§ 3.15 p.m.
§ Lord Mackay of Ardbrecknish
My Lords, I beg to move that this Bill be now read a second time.
The 1991 Child Support Act set up a new child maintenance system. At that time the existing system of child maintenance was clearly failing large numbers of children. Almost three in four parents with care received not a penny in regular maintenance for their children. The proportion was lower still—and falling even further as time went by—for those families receiving income support.
The system for assessing maintenance was fragmented with a variety of levels of courts involved. This resulted in inconsistent awards of maintenance with people in similar circumstances being required to pay vastly different amounts of maintenance depending on, first, the court attended; secondly, which magistrate or judge they appeared before; or, thirdly, what agreement DSS officers could reach with absent parents.
When maintenance orders were made under the old system, parents faced a return to court if they wished to vary their order, or if enforcement action were needed, with no guarantee of success. The new system was to be based on a maintenance formula which was intended to ensure consistency in assessing the level of maintenance payable. The Child Support Agency was set up to provide a "one stop" service for the assessment and collection of child maintenance. It is easy, with the benefit of hindsight, to see that there were potential problems with the child support system. However, at the time it was introduced, the proposed system was widely supported, although I understand your Lordships had reservations which were expressed during the passage of the Bill.
The Child Support Agency has now been operating for two years and although it has had a less than comfortable time since its inception it is already achieving a great deal. The need for the new child maintenance system has been borne out by the high number and proportion of cases taken on by the agency where no maintenance was being paid. Of the 400,000 cases taken on in 1994–95, 77 per cent. were not receiving maintenance. In 1994–95 the agency collected over £70 million in maintenance, which compares favourably with the £13 million the previous year. Additionally, £100 million in child maintenance, arising from agency assessments, was paid directly to people with care by absent parents. This represents a 1186 significant contribution to maintaining children and is illustrative of the agency's improved performance in 1994–95.
The Government have monitored progress closely: first, when, during the first year, we identified cause for concern as to the operation of the child support scheme we introduced reforms rapidly; secondly, in February 1994 we reduced the level of many assessments, allowed absent parents more time to adjust to increased bills and stopped charging some collection fees; thirdly, we responded to parliamentary concerns and in some respects went further than the recommendations of the Social Security Select Committee in its first report on the agency; fourthly, we continued to monitor the position closely and considered very carefully the Social Security Select Committee's second report.
We consequently published the White Paper, Improving Child Support, in January, which set out our plans for the reform of child maintenance provision. Those plans encompassed subordinate legislation to bring in speedily those measures which could be effected through regulation and primary legislation for those that could not.
In April we debated the important first step in implementing these measures in a package of regulations which changed the formula by: first, ensuring that absent parents normally keep at least 70 per cent. of their net income after maintenance; secondly, introducing a broad-brush allowance in recognition of property settlements and towards high travel-to-work costs; thirdly, allowing for the housing costs of new partners and step families; and, fourthly, reducing the maximum level of maintenance payable. That package also abolished interest and suspended the collection of fees for new cases for two years and deferred the liability by eight weeks for those absent parents who supply basic information quickly. During that debate I was heartened by the continued clear commitment of both the noble Lord, Lord Haskel, who was leading for the official Opposition, and the noble Earl, Lord Russell, to the principle that both parents are responsible for their children even if they live apart.
Today, I am pleased to bring forward primary legislation from another place. The Bill will represent a significant step forward. The Opposition in another place recognised that and agreed not to engage in "trench warfare", whatever "trench warfare" might be in the other place. The honourable Member for Glasgow, Garscadden commented during the Third Reading debate on 22nd May, "I accept that much of what is happening is what we have requested".
§ Lord Mackay of Ardbrecknish
My Lords, of course I am paraphrasing. I know the honourable Member for Garscadden well enough to know that I would have to paraphrase; otherwise I might be here for quite some time. I hope that your Lordships will approach the Bill in a similarly constructive spirit.
1187 The Bill includes important measures, first, to introduce an element of discretion to depart from the standard maintenance formula in special cases; secondly, to increase support to parents with care; and, thirdly, to improve the operation of the Child Support Agency.
The Bill amends the 1991 Act to enable a better service to be provided to both sides of a broken partnership. It will improve the assessment, collection and enforcement of child support maintenance and will enable our child support system to ensure that more maintenance is paid, more regularly, for more children.
The key provision in the Bill builds on the introduction of broad-brush allowances within the maintenance formula, by introducing an element of flexibility in the small proportion of cases where the formula-based assessment causes particular difficulties.
The existing child maintenance formula will continue to be appropriate for the assessment of child support in most cases. However, to recognise pre-existing arrangements, or to take account of special circumstances, the Bill will introduce a system of departures. This will allow flexibility to depart from the formula assessment in clearly defined circumstances where that is fair to all parties.
The Bill also introduces a number of other changes: first, a child maintenance bonus of up to £1,000 payable to parents with care when starting work; secondly, provision to compensate people on family credit or disability working allowance whose income drops as a result of changes in child support legislation; thirdly, refinements to the way disputes over parentage are resolved; fourthly, improvements to the review and appeal procedure; and, fifthly, provision to defer take-on of some cases by the Child Support Agency.
We have listened carefully to the concerns expressed both in and outside Parliament. Our response addresses many of those concerns effectively. The revised formula for maintenance assessments is fairer, and the introduction of simplifications will ease the task of administering child support and enable the agency to improve its service. This will help maintenance assessed to become maintenance paid. I believe that these proposals are consistent with the original purpose of the Child Support Act and that that is what Parliament wants.
I turn now to how the departure system will work. The starting point for calculating liability for child maintenance continues to be the formula. This will be the method of assessment in the majority of cases. The formula ensures that people in similar financial circumstances pay similar amounts of maintenance. But the Government accept that a small minority of people who face additional costs because of special circumstances would not be treated fairly under the formula. We therefore propose to allow some strictly limited discretion to depart from the formula assessment in such cases for: unavoidable high costs of travel to work; high costs of maintaining contact with children; extra costs arising from long-term illness or disability of the applicant or a dependant; for the costs of step-children, in exceptional cases; and for some debts, either from the 1188 relationship, or arising from pre-1993 commitments when those concerned believed their maintenance position to be settled.
Subject to some rules about minimum amounts, either parent will be able to apply for their maintenance assessment to be reduced to take account of the costs. Specially trained staff within the Child Support Agency will consider applications in the first instance. Any direction to depart from the formula will be given on behalf of the Secretary of State. Either parent can subsequently appeal to an independent child support appeal tribunal.
A departure will be allowed only if it would be "just and equitable", taking into account the circumstances of both parties and the best interests of the children and the taxpayer. Any expenses allowed will then be treated like other allowable expenses and deducted from the parent's income before maintenance is assessed. The regulation-making powers in the Bill will enable us to ensure that those to gain most from departure directions will be those on whom the formula bears hardest.
A major criticism of the Child Support Act has been the treatment of past property or capital settlements within the formula. Although the formula took account of many of the practical consequences of property or capital transfers which were intended to contribute to child maintenance, it did not explicitly reflect their value.
The April regulations introduced a "broad-brush" allowance for past property transfers, but inevitably some parents will find that the broad-brush allowance does not reflect the true value of their property settlement. In these cases, the departure system will allow flexibility to recognise all the relevant factors.
The departure provisions relating to special expenses will apply more usually to absent parents, but either parent could apply where appropriate in their circumstances. For example, those parents with care earning enough to contribute to maintenance with high travel-to-work costs can apply.
I also intend to introduce some grounds for departures which will be particularly relevant to parents with care. These grounds will include: first, assets which do not produce income, but are incapable of doing so; secondly, the other parent's standard of living appearing to be inconsistent with their declared income; thirdly, unduly high housing costs or such costs that a new partner should meet; and, fourthly, where the broad-brush allowance towards the other parent's travel-to-work costs is not reasonable.
For absent parents, consideration of a departure from the formula may be conditional on their making regular payments of child maintenance, although, if paying the full assessment would cause difficulty, a lower amount may be permitted until the application is decided.
The costs of the departure system are estimated as £10 million a year in benefit savings foregone, and £25 million in 1997–98 reducing to £15 million a year thereafter in administration.
The administration of a departures system will be complex. To ensure its effective introduction it is important to avoid overloading the agency. For this reason the Government propose to defer the take-on of 1189 applications from parents who have a court order or written agreement made before April 1993 when the parent with care is not receiving benefit. They will retain their right to use the courts if they wish to vary the amount of maintenance. I shall also offer them the opportunity to use the agency's collection and enforcement service.
It is important to achieve the right balance for both parents, for their children and for the needs of the taxpayer. The provision in the Bill for a child maintenance bonus will help the parent with care to improve her family' s standard of living by smoothing her transition to work. It will accrue at the rate of £5 a week or at the rate of maintenance paid, if less, and will be paid to the parent with care on leaving benefit because either they or their partner has returned to work. This measure will every year provide 60,000 parents with care with a greater interest in securing maintenance and an increased incentive to work. The annual cost of the child maintenance bonus will be £10 million in 1997–98 rising ultimately to £20 million.
Where maintenance is reduced because of child support policy changes, parents with care on income support will not lose money since income support is adjusted immediately. Awards of family credit and disability working allowance are, however, set for six months and some parents on those benefits could lose financially if their maintenance assessment drops. The Government wish to be able to give some compensation until the end of the award period and the Bill will provide the necessary power to make compensatory payments.
The Bill also makes provision for overpaid maintenance. At present an overpayment of maintenance is repaid by a reduction in the absent parent's maintenance assessment until it has been cleared. Most overpayments will continue to be dealt with in that way. In some cases, however, a reduction in maintenance may not be possible, or it would not clear the overpayment in a reasonable time. For example, maintenance liability may be about to cease because the child will leave school soon. The Bill therefore introduces a provision which will allow for a cash reimbursement in suitable cases.
We are introducing a number of administrative easements which will reduce the pressure on the agency, including simplifying the review process in cases where circumstances change; and replacing the current charging of interest where maintenance is paid late with an alternative financial charge.
We are also introducing a measure to clarify and merge the legislative provisions for joint payment of income support and maintenance which will ensure that the parent with care continues to receive her full entitlement whether or not the absent parent pays fully or regularly. This measure will also be extended to the income-based jobseeker's allowance.
Subject to the approval of Parliament, some of these measures will be introduced this year after the Bill becomes law. Most of the changes will require detailed operational planning and will take effect as soon as is practicable during 1996–97.
