§ 3.54 p.m.
§ The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)
My Lords, with the leave of the House, I shall now repeat a Statement made earlier by my right honourable friend the Secretary of State for Social Security on our reforms of the Child Support Agency, a 438 key part of our strategy for supporting families and children. The Statement is as follows:
"Last year, we published our Green Paper setting out our proposals. There was overwhelming support for change and I am placing in the Library a summary of the 1500 responses, along with a list of those who contributed.
"Today, I am publishing our White Paper on child support, setting out reforms which will get money to one million children who today miss out. I have written to all Members enclosing a summary of the White Paper and placed copies of the White Paper in the Vote Office.
"The reforms I will set out today are driven by principle. We are putting children first. And we are making sure the new system is fair on fathers who want to support their children and tough on those who will not. Our reforms mark a new contract for child support based on the right of a child to the care and support of its parents and the responsibility of parents to provide it.
"The responsibility for bringing up children lies squarely with both parents. And it is a responsibility that endures whether they live together or apart. All children have the right to a decent start in life and this Government are already doing a great deal to help. We are increasing child benefit by a record amount and providing more help for low-paid families through the new Working Families' Tax Credit, tax changes and the national minimum wage. Together, this means that a family on £13,000 a year will be better off by up to £2,500 a year. We are investing £540 million in the Sure Start programme for very young, disadvantaged children. And we are committed to ending the scandal of child poverty in a generation.
"We are determined to make sure children get all the help they need, which is why we are introducing a new system of child support that is simple, effective and fair. Because, today, many children miss out on the support of both their parents. Under the present system, only 250,000 children actually get maintenance and only 100,000 children get all they should. Thirty per cent of parents using the CSA are paying nothing towards the care of their child. That cannot be right. The child support system should help parents meet their responsibilities and, where necessary, take action when parents will not.
"But the system we inherited has failed. It does not help parents who want to pay and it is not tough enough on those who will not.
"The previous Government set up the Child Support Agency in 1993 to replace a courts system that could not cope. Going back to the courts is not the answer. In 1979, 52 per cent of lone parents on income support were getting maintenance. By 1990 the courts were getting money to only 20 per cent. On top of this, decisions were often unpredictable, unreliable and unfair. The CSA was meant to sort this out. But it did not. The percentage of lone parents on income support getting child maintenance is the same today as it was when the Agency was set up.
439 "The CSA became a bureaucratic nightmare for parents and staff alike. And the reason for that is clear. Under the current system the CSA can need over 100 different pieces of information to make a single decision. So today a third of all child support cases wait at least six months for a decision. The CSA spends 90 per cent of its time chasing information and only 10 per cent chasing parents who will not pay. The result: many responsible parents who genuinely want to support their children often find themselves facing a mountain of debt through no fault of their own, while irresponsible parents can play the system to their advantage and end up paying nothing for their children. And it is children who lose out.
"These failures have their roots in the complexity of the current system. And the result is an administration so burdened that only root and branch reform will turn things round.
"So we are tackling that inheritance by introducing a simple, new and effective system of child support; delivering for children by reforming the policy—and rebuilding the agency.
"We are putting the confidence back into child support by introducing radical reforms in four key areas. First, we are abolishing the current system for calculating child support, replacing unworkable policy with a workable new system that is based on a simple way of deciding how much parents should pay. Secondly, we are turning the agency around so that it provides a decent and effective service to all parents to make sure that children actually get the money from their parents—and quickly. Thirdly, we are introducing tough new measures to deal with parents who try to run away from their responsibilities. Fourthly, we are helping the fight against child poverty by introducing new help for children in the poorest families.
"I turn now to the detail of our proposals. First, I want to set out our plans to reform the formula that is currently used to calculate how much parents pay towards the care of their children. This is the fundamental flaw at the heart of the system. It was designed to take account of any—in fact, almost every—detail that might affect how much a father could pay. The result is a calculation so complex that it is barely workable; so complex that it is often difficult for parents to know whether a decision is right; and so complex that it takes months to get a decision.
"So, today, I can announce that we are abolishing the complex formula and replacing it with a system of simple rates that is so easy to understand that parents can work out for themselves how much they should pay. We will publish these rates—they are in the White Paper—putting leaflets in post offices, libraries and elsewhere. The new rates are reasonable because they reflect the amount that a parent would pay if he were still living with his children.
"Under the new system, a father will pay a flat rate percentage of his net pay—that is, his take-home pay. This will amount to 15 per cent if he has one child to 440 support, 20 per cent if he has two and a maximum of 25 per cent when he has three or more children. For fathers on less than £100 a week, there will be a flat rate payment of £5 a week.
