HL Deb 20 June 1995 vol 565 cc226-64

House again in Committee.

Earl Russell moved Amendment No. 90: After Clause 22, insert the following new clause:

("Certain arrears

. —(1) This section applies to arrears of child support maintenance which are payable under an assessment which was made at a date later than the dates of the period in respect of which the arrears in question are payable, and which were not also payable under an assessment which was in force during the period in respect of which they are payable.

(2) Arrears to which this section applies shall not be enforceable except with the leave of a judge of the Family Division of the High Court (or, in Scotland, of the Court of Session).

(3) In any proceedings concerning such leave, the person entitled under the assessment, and the person liable under the assessment, shall be entitled to be heard; and unless the judge otherwise orders, their costs of the proceedings shall be payable by the Secretary of State on an indemnity basis.

(4) In any such proceedings—

  1. (a) the judge shall not give leave unless he is satisfied that it would be unjust not to do so, and
  2. (b) he shall have power to remit all or part of the arrears in question.").

The noble Earl said: This amendment deals with arrears. The Committee may be aware that the procedure has been that arrears accumulate from the date when the parent with care signs the maintenance application form but they come as a bill to the absent parent only when he gets the maintenance assessment. Since the agency has been so severely overburdened and since the body of work has been such that it could not keep up with it, a very long time has been elapsing between those two events.

One of the biggest shocks affecting those who have received maintenance assessments is the enormous weight of arrears that comes with the assessment. I have already mentioned a case in which the arrears for someone with very little income had accumulated to £2,600. I believe that probably that resulted from an error, but the perfectly genuine cases of arrears become backbreaking.

That may have the effect of preventing the absent parent from paying a maintenance assessment which he might otherwise have been perfectly well able to pay. It is never worth breaking the camel's back when one has to rely on regular financial support afterwards. Here there is a situation with which it might be in the Government's interests to deal, apart from any consideration of justice.

I understand that a concession has been made on this matter for the future. No doubt the Minister is about to tell the Committee all about it. But the effect of the amendment would be to extend that concession back to 1993. So it would deal with weights of accumulated arrears which in many cases will never be paid off and which lie on people who have a horror—with which this Chamber is familiar—of being severely in debt.

In any of those cases applications over arrears would have to be made to a judge of the Family Division, who would have to decide that it was unjust not to enforce them. So before the Minister starts to hold forth as he has done many times about absent parents deliberately evading their obligations, let me stress to him that this amendment would do absolutely nothing for any absent parent who was deliberately evading his obligations. If, in the opinion of the judge—I have confidence in our judges and I hope that the Government do too—it would be unjust not to enforce them, then they would be enforced. But where the arrears arise perhaps from the agency's inability to keep up with its work or where they arise from complications, cock-ups or inaccurate information in the assessment, they might be remitted. Some remission is essential both for the absent parent's ability to go on paying and for any kind of continuing consent to the system, in which the Minister has an interest. I beg to move.

Lord Simon of Glaisdale

In my time it was the general practice of the judges of what is now the Family Division not to enforce arrears of more than one year. That practice was based on long experience of justice. So far the amendment of the noble Earl is entirely in line with it. I also venture to think that the discretion that he gives to the judge would be exercised precisely in the way that he claims.

Lord Mackay of Ardbrecknish

This amendment provides that arrears of maintenance due for the initial period—that is, the period from the date on which liability commences up to the date the assessment is made—shall be enforceable only with the leave of the Family Division of the High Court. It also enables the court to remit all or part of the arrears, and requires the Secretary of State to meet all the costs of the application unless the judge orders otherwise.

It will always be the case that initial period arrears will occur in cases where there is no court order in force because in such cases liability starts before the date on which the assessment is made. The noble Earl alluded to the two changes introduced in April that will limit the arrears payable in such cases. First, where the absent parent returns the maintenance inquiry form within four weeks of its issue providing certain basic information to enable the case to be progressed by the agency, the liability for maintenance will start eight weeks from the date the maintenance inquiry form was issued, rather than the date on which it was issued. Secondly, in cases where delay by the Child Support Agency has contributed to the arrears, only six months' arrears will be enforced if the absent parent pays his ongoing maintenance and maintains an agreement to repay the six months' arrears.

But where initial period arrears do arise and the absent parent does not co-operate in making arrangements for payment, there is no reason why normal enforcement action should not be taken. When the maintenance inquiry form is issued the absent parent is given clear advice about the date from which he will be liable to pay maintenance. In addition the Child Support Agency will make every effort to reach an instalment undertaking that repays the arrears at a reasonable rate over a period of time, before enforcement action is considered. In such cases payment of arrears and current maintenance will be limited to a maximum of 33 per cent, of net income, ensuring that the absent parent does not face an undue burden in repayment.

To require an application to the Family Division of the High Court in cases where the absent parent refuses to come to an agreement in respect of initial arrears is entirely unnecessary. Given the advice to absent parents about the date from which liability starts, the provisions relating to instalments, and other provisions relating to the date liability starts and the amount of arrears that will be collected, there is no justification for arrears to be remitted by the court. Furthermore, it would be wrong for the taxpayer to have to meet the costs of the application to the court, as provided for in the amendment, since such an application would only be necessary in cases where the absent parent refused to come to an agreement with the agency about repayment.

Although the noble Earl hoped I would not say this, it is worth pointing out that the new arrangements we are putting into place will encourage an absent parent to respond timeously, and if he does, then the amount of potential arrears—as long as he pays—will be greatly reduced. As I say, the agency can come to an arrangement within the 33 per cent, of the net income on repayments, which we believe is reasonable. Any parent about to come into the circumstance of being an absent parent must by this time know that he will be expected, via the agency, to pay maintenance to his children if they are being looked after by his former wife and not by himself.

The noble Earl said that the amendment would have a retrospective effect. I am advised that it would not have a retrospective effect; any arrears before the Act came into force would still be due even with his amendment. I do not believe he meant that, but that is the case. From now on the situation will be as I described; that is, that previous arrears will still be due. I would hope that the agency would be able to come to a reasonable arrangement with absent parents in regard to paying them. They are not simply arrears to the agency; they are arrears to the parent with care.

Earl Russell

Many times today I have been reminded of a debate in 1991 on whether the payers of 20 per cent, poll tax should be pardoned any further pursuit. That was the occasion when the Opposition Benches tabled an amendment, together with us, to put that practice of pursuit to a stop. The Government brought in the noble Lords, Lord Hanson and Lord White—those well-known champions of the poor—to oppose it, and succeeded in voting it down. With his obsessive concentration on wilful refusal, the Minister is beginning to sound rather like that. It is a familiar voice—Whitehall playing the tune of the retreat from Moscow, and it does not do it very well. The Minister seems to think that from now on all arrears will be entirely justifiable to collect; that nothing can possibly go wrong again and they all live happily ever after. It is not like that, as anybody who has the misfortune to deal with the CSA already knows very well.

Let me take as an example the case of a regular payment direction pending appeal for a departure. That regular payment direction may be set at a level which is actually too high for the absent parent to bear successfully. That could give rise to arrears. There are many other circumstances in which arrears could arise, including failure to co-operate by the parent with care. I was interested that Miss Chant said yesterday to the Public Accounts Committee that even mothers will not co-operate. I do not know why she is so surprised; I warned her in 1991 that that would be the case; or rather, to be more precise, I warned her predecessors.

The Minister does not understand the horror which a great many people feel on facing a great load of debt. He does not remember the very effective speeches made by the noble Lord, Lord Boyd-Carpenter, on the student loans Bill in 1990. He brought that horror to the attention of this Chamber. His prophecies about what people would feel are entirely accurate. To people who feel that way, saying that they can pay in instalments is not adequate. They feel stigmatised by carrying a load of debt. If the Government really have hostility to inflation as they make out, they should not so much stigmatise thrifty habits of mind and bring them into so much trouble.

I do not see any understanding of the case that is being made. But I am getting used to that. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 23 [Repayment of overpaid child support maintenance]:

Earl Russell moved Amendment No. 91:

Page 18, leave out lines 15 to 24.

The noble Earl said: In moving Amendment No. 91 I shall speak also to Amendment No. 92, which is consequential upon it. The amendment deals with the situation where the absent parent has made an overpayment of maintenance. It strikes out the existing provisions of the Bill and provides instead that, The Secretary of State shall make full reimbursement of any such overpayment to the absent parent as soon as practicable, and in any event within 14 days of the date on which it should have become apparent to the Secretary of State that such an overpayment had been made".

The Minister heard me talking earlier today about redress. On that occasion I was speaking on behalf of the parent with care; this time it is on behalf of an absent parent, but the principle is the same. If you cause damage to someone by unlawful or negligent acts, you owe them compensation. If the Minister asks, "Why the taxpayer?", I would remind him of the law of agency. The CSA is the agent of the state and therefore ultimately of the taxpayer. It is a claim that the Minister has made on its behalf many times; and since he allows so much for the agency, I think he ought to allow it against the agency as well. If you do injustice, you should put it right. It is just like the principle on which I brought up my children. If you make a mess, you clear it up. I beg to move.

Lord Mackay of Ardbrecknish

These two amendments make substantial changes to the provisions in Clause 23 for dealing with overpayments of maintenance. The effect would be that the Secretary of State would be required to reimburse all overpayments, and within a specified time limit.

Since the child support scheme came into operation a reduction to current maintenance has been the way in which overpayments have been dealt with. We accept that this does not always deal with overpayments satisfactorily, which is why this new provision has been proposed. But I believe it is right that an adjustment to the current assessment should remain the first consideration.

Payment of child maintenance is essentially a matter for the parents of the children. Overpayments occur for a variety of reasons and it would not be right for the taxpayer to have to step in immediately to sort the matter out. A reduction to the current maintenance assessment, where this is possible and reasonable, remains the most equitable way of initially dealing with overpayments. The right of the absent parent to be repaid can be balanced against the needs of the parent with care and children to receive regular maintenance. The regulations relating to the adjustment of maintenance assessments on account of overpayments were amended in April to give the child support officer greater discretion in setting the amount of the reduction. This will ensure a fairer outcome in most cases. But we accept that there will be a number of cases where a reduction to the current assessment is not possible or practicable, and that is why we are proposing the provisions in Clause 23. There may be no assessment, for example, where the child is no longer in full-time non-advanced education or the assessment is already at the minimum amount, meaning no adjustment is possible; or an adjustment may be inappropriate because, for example, it would take an unreasonable length of time to repay the overpayment. However, it would not be right for all cases to be dealt with under these provisions.

The amendments also introduce a 14-day time limit for making reimbursement, but I believe this is impracticable. It is not clear from the amendment just when the clock will start ticking, but in cases where a revised assessment results in a lower award, the Child Support Agency will be able to calculate the overpayment immediately and will deal with it as soon as practicable.

