HL Deb 16 July 1992 vol 539 cc361-6

2.8 p.m.

Lord Henley rose to move, That the draft regulations laid before the House on 22nd June be approved [4th Report from the Joint Committee].

The noble Lord said: My Lords, in moving these regulations I intend to speak to all three at the same time. The three remaining statutory instruments deal with the maintenance assessment formula, special cases and the information to which the child support agency will have access and of which it will be able to dispose and a number of provisions dealing with arrears of maintenance.

With permission, I propose to introduce the debate by mentioning briefly the key intention of each of the three statutory instruments. The Child Support (Maintenance Assessment and Special Cases) Regulations cover the workings of the formula and contain detailed specifications of the values to be used in the formula calculations.

As the House will recall, these specifications are largely based on those which apply in income support. The House will, I am sure, be interested in a number of these provisions, but perhaps in particular the provisions of Regulation 28 which allows for a contribution to maintenance to be made by certain absent parents in receipt of income support.

We think it is important that absent parents, even when they are in receipt of income support, should make some contribution towards meeting their liability and become accustomed to contributing to the maintenance of their children. Equally, however, we recognise the validity of concerns expressed about the position of particularly vulnerable groups and we have extended the categories of those exempt from this contribution. The effect is that it will only be taken from those who are over 18, fit and without children living with them.

Turning to the Child Support (Information, Evidence and Disclosure) Regulations, these regulations have been carefully framed so as to ensure that the purposes for which information may be sought are explicitly listed and for the information to be collected as the minimum required to assess and collect the absent parents' liability. I hope that the House will be reassured by the limited circumstances in which such information will be available for disclosure to a third party.

Finally, the Child Support (Arrears, Interest and Adjustment of Maintenance Assessments) Regulations, in addition to covering a number of technical matters, include provisions for interest to be charged on outstanding arrears, should full payment not be forthcoming from the absent parents.

These regulations provide much of the detail of our new scheme which is designed to ensure that parents make full and proper financial provision for their children. I commend the regulations to the House. I beg to move.

Moved, That the draft regulations laid before the House on 22nd June be approved [4th Report from the Joint Committee].—(Lord Henley.)

Lord Carter

My Lords, I discussed all the points that I wished to raise in my first speech and I do not propose to make a long speech now. There was one point which comes up under the Child Support (Maintenance Assessment and Special Cases) Regulations which I asked about first time round. I believe that the Minister did not answer it. It concerned the calculations of the earnings of the self-employed. I have looked at the regulations and believe that the child support officer will have fun if, for example, the absent parent is on the lump, in the building trade or something similar. There is reference to a balance sheet and profit and loss account to find out the earnings. What will happen if the self-employed person does not have such information and the child support officer has to make the best guess he can?

The other point of detail is on page 25 of the regulations, Regulation 26 in Part V. It concerns someone performing a service without receiving remuneration and who performed the service in order to reduce his income under the Act. The child support officer then has to make a calculation of the income that he has forgone. How is this supposed to be done? What on earth is the child support officer meant to do to work out the income that the person would have had? In effect, he has performed a free service but now to be included in his income is the amount that he would have received if he had not provided the service free. I find that hard to follow.

Earl Russell

My Lords, I must apologise to the House for intervening once again but it was not I who put so many regulations on the Order Paper all in one day. I am concerned about the effect of the regulations on the absent parent. A case has been brought to my attention by a citizens advice bureau in north London, again involving jumping the gun. It is of an absent parent already paying £180 a month being asked for a further contribution which reduces him to £37.16 a week on which to live. That is the kind of regulation which among single fathers has always tended to produce non-compliance.

The young man who got a girl into trouble and took the Queen's shilling is a familiar literary figure. I know that the Queen's shilling is in rather short supply these days. It seems to be subject to measures to control the money supply. However, young men in this situation still have Options for Change. I remind my noble kinsman about the prospects of free movement within the European Community. I ask him whether single fathers may be quite as easy to trace as he thinks.

I am also concerned about the housing costs of the absent parent in the event of remarriage. The amount of allowable housing costs for the absent parent drops sharply in the event of remarriage, even if there is no change in the actual accommodation. That is something which the second spouse might misunderstand, which will again tend to bring these regulations into disrepute. I shall not develop the point about the absent parent on income support having to contribute. At Report Stage of a Bill I divided the House on that subject at 10 minutes to 12 at night. I say now only that I am glad I did so.

