Child Support Bill

HL Deb 06 July 1995 vol 565 cc1318-68

8.10 p.m.

Consideration of amendments on Report resumed.

[Amendments Nos. 16 to 23 not moved.]

Lord Simon of Glaisdale moved Amendment No. 24:

Before Clause 18, insert the following new clause:

("Provision of information to the Secretary of State: repeal of

section 14(4) of and Schedule 2 to 1991 Act

. Section 14(4) of and Schedule 2 to the 1991 Act shall cease to have effect.").

The noble and learned Lord said: My Lords, this amendment relates to Inland Revenue confidentiality. The matter was gone into slightly in Committee because the noble Lord, Lord Houghton of Sowerby, raised it on another amendment which I moved. I should say that the noble Lord, Lord Houghton of Sowerby, who has his name to this amendment, has suffered a slight accident and has had to go into hospital. I know that all your Lordships will wish to concur in sending him a message of goodwill and good wishes for his rapid recovery.

Noble Lords

Hear, hear!

Lord Simon of Glaisdale

My Lords, I am sorry that he is not here to speak on this amendment because, although at one time I was a Minister responsible for the Inland Revenue and have dealt with Inland Revenue cases both at the Bar and as a judge, that is slight experience compared with that of the noble Lord, Lord Houghton. He devoted many years of his valuable life to the service of the Inland Revenue in a number of capacities. He was always urging—and I venture to second this—that Inland Revenue confidentiality should be respected.

I reminded your Lordships in Committee that our Inland Revenue system is in many ways peculiar. I know of no other system which relies to the same extent on self-assessment. But that self-assessment depends on an assurance of confidentiality. The provision which this amendment seeks to expunge—and it is now in a more correct form than it was in Committee—is to be found in the second schedule to the 1991 Act. It enables the Secretary of State and his officials to breach Inland Revenue confidentiality for the purposes of the Child Support Agency.

I have been long enough hereabouts to recognise the sound of entrenching tools in Whitehall. They have been very noticeable this evening. It is perfectly obvious that the department made what I think would be agreed generally, although it will not concede this, to be an egregious error in the 1991 Act, and it is now in a Maginot line. It is entrenching itself and taking a firm stand behind formulae which are worked out most capriciously. I have a whole list of cases with which I shall not trouble your Lordships at this hour of the night. But perhaps I may mention one. The Child Support Agency, evidently on the formula which your Lordships will be looking at later, made an assessment which left a father with 1p per week.

Although the Minister and his department despise the magistrature, is it really conceivable that any rational Bench would commit such an error or make the other egregious decisions which have been freely publicised? I sympathise with what the Minister said in support of the Child Support Agency and its officers. They were subject to great provocation and unfairness. It was not their fault that they had to administer an unworkable Act. It was the fault of the Government in arranging that they should have to do so by using their Whip in the other place and by using the management of business in this House so as to preclude your Lordships from amending effectively the 1991 Bill, although its defects were recognised clearly and identified. Some of those defects are rectified in this Bill.

One other matter to which I should refer is a heading to a leader in The Times of 23rd December 1993. It is headed Keeping the Flaws The reform of the Child Support Agency is disappointing". The leader spells that out in detail.

The Minister has rightly been staunchly loyal to his department. He has defended the officers of the Child Support Agency, who, as I say, were not responsible for the policy which they had to implement. But we should not lose sight of the fact that the 1991 Act was a major act of bureaucratic aggrandisement.

There was a good deal of slow, bureaucratic aggrandisement from 1945 when the Labour Government made use of the powers that had been vouchsafed to the Executive in wartime; and, indeed, that aggrandisement, a slow process, went on after the Conservatives came to power only ending with the disaster for the Conservative Government of Crichel Down, which resulted in the resignation of an able and popular Minister. That Minister took the blame for the bureaucratic errors of his department; and that should be a warning.

That is the general background: an unprecedented act of bureaucratic aggrandisement, seizing the jurisdiction from the magistrature, which had exercised it since the Middle Ages and done so under statute for a century, and vouchsafing it to a government agency charged with applying an inflexible formula. However, it did not rest there. They had to show that the Child Support Agency could do at least as well as the magistrates. That could only be done by arming the officials with exceptional powers.

In Committee we discussed—and I took the matter to a Division, so I only mention it in passing—the power of those officials to enter private premises on pain of a penalty and to interrogate on pain of a penalty the employer, the father and the fellow employees. In addition to those powers, the 1991 Act assumes power in the officials to breach Inland Revenue confidentiality.

I leave the other matters aside, but they are essential background—the bureaucratic aggrandisement, the power to enter private premises, the power to interrogate employers and fellow employees to elicit information that will strengthen the arm of the agency.

We now come to the breach of Inland Revenue confidentiality. I venture to say that that confidentiality lies at the very heart of the functioning of the Inland Revenue in this country. It is quite intolerable that officials should be given the ability, that no private creditor has, of being able to breach Inland Revenue confidentiality. I hope that the Minister will not say that that power is only used in certain circumstances and only as a last resort. That simply will not do. It ought not to take place at all. I beg to move.

Lord Carter

My Lords, I must apologise to the noble and learned Lord, Lord Simon of Glaisdale, for not being in my place when he introduced his amendment. However, I believe that he made some friendly remarks about my noble friend Lord Houghton of Sowerby. I am informed that, although my noble friend has had to have some treatment, he is now progressing well, although he will not be able to join us for the rest of this evening's proceedings.

As always, the noble and learned Lord made a very powerful case. There is but one point that I should like the Minister to clarify. As I read Schedule 2 to the 1991 Act, it seems to me that the access to Inland Revenue records only applies to the address of the employer of the absent parent. However, I should be most grateful if the noble Lord could make that crystal clear and confirm that that is the only information that can be obtained from the Inland Revenue and that no other information of any sort can be so obtained in connection with the work of the Child Support Agency.

Further, as regards local authority records, under the same schedule, can the Minister confirm that it is only the information regarding benefits—that is, housing benefit and, as it was then, the community charge benefit which is now council tax benefit—that can be obtained. It is extremely important that those points should be emphasised.

Lord Mackay of Ardbrecknish

My Lords, perhaps I may start in the elegant legal words of the noble and learned Lord, Lord Simon of Glaisdale, and say that I concur with the remarks made by my colleagues about the noble Lord, Lord Houghton of Sowerby. I very much hope that the noble Lord will be back with us in time for us to hear his voice raised on the issue next week when we come to Third Reading.

Section 14(4) of the 1991 Act introduces Schedule 2 which allows the Child Support Agency to obtain from the Inland Revenue the current address or current employer of an absent parent. It also allows the agency to obtain from local authorities details of housing benefit or council tax benefit which are needed in the assessment formula. The amendment proposed would remove those two provisions.

We had a full discussion in the House during both the Second Reading and the Committee stages of the Bill about the information which the Child Support Agency is able to obtain from the Inland Revenue. I would like to repeat and re-emphasise that the only information that is given to the CSA by the Revenue is—as the noble Lord, Lord Carter, asked me to confirm—the current address of the absent parent or the current employer of the absent parent. That is done by means of correspondence. Therefore, there is no suggestion that people from the agency can actually sit down and look at a person's file to see what the other aspects of his position may be as outlined in the Inland Revenue returns. As I said, it is done by correspondence and those concerned can only ask the following two questions if the agency needs to know the answers. Question one: what is the address of the absent parent? Question two: who is the current employer of the absent parent?

The agency does that when it is unable to trace an absent parent or the absent parent's employer. Then it sends a standard inquiry form to a central point within the Inland Revenue. That form is then returned with the absent parent's address and that of his employer, where it is known. As I said, officers of the agency do not visit the Inland Revenue premises and they certainly do not see any individual's tax returns.

During the Committee stage of the Bill the noble and learned Lord, Lord Simon of Glaisdale, seemed to compare the Child Support Agency with a debt collection agency. The CSA is much more than that. It has now taken over from the courts jurisdiction for the assessment, collection and enforcement of child maintenance in the majority of cases. I very much appreciate that that is where the noble and learned Lord, Lord Simon of Glaisdale, and I part company in that we do not agree with that takeover of what had previously been the role of the courts. As I said before, two of the many reasons for the introduction of the agency were the courts' general failure to trace absent parents and their lack of success in enforcing orders once they were made. The agency has had the same problems, but we are determined that it will be more effective than the courts in achieving fair and regular maintenance for more parents with care. However, to achieve that, the agency plainly needs to have more statutory powers than a simple debt collection agency.

In explaining why the provisions of Schedule 2 were introduced, I can do no better than to remind your Lordships of the commonsense contribution made in Committee by the noble Lord, Lord Donaldson of Kingsbridge, who said that, the whole thing depends on the wife who is left with a child by a man who by now dislikes her and has another wife. It is perfectly obvious that that man will not easily pay what he ought to pay".— [Official Report, 20/6/95; col. 170.] The noble Lord was surprised at the length of the argument that we had on that subject in Committee; indeed, so was I. Sadly, it is true that many absent parents try to avoid being traced and, when traced, try to avoid paying maintenance. In the past year the agency successfully traced 49,600 absent parents whose whereabouts were unknown to the parent with care. The agency has had success in tracking down fathers, and indeed mothers, who disappear without facing up to their responsibilities. Without the help of this simple information from the Inland Revenue, the number of successful traces would reduce significantly.

8.30 p.m.

Lord Carter

My Lords, I am much obliged to the noble Lord for giving way. With the leave of the House, it would perhaps be helpful if I asked a question now as the answer might be forthcoming from other sources. Are there other examples of where this power is used? Is it used only in connection with the Child Support Bill or are there other areas where there is access to the Inland Revenue or local authority records? It would be helpful to know that.

Lord Mackay of Ardbrecknish

My Lords, perhaps I may return to that in a little while because I wish to discuss the point about local authorities that the noble Lord raised. The second arm of the schedule which would be removed by the noble and learned Lord's amendment concerns the provision of relevant information from local authority records. I reminded your Lordships that the relevant information has been prescribed in regulations as the eligible rent for housing benefit purposes, the entitlement to housing benefit, the council tax payable and the entitlement to council tax benefit of either the person with care or the absent parent. The provision is beneficial because it allows the CSA to collect information which it would otherwise have to obtain from either parent; or, alternatively, the other parent would have to obtain it from his or her ex-other half.

An important element of the calculation of a maintenance assessment is the housing costs, which are net of housing benefit. The net council tax is needed for assessing protected income, which ensures that the absent parent and his new family remain significantly above the level of income support. That is why I find it strange to hear for the second time the case that the noble and learned Lord refers to of the person left with a penny. I would need to know a good deal more about that before I could comment on it. As I said, these calculations about housing costs and net council tax costs are very important; the net council tax is needed for assessing protected income. Failure to obtain this information could reduce the speed and accuracy of some assessments. That leads to some of the problems which have beset the agency. I must inform your Lordships that I cannot understand why the amendment has been drafted to remove this provision.

I was asked who has similar powers. The Contributions Agency can similarly ask the Inland Revenue for the address of a person who is in arrears of contributions, or it can ask for his employer's address. Therefore the Contributions Agency already has this power. If we lived in a world where the absent parent always made himself available to have his maintenance assessed and where, once assessed, it was always paid, it would not be necessary to have access to the limited information on addresses which the Inland Revenue is asked to provide. Lamentably, we do not live in such a world and therefore there is a need for the agency to be allowed to receive limited details from the Inland Revenue's records.

Provided that this information is carefully handled by the Inland Revenue and by the agency, I am afraid that I cannot see the great matter of principle which so concerns the noble and learned Lord. I could see it if the agency were asking to see all of a person's records, but as regards the two questions that the agency is allowed to ask the Inland Revenue and to which it expects an answer, I do not think any reasonable man or woman would consider that that trespassed on individual liberty or freedom. Therefore I am afraid that once again I must reject the noble and learned Lord's amendment.

8.30 p.m.

Lord Simon of Glaisdale

My Lords, I am afraid once again in the reply of the Minister there has been a quite perceptible note of antagonism to absent fathers—indeed there was hostility. That was marked earlier and it has been marked again. One of the wise things that was said by the noble Baroness, Lady Hollis, in Committee was that there are few men in this country who can afford two families. That was said repeatedly at the time of the Divorce Reform Act 1969, which ushered in an enormous spate of divorces in spite of it being sold to the public as a kiss-and-make-up Bill.

It was said on that occasion by Lord Hodson, who was the foremost matrimonial judge in this country, and by Lady Summerskill, with a lifelong devotion to women's rights, who recognised immediately that to allow polygamy, albeit successive polygamy, not simultaneous polygamy, was disastrous to the status of married women. What has happened is that society has allowed people to have two families, and it is perfectly absurd that the Department of Social Security has got into a false position that it should blame the absent father. That is the first thing I would say.

The second thing is that I would like again to quote what I have quoted from Dicey on previous occasions when he is describing the rule of law. He states: every man whatever his rank or condition is subject to the ordinary law of the realm … universal subjection of all classes to one law administered by the ordinary courts". He was dealing there expressly with the systems of administrative law on the Continent which put officials in a privileged position. That has never been our way until very recently. All persons—the ordinary debt collector and the official debt collector alike—should be subject and amenable to the ordinary law of the land. At this time of night, and having made a brief reconnaissance outside the Chamber, I see no point in wasting your Lordships' time with a Division. Without being in any way convinced—on the contrary, believing this to be an important point because the rule of law is an important principle—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 25:

Before Clause 18, insert the following new clause:

("Appeals: amendment of section 20 of 1991 Act

. In section 20 of the 1991 Act (appeals), in subsection (1) (b), at end insert—

1. "(c) to refuse an application for a maintenance assessment;
2. (d) to make an assessment;
3. (e) to refuse an application, under section 17, for a review of a maintenance assessment;
4. (f) in determining the amount of an assessment;
5. (g) to cancel an assessment;
6. (h) to refuse to cancel an assessment" ").

The noble Earl said: My Lords, in moving Amendment No. 25, I should like also to speak to Amendment No. 26. The matter of the two amendments is different but the area they cover has a certain amount of similarity. They both deal with the question of appeals. Amendment No. 25 would cut out the internal review which was provided in the 1991 Act and which adds to the delay, adds to the difficulty and adds to the obstruction. I can remember in 1991 the noble and learned Lord, Lord Simon of Glaisdale, waxing particularly eloquent against this internal review on the ground that it simply did not partake of the character of an appeal. It is an appeal to the same body which originally made the decision, and that is not what we understand by an appeal. The large number of decisions needing to be corrected is really much more an indication of poor adjudication and poor administration at the lower level. Indeed, those errors are so many and the number of missing papers so great that it is often not until there is investigation from outside that they come to light.