But, more importantly, the amendments would place operational constraints on the agency and would undermine its ability to organise all aspects of its work. The agency deals with a huge range of different tasks in making assessments; undertaking reviews; dealing with routine queries and correspondence; and collecting payments and passing them on to the parent with care. Imposing such a time constraint in respect of one particular activity—I have already mentioned this today—would have considerable implications for the way in which the agency manages its workload. Other activities do not have such time constraints, and there is no reason why the reimbursement of overpayments should be treated differently or have priority.

Of course it is right that overpayments are calculated as quickly as possible and appropriate action taken to ensure that the absent parent is repaid in the most appropriate way. The agency aims to ensure that all its work, including that of overpayments, is processed as quickly as possible. In considering the wider issues of processing work in the Child Support Agency, time limits prescribed in legislation for certain actions can only hinder rather than assist in providing a satisfactory level of service. With that explanation, I hope that the noble Earl will be able to withdraw the amendment.

8.45 p.m.

Earl Russell

That most of my amendments should be mistaken would merely mean that I was subject to the human condition. That they should all be mistaken would offend against the law of averages. I really had hoped that in the whole Bill there might be just one single amendment which would find the Government's favour because some of them were actually meant to be helpful.

I am sorry that the Minister has not seen it. He talks about placing operational constraints on the agency. But does he understand that the agency itself is placing the most severe of operational constraints on practically everyone else? Why should the agency be free of operational constraints while everyone else is more and more tightly restricted? That is the kind of question that was in the mind of the noble and learned Lord, Lord Simon of Glaisdale, when he introduced the concept of the rule of law. We have an agency which is more and more being given the discretion to do absolutely whatever it likes, with the Secretary of State to back it up. This is arbitrary government. It is something which we have a long history of resisting and which we were supposed to have a Parliament in order to prevent. I cannot see that it does very much about it.

I am sorry that the Minister does not understand the point of the amendment. He keeps on talking about absent parents refusing to accept their liabilities. What I see is a Secretary of State refusing to accept his liabilities. But if we were to attempt to deal with him with even one-hundredth of the vehemence used in the pursuit of absent parents, the squawking would be heard from here to Timbuktu. I hope that at some time the Government will hear something. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 92 not moved.]

Lord Carter moved Amendment No. 93:

Page 18, line 33, at end insert: ("() Subsection (3) shall not apply where the overpayment has arisen as a result of administrative error on the part of the Secretary of State, his servants or agents.").

The noble Lord said: In moving this amendment I shall speak also to Amendment No. 94. Both amendments deal with the matter of overpayment but from a rather different direction from that in the last group of amendments.

Amendment No. 93 deals with the situation where the overpayment has arisen as a result of administrative error on the part of the Child Support Agency. The effect of the amendment is obvious from its wording. It is intended to protect parents with care from the requirement to repay a debt to the agency where the agency itself is responsible for an overpayment being made. The Minister will not want me to labour the figures, which have appeared in the press only today, about the mistakes that have been made by the CSA.

Although the Government's intention to recompense an absent parent who is overpaid is to be welcomed, in fact the clause also makes it clear that the Government intend to go after the parent with care to recoup the losses of the offer the Government have generously made. This clause would help absent parents, but parents with care also need to be adequately protected against the considerable number of administrative errors which have been made and are likely still to be made by the agency. If the agency has admitted fault in causing an overpayment, the parent with care should not then be made to repay the debt to the agency.

I shall not be at all surprised if the Minister argues that if the parent with care was overpaid she should ultimately pay it back. However, in most of the cases—we are dealing here with people who are not very well off and will not have large savings or anything like that—the money will already have been spent and therefore the parent with care will need to manage on less money each week in order to repay the debt to the agency. In other cases the parent with care will suffer an actual overall financial loss should she be required to repay the payment.

For example, in the case of parents with care who are claiming family credit, they will lose in three ways. First, they will be claiming a reduced level of family credit to take account of the higher or overpaid maintenance payments. That underpayment, as we would describe it, will not be recompensed. Secondly, the readjustment of maintenance to the lower level will reduce their income, which may not be readjusted immediately due to the current six months rule on family credit, a point to which we shall return on later amendments. Lastly, if this clause remains, they could be asked to repay a debt to the agency. So they are caught with a troika of injustice.

This amendment was not proposed in the other place, but the Government have said that they intend to use their discretion when looking to claw back a debt from the parent with care—I think that the Minister indicated that in his reply to the last group of amendments—but they do not want any amendment to take away their discretion. This amendment would not remove discretion, but would simply limit discretion to cases where the overpayment was not made as a result of an error on the part of the agency.

I turn now to Amendment No. 94, which deals with a situation where the overpayment has arisen as a result of an interim maintenance assessment (IMA) being paid by the absent parent. The effect of the amendment, if accepted, is to ensure that where an overpayment has been made by the absent parent due to his non-co-operation, the agency would not offer compensation to the absent parent. If, due to the non-co-operation of the absent parent, an interim maintenance assessment is imposed by the agency, in the new regulations the absent parent who then co-operates will only be liable for the lower maintenance level. In some cases an overpayment of maintenance will result if the IMA was enforced.

The amendment will ensure that any overpayment would not be recompensed by the agency and therefore, under the terms of Clause 23, the parent with care would never be asked to repay the overpayment.

At the seventh sitting of the Committee in the other place the Minister said that the situation will not often arise. However, he said that the Government should not be constrained from recovering such money from the parent with care when it is right, on behalf of the taxpayer, to do so. As I say, the Minister said that the situation will not often arise.

The Government are right in saying that that will not often happen as in most cases the benefits will have been reduced to account for the higher payments. The Government are worried that the clause will take away their discretion to recoup the overpayment on behalf of the taxpayer. If this amendment is not accepted, it will mean that the agency can recompense the absent parent for what effectively amounts to non-co-operation, and then expect the parent with care to pay it back. It is reasonable to expect the parent with care to pay back an overpayment in certain circumstances. The legislation should allow the CSA the freedom to do that, but not when the debt is due to the non-co-operation of the absent parent. It is entirely wrong that if the absent parent refuses to co-operate the consequences which I have described follow. That is extremely unfair. I beg to move.

Earl Russell

The arguments for this amendment have a very large area of overlap, both with my own arguments for the previous amendment and my arguments against deducting income support from the absent parent, on the principle that an injustice is an injustice no matter to what sex it has been done. I warmly support this amendment. I do not believe that the Minister understands at all quite how burdensome it has been in many cases attempting to get clawbacks from those people who are existing very close to benefit level. That is something which is capable of causing shock and a very severe hole in the budget. Once one gets into debt anywhere near benefit level, one is carrying burdens which it is not easy to get out of. I wish the department would do some research on that problem because it is very badly needed. I do not see any reason at all why the Minister should not accept this amendment, and I hope that he will do so.

Lord Mackay of Ardbrecknish

These amendments would remove the ability of the Child Support Agency to recover from the parent with care a reimbursement of overpaid maintenance made by the absent parent where the overpayment is due to official error or an interim maintenance assessment.

I can appreciate the concerns surrounding the recovery from the parent with care of reimbursements made to the absent parent. As was said in another place during the passage of this Bill, it is not intended that recovery of reimbursements is sought in all cases. Consideration will be given to the circumstances of the parent with care and her ability to repay. It is not intended, for example, that recovery will be sought in any case where she receives income support or family credit, however the overpayment arose. There will also be other cases when the particular circumstances are such that recovery will not be appropriate.

In any case where recovery is considered appropriate, we shall not normally expect the parent with care to repay the money immediately. It will be possible to make an instalment arrangement to repay the relevant amount at a reasonable rate over a period of time.

I have listened to the debate and we need to think carefully whether it would be right to ask the taxpayer to bear the cost of repaying overpayment where the parent with care can in fact afford to do so. I am willing to consider very carefully whether there are specific circumstances—I mentioned some which have already been made clear in the other place—in relation to which I can give an undertaking that overpayments would not be recovered from a parent with care. On that basis, and with my explanation of how we would treat income support and family credit, I hope that the noble Lord will feel able to withdraw his amendment.

Lord Simon of Glaisdale

I am not quite clear whether the Minister was indicating an administrative discretion or that he will bring forward an amendment at Report stage which goes far to meet the case so persuasively put by the noble Lord, Lord Carter. Perhaps he will clear that up.

Lord Mackay of Ardbrecknish

In answer to the noble and learned Lord, I was not going as far as to say that I shall come forward with an amendment at Report stage. I made clear that we said in another place that it is not intended that recovery of reimbursements is sought in all cases. I mentioned two of them; namely, receiving income support and family credit, however the overpayment arose. We are looking at overpayments which have arisen as a result of the agency itself due to administrative official error or an interim maintenance assessment. As I have said, I am prepared to consider the matters which have been raised and I shall see whether I can give an undertaking at a later stage that overpayments will not be recovered from the parent with care in other circumstances which I shall then specify.

As regards the specific question, subsection (3) of the new Section 41B inserted by Clause 23 enables the Secretary of State to prescribe the circumstances in which recovery will be sought. Those regulations will be the appropriate place in which exemptions from recovery will be specified. As I have already said, we intend that particular consideration will be given to cases involving official error. I hope that that is helpful to the noble Lord.

Lord Carter

That is a helpful answer. Before deciding what to do with the amendment, as the Minister referred to subsection (3) which requires the relevant person to pay to the Secretary of State the whole or a specified proportion of the amount, would the specified proportion be nil in some circumstances?

Lord Mackay of Ardbrecknish

That will be one way to specify who was not going to pay. I shall have to take advice on that. As I said, the regulations would be the appropriate place to say in which cases there would be exemption from recovery. I do not believe that would meet the suggestion made by the noble Lord. However, in those regulations we shall be able to do what I have already suggested that we intend to do in certain cases. The other cases I shall seriously consider in the light of what has been said.

Lord Carter

I am extremely grateful to the Minister. That shows that occasionally regulations have their good points and allow a degree of flexibility. We shall not be harrying the Minister on this, but we shall certainly be watching the point very carefully. We may need to put down probing amendments at a later stage to stiffen the Minister's resolve. There is a glimmer of light there. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 94 not moved.]

Clause 23 agreed to.

9 p.m.

Lord Carter moved Amendment No. 95: After Clause 23, insert the following new clause:

("Limits on reduced benefit direction

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

(2) After subsection (5) insert— (5A) Subsection (5) shall not apply in cases where the parent with care or any child that would be affected by a reduced benefit direction is disabled.

(3) After subsection (7) insert— (7A) The child support appeal tribunal shall have the power to alter the time and level of the reduced benefit direction according to the circumstances of each case.

(4) In subsection (11) leave out "such amount, and for such a period as may be prescribed" and insert "no more than 10 per cent, of the personal allowance being claimed by that parent, and for a period not exceeding sixteen weeks".

