Child Support

HL Deb 23 January 1995 vol 560 cc869-83

3.38 p.m.

Lord Mackay of Ardbrecknish

My Lords, with the leave of the House I should now like to repeat a Statement made earlier today in another place by my right honourable friend the Secretary of State for Social Security. The Statement is as follows:

"The 1991 Child Support Act established the principle that parents are responsible for their children—both parents —even if they live apart. Taxpayers should pay only to the extent that parents cannot afford to do so. The whole House endorsed that principle, when it passed the Act, without a single dissenting vote. I reaffirm it today.

"But the whole House has also had growing concerns about the practical application of that principle and the operations of the agency. I responded rapidly to early concerns by introducing reforms last February. I promised then to keep the system under review, and I committed the Government to respond positively to the Social Security Select Committee's second report. In the light of that report and the experience of the first year and a half I am persuaded that further significant change is required.

"The proposals in the White Paper incorporate the majority of the Select Committee's recommendations, and in some cases they go further. Altogether, I believe our proposals will enable the system to achieve its original purpose. They will make maintenance assessments fairer, improve thė service offered by the agency, and ensure that maintenance assessed becomes maintenance paid. I believe that that is what Parliament wants.

"The major focus of criticism of the Child Support Act relates to past settlements of property or capital. Some of those criticisms are based on misconceptions. However much property was transferred, there never could be a 'clean break' from your children. Parents or the state always could return to court to seek increased child maintenance. Also the current formula does indirectly reflect property transfers. Nonetheless, it is true that the formula does not explicitly reflect the value of property or capital transfers which were intended to contribute to child maintenance. To establish how much of any past property settlement was in lieu of child maintenance is often very difficult. It involves the exercise of judgment and discretion.

"To give the agency and appeal tribunals discretion to amend assessments to reflect past property settlements will require primary legislation. I therefore intend to bring in a Bill in the current Session. But primary legislation means the new arrangements cannot be up and running before 1996–97. And I want to give some recognition now. So I propose, from this April, to introduce into the formula a 'broad brush' allowance for past property transfers. It will assume half the equity belonged to each partner. Where the absent parent transferred more than £5,000 of his share of the equity there will be set allowances in the formula for amounts falling in three broad bands. A parent who finds that the 'broad brush' allowance does not sufficiently reflect his property settlement may seek a departure from the formula under the new discretionary powers.

"I also propose to allow strictly limited discretion to prevent hardship by taking account of some other expenses that are not in the formula. These will include high costs of visiting children, extra costs of supporting a disabled dependant, exceptional costs of caring for stepchildren and certain debts of the former relationship.

"Madam Speaker, I also intend to make a number of amendments to the maintenance formula. First, I want to encourage people to continue working even where they have to travel long distances. Calculating actual travel costs would be burdensome for everyone. So instead, for parents who live more than 15 miles from their place of employment, I will introduce a 'broad brush' allowance. An automatic calculation will avoid the need for detailed inquiries to be made about actual travel costs. If this works out much too high or too low either parent will in due course be able to apply for a discretionary adjustment.

"Secondly, I will let absent parents who have a new partner or stepchildren deduct all their reasonable housing costs.

"Thirdly, I shall put a ceiling on assessments of 30 per cent. of net income, (or the minimum payment of £2.30), so absent parents will be able to keep at least 70 per cent. of their net income after paying maintenance. And even those who are also paying off arrears will be allowed to keep at least two-thirds of normal net income. This reassurance goes beyond anything recommended by the Social Security Select Committee, and I am sure that it will be welcomed by the House.

"Fourthly, the maximum amount payable under the formula can be very high, especially where there are several children. I intend to halve the maximum additional amount payable above basic maintenance.

"In addition, to encourage absent parents to co-operate, where an absent parent provides basic information within four weeks I will defer the start of his maintenance liability for eight weeks.

"Madam Speaker, most of the measures that I have announced will make assessments fairer for absent parents. Indeed, no absent parent will now be able reasonably to refuse to pay their child maintenance. As a result, these measures will also help parents with care and their children by securing maintenance more speedily. Even where maintenance already being paid is reduced as a result of these changes, parents with care on income support will not lose money, since income support is adjusted immediately. However, awards of family credit and disability working allowance are set for six months. For those whose maintenance drops because of the changes, the Government will provide some compensation for the rest of the award period.