I heard the Minister speak in defence of the agency earlier today. I did not intervene because I had no further locus standi on that amendment and I remembered that we are at Report stage. However, the Minister knows that in general I do not believe that the agency is to blame for what is wrong with the Bill. Ministers are responsible for the load they have placed on the agency. Since the Minister knew that, I thought that he did not need to take the general distrust of power which I believe every parliamentarian must have in all circumstances as personal hostility to the agency. That was a little unnecessary of him.

Amendment No. 26 is much more far-reaching. It provides, in case of error, for a genuine appeal to the High Court. It also gives the High Court authority to override the Act itself where that is necessary to prevent hardship or injustice to any particular person. I am sure that the Minister will not like that. However, from 1991 onwards it has been one of our substantial criticisms of the Act that it does not provide any proper machinery for appealing against an assessment.

Over and over again in my postbag I have found that what most frustrates people in appealing against an assessment which appears to them patently unjust is that they are unable to get any judicial recourse to appeal against it. That is all part of what the noble and learned Lord meant by describing the 1991 Act as a threat to the rule of law. I do not believe that the Government can imagine the frustration and disillusion that results from facing what people see, rightly or wrongly, as an unjust act by an executive power and being unable to query it, challenge it or bring it to scrutiny before any higher authority whatever.

Under Amendment No. 26 the court would be allowed to correct any error of fact or law involved in the decision appealed against. Due to the amount of work the CSA is asked to undertake, rather than through any incompetence on its part, the papers of the CSA are in such confusion that until it faces an outside authority with power to compel it to produce documents a great many errors will never be sorted out.

The power that the CSA enjoys would have been draconian enough if all its decisions had been accurate, but at present it seems that no more than 50 per cent. of its decisions are accurate. Enjoying that much draconian power and immunity from questioning in defence of decisions, some half of which are wrong, is too much. That is why it is important to be able to appeal against the CSA to a proper court—the Family Division or, in Scotland, the Court of Session.

Ever since I arrived in this House I have been hearing arguments about the need for a proper family court. I have heard the noble Baroness, Lady Faithfull, speak eloquently and persuasively on the subject. If the Minister has not learnt yet he soon will that the noble Baroness, Lady Faithfull, is usually right even if, as in this case, it takes three years for her rightness to become apparent.

Although they deal with very different points, both amendments need to be taken seriously. The provisions of Amendment No. 26 go a long way to make the internal review seem even more unnecessary and time wasting than it seemed in 1991. I beg to move.

8.45 p.m.

Lord Mackay of Ardbrecknish

My Lords, as the noble Earl, Lord Russell, explained, the two new clauses he proposes concern appeals. Amendment No. 25 deals with appeals to a child support appeal tribunal while Amendment No. 26 deals with appeals to the High Court.

Amendment No. 25 proposes to make provision for child support officer decisions relating to the refusal, cancellation, making, or adjustment of the amount of a maintenance assessment to be appealed directly to a child support appeal tribunal. Noble Lords will know that the 1991 Act provides for a statutory review of such child support officer decisions by a second child support officer. The new clause offers an alternative avenue for disputing a child support officer's decision—directly to an appeal tribunal. However, it does not do away with the provisions of Section 18 of the Act. The effect of the new clause is to give the aggrieved party a choice of whether to ask for a review by the CSO or to go straight to a child support appeal tribunal.

The statutory review which is carried out before an appeal can he lodged serves a useful purpose. It reduces the pressure on the appeals system. There are times when matters of grievance can be dealt with simply and quickly by a second child support officer reviewing the maintenance assessment. There is no need for an appeal. In effect, the second-tier review acts as a filter mechanism to identify such cases and avoid clogging the system. Currently only around one case in five of those reviewed under Section 18 of the Act continues on to appeal. Before anybody says that the other four out of five have had their appeal rights denied, I should point out that the right of appeal is automatic should either party be dissatisfied with the result of the review.

Therefore, it is not so much, as the noble Earl, Lord Russell, suggested, an appeal to the same body. The second-tier review process is not an appeal at all. It is an opportunity for either party to ask for a different officer to check the assessment to ensure that it is correct. If either party then disagrees with the outcome, there is the automatic right of appeal to a tribunal.

If, instead of applying for a review by a child support officer, everyone sought to appeal, the number of appeals launched could increase fivefold. It is entirely appropriate for people to apply to the child support officer in the first instance if they are unhappy about any aspect of the initial decision on child maintenance. If he agrees the decision is wrong, he can put it right. There is no need for cases to go to a tribunal unless people are unhappy about the outcome. I cannot understand what is wrong with that. To go down the road suggested by the noble Earl would undoubtedly increase the number of appeals made to tribunals and make the problems of the tribunals even greater and the delays which the parent with care would face in getting maintenance ever longer.

The effect of Amendment No. 26 would be to undermine all first and second level decisions on the assessment, payment and collection of child support maintenance. As the noble Earl explained, it would abolish the child support commissioners and allow any decision of a child support officer, a child support appeal tribunal, the Secretary of State, a magistrates' court or a sheriff's court to be challenged in the High Court. There would be no requirement to seek leave to appeal. The High Court would accept all comers.

Child support commissioners are appointed by the Crown. They are barristers, solicitors or advocates of not less than 10 years' standing. Their role is to consider points of law raised by decisions of child support appeal tribunals. It is a well-established process which also applies in other areas of social security. The commissioners, whose legal standing is equivalent to High Court judges, provide a valuable function in establishing case law which then applies in later cases.

I know that the noble Earl regards the abolition of the child support legislation as his main aim. I believe that these two amendments would disable the legislation and get quite close to that position by the route that he suggested in the two amendments. By providing for the Family Division of the High Court to hear any challenge to a decision on child support, the amendment in effect returns questions to the courts. Such a move would result in a great deal of extra work for the High Court and the Court of Session in Scotland and people would wait a very long time for the outcome of their case. Other cases currently heard in the High Court and the Court of Session would suffer equally. Frankly, I do not believe that that is an acceptable way to proceed.

Your Lordships will not have failed to notice that all the costs would fall on the Secretary of State unless the court decides otherwise. That would, of course, be a considerable and most unwelcome burden on the taxpayer. I am afraid that vexatious litigants would take every opportunity of pursuing their cases, especially if there was absolutely no possibility of them having to pay any of the costs. I do not believe that that is right.

I am sorry to tell the noble Earl that I think neither of his amendments are sensible. Both would increase costs and, more importantly, cause unacceptable delays. I believe that they would go a long way towards undermining the objectives of the Child Support Agency. The provisions would certainly add to delays. There are people who would use the procedures that the noble Earl would put in place as a way further to clog up the machinery of the system, to aggravate the system, to delay the system and to bring it into disrepute.

I cannot possibly accept the amendments. I am sure that the noble Earl is not in the least surprised at that. I hope he will withdraw this amendment. If he does not do so, I hope my noble friends will support me.

Earl Russell

My Lords, I am grateful to the Minister for one point in that reply. I am grateful for his admission that the second tier review is not an appeal. In 1991 we spent a great many hours seeking to induce his predecessor to agree to precisely that point. I am very glad that we have won the point now, even if somewhat belatedly. It does not partake of any of the proper characteristics of an appeal. The name of the officer undertaking the review is not given. The complainant does not know whether the officer is a different person. If we do not know who the person is, we do not know whether there can be conflict of interest or whom to hold accountable for the decision.

That is not justice; it is administration. It is at the heart of our complaint that administration is taking over from justice.

Lord Mackay of Ardbrecknish

My Lords, I appreciate the noble Earl giving way to me. Surely if the aggrieved party can have the problem resolved by what the noble Earl calls an administrative process, that is a perfectly satisfactory solution. A solution is reached a good deal more quickly and more easily, with the backstop that if the person is not satisfied his right of appeal is not altered.

Earl Russell

My Lords, that argument would carry a good deal more weight if the CSA were capable of getting more than 50 per cent. of its decisions right. Judging by some of the correspondence that I have seen from the CSA, I wonder whether it always knows that it has conducted a second tier review. Internal communication within the CSA seems to me to be a good deal less than perfect.

I cannot help wondering whether the Minister would entrust his car to a garage where there was a 50–50 chance that the garage would remember to tighten the wheel nuts. I can tell him that I would not. It makes the case for a proper appeal procedure all the more important.

I was a little disconcerted by the Minister's argument that we cannot have a proper appeal procedure because people might use it. It reminds me a little of the case of, A man in the restaurant at Crewe Who once found a mouse in his stew. Said the waiter, 'Don't shout, don't wave it about, Or the rest will be wanting one too' Yes, indeed, if justice is available, the rest will be wanting one too. If injustice, or perceived injustice, grows, then so must recourse to the courts to deal with it. The argument that everyone might want it is one which does a great deal more than I hope the Minister intended. One could use that argument to wipe out practically any appeal against an action of power. That really would be contrary to the rule of law. I hope that it is not what the Government intend.

In one form or another, we shall have to look at the issue again because as it stands at present the situation is totally unacceptable. I do not think that we shall get any further by pursuing the matter across the Chamber tonight. Therefore for the time being I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 26 not moved.]

Lord Simon of Glaisdale moved Amendment No. 27:

Before Clause 18, insert the following new clause:

("Enforcement of liability orders by distress: repeal of section 35

of 1991 Act

. Section 35 of the 1991 Act shall cease to have effect.").

The noble and learned Lord said: My Lords, the amendment relates to the remedy of distress which is vouchsafed to the Secretary of State in addition to the other powers that I rehearsed earlier. As your Lordships know, distress stems from a very ancient and primitive sphere of jurisprudence; namely, the time of self help.

When I raised the matter in Committee, I asked the Minister a number of specific questions about Section 35 of the 1991 Act. I also asked him a general question. The noble Lord was not then in a position to answer those specific questions which he said were questions of law. I have today received a letter from him dealing with the specific points that I raised. I am most grateful to him; I have had time to read the letter before the debate.

I do not propose to refer to the specific points, although they may arise on the general question which I asked the Minister and which remains unanswered. It is this. Section 35 gives the Secretary of State the right of distress. Does it give him additional powers over and above the ordinary rights of distress? If so, what are those powers? If not, what is the sole purpose of Section 35?

The matter arises in this way. Section 33(2) of the Child Support Act 1991 states: The Secretary of State may apply to a magistrates' court or, in Scotland, to the sheriff for an order (a 'liability order') against the liable person".

Under subsection (4) neither the court nor the sheriff is given power to question the maintenance assessment under which the payment for child support maintenance falls to be made. In other words, as I understand it, they may not question the operation of the formula, however defective it has proved in the past. That comes under Section 33, liability orders.

Section 35 states: Where a liability order has been made against a person ('the liable person'), the Secretary of State may levy the appropriate amount by distress and sale of the liable person's goods".

Perhaps I ought to read from subsection (7): The Secretary of State may make regulations supplementing the provisions of this section".

One then has a liability order obtained from the magistrates' court. I now read from Halsbury's Laws of England in the edition edited by my noble and learned friend Lord Hailsham of Saint Marylebone. I need read only the first few words of Section 5 in the article on distress: 5. Distress under Magistrates' Courts Act 1952".

That Act has now been consolidated. Paragraph 442 states: Jurisdiction. Where default is made in paying a sum adjudged to be paid by a conviction or order of a magistrates' court the court may issue a warrant of distress for the purpose of levying the sum".

In other words, when a liability order has been obtained from the magistrates, the magistrates may issue a warrant of distress.

I have examined the procedure under the Magistrates' Courts Act and there is some difference from Section 35. One asks why it exists. I ask again: what additional powers have been taken? Why is it necessary to have Section 35 at all when the issue of a liability order may immediately result in distress under the Magistrates' Courts Act? Either Section 35 gives additional power once again to officials or it. is unnecessary. I beg to move.

9 p.m.

Earl Russell

My Lords, I am happy to support the amendment, to which I have put my name.. Distress is an extreme power. It provides the right of entry; it lays down in Section 35 that no one is to be a trespasser. It is almost the nearest thing allowed under the rule of law to a Hobbesian state of war. It is an act almost forcibly to take what is owing to one.

That is an extreme power which may be justified in a situation which is properly controlled by the rule of law. In some cases, that extreme power needs to exist. But to be subject to distress for an assessment against which one has no legal appeal and which stands a 50 per cent. chance of being erroneous is too much. The contrast between those two things shows quite how far the 1991 Act went in exalting the powers of the Executive against the powers of the law.

If one is to be subject to those powers, one must be able to appeal against them. If the powers are to be claimed, there must be some good reason for believing that the debt which they are being used to collect is due. Without the right of appeal and with that rate of error, I do not see how we can have that.

There must also be some reason to believe that the debt can be recovered. We may find that that presents some difficulties. According to the report of the Audit Commission, which appeared an hour or two too late for us to use it in Committee, the agency itself told the National Audit Office that the total outstanding debt contained a growing core not yet quantified which was not likely to be collected.

So if we use distress to try to collect something that is not likely to be collected because the person does not possess sufficient property, we are getting into uncomfortable territory. I am reminded of a document I once saw recording the distresses taken from John Hampden's tenants for ship money. They had taken away from them as distresses their family Bibles and their frying pans. They were getting down to the bare minimum. We do not wish matters to get to that point. Nor do we want distress to be used where the legal powers are inadequate.

Another point which was made by the Audit Commission and which I do not believe the Minister will be able to get round is that many of the debts arise from interim maintenance assessments. Because they are incorrectly dated, they are legally unenforceable. If I am to be the victim of a distress for an inaccurately assessed debt on a maintenance interim assessment which is not legally enforceable because the date is wrong, I cannot do anything with the bailiff who comes into my property. What appeal have I? Is that not being subject to an arbitrary power? And is it not the kind exaltation of the Executive which is very hard to combine with the principles of government by consent?

Lord Mackay of Ardbrecknish

My Lords, the noble and learned Lord, Lord Simon of Glaisdale, and the noble Earl, Lord Russell, have again proposed this amendment which removes totally the provisions relating to the levying of distress. They are concerned that Section 35 of the 1991 Act—

Lord Simon of Glaisdale

My Lords, perhaps the noble Lord will allow me to intervene. I venture to point out that it does no such thing; the power to levy distress remains under the Magistrates' Courts Act.

