§ 6.34 p.m.
§ Baroness Hollis of Heigham
rose to move, That the draft regulations laid before the House on 6th December be approved [1st Report from the Joint Committee].
The noble Baroness said: My Lords, for the purposes of this debate, I shall refer to the draft Child Support (Information, Evidence and Disclosure and Maintenance Arrangements and Jurisdiction) (Amendment) Regulations 2000 using the number three, because they are the third main item on the Order Paper. I shall refer to the Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations 2000 using the number four, to the Child Support (Maintenance Calculation Procedure) Regulations 2000 using the number five, to the Child Support (Maintenance Calculations and Special Cases) Regulations 2000 using the number six and to the Child Support (Variations) Regulations 2000 using the number seven. I hope that the regulations, which were laid before Parliament on 6th December 2000, will be approved.
All children are entitled to the financial and emotional support of their parents. All parents are responsible for supporting their children, whether they live together or apart.
The current child support scheme was established, with the agreement of all parties in this House and in another place, to ensure that children benefited from the financial support of both parents and to make it easier for non-resident parents to provide that support.
We know that the current system has failed and is in need of radical reform. Our proposals for a new and simpler system, which is focused on the need to ensure that maintenance due becomes maintenance paid, have won widespread support. The Act that forms the foundation for the reform received Royal Assent last July.
1093 If your Lordships wish, I am willing to explain why we needed to reform the legislation, but I suspect that it is not necessary to repeat the Second Reading debate of a Bill that we have already discussed at great length. However, I am happy to revisit those arguments if that is what noble Lords wish.
The Act sets out the general principles on which the new child support scheme will be based, but, inevitably, much of the detail was left to secondary legislation. The regulations before the House, and several negative measures, which were made in December, provide that detail.
Before I explain the effect of each regulation package, I shall briefly discuss the way in which we shall bring the reforms and, consequently, the regulations, into effect. We believe that the new child support scheme will be better for children and their parents and we want to bring it into effect as soon as possible. However, there is a great deal of work to do to prepare the agency for the new scheme, including the development of completely new computer systems. We cannot rush that work, so we have set out to ensure that the new scheme will be introduced for new cases by April 2002, with existing cases transferring over from a later date, once we are sure that the systems are working well.
That phased introduction means that the regulations must also be introduced in a phased way. This is why the regulations in the packages before the House are, on the whole, designed to come into force when relevant sections of the Child Support, Pensions and Social Security Act 2000 are commenced in respect of specific cases. However, as my right honourable friend the Secretary of State said, there are some provisions in the new legislation which will improve the effectiveness of the current scheme, paving the way for reform.
It is for that reason that we are bringing the following provisions in the 2000 Act into effect on 31st January 2001: Section 13, which makes provision for two new criminal offences of failing to provide information to the agency when required to do so, or for providing false information; Section 14, which streamlines the appointment of child support inspectors to gather the information required for assessing and collecting child support; Section 15, which will help the agency to collect maintenance in cases of disputed paternity; and Section 22, which will allow the Child Support Agency to collect maintenance from certain non-resident parents working abroad for employers based in the UK.
Those provisions will help to address two key weaknesses in the current system, the first of which is the lack of information. The new criminal penalties will provide all who have contact with the agency with a clear incentive for frank and open disclosure. On conviction, those who continue to provide false information, or who refuse to provide the information required, will face a fine of up to £1,000. That penalty is intended as a deterrent but, wherever possible, the agency will attempt to avoid bringing prosecutions by 1094 encouraging clients to provide the correct information. However, we do not want clients to think that they can string the agency along.
Those incentives will be supported by the new streamlined appointment of child support inspectors. Currently, inspectors can be appointed, absurdly, only on a case-by-case basis, which prevents the establishment of the necessary core of expertise. The new provision will allow the agency to appoint teams of inspectors to deal with complex cases, such as establishing the income of self-employed parents, and thus to build up appropriate expertise.