"Every parent knows that one cannot calculate the cost of bringing up a child down to the last penny. However, our proposals are fair and reasonable. They are fairer to fathers because they are more reasonable and realistic; they are fairer to mothers who will get money much more quickly; and, above all, they are fairer to children who will actually get the money they need. Because it is so simple, it will take the agency only a few days to confirm what should be paid rather than the months that it takes now. It is fast and simple for parents, fast and simple for the agency, but, above all, right for children.
"Secondly, to do this we need also to reform the way in which the CSA operates and significantly improve the service that it provides. This will not be easy. The CSA will never be popular: it will always do a difficult job at a difficult and emotional time. However, by replacing the complex formula with new simple rates, we are laying the foundations for a far better service than would ever be possible under the current system. So these reforms mark a new contract for the CSA too: a new system in return for a radical change in culture, service and approach.
"The shake-up has already started. We are strengthening the agency's management, importing private sector know-how to work together with public sector experience to sort things out. From next week, we are bringing in the private sector to help the agency collect more money from more parents. I can announce today that we will invest an extra £28 million over the next three years. However, in return, the CSA will have to deliver clear and tangible improvements: a better service, quicker decisions and more money getting to children than ever before.
"The CSA will get new information technology and will make more use of the telephone to sort out queries quickly. The CSA will be there at times that suit parents so that they can call in the evenings or at weekends from the privacy of their own home and not in the daytime while they are at work. The CSA will also introduce a more effective complaints system to ensure swift and effective action if things go wrong. Parents will get a clear statement setting out what they have paid and what is due—a clear picture of where they stand, just as one gets from a bank statement. In short, the CSA will move from an organisation bogged down in paper to an organisation that will focus on the needs of parents and, above all, on the need to get money to children fast.
"Thirdly, our new contract for child support is good news for responsible parents who get a better service that helps them do what they want to do. However, it is bad news for the minority—the hard core who persistently let their children down—because we will make sure that they are brought to book.
"So I can announce that, for the first time ever, we are making it a criminal offence to fail to provide or misrepresent information to the agency. If parents lie 441 to the agency, if they try to dodge their duty and if they persistently pay late, they will face a fine or time in gaol. While most self-employed parents are highly responsible, there are some who are not. So we are introducing new measures allowing us access to tax records to get a true picture of their income. We will make sure that fathers who run around in the company Porsche but who plead poverty to their children cannot get away with it.
"We are also closing a loophole that allows fathers to string out a decision by denying that they are the father of their In future, if a child is born while a man is married to the mother, the burden will be on him to prove that he is not the father. We will also make sure that teenage boys who become fathers face their responsibilities. They must realise that bringing a child into the world is a lifelong responsibility—it is not something from which one ever walks away. So we will make sure that, once they can pay towards the care of their child, they do pay.
"Because we are determined to make sure that all parents meet their responsibilities, we are looking at further measures to deal with the persistent minority who will not co-operate, including taking driving licences from fathers who persistently shirk their responsibilities. The message is simple: no hiding place, no excuse and no easy way out. Their child is their responsibility. Every parent must face up to that—they owe it to their children.
"This is our new contract for child support: we will deliver a new, fair and simple system that will help responsible parents to support their children, but, in turn, we will take tough action to make sure that the rest deliver for their children.
"Fourthly, we are also reforming the system to make sure that it does more for children in the poorest families. Under the current system, mothers lose their income support, pound for pound, whenever any maintenance is paid. Because mothers lose out, their children lose out also. So today can announce significant new help for children in the poorest families worth up to £10 a week. More than 250,000 children will gain from this change alone. That is real help from this Government for children in the poorest families. For the first time ever, we will make sure that money gets to the poorest children, not to the Treasury.
"I can also announce today that in order to make work pay, from October, low-paid families in work receiving the working families tax credit will keep every pound and every penny of child maintenance paid. All of these measures are delivering on our commitment to do more for those who need it most, to end child poverty and to make sure that Government, parents and the Child Support Agency together deliver for children.
"Finally, we must make sure that these changes are introduced smoothly and successfully. We want to introduce the new scheme as soon as possible, but it is vital to get it tight. The present system collapsed under its own weight because the previous government tried to introduce it too quickly and with 442 too little thought. This is a massive task. Within a year of the millennium, the Child Support Agency will be dealing with more than one million cases—that is more than two million parents. Radical change on this scale will take time. The new system needs legislation—new IT systems—and a radical change of culture and working practices in the CSA itself. We plan to introduce the new system for new cases only towards the end of 2001, with existing cases coming onto the new system later, once it is up and running. But we want to introduce some measures earlier: such as making it a criminal offence to lie to the agency, and closing the loophole that allows fathers to falsely deny their paternity; and improving the administration of the CSA itself.
"The future of child support lies in our new contract that puts the rights of children first, and the unshakeable duty of parents centre stage. The new system will be simpler and fairer for those fathers who want to support their children. And it will be tougher on those who will not.