Lord Mackay of Ardbrecknish

Yes, my Lords, but I believe that the noble and learned Lord will agree that it removes the provisions as they apply to the Child Support Agency, giving it a different route to that which I believe the noble and learned Lord would prefer it to have.

Both noble Lords are concerned that Section 35 of the 1991 Act gives the Child Support Agency exceptional powers, and that this section is not needed—as the noble and learned Lord pointed out to me in his intervention—as there is an existing debt enforcement process in the county court. I should first like to remind the House of the efforts the agency makes to reach an agreement with the absent parent about the repayment of arrears before enforcement action is considered. There are a number of safeguards in place that limit the amount of arrears payable, the amount that the agency will seek to collect and the maximum amount of current maintenance and arrears repayments in cases where the absent parent makes prompt arrangements to meet his liabilities. Enforcement action is the last remedy for the agency in cases where an absent parent persistently seeks to avoid his liability.

For the sake of complete clarity I shall ask noble Lords to bear with me while I explain the stages in the agency's enforcement process in detail, relating them directly to the processes a private individual has to pursue to obtain the remedy of distress. First, the agency needs to establish that a debt has arisen and should be pursued. A magistrates' court must grant a liability order before any enforcement action by way of distress can be carried forward. As I explained in Committee, the court has no jurisdiction over the amount of the weekly maintenance assessment. That is a matter decided by the agency using the maintenance formula. Where a parent disputes the assessment, he or she has a right of appeal to an independent child support appeal tribunal. However, the court must be satisfied that the amount of debt stated on the application for a liability order is in fact owing and has not, for example, been paid in full or in part. All applications are heard in court and the absent parent may give evidence if he so wishes.

Section 35 of the 1991 Act provides for action to be taken to enforce the liability order by way of the levying of distress. This is necessary because all the liability order does is confirm that the debt is due. If Section 35 were taken away, the agency would be unable to use distress as a method of enforcing child support maintenance since, as there is no debt judgment from a county court, it would not be possible to apply to the county court for this action. Without the remedy of distress—

Lord Simon of Glaisdale

My Lords, I am so sorry to intervene again. If I may say so, the noble Lord has entirely missed the point. There is no question of a county court order. It is a question of an order of the magistrates' court. I read the section and the provision. It is an order of the magistrates' court which can be enforced by distress. The liability order is an order by the magistrates' court to pay.

Lord Mackay of Ardbrecknish

My Lords, I hear what the noble and learned Lord says. However, I understand that an ordinary company, let us say, wanting to levy distress because a debt arises has to go to the county court for a debt judgment. I shall come to why we believe that this is the right procedure in a moment. I am saying that the agency goes to the magistrates' court; and I explained what the magistrates' court may or may not do and how it can establish what it is asked to establish, namely that the debt is owed and that it has not been paid either in whole or in part.

As I was saying, without the remedy of distress it would be much more difficult for the agency to obtain payment of maintenance quickly and effectively in those cases where absent parents refuse to meet their responsibilities to their children and where a deduction from earnings order cannot be used. The provisions in Section 35 give enforcement powers to the Child Support Agency which closely resemble the process in county courts. The decision to use magistrates' courts for liability orders, rather than the county courts—I hope that this helps to answer the noble and learned Lord's point—was taken with the intention of being helpful to the parents. Magistrates' courts are often more local and therefore easier to attend than county courts.

An individual taking proceedings in the county court must first obtain a debt judgment and the debtor has an opportunity to attend court to defend the application if he wishes. The liability order process that I have described is similar, though taken in the magistrates' courts rather than the county court. If payment is not made following a debt judgment in the county court, the creditor can apply for a warrant of execution. But I should stress that that is, in most cases, an administrative procedure which does not involve the leave of the court. I do not, therefore, accept that the agency has exceptional powers in respect of distress. Creditors enforcing debt through the county court can have distress proceedings initiated on the basis of an administrative decision.

Section 35 of the 1991 Act does, of course, contain important safeguards to ensure that the absent parent is always left with certain essential items, including clothes, bedding, furniture and household equipment; and tools and other work equipment. There is also the right of appeal to the magistrates' court if the absent parent feels that the proceedings are irregular in any way.

I have been asked why it is not a magistrates' court order for distress. That would involve the agency going back to the magistrates' court, which is a two-stage process. The order for distress would normally be issued administratively and the agency has instead been given powers to act on the liability order. This is a simpler and quicker process to deal with the problem. I must say, frankly, that the problem will only come about and the person will only have that visited upon him if he is simply just not prepared to play ball with the agency and is showing no signs of paying the maintenance due to the children of the first marriage.

I hope that I have demonstrated that the distress provisions that the agency may use are the last resort in a well regulated process. The agency does not have exceptional powers. In Section 35 it has the means to use well-established procedures of debt recovery to secure maintenance payments for children whose absent parents are refusing to meet their responsibilities.

Earl Russell

My Lords—

9.15 p.m.

Lord Lucas

My Lords, I fear that the debate is getting a little out of order. The House may find it helpful if I remind noble Lords that it is possible to ask the Minister at the end of his speech short questions for elucidation before he sits down. There is no provision for interrupting a Minister in the middle of his speech at Report stage.

Lord Mackay of Ardbrecknish

My Lords, I was summing up and was about to say that I do not believe that these amendments are in any way helpful to the cause that at least I and, I suspect, most noble Lords and members of the public are trying to pursue; namely, to make sure that children in these circumstances get the maintenance that they are due from the absent parent. Therefore, I hope that with my detailed explanation, in addition to the letter that I wrote to him, the noble and learned Lord will feel able to withdraw his amendment.

Lord Simon of Glaisdale

My Lords, we are greatly in the noble Lord's debt. He has had an extraordinarily difficult brief to make good and has done it with force and patience. But I must, I hope with all respect, ask him to look again at this matter. He has talked all round the issue but has not faced it.

It is neither here nor there that any of those remedies—the right to intrude, the right to interrogate, the right to infringe Inland Revenue confidentiality and the right to levy distress—are only ultimate sanctions. The noble Lord says in effect—in fact, I believe that he said it in terms—that the debtor has only to co-operate and he can avoid all those unpleasant consequences. That is neither here nor there.

The question is whether Section 35 gives any additional powers. If it does not, it is unnecessary and the noble Lord can accept the amendment. I can put the matter very briefly again. Under Section 33, the Secretary of State may apply to a magistrates' court for a liability order. That is an order saying that the parent in question is liable to pay a sum. Then under Section 35, the Secretary of State, having obtained a liability order, may levy distress.

But what the noble Lord has not faced at all is that there is power under the Magistrates' Courts Act. I read the passage, as it is very short, and I can read it again: Where default is made in paying a sum adjudged to be paid by a conviction or order of a magistrates' court— a liability order— the court may issue a warrant of distress". The only answer to that is to go back to the magistrates' court. Is that really so onerous? Must he really have Section 35 so that the Secretary of State may exceptionally, unlike the ordinary creditor, proceed administratively to distress? If so, so much the worse.

I ask again. Does Section 35 give additional powers? Obviously it gives one additional power because, characteristically, it allows the Secretary of State to make regulations supplementing that section—the distress section. There is one other subsection that I notice is discrepant with the Magistrates' Courts Act and that relates to special damages. As it is in different terms, one expects it to have some different meaning. In his letter the noble Lord did not go into that and, as we shall certainly have to return to the matter, I shall not pursue it today. But we are exactly where we started.

A liability order is an order to pay and then distress can be levied under the Magistrates' Courts Act. That is the beginning and the end of the, matter. The only difference is whether the Secretary of State, unlike any other creditor, can proceed immediately by administrative action to levy distress or whether he is required to go back and obtain automatically, as I read the law, a warrant for distress.

As I said, we shall certainly have to return to the matter. The noble Lord may be able to find an answer to the question that I put. If so, I should be very grateful for a letter before Third Reading. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 28 and 29 not moved.]

Earl Russell moved Amendment No. 30:

Before Clause 18, insert the following new clause:

("Reduced benefit directions: amendment of section 46 of 1991

Act

. In section 46 of the 1991 Act (failure to comply with obligations imposed by section 6), after subsection (5) insert—

(5A) The prescribed amount of the reduction under a reduced benefit direction shall be no more than five per centum of the personal allowance payable in respect of the parent with care." ").

The noble Earl said: My Lords, in moving this amendment I wish to speak also to Amendment No. 31, with which it is grouped. The amendments concern the benefit penalty—the penalty which is imposed on the parent with care if she refuses to co-operate with the agency, to name the father and authorise the agency to take action. At present the penalty stands at 20 per cent. for one year and 10 per cent. for a further six months. It has been my contention right from the beginning that that penalty is too draconian, that it too much threatens both the mother's and the children's ability to maintain an adequate standard of living sufficient for health. In fact, the amendment is very much like one I moved on Commons Reasons in 1991.

We have now a very considerable body of evidence—I mention in passing the National Consumer Council and the National Children's Home, and the Minister knows the references—which indicates that on income support it is difficult to maintain an adequate standard of living. With reduced benefit direction it becomes, on occasion, very difficult indeed. When the benefit is subject, as is too often the case now, to a whole series of other deductions, then it can become very hard indeed. Those may include social fund loans, gas, water, electricity, community charge arrears still being pursued—and it is really about time that that stopped—occasionally court fines, arrears of rent and utility charges of all sorts. They are a much bigger part of the expenditure of people on benefit than they were five years ago.

There is a normal rule in the department that deductions from income support should not exceed 15 per cent. of benefit. Even that is arguably too much. But that rule, where it applies, is better than nothing. However, there is no such rule covering deductions under the benefit penalty. The Minister could perfectly easily bring that benefit penalty under the operation of the 50 per cent. rule. But leaving the deduction, if it remains at all, at 20 per cent., amounts to cruelty and, what is more, cruelty not only to the mother but also to the children. I cannot see how one can have a 20 per cent. reduction in the mother's income without it affecting the children also: it must. If the total household income is reduced that much, there is not the money to go round.

The Minister believes that deductions of this sort are not sufficient to act as an incentive to co-operate. But I do not believe that he has understood the psychology of those involved. There are some women who simply will not have anything whatsoever to do with the man with whom they have been previously involved. For them 20 per cent. is not enough and the statistics show that there is quite a number of them. I believe that there is no penalty known to the law which could be sufficient. In fact, I have known cases where even the penalty of death would not have been sufficient to induce co-operation. Some of those women I have known quite well and I know of what I speak.

There are others who are capable of being led by economic incentives, as the Bill proposes. For them a very small incentive is sufficient. So if they are capable of responding to an economic incentive at all, then I believe they are capable of responding to an economic incentive of 5 per cent. So I do not believe that the Minister will find a very great increase in the number of parents refusing to co-operate if this reduction were to be introduced. But even if that is not the case, it is my opinion that a reduction in the level of 20 per cent. is simply not tolerable: it is an injustice.

Amendment No. 31 deals with a point with which the Minister, after the Jobseekers Act, will be familiar. That is the right to enjoy benefit pending an appeal. If an appeal is to mean anything one must not be deprived of benefit until the appeal has been heard. If the Minister argues otherwise, I hope that he will watch the danger of once again falling into the trap of saying, "We cannot have more appeals for fear that everyone might want them". If people are aggrieved they have the right to appeal. I do not believe it right that they should be penalised for doing so. The Minister knows the arguments about this matter and I hope that he has thought about them a little more since the jobseekers' legislation. I beg to move.

9.30 p.m.

Lord Mackay of Ardbrecknish

My Lords, as I said in Committee, Section 46 of the 1991 Act provides for a child support officer to impose a reduced benefit direction in respect of a parent with care who has refused to co-operate in the pursuit of maintenance without good cause. The purpose of the benefit reduction is to make a parent with care think carefully about her decision not to co-operate. It is right that parents with care should co-operate in the pursuit of maintenance unless they have good reason not to do so. It is not right that the burden of maintenance should fall to taxpayers, many of whom have children of their own.

Amendment No. 30 seeks to reduce the amount of the reduced benefit direction to 5 per cent. of the income support personal allowance. A parent with care who receives, or whose current partner receives, a relevant benefit must give her authority for maintenance to be pursued from the absent parent unless she has good cause not to do so. If she does not give her authority without good cause, her benefit may be reduced by 20 per cent. of the income support adult allowance for six months, followed by a reduction of 10 per cent. for the next 12 months.

A reduction to 5 per cent. of the personal allowance would not be effective. It is right that parents with care should co-operate with the agency unless they have good cause not to do so. Taxpayers should not have to shoulder the burden of supporting other people's children unless that is unavoidable. I must stress again, as I did in Committee, that parents with care have their benefit reduced only after very careful consideration. Even after a benefit reduction has been imposed, the parent with care may give her co-operation at any time and the benefit reduction will be lifted. Alternatively, she may come forward with fresh representations about why she should not be expected to co-operate and these will be considered.

Amendment No. 31 would prevent a reduced benefit direction from coming into force until any appeal against it had been dismissed by a child support appeal tribunal. Parents with care are given every opportunity to make representations and to consider their position before a reduced benefit direction is imposed, and no benefit for a parent with care is reduced without very careful consideration having been given to her case and that of her children.

I could outline again the procedures leading to a benefit reduction, but I did that in Committee and, as your Lordships know, arguments that have been fully deployed in a Committee of the Whole House should not be repeated at length on Report. Therefore, I do not intend to repeat the considerable arguments that I put forward about how the procedure works and the checks and balances which it contains.

However, Amendment No. 31 would mean that, where there is an appeal against the reduced benefit direction, it would in effect be suspended, or would not take effect, until after the tribunal had rejected the appeal. That would encourage parents with care to appeal against the direction simply to delay its coming into force. That is not a proper use of the tribunal service or of Child Support Agency resources.

As I said at greater length in Committee when I explained the safeguards, we believe that the safeguards which are in place protect the parent with care before a reduced benefit direction is imposed. We believe that they are fully adequate. Therefore, with that somewhat briefer explanation than I gave the noble Earl in Committee, I hope that he will see fit to withdraw his amendment.

Earl Russell

My Lords, I do not find the Minister's answer at all persuasive. He says that his department never disentitles anyone without very careful consideration. That is the voice of the Executive believing that once it has thought, it must necessarily be right. That is not always so.

The Minister invokes the interests of the taxpayer—and we are going to hear a bit more about the interests of the taxpayer when we reach the next amendment. I do not think that it is necessary to serve the interests of the taxpayer by reducing people to a standard of living where they are in danger of malnutrition. Indeed, I do not believe that it is in the interests of the taxpayer to do so. It may be expensive.