I ask my noble kinsman to look at an exchange that took place in Committee on the Civil Service (Management Functions) Bill concerning the accountability of agencies to Parliament. As regards that matter, I believe there are general questions that have not yet been addressed. We have had little, if any, trouble with the benefits agency in that area, and I am grateful to my noble kinsman and to the benefits agency for that. However, it is not always possible, when dealing with a parliamentary agency, to obtain accurate records of exactly what has been done. It is vital to the monitoring of what happens under these regulations that we should obtain accurate records. I hope that I may ask my noble kinsman for co-operation in the matter.

As regards the effect of the regulations on students, I believe my noble friend Lord Addington wishes to say a few words. I shall not add to what my noble friend Lord McGregor of Durris had to say about disclosure save to draw the attention of my noble kinsman to what has been said by the Law Society. The Government have greatly underestimated the amount of work that the agency will have to undertake. That is a useful and I think exact statement. It is relevant to the argument about costs because if there is much more work than my noble kinsman foresaw, there will be much greater costs than he foresaw.

I note my noble kinsman said that he would never accept what I said on this subject. I cannot resist asking him,"What, never"? I hope he will go as far as the necessary qualification. I would be more convinced by his resistance in this area if he had more often calculated the net costs of the measures that he is introducing. If then he told me that I had miscalculated, I would be a great deal easier to persuade than if he made no attempt to argue the question.

My noble kinsman may perhaps be aware that this measure has led the Law Society to submit a memorandum to the Government expressing anxiety about the proliferation of Henry VIII clauses, and of changes in the law under them. We have several changes in the law under Henry VIII clauses in these regulations. I shall take one from the arrears regulations—that is, Regulation 12(2) (a). With the leave of the House, I wish to quote a few words from that regulation. It states: Section 18(6) of the Act shall have effect as if for 'the refusal, assessment or cancellation in question' there is substituted `the adjustment of the amount payable under regulation 10 of the Child Support (Arrears, Interest and Adjustment of Maintenance Assessments) Regulations 1992'". It is not a particularly heinous change in the law but it is a change in the law. It is something that should have been drawn to our attention so that we could consider it. I hope the committee on the scrutiny of delegated legislation will bring that matter to our attention. It reminds me a little of the famous case of Chief Justice Beresford when he said,"He that drew the statute meant to put it in the statute and only left it out through inadvertence. It shall therefore be construed to be in the statute". That is a method of legislation in which Parliament has never had confidence. I think we must all see why.

We are left considering who will be better off under these regulations. The caring parent will not be better off because the payment will simply be deducted from income support. If the caring parent leaves income support, he also loses passported benefits. I have heard of one case of a family with four children who are £20 a week worse off for losing school meals. The absent parent will not be better off and the Government, because they are undertaking a Sisyphean job of work, will not be better off, either. I cannot help wondering whether the only long-term effect of these regulations will be declining respect for the law. That, I hope, we would all deplore.

2.15 p.m.

Lord Addington

My Lords, I wish to comment briefly on the effect of these regulations on students. Effectively, a student who receives only a grant and a student loan and who happens to be a parent does not have to provide income for the child at that time. However, the minute that student obtains other income, he will be assessed in terms of providing extra support for the child, taking into account the income he receives from the student loan and the grant.

It is almost inevitable that every student will now fall into that category because there are no benefits available to them during the summer vacation. Also, we must bear in mind the fact that the grant and the loan are regarded as the bare essentials on which the student can live. That is not an undisputed point. Many people would say that under current circumstances in many parts of the country the grant, including the parental contribution and the loan, is not enough to live on. Therefore all students are forced to work at some stage.

We have a situation in which the Government say that if one is on the basic minimum income one does not have to pay out, but they will never allow one to be on the basic minimum. They will take into account income up to the basic minimum and will then start to assess the individual on any additional income. I suggest that any student finding himself in that position would probably be unable to continue to be a student due to financial considerations, because he will be called upon to make contributions to the mother and child—which I do not dispute he ought to do—to an extent which will mean that he is unable to continue with his studies.