"Some commentators have argued for maintenance to be disregarded in calculating income support. But that would make it much more difficult for a parent with care to improve her family's standard of living by returning to work. Instead, I propose that parents with care who are on income support or jobseeker's allowance will be able to build up a new maintenance credit of up to £5 a week. This will be paid as a lump sum when they start work. It will give parents with care an increased interest in receiving maintenance and enhance their incentive to work.

"Madam Speaker, the Child Support Agency has performed less well than I would wish, in spite of hard work by its staff. But the agency has already taken steps to improve its performance. In December, the agency announced two measures to help it manage its outstanding cases. These involved deferring the take-on of parents with care on income support who have not asked or provided sufficient information for the agency to pursue maintenance. All parents with care who continue on benefit will, in due course, be taken on by the agency. And there is no question of deferring action against unco-operative absent parents.

"Nonetheless, the policy changes announced today will impose further work on the agency. I do not want the agency to add unnecessarily to its backlog, but to devote its resources to its current workload. Cases where there was a court order or maintenance agreement before April 1993 and the parent with care is not on benefit were due to have access to the agency at the initiative of either parent from 1996. I now propose to defer take-on of these cases. I will ensure they retain the right to use the courts. And I will also give them the right for a fee to use the agency's collection and enforcement service.

"Some absent parents have suffered through no fault of their own from delays in making assessments, resulting in huge bills for arrears. In these cases, we will not enforce more than six months' arrears, provided that the absent parent agrees to pay them and to pay his ongoing liability for maintenance. After a year, it will be clear whether the absent parent is meeting his obligation and, if so, we shall compensate the parent with care for any financial loss. I have decided to stop charging fees and interest for two years from April 1995. After that, fees will be reintroduced and interest replaced by a late payment penalty.

"On Thursday I intend to lay a set of minor technical amendments to regulations, which will further help the administration of the scheme. Many of the changes that I am announcing today will take effect from this April. The formula will change, interest payments will be abolished and fees will be suspended. The agency will be writing to all its clients about these changes. There is no need for parents to contact the agency. Primary legislation is needed to introduce discretion into the maintenance formula and for other changes including deferring take on of non-benefit cases. Subject to the approval of Parliament, these changes will take effect during 1996–97. From April 1997 the new maintenance credit scheme and late payment penalties will start and fees will be re-introduced. None of these changes will apply retrospectively.

"Madam Speaker, legislation involving children, broken families and money will always arouse strong emotions. This is certainly the experience of Australia's Child Support Agency even after six years of operation. But I believe these changes will improve our child support scheme for both parents. They will take account of property or capital settlements, give flexibility to prevent hard cases, allow for high travel-to-work costs, help absent parents with step-families, reduce the maximum level of maintenance and ensure that absent parents normally keep more than 70 per cent. of their net income after paying maintenance. These changes should encourage and enable more absent parents to pay child maintenance regularly. As a result, they will give more parents with care and their children the chance of a better life. I commend them to the House".

My Lords, that concludes the Statement.

Baroness Hollis of Heigham

My Lords, we thank the Minister for repeating the Statement. I thank him personally for making available to me the White Paper and the Statement earlier than is often the case. That was extremely helpful.

Rather like the poll tax, and for many of the same reasons, the Child Support Agency was always going to be trouble because it brought 20 million people into the net of DSS to pay out very large sums of money, overriding court settlements and, in many cases, throwing family and financial lives into catastrophe.

As the Minster rightly said, no one doubts that parents may divorce each other, but not their children. It is right and proper that adequate contributions should be made to their children's maintenance. But, as this House has repeated on many occasions, those contributions from the absent parent have too often not been appropriate and have not taken account of the circumstances: second families, stepchildren, unexpected additional costs, property and clean-break settlements. Only belatedly following the orders of 12 months ago—last February—were the new arrangements phased in.

In addition, as the Minister has recognised, the agency's staff has had too vast a job and inadequate time in which to be thoroughly trained. The ombudsman's report of last week is a devastating catalogue of mistake after mistake: mistaken identity, inadequate procedures, failure to answer correspondence, incorrect advice, delay in assessment and delay in payments to parents with children.