(5) After subsection (11) insert— (12) Where a reduced benefit direction is issued, it shall take priority over other loans, and shall not be made in addition to other loans being repaid from that person's weekly benefit." ")

The noble Lord said: This is a new clause to be inserted after Clause 23. We return to the point about reduced benefit directions. The effect of the amendment would be threefold: to ensure that families which are particularly vulnerable due to one member being disabled do not have to pay a penalty by way of benefit reduction; to ensure that younger mothers who receive a lower rate of benefit do not pay a higher percentage of their benefit as a penalty than other, older mothers; and to ensure that a reduced benefit direction does not run concurrently with other reductions in benefits.

There has been some anecdotal evidence of fraud—I stress that it is anecdotal—in terms of absent parents attempting to make up the lost benefit in return for an assurance from the parent with care that she will not co-operate with the agency. Before the noble Earl, Lord Russell, seeks to intervene, I repeat that that evidence is anecdotal. However, there are also many cases where the parent with care has good reason for not wishing to co-operate, but where her reasons do not fall under those considered to be "good cause" by the agency. In those cases, we are concerned that the penalty is harmful to one-parent families which are already struggling on low levels of income.

The amendment seeks to limit the penalty and, in the case of families having to cope with disabilities, to remove from the Secretary of State the power to make a reduced benefit direction. By giving the power to vary a reduced benefit direction to the appeal tribunals, as is mentioned in the amendment, the provisions can take into account the welfare of any children involved by looking at the individual circumstances of each case.

The amendment also seeks to ensure that those living on benefits are not reduced to unacceptably low levels of income by the imposition of a penalty on top of other repayments, such as for arrears of water rates, overpayments, and repayment of crisis loans from the Social Fund. The Government have argued in the past that the penalty is necessary to ensure the co-operation of parents with care. We do not go all the way with the Government on that, but, although there is no reason to repeat all the arguments now, we can see the Government's point where no good cause, has been shown. However, reducing the income of a family to below subsistence levels can only be harmful to the children involved.

Therefore, I hope that the Minister can see that there is a problem. The wording of the amendment might not be perfect, but this is Committee stage, and the amendment is intended to highlight what we feel is a threefold problem. I hope that the Minister will give it his sympathetic consideration. I beg to move.

Earl Russell

This is a good amendment and I congratulate the noble Lord, Lord Carter, on tabling it. It is not quite as good as getting rid of the benefit penalty altogether, but I fancy that the noble Lord would not disagree with that.

If we have to have a fallback, this is as good as we can get. In subsection (2), the case for the disabled is extremely strong. The extra expenses of disability are a great deal more than the OPCS calculated, and make the benefit penalty more punitive than it would be for anyone else.

Subsection (3) imports a very welcome discretion which, to my delight, is administered judicially and not administratively. It allows the penalty, such as it is, to be apportioned to the circumstances of each case.

Subsection (4) reduces the benefit penalty to 10 per cent. It also reduces the period for which it lasts. It is almost identical to an amendment that I pushed to a Division on consideration of Commons reasons in 1991. I support it not one whit less strongly now than I did then. I have always thought that the 20 per cent, rate of reduction was absolutely penal and entirely without any justification in any reason that was put forward for it. If there must be a reduction, 10 per cent, is about as much as is compatible with subsistence—and even that is pushing it a bit, as I am sure that the noble Lord, Lord Carter, agrees.

However, probably the very best part of the amendment, like the very best wine, is saved until last. I refer to subsection (5), which provides that the reduced benefit direction takes priority over other loans and that those should not be repaid from a person's weekly benefit during the period of the reduced benefit direction. The Minister keeps talking about priority for child maintenance over other commitments. Why should not that apply where there is actually a hungry child hoping to eat as a result of it? The Government do not do nearly enough to study the effects of "top-slicing"—as the noble Baroness, Lady Hollis, recently described it—as a result of the long series of deductions from benefit. The rate of deductions for court fines, for example, is often penally steep.

The purpose of benefits is to allow people subsistence. That is in our national interest. It is in the interests of common humanity and in the interests of all concerned. The amendment would go a significant way towards getting us back to that, and I am happy to support it. I am glad that the noble Lord moved it. If he does not manage to get it accepted tonight, I hope that he will persist with it.

Lord Mackay of Ardbrecknish

Under the 1991 Act, a parent with care who receives, or whose current partner receives, a relevant benefit must give her authority for maintenance to be pursued from the absent parent unless she has good cause for not doing so. We have already discussed that in some detail earlier today. If she fails to give her authority without good cause, her benefit may be reduced by 20 per cent, of the income support adult allowance for six months—I think that I underlined earlier that the 20 per cent, reduction impinges only on the adult allowance portion—followed by a reduction of 10 per cent, for the next 12 months.

Amendment No. 95 seeks to change a number of matters relating to reduced benefit directions. I should like to restate that I believe that it is right that the parent with care should co-operate with the agency unless she has good cause for not doing so. Taxpayers should not have to shoulder the burden. No parent with care will have benefit reduced without careful regard being given to her circumstances and those of her children. The purpose of the benefit reduction is to make a parent with care think carefully about her decision not to co-operate. We believe that the current amount and duration of the reduction achieves that. We have already discussed that when dealing with amendments tabled by the noble Earl.

Amendment No. 95 would make changes to reduced benefit directions. Directions could not be imposed where the parent with care or any child affected by the benefit reduction was disabled. Secondly, child support appeal tribunals would be able to alter the amount and duration of the reduction depending upon the individual circumstances of the case. Thirdly, the maximum amount and the duration of the reduction could be lessened. Fourthly, a deduction could not be made where the parent has a loan which she is repaying from her benefit.

We believe that the amount and duration of the benefit reduction is set at the right level and should neither be reduced nor made subject to the discretion of appeal tribunals. Parents with care should know the consequences of their refusal to co-operate when they make their decision whether to comply. They should not be uncertain about how much the reduction will be or how long it will last.

Under the 1991 Act, the parent with care already has the right to appeal to a child support appeal tribunal, which will consider whether or not the reduced benefit direction was properly imposed. If a parent were successful on appeal she would be repaid any benefit due.

That leaves two issues; waiving the reduction where the child or the parent with care is disabled and waiving it where the parent has other loans. I am willing to look further at the noble Lord's suggestion relating to those two factors. I will look at cases of disabled parents and children and at cases where the parent is already having deductions made from her benefit, for example, to cover rent arrears at the time the reduced benefit deduction is made. Perhaps I may make it clear that I will look at those two issues but that I am rejecting and not promising to look at the other two issues. I hope that on that basis the noble Lord will withdraw his amendment.

Earl Russell

The Minister has shown some small mercies and for that we must all be grateful. He has put forward a great deal of argument for justifying the imposition of a benefit penalty, which was relevant to a previous amendment but not to this one. He has given no justification for making the penalty 20 per cent, and not 10 per cent. Is there any reason for that?

Lord Mackay of Ardbrecknish

I gave that justification earlier today. It was that the penalty must be such that it is meaningful but at the same time we must balance that with the fact that we do not wish to deprive the parent with care of her benefit. It must be of such a size that it is realistic and that it will act as a deterrent to someone who without good reason is not giving the name of the absent parent.

As I said earlier, in 73,000 cases we have accepted the good reason and have not pursued the matter. In 18,000 cases we have imposed the reduction. It is a matter of balance—20 per cent., 15 per cent., why not 25 per cent.? It is 20 per cent for six months and 10 per cent, for the following 12 months. That appears to us to be a reasonable balance, leaving the parent with care with some of her income while at the same time making it clear to her that we do not believe her actions to have been reasonable. I know that the noble Earl does not agree with me on these issues but it lies in the hands of the parent with care to restore her benefit to 100 per cent.

Lord Carter

I suspect that the real reason why the figure is 20 per cent, is the sophisticated reason that it is twice as much as 10 per cent.

I am almost overwhelmed by the Minister's response. As regards the first two amendments that I moved yesterday, which now seems a long time ago, the Minister was most helpful and promised to look at one of them. He promised to look at the first two amendments that I moved tonight. However, he has cherry picked as regards this amendment. I did not believe that he would buy subsection (4) but it was worth having a debate. However, he has promised to come back on the disability and loan issues. He has been most helpful and I congratulate him. It shows what one can do when one sets out to improve a Bill rather than mortally to wound it. I understand the Minister's comments—they are not assurances—which are most helpful. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 [Compensation payments]:

Earl Russell moved Amendment No. 96:

Page 19, line 7, leave out ("may") and insert ("shall").

The noble Earl said: Amendment No. 96 deals with Clause 24, which overall is one of the Bill's more welcome clauses. But, as usual, this Government have shown themselves to be the Old Man of Thermopylae; they never do anything properly. Having introduced a welcome concession they have not done so thoroughly and have not made it properly effective.

Perhaps I may explain the context. The clause deals with the situation which came to light during the debate on the February 1994 regulations. For some people, they meant a reduction in the maintenance that they were paying and for the parent with care a reduction in the maintenance which she was receiving. But if those people were on family credit it was fixed only once every six months so they had lost a large part of their income for whatever period of the six months remained until the next assessment.

On the debate on the regulations the noble Baroness, Lady Hollis, and I attempted a vigorous right and left—and I did not say which was which. That has been heard. In this clause we now have a provision for making compensation, through the machinery of family credit, to a parent with care who has lost some of the maintenance that she was receiving and whose income has therefore dropped.

The first point that I make about that and other later amendments is that instead of saying the Government "will" do something, we have instead the tedious words: The Secretary of State may by regulations".

My first question is whether the Secretary of State will introduce these regulations. Are the Government making a firm commitment to bring in regulations to introduce this concession which, in principle, is extremely welcome, or are they saying only that they may do so?

If the answer to that question is reassuring, which I hope it will be, then I shall ask the Minister why, if he means "shall" he says "may". Why do these Bills perpetually give the Secretary of State weasel let-outs in every direction when the Government will not, for one moment, consider giving them to anyone else? Why should the Secretary of State be free to escape from every obligation when everyone else is bound? That does not seem fair to me. I beg to move.

9.15 p.m.

Lord Mackay of Ardbrecknish

The Government made it clear in the recent White Paper Improving Child Support that they intend to make compensation payments to parents with care who are in receipt of family credit or disability working allowance if their maintenance assessment is reduced as a result of changes in child support legislation.

In April, your Lordships approved a number of changes to the child support regulations; and because those changes led directly to reductions in many maintenance assessments, we have, in advance of this Bill, been compensating parents with care who have lost out as a result.

There will, however, be circumstances in which it will not be appropriate to make such payments. For example, we do not think that it would be right to compensate parents in the same way if a departure order leads to a reduction in their maintenance. Departure orders merely allow some discretion to Child Support Agency officials to take account of certain aspects of parents' circumstances for which the normal formula does not allow. So a reassessment as a result of a departure order is different from a reassessment flowing from changes in the rules governing the maintenance formula.

Similarly, there may be circumstances in the future where a change in the legislation is needed to restore the policy intention; and it may not be appropriate to make compensation payments in those circumstances. So we need to leave ourselves free to look at future changes as they are made and to decide then whether or not it is appropriate to make compensation payments. Further compensation exercises will be triggered when we decide, in relation to subsequent changes in legislation, that compensation is warranted. This will then be achieved through a provision in the legislation which introduces the changes.