The new child maintenance bonus scheme will start from April 1997. None of these changes will pre-date the enactment of the Bill.
1190 I note that the noble and learned Lord, Lord Simon of Glaisdale, has put down an amendment regretting certain aspects of the Bill. As always, I look forward with interest to what the noble and learned Lord has to say. While I can guess from the terms of his amendment at least some of the points he is likely to make, I shall discuss the amendment in my wind-up after I have had the pleasure of listening to the noble and learned Lord.
The Government have responded positively to criticism of the child maintenance system by producing a fair and just package of measures which balances carefully the interests of both parents, their children and the taxpayer.
These changes will improve our child support scheme for both parents and should encourage and enable more absent parents to pay child maintenance regularly. No absent parent will be able reasonably to refuse to pay their child maintenance.
I believe the changes we made in April will ensure that the formula produces fair and realistic results in the vast majority of cases, but the new departures system introduced in this Bill will deal with those exceptional cases. I commend the Bill to the House.
Moved, That the Bill be now read a second time.—(Lord Mackay of Ardbrecknish.)
§ 3.32 p.m.
§ Lord Simon of Glaisdale rose to move, as an amendment to the Motion, That the Bill be now read a second time, at end insert ("but that this House regrets that the Bill does not fully obviate the hardships and injustices caused by the Child Support Act 1991; that it maintains those provisions of the 1991 Act which are inconsistent with the long-established principles of the rule of law; and that, like the 1991 Act, it is largely a skeleton Bill, leaving its effect to be achieved by subordinate regulations, orders or prescriptions.")
§ The noble and learned Lord said: I beg to move the amendment standing in my name.
§ Your Lordships will be grateful to the Minister for the very clear and engaging way in which he has moved the Second Reading of this Bill. But that very ability and clarity emphasise the absence of what your Lordships were looking for in the Second Reading speech, without which we shall have another legislative disaster like the legislation which became the 1991 Act. That Act has been an unprecedented legislative disaster. It has caused injustice; it has caused hardship; it has caused enormous public expense resulting in administrative chaos. Having listened to the noble Lord, from what he said your Lordships would have no idea that that was the history of the matter. In fact, your Lordships will not have had such bland assurances since we debated the 1991 Bill. Unless these things are recognised, we are in for another legislative disaster and further hardship.
§ The noble Lord said that it was easy with hindsight to see that things were not altogether right. But it was not a question of hindsight. Your Lordships, with foresight, identified precisely the things that have gone wrong. I am very glad that the noble Baroness, Lady Hollis, the noble Earl, Lord Russell, the noble Baroness, Lady Faithfull, and the noble Lord, Lord Houghton, are speaking in this 1191 debate. They were in the forefront of criticising what was put forward with such assurance and confidence in 1991, but they were disregarded.
§ Indeed, business was so arranged that it was impossible politically for your Lordships to amend the Bill. I have the timing. There were three days spent in Committee. The earliest time at which we adjourned was nearly a quarter-past 10 and the latest just short of midnight. There were two Report days. On the first we adjourned just short of 11 o'clock and on the second day just short of 1 o'clock in the morning. At Third Reading our proceedings were altogether truncated because the Chief Whip had arranged business for the following day and we were assured that unless we finished the Third Reading of the Bill the other business would be lost. It is your Lordships' practice to let any government get their business done, so the Third Reading was truncated. I am sorry that the noble Lord, Lord Mishcon, is not here today. He played a prominent part in 1991. I remember him saying at Third Reading that he would postpone his observations on the way in which the Bill was a skeleton Bill until the debate that the Bill do now pass. But there was no opportunity for him to tell us that, although in fact the matter had been analysed.
§ The Minister said today—and it has been said before—that there was general approval of what was proposed in the 1991 Act; namely, that an absent parent should pay reasonable maintenance for the support of the child. But that is what the pre-existing law said. The magistrates' courts had jurisdiction to fix reasonable maintenance for the child and for the mother on exactly the same basis—that is to say, what was reasonable under the circumstances and as was stipulated in the 1991 Act.
§ It has been again criticised that there were discrepancies between the decision of one tribunal and another. Of course there were. In this class of case, one case has infinite differences from another. What the courts did, but what was not done in the 1991 Act, was to allow such things as the cost of travel to work, the cost of travelling to keep contact with an absent child and the exceptional circumstances where there had been a transfer of property at the cost of foregoing maintenance. All those sorts of things were taken into account by the magistrates. That resulted in one case being different from another. But those are exactly the cases that are taken up in this Bill under the name of "departure". It did not require hindsight to see that such provisions would be needed. They were identified by foresight, and now, belatedly, the claim is made that the Government are being entirely reasonable in introducing provisions which were asked for at the time of the 1991 Act.
§ This Bill and the 1991 Act made no difference to the general underlying principle; namely, that an absent parent should pay what maintenance was reasonable in the circumstances for an absent child. However, the legislation removed the jurisdiction to award the maintenance from the magistracy—lay justices knowing local conditions who were close to the cases upon which they had to adjudicate. The legislation transferred that jurisdiction from the "great unpaid", as they are called, to the "great well paid" of Whitehall. That has resulted in the disasters with which all of your Lordships are familiar.1192
§ The other odd thing that was done, and is perpetuated, is to transfer to the Child Support Agency, which operates a formula, the jurisdiction to deal with a child's maintenance while leaving the jurisdiction to deal with the mother's maintenance still in the hands of the magistrates. Of course, common sense tells us that you cannot deal with the one without dealing with the other. They are intimately interrelated. But those provisions remain.
§ Therefore, we have to try to repair the damage that has been done by a fixed formula, a sort of procrustean bed, which no doubt eliminates some inconsistencies by lopping off a bit of the scalp at one end and a bit of the toes at the other. You do get consistency in that way, but can the Government really claim that the result of setting up the Child Support Agency—operating that extraordinary and incomprehensible formula—has obviated all inconsistencies?
§ I have dwelt on those aspects because, unless there is recognition that things have gone seriously wrong, they will go seriously wrong again. These days we are not only concerned with our own bureaucracy. Those of us who wish to see ourselves at the heart of Europe, promoting its cohesion, are embarrassed by the bureaucracy of Brussels. However, it is no use girning at that bureaucracy when we fail to put our own bureaucracy in order.
§ I should like to deal with one or two issues that are mentioned in the middle part of my amendment. I prefer to leave the first part to the noble Baronesses and the noble Earl, who are much more conversant with such matters. The second part deals with the rule of law. The classic statement of the rule of law is, as your Lordships know, contained in Dicey's Law of the Constitution. Dicey dealt with various aspects, one of the most important being that all citizens, including officials, are amenable to the ordinary law of the land. Let us consider the 1991 Act in that respect. Officials are given leave—power—to enter private premises. They may enter the premises of the employer. They are also given the power to interrogate employers and fellow employees. Those are exceptional powers, mercifully not vouchsafed to the ordinary citizen.
§ There is also the exceptional remedy of distress. That is self-help in repayment of a debt. It is a harsh procedure. Therefore, the common law makes sure that it is operated only with safeguards. However, in 1991 all those safeguards were swept away. Officials can now levy distress without any of the common law safeguards.
§ Those are three aspects of the matter. The fourth is that officials are given leave to breach Inland Revenue confidentiality. The noble Lord, Lord Houghton of Sowerby, has much to say about that and I am glad that he is to speak today. Those four invasions of the rule of law are left inviolate by this Bill which is supposed to ameliorate the situation.
§ Moved, as an amendment to the Motion, That the Bill be now read a second time, at end insert ("but that this House regrets that the Bill does not fully obviate the hardships and injustices caused by the Child Support Act 1991; that it maintains those provisions of the 1991 Act which are inconsistent with the long-established principles of the rule of law; and that, like the 1991 Act, it 1193 is largely a skeleton Bill, leaving its effect to be achieved by subordinate regulations, orders or prescriptions.").— (Lord Simon of Glaisdale.)
§ 3.47 p.m.
§ Baroness Hollis of Heigham
My Lords, on this side of the House we have always believed that, although parents may divorce each other, they may not divorce themselves from their children. By having a child, both parents commit themselves to a family covenant to support, and to ensure the well-being of, that child. However, we also believed that the old court system was breaking down. Barely one-quarter of lone parents received regular maintenance. The amount was often low, irregularly paid and payment was seldom enforced. To that degree, therefore, and for those two reasons, we supported the principle, the concept, of the Child Support Agency.
However, the Child Support Agency, as established by the Government, was deeply flawed. As the noble and learned Lord, Lord Simon, rightly said, it is not a question of the Government not knowing that. They knew it; they were told it; they were warned about it—and they ignored all that. From the beginning, the Government in their arrogance—I do not use that word lightly—ignored opposition from all around the House. They ignored opposition from almost every voluntary organisation and they ignored the experience of the Australian system.
What have we been saying? What have all those in opposition to the Act consistently said? First, they said that the 1991 Act was harsh both on the parent with care, usually the mother, and on the absent parent, usually the father. It was harsh on the parent with care because it merely replaced that parent's benefit pound for pound with maintenance, often leaving that parent poorer. I shall return to that point later. As was repeatedly said in 1991, that Bill was clearly not a child support Bill, but a Treasury support Bill.
From all around the House, we also argued that the Bill was harsh on absent parents—usually men—especially the low-paid absent parent, and especially those absent parents who—over half of such men are—were in second families with stepchildren. Such men found that clean-break settlements and the costs of travel to work and seeing their children were not taken into account. They found themselves obliged to maintain the children of their first marriage while out of decency often maintaining the stepchildren the new partners brought with them.
In 1991, 1993, and 1994 we told the Government repeatedly that absent parents, especially low-paid absent fathers, could not support two families without plunging both into poverty, but the Government muttered imprecations about the taxpayer and ignored us.
Thirdly, all of us around the House told the Government that the formula was too rigid; it needed to be more inclusive and more flexible; to include matters such as property settlements and the like; and to allow for appeals—the Government now call them departures from the formula—to reflect that the world outside, people's lives and people's incomes, are not as tidy as the Treasury would have us believe.
1194 Fourthly, we were all, I think, worried about administration—from problems of privacy and civil liberties, upon some of which the noble and learned Lord has already commented, to worries about threats of violence to women who failed to disclose the information that the Government were seeking. We were worried about contested paternity cases, and, above all, the simple ability of the organisation to take on such a huge swathe of cases all at once.