Thirdly, not only was the formula unfair to the absent parent, not only has there been a catalogue of administrative mistakes but seldom, if ever, did the arrangements benefit the parent with care. Benefit was lost pound for pound and in the process, parents with care lost the certain income from the DSS. That was replaced by uncertain income coming from irregular maintenance payments. Very often lost with it were the associated passported benefits such as free school meals. Not only were most parents with care not better off; very many were worse off as a result of the Government's changes.

I repeat that Labour has always supported the belief that both parents should contribute to the maintenance of their children. We have called for a more flexible financial formula. Secondly, we have called for an appeals procedure. Thirdly, we have called for a disregard, even a modest sum, for those parents with care so that, at the very least, women should be no worse off than they were on income support. After all, women with care are often the poorest, taking half of the Social Fund loans. They are often in debt, with top-slicing for fuel and water bills. Their children risk being poorly fed, poorly clothed and falling behind at school.

Against that, how adequate is the Government's Statement today? How adequate are the proposals which we shall see reflected both in the amendments which will be before us shortly and in the promised primary legislation? First, many of the proposals, especially those which affect absent parents, are greatly to be welcomed and we do welcome them.

The Government are proposing discretionary appeal procedures where otherwise hardship would result for the absent parent. That is splendid. Back on 9th February 1994, when we pressed the Minister to provide such a procedure, he said that to introduce discretion "is not practical" and would not work. We are delighted that, if belatedly, the Government have come around to our point of view.

Secondly, the Minister referred to property and capital transfers. We are delighted about that. Again, that was rejected by the Minister on 9th February 1994 on the ground that the formula already took account of that. Today we are delighted to see that the Minister has qualified it and has said that all such settlements are not fully taken into account and that in future they will be. We welcome that.

Thirdly, the Minister proposes changes in the formula such as a statutory maximum of 30 per cent., which we welcome, along with costs of travel to work, which we welcome, and, above all, support for stepchildren where there is no other means of support, which we welcome. However, we shall wish to reflect on the point of maximum maintenance payments. We welcome those changes.

Fourthly, we believe that the Minister is wise to defer the addition of new cases but that is only if it is deferral and not abandonment. On this side of the House we do not wish to see a Child Support Agency for the poor and court settlements for the rich. Will the Minster give us an indication of the timescale in which he expects those additional cases to be brought back into a common procedure for all?

Therefore, this is a whole series of changes benefiting absent parents, which we are delighted to support. We only wish that the changes had come earlier, as so many of us from all sides of the House have consistently argued.

However, what about parents with care? The Minister was surprisingly silent in his Statement about the implications for parents with care. Obviously, we are especially pleased about the modest adjustments to family credit because many of us in this House have long lobbied for those. But at the heart of the Minister's response there was no mention or proposal for any modest disregard so that parents with care might keep even a modest sum—£8, £10 or £5—from the maintenance paid before there was a pound for pound deduction from benefit.

That really will not do. I recognise that the Social Security Committee did not vote for it. It was a divided committee in which the Conservative Members went one way—they held the majority—and the Labour Party Members went another. Therefore, the Chairman had to abstain. But that will not do. The Government have responded to the sharp-elbowed—the men—and they are right to do so; but they have ignored the plight of those who cannot walk away, who cannot go on strike and who cannot defy the law—that is, the parent, usually the mother, with care.

What sort of signal are we sending out from this House today? Is it that if you defy the law changes are made, but if you obey the law and care for your children you are ignored? Mothers with care are poor. They are often worse off under this system than they are on income support. They and their children need a modest disregard but because the mothers do not go on strike, the Government have ignored their plight.

Secondly, the Government are giving a roll-up credit of £5 per week for when lone mothers return to work. That is downright perverse. It is when mothers are not in work that they especially need the bonus, not when they have returned to work. The Government's line seems to be that when they are earning some money they will give them a little more, but when they are not earning even that, they are given nothing at all.

Thirdly, are we really saying that two very young children, perhaps under the age of five, who have already lost one parent—the father—should now lose the lone parent to work away from home in order to be eligible for the bonus? It may be that that is the mother's choice as she desperately trades time with her children against financial support for them. But again, what sort of signal is this House sending out about family values when we are so obsessed with the Treasury's well-being that we ignore that of the children? Of course, we welcome the bonus but only in addition to a disregard for mothers with care and not in place of it.