"The agency will be turned around—so it provides the standard of service we all expect. We are putting the confidence back into child support; replacing complexity with simplicity; replacing delay with quick and accurate decisions; replacing bureaucracy with high quality customer service.
"Together, our reforms will help one million children who today are let down by the current system. We are delivering for children; putting their needs first. I commend these proposals to the House".
§ My Lords, that concludes the Statement.
§ 4.10 p.m.
§ Lord Higgins
My Lords, the House is grateful to the noble Baroness for repeating an important Statement on child support. Perhaps I may begin by congratulating her on her stamina. It was a fairly lengthy report. It is particularly appropriate that the noble Baroness should be the one to repeat the Statement in this House, as I understand that she has played a significant role in the work on the White Paper.
Ever since the Child Support Agency was introduced in 1993, policy has been bi-partisan. Indeed, that continued in 1995, when some of the proposals put forward by a Select Committee chaired by Mr Frank Field were placed before both Houses and implemented. The situation inherited by the present Government reflected that bipartisan policy. The matter was clearly in need of further reform.
Having spent many hours, as a Member of the other place, dealing with child support cases, I recognised the problems—not least when one was faced with a father who was determined not to pay anything at all if possible towards the upkeep of his children, and on the other hand a department that worked inefficiently and constantly made mistakes, thereby making it very difficult to resolve constituency problems. I remember spending a great deal of time on one case, and even taking a particular individual to see Ministers on two occasions, simply in order to try to sort out the problems that the agency was experiencing. Nevertheless, the 443 White Paper comes halfway through this Parliament, and its proposals will not be come into operation until nearly the end of its term.
There are some aspects of the White Paper that we can welcome. In particular, it is right for the Government to say that they are not going back to the courts—for the reasons mentioned by the noble Baroness, but also because many of the problems caused, which resulted in the setting up of the Child Support Agency, came about because the courts would often award the matrimonial home to the wife, and then expect public support—income support and so on—to provide for the children. That was the problem that the agency was intended to address.
Many of the problems at that time arose because, instead of dealing with new cases, the agency was asked to go back over previous cases, many of which had a long history, had been through the courts and so on. I therefore have some specific questions for the noble Baroness with regard to the proposals for the new system to work alongside the old. If I understood the Statement correctly, it is proposed to go ahead with the new system and then to turn back, so to speak, to the cases that are already in front of the Child Support Agency. I am sure that it is absolutely right not in any sense to give an amnesty to the old cases, but it seems that the Government intend effectively to place a moratorium on them. Perhaps the noble Baroness will clarify the Government's exact position in regard to the relationship between existing cases and those that will be dealt with under the new system.
Also, is it intended that cases that are already in front of the Child Support Agency will be dealt with on the old formula, and new cases on the new formula? If that is so, one family or another might reasonably complain that they are being treated either "too fairly" or unfairly. Will the noble Baroness also confirm that, as there are many cases of serious arrears now before the Child Support Agency, it is the Government's intention to collect those arrears in full? We need to be clear on that point.
On a more general point of principle, do the Government accept that it is important to encourage the sharing of care between parents, even though the actual marriage or partnership may have broken up? In that context, what will happen under the new formula as regards an allowance for the income of the parent with care? It may well be that the income of the parent with care is generally much smaller than that of the parent who does not have care; I believe that that is statistically the case. Be that as it may, there is an important point of principle here. Both incomes should be taken into account. Otherwise, there would seem to be an intrinsic bias against the father. How will the new formula cover that particular point?
Another point on which I am not entirely clear relates to appeals or tribunals. They have not been working properly. I remember one case that I finally managed to bring before a tribunal where everyone turned up except the chairman. What ideas do the Government have on improving the situation?
444 We part company with the Government on the question of penalties and the proposal that the criminal law should be invoked in relation to child support cases, by way of either a fine or imprisonment. Clearly, fines will be as difficult to collect as arrears are. But sending people in these circumstances to court, even as a last resort, may result in their having a criminal record and will not help the children. It would make it more difficult for them to get a job and pay for their children.
The noble Baroness referred at length to the consultations that have taken place. Have lawyers or the judiciary expressed any view on that point? My understanding is that, for example, the CAB took the view that it was not necessary to have such draconian sanctions but that it was important to use the existing sanctions more effectively. If cases are to go before the courts, we need to know to what extent the courts will be able to take mitigating circumstances into account.
The Statement also refers to taking away people's driving licences—although it is worded in a weasel way. It says that the Government are "looking at" the idea of withdrawing driving licences. Will the noble Baroness say how long they are going to look, or whether they have now finished looking so far as concerns that particular proposal? But again, taking away people's driving licences is not likely to help the children.
