely central features of the scheme—the maintenance formula. Any attempt to deal systematically and consistently with the complex realities of human circumstances will necessarily not be entirely straightforward and the provisions in Schedule 1 to the Bill repay careful study. But the key principles of the design of the formula are clear. Perhaps I should mention them. They provide a firm foundation for assessing what people can afford to pay in a coherent and equitable way. There are four basic elements.

First, there is the maintenance requirement. This is an amount, which will be calculated with reference to the income support rates, which represents the basic costs of maintaining the children who qualify for a formula award. Secondly, there is the assessable income. This is derived by deducting an exempt income from the parents' net income; that is, income after tax and national insurance. This exempt income represents the weekly amount which it is considered parents need for their own essential day-to-day expenses. It will be based on income support allowances, and will include reasonable housing costs and the costs of any children for whom they are liable. The remaining income is the assessable income; such income of both parents will be taken into account.

Thirdly, there is the deduction rate. A percentage of the assessable income of each parent will be taken into account in order to meet the maintenance requirement, where possible. We intend that, until the maintenance requirement is met, assessable income should be shared equally between the absent parent and his children who qualify under the Bill. A smaller percentage will apply in individual cases after the maintenance requirement has been met. Beyond that, there will be an upper limit to the operation of the formula and, as I indicated earlier, in high income cases above that limit the parties will be able to seek additional maintenance for the child from the courts.

Fourthly and lastly, there is the protected income. This is the income level below which no family of a person liable to maintain a child will be allowed to fall as a result of his meeting his maintenance obligations and his essential living expenses. It will protect those who are working, or who have other sources of income, from being left with an income less than a level set on the basis of income support levels.

The provisions of the Child Support Bill represent an important reform which will make the assessment of child maintenance fairer and its collection and enforcement much more certain. These provisions certainly put children first. I commend them to the House.

Moved, That the Bill be now read a second time.—(The Lord Chancellor.)

3.28 p.m.

Lord Mishcon

My Lords, the House is accustomed to expressing gratitude to the noble and learned Lord for the clear way in which he explains Bills that he places before your Lordships' House. This afternoon is no exception to what we now regard as a rule.

From these Benches there is obviously general approval for the principle that the child comes first. There is every support for seeing that the maintenance of children is made the responsibility of parents, and it is desirable to have an efficient administrative procedure for the collection of maintenance where that is necessary and, furthermore, consistency in the rules relating to maintenance.

Having said that, perhaps I may explain to your Lordships that it is my intention to look with some care at the legal and constitutional matters arising from this Bill on which I feel that some submissions should be made. One has only to look at the list of speakers to realise that the essential welfare element —looking after children who are physically and mentally handicapped—and other matters relating to the social welfare of children is in experienced hands which need no help from me.

I turn first to a constitutional point. This Bill amounts to a piece of skeleton legislation. The late lamented King Henry VIII may not have liked the title of the Bill but undoubtedly he would have been enamoured by the form of it. When I glanced at the list of speakers I had an idea that the noble and learned Lord, Lord Simon of Glaisdale, might wish to say something on this aspect. If I am wrong in predicting a portion of his speech I know that with his usual mercy he will forgive me.

I call the Bill a "legislative skeleton". I am entitled to say that in spite of the noble and learned Lord's diplomatic remarks referring, as is usual on these occasions, to the need for flexibility and the fact that the provisions are largely technical. I believe I am right in saying that under the Bill there will fall to be made 94 regulations. Of that figure, if your Lordships examine Clause 38 of the Bill, 12 only are subject to the affirmative resolution of Parliament. That is very distressing; it is constitutionally objectionable. From a parliamentary point of view—I do not wish to use overstatement—it is a little offensive. It means that at later stages in the passage of the Bill we must either attempt to introduce amendments to ensure that matters of consequence are contained in primary legislation or rely upon undertakings given by those representing the Government. Perhaps I may say with respect—or even without it—that that is most unsatisfactory.