Therefore, overall, the White Paper and the Statement mark a substantial retreat by the Government; and they are wise to do so. We are delighted that there is a proper recognition of the problems that the Child Support Agency and the Government's legislation have presented to absent fathers, although it is striking that the Minister did not mention the cost involved at any time in the Statement. But the problems of the parent with care have not been addressed. It is a one-sided response to those who have shouted loudest. We should have hoped for a more even-handed response than that from the Government.

Earl Russell

My Lords, on this subject, if it is not too Irish a statement, glasshouses are not confined to one side of the House. For that reason, I am not going to throw stones. But equally for that reason, I should like to pay tribute to those in this House and outside it who saw from the beginning what this Act would mean: first and foremost, the noble and learned Lord, Lord Simon of Glaisdale, whom I am delighted to see in his place, the noble Lords, Lord Houghton of Sowerby, Lord Mishcon and Lord Stoddart of Swindon, and on my Benches, my noble friends Lord Meston and Lord McGregor of Durris. I have learnt a lot from listening to them. I am glad to see that the Minister has also done so.

Last September, when we discussed this matter at the Liberal Democrat party conference, we set out a series of criteria to test amendments to the Act to see whether they were sufficient. The first concerned substantial changes in the formula. In that regard, we are given a great deal of what we asked for, even if not all, and for that I am very grateful. Secondly, we proposed real grounds of appeal—I shall probe that aspect later—and, thirdly, that the changes should benefit both sexes.

Lady Mary Wortley Montagu was once asked to comment on a certain Lord Harvey and replied that the human race was divided into men, women and Harveys. Nowadays, it is divided into men, women and the Treasury. The greatest of the three is the Treasury. One of the things I most deplore about the handling of the Act is the fact that it has been defended by continual attempts to set division between men and women. We already have enough of that; we do not need any more of it.

For that reason, like the noble Baroness, I deeply regret that there is so little in the legislation for the parents with care. Similarly, I welcome, as did the noble Baroness, the changes in the assessment of family credit. In fact, I am delighted by them. However, the big changes that were needed have not been proposed. There is nothing about a disregard. If the legislation is to have enough friends to survive—which, I believe, is still in doubt—it is essential that some people should be better off because of the Act. I say that because women who come on maintenance under the legislation will lose passported benefits. That is not regularly the case at present.

Where we are dealing with the support of children, free school meals are especially crucial. Therefore, that aspect must be given attention if the Act is to survive. Similarly, there has never been any case for the benefit penalty. If there were a disregard, we could then use a carrot instead of a stick. That is a much more effective way of securing compliance.

Much of the detail in the Statement is good and, in some places, extremely good. We owe our thanks to the department and in particular to Mr. Burt, who has been in charge, for proving, even if a little belatedly, that he can be a listening Minister, and, above all, for being a Minister to whom the Treasury has, in part, listened. There are not many of those.

It is a slightly overstated claim to say that property settlements are the major cause of complaint. However, they are certainly a big point. I am most interested in what has been done in that respect. I shall study the proposal with more care to see whether it is enough.

I have one technical question for the Minister about the broad-brush changes he proposes to introduce for this year. Are those changes to be brought in by primary legislation or by regulation? If they are to be brought in by regulation, what are the vires under which they will be introduced? Further, if the Minister intends to do that, will he study the remarks made by the noble and learned Lord, Lord Simon of Glaisdale, on 1st February last about the use of transitional powers? Those remarks needed attention. I hope that they have received it.

The general changes in the formula, are, on the whole, good ones. I am glad about access and about debts. I hope that attention will be paid to the debts of joint businesses that have been run by previous couples. I am also glad about travel costs, but I have one vital technical question on which paragraph 65 of the Select Committee's report put me into some doubt. It concerns the people who, regrettably, have no public transport available to them and cannot travel to work except by car.