I do not think that the Minister has considered the alternative means of occupation which women might find if they are driven below what is about the lowest reasonable level of subsistence. As a taxpayer, I am ashamed to use such methods—and I am ashamed that my own standard of living should depend on that. I believe that that view will be widely shared around the country. The Minister shakes his head, but we shall have the opportunity to ask the country soon enough. The Minister might listen to the country when he will not listen to me. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 31 and 32 not moved.]

Earl Russell moved Amendment No. 33:

Before Clause 18, insert the following new clause:

("Short title, commencement and extent, etc.: amendment of

section 58 of 1991 Act

. In section 58 of the 1991 Act, in subsection 2, at end insert— subject to the provisions of subsection 4A below, after subsection 4, insert—

(4A) At or before 6th July 1996, the Secretary of State shall lay before Parliament a Report on the net saving or loss to the taxpayer resulting from the implementation of this Act." ").

The noble Earl said: My Lords, the amendment asks for a report on the net gain or loss to the taxpayer as a result of implementing the 1991 Act. The Minister has been holding forth a great deal—most recently on the previous amendment—about the benefit to the taxpayer from implementing the principles of the Act, but that is rather begging the question, because it is a very wide open question as to whether the taxpayer does in fact benefit at all from the 1991 Act.

I am sorry for putting the amendment down late. The Minister knows, I think, what finally provoked me into doing it. It was a press report in the Independent of 29th June which claimed that the agency had benefited the taxpayer by £1.5 billion since 1991. I rang up the Minister's office because I wanted to see the figures upon which the DSS, which was the stated source, had based that. It appears that that press release never went through the DSS press office. If the Minister has discovered where it came from, I would be glad to know, because if the author of that report had any figures which I do not know, I am perfectly willing to listen to them.

I do not assert that my calculations on this are necessarily accurate. That is why I am calling for a report: so that there can be an independent, impartial attempt to assess what in fact are the gains and losses.

Savings to the taxpayer may come in two possible forms. They can come from maintenance collected or from benefits saved. It is difficult to be certain of maintenance collected or assessed for the reason I was touching on just now: that the Audit Commission found the CSA's accuracy rate was about 50 per cent. In fact the agency and the Audit Commission had a good deal of discussion about what was collected. Their figures are approximate. But they seem to be fairly close to each other, and we can take them to have a rough approximation to accuracy.

The Audit Commission found that the agency had collected £74 million in the financial year 1994–95. Of that, it had paid out £26.7 million to the parents with care and £47.8 million to the Secretary of State. By contrast, maintenance uncollected stood at £525.5 million, of which £87 million was owing to the parent with care and £438 million to the Secretary of State.

Unlike the Government, the Audit Commission does not see wilful refusal as a sufficient explanation of that shortfall. It finds that the total outstanding debt contains a growing core, not yet quantified, which is not likely to be collected. That is the agency's own evidence to the Audit Commission.

The Audit Commission found that 29 per cent. of those arrears arise during the period between when the absent parent is sent the maintenance inquiry form and the making of an assessment or an interim assessment. That is precisely the period which produces massive assessments of arrears which tend to break the back of the camels upon which they are loaded. The Audit Commission finds also that a number of the interim assessments cannot be collected because they have been given incorrect effective dates and are not legally enforceable. So that backlog of arrears is not necessarily likely to be cleared very fast.

The Audit Commission also found: The backlog of very old cases is likely to contain disproportionate numbers where the maintenance yield will be low even when assessments are completed".

It does not hold out much hope of improvement in a level of return which, as it runs at present, is unlikely to cover the CSA's operating costs. We get a superficially slightly more encouraging picture from a Written Answer at col. 164 of 7th March in another place. That shows a level of maintenance collected of £135 million. However, when it is broken down it emerges that £108.61 million is collected under arrangements made by the old liable relative unit. It is pre-1991 maintenance still coming in.

As the noble Baroness, Lady Faithfull, pointed out on Second Reading, it has a much better record than the CSA. According to Miss Chant's Answer to Donald Dewar on 7th March, the CSA claims to have collected only £44.48 million. That is rather less than the Audit Commission credits to it. The difference is not perhaps profound but it illustrates the difficulty of arriving at accurate figures on the subject. That is one of the reasons why I am calling for a report.

Is the picture any better when we look at benefit savings rather than maintenance collected? At first sight, as regards the 7th March Written Answer, the picture looks rather better. In that Written Answer, Miss Chant claims a figure of £186.83 million for benefit savings. But that too evaporates when it is broken down. Only £20.43 million of that is savings as a result of the collection of maintenance. The remaining £165.95 million is listed as non-maintenance cessations following action by the agency.

That is a very carefully chosen Whitehall form of words indeed. In other words, in plain English, the women have simply gone off benefit. Before we give any credit to the agency for their going off benefit—or discredit, as the case may be—it would be nice to know why they have gone off benefit.

The Minister is estopped from claiming that that figure is an achievement of the CSA because in Committee he admitted that he had not the first idea why they had gone off benefit. In his own words: it would be a huge task to keep details of everyone who left benefit and what happened to them".—[Official Report, 20/6/95, col. 191.]

That is fair enough, but, if he says that, he cannot insist that that £165 million should be counted as a saving achieved by the agency. Some part of it may be. It may be a large part or it may be a small part, but at present, so far as I can discover, we simply do not know. If we are to assess the consequence of the Act to the taxpayers, we need to know.

The Minister referred to a lot of coming and going on benefit. In saying that, he touched on the nub of the problem. Before the CSA came in, each month an average of 24,000 single mothers went off benefit for the normal reasons; because they got a job, they got married and so forth. Have all those ordinary "goings off" benefit, which occurred frequently before the Act, been listed as though they were achievements of the CSA or does, as I suspect, no one know the answer? If we do not know the answer, it behoves the Minister to show a good deal less confidence than hitherto in claiming that the Act has been for the benefit of taxpayers.

We have a clear figure for the gross income raised by the agency; it is £64 million if we accept Miss Chant's figures and £67 million if we accept the Audit Commission's figures; £44 million or £47 million in maintenance collected; and £20 million in benefit saved. Any income generated by the agency above that figure rests only on conjecture. But to obtain the real figure—the net figure for which I have asked—we need to calculate it net of the costs of running the CSA.

The costs of this Bill alone come out at £34 million for 1996–97, if the calculations in the Explanatory and Financial Memorandum are correct. I do not know—and I should like to know—whether the calculations in the memorandum are inclusive or exclusive of the costs of employing 750 additional staff. If inclusive, they will be rather poorly paid.

There are start-up costs of the CSA which the Minister on 25th April said were £146 million. I shall give the Minister the benefit of the doubt on that or any possible doubt that I can find. I am not calculating that into any annual figure because I do not know over how many years it needs to be divided. Moreover, I am not calculating any of the income which might have been collected by the Liable Relative Unit if it had continued. It might well be a great deal more than the agency has brought in but, since there is a doubt, L propose to allow the Minister the benefit of it.

On the other hand, the operating costs of the CSA must be allowed. On the Minister's own figure of 25th April, that was £139 million. Those must be allowed in full. Therefore, counting the costs of this Bill and the Minister's Answer, the costs of running the CSA are running at at least £173 million per year. Therefore, at the most generous figure to the Minister at which I can arrive, the CSA is costing the taxpayer a net loss of £109 million every year. It would be very nice to know whether that figure is anywhere near accurate. If it is, everything that the Minister has said about the interests of the taxpayer should be retorted upon him. I do not believe that the Government know any better than I do whether it is accurate. That is why I am asking for a report, because I should like to know whether the CSA is a white elephant or only a very pale grey one. I beg to move.

9.45 p.m.

Lord Mackay of Ardbrecknish

My Lords, the noble Earl has explained that this clause provides that the Secretary of State shall lay before Parliament a report detailing the net savings or loss to the taxpayer resulting from the implementation of the 1991 Child Support Act.

First, perhaps I may deal with the great mystery which the noble Earl managed to make out of the report in the Independent. In fact, the six-line article, which in the jargon of newspapers is called a filler, was not taken from a statement issued by the DSS. In fact, it was information from a freelance journalist who took it from the Permanent Secretary's comment to the Public Accounts Committee. I am quite happy to tell the noble Earl that the summation is correct although the reference to benefit fraud may perhaps not be entirely accurate.

I should say at once that we have no objection whatever to informing Parliament of the financial effects of this or any other legislation which my department has brought before your Lordships' House. Indeed, this rather abbreviated report comes from the Permanent Secretary's comments in public to the Public Accounts Committee. Most important Bills with financial implications are prefaced with a financial memorandum which indicates the expected expenditure consequences of the legislation proposed. The Department of Social Security produces an annual report which indicates the cost of its business. That report is available in the Library.

Further, in relation to child support, the annual report of the Child Support Agency also provides information on the cost of the agency and on benefit savings resulting from its work. Noble Lords can see from the 1995–96 business plan that the agency's benefit savings forecast for this year is £540 million, which was a figure used by the Permanent Secretary to get to the £1.5 billion as reported in the Independent. The financial allocation to the agency in the same year is £183 million. Over the first two full years of operating the provisions of the 1991 Act, the CSA was allocated £294 million in running costs and recorded benefit savings of £897 million.

Of course, those benefit savings come from a number of different directions. However, if the savings are as imaginary as the noble Earl thinks, why does he continue to tell us about all those absent parents throughout the country who appear to be being asked to pay, and are paying very considerable amounts of maintenance? I find that a little unusual. If the agency is not collecting very much money, then the size of the absent-parent problem, if I can call it that, in the country must be a good deal less than the noble Earl suggests.

The figures that I have given are those that we are making perfectly clear in public, both in evidence and in parliamentary Answers. They also appear in the agency's report. Therefore, even on that limited measure, the Act has led to considerably more savings to the taxpayer than expenditure from the public purse. Although progress on the wider aims of the legislation—to ensure that maintenance is assessed and collected effectively—has been much slower than we would have hoped, the agency is now showing real improvement in output and productivity.

It is not because of any wish to conceal the figures that I cannot support the amendment; indeed, I have suggested that the figures are freely available elsewhere. It is because to place on the statute book an obligation of that nature (an obligation which, once complied with in 1996 would cease to have any effect) cannot be justified. It would look very odd if, a few years down the line, one were to read in the Child Support Act a provision, made long ago, requiring the Secretary of State to make a report some years previously which no longer had any effect.

I will reflect further and discuss with my right honourable friend the Secretary of State, and with the chief executive of the Child Support Agency, whether those figures should form a permanent part of the agency's annual report. In my view, the laying of such a report before the House would then be wholly redundant as the information would be available elsewhere. Indeed, all agency reports and the department's own report are available. Therefore, while I appreciate what the noble Earl is trying to find out, I do not believe that it needs to be done by the means proposed. The information is available in the various reports I mentioned. I believe that it shows that the agency has succeeded in very difficult conditions to make the savings for the taxpayer that I outlined.

Earl Russell

My Lords, before the Minister sits down, perhaps I may ask him two questions. First, can the noble Lord tell us when the evidence of Sir Michael Partridge to the Public Accounts Committee to which he referred will he available? Secondly, does the Minister dispute any of the figures I put before the House and, if so, which?

Lord Mackay of Ardbrecknish

My Lords, I do not know when the Permanent Secretary's comments will be published. In fact, they may have already been published. Of course, that is not a matter for me; it is a matter for the Public Accounts Committee in the other place. The hearing was conducted in public, as is obvious because a freelance reporter was present. I am afraid that I cannot help the noble Earl in that respect. However, I can perhaps write to him if he needs to know exactly when the material will be published.

In response to the noble Earl's second question, I am afraid that I have not gone through each and every one of his figures. Frankly, I find it difficult to follow them all. Moreover, I suspect that one of the ways by which the noble Earl arrives at his conclusions is by doing a lot of discounting—for example, by saying, "Those savings would have been made anyway", "That can't be counted", and so on. I have given the figures that we believe are accurate both as to the cost of the agency and as to the amount of benefit saved.

Earl Russell

My Lords, I thank the Minister for that reply. He has given me one useful piece of information; he has given me the present operating costs of the agency which, at £183 million, are rather higher than any figure I had available before. That makes the picture look rather worse than I thought. However, the biggest mystery here is the £897 million of benefit savings. This is the hub of the argument. If the Minister can give me only a little information he might he able to keep me quiet.

In the reply to Mr. Dewar of 7th March there is a category of non-maintenance cessations—benefit ceases following action by the agency. We need to have some information before we decide whether or not to give the CSA any credit for those figures. I do not prejudge that point either way until we have some evidence, but we must have evidence on that. Can the Minister tell me, as he has supplied the figure of £897 million in benefit savings, whether that figure is corrected for the number of people who on average would have gone off benefit anyway? Can he tell me what reason he has for connecting that figure with any action by the agency?

He asks me why the problem of absent parents asked to pay is so acute if the agency is collecting so little money. Of course, the agency is consuming its own receipts to the tune—the Minister says now—of £183 million. The other point to which I have drawn his attention many times is that absent parents are being asked to pay what they do not have. The Minister's answers are getting to sound more and more like the Government's defences of the poll tax where they always insisted that the money must be there if only people would try hard enough to get it. In the case of arrears from the poll tax, they are still insisting on that point and not getting very far with it either. I suspect that after the agency is abolished—which I am sure one day it will be—we will still have this problem of pursuing arrears left over from it.

The Minister says the information is all available but he knows as well as I that there is more than one way in which information can be presented. Even with the best will in the world there is more than one way in which information can be presented. I would like to see someone with competence have a look at this information but as I shall not get anywhere asking that tonight I shall beg leave to withdraw the amendment and return to this subject in the form of Starred Questions. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

10 p.m.

Lord Simon of Glaisdale moved Amendment No. 34:

Before Clause 18, insert the following new clause:

("Calculation of maintenance: repeal of paragraph 4 of Schedule

1 of 1991 Act

. In Schedule 1 to the 1991 Act, paragraph 4 shall cease to have effect.").

The noble and learned Lord said: My Lords, we have heard much this evening about the formula which is indeed what the department, the Child Support Agency and the noble Lord are clinging to. Perhaps that argument reached its crux when the noble Lord said, while keeping quite a straight face, that the welfare of children could be safely left to the operation of the formula. Therefore, the time has now come for us to look at that formula.