It is always useful to look at the facts which lead to legislation and then one obtains an idea of the stage one is looking at in order to make the acting suitable. The figures do not make comforting reading from a social point of view. I obtained the figures from the Family Policy Studies Centre document, which no doubt other noble Lords have seen. They show that lone-parent families have increased from around ½ million in 1971 to more than 1 million now. More than half represent divorced or separated parents. With regard to the single, non-married mothers, they represent another quarter of that figure.

The figures show that more than 1.6 million of all dependent children—that is, one in eight—are in lone-parent families. A recent Department of Social Security survey of lone parents showed that only 39 per cent. had ever received maintenance, and 29 per cent. were receiving regular payments. Therefore one immediately finds support for the principle of the Bill; namely, that something must be done in regard to looking after the maintenance of children and one must try to ensure that one finds an efficient way of providing for their maintenance.

The first aspect of the Bill which one considers is the setting up of the agency. I should like to share with the House a deep anxiety that I feel when I see that a fundamental view taken by this House—supported also by the noble and learned Lord the Lord Chancellor—has been slightly eroded. I refer to the view that we all held that the most desirable way of dealing with family problems concerning the husband, wife and children was to ensure that they were dealt with in one court. That was the reason why many of us pleaded for a family court; that is the reason when the noble and learned Lord dealt with the enactment of the Children Bill in 1989, we supported him to the full when he spoke of the problems of children and families being dealt with in one court.

Maintenance is a fundamental part of the matters with which one must deal in regard to children and families. Therefore I doubt whether the setting up of an agency is preferable to the fulfilment of the dream of a family court with similar powers. I wished to state those doubts before we move on to approve the principle of the legislation.

I move on, almost naturally, to consider the question of the family home. I believe—and I am sure other noble Lords agree—that one of the tragedies of lone parentage, whatever be the cause of the loneliness, is the grave insecurity of the children. The one support in regard to that insecurity is the keeping of the home to which they are accustomed. Cause that home, the small child's bedroom and the parentage to be altered, and there is such an accumulation of insecurity that the psychological effects may be dramatic.

At the moment the family home is usually the only asset that a family in the middle and lower income groups possesses—possibly the upper end of the lower income group, but nevertheless, in spite of the difficulties occasioned by mortgages and high interest rates in these latter days, it is more and more the pride of the family to have a family home. What happens now—in fulfilment of an aim of our recent divorce legislation, of which the noble and learned Lord is a great supporter—is that it is the rule and the desirability in many cases to achieve a clean break. That means that the husband or father, as a rule, does not have round his neck a millstone of unceasing maintenance for the years ahead. It means providing the ability to create new lives; to write new chapters when the old ones are unhappy. The way that the courts achieve the clean break is often by suggesting —and certainly agreeing to any consent order—that the father transfers the family home over to the mother. Often the mother will thereupon get income support, the idea being that spouse maintenance ceases when the father or husband does that, and the child maintenance order is a pretty low one.

There is an alternative to those provisions and it is called a Mesher Order. The court says "We shall make an order. The home will remain where it is now and when the youngest child attains the age of 16, the family home will then be sold and the proceeds of sale will be divided between the spouses and sometimes with some benefit to the children under some settlement". What we are looking at here is a result of the division between the court and the agency and the absence of one court dealing with the matter. Faced with a maintenance order under the statutory provisions that we are now looking at, the court will be unable to make an order transferring the house to the wife for the benefit of the children and their security.

The husband will say, "Goodness gracious me, I face a continuing liability". There is no question now of the ability to carry out the provisions of the divorce legislation which has pertained until now, and which cut off the liability and allowed such a settlement to be made. That is something which is so essential concerning the security of children and the family that I make no apology for having spent some time on it.