A great deal of the correspondence I have received has come from people who could not travel to work except by car. Some were buying a car on an HP loan but could not keep up the payments if they paid what they were assessed to pay under the formula. Will the broad-brush approach take account of the capital costs of owning a car? Alternatively, will it, as the Select Committee suggested, ignore the overall costs of car ownership? If it does so, there will still be many people who cannot afford to work while paying what they were assessed to pay under the legislation and it will not be true to say that no absent parent has a reasonable complaint regarding what they are assessed to pay under the formula.

I am extremely glad to see the proposals as regards second families; for example, the recognition of all the housing costs of the second family. Had that been done a year ago, couples who are now divorced would still be living together. I am glad about the provision for the exceptional costs of stepchildren. However, I should like to probe what is meant by the word "exceptional". In particular, I want to know whether account has been taken of cases where the natural father of the stepchildren cannot support them because he is dead. That has caused much hardship in some cases.

I am pleased to see the cap on maintenance. Indeed, I doubly welcome it because I believe that I was the first person to propose it on 1st February last. What has been done has a considerable resemblance to what I proposed. Therefore, I am doubly grateful for it.

I am also grateful for the deferring of the start of maintenance assessment. I believe that that will help to avoid the enormous interim assessments which have arisen. I am glad about the concession on fees, but I wonder whether the Minister is perhaps slightly wriggling out of the situation when he puts the blame on the performance of the Child Support Agency. I am no fan of the agency, but I believe that account should be taken of the burden which was placed upon it. We should learn from the remarks made by the ombudsman. If such "misfortunes" are to be avoided, he said that, great care should be applied by public servants and those who instruct them whenever a policy decision is taken to devise a fresh administrative task which affects large numbers of the public". The ombudsman also spoke about "maladministration", where quality of service is subordinated to sheer throughput". I do not believe that the Government, even now, have any sense of the burden they have placed on the agency. When trying to deal with the agency, I hope they will take that factor into account.

Something must be done about appeals. I have proposed that appeals should be allowed in cases where either parent is left below benefit level; in cases where, under Section 2 of the Act, what is done is not in the best interests of the children; or in cases where the parent paying is unable to maintain the second family, including the stepchildren. Will the proposed changes bear any resemblance to my proposals?

The Government often say that no one is interested in constitutional reform. However, among the many hundreds of letters I have received regarding the Act, one constant theme is the fact that people cannot understand how Parliament allowed such legislation to come into existence. Only last week, I had to write to someone who complained that the Act was illegal. He said, "Although I understood what they were getting at, what they were saying could not literally be true". The feeling that the Executive is not being adequately scrutinised through the parliamentary process is painfully acute in such letters. They represent a large part of the public that is interested in constitutional reform.

If the department studies—as I am sure it has—the Hansard Society report drafted by the noble Lord, Lord Rippon of Hexham, on the drafting of legislation, that would be a start. However, it should be taken into account that the parliamentary sovereignty that is praised so much appears to many of the public to be simply, as the White Paper on the subject was nicknamed, a case of "Treasury comes first". It can, in fact, appear to be a form of arbitrary power. However, while we think about the changes in the Act, most of which I welcome, we should also consider the long-term constitutional implications.

Lord Mackay of Ardbrecknish

My Lords, I am grateful to both the noble Lord and the noble Baroness for welcoming the Statement. I suppose it would have been too much to expect them to resist the old adage about glasshouses and throwing stones, and they threw a few. I suppose I could almost excuse myself as regards being in the glasshouse in that I was not in your Lordships' House when this particular Act was passed. However, I will not take refuge in that safety valve.

My colleagues in the Department of Social Security have looked long and hard at the workings of this Act. I do not think either of the two speakers spoke in any way against the principles of the Act this afternoon in that we are still all agreed—as the noble Baroness, Lady Hollis, said —that it is right and proper that the parent in a particular case should make a contribution to his, or indeed her, children. However, it is more often a case of his children. That is something which does not divide us and we continue to want that. We want it done effectively. As I said, one of the problems with the working of the Act was that many absent parents were opposed to it and the money which ought to have flowed to the parent with care did not. I hope that what I have outlined today will mean that the money will begin to flow.

I am grateful for the welcome given by both the noble Baroness and the noble Earl for the changes to the formula and for the principle of having an appeals system which will allow departures from the formula. I am particularly grateful to the noble Earl, Lord Russell, for his kind words about my honourable friend Mr. Alistair Burt, who I know has spent many months deeply engrossed in this subject trying to see how we can improve the position.