The amendment I am moving, which I tabled in a slightly different form at Committee stage, is to remove what seems to me a self-contained provision of the schedule setting out the formula—Schedule 1 to the 1991 Act. I did not move it at Committee stage because it had failed to be called at virtually midnight. The position is not much better tonight as regards your Lordships' role as a legislative Chamber which listens to debate, and after listening to debate comes to a decision in the Division Lobbies. Therefore, I shall not put the amendment to a Division.

I am not sure whether it is a wrecking amendment because I do not understand the formula. In that I believe I am not alone because I have yet to find anybody who claims to understand it. Even my noble and learned friend the Lord Chancellor was invited on several occasions in 1991 to explain how it worked. He is a famous mathematician, so perhaps we lesser mortals may be excused for not understanding it. However, the Minister has had ample warning of the topic that is to be raised, so I turn at once to this provision of the schedule.

Paragraph 2(2) of Schedule 1 to the 1991 Act reads: Where the result of the calculation made under sub-paragraph (1) is an amount which is equal to, or less than, the amount of the maintenance requirement for the qualifying child or qualifying children, the amount of maintenance payable by the absent parent for that child or those children shall be an amount equal to A x P where A and P have the same values as in the calculation made under sub-paragraph (1)".

Sub-paragraph (3) reads: Where the result of the calculation made under sub-paragraph (1) is an amount which exceeds the amount of the maintenance requirement for the qualifying child or qualifying children, the amount of maintenance payable by the absent parent for that child or those children shall consist of a basic element … and an additional element".

The basic element is A x G x P where A and P have the same values as in the calculation made under paragraph 2(1) and G has the value determined under sub-paragraph (2).

We turn to G, which is an item in the basic element, which your Lordships remember is A x G x P. G equals MR (the maintenance requirement) over (A + C) x P. If my recollection is right, A is the assessed income of the absent parent and C the assessed income of the other parent. Therefore we have to add G to A x G x P, G being the maintenance requirement—which is calculated under paragraph (1) of the schedule—over (A + C) x P. That is not merely where it stopped. However, I ask the noble Lord not only to explain that, and what follows, but to say frankly whether he considers that the child support officer, the absent parent, or the caring parent, can possibly understand what it is all about. Those parents ask for bread and they are given a formula.

However, the formula goes on. There is an additional element. Your Lordships remember that there is a basic element and an additional element. The additional element is this: Subject to sub-paragraph (2), the additional element shall be calculated by applying the formula—AE=(1 - G) x A x R", and your Lordships will remember the complicated equation of "G". "A" has the same value: in other words, the absent parent's assessed income. Your Lordships already have the formula for "G". There are no guesses as to what "R" is: R is such number greater than zero but less than 1 as may be prescribed".

However, lest we should be unsatisfied, the sub-paragraph goes on. There is an alternative formula. The provision states: Where applying the alternative formula set out in subparagraph (3) would result in a lower amount for the additional element, that formula shall be applied in place of the formula set out in sub-paragraph (1)".

I have just read that out. The alternative formula for "AE" is:

" Z x Q x (A/A+C)".

I have already reminded your Lordships of "A" and "C".

Your Lordships will be able to guess that, Z is such number as may be prescribed; and Q is the aggregate of any amount taken into account by virtue of paragraph (1) (3) (a) in calculating the maintenance requirement; and any amount which is both taken into account by virtue of paragraph (1) (3) (c) in making that calculation and is an amount prescribed for the purposes of this paragraph".

I repeat those last words: an amount prescribed for the purposes of this paragraph".

I wait avidly for the Minister to explain that extraordinary farrago, and even more eagerly for him to tell us frankly whether he believes that ordinary absent parents, ordinary caring parents, can possibly understand what they are being offered. If they cannot understand, it is most improper legislation. It is just the legislation of the bureaucracy which animates this whole scheme. I beg to move.

Lord Lyell

My Lords, I have listened to 10 minutes of explanation by the noble and learned Lord, Lord Simon. I hope that I have been paying adequate attention to proceedings on the Bill tonight. The noble and learned Lord made the formula reasonably clear, step by step. I am sure he will accept that when he compares what he explained with some of the green pound calculations which we, as agriculturists, have to carry out, it seems fairly simple.

Lord Simon of Glaisdale

Does the noble Lord think that he would understand how much maintenance he was being offered under the formula and why?

Lord Lyell

Certainly not why, but I suspect that the officials who are explaining it to the absent parents or the concerned people would master the formula fairly quickly. The noble and learned Lord put his finger on the reason for his amendment when he said that it would be difficult for the official to explain why. In my own mind, the reason for the complicated formula is that the whole area is fraught with many factors which have been brought in step by step as the legislation has proceeded.

It takes me back to my 0-level mathematics and algebra, remembering the simple rules and simple drills. I am sure that the noble and learned Lord will accept that now students of O-level mathematics are masters of fairly simple calculating machines. I have a great deal of sympathy with what the noble and learned Lord said, but I hope he will accept that he explained the matter so well that he made it much simpler to me.

Earl Russell

My Lords, before the noble Lord, Lord Lyell sits down, if he has understood it he can perhaps explain it to me.

Lord Lyell

My Lords, with the leave of your Lordships' House, not tonight as I look happily at the gleam in the eye of my noble friend on the Front Bench who is burning to explain it himself. He can do it in half the time.

10.15 p.m.

Lord Mackay of Ardbrecknish

My Lords, the noble and learned Lord, Lord Simon, has read out the formula used in this instance. Of course, given way he put over the formula, it sounds complicated. However, as my noble friend Lord Lyell pointed out, a simple blackboard or, in these modern days, an overhead projector would allow a child with a fairly basic knowledge of algebra to follow the formula. There are not too many complications in it; it is all letters. There are no sines and cosines, no tangents, integrations or differentials. If the noble and learned Lord thinks that it is a difficult formula, then he has clearly not seen any of those used by mathematicians, engineers, designers and a host of other people whose formulae would give him much cause for complaint.

The formulae are laid out and what the letters say is clearly laid out. It is complicated, but when it is seen on paper it is a good deal easier to follow than when it is read out. I have to tell the noble and learned Lord that that is the case with all formulae of any kind, even simple ones.

The amendment would mean better off absent parents paying only the maintenance requirement calculated for their children's basic maintenance needs. They would no longer pay the additional element, irrespective of how high a level of income they have. The formula which the noble and learned Lord read out was part of the formula laid down in order to calculate the additional element.

Perhaps I may explain it without the use of the formula, which is a good deal easier in speech. The maintenance requirement is calculated using income support rates as a benchmark for the basic needs of the children. The absent parent is required to contribute towards this figure from his assessable income at the rate of 50 pence in the pound. Assessable income is net income less allowances for living expenses, housing costs and any allowable travel-to-work costs. If he still has income left after meeting the maintenance requirement, he continues to contribute but at the lower rate of either 15, 20 or 25 pence in the pound, the exact rate depending upon the number of children for whom he has liability. This extra contribution is the additional element that the amendment would abolish. The additional element is intended to allow children in first families to share the prosperity of an absent parent as they would have done if the parents had not separated. The deduction rate is set lower than that used to meet the maintenance requirement in recognition of the fact that the proportion of income a parent retains for his own use is likely to increase once the basic needs of his children have been met.

If the amendment were accepted, the maintenance requirement, which is fixed by reference to income support levels, would be the maximum payable for any child, even if the absent parent were wealthy. Very few children whose parent with care was on income support would see any improvement at all in their standard of living unless the parent with care obtained a so-called top-up order. This would involve going to court for the initial order and further applications to the court for any future variations. So the parents with care involved would suffer the inconvenience which the one-stop service provided by the agency was intended to avoid; would probably incur extra costs; and all this with no guarantee of a successful outcome.

Earlier in the Report stage I drew attention to the fact that, whatever iniquities are being laid at the door of the agency and the formula, the fact is that most first families are still poorer than second families. That is particularly true if the man in question has a reasonably high or very high income. His second family will enjoy all those benefits. If the noble and learned Lord's amendment were accepted, a man's first children, for whom I believe he has considerable responsibility, would receive nothing other than the bare minimum. I cannot believe that that is right.

We fully recognise that there comes a point where maintenance is providing quite a high standard of living for a child and it would not be right to require more under a formula approach. So current rules already ensure that an absent parent's maintenance liability does not increase indefinitely as his income rises. We consider that these rules are fair.

It is important to remember that from April 1993 all separating couples, with the exception of those where the taxpayer is not involved and the parties are able to reach an amicable agreement, have to use the Child Support Agency to make arrangements for child maintenance. This amendment fails to recognise that many of those involved will have incomes well above those paid to income support recipients. It is quite illogical to suggest that liability in such cases should be restricted to the maintenance requirement, which is based on income support levels. The additional element represents a logical method of ensuring that better-off absent parents make a contribution to maintenance that is commensurate with their level of income. It is a necessary part of the scheme.

The noble and learned Lord has a bit of fun at my expense on the issue of the formula. However, I hope that he realises that the additional contributions represent a serious point. There are good grounds, to which I believe the great majority of people would subscribe, for agreeing with that.

Lord Carter

My Lords, before the noble Lord sits down, on a point of information, does he agree that it is unusual to expect a layman to read an Act of Parliament and use that as his guide? Is he aware that the excellent Child Support Handbook, produced by the Child Poverty Action Group, was reviewed by Woman's Own as giving, a thorough explanation of the system"; by the New Law Journal in these terms: It is hard to beat the CPAG guide … it is outstanding value for money. It is clearly written and easy to find your way around"; by Legal Action as, Very readable … it gives a good and easy-to-understand exploration of the formula"; and by The Adviser in this way: This book will undoubtedly take its place as the standard and indispensable guide for advisers"?

Lord Mackay of Ardbrecknish

My Lords, the noble Lord is quite right. I am reading Child Support: The Legislation, a commentary by Edward Jacobs and Gillian Douglas. If we are advertising books, we might as well both do it. The noble Lord makes a very valid point. The handbook is clearly set out, and anybody going through it will be able to work out the amounts; and certainly with the help of the agency an absent parent can clearly see how the conclusions were drawn.

But the main point of this amendment is the one that I make about an absent parent who has a reasonable standard of living and a reasonable income. My contention is that his first child or children ought to share in some of that prosperity.

Lord Simon of Glaisdale

My Lords, the noble Lord has explained the object of the formula but not at all how it works. His speech has once again been redolent of objurgations against absent fathers. He deals with the very rare case in which the absent father has a high standard of living; he keeps a second family and the first family is on the breadline.

I have spent much of my life dealing with such maintenance problems. Throughout this evening what the noble Lord has been pursuing is a vendetta which the department and the Child Support Agency have maintained against absent parents. As I said earlier, picking up an observation of the noble Baroness, Lady Hollis, the normal picture is that ordinary people, overwhelming in number, cannot afford two families. As soon as the divorce law is altered, enabling an ordinary person to have two families, in the overwhelming majority of cases both families go down to the poverty line—both of them. It is quite wrong to draw the picture of the poverty stricken first family and the opulent second family, rolling in wealth. That can hardly happen except in a minority of cases.

We greatly welcome the advent to our debate of the noble Lord, Lord Lyell. He invited the Minister to say that the officials could explain the formula to the unfortunate parent. In that the noble Lord was woefully disappointed. There was no such explanation. If the formula is so explicable, why has there been this state of egregious error in assessing maintenance payments under the Act? The truth is that the officials, no more than my noble and learned friend the famous mathematician, have been able to understand what this is about. All that they would be able to do would be to fit figures to corresponding letters and work out a formula.

As I said, it is simply not good enough to legislate in this way such that the people who are affected cannot understand what is happening to them. I have no sympathy at all with the violence shown to the child support officers. But many of the people have felt deeply ill used because, instead of an explanation, they are given a formula that they cannot understand even when it is explained to them. As I said, I do not propose to press this amendment to a Division. Accordingly, I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 35:

Before Clause 18, insert the following new clause:

("Exempt income of absent parent: amendment of Schedule 1 to

1991 Act

. In Schedule 1 to the 1991 Act, after paragraph 5 there shall be inserted—

"5A.—(1) Regulations implementing paragraph 5 of this Schedule shall ensure that the exempt income of an absent parent or a parent with care includes—

1. (a) an allowance in respect of the full amount of any council tax or water charges in respect of the parent's home;
2. (b) an adequate allowance in respect of the liabilities referred to in sub-paragraph (2) below.

(2) The liabilities in question are any debts, obligations or other liabilities of the relevant parent which—

1. (a) are legally binding on him (whether under civil or criminal sanction); and
2. (b) arise from transactions effected, or events occurring, before the date specified in sub-paragraph (3) below.

(3) The date in question is—

1. (a) in the case of an absent parent, that on which he first received a maintenance enquiry form under this Act;
2. (b) in the case of a parent with care, the date on which she first submitted to the Secretary of State a completed maintenance application form under this Act.

(4) An allowance in respect of a liability referred to in sub-paragraph (1) (b) above shall not be regarded as adequate within the meaning of that provision, unless (on the basis of weekly equivalence) it is at least equal to—

1. (a) the amount payable periodically by the parent in question in respect of the liability in question under arrangements which were in existence at the date referred to in sub-paragraph (3), where such arrangements then existed; or
2. (b) in any other case, the minimum amount which would be necessary to enable the liability to be discharged by periodical payments within 12 months of the effective date of the maintenance assessment in question." ").

The noble Earl said: My Lords, Amendment No. 35 is, in effect, a rule of law amendment. It deals with certain other expenses which should be taken into account. It proposes an allowance in respect of the full amount of any council tax or water charges and an adequate allowance in respect of a number of others. It applies to both the absent parent and the parent with care, so the Minister cannot answer it by continuing to preach the gospel according to St. Mellons.

The liabilities for which an adequate allowance is to be made are debts, obligations or liabilities which are legally binding under civil or criminal sanction and arise from transactions before, in the case of the absent parent, he first received a maintenance inquiry form or, in the case of the parent with care, when she submitted a completed maintenance application form. In other words, it deals with liabilities honestly entered into before any liability under this Act arose—in short, with prior liabilities.

The Minister will be in considerable difficulty if he starts trying to argue that this is downgrading the priority for child maintenance. Child maintenance is necessary but I cannot see that it should be argued against the law. The Minister argued when we were on this matter last time—I am trying not just to repeat what I said before but also to respond to what he said—that this would create an improper difference between families subject to the CSA and other families outside. That is not a valid argument. It is really quite the other way. All the rest of us, if we have binding legal liabilities which we cannot get out of, have to meet those liabilities and we have to attempt as best we can to maintain our children out of what is left.