I assure the Committee that it is the Government's intention to compensate parents where maintenance assessments are reduced by a specific change in the legislation which introduces a clear change of policy. We intend to lay general regulations under this clause in the autumn setting out the basis of how compensation payments will be calculated and administered.

Although I may not accept the "may" and "shall" exchange, I hope that my assurance will reassure the noble Earl of my intentions in that regard.

Earl Russell

I am afraid that it does not. Together with my Amendment No. 96, the Minister has answered Amendment No. 97. I hope that it may be convenient to the noble Lord, Lord Carter, and the Minister to deal with those amendments grouped together.

On Amendment No. 97 I intended to refer to what the Government told the Delegated Powers Scrutiny Committee; namely, that there is no commitment to compensate for all changes which could reduce maintenance payments. The Minister has confirmed that but I do not understand why not. We are dealing with subsistence. There is no reason why some changes should result in a guarantee to maintain the subsistence and some should not.

The Minister said that he would offer compensation for any specific change in policy. He then said that he would not offer compensation for the effects of a departure. He seems to have contradicted himself because on 23rd January he told the House that the introduction of departures was a significant and specific change of policy for which the Government deserved very great credit.

The Minister really cannot have it both ways. Is the introduction of departures a change of policy? If it is not, why did he and his honourable friend Mr. Burt spend so long telling both Houses that a departure was something which could never ever, under any circumstances, be allowed? It really illustrates the principle that "never" is a short time in politics.

It seems to me rather more important, as the Minister has admitted that compensation will not be given in all circumstances, to ask what other circumstances apart from departures will not be covered. It is a yawning pit. As an Englishman, I cannot help wondering whether the Minister is planning a new battle of Bannockburn. Although, as I said, I am an Englishman, I speak as a descendant of Robert Bruce.

It is most unfortunate. It is not at all clear what is being put before the Committee. If they can depart in one circumstance, they can do so in two; if they can do it in three, then they can do it in four. Indeed, they could even decide to do so in all cases individually. Is there any circumscribing principle covering the limits which the Government put on that doctrine? I should like to hear what that is before we leave the matter.

Lord Carter

Amendments Nos. 98 and 100 are tabled in my name. I should prefer to deal with those separately, because we are now dealing with Amendments Nos. 96 and 97. I believe that the noble Earl put his arguments extremely well. The noble Earl referred to a change of policy which is not a change of policy. I believe that something called the Scott Inquiry has been dealing with that.

Lord Mackay of Ardbrecknish

I am asked to respond to the points made by the noble Earl and also to bring in Amendment No. 97 in my response. The latter amendment simply removes the words "in prescribed circumstances and". I know that it may sound like splitting hairs, but the point about the changes that we have made to the departure order—which we believe are significant—is that they may or may not necessarily lead to any changes in the reduction of maintenance. They are departures from the formula and, as I said, they allow important discretions to the Child Support Agency official. Of course, if the absent parent does not agree, then he can appeal. Indeed, both parents can appeal but, by and large, I suspect that it would be the absent parent who would wish to appeal to the tribunal in the case of departure orders. They are there in order to ensure that in very special circumstances there can be a deviation, an alteration, from the formula.

That is the point that I am trying to make about departure orders. They are akin to a change in circumstances in the absent parent's position and/or the position of the parent with care. There is no intention to compensate family credit claimants for the normal variations in maintenance. I can see the noble Earl's point if he is saying that that should apply in the first instance due to the change that we have made. But then, when the system is up and running, a departure may be made as the result of changes to the position of the absent parent or the parent with care who makes such a request. In those circumstances, we do not believe that it would be appropriate to make the changes that we propose ought in other circumstances to be made to family credit.

Earl Russell

Is family credit a benefit which is means tested or is it morals tested?

Lord Mackay of Ardbrecknish

No, it is not morals tested. However, as the noble Earl knows, the point is—and we shall come to deal with this in more detail later when we come to the related, although not linked, amendments—that family credit is paid for six months. In fact, quite considerable changes can already take place during that period. No change is made either up or down to the level of family credit; for example, someone could find himself earning more money than he earned on the day of application for family credit but he would continue to receive the benefit at that level until the end of the period, when it would be recalculated. Of course, conversely, he could receive less money and the opposite situation would occur. The key to family credit—it is an important key—is the six-month period over which it operates. We have to be careful about departing from that important principle in family credit.

That is the general position on family credit. It is there for six months. What we are proposing to do in the Bill is to make an exception to that position in the case of changes which come directly from our legislation and impinge directly on the parent with care. We believe that the departure system may or may not impinge on someone—it will, of course, always be there—whereas the changes that are made to the income of the parent with care will run on. A departure system will continue to be there and we do not propose that we should make changes to family credit in the future just because an application for a departure is upheld and the amount of money coming to the parent with care is reduced. I rather hoped that there might be some small welcome for what we are doing in this regard. I appreciate that people would like us to go further, but I am afraid, for the reasons I have explained; I do not believe that we can.

Earl Russell

The noble Lord has not answered what was perhaps my most important question. Is there any circumscribing principle at all limiting the Minister's right to decide circumstances in which compensation will not be paid, or is this right arbitrary and unlimited? I would like an answer to that question as it will be important to a great many people.

Lord Mackay of Ardbrecknish

I sometimes have quite considerable difficulty in getting my mind round the questions that the noble Earl asks me because I live in a reasonably simple world and he seems to live in an extraordinarily complex world. The position is as I have outlined. We have taken this power. I wish I could find my copy of the Bill. However, everyone else has a copy and they can read the provision. I thank the Deputy Chairman for handing me the document. Unfortunately, it is not much of an advance.

As I said, we have taken this power in order to be reasonable and helpful in the changes we are making by legislation. We will prescribe the situations where we consider there ought to be changes made to family credit. I do not wish to try to see into the future and decide what other circumstances may or may not arise. That takes us over the issues which the noble Earl has gone over time and again. I and my honourable friends in the other place have made it clear what we intend to do with the power we are taking in this Bill at the present time. As I have said on a number of occasions, I do not have a crystal ball to see in what way it may or may not be used by Secretaries of State in the future.

Earl Russell

Is the Minister really telling me that Secretaries of State can use this to do absolutely anything they like; that they could withdraw the whole effect of the clause if they chose? If that is so, I find that a deeply improper method of legislation. If it really is the case that the Secretary of State can do whatever he likes, he is absolutely without control. Here we have the merging of a constitutional principle about the drafting of legislation with a practical principle of social security about the welfare of individuals who are short of food. This is an amendment about people who need to eat. They do not need to eat one bit the less because the Minister wants discretion. I ask the opinion of the Committee.

9.28 p.m.

On Question, Whether the said amendment (No. 96) shall be agreed to?

Their Lordships divided: Contents, 18; Not-Contents, 48.

Division No. 2
Addington, L. Kilbracken, L.
Carmichael of Kelvingrove, L. Kinloss, Ly.
Carter, L. Mar and Kellie, E.
Dean of Beswick, L. Palmer, L.
Ewing of Kirkford, L. Perry of Walton, L.
Ezra, L. Russell, E.[Teller.]
Seear, B.
Farrington of Ribbleton, B. Shepherd, L.
Graham of Edmonton, L. [Teller.] Simon of Glaisdale, L.
Taylor of Blackburn, L.
Addison, V. Howe, E.
Annaly, L. Inglewood, L. [Teller]
Astor, V. Total: 26
Balfour, E. Kimball, L.
Barber, L. Long, V.
Blaker, L. Lucas, L.
Blatch, B. Lyell, L.
Brougham and Vaux, L. McConnell, L.
Bruntisfield, L. Mackay of Ardbrecknish, L.
Carnock, L. Mackay of Clashfern, L. [Lord Chancellor.]
Cochrane of Cults, L.
Craigmyle, L. Middleton, L.
Denton of Wakefield, B. Miller of Hendon, B.
Dixon-Smith, L. Oppenheim-Barnes, B.
Dudley, E. Oxfuird, V.
Ferrers, E. Rawlings, B.
Flather, B. Shaw of Northstead, L.
Glenarthur, L. Stodart of Leaston, L.
Goschen, V. Strange, B.
Gray of Contin, L. Strathclyde, L. [Teller.]
Greenway, L. Torrington, V.
Hacking, L. Trumpington, B.
Hayhoe, L. Wakeham, L.
Henley, L. Wynford, L.
Hesketh, L. Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

9.36 p.m.

[Amendment No. 97 not moved.]

The Deputy Chairman of Committees (Lord Brougham and Vaux)

If Amendment No. 98 is agreed to, I have to inform the Committee that I cannot call Amendment No. 99.

Lord Carter moved Amendment No. 98:

Page 19, line 9, leave out ("compensation or partial") and insert ("full").

The noble Lord said: As Amendment No. 97 has not been moved—it was grouped with Amendments Nos. 98 to 100—I shall move Amendment No. 98 and speak to Amendment No. 100. I shall leave the noble Earl, Lord Russell, to deal with Amendment No. 99.

Amendment No. 98 is intended to ensure that family credit or disability working allowance claimants are fully compensated for the reduction in the maintenance assessments which are brought about by amendments to the legislation.

The White Paper suggests compensation for half of the reduction in the assessment for the remainder of the benefit award. But we feel that that is inadequate. Even with 50 per cent, compensation, because the level of family credit or disability working allowance is set for a period of six months and cannot be reviewed during that time, claimants with awards over £15 a week will be worse off than if they had never expected any maintenance.

The Minister dealt with the six months' point on the last amendment. However, it is important in the context in which I move the amendment.

The point was not debated in another place. We wish to press the Government for full compensation for all low income persons with care. If full compensation was defined as being equal to the reduction in the maintenance assessment, I am advised that the estimated cost would be an extra £1 million in 1995–96.

The effect of Amendment No. 100 is similar: that no family credit or disability working allowance claimant ends up worse off than they would have been without any CSA assessment. It is calculated that 70 per cent, is the rate at which the benefits are withdrawn as income rises. This is the group of people which the Government aim to encourage—the parents in low waged work. Those people are already losers as a result of their maintenance assessment being reduced. That will not be reinstated by recalculation of the benefit at the end of the six month award.

Compensation of 70 per cent., if agreed, would never mean that parents with care end up by gaining overall as a result of the reduction in their maintenance assessment. However, it would ensure that no claimant for family credit or disability working allowance would end up worse off than if he had been assessed at the reduced rate of maintenance at the time either of the benefits were calculated.

It is a complicated point. I think the Minister will understand the point we make. The issue relates to the previous amendments. However, the amendment deals with the issue from a slightly different direction. I shall be interested to hear the Government's response. I beg to move.