I shall answer some of the particular points raised today. I was asked about the cases which will be deferred and about when they will be taken on. The proposal currently is that they should be deferred indefinitely in order to allow the new departure system to be introduced and to clear the agency's books. Quite frankly it would be pointless for me to commit myself to a date at some time in the future if the agency had not cleared its feet, so to speak, and was then overwhelmed by another bunch of cases coming in on top of the work it already had. I cannot remember who mentioned this point but I appreciate that that may not be the answer wished for and that that person would have preferred me to give a date. Dare I say that I think that is the sensible and pragmatic answer when dealing with that question?

The noble Baroness, Lady Hollis, asked me about maintenance disregard. I believe the noble Earl also raised that point. Disregard in income support would, of course, make it more difficult for the parent with care to be better off in work than out of work because clearly she would have to earn more to lift herself and her children out of the benefit in those cases. It would also be very costly. While I appreciate that some Members of your Lordships' House do not seem to mind that, I think there are others who know that that is a major determinant of all Government policy. Indeed, even Members of the Opposition in another place seem to think that making promises about spending more taxpayers' money is no longer in fashion. We hope that maintenance credit will provide a helpful sum of money when someone moves from being out of work to being in work. I thought one of the things we were agreed on was that there is a difficult bridge between being out of work and being in work. We hope that this particular maintenance credit will help a parent with care to cross that bridge.

On the same subject, the question then arises of parents with care being worse off when the maintenance floats them off benefit. In this regard maintenance is treated no differently to other forms of income which, of course, can also float the parent with care off benefit. But they can still qualify for help with such matters as National Health Service charges; for example, dental and prescription charges. Family credit rates, when they were originally set, included an amount to reflect the cost of school meals. Therefore, there is help in that regard.

The noble Earl, Lord Russell, asked how the formula changes were to be brought in. I said that they would be brought in this coming April; that is, April 1995. The measures will be introduced by regulations, using the power in Schedule 1 of the Child Support Act to make regulations relating to exempt income. I shall certainly—as I always do—study the remarks of the noble and learned Lord, Lord Simon of Glaisdale, on transitional powers, to which I was referred by the noble Earl, Lord Russell. However, I do not think there are any transitional powers involved in this regard.

The noble Earl asked an interesting question about the cost of going to and from work. This is a difficult matter. We are proposing a broad brush approach because it would be far too complicated to do otherwise. When the departures I have mentioned arise, some of the detail of this matter may then become an important point as regards the appeal for a departure. I cannot say whether that may or may not involve the cost of a motor car, but certainly I can envisage cases where that might be prayed in aid as a reason for the departure.

I hope I have answered most of the points raised. I have little doubt that when the legislation I have foreshadowed comes to your Lordships' House we will be able to look at it in greater detail. I am grateful for the welcome which both speakers gave to this Statement and I very much hope that we can proceed to make this agency run properly for the benefit of the absent parent, the parent with care, the children and the taxpayer.

4.16 p.m.

Baroness Faithfull

My Lords, I hope I may ask my noble friend the Minister two questions. The first concerns the staff. Will the staff in the Child Support Agency be trained, as I think they have a heavy load? I would suggest that there are not enough staff and that this Bill cannot be properly implemented without good and adequate staff. Secondly, as regards parents with care, are we basing much of our work on the Australian pattern or are we considering the European pattern? In France, for example, the parent with care is given the equivalent of a teacher's salary to stay at home and look after her very young children. Are we considering what is being done on the Continent—in as much as we are, so to speak, in Europe—or are we basing our work on the Australian pattern which I understand is not a great success?

Lord Mackay of Ardbrecknish

My Lords, I assure my noble friend that we are well aware of the importance of the staff of the agency. Indeed, additional staff were taken on to deal with the problems which were arising. We are equally aware of the need for the staff of the agency to be well trained in the procedures to make sure that some of the hiccups that have occurred do not occur again. I can give my noble friend the assurance that we will be considering the numbers of staff and the important matter of their training. In the months leading up to this Statement my honourable and right honourable friends and their advisers have considered many of the systems of support around the world, including the Australian one.