The noble and learned Lord referred to Clause 5 which deals with the giving of information. That clause is very loosely worded. One may think that the noble and learned Lord would not wish to excuse himself for any vagueness of language on the grounds of being flexible or because it is too technical. Subsection (7) states: The obligation to provide information which is imposed by subsection (6) shall not apply in such circumstances as may be prescribed; and may, in such circumstances as may be prescribed, be waived by the Secretary of State". Why should we not know what the circumstances are? If they are to be put into regulations why should they not be put into primary legislation? What is the reason for the vagueness? I am thinking—as undoubtedly the noble and learned Lord did and as I expect other noble Lords are—of the matter we debated concerning the White Paper; namely, the mother who, because of fear, supreme embarrassment or whatever it may be, does not wish to reveal the name of the father and his address. In many cases it may be due to fear. If the excuse for that is to be a meritorious one which is accepted by the Government, I call on the noble and learned Lord to say so and to see that this provision is in primary legislation at the correct stage of the Bill and that it does not rely on a regulation. I remind noble Lords that when dealing with either an affirmative resolution or praying against a regulation, we have no ability to alter at all. We can only accept or refuse. That is one of the matters that we must look at.

I wish to ask a question concerning Clause 6. The noble and learned Lord explained to us that there were variations between England and Wales, and Scotland because of the difference in Scottish law. In Clause 6 there is a provision that in Scotland the right of a child to make its own application is to continue. I ask a question, and it may be that my ignorance may be shown up when I receive the answer. For the benefit of the whole House I ask: has that provision worked well in Scotland? Is it used very often in Scotland? If that right of a child is to apply in Scotland, should it not be available in England and Wales as well?

Clause 18 deals with appeals. It merely states that an appeal shall be to a court. Nobody knows whether it will be to a tribunal specially set up for the purpose or already existent—because that can be a court—or whether it will be a court of law as we understand it. I ask for clarification on that point. There is no need for vagueness on the ground of technicality and there is no need for flexibility. One wants to know the answer. It is very important for husbands, wives, fathers and those representing children to be able to get proper advice and representation. If it is a tribunal we all know the answer: no legal aid.

In the closing time that is available to me I wish to refer to the somewhat draconian aspects of parts of the Bill. I ask noble Lords to look at Clause 13 to which the noble and learned Lord gave some attention. He spoke about the ability to appoint inspectors and said that that provision was also in social welfare legislation. The noble and learned Lord was quite right because that provision is in social welfare legislation which deals with fraud, national insurance contributions and matters of that kind.

We are dealing with the maintenance of children. Your Lordships will see in Clause 13 what rights have been given against citizens of this country. The Secretary of State may appoint inspectors for the purpose of acquiring information. I ask noble Lords to look at subsection (2) which states, for the purposes of this Act, an inspector appointed under this section"— we are dealing with the maintenance of children by parents— shall have power to enter at all reasonable times any premises which may be inspected under this section; and to make such examination and enquiry there as he considers appropriate". I ask noble Lords to look at draconian subsection (3) which states: The premises which may be inspected under this section are any which the inspector concerned has reasonable grounds for supposing to be premises at or from which— (a) any person is employed". Can noble Lords imagine the effect on employment and the embarrassment among fellow employees when an inspector calls at premises where somebody is employed in order to gather any information which he thinks relevant in regard to somebody who presumably has not paid maintenance for his child? There is not even a provision that the inspector will need the specific authority of a Minister to do so. It is at his own discretion. That cannot be. There are other provisions to which I had intended to call attention. I shall mention only one other before I sit down. I shall have to deal with the others at later stages of the Bill unless my noble friend Lord Prys-Davies happens to cover them in his winding-up speech.

It is a question on Clause 32, one of the provisions to which the noble and learned Lord drew attention in his opening remarks. It concerns the power to commit to prison where arrears have not been paid and where it is the view of those who apply for that committal that they have wilfully not been paid. I have read the clause and there is one thing that I could not gather from it. If the man serves his term of imprisonment, are the arrears wiped out; or will he still have to pay the arrears on his release? At this stage I am not coming down on either side as to the merits of the matter. But I ask the question because the old power to commit for debt has gone and one wants to know therefore what is the new legal situation created by the clause.

Your Lordships have as always been most patient and it is about time that I sat down. I repeat that the general aims of this Bill are most acceptable to those whom I represent at this Dispatch Box, but there are many questions to be asked and many defects to be rectified in the remaining stages.

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