Earl Russell

Amendment No. 98 in the name of the noble Lord, Lord Carter, and my Amendment No. 99 are identical, for all practical purposes. If there is any reason for distinguishing between them, it would be purely drafting. I cannot imagine what it would be, but if the Minister has a preference I am sure that neither the noble Lord, Lord Carter, nor I would argue against it.

Amendment No. 100 is obviously a fallback position. It would be better than nothing, assuming that we had lost both the other two in the Lobby. I believe that the noble Lord, Lord Carter, will agree that it is only if we cannot possibly win either of the others that we will settle on Amendment No. 100.

We are dealing here with people having enough to eat. We are also dealing with the fact that people's outgoings are normally proportional to their income. If they are on a very low income, the proportion may be tight, so suddenly withdrawing a large proportion or even a significant proportion of their income will cause a considerable shock to the family's economic system. For example, it may interfere with their ability to pay their fares to go to work.

It also rather defeats the purpose of the concession embodied in Clause 24. I said that the Government were playing the Old Man of Thermopylae. On 23rd January I was pleased when I heard that they were making the concession but it was not until I saw the way that they had done it that I realised that my pleasure had been premature and I am now sorry.

Lord Mackay of Ardbrecknish

To a certain extent we must retrace our steps, but for completeness, especially in the record, it is probably worth doing that and I hope that the Committee will bear with me.

Clause 24 provides for the payment of compensation to persons with care in receipt of family credit or disability working allowance who suffer a reduction in their maintenance assessment as a result of changes in the child support legislation. If a person with care is in receipt of income support, that benefit can be increased immediately to balance any reduction in the amount of maintenance that they receive. Similarly, housing benefit and council tax benefit can be increased by 65 per cent, and 20 per cent, respectively of the amount of the reduction.

Family credit and disability working allowance, however, cannot be increased in this way. One of the most important features of the benefits is that they are payable at a fixed rate for 26 weeks at a time, based on the person's income at the time that they claim. I do not believe that anyone disputes that the great advantage is that it gives the claimant a secure source of income for the six months, even if his or her other income should increase.

However, it also means that the benefit cannot be increased to take account of a drop in other income such as maintenance. So in the desire to have a fixed six-month period, there is the inevitable consequence that there could be variations in both directions which the family credit does not take into account.

Normal fluctuations in maintenance are, I contend, similar to fluctuations in earnings or other income and therefore do not warrant special arrangements. However, we decided that there is a special case where a reduction in the amount of maintenance that a person receives is the direct result of a change in the child support legislation. The clause therefore provides for persons with care who are in receipt of either family credit or disability working allowance to receive compensation payments.

It is necessary because of the technicalities involved to have a power to prescribe the detailed circumstances in which compensation will be payable. The Committee will have the opportunity to debate the regulations in due course. We have already been making compensation payments extra-statutorily to those parents with care whose maintenance assessment was reduced as a result of last April's regulations. They have been paid on the same basis as we have set out in this clause and we propose to set out in regulations.

We intend to provide for the compensation to be at the rate of 50 per cent, of the reduction in the maintenance assessment. For many parents with care on family credit, that formula will provide full compensation for their actual financial loss. Indeed, some will be over-compensated.

In proposing compensation by this route we are seeking to strike a balance. There is no direct connection between the level of the maintenance assessment and the level of maintenance taken into account in the family credit award, except that the amount taken into account cannot exceed the amount of the maintenance assessment at the time that family credit is claimed. The amount taken into account for family credit is based on the actual maintenance in payment in the period before the award. That is the first important point. The other important point that is worth making is that there is a £15 disregard which Members of the Committee should bear in mind when they do the arithmetic regarding the consequences of our proposal.

If compensation were based on the actual loss of benefit, over 40 per cent, of parents would not be assisted, even though they would have lost maintenance. For the majority—some 33 per cent.—that is because the maintenance received is less than the £15 disregard. The remainder, some 8 per cent., would not be assisted because they already receive the maximum family credit for their type of family. A compensation system based on the maintenance assessment is the only way to address their loss of income.

In the majority of cases the maintenance assessment is higher than the amount taken into account in the family credit assessment or than the parent with care's actual income from maintenance. There is also the question of timing: because family credit is paid at a fixed rate for six months, some parents will begin to receive maintenance in that time, which will lift them off family credit altogether when the next benefit is reassessed. When payment is first made, those parents on family credit will be what I might describe as gainers for the remainder of the six months until the six-month period for reviewing family credit comes up.

I appreciate that the rate of 70 per cent, is intended to reflect the fact that the effect of the taper in family credit is that reductions in income are generally compensated at the end of the award period by an increase in family credit to the extent of 70 per cent, of the reduction. But as I have pointed out, the majority of family credit awards take into account much less maintenance than the maintenance assessment itself. So even compensating at 70 per cent, of the reduction is giving much more than could be received in increased benefit.

Taking all those factors together, we took the view that there was no simple way to compensate exactly for losses suffered. But it was clear to us that compensation at the rate of the full difference between the old and new maintenance assessments would be over-generous. In some cases, the proposed 50 per cent, rate will provide full compensation for the financial loss. In others it will be less than the loss, and in some it will be more. The issue is complicated.

I have some interesting arithmetic here which I think I will resist the temptation to share with the Committee at this time of night and perhaps without an overhead projector or a blackboard (if anybody uses anything as old-fashioned as a blackboard). In the circumstances we believe that our proposal strikes a fair balance. I hope, with that rather complicated explanation, the noble Lord can withdraw his amendment.

9.45 p.m.

Earl Russell

While the noble Lord, Lord Carter, decides what to do with his amendment, perhaps I may intervene. The Minister's arithmetic has in some ways assisted us. I am grateful to him for the amount of time that he took to explain it, which was helpful. However, it also illustrates how reliance on a formula tends to conflict with any genuine concern with individual cases. The Minister said that some would benefit and some would lose. There is no attempt to judge a case on its merits.

Another matter puzzles me. The Minister announced a 50 per cent, formula according to which the payments operate. If that is the Government's intention, it is at least clear. But why did they not say that in the Bill? Then we should have known where we were, and, had we so wished, we should have been able to put down an amendment to change 50 per cent, to 60 per cent, or 70 per cent., or even perhaps 40 per cent. This is another example of the way in which the reliance on delegated legislation must diminish parliamentary control. This Government keep on talking about parliamentary sovereignty. In fact, their practice is coming near the point where it puts the very survival of Parliament in danger. I really do wish that they would think about their drafting before it is too late. They believe that they make the law and we rubber-stamp it. If that is a correct understanding, what are we all doing here at this time of night?

Lord Mackay of Ardbrecknish

I hope that the noble Lord, Lord Carter, will not object if I respond. I had a small chortle at the rubber stamp. If it is such, it is not an easy rubber stamp to operate, I can assure the noble Earl. On occasions this Session it has proved a quite impossible one.

Let me reply to the noble Earl in this manner. My observations should not be read in any way other than as a general comment. I am not in any way suggesting any thoughts on the matter. Starting at 50 per cent.—let us say for the sake of argument that the Government decided in the future that it was not working in the way in which they had intended or hoped that it would work. There is the availability in regulation to make a change: 60 per cent, or 40 per cent., whichever way the change might go. Parliament in general, both Houses, would be able to give their views, although I fully accept all the arguments put forward by the noble Earl about the way in which this Chamber has to give its view.

I am not entirely sure about this matter. Indeed, I may have second thoughts about it. The noble Earl mentioned the inflexibility of the formula. In fact, the problem that we have here is not the formula as we are using the word this evening—namely, the Child Support Agency formula. The problem is the way in which we have correctly (I think I am right in saying that for everybody) devised family credit to make it a payment which lasts for six months and it gives some security and constancy. That is the difficulty when it comes to working out compensation.

Lord Carter

I am grateful to the Minister, not for the content but for the fullness of the answer that he gave to me and also to the noble Earl, Lord Russell. He said that many parents would receive full compensation. Obviously, by inference, that means that not all parents will receive it. He said that others would be over-compensated.

There is one thing on which I should like to congratulate the Minister. As I sat here making notes, I thought back over the years in which I have been involved in social security. At least the Minister has not used the phrase used by so many of his predecessors in this Chamber; namely, swings and roundabouts. When that phrase was used, I always had to point out that it has not statistically been proved that swings do equal roundabouts. But we shall have to read this debate very carefully. Perhaps I may say to the Minister as kindly as I can that it was one of those answers that I am sure read much better in the original Sanskrit. It was very complicated. We must look at it and take advice.

We do not agree with the arithmetic. I have many figures with me but I shall refrain from giving them to the Committee at this time of the evening and at this stage of the Bill—more particularly in the absence of my noble friend Lady Hollis, who has a previous engagement this evening. She is a great expert in these matters and I know that she wants to come back to the Minister on decoupling and the period of six months. She has some interesting ideas on that and we might have to come back to the matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 99 to 101 not moved.]

Earl Russell moved Amendment No. 102:

Page 19, leave out line 33.

The noble Earl said: This amendment proposes to delete from the Bill the line in Clause 24: '"relevant time' has such meaning as may be prescribed".

Some members of the committee remember the case in the Jobseekers Bill, in which there were terms which had "such meaning as may be prescribed". The noble Lord, Lord Boyd-Carpenter, asked to be told of any cases in which those words had been used in previous legislation. I understand that he is still waiting for his answer.

But, thanks to the efficiency of the Minister here, I am not still waiting for my answer. I am grateful to him for his trouble. I do not know that I am entirely reassured, though. The Minister has come up with two previous examples. The first is from paragraph 4 of Schedule 4A to the Leasehold Reform Act 1967, which provides that a lease for the elderly is excluded from the operation of the relevant part of the Act in certain circumstances. The term "lease for the elderly" has such meaning as may be prescribed.

The other example comes from Section 117(2) of the Reserve Forces Act 1980, which prescribes that the term "active list" shall have such meaning as may be prescribed. In fact, so far as the Minister and his staff discovered—I am sure that they have done their best—there are only two previous examples in all legislation. That seems to me to be two too many.

But even having said that, one could understand where the meaning of the terms "lease for the elderly" and "active list" may change. But putting into a Bill the phrase that such words will have, such meaning as may be prescribed",

is simply using a control over language to acquire a control over legislation which did not appear in the original draft. That is most improper. It is a form of words which should not appear in any Act of Parliament. I should like to know whether the Minister can convince me to the contrary. I beg to move.

Lord Carter

I support the noble Earl, Lord Russell, on this point. Subsection (2) contains definitions of "child support legislation", "compensation payment", "qualifiying person" and "reduction"; but there is no definition of "relevant time".

The Government have gone to the trouble, on the face of the Bill, to define carefully those other terms but they then introduce this catch-all, relevant time' has such meaning as may be prescribed". If the Government have gone to the trouble of defining those other terms, why is it so hard to define the two words "relevant time"?

Lord Simon of Glaisdale

I support Amendment No. 102. The two measures which are to be construed together are both in substance and in form the very quintessence of bureaucracy, and this is the quintessence in legislative form: "X shall have such meaning as may be prescribed".