Finally, we believed—we argued this at the time—that all those problems were compounded because the Government refused to follow the Australian experience and insisted upon making the Act retrospective. Nearly all the problems that have so far arisen flow from that. It meant that many people who had made a court settlement, which however generous to one party or unreasonable to another, was, nonetheless, a legal settlement—a framework upon which both parties expected to get on with the rest of their lives and to make other financial commitments accordingly—had that settlement overturned at a stroke. The Government were not forgiven.
Those were our worries, and that is why we have so much sympathy with the substance of the amendment moved by the noble and learned Lord. We have reservations only about that part of his amendment which suggests that the Bill is inconsistent with the rule of law, which is why we shall not support it as presently worded. But the worries outlined by the noble and learned Lord are exactly right. We debated them, we referred to them, and we returned to them as regulations came before your Lordships' House. At every stage, on every occasion, the Government ignored your Lordships' House.
Having ignored parliamentary dissent, the Government then found themselves overwhelmed by extra-parliamentary dissent and have created such a culture of resistance that the Act has become unenforceable. That is why we are seeing it amended today. It is not because the Government want to amend the administration to make it more equitable, but because the Act has become unenforceable. Just like the poll tax, now the CSA. The Government Benches remind us strongly of the dying years of the Bourbons who learnt nothing and forgot nothing. We all know what happened to them.
The Bill is the second part of the package outlined in the Government's document, Improving Child Support. For starters, that is a misnomer: it does not improve child support, but it does improve the Child Support Act. Taken together, to what extent do the regulations and the Bill meet the five criticisms that I have outlined? Because it is the last chance—I mean it—for the Government to get the agency right.
First, does the Bill improve the position of the parent with care? Barely. Lone parents are poor: 42 per cent. of those having deductions for social fund loans are lone parents; nearly half are having their benefits top-sliced for fuel debts; and over half of them have rent arrears. When, under the CSA, their benefit is replaced by maintenance, many find themselves worse off because their maintenance payments, unlike income support, can be irregular, and mothers with care are on and off. If the CSA 1195 were to pay mothers the maintenance and then claw it back from the father, they would at least have a secure income.
It is even worse than that, because once a mother loses benefit—even if it is replaced pound for pound with maintenance—she loses the passported benefits, such as free school meals, which go with income support. As a result, under the Act many women who care for their children at poverty levels are worse off, and the Bill does not make them any better off. That is why we on this side will argue for the principle of introducing a disregard in order, at the very least, to ensure that women are no worse off by going onto maintenance from benefit and thus losing access to free school dinners and the like.
Will the Minister also tell us to what extent such women will be deleteriously affected by the new changes in mortgage support for people on income support, particularly when they go on to maintenance? What protection will they then have in order to keep a roof over their heads? I hope that the Minister will come back to that point for us.
We shall be pressing, as I said, for the principle of a modest disregard. In the other place the Minister had two objections. The first was on the grounds of cost, and the second was on the grounds that it was a disincentive to work. On the first of those, the Minister is expecting to make significant benefit savings when the Bill is running smoothly—some £800 million a year. We ask that a small proportion of those savings be recycled back to target—one of the Government's favourite words, and certainly one of their most used words—the poorest and most vulnerable; that is, women on the poverty line. We refuse to accept that, when we recycle some fraction of savings, that is therefore an expenditure commitment. It is the difference between gross and net savings, and an honourable difference.
Secondly, I am confident that the Minister will argue that a disregard is a disincentive to work. I have a couple of points to make on that. First, perhaps other noble Lords may share my apprehensions about expecting a parent with a child of one year and one of three years to be back in work, against her choice, leaving those children to other people to look after them. The Government are merely offering a back-to-work bonus which will take at least four years to be arrived at, and gives the wrong money to the wrong mothers at the wrong time for the wrong reasons. Most lone parents want to work, and seek work when their children are of school age. The problem that stops them is child care and the new arrangements still do not allow for any of that. So, are the mothers with care better off? No; barely. But for the back-to-work bonus, which will be irrelevant for most of them, mothers with care—those who have remained silent over the past two years—are not being helped one little bit.
Does it improve the other group—the absent parents? Yes, but disproportionately for the better-off who have shouted loudest. What would one expect when the Government have bowed to the pressure of the sharp-elbowed? They have had a ceiling placed on their contributions. We welcome the fact that property settlements on a broad-brush basis are to be taken into account, although we urge the Minister to extend that and 1196 not to limit it merely to property settlements agreed before 1993. However, as the Government are deferring indefinitely the taking on of those maintenance cases where the mother is not on benefit, that means that a man whose second wife brings children with her into the marriage may now find that he is still supporting the children of his first marriage and the children of his second; and, because the mother is not on benefit, the agency will not have a role to play. We want to ensure that all absent fathers, including the absent father of his stepchildren, contribute properly to the maintenance of their children.
Thirdly, we ask whether the formula is too rigid. The Government are belatedly accepting the Australian principle of appeals on well defined grounds. The Minister calls them "departures", but they are the same as the Australian grounds. It is right that either side should appeal and we welcome that. However, if the Australian evidence is anything to go by, approximately 40,000 appeals will be added to the 140,000 appeals that the Minister expects in respect of incapacity benefit and the high number from jobseekers. Can we hope that the independent tribunal system will cope with that? What will be the implications for legal aid? Will the Minister tell us what numbers he expects?
More worryingly is our anxiety about the quality of the administration, which we have continuously raised. Last October, the chief child support officer found that 86 per cent. of child support assessments were incorrect or unsound. In other words, he found that six out of seven were incorrect or unsound; that only one in seven was correct. That was confirmed by the National Audit Office. As a result, in January the ombudsman reported that he had,found mistaken identity, inadequate procedures, failure to answer correspondence, incorrect or misleading advice, delay in the assessment and review of child support maintenance and delay in its payment to the parent with care".The chief child support officer, the National Audit Office and the ombudsman have all stated that the CSA administration is faulty. Therefore, we cannot be assured when those in the Child Support Agency tell us that women fearing violence are fully protected or that benefit deductions, which are running at 60,000 and take £10 away from women who refuse to co-operate, are correct. If six out of seven such formulations were previously suspect, why should we now have any confidence in the figures?
The Select Committee dealing with the report of the Parliamentary Commission concluded:The work of the CSA touches on the most difficult and sensitive aspect of many people's lives. The agency should not add to the individual's distress by sloppy procedures, carelessness, delay, inattention or incompetence".The CSA did all those things.
I repeat the fact that those problems would have been greatly mitigated had the Government learnt from Australia, where the introduction of a similar agency was relatively trouble-free. The reason was that the Australian system was not retrospective, which brings me to the final criticism of the Act. In our judgment, that failure was the greatest folly of all.
1197 The Government are now removing from the review of the Child Support Agency all maintenance cases in respect of which the parent with care is not in receipt of benefit. That effectively means that in respect of all those families the Act is no longer retrospective. While that is to be welcomed on the one hand, on the other it introduces new unfairnesses. Women in low paid work may well receive low and erratic maintenance and have few powers to obtain it. We hope that the courts will be more pro-active and that in more cases women will return to the courts to claim the maintenance that the law has bestowed on them. Equally, we hope that the settlements will increasingly come more into line with the CSA.
In many ways, the Bill meets many of the anxieties that we have expressed time and again since 1991. It helps the absent parent; it introduces a modified appeals system; it removes retrospection in respect of non-benefit cases; it may—and I hope will—improve the administration of the agency; and it introduces new flexibility into the formula. We welcome all that. But—and it is a very large "but"—the Bill does virtually nothing for the parents with care and therefore for the children of the first marriages. They remain as poor as ever. The maintenance payments may be as erratic as ever, and their ability to enter the world of work as difficult as ever. The number of children in poverty grows annually. The Government concede that some 50,000 first families will be worse off as a result of the Bill and its accompanying regulations. Two million children are in single parent families and three-quarters of those families are in receipt of income support. Many will become poorer as a result of the Bill.
However, because women caring for children will not go on strike, will not walk away, will not defy the Government and will not abandon their children, as many of their partners have done, they will be punished for being law abiding while their former partners will be rewarded for their law breaking, for refusing to pay. The Government have acceded to the pressure not of the lawful but of the law breakers. They have mitigated the plight not of the poorest—the parents with care—but of the less poor—the absent parents—who in all circumstances are better off than the parents with care.
The Government have listened to those who have shouted a macho message. I do not say that they should not have listened, because at this stage any listening is welcome. However, those who stayed mute, in particular the mothers, have received nothing. And all because the Government in their arrogance refused to listen the first time around, the second time around and the third time around.
Now that we are dealing with this Bill, will the Government exhibit the same arrogance and the same indifference to parliamentary opinion? Will they again refuse to listen? Will the Minister's brief be marked with the word "resist", as it was again and again and again during the passage of the Jobseekers Bill? We want the Child Support Agency to work, but it will work only if it is seen as being fair and equitable. It is not that yet, which is why the Bill must be amended.
I said at the beginning that parents who support their children are fulfilling their family covenant. But we as a society have a covenant; that all children should have the chances and opportunities that we wish for our own 1198 children. Nothing less is anywhere near good enough. We shall seek to amend the Bill to enable that to happen. I suggest that the Government would be wise to listen this time around.
§ 4.7 p.m.
§ Earl Russell
My Lords, before normal service is resumed, I hope that the House will join me in expressing our sympathy for the Minister for the extraordinary burden of work that he is having to carry at present—
§ Earl Russell
My Lords, of course, they might increase the work load.
On 23rd May, the Tuesday before the Recess, when the Bill was given a First Reading and the Jobseekers Bill was undergoing its Third Reading, the Minister was responsible for three Bills before this House at one time. That is a hat trick that I do not envy him. We on these Benches agree with practically every word uttered today by the noble and learned Lord, Lord Simon of Glaisdale. He was one of those who showed us the way in 1991. We shall support his reasoned amendment, and if he chooses to put it to a Division we shall be happy to go into the Lobby with him.
We all know that in the Palace of Westminster we live in a micro climate. In respect of some issues a kind of culture sweeps across the Palace of Westminster and carries away everything, even when the rest of the world is unaffected by it. Any member of my profession knows that perfectly well. The 1991 Act was the product of one of those parliamentary cultures. When they grow, they seem to be proof against almost any manner of evidence or outside appearance. I cannot see how one can puncture them.