The second weakness involves disputed paternity. Too often, non-resident parents are able to delay the process of collecting maintenance for their children by denying paternity even when they have no reason to doubt it. About 200,000 cases a year involve the denial of paternity, but only 20,000 are subsequently tested and in only 2,000 cases is the claim upheld. The new provision will extend the circumstances in which the agency can presume paternity where an alleged parent is likely to be the child's parent. The agency will also be able to assume that an alleged parent who refuses to take or accept the result of a DNA test is, in fact, the parent of the child.
In addition, from April this year we are commencing Section 16 of the 2000 Act, which provides for magistrates, exercising their civil powers, to make orders for the disqualification of non-resident parents who have persistently failed to meet their child support responsibilities from holding a driving licence. That provision, which offers an alternative to committal to prison for the most unco-operative non-resident parents, was debated at length during the passage of the Bill. Section 17 of the 2000 Act applies to Scotland.
The first two packages of regulations before the House today, therefore, will, in part, support those early changes.
The Child Support (Information, Evidence and Disclosure and Maintenance Arrangements and Jurisdiction) Regulations amend existing provisions governing the collection and disclosure of information for child support purposes. Amendments made by Regulations 5(2)(b), (d) and (e) provide access to records held by the DVLA, the Prison Service and accountants. Regulation 6(3) amends existing legislation to ensure that people providing information to the agency are aware of the new criminal offences. Those provisions will be brought into effect on 31st January.
Those regulations also cover the jurisdiction of the CSA to calculate and collect maintenance. Amendments made by Regulation 8(3) support the extension of agency jurisdiction to certain non-resident parents working abroad for employers based in the UK by virtue of Section 22 of the 2000 Act. That provision will also come into effect on 31st January.
The Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations also amend existing regulations. Provisions include those relating to withdrawal by the courts of driving licences as an alternative to an order for committal to prison. 1095 Amendments made by Regulation 2(6) and the schedule to those regulations provide for a disqualification from driving order and for the way in which such an order may be executed. Those provisions will come into effect on 2nd April. These regulations also make detailed provision for the imposition of financial penalties for late payment of maintenance.
The Child Support (Maintenance Calculation Procedures) Regulations will govern the processes in relation to applications for maintenance and cases where a parent with care claiming IS or JSA(IB) opts out of child support. In particular, these regulations provide for the date on which an application for child support will be treated as made (Regulation 3); determining, in cases where there is more than one application in relation to the same parents and child, which application will be proceeded with (Regulation 4 and Schedule 2); giving notice of an application for child support to the non-resident parent (Regulation 5); the rate of maintenance liability to be set by a default maintenance decision (Regulation 7); the procedure for making a reduced benefit decision when a parent with care on IS or ISA(IB) opts out of child support without good cause and the penalty which will apply (Regulations 8 to 20); and, finally, the date from which maintenance calculations take effect (Regulations 25 to 29).
I am happy to enlarge on any aspect of the provisions, but noble Lords may wish me to move on to the next package of regulations. However, I am happy to respond, if I can, to any questions as they arise.
The Child Support (Maintenance Calculations and Special Cases) Regulations provide in detail for the calculation of child support liability and for determining which parent is to be treated as a nonresident parent in certain special cases. Noble Lords will recall that the Act provides for liability to be determined using one of four rates: the basic rate where the non-resident parent's net weekly income is £200 or more; the modified rate where net weekly income is less than £200 but more than £100; the flat rate where net weekly income is £100 or less or the non-resident parent or his partner is receiving a prescribed benefit; or the nil rate, which will apply to prescribed groups including prisoners and students. Regulations 2 to 5 provide the basic rules for working out child support liability. They specify the information on which the calculation is to be based and provide rounding rules and the like.
Regulations 6 and 14 provide for working out the apportionment of liability between a number of parents with care. Regulations 7, 9 and 11 provide detailed rules for working out reductions in liability to reflect shared care arrangements, care of the child by a local authority and the non-resident parent's responsibility to maintain other children under a court order.
The more generous shared-care arrangements under the new scheme will ensure that the child support scheme gives proper recognition to those who take on the important job of providing day-to-day care for their children. The remainder of the regulations deal with special cases, such as where a child is in hospital, and the schedule provides for the calculation of net weekly income.
