HL Deb 08 December 1992 vol 541 cc167-75

7.39 p.m.

Lord Henley rose to move that the draft order laid before the House on 11th November be approved [11th Report from the Joint Committee].

The noble Lord said: My Lords, as the House will know, from next April the Child Support Agency will acquire the responsibility for the assessment and collection of child maintenance. The regulations before the House today contain the provisions for the charging of fees for the services the agency will provide. The regulations contain provisions dealing with who will pay fees, and who will be exempt. They also cover the services for which fees will be charged.

The House will be aware that under the present system, many parties seek to involve solicitors in determining maintenance, and the matter often goes to court. The costs of all of this can be considerable.

Although the method of assessment will change when the agency takes over, there will still be a considerable amount of work to do. We believe that it is right that parents should make a contribution to the costs of all of this activity, if they are able to do so, rather than expecting the entire cost to fall on the taxpayer.

The agency will charge fees for two services. The charges will be made on an annual basis. The first fee of £44 will be for the assessment of maintenance and any reviews of the maintenance liability that may take place within the year. The second fee of £34, which is optional in voluntary applications under Sections 4 or 7 of the Act, is charged where my right honourable friend the Secretary of State for Social Security is arranging for the collection of maintenance.

Turning to who will pay fees, there are two points which I would like to make. The first point is that we believe that it is not right to expect taxpayers to pay for the full cost of determining how much maintenance an absent parent should pay. Many taxpayers have children of their own, so, as I said earlier, when parents are able to make a contribution, then they should do so. Equally, however, we accept that it would not be appropriate to charge a fee in every case.

These regulations, therefore, contain provision detailing those clients who are exempt from fees. The exemptions have been drawn quite widely to ensure that the least well off should not be required to pay a fee. I should also point out that we have also ensured that liability to pay a fee depends on the individual's own circumstances and not those of the other party to the assessment. In addition, if a client is exempt from a fee at the time it becomes payable, the exemption will last for a year. We estimate that over 50 per cent. of the agency's clients will be exempt from fees, although as people move from the courts to the agency the numbers likely to pay fees may well increase.

Finally, I should like to stress that fees will not take priority over the collection and payment of maintenance. Maintenance for children must have priority over the payment of fees. These regulations strike the right balance between the taxpayer and parents who can or cannot pay fees. They give parents scope to decide what services they require. I commend them to the House.

Moved, That the draft order laid before the House on llth November be approved [11th Report from the Joint Committee].—(Lord Henley.)

Baroness Hollis of Heigham

My Lords, we on this side of the House accept that absent parents should contribute to the support of their children, but the tone of these regulations (and of some of the previous regulations associated with the Act) seems to suggest that the purpose of the Act is to make irresponsible young women and even more irresponsible young men live up to their social responsibility for the woman having casually and self-indulgently become pregnant. Not so, most single-parent families were once two-parent families and, in a significant number of cases, the absent father is now in a second family.

We want to register a real concern about the level of fees in the regulations. We originally expected that they would be about £20 or £25 in total (between both parents) but under the regulations we are talking about £44 for assessment and £34 for collection each year for each parent—or about £150 a year in addition to maintenance. That is much higher than was originally proposed. The Minister has already quoted the comments of Mr. Burt who admitted in the House of Commons that the fees were higher than necessary merely to cover the administrative costs of the new agency. Under questioning, Mr. Burt admitted that included in the fees were overhead costs such as the depreciation of capital assets. That suggests that the fees are inflated by the fact that they are being asked to serve a commercial and not merely an administrative purpose. We are talking about taking fees from some of the poorest families in the land. Therefore, when he replies, will the Minister spell out exactly what costs go into the fees?

The Minister will expect me to register some wider concerns also. Obviously, we welcome the range of exemptions from the fees, but I must ask why full-time students in higher education are not exempt, especially since their grants are desperately inadequate; they are not eligible for benefit; and their disposable income for living costs is lower than the income support level. We should also like to know to what extent the fees are high on the assumption that they are recovering maintenance payments for the carer as well as for the children.

Beyond that, wider anxieties remain about the maintenance proposals laid down in the Act. Even those on the lowest incomes are expected to contribute some 5 per cent. in maintenance—or about £2.30 per week. Given that, according to a Written Answer yesterday, as of 3rd December 637,000 families were top-sliced for the social fund; 305,000 families were top-sliced for fuel and 337,000 families were top-sliced for the poll tax, one in five families on income support are already receiving a net income which is well below income support levels. Will the Minister reconfirm that the absent parent will contribute to maintenance if he is on income support only if he is living alone or in a childless couple? Clearly, otherwise there is a major problem for the family.