There was a strange reference in the Statement to the "company Porsche". I can see why the reference is made to Porsches, but I am not quite clear why it has to be a company Porsche. If it is a company Porsche and the driving licence is taken away, then the person will not be able to work as effectively and will have less money to give to the children. Perhaps the noble Baroness will make that plain.
The crucial point is this. Is it really the case that the present civil penalties are inadequate? Will the noble Baroness tell the House how many civil cases in relation to child support cases have actually been brought successfully? I understand that there are very few. The Child Support Agency has not used all its existing powers, but now wants to take the more draconian powers outlined in the Government's Statement.
Other issues cause concern, particularly with regard to the transfer of information from the Revenue. The noble Baroness will know that I have often raised that subject with her. At what level of seniority in the Civil Service will approval for transferring information to the Child Support Agency be given? We do not want that kind of information floating around at the level of seniority in the Child Support Agency that deals with such cases at the front end. One may be aware of situations like that from one's constituency experience.
There is also some concern about the idea of the private sector collecting such child support payments. I am not sure what sort of organisation the Government have in mind, nor am I sure what degree of supervision and accountability there will be by the agency and by Ministers.
In regard to the timetable, I understand that the Government need time to make sure that their computers work. Their record on computers in the Department of 445 Social Security recently has not exactly been magnificent. Therefore, it appears that we shall not see the new system in operation until 2001.
Shall we have one or two Bills to deal with this matter? The implication in the Statement is that in regard to the penalties and in regard to one other matter, the Government will go ahead with the main bulk of the legislation, and the implication would seem to be either that they will tag it on to another Bill, or that there will be two Bills before your Lordships' House.
Be that as it may, we on this side of the House welcome a number of aspects of the Statement and what is proposed, but we shall scrutinise with great care some other aspects that vie believe are controversial.
§ 4.20 p.m.
§ Earl Russell
My Lords, while on my way to the House today I remembered another occasion when I had to come hot-foot from my day job to deal with a Statement on the Child Support Agency. That was the very first Statement by the noble and learned Lord, Lord Mackay of Clashfern, in October 1990 announcing the policy. I believe I am the only spokesman in any party in either Chamber who was in place then and is still in place now. I have seen it all. It is beginning to feel rather like reading War and Peace, except that there is not much peace.
During that time I have done business with a number of extremely able Ministers. I want to say a word in praise of Mr Alistair Burt, whose handling of casework showed a degree of integrity and attention to detail which I admired deeply. The Minister herself is in that league. It has been a privilege to do business with her. She has listened with immense care. She is well aware of a number of points which I shall not repeat at as great a length as I otherwise would have done. However, that does not mean that the policy is satisfactory.
The noble Lord, Lord Higgins, chose his words carefully when he said that the policy was bipartisan. He did not say it was all-party. We on these Benches have never been convinced by this policy and we are beginning to feel uncomfortably like Cassandra. Our objection is not—I repeat this for about the thousandth time—to the principle that fathers should pay for their children; our objection is to the principle that they should do so according to a formula.
The formula does not fit into the real world. The Minister said that the formula was complex; that is because real life is complex. The Government are entirely unaware—at least in their official capacity—of the immense variation in the types of matrimonial break-up that exist in this country, of the immense variation in the types of financial arrangements that have been reached and the types of problems involved.
Beware of Ministers offering simplicity. When they tell us all about the problems of fathers who will not pay, and do not consider the possibility that any of them may be in a position where, because of the formula, they cannot pay, I am uncomfortably reminded of Ministers defending the administration of the poll tax.
446 In regard to teenage boys, it is right that they should be held responsible. The Minister should consider that there may be more than one way of accepting responsibility. I remember one of my pupils asking to change the time of her tutorial in order to look after her sister's baby while her sister sat her A-level examinations. The parents were both teenagers, both father and mother took full shares in the care of the child and both sets of grandparents took full shares in the care of the child. Both parents graduated; they then married and set up a stable household. If the CSA had intervened I am almost certain that that success would have been made impossible. I am not sure that that would have been in the interests of the child, the Treasury or anyone else.
I could add many other stories, but I shall not. I hope that the Minister will understand that there is more than one kind of responsibility. I do not believe that the comments of the Minister on the courts—and those of the noble Lord, Lord Higgins—took account of the improvements in procedure in courts brought in under the Children Act 1989, or indeed of the improvements in the courts' powers of enforcement. I believe that some of what they said is out of date. Perhaps they could consult the Magistrates' Association on that point.
I shall concentrate on what is new in the Statement. In relation to misleading information, we on these Benches have no objection to the idea that to supply misleading information should be an offence, but we should welcome the qualification "knowingly supplying misleading information". I believe that the term is known in law. We have misgivings, like the noble Lord, Lord Higgins, about imprisonment and deprivation of driving licences. Improving employability has been the basis of much of this Government's social security policy. I do not believe that the Minister will tell us that either of those measures complies with that policy. To diminish "aggro" between parents, which occasionally leads to seriously undesirable consequences, is a desirable objective. I cannot see that that would do that.