Something else must be done because we are effectively saying that by assessing them harshly now we will restrict the economic bargaining power of such individuals by restricting their training. That means that in future they will probably not be able to provide as high a level of income for the child. I ask the Government to give some thought to that aspect of the matter and to try to arrange matters a little better. It is nonsensical to say that someone must work but if he does work a certain amount of income will be taken away from him. Indeed, the reasoning is difficult to explain because it chases itself around in a circle.

Lord Henley

My Lords, there are one or two detailed points to which I should like to respond. The noble Lord, Lord Carter, complained that the regulations relating to the self-employed and calculation of their income were too complicated. The regulations closely follow similar rules which exist for family credit. Therefore we have some experience of them. I accept that they can be necessarily very, very complicated. But if the noble Lord would like me to write to him with further details I should be delighted to do so. It is certainly a matter we shall continue to monitor throughout the social security system.

The noble Lord also raised a rather complicated question about the calculation of income for someone providing a free service under Regulation 26. I think that the noble Lord would probably be happier if I said that I would write to him on that point. I would rather not respond in such detail from the Dispatch Box.

The noble Lord, Lord Addington, raised the problem of a student living, as he quite rightly put it, purely on his grant and loan and not paying any maintenance. As soon as he has some income he may be able to afford some child maintenance, as the noble Lord rightly said. We believe that if he can, then so he should. We can see no reason at all why students should be made an exception. In this situation we need to look at all a student's income, including his grant and loan. I should like to point out to the noble Lord that we have taken proper account of the nature of a student's income in the assessment of maintenance. For instance, there are disregards on parts of a student's income, and in particular £10 a week is disregarded from any student loan he may have. The amount of maintenance a student will have to pay will obviously vary according to whatever other income he may have, his housing costs and so on. A student who has a large private income may well be able to afford to pay more.

Earl Russell

My Lords, if that makes the student withdraw from his course, might the caring parent legitimately hold the view that it is killing the gander that lays the golden eggs?

Lord Henley

My Lords, I do not think that it would necessarily cause the student to withdraw from his course. I was going on to say that if a student has a large private income he might well be able to afford to pay a substantial amount of maintenance.

Lord Addington

My Lords, it is not so much a question of if they can pay they should but the way in which the Government are taking into account the smaller amounts. Could we not have some income threshold? That would be so much more sensible than merely saying that everything up to that point will be taken into account if one covers the basic minimum living requirements. It is not a matter of principle but of some of the details. Could the regulations not be applied on a more coherent basis?

Lord Henley

My Lords, there is room. We take into account the income of the individual student. All we are saying is that we will not bother if he is purely on a grant or loan; if he has other income we will look at that income and the grant or loan. I see nothing wrong with that, but obviously we will have to agree to differ.

My noble kinsman suggested that there was already one absent parent paying some £180 per week and being asked to pay more, reducing his net income to £37 per week. The formula is very carefully devised to be fair to both parties. The absent parent will be asked to pay more only if the formula shows that he can afford it. The protected income calculation will ensure that he does not fall below the income support levels plus an extra incentive. Therefore, if he is on income support of £42 or whatever he should not be falling below that figure. If my noble kinsman would like to draw attention to a specific case where he says those requirements are not being met I am prepared to look into it.

My noble kinsman also asked about the allowance for housing costs on remarriage. As he suggested, it will certainly be very hard for the second partner to understand. Just as we will not take into account any income from the new partner in calculating how much the absent parent should pay in maintenance, so we do not allow the new partner's share of housing costs. If we did allow her housing costs we should be putting her costs before those of the absent parent's child. The calculation of protected income will ensure that second families are able to meet their basic living costs.

I accept the case for full accountability of the Child Support Agency. Full records will be kept of all decisions and answers to questions from Members of both this House and another place will he available.

My noble kinsman asked whether I would withdraw my use of the word "never" in terms of agreeing with him. My noble kinsman intervened at Question Time to support me not so long ago, and I accept that there are some rare occasions when the noble Earl and I may be at one.

The three statutory instruments we have just discussed fill in the detail of a number of important features of the new scheme for dealing with child support. I commend them to the House.

On Question, Motion agreed to.