Will the Minister also confirm that the caring parent who is failing to disclose the name of the absent father, or of the absent parent, will continue to suffer a benefit penalty of at least 20 per cent. for 26 weeks —that is, some £8 per week which in total, with all the top-slicing, could halve that parent's income support level? Could we have guarantees from the Minister that guidelines have been issued to DSS staff about the issue of exerting pressure or coercion on the mother to name the absent father? All the evidence suggests that currently one-third of single parents are saying that they will refuse to give the name of the absent father because they fear violence and further contact. What guidance will be offered to DSS staff as to what constitutes a reasonable refusal? Will we find that not only is the absent father being top-sliced, but that the mother, by refusing to disclose the father's name, will find herself unreasonably top-sliced as a benefit penalty, thus lowering the living standards of her children even further?

Will the Minister also comment on the issue of privacy? When paternity cases come to court not unnaturally many absent fathers deny that the child has anything to do with them. Many of us are worried about some of the questions in the questionnaire which ask the mother to give, for example, the time and place when the child could have been conceived.

One wonders about things such as lay-bys on the M4. The questions also include, "Was the man a childhood friend?" and "By whom was he introduced?" Such questions make mothers increasingly reluctant to give information, especially if there is to be a contested dispute over paternity which may come to court and which may result in a serious invasion of her privacy. We are anxious about questions of privacy as well as of finance.

I have a further question for the Minister. Why are the Government not giving single parents on income support the same £15 disregard as those on family credit? Behind this is the wider question that was fully aired in our debate on the Bill: why should there be no financial gain to the family but only to the Treasury as a result of the serving of the maintenance orders and the associated fees? After all, three-quarters of families on income support will not gain from the regulations. Indeed, if maintenance payments float them off income support (as they almost certainly will for 50,000 families) they will lose passported benefits, such as school meals, and be worse off. Those on family credit who get the £15 disregard are already among the better off lone parents because they are, by definition, in work, and they are receiving more generous disregards.

I have two final points. From work that has been carried out into single parents and maintenance payments it is clear that there continues to be the belief, which was thoroughly aired in your Lordships' House, that there will be a link between the duty of compulsory maintenance on the part of fathers and their right of access. We accept that, under the Children Act 1989, this is a matter for the courts but in practice, as was pressed in the other House, it will generate a demand for that right to be exercised. That is much dreaded by mothers where there may have been violence in the past relationship or where they are now in a new and, one hopes, stable relationship which they do not want disturbed by the re-emergence of a partner with whom they might have had only a transient relationship 10 years ago. There is nothing to stop absent fathers suddenly turning up without court permission. All the research shows that this is a serious consideration in people's minds.

Behind the matter is the wider question of child poverty. Low-income fathers cannot support two families. In practice many such fathers—I use the word deliberately—are in a second family, and it is the children especially of the second family who may well suffer as any increase in family income is deflected to support the first family. As the DSS research by Bradshaw and Millar states, too robust a maintenance regime may impoverish second families and their children, thus increasing the possibility of breakdown of that second family relationship. The right response is not only to pursue appropriate maintenance—we do not dispute that—but to brigade it with enhanced child benefit. All the evidence shows that the acceptable method of income support for lone parents fearing violence, fearing the re-establishment of a relationship, trying to protect their privacy and trying to protect any new relationship into which they have entered as well as protecting the rights of the second family, is through child benefit rather than through these proposals for compulsory support and extremely high fees.

Earl Russell

My Lords, I remember the first regulations on which I had to speak in the House being described by the noble Lord, Lord Skelmersdale, as of a more than usually impenetrable character. There is a mystery about regulations; the task of penetrating the unintelligible language; almost an odour of the road to Samarkand. But on this occasion I am really disappointed. These regulations are almost comprehensible. It is really extremely surprising.

Just as there is no free lunch, there is no free maintenance assessment. Someone has to pay for it. It must be by fees or by the taxpayer or by some combination of the two. I am not entirely clear, even after listening to my noble kinsman, why he has decided that there must be a substantial contribution from the clients. The only reason my noble kinsman gave was that it was not right to ask the taxpayer to pay because many taxpayers have children themselves. But if that were to be the sole general principle I think it would do rather more than my noble kinsman, I hope, intends. I should like a little more explanation of why the Government have thought it best on this occasion to introduce a fee regime. This is not necessarily to say that they are wrong. I cannot pass any judgment on whether they should have done it until I have some idea of why they have done it.