I listened to what my noble friend said about paying the parent with care to stay at home and look after the child. However, I must tell my noble friend that while I understand that argument, it goes a good deal wider than just the parent with care in a divorce case and would also encompass all mothers who would prefer to stay at home and look after their children. I think my noble friend is perhaps opening a much wider question than we are addressing in this Statement.

Lord Simon of Glaisdale

My Lords, when your Lordships were debating the Child Support Bill was it not clearly foreseen and prophesied that that piece of bureaucratic aggrandisement at the expense of the magistrature would cause exactly the sort of hardships, injustices and expenses which are now at last being recognised? In view of that, would it not be desirable to recognise that the previous system was superior; namely, trial by magistrates' courts close to the people concerned, using the judgment and discretion, which seem now to be claimed as a statutory innovation, in order to take account of all the multifariously different circumstances that arise in these cases?

Finally, I should like to ask the noble Lord about the expenses. When we discussed the Bill, large sums were paraded as being likely to inure to the Exchequer by way of savings. Will the noble Lord remind your Lordships' House what those were? How do they compare with any savings which are likely to inure under the system as modified, including the modifications by use of the transitory regulations?

Lord Mackay of Ardbrecknish

My Lords, with some reluctance I must disagree with the noble and learned Lord, Lord Simon of Glaisdale, about the previous system. It was not by any means a perfect system. The assessments were made very much at the discretion of a variety of courts. The result was uncertain and inconsistent and in many cases resulted in failure to deliver payments. Only one third of parents with care actually received maintenance regularly. The costs fell on the taxpayer. I explained a few moments ago that I was not a Member of this House when the Bill was debated. Therefore, I am afraid that I cannot remind the noble and learned Lord—although I suspect that he does not need to be reminded—how much it was claimed would be saved by the Child Support Agency.

Lord Simon of Glaisdale

My Lords, was it not set out in the Financial Memorandum to the Bill?

Lord Mackay of Ardbrecknish

My Lords, that is my point. I was not here at the time. Therefore, I shall have to refresh my memory when I leave the Dispatch Box. However, undoubtedly, considerable savings were prophesied for the taxpayer. I do not suppose that anyone complains about that saving. Everyone thinks that absent parents have a responsibility for their children and that they should not offload it on to the taxpayer.

Unfortunately, it is true that we have not made the savings that we would like to see. But we believe that as a result of the actions I have outlined today—which will cost us a little money—we shall make net savings. Most importantly, the parent with care will receive the maintenance from the absent parent which she deserves.

Lord Stoddart of Swindon

My Lords, the Minister said that the Act was passed without a dissenting voice. That may have been the case in the other place but, as the noble Earl, Lord Russell, pointed out, some of us—including my noble friend Lord Carter on the Front Bench—spent night after night, day after day, trying, into the early hours, to talk some sense into the Government. The noble Earl, Lord Russell, played his part very well during those long watches of the night.

At that time we warned that the Act would be an administrative and financial disaster comparable with the poll tax. No notice was taken of us at all. No amendments were accepted or agreed by the Government. We were told that we did not know what we were talking about and that the Government wished to save £400 million. In spite of our protests that that was an undemocratic way to proceed, the Bill was passed by this House and another place with 100 Henry VIII clauses which allowed the Government to do just what they wished. That is what has happened.

If there is any criticism to be levelled it should not be directed at the Child Support Agency, which had a difficult job thrust upon it. The criticism should be directed where it is deserved—at the Government, for bringing forward such a Bill and forcing it through Parliament without proper and reasonable consideration even of proposals by people like the noble and learned Lord, Lord Simon of Glaisdale, who is an expert on the law and who foresaw the difficulties which would occur in relation to the Act.

Having delivered myself of those remarks, I should like to ask one or two questions. First, can the Minister say whether those cases which are not related to income support will be brought into the net from 1996 as the Act states? My noble friend shakes her head. I did not understand whether that was the case. Perhaps the noble Lord would confirm that. I was also not clear as to whether the action to be taken in relation to clean-break settlements will be retrospective. Will the Minister clarify that point?