1096 I turn finally to the Child Support (Variations) Regulations. These regulations make detailed provision for the variation of the maintenance calculation to reflect exceptional circumstances, including child-related special expenses and income not taken into account in making the maintenance calculation.
Part II of this set provides the detailed rules relating to an application for a variation, including, in Regulation 4, how to apply and, in Regulation 9, the process for determining an application which has not been rejected on a preliminary sift.
Parts III, IV, V and VII of the regulations set out in detail the cases in which a variation can be allowed and provide for the resulting maintenance calculation. We have not provided for any cases additional to those listed in Schedule 4B to the 1991 Act as amended by the 2000 Act. As I explained in earlier debates, we are determined to keep the variations scheme tightly focused. While I understand the arguments for recognising other expenses, we concluded that for most parents the child support rates provide a fair liability. All parents have special expenses. The rates are intended to allow non-resident parents to retain sufficient income to meet most of them. We do not seek to re-introduce the complexity of the current scheme which will move them from the assessment back into the variation system.
In conclusion, taxpayers, parents and, most importantly, children deserve better than the current confusing, slow and above all ineffective child support arrangements, which mean that 1 million children go without the money to which they are entitled. Our reforms will ensure that parents meet their responsibilities; that maintenance can be sorted out quickly; and that many children will for the first time see the benefit of maintenance payments. These regulations are an important part of the reform. I commend them to the House.
Moved, that the draft regulations laid before the House on 6th December be approved [1st Report front the Joint Committee].—(Baroness Hollis of Heighani.)
§ 6.45 p.m.
§ Lord Higgins
My Lords, in listening to the noble Baroness on this subject, I am not sure whether I was overcome with a sense of déjà vu or nostalgia. Almost all those present in the Chamber recall the long series of elaborate debates on this matter—one which in a real sense the Minister has made her own. She has been very much involved in trying to reform the system of which, when introduced, everyone was in favour but which subsequently turned out to raise extremely large difficulties. Hopefully it is now settling down.
When we discussed this matter previously, we were concerned about various aspects; for example, the upper limits on maintenance payments, which I understand appears in the orders and that we welcome; the sole emphasis on the income of a non-resident parent; and the provision for the CSA to intervene in private agreements, which was the other aspect of what was in effect a deal which the noble Baroness did. We 1097 were also concerned about the disqualification from driving as an alternative penalty. That was debated at great length. Alas, it still comes within the regulations. We still regard it as being—I was going to say "stupid"—not a sensible provision.
What is frightening is the sheer volume of detail in the regulations. The part of the Bill concerned with child support appears to be roughly the same size as the main legislation.
I was slightly puzzled by the debate in another place on 18th December, which concerned the shift from one system to another and the way in which the existing and new cases were to be dealt with. My understanding was that existing cases would be dealt with on the old formula and the new cases under the new formula. That seems likely to produce considerable problems.
§ Baroness Hollis of Heigham
My Lords, I am happy to respond to the noble Lord now.
We are saying that from April 2002 new cases, as they come through the system week by week and month by month, will go on to the new formula. We will bring existing cases over on to the new formula when we are confident that the IT system is running smoothly. In other words, we are avoiding bringing existing cases over at the same time as the new cases and the "big bang" argument. Therefore, it is true that existing cases will be on the old formula for a period of time—I hope a fairly short period of time—as the new cases come on. However, as soon as we are confident that the system is robust—I have every faith that it will be—the existing cases will come on to the new formula. I hope that that assists the noble Lord.
§ Lord Higgins
My Lords, I am grateful for that clarification. I had misunderstood the situation. We shall obviously go through a transitional period on the basis described by the noble Baroness, but the sooner that happens the better. I presume that means that when some people who are on the old formula change to the new formula they will pay less than before.