If I were to owe a large debt to my bank I would not be able to get away with telling my bank that I could not pay it because I had to maintain my children. I do not think that it would be particularly impressed. If I were so unwise on my way home tonight as to drive in a way which incurred a court fine I could not tell the court that I could not pay the fine because I had to maintain my children. I would get very short shrift indeed for that answer.

I do not see why people who are subject to the CSA should be in precisely the same position. They, too, have certain legal liabilities which they must meet—under civil or criminal sanction, in the words of the amendment—and if they do not, they suffer penalties. If the formula is having the effect of putting them in a position where they cannot meet those liabilities—which I know from my postbag is often the case—account must be taken of it.

We have a government who purport to uphold the rule of law but tend to see the rule of law in ways almost exclusively to their own advantage. But that is not what the rule of law is about. The rule of law is supposed to be an impartial rule between subject and ruler. We need some recognition of the need for people to keep the law. If the Minister argues otherwise, he must insert into the Bill, which he presumably still could do at Third Reading, a proviso allowing people, in order to enable them to pay their child maintenance, to default on their court fines, to default on their legal debts, to default, indeed, on their income tax. If he did that he would be going against a very long history of the Crown's attitude to its own debts. It would be a profoundly mistaken approach. If he has any respect for the rule of law he ought to accept this amendment. I should like to hear what he is going to do about it. I beg to move.

10.30 p.m.

Lord Mackay of Ardbrecknish

My Lords, this amendment would extend the range of expenses which can be included in exempt income, which is the part of a parent's net income which is not available for payment of maintenance. It represents sums allowed for a parent's basic expenses.

Exempt income includes standard amounts for the normal living needs of the parent and any of his children who live with him; an allowance for housing costs and, where appropriate, an allowance towards the cost of travel to work. In addition, an absent parent keeps at least 50 per cent. of any income over and above his exempt income. The broad principle is to ensure that all absent parents should retain a substantial proportion of their net income after paying maintenance, so that they have flexibility in planning other expenditure. The Government recently underpinned this principle with a provision to cap maintenance payments at 30 per cent. of an absent parent's net income.

The amendment proposes making provision for council tax. There is no allowance for council tax in the basic maintenance calculation. It is an expense to be met from the margin of income left over after maintenance has been paid. An allowance for council tax is, however, included in protected income. So there is a safeguard for less well-off absent parents. Water charges should similarly be met from the absent parent's remaining income after maintenance. I would remind your Lordships that people on income support have to meet these charges from their benefit. After all, an absent parent would be left at least with benefit levels in excess of these levels. So absent parents would not only have the equivalent of income support rates allowed before maintenance is calculated, but they would actually keep a large proportion of their income above these levels. Therefore, they are not in a different position from someone on income support who has to meet these charges from that income support.

The proposal would also make allowance for any other legally binding liabilities which were incurred before the Child Support Agency's involvement in the case. Allowance would be made irrespective of the amounts involved, of whether or not the parent could afford to meet the liability when it was first acquired; or of the nature of the debt or obligation, even if it was for luxuries or for some other purpose which might reasonably be considered less important than the support of the parent's own child.

Your Lordships will be aware that the departure system proposed under the Bill will make provision for certain debts and other financial commitments where these are causing difficulty. We believe that the departure system, with its provision for discretion and for balancing the interests of all parties, is a more equitable way of dealing with these issues than that proposed by the noble Earl, which would allow any and all such liabilities automatically to take precedence over the child's needs.

The noble Earl's proposal also includes provision for liabilities under criminal sanction. Fines are a sanction against people who break the law, not against their children. To suggest that an offender should be able to offset a fine against his child support liability strikes me as totally unacceptable. I am not going to fall into the rather clever, but totally false, trap that the noble Earl tried to lay for me, that if I am not prepared to allow it to be offset, then I should excuse them from paying a fine. That really is a false trap. The position is that anyone who incurs fines has to try to pay for them out of income. They are allowed to pay them in weekly instalments to the court, so there is a way in which they can spread their fines. I shall resist saying that they should avoid getting themselves into a position of having to pay fines in the first instance. The fact is that I do not believe that it would be in any way proper to say that payment of a fine incurred by an absent parent should be given precedence over the maintenance due to his child.

The exempt income calculation already makes allowance for a parent's basic living costs, and he keeps at least 50 per cent. of his income over and above that. The new provisions for departures from formula assessments, which we have already included in the Bill, will deal with exceptional expenses. I believe that this amendment goes much further than is acceptable. With my explanation of where I stand on this, I hope that the noble Earl will feel able to withdraw it.

Earl Russell

My Lords, the Minister has not fallen into what he described as the trap that I have set him but he has fallen into the one that he set himself. He has fallen into the trap into which all Administrations have fallen since records began -of believing that things are as they appear when Ministers read their papers in their offices. They are not.

If the formula was working as the Minister thinks that it is, his argument would be perfectly reasonable. If there were enough basic income left over to meet all the obligations, or even to create a reasonable chance that, with care, one might meet them, what the Minister says would be perfectly accurate, but he simply is not aware of how small is the proportion of their income over which most people can exercise choice. If the Minister had seen as many payslips and statements arising from the Act as I have from reading my post-bag, he would know perfectly well that for a great many people the reasoning that he has put forward—sound though it might appear in principle and in the abstract—simply will not work because there is not enough money. Governments ought to know what it means not to have enough money - it happens to them often enough. It happens to other people as well.

If one had proposed to increase taxation by the amount that some people's costs have been increased by the increase in child maintenance, those on the Government Benches would have created such an outcry that you would have heard it from here to kingdom come. They really do not know what is going on out there. Some day I hope that they will know. I hope that a certain amount of constituency casework might bring it home to them. I shall not do it tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 36:

Before Clause 18, insert the following new clause:

("Day to day care: amendment of regulation 1 of the Child

Support Regulations 1992

.—(1) The definition of "day to day care" contained in regulation 1(2) of the Child Support (Maintenance Assessments and Special Cases) Regulations 1992 (as amended) shall be amended as follows:

(2) For "104 nights", or each occasion where that expression occurs, there shall be substituted "52 nights".

(3) At the end of the definition there shall be inserted— (iii) a person shall be taken to have care of a child where he would have actual care if a court order which is in force were being properly complied with by another person, and a person shall be treated as not having care of a child where she has actual care in consequence of her failure properly to comply with a court order; and for this purpose a court order shall be regarded as properly complied with by a person only if she makes every reasonable effort to give effect to its terms and purposes.").

The noble Earl said: My Lords, this amendment deals with what has become known as the 104 nights rule. It provides that care is to be treated as shared if the child spends 104 nights a year in the care of the allegedly absent parent. That is recognised as creating a situation in which the absent parent becomes, for the time being, a parent with care and the formula is adjusted accordingly.

There is one small defect in the wording of the amendment. If by any remarkable chance the Minister feels inclined to accept it, we shall have to tidy it up later, but since that is an unlikely eventuality, I thought it better not to withdraw it and bring it back on Third Reading in a redrafted form since the principle can perfectly well be debated now.

The insistence in the Act that only one parent can be treated as having care while the other is deemed to be "absent" runs against many recent developments in family law which have tended towards thinking in terms of shared residence and of both parents as being continually involved. When it can work with reasonable harmony - of course, it cannot always - that is very much in the interests of the children and is to be encouraged. The insistence that only one parent is to be treated as having care tends to go against the pressure that the law has rightly been exercising in other fields to try to push the parents to recognise a continuing sharing of care even after divorce. You have to go a certain amount against the grain to get that through to divorced parents. But the legislation pushes them back towards an attitude into which many of them fall too easily anyway—of thinking of only one parent as having care.

It was, I think, the original intention of the rule as now drafted that the 104 nights represented every weekend of the year, so that any care less than every weekend of the year was to be ignored. In Committee the noble Lord, Lord Kilbracken, made the important point that for practical purposes, if you have to be at school on a Monday morning, the weekend is one night even if it may be two days. So in fact every weekend of the year, which was the Government's original intention as I understand it, is represented by 52 nights, not 104.

There is some case for arguing that the amendment is not only good in itself; it is a more accurate representation of the Government's original intention than the bureaucratic, as distinct from imaginative, drafting of the 1991 Act succeeded in achieving on its own account. This deserves consideration. There will be more heard of it until something is done about it. At some time the conflict between this and the development of family law will need to be resolved. I beg to move.

Lord Kilbracken

My Lords, I supported the noble Earl when he put down a comparable amendment in Committee and I have added my name to the new version he has put down today. First, I agree with him very much that it is considered more and more important in our courts that care should be shared by both parents, although of course to talk about care and control nowadays is now no longer appropriate since the Children Act when care and control ceased to exist, and instead we talk about residence orders and access orders. So to talk about a parent with care is inappropriate.

I have objected again and again to the use of the phrase "absent father". Without going into that again, I intend to speak, and always will speak, about the "so-called absent father".

Since Committee I have tried to look with more care at this legislation. I have found out, and realise fully, how extremely complicated it is. I agreed completely with what the noble and learned Lord, Lord Simon, was saying about the complexity of the formulae that are used, which really are incomprehensible without the assistance of an accountant and a solicitor, preferably armed with a very sophisticated computer. It seems to me most unfortunate that in legislation of this kind it should be impossible for those who are personally involved (the father and the mother) to work out either what sums should be payable under the Child Support Act or a great many of the other details in this legislation.

The noble Earl has indicated that there is a slight flaw in our amendment, if I may use the first person plural, in that it refers to:

"For '104 nights', or each occasion where that expression occurs, there shall be substituted '52 nights'".

Unfortunately, on studying the legislation I could not find any occasion on which 104 nights occurred. The phrase instead is "two nights a week". So this should be amended on a later occasion by substituting: For 'two nights' a week 'one night' a week"; that is, on average throughout the year.

What precisely, I ask, is the significance of these two days per week on average throughout the year. I had not fully realised what it meant. What I think I found, but I am sure the Minister will correct me if I am wrong, is that it is laid down in one of the schedules—for heaven's sake do not ask me which of them—that certain of the outgoings of the so-called absent father are claimable 100 per cent. by him as exempt income, but with certain other outgoings only a fraction of them is claimable. That is the same percentage as the percentage of nights a week spent on average over the year with the child. That is presumably because it is recognised that the more time a so-called absent father spends with his children the more compensation he deserves.

It is obvious that it can never happen that the child spends an average of more than three-and-a-half nights a week with his so-called absent father because if he did he would be spending exactly as much time with the father as with the mother. I do not believe that even the Government could then continue to refer to the father as being absent. But if the father did spend an average of three-and-a-half nights a week with his child then three-and-a-half sevenths, or 50 per cent., of these sums would be claimable. If he spent an average of two-and-a-half nights a week it would be two-and-a-half sevenths, or five fourteenths, and so on.

Under the Act as it exists at present, if the average number of nights spent by the father with the child is under two a week—if it is 1.9 a week, and decimal points are perfectly possible—no such sums are claimable as exempt income. This amendment would bring down that minimum figure from two nights a week to one night a week.

As I stated in Committee, I have an interest in the matter as the father of a young son from whose mother I am unhappily divorced. However, I have no financial interests because my matters have never come under the Child Support Act. I gave the example of my own case. I have very liberal access, by normal standards, to my young son. I spend more time with him than 90 per cent. of fathers in my position; it comes to 71 days a year, which is 19.5 per cent. of the days in the year. That is the equivalent of 1.365 nights a week.

Therefore, a father in my position spending so much time with his son would not be eligible for relief under the Act as it exists at present. However, under the amendment that I have tabled with the noble Earl he would be. Even in that case, the financial benefit to him would be only a small fraction of the extra costs to him of those 71 days with his son or daughter. That is probably, let us say, £700 a year. In my case it is usually much more, plus the fares between here and Ireland and my own fares to his mother's home and so on. At the same time, the mother makes considerable savings because for those 71 days she has no expenses in respect of him.

I ask the Minister once again: why should that not be taken into account? Why should the so-called absent father receive no compensation whatever for that? Why is it completely ignored?

Lord Mackay of Ardbrecknish

We had a debate on a similar amendment in Committee. Indeed, it was an almost exact replica. The normal duet of the noble Earl and myself was changed into a trio by the presence of the noble Lord, Lord Kilbracken. I shall not risk boring the House by repeating the arguments I put forward in Committee.

As I said then, the amendment is founded on a misunderstanding of two related but entirely distinct concepts: that of care and that of contact. The Government clearly support—as did the noble Lord, Lord Kilbracken, in his speech—the principle that following the break-up of a relationship, children should keep in touch with both parents where that is in their best interests. But there is a clear distinction between contact visits, even if those involve overnight stays, and providing for the regular care needs of the child.

For there to be shared care, the absent parent must be making a substantial contribution to the care needs of the child and thus incur a substantial proportion of the costs associated with his support. The existing provisions allow for an absent parent's maintenance liability to be reduced where he is providing a significant amount of care for a child. We believe that the average of two nights a week continues to provide an appropriate benchmark. Much was made of school and Saturday and Sunday and the fact that if the child goes to school on Monday morning the chances are that the child will return to the parent with care on Sunday evening. But Friday night has been ignored. I assure your Lordships that in Scotland that is considered to be part of the weekend. After school on Friday, there will be plenty of time for the child to join the absent parent to have a two-night weekend, which gives him the whole of Saturday and Sunday until the evening.

Lord Kilbracken

My Lords, I thank the noble Lord for allowing me to intervene. But many children, including my own, have to go to school on Saturday morning.

Lord Mackay of Ardbrecknish

My Lords, I do not believe that many children have to go to school on Saturday morning. I suggest respectfully to the noble Lord that those children who go to school on Saturday morning clearly have parents who are paying school fees. That will assuredly take them beyond the scope of income support and the remit of the Child Support Agency, as the noble Lord suggested. I am afraid that I shall not consider too carefully the needs of people who can afford to send their children to boarding school because they will not be encompassed by the agency's work. It is more likely to affect children attending state schools who probably live near the parent with care and, therefore, there is not much of a problem in relation to Friday night.

One night of care per week is 52 nights per year. Of course, the chances are that 14 nights may be taken as a holiday period and, therefore, it is not a case of every weekend in the year. If the figure were dropped to one night of care per week as representing a genuine sharing of responsibility, we should be disadvantaging seriously the parent with care because it is most unlikely that where that amount of care is being provided by the absent parent there will be any noticeable reduction in the costs of bringing up the child for the parent with care. It would be unreasonable to make her suffer a drop in the income she was receiving while having to look after the child. As I said in Committee, 104 days is a reasonable, sensible figure at which to draw the line. I hope that, having heard my argument again, the noble Earl will withdraw the amendment.