What are we here for except to express in the law the words by which the citizen is to be bound? Yet we are now asked to agree that a word shall have such meaning, "as may be prescribed". I care not how many precedents have been infiltrated by this department or any other into our legislation. It is high time that we brought that practice to an end.

Lord Mackay of Ardbrecknish

The words "relevant time", which the amendment would prevent us from prescribing, appear in the definition of "qualifying person". They enable us to provide that a person will qualify for compensation only if he or she had a maintenance assessment at some earlier date. The earlier date is the "relevant time", and that is eminently sensible.

Having the power to prescribe the "relevant time" enables us to pinpoint the date on which we require the person to have had a maintenance assessment to be a "qualifying person". Without that power, the provision is left blowing in the wind.

As the Committee knows, our intention is to base the compensation payments on the reduction in the maintenance assessment brought about by the change in the child support legislation. We therefore need to provide for the starting point to be the maintenance assessment in force when the child support legislation changes take effect. We therefore intend to define the "relevant time" as the day before the revised maintenance assessment takes effect.

That is our clear intention. I hope the noble Earl does not think that there is anything suspicious or underhand about that. Perhaps I may go on to say that, if a future government decided to pay compensation on the actual loss of family credit or disability working allowance, then it would be necessary—as the noble Lord, Lord Carter, invited me to do earlier—to define "relevant time" in relation to the date of the family credit or DWA claim. There are options as to how to define "relevant date" according to what one wishes to achieve. I have explained what we wish to achieve and what that relevant date will be in our case. I hope that I have also explained, rather unusually perhaps, to the noble Earl—the noble Earl may think it unusual for me to look into the crystal ball to envisage what future governments may or may not do—that in this case it is rather easy to consider another possible scenario dealing with the same problem, especially as the noble Lord, Lord Carter, has raised it this evening. With that explanation I hope that the noble Earl will be able to withdraw the amendment and noble Lords will not feel that I am asking for some unnecessary and draconian power for the Secretary of State.

Lord Carter

As I understand the Minister's answer, he seems to be making it easier for a future Labour Government to make changes, which I think is an extremely good idea.

Earl Russell

I am grateful to the noble Lord, Lord Carter, for that point, which brings to our attention one of the fundamental issues about this kind of provision. I have no argument with the Minister's definition of what he actually intends to do. If he had put that into the Bill we would not have argued with it. I entirely accept what he said in his letter: But I can assure you that such powers in the Child Support Bill have been drafted with no such purpose". He means no sinister purpose. But the Minister and all who advise him must get used to the fact that when we look at what is in effect a delegated power like this we are not only concerned with the immediate policy intention. The immediate policy intention may be entirely acceptable. What we look at are the vires. We look at what may be done with this power at some time in the future by some government in the future.

We never assume that any government are trustworthy, even if we were in charge. No one is trustworthy in office. Power needs control. What I look to see is whether there is any circumscription in the vires. Whenever I find, "This word has such meaning as may be prescribed", there I see something where there is no limitations in the vires. It is an absolutely unacceptable method of legislation at all times. The only way I can explain to the Minister that it will be so is to ask for the opinion of the Committee.

10.3 p.m.

On Question, Whether the said amendment (No. 102) shall be agreed to?

Their Lordships divided: Contents, 16; Not-Contents, 29.

Division No. 3
Carmichael of Kelvingrove, L. Kilbracken, L
Carter, L. Mar and Kellie, E.
Cocks of Hartcliffe, L. Monkswell, L.
Dean of Beswick, L. Palmer, L.
Dubs, L. Russell, E. [Teller.]
Ewing of Kirkford, L. Seear, B.
Ezra, L. Simon of Glaisdale, L.
Graham of Edmonton, L. Taylor of Blackburn, L. [Teller.]
Addison, V. Howe, E.
Astor, V. Inglewood, L. [Teller.]
Balfour, E. Long, V.
Barber, L. Lucas, L.
Blatch, B. McConnell, L.
Brougham and Vaux, L. Mackay of Ardbrecknish, L.
Carnock, L. Mackay of Clashfern, L. [Lore Chancellor.]
Cochrane of Cults, L.
Craigmyle, L. Oppenheim-Barnes, B.
Denton of Wakefield, B. Rawlings, B.
Dudley, E. Stodart of Leaston, L.
Ferrers, E. Strathclyde, L. [Teller]
Goschen, V. Trumpington, B.
Hayhoe, L. Wakeham, L.
Henley, L. Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.

10.10 p.m.

[Amendments Nos. 103 and 104 not moved.]

Lord Carter moved Amendment No. 105:

Page 19, line 47, at end insert: ("() The Secretary of State shall make provision for payment by him to qualifying persons of sums by way of compensation where financial loss, worry or distress has been caused to that person or a member of his family by the actions or inaction of the Secretary of State, a child support officer or any other person carrying out duties in connection with child support legislation.").

The noble Lord said: I shall try to be brief in moving this amendment. However, it raises an important point. In the report on the Child Support Agency by the Select Committee on the Parliamentary Commissioner for Administration, paragraph 34—I shall not read out the whole of it—dealt with what it described as, many other cases of serious distress arising from the maladminstration of the CSA. It is quite within the power of the DSS to apply greater discretion in its consideration of 'worry and distress' payments and to remove the current requirement of medical certification before any such payment is made".

Its recommendation which, as your Lordships will know, appears in heavy type at the end of each paragraph stated: We recommend that the DSS consider discretionary payments for worry and distress caused by the maladministration of the CSA, removing the insistence that there be medical certification of harm or proven malice from officials".

That recommendation is repeated in paragraph 28 of the Government's response to that document, but it is completely ignored in their answer. I am sure that the Minister has a good reason for that, but so far as I can see, the Government make no attempt to answer the recommendation that was made in the previous report. They have reprinted it—they have had to because it appears in heavy type and recommendations are always reproduced with the Government's response—but, so far as I can see, they have completely ignored it.

Given the acknowledged poor performance of the CSA in its first two years, the amount of compensation that has been paid out as a result of that poor performance has been derisory. The Parliamentary Ombudsman's report documented the problems being caused for families by the poor service being provided by the CSA. The Select Committee's report, from which I have just quoted, severely criticised the DSS for the limitations placed on its compensation scheme. Those limitations were the requirement for medical certification or proven malice from officials. As I have said, the committee used the phrase "worry and distress", which we have repeated in the amendment.

We should all prefer the problem to be solved by a dramatic improvement in the performance of the CSA but, if we go by the figures which appeared in the press today to which I referred earlier, that will be a long time acoming. If that were to happen—if the performance were to improve—the amounts to be paid out under the compensation scheme would not be great. However, while the problems remain at their current level, we feel that CSA clients must be guaranteed some form of compensation, otherwise pressure will remain to keep the ex gratia scheme very limited. The severity of the administrative problems and errors are illustrated by the fact that the ombudsman had insufficient staff to investigate all complaints against the CSA and therefore will be restricting investigations to issues which he has not yet covered.

As I have said, I should like an answer from the Minister if the amendment is not to be accepted. Perhaps he could also say why the recommendation which was made by the Select Committee was completely ignored in the Government's response. I beg to move.

10.15 p.m.

Lord Mackay of Ardbrecknish

The noble Lord, Lord Carter, seeks in this amendment to provide statutory provision for compensation payments in circumstances where a person has been caused financial loss, worry or distress as a direct result of the activities of the agency.

The amendment is framed by way of an addition to Clause 24. It would, in fact, have been more appropriately placed as a new clause since Clause 24 does not deal with compensation related to the administration of child support. That is a technical point and I will not rest my case on it.

Members of the Committee will no doubt be aware that, notwithstanding that child support legislation makes no provision for compensation payments of the type referred to in the amendment, there are nevertheless administrative mechanisms for compensation to be considered in appropriate cases. If someone considers that they have suffered a financial loss or undue delay as a result of an action or omission on the part of the agency, they can contact the agency, which will deal with cases on an individual basis. This is in line with practice which operates elsewhere in the Department of Social Security.

The noble Lord, Lord Carter, raised the issue of the ombudsman's criticism. The Permanent Secretary at the department made it clear in his evidence to the PCA Select Committee that the agency now operates general DSS arrangements for compensating actual financial loss. He made it clear that special payments were considered where it was clear that agency error had resulted in an actual financial loss to a customer.

The Department of Social Security special payments arrangements, which now also apply to the Child Support Agency, have been in place for almost 20 years and provide for payments to be made on an ex gratia basis. Compensation may be considered where an individual has experienced undue delay or suffered an actual financial loss as a result of official error. Compensation arrangements specifically designed to cover the work of the agency are being developed and it is hoped to introduce them in the near future. There are no plans to introduce these arrangements on anything other than a discretionary ex gratia basis. We do not consider that specific provision needs to be made in primary legislation.

Were a compensation scheme to be placed on a statutory basis, it would be necessary to regulate, I believe at some length, for the detail of the scheme. That would inevitably limit the extent to which it was possible to deal flexibly with the individual circumstances of each case. We believe this flexibility to be a great advantage of the current arrangements and therefore consider the introduction of a statutory scheme to be unnecessary as it would not in itself guarantee a better standard of redress to customers of the agency.

I turn to the issue of compensation for worry and distress. I should make it clear, as did the Permanent Secretary yesterday in his evidence to the PCA Select Committee, that the Government do not accept that compensation should be paid in all cases to those falsely identified as absent parents. I imagine that that is the circumstance in which the worry and distress arises. Maintenance inquiry forms clearly state that they are issued on the basis of information provided to the agency by the parent with care. Absent parents are invited to contact the agency for information if they believe that they have been incorrectly identified as an absent parent.

We do not accept the need for a statutory right inside the child support legislation to receive compensation on those grounds because the right to compensation already exists under common law. I hope that with those explanations of what we are doing in the agency to address at least some of the problems raised by the noble Lord, Lord Carter—although I accept not others—he will withdraw his amendment.

Baroness Seear

Once again, the Minister does not appear to understand why we are so dissatisfied with a great deal of this legislation. He is making the department judge and jury in its own case. That has happened again and again and for a long time. It is part of what years ago Lord Hewitt called the new despotism. It is by now becoming a long-established, long-toothed despotism. We wish to have embedded in the legislation a right to compensation and not compensation graciously given by the department which is inflicting the injury. That is totally unacceptable.

Lord Carter

The Minister's answer was not very satisfactory. He read out almost word for word the answer which the Government gave at paragraph 29 of their response to the Select Committee which dealt with the recommendation that financial compensation should be paid to those identified falsely as absent parents through the maladministration of the CSA. The point that I made was that the report then went on to deal with the other recommendation about discretionary payments for worry and distress. That was ignored completely in the Government's response. It has not been ignored by the Minister but he certainly skirted round it to some extent by concentrating on a point which I did not make about absent parents.