In respect of this matter, the media, much maligned, and justly maligned, though they often are, are a great deal nearer to understanding what is going on than those in the Palace of Westminster—and I do not refer only to the Government. Your Lordships know that it is the policy of the Liberal Democrats to repeal the 1991 Act lock, stock and barrel. I am grateful to the Minister for recognising that that does not mean that we abandon the principle that parents are financially responsible for their children. But we reject the formula, and we reject it first, and foremost because it is a formula. The Minister said—and I believe that I have his words correctly—that a formula means that people in similar financial circumstances pay similar amounts. I am sorry, but that really is not accurate. It means only that people whose circumstances are similar in relation to those points which it has occurred to the draftsman to mention are treated alike.
Once again I must remind the House of the principle of the Renton Report: that no draftsman can possibly foresee all contingencies. I hope that the Department of Social Security possesses a copy of that report. Therefore, all that happens is that cases which in fact are very different are treated alike. That is why the defence of consistency in relation to a formula is entirely misleading.
Perhaps I may give two examples, both of which will be familiar to the Minister or at least to his department. A man in Henley-in-Arden lived 30 miles away from his 1199 work. There was no public transport. He was buying a car on hire purchase which was costing him £1,500 per year. He could not pay the amount which the CSA assessed him to pay and keep up the HP payments on his car. Because he was one of the very early cases when people still believed that some form of help, co-operation or negotiation was available, he rang the CSA helpline and was advised to sell his car.
I wrote to Mr. Burt about that and asked whether he could assure me that that was not government policy. He wrote back an extremely helpful and considerate letter, but he could not give me the assurance for which I had asked because the formula had not foreseen that case.
I have another example where I do not have to rely on ex parte information because the person in question is well known to some senior members of my party. The gentleman had been married and had made a settlement on his ex-wife and daughter which was well above any amount which the CSA might have asked him to pay. His ex-wife then married again and allowed her second husband to get his paws on the money. He put it into risky investments where it all disappeared. He then left her, leaving her on benefit, whereat her first husband was again clobbered by the CSA for the misdemeanours of his wife's second husband, for which he believed himself not to be answerable. The noble Viscount, Lord Astor, to whom I wrote, was extremely sympathetic about that case, but he could not do anything about it because the draftsman had not foreseen it. That is what is wrong with the formula.
My second objection to the formula is that it attempts to make people pay too much. We are in favour of parents paying but we are not in favour of them paying what they do not have. The formula seems to produce a significant poverty trap in levels of income between £13,000 and £18,000 per year, which of course covers a very large proportion of the population.
I have a letter from somebody affected by the Act whose husband is paying to his daughter, aged 13, more than he is able to keep back for himself and his household. That is not right. That results also from the fact that the formula is assessed on gross income which, as we all know, is very different from our disposable income. For many years I never bothered to know what was my gross income. It was of no interest to me and had nothing whatever to do with how much I had to spend. That person sent me a payslip. His pay is £985 per month and the CSA assessment is £371. That sounds reasonable enough until one sees £49 council tax, £65 national insurance, £122 income tax and £58 for pension. Therefore, that person brings home £316 and is paying to his daughter £371. I believe that that is a disproportionate amount to be made available to one single "daughter. That shows how misleading is the reliance on gross income.
This Act attempts to stand on a one-legged tripod, which is a rather unstable position. We think that there should be three different legs to support separated families. First, we think that the father should pay what he really can afford to pay. Secondly, almost all mothers who are caring for children on their own say that they would like help with childcare in order to go out to work so that they can make a contribution towards supporting the 1200 children. We support that, as does the noble Baroness. We believe that one of the problems with the Act is its reliance on the old-fashioned world of the breadwinner, which disappeared quite a long time ago. In relying on childcare, we go with the grain of letting people do what they want to do, which is a much more constructive way in which to legislate.
Thirdly, when we have relied on what the father can pay and what the mother can earn if she has help with childcare, the state must accept that it must bring up the tail and look after what is left. The state is entitled to wish to reduce the amount that it spends in that regard, but it cannot abolish it altogether.
Who gains from the 1991 Act? The Treasury does not. We have a new study which shows that the noble Baroness, Lady Faithfull, was right all along in what she told us in 1991; that the trouble arose because of cut-backs in the number of staff in the liable relative unit, which was doing a fairly good job until those cut-backs were made. That just goes to show that if economies are not undertaken intelligently, they may become an extremely expensive habit.
The CSA's claims of savings are based on some fairly questionable figures. According to a Written Answer of 7th March in another place, of the amount that it is bringing in, £108 million is from old maintenance achieved by the liable relative unit, which is still continuing; £44 million is from new maintenance, not a particularly impressive figure; and £165 million is from people no longer claiming benefit. But we are not told how those figures are compiled. Before the Act, an average of 24,000 parents every month went off benefit for the ordinary normal reasons: they got married; they left the country; or occasionally they even managed to find a job. It looks as though all those are lumped together as savings which are all ascribed to the Act. That is misleading.
We are told also that all those women who have gone off benefit rather than naming the father of their children are savings due to the Act. Occasionally the Secretary of State tries to make out that that is uncovering fraud. I should like to know whether there is any concrete evidence for that statement because, if it is only a hypothesis, I can offer a contrary hypothesis. Most people do not understand quite how terrified women are of contact with the men who have inflicted domestic violence upon them. I know that there is the harm and undue distress provision for which I am grateful. Ministers do their best to make it operate. But a case which came to me only last week involved a woman who not once, but twice, had had her name revealed to a violent former partner and who had had to change her name and move house at a loss on each occasion. I do not blame Ministers for that. I blame Ministers for creating a situation in which that can happen all too easily.
Also, most men do not understand—I am sure that I do not myself, although I try—quite how much women may mind intrusive questioning about the circumstances of a former relationship. One case which came to me from a CAB involved a woman who was questioned about the putative father of her child. She was asked how many times she had had intercourse with him and how long it had lasted on each occasion. The noble Viscount, Lord 1201 Astor, was as horrified as I was by that case. But if you set up "Jacks" in office—or nowadays one should add "Jills"—you give them power, and sometimes people will abuse it. I should like to know how many women who have come off benefit rather than name the father have done so for such a reason. I should also like to know in how many such cases there is evidence which can be ascribed to fraud and in how many such cases we simply do not know what actually happened.
The noble Baroness is entirely right to say that women have not benefited from the Act. By "women" we must include second as well as first wives: they are not honorary men and are not to be treated as such.
I agree with what the noble Baroness said about the disregard. We on these Benches will work for it. I also agree with what the noble Baroness said about passported benefits. The noble Lord, Lord Carter, divided the House on that subject in 1991; indeed, he was quite right to do so. I believe that the noble Baroness also mentioned the benefit penalty. That was something which the House rejected in 1991. I hope that it will do so again.
I very warmly welcome something for which the noble Baroness and myself have pressed; namely, the concession to women on family credit. I refer to those women who lose family credit because of child maintenance but who, when the child maintenance is reduced, do not have the family credit returned to them. However, now that the Minister has made a concession in that respect, why is it only partial? Why not go the whole hog? That is a matter to which we must return in Committee.
On these Benches we also believe that an injustice is an injustice no matter whether it is done to men, to women, to children or to people having a sex-change operation. The Act has done no more justice to men or to children. We were told in 1991 that children come first. But Mr. David Pannick QC, appearing for the Secretary of State in the case of Biggin v. Secretary of State, told the court that the welfare of the child is not a paramount or even a particularly significant consideration under the 1991 Act. Now they tell us! They did not tell us that when the legislation was before the House. We said it; but it was hotly denied from the Government Bench. I am glad to see that the truth has now come to light.
Whatever the noble Baroness said, what is done for men is not done in response to law breaking; it is done, first and foremost, in response to a careful, well-argued campaign in letter writing. I have received many hundreds of such letters and they are very powerful and well argued. Most of those people to whom I have talked are attempting to use the legitimate, democratic and political channels. The noble Baroness's response in that respect may run the risk of discouraging them from doing so. I would regret that. We all agree that law breaking should be discouraged, but one way to do that is to allow people the hope of achieving change by legitimate means.
I turn now to travel costs. At 250 miles a person has £10 a week exempt income and £1.50 maintenance reduction a week. That is not especially generous. Then there are capital settlements. Over £25,000, a person has £60 a month exempt income and £9 maintenance reduction. That, too, is not especially generous. It reminds me of Richard Hooker on irresponsible child minders, who, he 1202 said, used to eat the baby's dinner and then smear its mouth with a spoonful so that when the parents returned and found the child crying they could say, "It must be colic; you see he has eaten". In my view, the concessions are really a little like that.
On capital settlements, people have to produce documentation dating from a settlement which was made before the Act to show what proportion was for the wife and what was for the children. Before 1993, no one felt the need to do so. That shows the problems of retroactive legislation. That retroaction must go.
The Minister knows my views on the use of cars for people who cannot travel to work by any other means. He will hear them again. Why does the White Paper say that departures are allowed only in a small minority of cases? Why is there no general reduction in the amounts assessed, which are generally and universally too heavy? Why is there no change in the 104-night rule? Further, why is there no change in the principle of spousal maintenance? Why are caring costs allowed for stepchildren only in exceptional cases; and which "exceptional cases"? What if the father is dead and cannot maintain them? Why is there such a patriarchal and limited assumption?
I shall not detain the House by discussing the wording of the Bill. But once again we have words with such meaning as may be prescribed. I should like to know when the noble Lord, Lord Boyd-Carpenter, is going to receive the letter that he has been promised stating where that has been done in previous legislation. When the noble Lord receives that letter, I should be grateful if I could have a copy of it.
Most of the big changes in the Bill are ones which this House cannot address. The House of Lords lives by its capacity to amend government legislation. If such legislation is to be done in a form which we cannot amend, that is something which threatens the future of this House more than anything that has been said by the Opposition.
§ 4.27 p.m.
§ Baroness Faithfull
My Lords, first, I should like to thank my noble friend the Minister for his explanation of the Bill. Secondly, I must offer him my deep condolences for the fact that, although he has charge of this Bill, he did not take the 1991 legislation through the House; indeed, I have great sympathy with him, especially after listening to all the speeches that have been made hitherto.
I should like to begin by looking at the past to which the noble Earl, Lord Russell, also made reference. In about 1985 I went to a member of Her Majesty's Government and pointed out that there was a rise in unemployment and that, because of such a rise, the social security offices were being overworked and overburdened. Those concerned were quite unable to deal with all the applicants who came to the social services departments. At that time, as has already been said, there was the liable relative unit of the Department of Social Security. As a director of social services and a children's officer, I came into contact with that unit. Its officers did a magnificent job of work. The cases came before the court; the court made a decision; and the officers of the 1203 unit—who used to be called "the matrimonial men"—would visit the father who was not paying the wife according to the court's recommendations.