§ Baroness Hollis of Heigham
My Lords, I believe that we explored this issue in the course of debates, but that was some time ago. Yes, some NRPs will be better off and some parents with care will be worse off, and vice versa. The noble Lord will recall that that is why we are introducing phasing arrangements, so that nobody on a relatively similar income will find their situation sharply affected and therefore be unable to cope with properly entered into other responsibilities. First, we are bringing the existing caseload in after the new cases have settled in, so that people have plenty of advance notice as to when they will come in. Secondly, the noble Lord will recall that when they do come in, there will be a £5 per year change for those in receipt of under £200 and a £10 per year change for those in receipt of above £200 if they have a substantive fall or gain in their maintenance calculation because we are trying to protect their financial situation.
§ Lord Higgins
My Lords, once again, I am grateful to the Minister for that clarification. That being so, and 1098 because we have certainly debated the four issues I mentioned at considerable length, I shall not detain the House further. I am sorry about the driving licences, but I hope that the reforms which are now being introduced will result in a much better system in which the parents pay for their children in a sensible way. The noble Baroness should be congratulated on the way in which she has dealt with this matter. We hope that the system will work and that the transitional period will be short.
§ Earl Russell
My Lords, I thoroughly share the Minister's sentiment about Second Reading debates. I do not want to engage in one and I hope that I do not. However, perhaps I may ask in return that the Minister will not say again that the measure, either now or in the past, was brought in with the assent of all parties. Mr Peter Lilley, who I believe knows something about this, said in the debate on the football Bill last year that most of the worst mistakes he knew of had been made by collusion between the Front Benches. Therefore, one should be a little careful about such a claim.
I shall pay attention to the detail of the regulations. I assure the Minister that I shall not mention them all or we would be here all night. My first point concerns the collection and enforcement regulations. I refer to the penalty payment for being in arrears. The Minister knows my sentiment on the "can't pay won't pay" point. I shall not repeat that. However, perhaps I may ask the noble Baroness to consider the possibility that there might be one single case in future which is genuinely a case of "can't pay". Is there any discretion about requiring the payments for being in arrears? Would I be justified in inducing encouragement on that point from the use in the regulation of the words,The Secretary of State may require"?Does he have to impose the penalty or is there any discretion? If he does have to impose it, do the Act and the regulations exclude the prerogative of mercy? That is a real question to which I should rather like the answer.
I refer to the variations regulations. Regulation 10(1) lists allowable special expenses. I notice in Regulation 10(1)(c) that transport by taxi to visit one's child is to be allowed only in cases of disability or long-term illness.
§ Baroness Hollis of Heigham
My Lords, I thank the noble Earl for giving way. Perhaps he would be kind enough always to repeat his cross-references. By the time I have identified the correct set of regulations I have forgotten the particular line to which he refers.
§ Earl Russell
My Lords, I beg the Minister's pardon. I have probably not helped by taking these out of order because it was the order in which they came to me in my pile. From the collection and enforcement regulations I quoted Regulation 7A(3) which contains the words,The Secretary of State may requireand that gave rise to the question about the prerogative of mercy. In the variations regulations I referred to Regulation 10(1)(c). What of the case where the taxi is the only means of available transport? Sadly, there are 1099 many more such cases, in rural areas in particular, than one would like to think. It is a weakness in the system that special expenses can be allowed only if they have been prescribed in the past. So, if they have not been foreseen they cannot be recognised.
I gave the Minister's office notice that I wanted to raise a point from one of the negative regulations on this subject. I refer to Regulation 3186. Regulation 7 states that the Secretary of State's use of information shall be intraversable. That caused me concern. I should be glad to know why it is there and what it means.
I refer to the maintenance calculation procedure regulations and wish to raise a point from Schedule 1, Regulation 3. This is another case of the interface between the education system and the social security system not really being carried out with proper understanding on both sides.
The problem the regulation addresses is that of deciding when people of 16 and 17 are still in full-time education. The attempt is made to define "full-time education" by the number of hours concerned minus meal breaks. I am sure that the Minister knows as well as I that that will not work where one is dealing with people who are doing an A-level course in humanities and who spend a great deal of time at home reading books. It simply cannot be done in that way; it will not work. Perhaps the noble Baroness, Lady Amos, remembers the exchanges we had about the students regulations and social security. There is a real problem here which needs to be addressed. Perhaps I may look back a moment because this also relates to the power in the Social Security Fraud Bill to require information from educational institutions. It would be helpful to such institutions if the questions could be designed in a format which is capable of an answer.