Nor do I believe that that would diminish tension for the children. One can imagine what two very quarrelsome parents may tell them about it. I am pleased that they are still thinking about driving licences. The noble Lord, Lord Higgins, said that the Government had used weasel words, but at least the weasel appears to be travelling in the right direction. I hope it carries on.
I was a little taken aback by the Minister's statement about clarity—"just as you get from a bank statement". I must offer my congratulations to her bank manager.
There was much in the Statement about improvements for children. Many are genuine and I want to congratulate the Minister on her achievement with the working families' tax credit. I also want the Minister to ensure that the Department of Social Security, as well as the Department of Health, studies today's publication by the BMA, Growing up in Britain, in which they show that in health, in height and in infant mortality there are still wide variations between children in different income groups. The BMA also recommends that there be no further cuts in the single parent benefit. That needs to be put on to the other side of the scales.
447 On what we may, in shorthand, describe as the "Porsche problem", yes, something needs to be done. Long ago, I remember writing to a correspondent, "Don't shoot Mr Lilley, he's doing his best". The Minister may perhaps have done better, although I take the points made by the noble Lord, Lord Higgins, about the level on which decisions are taken and about confidentiality. There is a real problem here. If there is a solution—I am not sure that there is one—it may be along the lines that the Minister is investigating. I wish her luck.
I share the misgivings of the noble Lord, Lord Higgins, about involving the private sector. I hope that the Minister can give us a little more detail about the way in which the private sector is to be involved, in what context and on what terms. If it is starting next week, at least some of the answers must be "No".
There are problems of confidentiality; I should be glad to know how those are to be tackled. There are also problems of conflict of interest. The private sector must necessarily aim at profit; that is what it is for. It is foolish to complain about that; it is simply the nature of the animal. Attempts will doubtless be made to control that by performance indicators, but performance indicators, as Matthew Taylor of the IPPR pointed out recently, are capable of creating all kinds of perverse incentives. This is something that should be scrutinised very carefully. The terms on which the private sector is brought in are something about which the House should know a great deal more than it does at present.
Finally, I should like the Minister to think very hard about the point made by the late Lord Bancroft in the last year of his life that, if we are to expect the CSA to produce anything half-way towards a competent performance, we must consider the case for exempting it from the change programme which cuts the running costs of the DSS by 25 per cent. There are not many organisations that could take a 25 per cent cut in their running costs with their performance unimpeded. If there are any, I do not believe the CSA has turned out to be one of them.
§ 4.30 p.m.
§ Baroness Hollis of Heigham
My Lords, I welcome the responses of the noble Lords, although I welcome that of the noble Lord, Lord Higgins, rather more than that of the noble Earl, Lord Russell, but the noble Earl will not be surprised about that.
Perhaps I may thank the noble Lord, Lord Higgins. I was pleased that he felt able to adopt such a bipartisan and consensual approach. He was right that when the agency was set up in 1993 there was support for the principles of what the then government were seeking to do. The difficulty was that, the more the previous administration sought to tweak the formula by taking extra information into account to make it apparently fairer, the net result was simply to complicate it still further and therefore make it harder for the staff to produce speedy and accurate assessments. That meant that men waiting for their assessments and women waiting for their money had to wait longer and longer 448 and became more and more baffled and the system imploded into a black hole. We ended up with a system which had none of the simplicity of the bureaucracy and none of the individually tailored quality of the courts.
That is why—turning to the point made by the noble Earl, Lord Russell—when we approached this matter I did my best to read the research and track the footsteps of the previous government to see why they decided in 1992–93 not to go back to the courts. Some of the reasons are mentioned in the Statement today. It was clear that by 1990 the courts were delivering only about 20 per cent of maintenance to families entitled to it. It was also the case that the decisions the courts were making were extremely erratic. On the then average income of £140 a week, for a family with three children, in a quarter of cases assessments were below £12 and in a quarter of cases assessments were over £40. In cases with identical circumstances, there were whimsical results. Should we go back to the courts? I think not.
We now have a situation in which 1 million couples—2 million parents—are coming through the CSA. For the most part they are poor, particularly the women with care who are on benefit. For the most part they are not married, do not have matrimonial property and are not getting divorced. They have no need to come through a court system. Suddenly to bring through a court system nearly a million extra people, possibly having three changes of circumstances in a year, resulting in three million court visits, would, I think, destroy the court system for those who can go nowhere else but to the courts.