The procedure worked very well. On a casework and mediation basis, fathers were persuaded to pay. But if they could not do so, the matrimonial men would help them to return to court and ask for a readjustment. The courts did not have a formula and were able to judge each case on its merits and determine how each father could pay. Therefore, it was a court-centred discretion.
As I said, in about 1985, I went to the social security offices and I found that because there was growing unemployment the matrimonial men were being taken off their matrimonial work to be put on work on the counter. I could not believe that that was the case and therefore I went to see Sir Peter Barclay who was then the chairman of the Social Security Advisory Committee. Sir Peter Barclay and his committee then looked into the matter and made recommendations to Her Majesty's Government. They advised Her Majesty's Government that as the matrimonial men were being taken off their matrimonial work, the men they had been pursuing for non-payment of moneys were no longer being pursued and taken to court and the sums of money owed were therefore gradually accumulating. Her Majesty's Government sent someone to report on the situation in a social security office. That person reported that things were awful in the social security office and that staff were having a terrible time. However, nothing was done about that.
In 1990 the figures were considered and it was discovered that there was a tremendous amount of arrears. Then the Government began to consider the Child Support Bill. As has already been said, the Government produced the White Paper, Children Come First. We all thought at the time that it was a good White Paper. However, I must say that the mediation method of dealing with cases before 1985 and before the matrimonial men were drafted onto work on the counter was usually successful. However, it was not always successful and when it was not successful the matrimonial men returned the case to court and the court decided what should be done. Something was worked out which was to the benefit of the mother, the father and the children.
I now wish to discuss a completely different point. I hope that in the very near future a divorce Bill will come before your Lordships' House. The divorce Bill lays down that there should be mediation between the divorcing parents before a divorce is granted, and that there should be a year in which the divorcing parents can work out the arrangements that are to be established for the father, the mother and the children. I take this opportunity to say that I hope that reference to the divorce Bill will appear in the Queen's Speech because I think that the mediation system which is recommended in that divorce Bill will possibly forestall a great many of the problems that we face today.
I wish to pay tribute to the staff of the Child Support Agency. I believe they have had an impossible task and they have had to face almost insoluble problems. As the noble Earl, Lord Russell, said, they have had to work with a formula which they must have known could not 1204 work. I pay tribute to them for having to deal with such a difficult Bill. I particularly pay tribute to the staff in the appeals section who have tried hard to show compassion and understanding of the problems. However, they have been held back by the formula with which they have had to work, as has already been said by many noble Lords.
All the parties supported the principle that absent parents should accept a responsibility where appropriate rather than rely on the state to meet obligations which should be those of a parent. It is the detailed implementation of the measure which has created so much disagreement. The two main areas of contention appear to be first, balance; and, secondly, efficiency. First, where should the balance be between the rights of the first family and the second family; between the interest of the lone parent on the one hand and the absent father on the other; between the state/taxpayer and the deserted wife/mother and her children? The second issue concerns administration, which by all accounts has been pretty chaotic during the first year. The wrong decisions have been taken; the wrong letters have been sent to the wrong people; and not enough cases have been dealt with in a timely manner.
Here again I must say that I still support the principle of court centred discretion which meant that the court took into account all the circumstances. That is something which the formula cannot do. I suppose it will never be possible to return to the principle of court centred discretion, but nevertheless the Child Support Agency might well take into account all the circumstances of all the members of a family. I refer again to the White Paper Children Come First. However, in this instance, children do not come first. I submit that in this Bill, as it stands at present, it is a case of the Treasury coming first, and not children. In the Children Act 1989 the welfare of the child is paramount. However, that is not the case in this Bill.
I do not believe that we have thought about research. When I opposed the Bill when it came before your Lordships' House in 1991, I particularly asked for some research to be done. I was grateful to Mr. John Eekelaar, a research worker at Pembroke College, Oxford, who carried out some careful research. That research was forwarded to the Ministry and it was given to me. That, together with my own experience of having worked with these families, made me realise that the Bill would not work, and that it would not be possible to make it work. The various points that I wished to make have already been made by other speakers. I cannot see how the formula can ever be successful unless it has much more flexibility than at present.
I fully support the comments made today by the noble and learned Lord, Lord Simon of Glaisdale. If there is a Division on his amendment, I shall vote with him. I shall not detain your Lordships further because, as I said, the points I wished to make have already been made. But could we not consider what has happened in the past and build on the best of the past instead of on the poorest of the future?
§ 4.37 p.m.
§ Lord Houghton of Sowerby
My Lords, when we finished with the Child Support Act 1991 some of my noble friends accused me of having used intemperate language about the principal Act. I do not apologise for that. I regret that it stirred me to a state of mind that no previous legislation had done. I thought it was an affront to a large section of the people and an insult to the magistracy and other machinery that dealt with these matters in a more temperate way.
The Minister in his introductory speech this afternoon spoke as if little had happened for which he had to apologise. The chaos behind the child support scheme, the near disaster to which it came, and the drastic steps that had to be taken to change management while the engine was at full steam all showed what a morass had been created in this field of administration. It is all very well for the noble Lord to say that it is easy to speak with hindsight. But as my noble and learned friend Lord Simon of Glaisdale said, it was not hindsight that was needed but foresight. We were telling the Government that they were entering a minefield of delicate emotional human relationships. One feels that the original Act intruded a new bureaucracy, a new instrument of interference, with powers in hand to settle difficulties and disputes between men and women who had a responsibility for children.
In introducing this Bill, I had thought that the Minister would tell us something about the present state of affairs in the Child Support Agency. It is the first debate on the issue since we parted with the relevant Bill in 1991. Much has happened since then, but there is still something to be told. The noble Lord just brushed aside that aspect as though all were well. However, the explanatory notes refer to a backlog which has still to be overcome. The truth is that a large slice of the work of the agency had to be set aside completely in order to leave the agency free to deal with other work which appeared to be more urgent. What was that work? We ought to know whether the Government are within sight of getting on top of that complex task and how many more staff will be required to do so. We have heard nothing about the increases in expenditure or staff which have been given to the agency over several years.
Noble Lords might have known that any legislation coming out of the 1990–91 Session would be faulty. Look what came out of that period, my Lords. I refer to the Environmental Protection Act 1990. The Government went through the most amazing parliamentary gymnastics to prevent both Houses from registering sympathy with the idea of a national registration scheme for dogs. But it was the dying period of the Thatcher despotism. The Government also took from the magistrates their customary role with regard to mandatory death sentences in the Dangerous Dogs Act. They relieved magistrates completely of their powers in that delicate field of human relationships.
Bills which require regulations have needed a wheelbarrow to take the regulations from one part of a department to another. Look what we have coming in the field of regulation, my Lords. Look at the Jobseekers Bill. Look at the Disability Discrimination Bill. Heaps of regulations are still to come. With regard to this Bill, the regulations are still to come. It is a regulation-creating 1206 Bill. If noble Lords want to know what the regulations will be, let them read the schedules. Your Lordships will see the hairsplitting which will be brought into the regulations. Regulations may be made to see whether assets which do not produce income are capable of producing income in order that those assets may be brought into the picture regarding allocation income. That is not the only provision. I invite noble Lords to read Schedules 1 and 2 and they will see what is coming.
I assume that the Bill is largely concentrating on that part of the work which formula assessments could not reach, or if they reached it they messed it up, or were unfair or inadequate. The first nine clauses of the Bill create a new superstructure of assessments of liability which goes under the name of departure directions. That is nothing to do with "goodbye" or "au revoir". Departure from what? What directions? The Bill almost states that a departure direction means a departure direction; it is almost as informative as that.
The Bill provides a departure from the inadequacy or unfairness of what are called formula assessments. We ought to have a glossary of words and phrases in common use in the bureaucracy of Britain today. I note that a list of abbreviations is published in many official publications in which initials are used and the Government do not want to print the whole word every time. But it is becoming increasingly difficult to follow the technique of legislative practice.
There is another aspect of this superstructure. I surmise that the provisions deal with cases which brought so many people out on the streets. It is no good glossing over the difficulties of the past when more than once women paraded with children in perambulators protesting about the injustices of the Child Support Act. I guess that in those cases an allocation of income had already been made towards the children but the agency decided to have a go to see whether it was right. The agency increased agreements which had been reached, in some cases doubling the contribution of the father towards the maintenance of the children.
With regard to Clauses 1 to 9, the Bill deals with a small minority of cases. What is "small minority" in this context? How many? Are they cases where no state funds are employed? Are they cases where it is a matter of an allocation or re-allocation between the parties but no state benefit is being paid? I do not know. Should those cases be in the scheme? We want a little information on that.
Let us turn to the consequences regarding staff and expenditure. That is where we find a clue to what things mean. My estimate is that the Bill will cost the expenses of 1,000 extra staff; 750 are already mentioned as being necessary for the initial reassessment of cases which will come within the provisions of the Bill. The departure directions can have two stages: applications can be thrown out at a preliminary stage, or they can go straight to a final stage. The strictest discipline will be exercised on discretion. It is a form of taxation far more meticulous and rigid than income tax.
The Minister puts the proposals over in his benign and persuasive way but he is an expert in the art of persuasion. I remember his maiden speech from the Back Benches when he was so persuasive in his promotion of the consumption of Scotch whisky that a number of us went 1207 out and bought a bottle to see what it tasted like. What can you do with a Minister like that! He tells us that this is a benign scheme, holding the hand of justice evenly between the parties. However, the Act has already created more additional domestic worry than probably any other similar Act. There may be benefits in the legislation but what a price has been paid for them. I have in mind the results of various monitoring bodies throughout the country which have sent reports of what they experienced at the hands of the system. Those reports were very worrying indeed.
My noble and learned friend Lord Simon of Glaisdale referred to the part played by the Inland Revenue in the matter. I took the strongest objection to the inclusion in the principal Act of a provision for child support officers to be entitled to apply to local inspectors of taxes for the right to look at the payroll particulars delivered to them by employers in their district. The provision was surrounded by conditions: the officers were not to be told the person's earnings; they were not to be allowed to roam over all the payrolls in the office; they had to know which firm was suspected of having in its employment someone who was wanted for child benefit payments. The applications had to go to the board of the Inland Revenue.