Earl Russell

My Lords, the problem with all the reasoning based on the Bill is that it all starts from the premise: either one parent or the other. That is not a very constructive approach for dealing with parents who are separated. It tends to produce a picture in which children are assumed to have to choose one parent or the other. Sadly, sometimes, it is that way. But one does not need to create an administrative framework which makes it that way when it does not have to be so.

The other matter which strikes me increasingly as I listen to the Minister is that the present method of calculation—two nights per week—has a strong built-in bias in favour of two separated parents living in close geographical proximity to each other. Those, of course, are precisely the ones where help to maintain contact is least needed.

Let us suppose, for example, that one parent is in London and the other is in Oban. Would the Minister wish to encourage the child, who may be quite young, to set off from Euston Station after school on a Friday and go to Oban that same night? It is quite a long journey for a seven or eight year old. Even without invoking anything quite as extreme as Oban, I still think that, as a parent, when a child comes rather tired out of school late on a Friday afternoon, and with Friday trains stopping earlier and earlier each year, I should hesitate to encourage him to go on a very long journey that night.

Therefore, the two nights a week will really only apply where the two separated parents live in fairly close geographical proximity. Well, it is hard enough for parents to keep contact with their children if they are a long way away. My honourable friend Mr. Kirkwood had one absent parent in Roxburgh, while the children were living in Plymouth. He had no end of trouble keeping contact over that. In that position, one really cannot manage two nights a week of contact. It does not mean that one wants any less to see one's children.

I cannot help suspecting that the Government fixed on the formula of two nights every week simply because it is administratively simpler. That is no way to treat real people. Can they not use a little imagination? However, it is clear that we shall not get imagination tonight. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 [Deferral of right to apply for maintenance assessment]:

[Amendments Nos. 37 and 38 not moved.]

Earl Russell moved Amendment No. 39:

Page 14, line 8, at end insert: ("(12) Nothing in subsection (10) or in any commencement order or regulation under this Act shall have the effect of preventing or delaying, transitionally or otherwise, the making of an application for child support maintenance under this section by a person who, or whose partner, is subject to an assessment of child maintenance as a result of an application under section 6 of this Act." ").

The noble Earl said: My Lords, the above amendment deals with a situation which has come to be known among those involved with the legislation as the "pig-in-the-middle" situation. It is a situation where the first wife is on benefit and has come within the legislation, so the husband of the first wife is paying maintenance. He is married to a second wife, herself divorced from a previous husband, who has not been on benefit. Her former husband has not been brought within the legislation and is, perhaps—as we on these Benches have always admitted some parents do—evading his responsibilities. It does happen, although it is not the normal situation.

In such a case, the unfortunate man is paying out maintenance for one lot of children, but his wife, who has another lot of children—his step-children—is not getting anything coming in for them. Therefore, in effect, the man is carrying the whole weight of supporting two lots of children. It is one of many cases in which the Government's principle that children must be the responsibility of their natural parents does not work in practice; indeed, any principle quite so general very often does not. I hope that the amendment will receive some consideration. I beg to move.

Lord Mackay of Ardbrecknish

My Lords, as your Lordships know, the Government's original plan was that all cases would come into the agency's jurisdiction within four years. However, because of the problems faced by the agency and the need to introduce new procedures, particularly the departure scheme, that will not prove possible.

Once again I have to reiterate to your Lordships that the highest priority for take-on are those people who have no access to the courts, or those who are claiming benefit and who are being supported by taxpayers. Of course, I do have sympathy for those parents with care who receive only a small amount of maintenance through a court order while their current partners pay out a larger amount in child support maintenance to their first wives and first families. However, those parents with care are able to apply to the courts to have their orders varied. The mere fact that the family finances have been affected by a child support assessment is a change of circumstances which could be put to the court in support of an application to vary the order. We do not want to jeopardise the smooth introduction of other provisions by taking on these cases immediately. I am beginning to get a bit uncertain as to what we discussed in Committee and what we are discussing on Report but I certainly know that this matter was discussed in another place. As my right honourable friend the Secretary of State made clear in this instance, we do not believe that we can give way to this request. My suggestion is that the parent with care in those circumstances should consider returning to the court to have the order varied.

11 p.m.

Earl Russell

My Lords, I thank the Minister for that reply. I understand the point that he is making. Perhaps where the procedure he suggested for any reason does not prove effective he might consider this as a case where a departure under this new Bill might be allowed because there are some cases where hardship does arise, sometimes because there is no money to be recovered from the former husband of the second wife, sometimes because he is perhaps ill, mentally ill, or out of the country. In particular, if he is out of the country returning to the court to recover money can be very difficult indeed. So there is, I think, a slightly bigger problem here than the Minister has allowed for, but he is awake to its existence. I thank him for that and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 [Non-referral of applications for maintenance assessments]:

Lord Mackay of Ardbrecknish moved Amendment No. 40:

Page 15, line 17, leave out ("person") and insert ("parent").

The noble Lord said: My Lords, this amendment resolves a minor technical inconsistency in the wording of Clause 19 which occurred when an amendment was made to the clause in another place. Clause 19 currently refers to the person with care (page 15, line 17) but later refers to the same individual as the parent with care (page 15, line 28). The amendment corrects this minor inconsistency by using the phrase "parent with care" in both instances and I commend this minor amendment to your Lordships. I beg to move.

On Question, amendment agreed to.

Clause 20 [Disputed parentage]:

Lord Carter moved Amendment No. 41: Page 16, line 5, leave out from beginning to end of line 7 and insert ("any other proceedings concerning the qualifying child with respect to whom the declaration of parentage was made."").

The noble Lord said: My Lords, in moving Amendment No. 41 I wish to speak also to Amendment No. 42. The two amendments deal with a rather complicated point which in each case was debated in Committee in another place and the Minister in each case said he would consider them further and respond, but I do not think he has done so. This will give the Government an opportunity to do that. I quote from Standing Committee E: The new subsection 27(3) to the Child Support Act 1991 inserted by the clause provides that a declaration of parentage made under the Act shall have effect in relation to proceedings under the Act and other proceedings for related court-based applications for maintenance for children. The purpose of the amendment is to extend the effect of that provision so that a declaration of parentage made under the 1991 Act has effect whenever a question about the child's paternity arises in other proceedings, saving those with care from having to make more than one application for a declaration of parentage in relation to the same child. The Government may oppose the amendment on the basis that it would allow women on benefit to apply at the state's expense for a declaration of paternity that they could then use for other proceedings, but that argument is flawed for three reasons. First, other declarations in family proceedings are generally binding—for example, sections 56 and 58 of the Family Law Act 1986, dealing with declarations of legitimacy and legitimation. Secondly, if the declaration is not binding in all other proceedings relating to the child and a second declaration has to be sought, the cost to the state will be increased, since individuals in that category are likely to be eligible for legal aid. If individuals in that category are not on benefit, the agency will not undertake work to obtain a declaration for them. Thirdly, that argument ignores the state's interest in obtaining the declaration. The agency applies for declarations in benefit cases only when it is thought that some financial benefit will accrue to the Government through benefit savings due to higher maintenance payments".—[Official Report, Commons, Standing Committee E, 25/4/95; col. 185.]

As I said, when this was debated in the other place in Committee the Minister, Mr Arbuthnot, said, In view of the wide range of situations that could be affected by the amendment, I shall consult my colleagues in other Government Departments about the best way to proceed and I shall return to the House on Report to advise honourable Members of the results".— [Official Report, Commons, Standing Committee E, 25/4/95; col. 186.]

I do not believe that the matter was discussed on Report in the other place.

Amendment No. 42 is also rather complicated. Section 26 of the Child Support Act 1991 currently provides that an alleged absent parent is deemed to be an absent parent where, for example, the child is adopted. The fact that that section does not currently incorporate the current common-law presumption of legitimacy and the statutory provisions concerning legitimation means that formerly married absent parents are able to manipulate the agency by denying paternity. The purpose of the amendment is therefore to ensure that the common-law presumption of legitimacy and the statutory provisions concerning legitimation are incorporated in the Child Support Act 1991.

Again, this issue was debated in Committee in another place, and, again, the Minister promised to consider the matter further; but there has been no response, so far as I am aware.

It would be helpful if the Minister could indicate the Government's position on the amendments. I beg to move.

Lord Mackay of Ardbrecknish

My Lords, as the noble Lord, Lord Carter, said, the amendments have already been discussed in another place.

Amendment No. 41 would allow for a declaration of parentage under Section 27 to be relied on in any future proceedings involving the qualifying child. While it would not necessarily be disadvantageous for all those involved to use the paternity declaration made under the Child Support Act, we would need to ensure that there were adequate safeguards if the declaration were to be valid in determining wide-ranging issues relating to a child's upbringing, and this cannot be done without full and proper consultation. Similarly, we would need to consider whether a declaration of paternity obtained for non-child support purposes, other than those currently set out in the Child Support Act, should be binding for child support maintenance assessments.

Amendment No. 42 is concerned with presumptions of paternity. There is already a presumption in Scottish statute law that a child of a marriage is deemed to be the child of both parties to that marriage. The 1991 Act recognises this presumption so that, in Scotland, a child support officer can make an assessment for maintenance if the alleged parent was married to the child's mother at any time between the child's conception and birth. Amendment No. 42 would extend the presumption of paternity to England and Wales. Such a presumption already exists in common law in England and Wales and it may be desirable to establish it in statute law. However, again we need to consider possible implications for other areas of law such as property and inheritance, registration of births, parental responsibility, immigration, residence and contact issues. Responsibility for those issues ranges across a number of different government departments, and the implications need to be fully considered and discussed.

The Lord Chancellor has general policy responsibility for family law issues, and he has agreed to co-ordinate a consultation exercise on both of these matters. I understand that the exercise will commence shortly. However, such an exercise could not be concluded in time for any changes in the law to be introduced in this Bill.

I appreciate that that may come as something of a disappointment to the noble Lord, Lord Carter, but I hope that he will understand that, while I very much take the points made in his amendments, there are other wider issues which my noble and learned friend the Lord Chancellor will have to consider and that we shall have to consult on these matters before we can come to any conclusion.

Lord Carter

My Lords, I am grateful to the Minister. That is what the Minister said in the other place on 25th April. I thought that by now the consultation might have taken place. It would be helpful if we could be given some idea of when the Lord Chancellor's work will be completed.

I am pleased to know that, as is often the case, Scottish law deals with a problem that is not dealt with in English law. However, I am surprised that the Minister referred to parents who were married between conception and birth; surely it should be before conception and birth.

However, I understand what the Minister said. At least the Government recognise the problems. I hope that when the Lord Chancellor's group completes its work they will be able to deal with this point. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 42 not moved.]

Lord Carter moved Amendment No. 43:

After Clause 23, insert the following new clause:

Limits on reduced benefit direction

(".—(1) Section 46 of the 1991 Act shall be amended as follows—

(2) After subsection (5) insert—

"(5A) Subsection (5) shall not apply in cases where—

1. (a) the person with care or any child that would be affected by a reduced benefit direction is disabled, or
2. (b) the benefit entitlement of the parent with care has already been reduced by reason of a deduction to pay any outstanding debt."").

The noble Lord said: My Lords, in moving the amendment, I speak also to Amendment No. 48 in the name of the noble Lord, Lord Mackay. I believe that that amendment is a good example of what one can do if one's intention is to improve the Bill and not to wreck it. Amendment No. 43 was tabled before I knew the exact timetable in which the Minister intended to put down his amendment. I am fairly clear that Amendment No. 48 deals with the point that I raised in Committee. The Minister kindly agreed to come back with his own amendment to deal with the matter through regulations. I refer to the exemption from benefit reduction of parents who are disabled or who have a disabled child, and those who are already repaying a loan from their benefit.

I shall formally move the amendment. If the Minister will speak to his amendment, Amendment No. 48, to explain how the provision overtakes mine, I shall beg leave to withdraw Amendment No. 43. He can then move Amendment No. 48 on the Marshalled List. I beg to move.

Earl Russell

My Lords, perhaps I may ask the noble Lord, Lord Carter, to withdraw his reference to wrecking the Bill. If I had intended to wreck the Bill, I would have moved very different amendments from those that I have moved.

Lord Carter

My Lords, I have not the slightest intention of withdrawing that remark.

Lord Mackay of Ardbrecknish

My Lords, during Committee stage the noble Lord, Lord Carter, tabled an amendment so that where a parent with care who refuses to give her authority is disabled or has a disabled child, or where deductions are being made from her benefit to repay a debt, her benefit would not be reduced. I undertook to consider his arguments on both those points.

It is right—we have discussed it earlier—that parents with care should co-operate with the agency in pursuing maintenance unless they have a good reason not to do so. Only if a parent with care co-operates can maintenance be sought from the absent parent. As I said earlier, this financial burden should not be passed to the taxpayer. Even where parents with care are disabled, or have a disabled child, their duty to co-operate remains.

However, I considered and reflected on what the noble Lord said at Committee stage. I am persuaded that where a parent with care, or her child, is disabled the benefit reduction may cause particular hardship. The Government agree with the noble Lord that benefit should not be reduced in these cases. My amendment will provide the necessary power to set out the detail of this exemption in secondary legislation and will enable other categories of parents with care to be exempted in the future if the need for such exemption arises.

If we were to exempt parents who are repaying loans by deductions from their benefit we would be discriminating against those parents who are better able to budget or who choose to pay off loans themselves without involving the benefits system. However, I accept the noble Lord's concern and I have decided that a reduced benefit direction should be suspended while a parent with care is having deductions made direct from her income support, to pay outstanding debts such as for fuel or rent arrears. If deductions cease the reduced benefit direction will be reimposed, but existing legislative safeguards will apply and the parent with care will be given adequate notice and will be invited to reconsider her refusal to co-operate. Again, I will be setting this out in full in regulations as soon as it is practicable.

The benefit reduction is intended to make the parent with care think carefully about her decision not to co-operate and, as I said earlier this evening, I believe that that is right. However, the amendment in my name will mean that, in specific circumstances, where the reduction will cause particular hardship, the reduction will not be imposed.

I hope that the noble Lord, Lord Carter, will withdraw Amendment No. 43. I commend Amendment No. 48 to the House.