I agree with the previous administration that it was right to abandon the court system and to deliver instead an agency with a formula. We are all culpable in having made that formula more complicated. As far as concerns housing costs for those who have a mortgage, there are 49 different kinds of mortgages. Every time a mortgage changes, new calculations have to be made. A father may receive four different assessments in a week, all containing different figures. It is not surprising that he does not pay. We need to go back to a simple formula in which all that is needed to be known is the father's net take-home pay and the number of children. He pays the money according to the ready-reckoner of tables. The children, his former partner and he all know where they stand.
I now turn to the questions raised by the noble Lord, Lord Higgins. He pressed me about the timetable. We are expecting that new cases will come into this system towards the end of 2001. We shall bring on existing cases as soon as we decently can, but we are determined that the information technology that sustains the system must be rock solid. What we cannot afford to do is to bring a million new cases into the system on day one and risk the kind of overwhelming flood of cases and problems that the CSA experienced in 1993 and even now has not fully overcome. In the meanwhile, the existing cases will continue on the old system. I reaffirm that we shall not give any amortisation of arrears. Any money owed is properly owed. To amortise arrears would be to signal to those who have paid that they are being punished for doing the decent thing and paying for their children. Clearly, if someone is having financial 449 difficulties we shall talk to them and make reasonable arrangements. If they pay regularly, we shall suspend more than six months of arrears as an encouragement to them to continue The existing system will continue until the non-resident parent goes on to the new system.
The noble Lord, Lord Higgins, pressed me on shared care. He is absolutely right: the argument behind this is that what we want is child support, in all its complexity, going to children. That is a financial matter and, as an agency, we are obviously dealing with the financial aspects. But we also want to encourage the emotional support that children are entitled to enjoy, even when their parents are separated. It seems to me that this is best done by enabling contact and making the maintenance system support contact where possible without legally connecting the two. This means that for the first time, instead of providing for an abatement of maintenance only in cases where the child stays with the non-resident parent at least two nights a week, we are proposing an abatement of maintenance where a child stays with the non-resident parent one night a week—say, every other weekend. We think that this will encourage the father to have the child living with him on an occasional basis while not discouraging the mother for fear of losing too much maintenance.
The noble Lord, Lord Higgins, asked why we were not taking into account the income of the parent with care. There are two reasons for that. First, we do not think it is reasonable to do so. The parent with care is providing her share of support for the child because the child is living in her home. Whatever standard of living she enjoys, through her own income or that of her new partner, so will her child. That is her contribution. If we calculate that on average it may cost 30 per cent of an income to bring up a child, the father continues to pay 15 per cent and the mother's share comes through her contribution. We do not think that the father's responsibility for his child should ebb and flow according to the fortunes of the parent with care or the size of her new partner's income. We believe that the father's responsibility to the child continues, whatever happens, and that it should be firm and clear.
The second reason why we are not taking into account the income of the parent with care is that it would make little practical difference. Ninety-six per cent of all parents with care have incomes of less than £100. Only 200 of a million parents with care have incomes of more than £500 a week. The amount of income earned by the parents with care is so modest that in relatively few cases would it significantly affect the assessment. Why bother? Ninety-six per cent of parents with care have incomes around income support rates or just above. In the same way, we are not taking account of the income of the new partner of the father, so we believe that there is equity across both families.
The noble Lord, Lord Higgins, asked me about tribunals and whether we were speeding up the process. As he knows, the new decision-making and appeals procedure is coming into force as of June. I share his hope that this will result in a speedier approach.
The noble Lord and the noble Earl, Lord Russell, both pressed me on penalties. We are seeking to change the culture. We are trying to develop a system in which the 450 60 per cent of fathers who do not now co-operate and the 70 per cent of mothers who do not now co-operate will in future co-operate in the best interests of their children. The men should co-operate because we are making a lower assessment for them, because the system is simple, and because we are giving greater support to their second families. We hope that mothers will co-operate because we are allowing them to keep maintenance for the first time.
If we are wrong and a father who can pay fails to co-operate, even though his assessment is lower, the system is simple and the money is going to the children. we shall be unashamedly tough. We shall not tolerate people who could and should pay but who apparently so undervalue their children that they would rather that anyone but themselves took responsibility for caring for them.
§ Earl Russell
My Lords, will the Minister think a few more times about her criteria for defining those who "can't pay"? She is achieving simplicity only in so far as she departs from reality.
§ Baroness Hollis of Heigham
My Lords, does the noble Earl really think that someone on an income of £200, £300 or £500 a week cannot afford to pay 15 per cent for the support of his child, leaving him with 85 per cent of his income? That is an entirely reasonable figure and somewhat less than he is currently assessed to pay. Any man who believes that a child can be maintained for less should do the weekly shopping.