Admittedly, there are plenty of other cases of use of fees; for example, applications for passports. But those who apply for a passport normally do so voluntarily. The caring and absent parents with whom we are here dealing did not ask for this Act. The Act came in ostensibly to relieve the pressure on the taxpayer, so it is the taxpayer who is expected to benefit. One would have thought that that might have made a case for it being the taxpayer who pays. I am not dealing now with general questions arising from the policy behind the Act but I will say in passing that I agree with the general tenor of what the noble Baroness, Lady Hollis of Heigham, had to say, especially the points about guidance in the case of the mother who refuses to name the father, and the £15 disregard on income support. I should like to associate myself quite strongly with both those points.

We seem to be witnessing something of a general trend towards fees. It is not the first time in our history that that has happened. It happened very strongly in the early 17th century, which was also a period dominated by a low taxation philosophy. One of the best historians of this subject has classified fees as a form of indirect taxation. I think he is right about that. If we accept that idea it has some quite far-reaching implications. We are not here reducing the burden of taxes; we are simply shifting the burden of taxes from one taxpayer to another, so there is room for some discussion about whether that is in fact right. I hope that, for future figures about the proportion of GNP that goes in taxation, fees will be taken into account in the calculations.

Of course, there have been problems in the past about any very heavy use of fees as an alternative to taxation. The biggest in the 17th century soured the relationship between officials and members of the public with whom they had to deal. I hope that my noble kinsman will listen to reports coming back from the Child Support Agency and see whether there is any danger of that happening in this case. If it does, I hope he will think again.

Among other problems I would again associate myself strongly with what the noble Baroness had to say about students. I am also a little unhappy about the wording of Regulation 4(8): If a fee invoice is sent by post to a person's last known or notified address, it shall — be treated as having been given or sent on the second day after the day of posting". That is a little optimistic, is it not? I had a letter sent to me from the House Magazine on 23rd September which reached me on 23rd November. Let us suppose that I had been an absent parent faced with a maintenance assessment and had done nothing. What would have happened to me as a consequence? I should be grateful for an answer to that question.

The biggest problem is the size of the fee. I noted from what my noble kinsman said that they are not seen as full cost fees. I listened also to the noble Baroness. That moves me to ask exactly what is meant by "full cost". Exactly how has this sum been calculated? What is the rationalisation behind it? It is a sum which will be paid by people only just over the level of income support—£44 as a lump sum may be quite burdensome. I should like to know what will happen to people who do not pay these fees and say that they cannot. Presumably some unpleasant consequence will follow. I should like to know what that is. The problem of this second family which has been referred to is extremely relevant.

I should also like to ask my noble kinsman, and the Government in general, how this House should proceed if it thinks, for example, that these fees are too large and that it would approve the regulation if they were smaller. I wish to reassure my noble kinsman that I shall not pursue this matter further on this occasion, but if we are asked to approve a regulation, as we are, it must be possible for us to say that we would approve it if one point were different. I should like to know what is regarded as an acceptable method of pursuing that point; and I do not mean just making representations to the Government and praying for them to change their mind, which they might or might not do.

These regulations are supposed to take effect by approval of the House. Suppose, for example, the fee were £500 and the House thought it grossly excessive, how could the House give effect to the view that it would approve the regulations if the fee were smaller? There must be a practical way in which that can be done. I should like to know what it is.

Finally, I should like to know what my noble kinsman proposes to do in the way of monitoring any hardship caused by the payment of these fees to those on whom they are imposed. I have a hunch that if he collects information he might find that the burden is a great deal heavier than he at present supposes.

Lord Henley

My Lords, perhaps I may say how grateful I am that my noble kinsman for once finds these regulations somewhat penetrable. I am glad that he can understand them. A number of concerns have been raised by both my noble kinsman and the noble Baroness. I hope I can deal with some of them, but obviously I will concentrate on those relating to the regulations themselves. The first and most important fundamental question that my noble kinsman raised is why should the clients be paying fees, full stop. Before I answer that I should respond to one point my noble kinsman made, and that is the Bill was not brought in purely and simply for the relief of the taxpayer; it was brought in so that absent parents, frequently the father, did honour their obligations to pay for their children.