I do not wish to labour the point now. It would perhaps have been better to draft this as a new clause. We are not happy about this. There is still anxiety about worry and distress. While the Minister spoke, I was trying to look at the evidence which Sir Michael Partridge gave to the Select Committee, and in part he was fairly po-faced. I shall read it again, but we shall wish to return to this matter on Report. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 agreed to.

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

[Amendment No. 106 not moved.]

Clause 25 agreed to.

Clause 26 [Regulations and orders]:

Earl Russell moved Amendment No. 107:

Page 21, leave out lines 20 and 21.

The noble Earl said: I hope that the Minister will succeed in assisting me a little on this amendment. I hope that the two previous Divisions may have done a little to concentrate his mind. But in order to give a satisfactory reply he will need to understand what it is that he is being asked about.

Clause 26, to which the amendment relates, deals with the power to make regulations and control of statutory instruments. It deals with what is affirmative and what is negative. The lines which I propose to delete state: Any such power includes power…to provide for a person to exercise a discretion in dealing with any matter".

If those words mean what they appear to mean, the whole Bill is redundant and we have been wasting our time for two days. Therefore, I wish to ask the Minister about the vires conferred by those words.

I do not wish to hear about the policy intention because, especially in the context of the CSA, I am certain that it will not be the last policy intention and that we shall have more changes. I want to know what is the vires. What can be done under this clause and, even more important, what cannot be done? Is there any way in which this power is circumscribed? Is there anything which a future government cannot do under this clause and, if so, what can they not do? What limiting principle is it governed by? If it is not governed by any limiting principle, I do not see any point at all in passing parliamentary legislation.

There must be some sort of control. We certainly cannot accept that executive power should be capable of doing absolutely whatever it likes; that it should have discretion to change the rules in the middle of the game and to give things to one person and to take them away from another entirely as it thinks fit. That is arbitrary power. That is what the rule of law and parliamentary government are supposed to prevent. Therefore, will the Minister tell me, please, how that power is circumscribed and by what principles? I beg to move.

Lord Mackay of Ardbrecknish

Perhaps I may deal first with the actual provision. The provision to which the amendment relates is a normal one and is parallel to a provision already in the 1991 Act. I know that that does not carry any weight with the noble Earl. Indeed, I believe that I have understood that much, although according to the noble Baroness, Lady Seear, I have not understood much else. It will enable regulations made under what will become Section 10 of the 1995 Act, which deals with the child maintenance bonus, and Clause 24, which deals with compensation payments, to allow for a person to exercise discretion in a variety of circumstances. Therefore, it is not an unlimited power over the whole field. It is circumscribed as regards the two issues that I mentioned—that is, the clause dealing with the child maintenance bonus and with Clause 24 which deals with compensation payments.

As I mentioned, the power to exercise discretion is contained in the 1991 Act and in the Social Security Contribution and Benefits Act 1992. The power is not used extensively. However, it can prove useful in cases where it might not be possible to set out all considerations in advance. One of the great arguments that we had only yesterday—but it seems like over a week ago—was about whether legislation should just enunciate a few principles and then leave everything to the discretion of the people who run the system. Now I am being caught with the vice coming the other way when I want a little discretion. I see that the noble Earl wishes to intervene. Well I did say that the vice was coming the other way, so I give way.

Earl Russell

The Minister is significantly misrepresenting what we said yesterday. That misrepresentation illustrates the heart of the problem. We propose that general principles should be left to the discretion of the courts and not to the discretion of those who run the system. The difference is fundamental. If the Minister does not understand that, he cannot answer anything.

Lord Mackay of Ardbrecknish

No one will be able to run any social security system if there is no discretion at all and if one is not allowed to have the matter outlined in regulations. All sorts of social security systems, including this one, would have to be run by the courts. I do not believe that that is a sensible proposition, although, probably, I have misunderstood again. It seems to me that if the accusation applies to the Child Support Agency, it must apply to all the other benefit systems operated by the department, many of which are operated through regulations and also with an element of discretion.

I was trying to illustrate why we believe that the provision is necessary. I wanted to do so by considering the child maintenance bonus as introduced by Clause 10 of the Bill. As a general principle, people accrue a bonus through maintenance paid while they are receiving income support. When they move into work the bonus is paid in respect of all the maintenance received up to that point. We discussed some of the difficulties which might arise. It is possible that we shall need an element of discretion in its application. For example, a person with care was not receiving maintenance due while on income support perhaps because the absent parent was refusing to pay or perhaps he had appealed against the maintenance assessment. The person with care then moves off income support into work. At that point, the arrears are paid after the time limit for claiming the bonus had passed.

It would be reasonable to have a provision to allow an adjudication officer the discretion to treat those late payments in such analogous circumstances as if they had been paid on time and to accrue a bonus accordingly. Those were some of the issues which I believe the noble Baroness, Lady Hollis, raised with me yesterday. If the proposed amendment were accepted, there would be no scope for regulations made under Clauses 10 and 24 to provide for a person to exercise discretion. The loss of flexibility appears to offer no advantage to any party.

I should like now to answer one of the noble Earl's questions in the latter respect. The power to exercise discretion is confined within the bounds of the regulation-making power in the Bill. It is not, therefore, an unfettered discretion. As we discussed on a number of occasions, any regulations have to come before Parliament—affirmative ones in one way and negative ones in another—and, therefore, the Executive is, at least to a certain extent, called to account and asked to explain any changes that it makes in regulations. Indeed, I presume that I will be asked to explain any regulations that are made in the first instance under those pieces of legislation—

Lord Simon of Glaisdale

Does the Minister not recognise that there is a difference in parliamentary control whether the legislation is primary or subordinate?

10.30 p.m.

Lord Mackay of Ardbrecknish

Yes, of course; indeed I do. I clearly recognise the difference between primary and secondary legislation. I am not sure where that leads us. I believe that we could not enact all the legislation which we enact as regards the ways we attempt to run—dare I say it?—a fair system in this country of, say, social security. I am not sure that the noble Earl agrees with me that it is a fair system, but (hat is how we attempt to run it, and that is how I believe any government would attempt to run it; that is, primary legislation followed by a great many regulations to operate a system. If I remember rightly, there are over 1,200 benefit offices dealing with many people with quite different circumstances. It is not easy to legislate for that in primary legislation.

We have had this debate a number of times in this Bill and on a number of occasions on the previous two Bills that I have piloted through this Chamber. I hope I have tried to explain to the noble Earl, Lord Russell, what we intend to do here and that it is not as unfettered a provision as he seems to think it is, just like all the other prescriptions we discuss which he seems to think give the Executive unfettered power. I have to tell the noble Earl that speaking as a member of the Executive I do not feel I have unfettered power.

Earl Russell

The Minister is not the first representative of an Executive to say that he does not feel he has unfettered power. King Charles I said in 1641, "I do not feel in myself any such excess of power". Those words are familiar. I accept it feels that way to the Minister; it does not necessarily feel that way to the rest of us. He is of course right; it is not a reassurance to us to say that it has happened before. He heard my noble friend Lady Seear refer just now to a long-in-the-tooth despotism. We hope it might at some time receive a departure direction. However, I appreciate the attempts the Minister has made to describe the circumscription of the vires. I hope to hear him say that it is confined to the regulation-making powers in this Bill. It is confined, I presume, in spite of the general wording, by its presence in this clause. That is one mercy. He said—if I heard him right—it was further confined to the child maintenance bonus and compensation. That restricts it a great deal further. What I cannot actually see, in words which are governed, as far as I can see, by the provision, Any power under this Act to make regulations or orders", are any words there imposing this specific restriction. If the Minister could direct my attention to such words I would be grateful and I would find it extremely helpful.

The Minister says that we want a system with no discretion at all. Of course we do not. Like Lady Bracknell we say, "Discretion to do what, may I ask"? We want to see discretion governed by general principles and by vires which are circumscribed enough for us to understand what they mean. The Minister referred to discretion for an adjudication officer. That in many circumstances—we had a good few of them on the Jobseekers Bill—can be entirely acceptable, but he ought to remember that there is, in our eyes, a fundamental distinction between judicial and administrative discretion.

My noble friend Lady Seear just now used the phrase, "judge and jury in its own case". It is not the court's own case save only in the sense that it is hearing it. It does not have an interest in the decision. The Secretary of State regularly has an interest in the decision. That is the principal reason why we do not think that he should be trusted with the amount of discretion that he is claiming.

If our positions should at some future time be reversed, and should we be tempted by the arguments that the Minister is deploying now, I hope he will remind us of these things that we are saying at the moment. People in office need to be reminded of what they said in Opposition, as we heard from the noble Earl, Lord Onslow, earlier this afternoon. Is the Minister in any position to assist me yet about the circumscription of the vires to the child maintenance bonus and to compensation?

Lord Mackay of Ardbrecknish

I think I am. As regards Clause 26, the two regulations that we are discussing, and which I have mentioned, are the only two regulation-making powers brought in by this Bill. The other regulation-making powers we have discussed are insertions in the 1991 Act and are therefore controlled by the equivalent clause at the end of that Act.

Earl Russell

I am very relieved to hear it. Like Tom Lehrer, I find that there was a reason. That does just enough for me to save me from completing my hat trick, which I had not wanted to do. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 108 and 109 not moved.]

Clause 26 agreed to.

Clauses 27 to 29 agreed to.

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

Lord Mackay of Ardbrecknish moved Amendment No. 110:

Page 22, line 40, leave out ("paragraph 1") and insert ("paragraphs 1 and 15 A").

The noble Lord said: In moving Amendment No. 110 I shall speak also to Amendment No. 113.

These are minor, technical amendments which rectify omissions from the Child Support Act 1991. The Child Support Act currently refers only to Part I and Part III of the House of Commons Disqualification Act 1975 and does not indicate to which schedule the parts belong. The amendments make clear that it is Parts I and III of Schedule 1 to the House of Commons Disqualification Act 1975 which are amended.

The amendments also rectify a similar omission from the parallel amendment to the Northern Ireland Assembly Disqualification Act 1975, where again the relevant schedule is not indicated.

I hope that the Committee will accept the amendments. I beg to move.

On Question, amendment agreed to.

Clause 30, as amended, agreed to.

Schedules 1 and 2 agreed to.

Schedule 3 [Minor and Consequential Amendments]:

Lord Mackay of Ardbrecknish moved Amendment No. Ill:

Page 29, line 33, at end insert: (". In section 33 (liability orders), at the end add— (5) If the Secretary of State designates a liability order for the purposes of this subsection it shall be treated as a judgment entered in a county court for the purposes of section 73 of the County Courts Act 1984 (register of judgments and orders).").

The noble Lord said: I seem to be coming into my own in what I hope is the home stretch regarding amendments.

This amendment gives the Secretary of State the power to apply for a liability order to be entered in the register of county court judgments. I believe that it will encourage absent parents to pay their child support maintenance liability, particularly in cases where they are self-employed. Experience in other areas has shown that the threat of an entry in the register acts as an incentive for debtors to pay their liabilities because it can result in difficulties in obtaining credit for personal and business purposes.