I hope that fathers will co-operate with us and pay the money, knowing that it is going to their children and that their children will see that they are paying. If they do not, we are willing to extend the penalties available to us. There are already extensive civil action powers, including bailiff action and garnishee orders. Because it takes us so long to assess and the formula is so complex, those powers have not always operated as successfully as they should. We are seeking to strengthen the penalty regime for those who can pay but refuse to do so. I am grateful to the noble Earl, Lord Russell, for giving me notice of his question and I am happy to assure him that we shall seek additional penalties for those who knowingly or wilfully give false information. An honest mistake is not an issue for us. We are talking about someone who is wilfully deceitful to avoid his responsibilities.
We are contemplating the penalties that other countries use. In some states of the United States, driving licences are taken away. The state of Texas has been doing that since 1995. In that time 18 have been taken, but in the past six months the threat has brought in an extra 22 million dollars in child support. If we have to implement the penalty, we have failed. But we may need to do so if men who should pay do not. We are not seeking to make life harsh, but we are determined to ensure that children enjoy the support that they should get.
The noble Lord asked about the transfer of information. The relevant level of civil servant will be executive officer. On the role of the private sector, we are expecting banks and building societies to help to 451 collect the money in the same way that they help to collect housing benefit from local authorities. The issues of confidentiality are similar in both circumstances. Will we have one Bill or two? If legislative time permits, we expect an early Bill to deal with all the issues, but some proposals could be implemented ahead of the new case load, which has to wait for the IT machinery.
Finally, the noble Earl, Lord Russell, asked whether I was aware of the British Medical Association report Growing up in Britain. He should keep reminding the House that the poorest children in this country still suffer in their education, their health, their housing, their poverty and their life chances. The poorest children in this country are the children of lone parents. They are poor sometimes because their mother is not in work, in other cases because their mother is not receiving the maintenance that she should. With the New Deal and the working families tax credit, the Government are encouraging parents to go to work, but through child support we are ensuring that the non-resident parent should co-operate. The noble Earl and I may disagree on how best to deliver support to children, but by ensuring that child support flows and that parents have opportunities to go to work we can stop children bumping along on the bottom of income support rates for 16 or 18 years and then becoming unemployable as they hit working age. We have a responsibility. Child support is part of it. I hope that your Lordships will help us to achieve it.
§ Earl Russell
My Lords, before the Minister sits down, I am sorry to say anything more after such a full reply, but will she tell the House in what way the Government are involving the private sector?
§ Baroness Hollis of Heigham
My Lords, we are expecting to use the private sector for consultancy on debt collection and its expertise on issues such as debt management work for self-employment.
§ 4.46 p.m.
§ Baroness Anelay of St. Johns
My Lords, like my noble friend Lord Higgins, I consider this to be a bipartisan matter. I welcome the Minister's commitment to maintaining the principle of the child coming first as the mainstay of the Child Support Agency. Like my noble friend, I recognise that there have been great failings in the way in which the system has worked. I sat for a few years as a lay member of a child support appeal tribunal. I have also sat on a family panel dealing with non-CSA maintenance payment enforcement. I see the noble Lord, Lord Gladwin of Clee, in his place. I was honoured to serve with him as a magistrate on that panel. I am sure that it is fair to say that we both found it frustrating to see how difficult it is to enforce the payment of maintenance to children from the father or, in some cases, the mother.
My questions for the Minister are about the penalties. With great respect, she talks about the Government getting tough and imposing tough penalties, but in the real world it will be the magistrates who will be called on to impose those tough penalties. What consultations 452 have the Government had with the Magistrates' Association about the implications of imposing fines for the way in which magistrates' courts currently work? The Minister talked about penalties of imprisonment thereafter. I am sure that she is aware of the instruction from the Lord Chancellor's Department on the training of magistrates—it has been in force for some years—that imprisonment should be a last resort. Even if the penalty is "only" the imposition of a fine, non-payment of the fine will result in possible imprisonment. Magistrates are very reluctant indeed to impose a sentence of imprisonment. Very few cases of social security fraud ultimately lead to that. Perhaps we might temper our language when talking about penalties to take into account the practical realities.
What views have the magistrates expressed about the implications of such changes for CSA cases on the way in which maintenance is enforced through the family panel? The Minister and others have talked about equity. The noble Baroness also referred to abandoning the courts. One must remember that a huge number of maintenance cases are still heard in magistrates' and county courts. That will continue regardless of what has been said today. But the White Paper proposals may have huge implications for the way in which those cases are heard. For example, there is the matter of equity of treatment in access to tax records. Magistrates may feel hampered by not having access to them in cases that they hear. Those who are subject through CSA assessment to having their tax records open to view may find that there is a lack of equity of treatment. What view have the Government taken on that and what advice have they had from the Magistrates' Association.
What view has the Lord Chancellor's Department expressed to the Department of Social Security on write-offs? The Minister has already said that in the interim there may be write-offs for those who find it difficult to pay under the current system. I heard her refer to write-offs in her response to my noble friend Lord Higgins and the noble Earl, Lord Russell. I am sure that she is aware of the guidelines given by the Lord Chancellor's Department to magistrates in non-CSA cases that if someone has run up substantial arrears, usually more than one year's total maintenance, the amount is written off and the person escapes—I can say that in this House—from their duty.