I was shocked to find that in the first period of a year or less no fewer than 113,000 applications had been made to the Inland Revenue for permission to look at payrolls. That is an unjustified intrusion into the affairs of the revenue and the relations between the Inland Revenue and taxpayers. What is more, not even the police are allowed to do what child support officers are asking for. Police officers are not permitted by tax officers to scour through payrolls, except in cases of murder. So the child support officer has been put in a position equal to that of a policeman looking for a murderer. What a state of affairs!
I believe that there are some things which you do not do, even if it means that you have to find alternative methods of pursuing your purpose or even if you are frustrated. Sometimes the means matter more than the end and we must beware of that. We must beware of anything that imposes a feeling of inferiority on a large section of society, with people having lost their dignity and being put in the hands of bureaucracy, in order that officers may go into the intimate details of relationships and why people are not paying more towards the support of the child. In some circumstances, it would be worth while the state taking over the responsibility rather than allowing the kind of problem that can occur between a father and a mother. I went into all that on the original Bill and I am not without hope that one day something better than this scheme may be used.
I finish by saying that we have quite a Committee stage on the Bill in front of us. I sometimes wonder what the House of Commons is doing after what we went through on the Jobseekers and the disability benefit Bills, the flaws that could be found and the difficulties that might arise. When we consider what was needed to make the legislation better understood and more acceptable, there is something wrong with the system. This Bill ought to go to a committee which could go over all the details with care, free from the spirit of debate. The difficulty with the administration of the Act is that it began with a perfectly 1208 good intention and a simple purpose. The intention was to provide better provision for children who ought to receive support from a parent. The principle was, in civil terms: "Make the blighters pay". That is all we need say. The child support scheme was set up, with nothing like the consultation that was necessary as a precaution to introducing legislation of such complexity and sensitivity.
I believe that my noble and learned friend Lord Simon was fully justified in putting the amendment on the Order Paper. Why do I call him "my noble and learned friend"? Because he has been a friend of many years; not all our friends are on one side of the House. I say to noble Lords that if they do their duty, they will pass the amendment and let the Government know that, at any rate in this Chamber, we are sensitive to all that has happened under the Act, moving the House to refer to the agonies which we know have arisen behind the scenes in recent times. I hope that out of the Bill will come a better approach to the problem. Perhaps the Minister has introduced a more benign climate with the Bill, it is not laced with hostility, as was the original Act. It does not confer the disgrace of defaulter, deserter, repudiator of responsibilities and all the language that can be used about someone who is believed not to be doing what he ought in the interests of his family.
I welcome the amendment, although I wonder whether we are spending time and money on rearranging the allocation between fathers and mothers, who are above the range of social benefits, to support the children. I do not know why the agency had to assume a wide brief over the subject when in the beginning its main purpose was to ascertain whether the public interest was being properly defended in the application of social benefits to thousands of cases. What shall we do about the women who refuse to have anything to do with the agency? Presumably they are now themselves defaulters or have got on the wrong side of the agency and lost its sympathy. And why an agency? This is a matter of public administration. Under this scheme we have removed maturity from those who deal with the clients of the state, when some better understanding would probably have been needful and possible at the level of court jurisdiction.
I have made my speech. I hope that I shall have the energy to go through a Committee stage if it lasts from now until Christmas. Let us see whether we can improve the Bill. I hope that my noble friends will see that the final stages of this Bill are kept free—as the final stages of other Bills should be—at Third Reading and Bill do now pass for some summary to be given of what we have done with the Bill and where we are proceeding with it. To put down amendments at the last minute, and then at two o'clock in the morning debate the Motion that the Bill do now pass, is not fair given all the work that will have been put into it. Let us have a little space for an assessment of what we are doing and of the impression that we are making upon red tape and a Ministry that has less resilience than any in my long experience.
§ 5.1 p.m.
§ Lord McIntosh of Haringey
My Lords, this debate has been, sadly, short in numbers of speakers. That is perhaps because it has taken place on the first day back 1209 following a week's Recess and on a day when the House of Commons does not seem to think it worth while working. However, it has certainly not been short on quality or understanding and sympathy with the issues that arise in relation to this Bill. And it has certainly not been short on agreement on the fundamental ends that we all seek to achieve. We disagree in many respects about the means to achieve those ends, but I believe we are all agreed, as my noble friend Lady Hollis said at the very outset, that the principle on which we base our approach to the legislation is that you cannot divorce children. You can divorce a wife or husband, but responsibility for children continues throughout their childhood. That means financial responsibility on both sides.
This problem of the break-up of marriages and of lone parents is only one aspect of a whole series of social problems which have been, as I believe everybody would agree, getting worse in recent years. We have to look at the life chances of children and what makes those chances more difficult to achieve. It could be low pay; it could be the unemployment, disability or sickness of their parents. Now, added to that is the undoubted increase in family break-up.
When, over 50 years ago, Beveridge set out the skeleton, and indeed some of the detail, of the welfare state, he made assumptions that we cannot any longer make. He made assumptions about stable family relationships; about a divorce rate that was far lower than it is now; about a level of full employment to which at the moment we can only aspire without doing anything very effective to achieve; and even, for those in employment, about lifetime stable employment conditions, which we do not seem to be able to achieve either. All these aspects, from the point of view of children, have gone to make life enormously more difficult and to increase the numbers of children in families that are themselves subject to dependency on the state.
There has been much philosophical discussion about that aspect—not so much this afternoon, but particularly in the United States. I find that unrealistic and very often unwelcome. I do not find acceptable some of the talk about dependency on the state being replaced by dependency on communities in the way that Etzioni and his rather unwelcome disciple Newt Gingrich seem to think is possible. I certainly do not believe, along with Charles Murray, that we should look on dependency as the cause of family break-up. It is fairly clear that dependency is the effect of family break-up and all the other sorts of insecurity. Therefore we are bound to look to the state as the saviour, the provider, where other conditions do not exist to give children the life that they deserve.
The problem has been that, increasingly, demands on the state have meant that dependency has itself led to a degradation in the quality of life of those who are forced into dependency. Some of that seems to me to be quite avoidable. It seems to me that the conditions imposed, for example, on jobseekers, on those who are unemployed, must affect the children in those families and must affect their life chances. The Social Fund replacing grants for household equipment and so on with loans that have to be repaid is surely an avoidable way of degrading those in a dependency situation.
1210 There can be no doubt that the Child Support Bill before us now is a special case of a much more general problem. But it is a very important special case. My noble friend Lady Hollis said that there are nearly a million children in families where the parent or parents are unemployed and on income support, but there are nearly two million families with lone parents who are on income support. We must—and I believe it is possible—do better than we have been doing in making life better for those children. After all, dependency of the kind that we have created in this country is not universal in civilised Western countries. In the UK 70 per cent. of all lone parents are in families on income support. However, in Sweden, which has a much more coherent social security and welfare state system, 70 per cent. of lone parents are in the labour market. That is the kind of objective that we must seek in our approach to this aspect of social policy.
I shall not go over the history of the Child Support Act and what has gone wrong with it. That has been very fully aired in the debate, and in any case I am not particularly qualified to deal with it. However, I wish to make clear that when we consider the policy that underlies this Bill, we are considering not only the Bill but the regulations that were introduced in April this year. It is that package of regulations plus the Bill that we have to judge. That is what I propose to do.
I have to say a word about the amendment moved by the noble and learned Lord, Lord Simon of Glaisdale, for whom I have an enormous respect and with whose judgment on these matters I do not normally find myself in disagreement. The noble and learned Lord is of course right in two of the three parts to his amendment; namely, that the Bill does not fully obviate the faults of the 1991 Act and that it is a skeleton Bill, leaving far too much to regulation. But these are matters that we ought to address in Committee. It would be a grave mistake—I say this having made the same mistake myself—to put such an expression of opinion about the content of the Bill into a reasoned amendment of this kind, have it inevitably defeated by the Government in a Division, and then find ourselves up against the argument in Committee that the House has already expressed an opinion on the matter that we seek to amend—
§ Earl Russell
My Lords, does the noble Lord remember the Education (Student Loans) Bill 1990? I believe that if he checks the precedent, he will find that his argument is mistaken.
§ Lord McIntosh of Haringey
My Lords, there are a number of precedents for reasoned amendments and, generally speaking, they do not encourage us to think either that we can win reasoned amendments at Second Reading or indeed that, even were we to win them, it would make any difference to the subsequent passage of the Bill. But that is a tactical argument rather than an argument of principle which I make to the noble and learned Lord.
One comment that I would like to make is about the noble and learned Lord's second point on the rule of law. I cannot agree with him that there is anything new about the provision that civil servants in the Child Support Agency shall make decisions about people's lives. That happens all the time. Indeed, the noble and learned Lord 1211 himself voted with the Government in a Division on an amendment to the Jobseekers Bill which sought to overcome the principle that jobseekers could be deprived of their benefit while the case was being heard by the appropriate officials. I found that a surprising judgment on his part, on a much more serious issue than the issues raised by this Bill. So, although I have much sympathy with what he says, I find it impossible to recommend my noble friends to support him in a Division, should he call one. He has made valuable points and the House should be grateful for them.
Similarly, there is the position of the Liberal Democrats. I listened to the speech of the noble Earl, Lord Russell, who said in terms that his party rejects lock, stock and barrel the Child Support Act of 1991. The noble Earl rejects that Act because he rejects a formula. What does that mean? It means that we return to the courts—very largely to the magistrates' courts and perhaps to a unified family court. That would be very valuable for all kinds of other reasons but it does not solve the problems which led to the introduction of the Child Support Act in the first place.
If these matters are left to the courts, there will be huge variations in different parts of the country. The chance of a single mother obtaining a decent settlement will depend on the judgment of local magistrates rather than on an attempt—only an attempt and it is a difficult thing to do—to find a formula on which to operate. The balance of a formula with departures, which is the appeals procedure now proposed in the Bill, may not be perfect and may never be perfect, but it is better than relying on the courts and magistrates alone. The noble Baroness, Lady Faithfull, made that point very effectively when she said, perhaps sadly, that we cannot go back to the original system. That time has passed.
That does not mean that there is not very much more still to be done. The Child Support Agency has had enormous difficulties, partly—I believe largely—for the reason given by my noble friend Lady Hollis; namely, that the original Act was retrospective. That led immediately to a huge backlog and huge delays. But the difficulties also arose because insensitive performance targets were set for the agency by Ministers. If performance targets were set, they were rather low targets which have not been achieved. But, if the agency is set targets which depend, for example, on the amount of money collected from absent fathers and there are no further qualitative targets, then inevitably the agency will try to get more money from the absent parents whom it knows and with whom it already has contact rather than look for the ones it does not know.