Unfortunately, there are some absent parents who are reluctant to pay maintenance, and where the absent parent is self-employed there is a particular difficulty because it is not possible to issue a deduction from earnings order. If the absent parent does not co-operate in making payment, it is necessary for the Child Support Agency to apply to a magistrates' court for a liability order. That is then followed by distress action, or if this is ineffective by garnishee proceedings or charging orders in appropriate cases.

But that process can be protracted and some absent parents are deliberately unco-operative, using every means to avoid or delay for as long as possible payment of maintenance for their children. It is therefore right that we do everything we can to ensure that parents with care receive payment of maintenance promptly.

Liability orders will not be entered automatically in the register. When a liability order is granted, the absent parent will be warned that consideration will be given to making an application if the absent parent has not made arrangements to meet his liability within a reasonable period. This measure is not intended to be punitive, and absent parents can easily avoid the consequences by co-operating with the agency and making an agreement to pay maintenance and to contribute to clearing the arrears. But I believe that it is right that we do all we can to frustrate the deliberate attempts of a few absent parents to avoid meeting their responsibilities for their children. I beg to move.

Earl Russell

I seek a little clarification. The Minister proposes to give judicial force to an administrative decision. He proposes to do something, as he said, which will affect people's credit rating. That is a matter on which damage done through an error may be with one for the remainder of one's life. So mistakes need to be carefully supervised, and any real injury done to someone ought to be a matter for compensation. Can the Minister tell me, first, whether that will be so?

Secondly, when the Secretary of State designates a liability order for entry as a judgment, will the court be bound automatically to register that judgment or will the courts have power to conduct a hearing to see whether the facts are as stated? It is the second question which is crucial. I need to hear the Minister's response. With such a power, the provision is acceptable. Without it, at this time of night it would put us in considerable difficulties.

Lord Simon of Glaisdale

I hesitate to intervene at this hour. Indeed, I regard it as quite disgraceful that we are still sitting here after half past ten—again a very late sitting on the second day of this Committee. Indeed, to conduct our business like this is virtually a frustration of your Lordships' legislative role in the constitution.

However, I have a question that I should like to ask the Minister because I confess that at the end of our discussion on the remedy of distress I was left in a state of considerable confusion. I realise that that was partly because I had not had time to master a letter which the noble Lord had written to me which I received only yesterday morning, although the matter had been raised on both the 1991 Act and at Second Reading of the Bill. The other reason was that the noble Lord was not at the time in a position to answer in relation to the specific matters to which I referred in Section 35 which seem to give the Secretary of State exceptional power as a distrainer—powers well over and above those that the ordinary creditor has.

I understood the noble Lord to tell me that there were, in fact, no exceptional terms: that what was in question was merely the procedure under the County Courts Act which is, I believe, that which is now referred to. If that is so, I ask again why Section 35 is necessary. Is there any other purpose than to give the Secretary of State exceptional powers of distress, well over and above what is enjoyed by the ordinary citizen? Why cannot the powers under the County Courts Act which are now to be invoked not sufficient?

Lord Mackay of Ardbrecknish

The two debates are linked to a certain extent. I did my best to explain the answers to the points raised by the noble and learned Lord from the point of view of a layman in the law. I am sorry that he is still in doubt as to whether I gave him a proper answer. I shall certainly read again what happened earlier and if I feel it necessary I shall write to him in order to—

Lord Simon of Glaisdale

I did not complain when the noble Lord declined to answer in regard to the specific matters to which I drew attention. The question now is a perfectly simple general one: why is Section 35 necessary at all if the powers exist under the County Courts Act 1984?

Lord Mackay of Ardbrecknish

I am grateful to the noble and learned Lord for clarifying in my mind what I have no doubt was absolutely clear in everyone else's as to the question he asked. I shall go back a little in order to deal with the questions in order. We are discussing someone who has declined to pay over a considerable period and there is no other possible way of ensuring that he pays. Those are the circumstances.

As I said in my introductory remarks, in the first instance it will require a liability order from a magistrates' court. That order will have to exist and we have discussed it. The absent parent will know about the order and, if I recollect what I said earlier, he will have the right to make any points he wishes to the magistrate. If the magistrate grants that liability order, once again the absent parent will be given time to deal with the problem and prevent the next step being taken. In a way I am trying to help the noble Earl, to show that there are plenty of opportunities for the person to reach an agreement with the agency to prevent each step in the process from happening.

Earl Russell

The Minister is being helpful, but perhaps I may ask for crucial clarification. Has the court the right to refuse to enter?

Lord Mackay of Ardbrecknish

We discussed what the court could or could not do earlier, but my understanding is that the court does not have the right to refuse to enter and that is the position. We have reached the stage where a liability order has been granted by the magistrates' court.

Baroness Seear

Is the noble Lord telling us that all the court can do is to rubber stamp a decision which has already been made? If not, what can it do that is different?

Lord Mackay of Ardbrecknish

My problem is that, as the noble Baroness knows, I am not a practitioner in the courts. I have given my understanding of the position and, if in practice the position is different, I shall tell her.

Lord Simon of Glaisdale

Will the noble Lord forgive me again? He has not answered my question at all. He has merely repeated the argument that there is no need for distraint or distress if the debtor goes quietly. We have heard that argument and are not impressed by it.

However, that was not what I asked. If a liability order is issued in the magistrates' court and it is registered under the County Courts Act, why is there any necessity for Section 35, unless it gives remedies to the Secretary of State over and above the ordinary remedies under the County Courts Act? That is the question and I hope that the noble Lord has now received the answer.

Lord Mackay of Ardbrecknish

I am grateful to the noble and learned Lord for helping me. I was coming to the answer but I was trying to address two issues at the same time—the issue that he raised and the one raised by the noble Earl—and to look at the procedural point.

We have a liability order from the magistrates' court. The question is then: why do we need Section 35? The liability order from the magistrates' court will have the status of a county court judgment. Therefore there will be no role as such for the county court. The order would go directly on for registration. As I say, the liability order is not a county court judgment. If it were, this provision would not be necessary. Perhaps that answers the noble and learned Lord's question.

Lord Simon of Glaisdale

I am afraid that it does not. Would not the county court order follow if it were applied for?

Lord Mackay of Ardbrecknish

I believe I pointed out earlier that we are looking for a simpler proceeding, not one that takes time but one that will deal with the proceedings expeditiously. I explained that the order will have to go to the magistrates' court, so there will be a judicial stage, and the person involved will certainly know all about it at that stage. He will then have the opportunity to do something about it before it is moved to the next stage; namely, to be registered.

Because the order will have the status of a county court judgment, there will be no role for the county court. It would go directly for registration.

I can appreciate that the noble and learned Lord and the noble Earl do not particularly agree with what I am trying to do here; but I hope that I have explained the position. I beg to move.

Earl Russell

This gets worse and worse as it goes on. The Government are moving into the courts and using them to rubber-stamp an administrative decision. The point about a judgment is that it follows a hearing; and it follows consideration of evidence by an impartial authority. That is what the Secretary of State cannot pretend to be.

I have sympathy with the Minister not being a lawyer; after all, I am not either. Clearly a lot of questions have been raised tonight that were not foreseen and on which expert legal advice is needed. Would it be for the convenience of the House if the Minister were to defer moving this amendment until Report when he has been better advised about it? I hope that he will do that. It will be very difficult if he does not.

Lord Carter

I have listened to this debate with great interest. This is a point which I am sure could be answered in correspondence. I am satisfied with the Minister's answer. If the noble Earl decides to divide the Committee, I shall persuade my colleagues to vote with the Government.

Lord Mackay of Ardbrecknish

It is late, and we shall be in the same position at Report stage. I have tried to answer all the questions. In particular, perhaps I may clarify this point—I might have made a mistake earlier on. The magistrates' courts would always have a hearing before making a liability order. I hope, given that additional explanation, the noble Earl will accept that I am not withdrawing the amendment and that he must do what he feels he must do.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 112:

Page 30, line 8, after ("or") insert ("under").

The noble Lord said: This amendment clarifies an earlier amendment introduced during the Bill's passage in another place. The Bill, as it was originally introduced, made provision for regulations made under paragraphs 4 and 5 of Schedule 4B to be subject to affirmative procedures. However, prompted by an Opposition amendment to reconsider the schedule, we judged that it would be right for all regulations made under it to be approved by both Houses before coming into effect.

But it is possible that the current wording of the Bill could be interpreted to mean that affirmative procedures apply only to those regulations made under Part 1 of Schedule 4B, which was neither the Opposition's intention nor ours. The proposed amendment will put the matter beyond doubt. I therefore ask the Committee to accept it. I beg to move.

Lord Carter

I am extremely grateful to the Minister. This point was raised by my colleagues in the other place. It was a sensible one. The Minister has now put the matter right.

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 113:

Page 30, line 23, at end insert: (" .—(1) In paragraph 3(2) of Schedule 5 (amendment of the House of Commons Disqualification Act 1975), after "Part I" insert "of Schedule 1". (2) In paragraph 3(3) of Schedule 5, after "Part III" insert "of Schedule 1". (3) In paragraph 4(1) of Schedule 5 (amendment of the Northern Ireland Assembly Disqualification Act 1975), after "Part I of insert "Schedule 1 to".").

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

On Question, amendment agreed to.

Lord Mackay of Ardbrecknish moved Amendment No. 114:

Page 30, line 23, at end insert:

("Social Security Administration Act 1992 (c. 5)

. In section 170(5) of the Social Security Administration Act 1992 (the Social Security Advisory Committee)—

  1. (a) in the definition of "the relevant enactments", after paragraph (aa) insert—
    1. "(ab) section 10 of the Child Support Act 1995;"; and
    2. (b) in the definition of "the relevant Northern Ireland enactments", after paragraph (aa) insert—
    1. "(ab) any enactment corresponding to section 10 of the Child Support Act 1995 having effect with respect to Northern Ireland;".").

The noble Lord said: As the Child Support Bill currently stands, issues arising from a payment of the child maintenance bonus could not be considered by the Social Security Advisory Committee. It was never our intention to exclude payments of the child maintenance bonus from the scrutiny of the committee. This amendment makes sure that issues arising from a child maintenance bonus payment made under Section 10 of the Child Support Act 1995 can be dealt with by the Social Security Advisory Committee. That is achieved by amending the definition of enactments given in Section 170(5) of the Social Security Administration Act 1992, in relation to which the Social Security Advisory Committee can give advice and assistance, to include Section 10 of the Child Support Act 1995.

A similar change is made to the definition of the Northern Ireland enactments which are relevant to the Social Security Advisory Committee to add any Northern Ireland enactment corresponding to Section 10 of the Child Support Act 1995. I beg to move.

On Question, amendment agreed to.

Schedule 3, as amended, agreed to.

House resumed: Bill reported with amendments.

House adjourned at four minutes before eleven o'clock.