However, as I am sure the Minister anticipated, my main concern is over the reduced benefit directions in the maintenance calculation procedure regulations. I should like first to mention a small point on the time limit for supplying information on good cause for not supplying the father's name. There is a time limit of four weeks which, if I understand correctly, is not discretionary. However, I would be reassured if I were told that there could be discretion about that.
I think, for example, of cases of domestic violence where sometimes the trauma is such that for a long time the person cannot bring themselves to say in public what has happened; or the case, which is sadly common, of people suffering from depression. From my experience as a tutor I know to my cost that it can be dreadfully difficult to get people to take any kind of action. That is a symptom of the disease and as such must be treated with understanding, however much one may at times wish otherwise.
However, my main concern is Regulation 11(2) which raises the duration of the reduced benefit decision; that is the length of time during which the woman who will not supply the father's name to the CSA can be without benefit. That is now increased to 156 weeks, which is three years. It is beginning to sound like 18th century criminal legislation. In interpreting legislation, a good rule is that constantly increasing 1100 penalties imposed for a particular offence suggests that something about the definition of the offence makes it difficult to enforce. In fact, the escalation of the penalties is a legislator's confession of failure. The situation needs reading in that light.
There is also a serious question about the consequence of any such reduction for this length of time. Perhaps I may again revert to an exchange we had during the previous business. The Minister, replying on the issue of war pensions, said that she did not believe that anyone would maintain that in the case of two such serious offences the person concerned might still receive benefit.
This is not only a moral issue; it is a practical issue, too. In any legislation, one must always ask whether the mischief created by the legislation is greater or lesser than the mischief it is designed to avoid. One cannot even so much as answer that question if one does not know the consequences of the measure one is introducing.
That is why monitoring what happens to people who are deprived of social security benefits is so vital to any serious argument about whether the sanction should be imposed. One cannot know whether a sanction is justified if one cannot know the consequences.
I have taken the Minister through the matter once today so she is familiar with my arguments. Until she can give coherent information on the consequences, she will continue to hear those arguments and, from time to time, find divisions, some possibly unexpected, on the benefit sanctions.
This is the third time I have raised the matter today. Occasionally, I can claim to be a bellman and I believe that this is such an occasion. I hope that one day I shall receive an answer.
§ Baroness Hollis of Heigham
My Lords, I did not expect to be let off so gently by the Liberal Democrat Benches—not as gently as the Conservative Benches because there is a meeting of minds between Labour and Conservative Benches. However, the noble Earl, Lord Russell, was sincere in making his points. He asked whether there was any discretion in penalty payments, saying that if I could assure him that there was, he would be content. I am happy to say that I look forward to the noble Earl being content because the penalty will be totally discretionary. The agency will use its powers to encourage compliance and will not automatically impose a penalty whenever a payment is late. I do not know whether the noble Earl will be satisfied with the remaining answers, but I hope that he will regard that as a reasonable start.
He went on to ask whether we have a reasonable definition of "full-time" education, given the hours of study and reading. As a former academic, I take his point, but the provision reflects the position in other legislation; for instance, the child benefit provisions. Therefore, we are being consistent.
The noble Earl asked a substantive question about the reduced benefit directions about which he has been concerned over the years. He asked about the increase to 156 weeks of reduced benefit decisions. There may be 1101 a misunderstanding because that duration was last increased in 1996 and there is no change as a result of these regulations. Therefore, the Act has not worsened the benefit penalty.
He then went on to ask whether the Government have a coherent, informed position of what happens to women in that situation. As I knew the noble Earl would be properly concerned about the issue, and because we wanted to have the information, we undertook research as the Bill progressed. We know that of the 70 per cent of people who lose their reduced benefit direction within a few months of its imposition one-third will have started work, one-third will have cooperated with the agency, and one-third will have repartnered. We undertook, first, a sample survey to discover how many people were being affected and then, secondly, a detailed qualitative survey following what happened to the women who had been sanctioned. The survey was small and quick but seems to confirm our other evidence.