My final point relates to allowances for expenses incurred by non-custodial parents visiting their children. Will they be paid in full in respect of whichever means of transport is adopted? In answering that question I hope that the Minister will bear in mind that in France there is only a 16 per cent. loss of contact between children and non-custodial parents in divorce cases compared with a 50 per cent. loss of contact in the United Kingdom. Therefore, I hope that the noble Lord will be able to reassure me that the full costs of non-custodial parents visiting their children will be allowed.

Lord Mackay of Ardbrecknish

My Lords, I am glad that my Statement has allowed the noble Lord, Lord Stoddart, to get so much off his chest in one afternoon. That is probably a good thing for your Lordships' House in relation to other questions which may arise as the week progresses.

In relation to the noble Lord's question about non-benefit cases, as I made clear, we shall take powers in the legislation to defer the taking on of those non-benefit cases.

On the question of the departures—as these would be, since this is not a change in the formula—which would be allowed if the expenses incurred by parents visiting their children were excessive, that would be a matter for the appeals procedure to determine. I do not believe that all the expenses would be allowed, because at least some of the normal expenses would be part and parcel of the absent parent's use of his normal income, less any maintenance he has to pay.

The broad-brush provision for property and capital assessments will deal with property and capital transfers made before 1993.

Lord Dean of Harptree

My Lords, I also welcome the Statement. It appears to deal with most of the difficulties which have arisen in practice since the agency came into being. Can my noble friend give an assurance that the agency will not interfere with agreements which have been freely reached on divorce and are properly documented regarding property and the maintenance of children?

Can my noble friend also give an assurance that nothing in the Statement in any way undermines the fundamental principle that wherever possible parents should be responsible for their children and should not pass the buck to the taxpayer?

Lord Mackay of Ardbrecknish

My Lords, I am grateful to my noble friend for his support. To answer his question, as I mentioned, the take-up of those cases which were not on the benefit system before 1993 will be deferred in the legislation to come, although at some stage in the future, when the agency has caught up with the new departures and with its workload, it will consider taking them on board.

I have explained how the property settlements and capital settlements will be accounted for. In cases where the benefit system is involved—and I understand that the same applies under the court system—there is no such thing as a clean break between a parent and his child. There may have been a clean break between the spouses, but there cannot be a clean break between the parent who has left and the child. With regard to those cases which will be dealt with in the courts, there was no such thing, and there cannot be, in the Child Support Agency's work. As I believe my noble friend mentioned at the end of his question, it remains the major item of principle in the whole business, agreed by almost all noble Lords, that the absent parent has a financial responsibility to his children which he cannot and should not shrug off.

Lord Kilbracken

My Lords, as a so-called absent parent, I wonder whether I may make two observations. First, I wish to object most strongly and strenuously against the use of the offensive and misleading phrase "absent parent". I know that it is the phrase used throughout the Act, but I wonder whether the Minister could set a good example by using some other phrase such as, for instance, "a non-resident parent". My son spends about a hundred days a year with me. During those hundred days his mother is the absent parent and I am the parent with care. The phrase is much resented by fathers—and they almost always are fathers—all over the country.

Secondly, it is most unfair that boarding school fees paid by a father are not taken into account in calculating the sum payable to the mother. The father has to pay the same amount whether the son is at a fee paying boarding school—Eton, or wherever it may be—or is a day boy at a state school. I do not see how that can be justified. I wonder whether that point can also be considered.

Lord Mackay of Ardbrecknish

My Lords, of course I shall take away the last point and consider it. I understand the noble Lord's point about the names used. Many children will have two parents who consider themselves to be "with care". I accept that in the kind of case to which he refers, where one parent may look after the child for 100 days and another for 265 days, or 266 if it is a leap year, it is a little unfair to make the assumption, which is built into the phrase "parent with care", that the absent parent (if I may use that phrase) does not have care. Perhaps we may apologise to the noble Lord and say that it becomes complex to seek labels which will encompass every situation. I am afraid that we are stuck with the two that we have.

I shall certainly consider the question about school fees. I do not suppose that it affects very many people. However, I understand that those who are affected find it a serious point.

Lord Kilbracken

My Lords, can the noble Lord consider the phrase "resident" and "non-resident"?

Lord Mackay of Ardbrecknish

My Lords, of course. But, frankly, we are a little too far down the road to start changing some of the fundamental definitions in the Act.