I appreciate that the Minister may not be able to answer some of my questions today because I have referred to the Lord Chancellor's Department. I would be happy for her to write to me about them.
§ Baroness Amos
My Lords, I remind noble Lords that we have 20 minutes for questions to the Minister on this matter. It would be helpful if noble Lords confined themselves to questions rather than comments.
§ Baroness Hollis of Heigham
My Lords, my answer will be very brief. We have consulted both the Magistrates' Clerks' Association and the Magistrates' Association, not on the particular point about penalties 453 but the scheme as a whole. They put their views to us which we found extremely informative. I must point out to the noble Baroness that most of her remarks went outside the realm of the White Paper which is concerned with reform of the Child Support Agency and, therefore, the mode of child support. We are not addressing ancillary relief issues currently handled by magistrates' courts. I am very happy to write to the noble Baroness on the question whether the LCD has any proposals for magistrates' courts, but they are not part of the White Paper. Therefore, many of the questions put by the noble Baroness go well beyond the subject we are discussing today.
My Lords, the staff have had a very difficult task over the years. Is it intended that their number should be supplemented under the old system. which is extremely complex, while they prepare for the new?
§ Baroness Hollis of Heigham
My Lords, I am grateful for the point raised by the noble Baroness. We are recruiting an extra 600 staff in order to develop face-to-face interviews. I have worked on these schemes with the staff fairly closely. They say that they spend 90 per cent of their time trying to make an assessment and, because the system is so complicated, only 10 per cent of their time is devoted to compliance. They want a simple system so that they can get the assessment cleared within days and then spend their time ensuring that the money flows. They tell us that a simple system such as that now proposed will make training and other matters much easier. We hope that as a result we can retain more staff—obviously, there is, a problem of morale and turnover—and offer a quality service, with the provision of information and face-to-face or telephone contact that too often the CSA has not been able to deliver.
§ Lord Avebury
My Lords, can the Minister deal with the point raised by the noble Lord, Lord Higgins? The Minister said that the new IT system would come into operation at the end of 2001 and new cases would be dealt with under that system at that time. That is a very short interval for a major computer system. As the noble Lord said, the record of the department has not been magnificent. Can the Minister say to what extent the timing of the introduction of the scheme is robust in terms of the non-delivery of the computer system? This has arisen in many other sectors of government. What are the fall-back plans if the noble Baroness introduces the new casework system at the end of 2001 and the computer system is not operational?
§ Baroness Hollis of Heigham
My Lords, I entirely take the noble Lord's point. The most worrying aspect may very well be the slowness of any new computer system. We cannot afford to bring on the new case-load, let alone the existing one, until we have a secure IT system. As this year progresses I shall be able to share with your Lordships the information that is available. Our realistic expectaion is that the IT system will be in place so that we can take on new cases towards the end 454 of 2001. But noble Lords are right to be pessimistic. Our experience and that of the previous administration of IT systems has not always been a happy one.
§ Baroness Carnegy of Lour
My Lords, the Minister said that the comments of my noble friend Lady Anelay were lengthy and not wholly relevant. I suggest that when she reads Hansard she will find that a number of the points are relevant, particularly those related to penalties. The Minister said that all along she had consulted the Magistrates' Association. Has she also been in touch with the courts in Scotland to which this White Paper applies? If not, will she ensure that she does so soon? I am not sure how it is to be done, because as from today the courts are devolved to Scotland's Parliament. However, I am sure that the Government have worked out a way. It is important that any scheme that emerges in the form of legislation fits well with the Scottish system.
§ Baroness Hollis of Heigham
My Lords, not only have we had replies from 1,500 individuals; we have also discussed these proposals round the table with about 40 organisations, including the Law Society, the Magistrates' Association, family court judges, solicitors, the Family Law Bar Association and so on. They spoke regularly about both the Scottish and English experience. Representations have also been made to us by Scottish organisations. If the noble Baroness believes that we have overlooked any points I shall be very happy to take her advice, but in our consultations we have cast the net as wide as we can possibly conceive.
§ Lord Milverton
My Lords, does the Minister accept that many noble Lords hope that the attempt to make the CSA more effective will succeed and that the many children who need help receive it? Does the Minister agree that those who lie or who are deceitful, and fathers who deliberately evade their responsibilities, should realise that if they persist they must take the consequences?
§ Baroness Hollis of Heigham
My Lords, I agree with the sentiments of the noble Lord and others. This matter will be judged by whether the poorest children, particularly the 1 million who should receive maintenance at the moment but who do not, are given that support. If so, all of us can help to trampoline those children out of a life of rather deep poverty.