It is rather like the drunk who is found looking for his keys underneath the lamp post. A passer-by asks him, "Did you lose your keys here?" and he replies, "No, I didn't lose my keys here but the light is better here to look for them." That is exactly what has been happening with insensitive ministerial directions. The figure given by my noble friend of 86 per cent. incorrect assessments is absolutely horrifying. The suggestion in the targets for the CSA that it should be looking for only 75 per cent. correct assessments seems to me to be even more horrifying.
1212 We have to say that the package of Bill plus regulation, which is before Parliament and which has been the policy of the Government, benefits the absent parent and particularly the absent parent in better-off conditions rather than the parent with care or the children. The benefit to the absent parent appears in the regulations; the improvements appear in this Bill. That is why we do not propose to vote against the Second Reading and why our approach to the Committee stage of the Bill will be constructive. We do not indulge in trench warfare, as I am sure the Minister will agree.
However, we must somehow ensure that what comes out of this legislation is benefit for children rather than benefit for the Treasury. Of the many lines of amendment about which my noble friend has given notice the most important is the issue of maintenance disregard. It is essential to make sure that a certain amount of the money that is obtained from the absent parent does not just go to the Treasury by being offset by a reduction in benefit but that it goes to the quality of life and the resources of the parent with care and the children. I believe that if we could achieve that—it does not have to entail enormous amounts of money—we should overcome some of the problems of the resistance of absent parents to making payments and some of the difficulties which the hard pressed staff of the Child Support Agency have experienced.
This is not a bad Bill. It is not as good a Bill as it should be. It does not address many of the problems that still exist. Perhaps they cannot be addressed simply in the context of the problem of child support. Perhaps the social policy issues are very much wider. But it is a Bill which deserves your Lordships' attention. It deserves careful consideration in Committee and on Report. I hope that the House will give it that attention.
§ 5.17 p.m.
§ Lord Mackay of Ardbrecknish
My Lords, we have had an interesting debate. It has been a little shorter than the normal run of Second Reading debates in which I have participated in this Session. It is nonetheless welcome for that. As the noble Lord, Lord McIntosh, said, although the debate has been short and had a limited number of speakers, it has certainly been interesting and has effectively covered the field.
My noble friend Lady Faithfull indicated, perhaps in an attempt to throw a lifebelt in my general direction, that somehow she did not hold me responsible because I had not been involved in the 1991 Bill. I cannot even remember whether I had arrived in your Lordships' House at that time and therefore whether I had voted on that Bill. I may check on that point before we come to Committee.
The noble Earl, Lord Russell, who has been present at all my previous performances at the Dispatch Box on legislation this year, discussed the matter of my hat trick, which occurred one day when I had three Bills up in the air, so to speak, at the same time. I am happy to say that one of them is now safely down from the air and at the other end. I am now dealing with only two Bills.
I am grateful to the noble Lord, Lord Houghton, for remembering my maiden speech and the influence that it obviously had. He was very charitable in not reminding 1213 the House of some of my other speeches in response to his Bills to amend various dogs Acts. I am grateful to him for that. Perhaps he has a less charitable view of me on the subject of dogs than of whisky.
The debate showed that there were differences between the Government, myself and other noble Lords. But it also showed that there were considerable differences between some of the other noble Lords who spoke. Clearly, the official Opposition, as we heard from the noble Lord, Lord McIntosh of Haringey, and the noble Baroness, Lady Hollis of Heigham, understand, appreciate and wish to deal with the problem of absent parents paying their contribution to the maintenance of the children for whom they have responsibility. I am not sure that that is entirely agreed everywhere. I read the speeches in the other place at Third Reading and have to say to the noble Lord, Lord Houghton of Sowerby, that we have had significant Bill-do-now-pass speeches in the last two Bills in which I have been involved. The noble Baroness, Lady Hollis, made substantial speeches pointing out the error of my ways. I made substantial speeches at Third Reading pointing out why I was right. The noble Baroness is saying that she is waiting for repentance; she will have to wait for a long time.
In the other place the Opposition and the Government were accused by Mrs. Liz Lynne, the Liberal Democrat spokesman, of being in collusion on this matter. I do not believe that we are in collusion. But we are in agreement with the widespread and continuing support for the underlying principles of child support: that a parent should be responsible for supporting his child when he can afford to do so.
I was chided by someone for not dealing with the problems that have occurred with the agency since the Bill became an Act. However, I thought I had. Clearly, it has not been easy to translate that expression of support into practice. Reversing a culture where all too often the taxpayer took care of the bill was never likely to be easy. There has been resistance to the move away from the court system despite the inconsistent and unpredictable results with low awards of maintenance for children which that system produced. We now accept that we have gained some experience in the difficult business of running a child support system, and I hope that the House recognises that we have not been intransigent. We are working to restore the balance. We have undertaken a review of both the policy and the workings of the agency. We welcomed the helpful advice; we listened and acted. Indeed, we have gone further than the recommendations of the Social Security Select Committee and that is evidence of our commitment to get it right. The changes introduced in April are already producing tangible results for many absent parents; and those, together with the changes contained in this Bill, will improve the way in which maintenance is assessed, collected and enforced.
Perhaps I can deal with a number of the issues raised. There were a fair number, and I shall try to do as many as I can without trying the patience of your Lordships too long. On the question of maintenance disregard, to which the noble Baroness, Lady Hollis, and her noble friend Lord McIntosh of Haringey referred—I have no doubt we shall return to this issue—experience has shown that the best way of helping families to improve their standard of 1214 living is to ease the move from benefit dependence into work. Surveys of lone parents, and indeed some of the debates we have had in this House, show that the majority want to return to work, and there is no great disagreement between us on that.
Where there may be disagreement is that we believe that the £15 maintenance disregard within the in-work benefits—family credit, disability working allowance, housing benefit and council tax benefit—is a better way of providing help to parents with care to help themselves and their children rather than a disregard in income support. The Bill contains the provision I mentioned which will further improve work incentives—that is, the proposed maintenance bonus which is worth up to £1,000. That will give a boost for a parent with care when that parent moves into work. An income support disregard would make it more difficult for a parent with care to earn enough to make her better off in work than on benefit. It would increase her dependency on benefit rather than reduce it. Noble Lords will not be surprised when I say that we estimate that the long-run cost of a £5 per week disregard in all cases would be around £110 million a year. The proposed maintenance bonus is a more imaginative and effective use of resources.
The noble Earl, Lord Russell, asked, as did the noble Baroness, Lady Hollis, about the number of appeals and the number of departures. The noble Earl asked also why I thought we would have departures in only a small minority of cases. As I explained in my initial speech, the standard formula approach is needed to achieve consistent results in the majority of cases and the departure should only come into play in exceptional circumstances.
On the Australian experience, which has been prayed in aid on a number of occasions, in only 7 per cent. of Australian child maintenance cases is there an application for a departure. The Australian system is very different from the UK system. For example, the assessment is made on the basis of taxable income for the year before last; a broad percentage of gross income is taken for child support and there is no protected income to avoid hardship as there is in our system. There are various reasons therefore, which do not apply here, why Australian absent parents and parents with care may ask for departure. It would not be wise to try to extrapolate their experience in order to make estimates. Our own experience in social security is that appeal rates in general are under 2 per cent. However, for estimating purposes we assumed that applications for departures may well run closer to 6 per cent. or 7 per cent.
§ Baroness Hollis of Heigham
My Lords, can the Minister turn those percentages into figures? What numbers of appeals does he expect?
§ Lord Mackay of Ardbrecknish
My Lords, I am afraid that while on my feet I cannot turn the percentages into figures. I shall have to examine the calculations first and return to that in Committee.
The noble Earl, Lord Russell, brought to the Jobseekers Bill his anxieties in relation to the fear of violence felt by, largely, women. He mentioned it again today on the question of absent parents. The policy in relation to potential violence from a former partner appears to be working well in our current system. Between the agency's 1215 launch and 27th April this year, good cause not to name the father had been accepted in over 73,000 cases from over 156,000 which are being or have been investigated. In only 18,000 cases so far has it been necessary to impose a reduced benefit direction.
The noble Earl asked also about the formula. The formula provides for basic living costs. It also provides for protected income ensuring that an absent parent and any new family remain well above income support levels after paying maintenance. It is true that it does not provide for debts, for example. We believe that it would be wrong to allow any commitment automatically to come ahead of one's children. In individual cases the new departure system will be able to take account of specific expenses not included in the formula.
I listened with some interest to one of the noble Earl's many examples—he always brings a fair number to the Chamber—where, if I can paraphrase it, a man started with £900 and got down to paying out more for his daughter than he had, and therefore he had nothing left to live on. The noble Earl puzzled me because he started working from gross income. The formula works on net income. It allows for living expenses and housing costs. It is only after those deductions that we take 50p. in the pound until the maintenance requirement is met. I find it hard to follow the arithmetic of his case, though it is always easier to do so the following day when one reads Hansard. I shall look at it again tomorrow.
§ Earl Russell
My Lords, if I might assist the Minister, does he agree that the formula does not allow for council tax or 50 per cent. of superannuation payment?
§ Lord Mackay of Ardbrecknish
My Lords, I thought it did allow for 50 per cent. of superannuation payment. I am not sure about council tax; but if the noble Earl says that it does not allow for it, I shall accept that. Indeed, in a way people have to be left to pay their own bills, just as the rest of us have to pay our bills and things like council tax. Many people would be happy to be relieved of council tax commitments, but there you are.
The other question relating to property was the property settlement example where the parent with care's new partner—obviously not very well chosen for financial management attributes—had squandered all the resources. The new provisions will allow for that type of case to be dealt with. The absent parent will receive his allowance for the settlement irrespective of the fact that the money has now been spent. That should help in that circumstance.
Still on property, I was asked by the noble Baroness what will be done to help parents with care on income support when help with mortgage interest payments for the first nine months is withdrawn. We are considering the report by the Social Security Advisory Committee on the new arrangements for income support mortgage interest. I have to say that the noble Baroness will not tempt me into forecasting our conclusions, but they should be along shortly.
The noble Earl asked me about the father of step-children who is dead and therefore can no longer maintain them. In such cases a departure can be asked for.
1216 The noble Lord, Lord Houghton of Sowerby, asked me about the expression,assets which do not produce income are capable of producing income".While that might be a rather legalistic phrasing in the Bill, it should not prevent us from recognising the intention behind it, which is that in this case we intend to allow a parent with care to ask for a departure on the ground that the absent parent is diverting what should properly be income into some form of asset so that his child or children support liability would be lower than it ought to be. That is why that rather legalistic phrase is in the Bill.
