---

Child Maintenance and Other Payments Bill

My Lords, I beg to move that this Bill be now read a second time. The Bill implements important reforms to the way in which child maintenance is organised in this country. It breaks the link between child maintenance and the benefit system. It gives parents the power to manage child maintenance in the way that is best for them and their children. It ensures that those non-resident parents who try to avoid their responsibilities to their children can no longer do so. Above all, at the heart of this Bill lies a commitment to tackle child poverty. The measures contained in this Bill, together with the increased disregard of £20 by the end of 2008 and £40 from April 2010, announced in another place in the Chancellor’s Pre-Budget Report, will lift 100,000 children out of poverty. And the Bill is concerned not only with children. Its ““Other Payments”” section makes provision for sufferers from mesothelioma, a virulent and almost invariably fatal disease caused by exposure to asbestos. Under the provisions in this Bill, anyone suffering from mesothelioma as a result of being exposed to asbestos in the UK, or their dependants, will be eligible for a lump sum payment from the state if they have not previously received compensation. The system of child maintenance in this country has been a source of great anxiety to parents for many years. Around 2.5 million parents with care in this country could potentially receive child maintenance from a non-resident parent. However, only about 40 per cent of these parents are actually paying. This leaves a huge number of children without any maintenance, often suffering unnecessary poverty as a result. The Child Support Agency has failed to provide an acceptable level of service to many families. This is certainly not the fault of its staff who have worked valiantly, often in very difficult circumstances, to help children. However, parents have often been left confused, frustrated and angry, while children have been disadvantaged. The Bill makes reforms which will ensure that many more children benefit from maintenance. It will support parents to make maintenance arrangements that are right for them personally, while bearing down on those who do not comply with their responsibilities. Child maintenance can make a substantial contribution to combating child poverty; by supporting parental choice while offering the security of an improved statutory service, we can ensure that many more children receive the money that is due to them. As my honourable friends in another place have emphasised, a relationship may end, but responsibility to one’s children does not. It is not right that a child lives in poverty because a parent fails to provide adequate support. Parts 1 and 2 of the Bill establish a new non-departmental public body, the Child Maintenance and Enforcement Commission, to take responsibility for the entire child maintenance system. As a non-departmental public body, at arm’s length from government, the commission will have greater autonomy to implement the measures in this Bill and to develop detailed policy. It will be able to define a strategy for delivery through partners and contractors, allowing it to harness the very best of private, public and voluntary-sector expertise to deliver the very best services to parents and children. The chair designate, Janet Pareskeva, is already shaping the new organisation, and we expect to announce a commissioner designate in the new year. The commission will be fully accountable to Parliament and will be bound by its statutory objectives, as set out in Clause 2. The overarching objective for the commission is to maximise the number of effective maintenance arrangements that are in place, whether voluntary or statutory. This is supported by two subsidiary objectives. The first requires the commission to encourage and support voluntary arrangements when these are ““appropriate”” for the parents in question. Where they are not appropriate, the second objective requires the commission to support applications to the statutory maintenance service, thus avoiding the risk of anyone slipping through the net. With the encouragement of voluntary arrangements, the commission is given responsibility for a long-term change in parental behaviour, tackling the root causes of child poverty while strengthening parental responsibility. This is of course backed up by the requirement to ““support”” both voluntary and statutory arrangements, whichever is the most effective and appropriate for the parents concerned. The requirement is for the arrangement to be effective. The creation of a new commission will mark a clean break with the past. The Child Support Agency has been dogged by serious problems since its inception. As I have said, these are not due to the agency’s staff. They have not had the right tools for the job, have faced over-complex policy and processes, and have often done a very good job in very difficult circumstances. However, all noble Lords will be aware that the agency has never worked as effectively as had been intended, and it will always suffer from the legacy of the past. In these circumstances, a fresh start under a new administrative organisation is the only viable option. As my honourable friend James Plaskitt, the Parliamentary Under-Secretary of State, announced at Third Reading in another place, we intend to bring forward amendments to give this body Crown status. This will allow the Child Support Agency’s staff to remain civil servants when they transfer to the commission. The staff are essential to the success of the reforms that we are making. As their status as civil servants is something which matters deeply to many of them, these amendments will ensure that they can look forward to, rather than worry about, the launch of the commission. After a three-year period, we will review the position. We know that some parents feel frustrated by the fact that they are forced to use the Child Support Agency if the parent with care claims benefits. The Bill breaks the link between the benefit system and child maintenance, equalising choice between those on and off benefit and allowing all parents to make the best decisions about the maintenance arrangements for their children. However, the opportunities that can arise from the removal of compulsion will be realised in practice only if we also ensure that low-income families who separate get help to navigate the system. Such help also needs to be available in a manner that makes it accessible to all who need it. The Bill establishes a new Information and Support Service, which is expected to be available through three main channels. A large-scale national contact centre will be backed up by a face-to-face service and web-based support. The service will identify and draw in low-income families, give them impartial information about the options that they have to secure maintenance, help them to act on their decisions and provide general information on wider separation issues. Therefore, the Bill moves us on from a system of compulsion and no choice to one which will ensure that parents are offered the help to make real choices. To be clear, this system will be all about securing maintenance for children, but of course we need to keep our broader aspirations in focus. Separation is a difficult time, and we must plan for a joined-up approach across government, which includes but goes