As I said, we understand that of the 70 per cent, one-third start work, one-third co-operate and one-third repartner. Of the remaining 30 per cent, approximately two-thirds lose their reduced benefit direction within the year because they are co-operating, and we suspect that where claims to benefit are withdrawn, there may be fraud. I do not know whether that helps the noble Earl but I assure him that I would not want to be party to any such scheme of sanctions if I did not feel it was decent and appropriate under the circumstances. A child is entitled to the support of both parents. The noble Earl is entitled to press me on whether the definition of "good cause" is adequate, but if there is no good cause the woman has no right to expect the taxpayer rather than the child's natural father to act as the father of the child. That is why we have such sanctions.
§ Earl Russell
My Lords, I am grateful to the Minister for undertaking the research and I note her information. First, will the research be published? Secondly, does it contain information on the means of subsistence which are open to the women concerned while they are not receiving benefit?
§ Baroness Hollis of Heigham
My Lords, no, it will not be published because it was undertaken quickly, based on a qualitative sample, by the analytical services divisions of the DSS and the CSA. We shall in any event monitor the effect of our policies but will not publish the research.
The noble Earl asked whether we know what happens to those who have no means of subsistence. I suggested that of the 70 per cent of those exposed to reduced benefit direction, one-third repartner and are then no longer of lone parent status and entitled to income support; one-third return to work and are not entitled to income support; and one-third go on to cooperate with the agency and receive their benefit. The 30 per cent who do not end their RBDs lose their income support. I do not want to malign lone parents, but our evidence—it is speculative because there is no way of 1102 detecting this undetected fraud—suggests that someone may be cohabiting and therefore unwilling to have her income support claims further exposed. In that situation, such women tend to come off benefit.
We have done the best we can. We have reached the point where women are refusing to provide the information we can use in order to discover the consequences of their behaviour.
§ Earl Russell
My Lords, in future research questions, will the Minister include those which show whether benefit sanctions encourage fraud?
§ Baroness Hollis of Heigham
My Lords, if the noble Earl would like to write to me with the counterfactual evidence which would prove that, I should be pleased to consider it. However, you cannot have as a question for research whether benefit sanctions include fraud. The question is not answerable in that form. If the noble Earl would break it down into sub-questions to which numbers can be attached so that they could be quantified, I should be pleased to ensure that they would be counted. However, in all humility I suggest that as he phrases the question, it is not answerable because it is a qualitative statement about cultures. One can count only those questions which have numbers attached.
However, at the end of the day the noble Earl must stand behind it and ask why we are doing this. It is not the intention to be nasty to lone parents, but there may be a point at which the perceived interests of the lone parent diverge from those of the child. We believe that the child is entitled to the support of his natural parents, including, for the most part, the non-resident father. We also believe that because of the pain and anguish of divorce sometimes the mother may wish to have a clean break. However, she is not entitled to project that onto the child. Therefore, she should be required to cooperate. Alternatively, she may take the consequences of not co-operating and accept a benefit penalty.
As a result of the system that we have developed, which means that we work with the Benefits Agency so that at the point at which the lone parent first comes onto income support she is encouraged to fill in the form, we have moved from the inherited situation in which only 20 to 30 per cent of lone parents co-operated with the CSA to one where over 80 per cent co-operate with good grace to the benefit of the child. Obviously, I should like to see all lone parents co-operate. We know that where reduced benefit directions kick in most lone parents either co-operate or have alternative sources of income. At the end of the day, those who do not cooperate may be operating within the informal economy and do not wish to expose themselves in that way. I hope the noble Earl accepts that we are not doing this to get at lone parents but to ensure that children receive from their fathers the support to which they are entitled. The taxpayer should not provide that support in lieu simply because the lone parent prefers a clean break.
I shall write to the noble Earl about "untraversable". He was kind enough to notify me of the point. However, because we were tied up with the earlier Bill I was unable to provide a satisfactory answer. I shall also deal with 1103 the noble Earl's point about taxis. I believe that that exhausts the specific points that he made about the regulations.
On Question, Motion agreed to.