The noble Lord, Lord Sowerby—
§ Lord Mackay of Ardbrecknish
My Lords, I am sorry about that, but who am Ito complain about our titles when I have one which I constantly have to pronounce and spell. The noble Lord, Lord Houghton, and the noble Baroness, Lady Hollis, asked me about the agency's performance, a matter raised by the ombudsman and by others. As I admitted at the beginning of my contribution, the agency had a difficult start. But in the past year it has undertaken a full review of its business and it has taken measures to improve both its productivity and the quality of its service. That includes methods for improving accuracy, additional check-ups to prevent errors, enhanced training for staff, better targeted quality checks and new working arrangements. As a result, we believe that the improvements already apparent during the second year will be built on during this year.
The Bill sets out that around 750 staff will be required to administer the scheme, split between the agency and the independent tribunal service. As old cases—pre-departure scheme ones—are dealt with, the number of staff will be reduced. The news of the agency's performance is that by the end of March 1995 it had completed more than 450,000 maintenance assessments, issued more than 1 million application forms to parents with care and secured more than £890 million in benefits savings. Full details of the agency's activities are placed in the Library of the House each month.
Perhaps I may turn to the speech of the noble and learned Lord, Lord Simon of Glaisdale, who has an amendment down on the Order Paper, and take up one or two of the points that he made. He suggested that it was contrary to the rule of law for the Child Support Agency to use distress for enforcement. As he will know, the use of distress to enforce a civil debt is normal. The agency does not and cannot employ distress without a liability order issued by the courts.
§ Lord Simon of Glaisdale
My Lords, what is objected to is that the child support officer could enter private premises and interrogate employers and fellow employees who would be bound to answer as otherwise they would incur a penalty. It was that that was said to be contrary to the rule of law, because officials enjoy that and ordinary citizens, rightly, do not.
§ Lord Mackay of Ardbrecknish
My Lords, I was going to come on to that point but I shall do so now rather than later. I refer to the question of Inland Revenue confidentiality, which was raised not only by the noble 1217 and learned Lord but also by the noble Lord, Lord Houghton of Sowerby. The CSA does not approach the Inland Revenue for information on income. There are no powers for the Revenue's records to be used except to determine the current address of an absent parent or the current employer of an absent parent. The CSA has no power to ask the Revenue for any information except in those two areas. It has power to send in inspectors to obtain information from unco-operative employers but it has done so in only a handful of cases so far. It may approach employers for information as a matter of routine. The fact that inspectors who are appointed to acquire information under the Child Support Act have that power is not unlike other inspectors in similar areas where they are appointed for the purposes of gathering information. For example, National Insurance inspectors enter premises to examine wages and other records. As I said, in the case of Child Support Agency inspectors approaching the Inland Revenue, it is to check on addresses and not on income. So I do not believe the inspectors have been given sweeping powers that are not given anywhere else.
The noble and learned Lord, Lord Simon of Glaisdale, and my noble friend Lady Faithfull rather took us back to the court system and looked back as if, before the Child Support Agency, all was well. The system before 1993 was fragmented. Assessments were being done in a range of courts as well as in DSS local offices. They were inconsistent and maintenance was often not paid. Fewer than 50 per cent. of lone parents received maintenance. It is easy to think that the past was ideal, especially when we remember some aspects of the agency's earlier performance. But the agency is improving all the time.
§ Earl Russell
My Lords, has not the noble Baroness, Lady Faithful!, given us the explanation of why the amount of maintenance paid was so little?
§ Lord Mackay of Ardbrecknish
My Lords, I heard that and I explained that I think we look back perhaps through more rose-tinted spectacles than the situation of those years merits. In the year prior to the introduction of the scheme only around 20 per cent. of parents with care on income support had maintenance arranged. In that year £330 million in benefits savings were secured. The position in 1994–95 had changed so that 96 per cent. of the agency's work involved parents on benefit, of whom an estimated 77 per cent. had not previously received maintenance. That secured £479 million of benefits savings.
The noble and learned Lord, Lord Simon of Glaisdale, said that the 1991 Act had caused great public expense. In 1994–95 the agency achieved benefits savings of £479 million, at an administrative cost of £184 million. It is expected to achieve savings of £540 million next year, with an administrative cost of £183 million.
The noble and learned Lord said that maintenance for ex-partners and for children were intimately inter-related and that we should abandon an agency and formula-related system and revert to a court-related system. We have encouraged adults who separate to reach a clean-break agreement so that each can then rebuild his or her life. But there can be no clean break between parent and child. There is no full and final settlement. Indeed, the 1218 noble Baroness, Lady Hollis of Heigham, put that point in her usual very strong manner. It is right that the courts should determine the disposition of assets between the adults, but we believe that the best way of ensuring proper maintenance for children is through a fair and consistent formula system with departures, where appropriate, in a minority of cases.
We believe that the Bill will make the child support system a fairer system. Any absent parent who has special expenses and genuine difficulties in meeting his commitments will now have the opportunity for his case to be looked at again. Absent parents will not be able to say that their assessment is unfair. I trust that the noble Baroness will not be able to accuse me of bending to the campaigns of organisations like, I suppose, Network against the Child Support Act, where it would appear she was suggesting that former partners were being rewarded for their law breaking. That is certainly not our intention. We believe that former partners will not be able reasonably to refuse to pay. Anyone simply intent on avoiding his responsibilities to his children will find the agency better equipped to secure his compliance. The whole purpose of the child support scheme continues to be to secure more maintenance more regularly for more children. I believe that these changes will help to achieve that aim.
I do not know what the noble and learned Lord, Lord Simon of Glaisdale, intends to do, but if he were to respond to the request of the noble Earl, Lord Russell, and my noble friend Lady Faithfull and put his amendment to the test, I trust that the rest of my noble friends will support me in the Lobby. I trust that your Lordships—
§ Lord Mackay of Ardbrecknish
My Lords, I shall not split hairs about that. I hope that the rest of my noble friends will support me in the Lobby and that the House will give this Bill a Second Reading.
§ 5.40 p.m.
§ Lord Simon of Glaisdale
My Lords, I am extremely grateful to noble Lords who have participated in this debate. Of those who spoke only the noble Lord, Lord McIntosh, and the Minister did not participate in 1991. We are very grateful for the thoughtful way in which the noble Lord, Lord McIntosh, put this question in its wider social context. As for the Minister, I presume to say that he did valiantly. Of course, he has to defend his department, but I respectfully join with the noble Earl in expressing sympathy with the Minister about the case that he has to meet.
I believe that the noble Baroness misunderstood—I am sure that it was my fault—as to the rule of law. I did not say that erecting a child support agency as a statutory agency in place of the jurisdiction of the magistrates' court was in itself an infringement of the rule of law. But I adopt what the noble Lord, Lord Houghton of Sowerby, said. It is a monstrous arrogation and proliferation of bureaucracy. It is an aggrandisement of bureaucracy at the expense of the judiciary. What I did say was contrary to the rule of law was based on what I cited from Dicey; namely, that it is a fundamental part of the rule of law that 1219 you do not put officials in an exceptional position; that they should be like their fellow citizens, amenable to the ordinary law of the land.
I indicated four respects in which that was infringed in 1991, and this Act does nothing to remedy the situation. The first was to give officials the right to enter private premises and, if they were denied, they were denied on the threat of a penalty. The second was to interrogate employers of fellow employees as to the circumstances of the person they were investigating. That again is an exceptional power. I am bound to ask from the Cross-Benches this question: what are a Conservative Government doing introducing such a power?
The third point I indicated was not referred to at all, even obliquely, by the Minister—that is to say, the exceptional power of distress. As your Lordships know, that is a self-remedy to recover a debt. It is a very harsh process. The common law has fringed it around with safeguards. All those safeguards are swept away in the case of officials. It is that, with the other matters, which are contrary to the rule of law. I ask again: what are a Conservative Government doing about that?
The fourth matter is one to which the noble Lord, Lord Houghton of Sowerby, referred so robustly; that is the power to infringe the confidentiality of the Inland Revenue. The Minister said that it is a limited power. Even so, it is a grotesque power to put into the hands of officials. The Minister said that as regards some of those matters there are precedents. So be it. That is the way in which bureaucracy works. It encroaches from precedent to precedent. In the last century it was said that freedom goes from precedent to precedent. Under this regime it is bureaucracy that goes from precedent to precedent. It is a major matter that these four points are not faced at all in this Bill and are barely defended by the Minister in his very able speeches.
Contrary to what the noble Earl has advocated, the noble Baroness wants to keep the Child Support Agency. I am afraid that she has contaminated the noble Lord, Lord McIntosh of Haringey. I am afraid that she has allowed a cloven Fabian foot to escape from her elegant footwear. I entirely agree with the noble Earl. We want to return to a judicial system. Naturally, it was not perfect, but magistrates are human beings, as are, dare I say, the officials who put forward these two Bills. Of course the magistrates' courts system could be improved. It could have been greatly improved at a tenth of the effort which has been put into the Child Support Agency if that effort had been devoted to trying to improve the system of the magistrates' matrimonial jurisdiction.
The noble Earl invited me to divide the House on this issue. I am most grateful to him for saying that he will support me, as did the noble Baroness, Lady Faithfull, and, I believe, the noble Lord, Lord Houghton of Sowerby. But during the speech of the Minister I have been conscious of the way in which the Benches on my left have been filling up. I am also conscious of absent friends who may be lurking outside the Chamber. To divide the House, realistically looking at it, would at least show that there are more just men in your Lordships' House than were found in the cities of the plain. But the result in the end would be the same. The noble Lord, Lord 1220 Strathclyde, would emerge as flagella intacta as he has proved to date. I shall not withdraw the amendment because that might seem to be an admission that the Government have vindicated their arguments and I do not think that anybody listening to the debate could really claim that to be so, so I shall simply go as far as a collection of voices and shall not ask your Lordships to divide on the matter.
§ The Deputy Speaker (Viscount Allenby of Megiddo)
My Lords, the original Question was that the Bill be now read a second time, since when an amendment has been moved at the end to insert the words set out on the Order Paper. The Question is that the amendment be agreed to. As many as are of that opinion shall say, "Content". To the contrary, "Not-Content".
§ On Question, Bill read a second time and committed to a Committee of the Whole House.