Lord Carter

My Lords, I am extremely grateful to the Minister. We began the day with the Government in fact drafting an amendment for me to improve the Bill. Amendment No. 48 certainly improves the Bill. I beg leave to withdraw Amendment No. 43.

Amendment, by leave, withdrawn.

Clause 24 [Compensation payments]:

Lord Carter moved Amendment No. 44:

Page 19, line 24, at end insert: ("() The Secretary of State shall make provision for payment by him to qualifying persons of sums by way of compensation where financial loss, worry or distress has been caused to that person or a member of his family by the actions or inaction of the Secretary of State, a child support officer or any other person carrying out duties in connection with child support legislation.").

The noble Lord said: My Lords, when we discussed the issue, I said that I would come back with the matter at Report stage. It is a simple point. In Committee I referred to paragraph 34 of the Third Report of the Select Committee on the Parliamentary Commission for Administration on the Child Support Agency. It recommended that the DSS considers discretionary payments regarding worry and distress caused by the maladministration of the CSA, removing the insistence that there be medical certification of harm or proven malice from officials.

When the Minister was kind enough to respond in that Committee, he rather avoided the point and answered one which I had not made. I said then that I should like to read again what he said and reserve the right to come back at Report stage. It would be helpful if he could deal with the point. In the Government's response they ignored it. It would be helpful if we could have the reasons why they wish to ignore—if they did—the recommendation from the Select Committee about discretionary payments for worry and distress. I beg to move.

11.15 p.m.

Earl Russell

My Lords, St. Jerome said that no man should be patient when taxed with heresy. I do not see why I should be patient at the charge of the noble Lord, Lord Carter, of wrecking the Bill. I was distressed to discover that the charge was first made by the noble Baroness, Lady Hollis, in Committee at practically the only moment in the whole of the Committee stage when I was out of the Chamber. I thought that that was a little ungenerous as a choice.

The noble Baroness made the charge against all my amendments. That is an extreme charge. Even the noble Lord, Lord Denham, in all his glory, never went so far as that. It did not appear to me to be the case that an attempt to introduce a little respect for evidence and for law was wrecking the Bill. I did not believe that the Bill was so easily wrecked; if it is, then it is not a tribute to it as a Bill.

I was also somewhat distressed throughout the Committee stage that the Opposition showed so little understanding of all the issues arising out of the rule of law and that they had so little to say and so little understanding of the points made by the noble and learned Lord, Lord Simon of Glaisdale, on Second Reading. It does not encourage confidence in what they might do in office.

I was also disappointed that every single one of the amendments moved by the Opposition in Committee favoured the parent with care. I know injustices are being done to the parent with care. I have tried to put some of those injustices right, but to argue that the Government have put right all the injustices to absent parents in the Bill is, first, in the nature of administration, improbable. Secondly, according to the past conduct of the Opposition, if the Government had put them all right, it is extremely improbable that the Opposition would have agreed that that was the case. Compared with their otherwise creditable conduct in 1991, the Opposition's conduct on this Bill shows quite how much they have been taken over by political correctitude. I deplore it. I had not intended to say all that but the noble Lord, Lord Carter, asked for it and he got it.

Lord Mackay of Ardbrecknish

My Lords, I do not think I will intervene too much in the dispute apart from saying that the noble Earl would be insulted if I did not say that had I accepted all his amendments he would have changed the Bill and the 1991 Act out of all recognition. I believe that that is what he intended to do and I am happy that I have been able to resist him on all the occasions on which he tried.

I turn to the substance of the amendment. Your Lordships will he aware that there are already administrative mechanisms for compensation to be considered in appropriate cases. I explained in Committee that where a customer of the agency considers that they have suffered financial loss or undue delay as a result of an action or omission on the part of the agency they can contact the agency. Their case will be dealt with on an individual basis in line with practice which operates elsewhere in the Department of Social Security.

Under the department's special payment arrangements, compensation may be considered where an individual has experienced undue delay or suffered an actual financial loss as a result of official error. These arrangements, which now also apply to the Child Support Agency, have been in place for almost 20 years and provide for payments to be made on an ex gratia basis. We plan to introduce compensation arrangements specifically designed to cover the work of the agency shortly, which will also be on a discretionary ex gratia basis.

We do not consider that specific provision needs to be made for compensation in primary legislation. If a statutory compensation scheme were to be introduced it would be necessary to regulate at some length for the detail of the scheme. This would inevitably limit the extent to which it was possible to deal flexibly with the individual circumstances of each case. Flexibility is a great advantage of the current arrangements and I consider the introduction of a statutory scheme to be unnecessary as it would not, in itself, guarantee a better standard of redress to customers.

In Committee, the noble Lord, Lord Carter, made the point that the Government had not fully answered one of the recommendations of the PCA Select Committee—namely, that the Department of Social Security should consider discretionary payments for worry and distress caused by the maladministration of the Child Support Agency, removing the insistence that there be medical certification of harm or proven malice from officials. He also referred to the evidence that Sir Michael Partridge gave to the Select Committee and indicated that he would return to this point.

The Permanent Secretary made it clear in his evidence to the PCA Select Committee that the Government did not accept that compensation payments should be made, as a matter of course, for worry and distress. He stated that they would be considered only in instances of proven malice on the part of officials, or where worry and distress was alleged to have been caused as a direct result of maladministration by the agency and there was medical evidence that a person had suffered a material and objective injury directly attributable to the agency's actions.

Sir Michael pointed out that it would not be consistent with government policy generally, and contrary to practice in other government departments, to make compensation payments on the grounds of worry and distress where neither of these factors was present. It would, in any case, be an extremely difficult and highly subjective exercise to try to place a monetary value on the appropriate level of compensation for worry and distress in individual cases. Furthermore, it would open up the opportunity for people to claim compensation for the most trivial or vexatious reasons.

For the reasons I have given, we do not accept that there is any general need for a statutory right in child support legislation to receive compensation, where there is already a discretionary scheme and, as a last resort, a right to compensation exists under common law. With that explanation spelling out the position we are taking up on the Select Committee's point, I hope that the noble Lord can withdraw his amendment.

Lord Carter

My Lords, I am extremely grateful to the Minister.

To respond to the noble Earl, Lord Russell, it seems extraordinary to me that his major constitutional point on the rule of law, and all the other points that he raised, were apparently completely ignored and overlooked by his Liberal colleagues in the other place, who said nothing on this Bill, so far as I can make out, in any of the areas that he raised. When the Bill came to this House he decided to take up all these points. I will certainly not take any lectures from the noble Earl when the latest report from the Network Against the Child Support Act (NACSA) states that, There is no doubt that the Liberal Democrats are delighted with the sudden input of support for their party from NACSA supporters. Campaigners in many areas … helped them during the council elections. Word from Lib Dem HQ and the ecstatic Liz Lynne is that they have already had a foot high stack of support pledges from NACSA supporters … These are people who, a page or two later, advise people to lie and to harass. They say … Around 150 NACSA stalwarts turned out at Brierley Hill to harass the life out of the inmates of the Dudley CSAC",—[Official Report, Commons, 22/5/95; col. 667.] etc., etc.

Earl Russell

My Lords, the noble Lord, Lord Carter, was in the Chamber when the Motion, That the Bill do now pass was moved in 1991. Does he remember that I told the House then that the Bill would prove unenforceable, as it has?

Lord Carter

My Lords, I said much the same thing. That is why we have this Bill that tries to improve the working of the Child Support Agency. I was about to say that prima donnas on an ego trip are not the best way to improve a Bill. Perhaps I shall not say that since it will upset the noble Earl.

I am grateful to the Minister for what he said. He has now given me the answer that I was hoping—

Baroness Seear

My Lords, very reluctantly I have to interrupt the noble Lord, partly because he quoted various remarks about the Liberal Democrat Party, which he read at such speed that they were totally incomprehensible to me. They did not sound very flattering. I should like to be able to argue with the noble Lord, but, as he did not make it at all clear what he was saying and as it is now half past eleven, I do not intend to do so. I merely wish to register that I think the whole of this little episode is rather unfortunate.

Lord Carter

My Lords, the noble Baroness is quite right, but I did not start the "little episode". To the Minister I say that this is the answer that I wanted. It is not entirely satisfactory, but it is the answer that I was hoping to get when I raised the point in Committee. As he has now answered the point that I made then, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Carter moved Amendment No. 45:

Page 19, line 33, at end insert: (""partial compensation" means a weekly amount not lower than any difference between the child maintenance taken into account when the family credit or disability working allowance was calculated and the new child support maintenance assessment;").

The noble Lord said: My Lords, this amendment deals with partial compensation. The effect of the amendment is to ensure that no claimants for family credit or disability working allowance end up worse off than they would have been without any CSA assessment. It takes into account the Government's argument that not all FC and DWA claimants have the full CSA assessment taken into account in the first instance; for example, if the absent parent had not been making the payments before the benefit calculation.

We suggest that compensation should equal the amount of maintenance taken into account after the £15 maintenance disregard has been applied, where this is larger than 50 per cent. of the actual reduction. There were some objections from the Government to that approach in the other place. Therefore, we have produced a compromise position. The increased expenditure involved is insignificant. We accept that this will be slightly harder to administer, but there should not be a large problem as the payments are being made by the FC and DWA unit, which has access to the figure used in the last benefit calculation.

In the light of that introduction, I hope that the Minister will accept the amendment. I beg to move.

Lord Mackay of Ardbrecknish

My Lords, this amendment is concerned with the level of compensation to parents with care on family credit for reductions in maintenance. We discussed much earlier today aspects of family credit and how maintenance impacts on it. We have now come to this amendment which is about the compensation being paid.

As drafted, the clause provides for the method of calculating the compensation to be set out in regulations, which your Lordships will have the opportunity to debate in due course. We intend to provide that the compensation will be at the level of half the reduction in the maintenance assessment for the outstanding period of the family credit award.

For many families, that formula will provide full compensation for their actual financial loss. Some will even be over-compensated. That is because the maintenance assessment and the amount of maintenance taken into account in the family credit assessment are often different. The amount taken into account in the assessment is the actual amount of maintenance being received in the period immediately before the claim. In many cases, that is considerably less than the maintenance assessment itself. The noble Lord's amendment recognises that by providing that the compensation will be based on the difference between the amount of maintenance taken into account in the family credit assessment and the new maintenance assessment.

We considered the option of basing the compensation on this method, as proposed in the amendment, but the problem with that solution is that it would make the compensation exercise much more complicated and time-consuming. It would be necessary to examine the details of the family credit assessment in each case, whereas the method that we propose relies simply on the reduction in the maintenance assessment itself without the need to refer to the details of the family credit assessment. This enables the Benefits Agency to make the payments very quickly, as soon as the family needs them. The noble Lord's amendment would slow down the process, with the risk that the family would have to wait some time for the money which it needs.

Furthermore, many families would be likely to receive less compensation under the noble Lord's amendment than they will do under the broad brush scheme. I fully accept—I believe I said it previously—that this is a broad brush scheme, but I believe that it is one which delivers what we all want as quickly as possible. Any attempt to fine tune it in order to make it a more detailed scheme, treating every case and every family credit separately, would complicate the issue and take up much more time. Looking at it in the round, it would not be to the advantage of the parent with care, who could have to wait some considerable time for her compensation.

I understand the noble Lord's point but I hope that, with my explanation that perhaps the broad brush approach is the best one to stick with, he will feel able to withdraw his amendment.

Lord Carter

My Lords, as the Minister said, what we have now is a broad brush approach. We did not feel that the way that we suggest is that much harder to administer because all the figures are available. However, I should like to read what the Minister has said. It is a complicated point. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 25 [Payment of benefit where maintenance payments collected by Secretary of State]:

[Amendment No. 46 not moved.]

Clause 30 [Short title, commencement, extent etc.]:

Lord Mackay of Ardbrecknish moved Amendment No. 47:

Page 23, line 8, leave out ("and 17") and insert ("16A, 17 and 18").

The noble Lord said: My Lords, in moving this amendment I wish to speak also to Amendments Nos. 49 and 50. Amendments Nos. 47 and 50 are minor and technical amendments. Amendment No. 50 corrects a minor drafting error in an earlier amendment. However, Amendment No. 49 introduces a new provision relating to expenses for people attending hearings before a child support commissioner. Such a provision already exists in social security legislation and the new paragraph we propose to add to Schedule 4 to the Child Support Act 1991 by means of this amendment to Schedule 3 to the Bill will mean that a consistent approach is taken for child support cases. Our colleagues in Northern Ireland propose to bring forward legislation along these lines for their own purposes in due course. The amendment therefore proposes an amendment to paragraph 8 of Schedule 4 to the 1991 Act to prevent provision for travel and other expenses from applying to Northern Ireland. Amendment No. 49 is a technical amendment which gives effect to this exclusion.

Amendment No. 49 also ensures that a further provision in the Bill, which we had always intended should extend to Northern Ireland, does so. This provision enables issues arising from the payment of the child maintenance bonus to be dealt with by the Social Security Advisory Committee. The necessary amendment to Clause 30 was overlooked when we introduced that provision through an amendment agreed in Committee. With that explanation, I beg to move.

On Question, amendment agreed to.

Schedule 3 [Minor and Consequential Amendments]:

Lord Mackay of Ardbrecknish moved Amendment No. 48:

Page 31, line 3, at end insert: (". In section 46(5) (circumstances in which child support officer may give a reduced benefit direction), after "may" insert ", except in prescribed circumstances,".").

The noble Lord said: My Lords, I have already spoken to this amendment. I beg to move.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendments Nos. 49 and 50:

Page 31, line 28, at end insert:

("16A.—(1) In Schedule 4 (Child Support Commissioners), after paragraph 2 insert—

"Expenses of other persons

2A.—(1) The Secretary of State may pay to any person required to attend at any proceedings before a Child Support Commissioner such travelling and other allowances as, with the consent of the Treasury, the Secretary of State may determine.

(2) In sub-paragraph (1), references to travelling and other allowances include references to compensation for loss of remunerative time.

(3) No compensation for loss of remunerative time shall be paid to any person under this paragraph in respect of any time during which he is in receipt of other remuneration so paid."

(2) In paragraph 8 of Schedule 4 (application of Schedule to Northern Ireland), after sub-paragraph (b) insert— (bb) paragraph 2A were omitted;".").

Page 32, line 3, after ("Ireland;") insert ("and").

The noble Lord said: My Lords, I have already spoken to these amendments. I beg to move.

On Question, amendments agreed to.