What these regulations establish is the requirement that, in general, the client of the agency should pay a fee. Now currently the parent will have to pay the courts the cost of having maintenance determined in the courts. Although the determination of the amount of child maintenance is passed from the courts to this agency, that does not mean the taxpayers themselves should now shoulder the total costs of the determination of child maintenance.

Turning to the actual level of the fees, figures of £25 or thereabouts were based on early estimates of numbers that we would be likely to be dealing with. Obviously this assumption has now been refined. The level of fees has now been calculated, as my honourable friend said in another place, to take account of the full economic costs of the agency. I think, in passing, one ought to say that these costs will be considerably more reasonable than certainly a great many charged by some of the solicitors we know of and certainly the costs of the courts. I am grateful that I do not see many of our friends from the learned professions in the House at this moment.

My noble kinsmen then asked as to what his attitude should he, or what procedures he should follow, if he feels that the regulations themselves are acceptable but the actual figures themselves are too big. I am afraid I have to say that I think that the best bet is that my noble kinsman makes representations to the Government. As I understand it, it is not customary to amend regulations in this House or another House, and therefore it is a matter for the regulations themselves to specify the exact figure. Therefore, there is no power, as I think my noble kinsman is aware, to amend them. I can only suggest he makes representations, as I said, to myself.

Turning to the exemptions and those who will be exempted, I think that the noble Baroness, Lady Hollis, accepted that it had been drawn relatively widely so as to protect the interests of those who cannot afford to pay fees. Most of those are listed in Regulation 3(5), although I would also mention that in Scotland, under Regulation 3(1), a child applicant in Scotland will not be required to pay a fee. The other exemptions cover chiefly those who have no, or a relatively low, income: those on income support; family credit or disability working allowance; any children of those whose assessable income is nil or who benefit from the protected income provisions which are designed to protect the position of those for whom payment of the maintenance assessment in its entirety would result in their falling below income support levels. The circumstances applicable would be those of the party who would otherwise be required to pay these. The circumstances, I think I said in my opening remarks, of the other party's assessment will have no impact either way.

Concern was expressed by both my noble kinsman and the noble Baroness as to why students over the age of 18 should be charged fees, but not those, say, still at school. Students in advanced education are considered independent. The definition of those exempt from fees follows that for those regarded as dependent for child benefit purposes in line with the meaning of "child" in the Child Support Act, but I have to say that it is most likely that most students would come under one of the exemptions of either nil assessable income or come in under protected income anyway.

The noble Baroness asked about the guidelines on refusal to co-operate with officers in the Child Support Agency. We have made it consistently clear that the requirements to co-operate will be waived when harm or undue distress will be caused. I should like to repeat that assurance. The staff in the Child Support Agency will be very carefully trained to conduct interviews sensitively. Guidance will be available, but we are very anxious not to create what might be termed, say, a thugs' charter, so we are still considering very carefully whether or not the guidance should be published. The principle is that the agency will be an open, accessible organisation.

I think the noble Baroness also asked for confirmation that an absent parent on income support would only be required to make a contribution to maintenance—I think the noble Baroness accepted that we are not now talking about fees—if single or childless couple. I can give the noble Baroness that assurance; an assurance that, again, deductions will be well down the list of deductions, and, in general, there is an overall maximum for all deductions, whether they are for housing, fuel, or whatever, of some 15 per cent.

Finally, the noble Baroness—I have one or two other points—did stress that there was a belief common among many people that there was a link between access and maintenance. Again—this was made quite clear in both Houses during the passage of the Bill—we cannot stress enough that there is no link between access and maintenance. Access will still be a matter for the courts, but I do understand the concern of my noble kinsman that we should listen to any evidence that emerges from the Child Support Agency as to there being perceived to be a developing link between access and maintenance, and certainly we will take that into account if necessary.

My noble kinsman also asked about Regulation 4(8) and invoices being sent to a person's last known address. This regulation is to establish receipt of the invoice. If a parent approached the agency to say that he had not received the invoice, the agency would consider all the circumstances. It is just a general court rule for posting and is in fact common throughout legislation.

I hope that I have dealt with most of the points that have been raised by the noble Baroness and my noble kinsman. I understand my noble kinsman might have concerns about the levels of fees—the actual figure that we pitched them at —but I think he understands the conventions relating to affirmative instruments. I hope that on this occasion he is prepared to accept them and make subsequent representations to myself and other Ministers in the Department of Social Security. On that basis, I commend the regulations to the House.

On Question, Motion agreed to.