beyond the financial consequences and arrangements. For example, last week’s Children’s Plan made clear the DCSF’s intention to launch work on how better to support parents and their children during and after family breakdown. We are already working closely with the DCSF and will be fully engaged in this specific endeavour. Those parents who choose to, or need to, make a statutory arrangement want to deal with a simple but effective system for assessing, collecting and, if necessary enforcing child maintenance. Part 3 of the Bill, therefore, makes significant reforms to the statutory service itself. It simplifies the assessment process, and provides new, stronger collection and enforcement powers. That will make the system easier for the many fully compliant non-resident parents, who recognise their responsibilities to their children, while allowing the commission to deal effectively with those who refuse to pay. Currently, the Child Support Agency makes a maintenance calculation based on information provided by the non-resident parent. That can obviously lead to delay. The commission will be able to get the non-resident parent’s income data directly from HMRC, making the process much simpler and easier for everyone. The assessment will then be updated annually to reflect the changes in the non-resident parent’s tax data. That means that generally parents will not be required to provide large amounts of information to the commission, as the use of HMRC data will provide the commission with easily accessible and accurate earned income information. Money will therefore flow more quickly to more children. We also plan to introduce an amendment allowing parents to pass financial information disclosed in certain court proceedings to the commission, to help it make a fair and accurate assessment. I know that some noble Lords have concerns about the treatment of investment and dividend income, and more generally in relation to the self employed. We are considering placing a duty on the commission actively to investigate applications for variations, so that non-resident parents pay a fair amount of maintenance whatever their financial circumstances. As the operational realities of the future scheme and the availability of unearned income information becomes clearer, we will continue to examine what can be taken into account in the main calculation. The changes will make the assessment process easier and we need to do that not least in fairness to those many non-resident parents who want to provide for their children. However, it is a sad fact that no matter how easy we make it for people, some non-resident parents will attempt to avoid their responsibilities to their own children. For those cases, we are giving the commission new collection and enforcement powers. The use of administrative liability orders will make the processes of enforcing arrears considerably quicker, while the ability to collect money directly from bank accounts and other financial resources will mean that the commission can get the money moving as quickly as possible. If a parent still refuses to comply, the commission will be able to use a variety of powerful tools, such as disqualifying a person from holding a passport, or applying to the magistrates’ court, or in Scotland to a sheriff, for the imposition of a curfew order. We have listened to recommendations made in another place, and have introduced a clause which will make the failure to notify the commission of a change of address if required to do so an offence. Following discussion in another place, we intend to introduce an amendment allowing the commission to use its enforcement tools to collect old debt. We are also considering further enforcement powers, including opening up the types of account against which ongoing and lump-sum deduction orders can be made, and giving the commission the ability to apply to the court for an order freezing a non-resident parent’s assets where there is evidence that they are about to dissipate them in order to defeat the payment of child maintenance. These are strong but necessary measures. The money in such cases rightfully belongs to the children, not the non-resident parent. While I acknowledge that many non-resident parents are meeting their financial responsibilities to their children, it is both right and fair that we should use fully effective measures against those who chose to deny their children the maintenance that could make a real difference to their young lives. Part 4 of the Bill sets out the lump sum payment scheme for sufferers from mesothelioma or their dependants. While money cannot compensate for the suffering and loss experienced, the quick and efficient payment of a lump sum will help to alleviate much anxiety and allow people to provide for their loved ones. A lump sum scheme for mesothelioma sufferers already exists. However, it does not provide for sufferers whose exposure to asbestos was not directly caused by their employment. A worker in an asbestos factory can currently claim a lump sum; a woman who washed her husband’s overalls every week after he returned home from the same factory cannot. She will have breathed in the same contaminated dust, but she cannot claim under the existing Act should she contract the disease herself, and neither can her dependants. That is unfair, and the Bill corrects it. From now on, anyone who was exposed to asbestos in this country, or their dependants, will be entitled to a lump-sum payment if they go on to contract mesothelioma. The scheme will be funded by an amendment to the Social Security (Recovery of Benefits) Act 1997 to allow the state to recover moneys in cases of double compensation. If a person receives both a lump sum from the state and, later, a civil compensation payment from their employer, the Bill will allow the state to recover the amount of the lump sum. Currently, that amount is deducted from the civil compensation payment made by the employer or the insurance industry. That means that the state effectively subsidises civil compensation payments, allowing the polluter to pay less. Such a situation is not acceptable, as all stakeholders, including the insurance industry, have recognised. The Bill ensures that negligent employers or their insurers can no longer benefit from the state’s duty towards those who suffer from industrial diseases such as mesothelioma. This Bill sets out a framework through primary legislation, and I know that noble Lords will be interested in the regulation-making powers arising from it. Indeed, much of the detail will be in secondary legislation. On the child maintenance provisions, that is important because the commission has the opportunity to develop its own thinking to take these reforms further and make sure that they work. However, I assure noble Lords that where we have draft regulations, I will make them available and where we do not, I will provide a dossier of information relating to the secondary legislation at the earliest opportunity once your Lordships’ House returns in January and certainly before we enter Committee. The broad consensus and cross-party support which this Bill has enjoyed in its passage through another place is a clear sign of its importance to many people. I welcome the scrutiny which I know will ensue in the remaining stages in your Lordships’ House. I commend the Bill to the House. Moved, That the Bill be now read a second time.—(Lord McKenzie of Luton.)