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Child Maintenance and Other Payments Bill

My Lords, I would like to know the context of that if I am to deal further with it. The noble Lord also said that things are not getting better but we should acknowledge the progress that has been made since the operational improvement plan was put in place. Maintenance has been collected and arranged for 674,000 children, which is an increase of 77,000 since the OIP was introduced. For example, uncleared new scheme applications continue to decrease and the figure is now 128,000—the lowest figure since December 2003. In the first six months of 2007-08, £475 million of maintenance was arranged or collected—an increase on the equivalent figure last year of £441 million, so there has been progress. The noble Lord asked about the change to Crown status. I should stress that the commission will still be an NDPB and this has no material effect on customers or relationships with Parliament. It will still be an autonomous body with responsibilities to the Secretary of State and to Parliament, as set out in the Bill. The noble Lord raised the 12-month rule, which I am sure we shall debate in more detail in Committee. If parents are happy with the arrangements made through the court, we would want them to continue. However, without the 12-month rule parents would be irrevocably locked into arrangements that further down the line may no longer work or meet the needs of the children concerned, but I am sure that we shall debate that issue in more detail. The noble Lord referred to the income threshold of 25 per cent being too high, as did my noble friend Lady Hollis. Twenty-five per cent allows serious changes in income, such as the loss of a job or a substantial change in wages, to be taken into consideration while ensuring that minor changes do not hamper the efficiency of the new system. I stress that under the new system there will be annual changes to the assessment so eventually a change in circumstances will be reflected. The noble Lord said that this had to be fair to both parents. That is absolutely right. There is a risk that we always cast the non-resident parent, who is the father in the overwhelming number of cases, as a villain in this piece. We need to make sure through the Information and Support Service and whatever emerges from charges—which is some way down the track and depends on what flows from regulations—that we are even-handed. I shall deal with the point about pleural plaques when I address the points raised by my noble friend Lord Dixon. I am pleased that the noble Lord, Lord Kirkwood, found the DWP advertisements inviting. He referred to the attempt at a clean break because there is a culture of non-compliance. However, I believe that we are already beginning to break that. There has been some very effective media campaigns, certainly in some of the big cities, which are showing progress. He referred to the fact that we will have three systems for a time. That is absolutely right. We will have the original system, the current system and then the new system in 2010-11. But, of course, for those who choose to stay in the system, by 2013 we shall need the time to make sure that the transition can take place effectively. We will end up with one basis of assessment and one system. There will be challenges in the interim but I believe that is the right way to proceed. The noble Lord referred to the nature of some of the client group being such that they will always seek to mess up the system. That is why it is important that we use HMRC data because we would no longer need to rely on those individuals to be able to make the assessment. References were made to the state of the agency’s telephony and IT. I shall not go into great detail on that but a great deal of work has been carried out to improve the stability of the new CS2 computer system, and operational performance has improved to the point where contracted service levels are now consistently being met. We should perhaps engage in that more fully in Committee. The noble Lord and others referred to the importance of the information and support system. That is absolutely right. That system needs to be in place by the time the Section 6 compulsion is withdrawn; it needs to be a robust system that properly addresses the needs of the clients it seeks to serve. There was reference to the range of bank accounts we are seeking to reach in terms of enforcement. I accept the noble Lord’s point that in some instances it may not be that difficult to avoid the sort of accounts that we are trying to reach, but further work is being done to see if we can draw more accounts into that process. The noble Lord asked whether the system would be resourced if it proved to be more ““pesky””. I believe that it must—it is important that we deliver on this. My noble friend Lady Hollis, as ever, produced a challenging contribution. She stressed the importance of the enhanced disregards and that is absolutely right, and she made interesting comments about the wider impact, how that sits together with the benefit system and how that works effectively. I know that my noble friend supports the process of automatic deductions from earnings, which was not automatically available previously. We would seek to have that process piloted to see what it entails in practice, but it will be an important addition to the enforcement armoury of the commission. It is important to include HMRC data. My noble friend had two worries—the first was to do with the uneven bargaining power of the parent with care and the non-resident parent, particularly if the parent with care is not aware of the non-resident parent’s income level. That point is acknowledged. In those circumstances, the information and support service, when it is clear that the parent with care has no realistic idea of being able to assess what the income is, would look towards the statutory system as a backdrop that is always there as the safety net. My noble friend made an interesting point on the impact of linked cases, particularly on the complexities that they will introduce into the system. It is impossible to deal with that point at this juncture, but I know that we will consider it in Committee. The changes to the IT system mean that clients will be grouped in a different way and be NRP-led. That will particularly help some of the issue that my noble friend raised. Perhaps we can talk about the detail of that in due course. The right reverend Prelate the Bishop of Southwell and Nottingham acknowledged that we need to sort out the child maintenance system, which is not working now. I am grateful for his support for the new era that we are trying to build. He again argued that it was important for the information and support system to be robust. That is absolutely right. As I said in my opening remarks, that system will be particularly focused on maintenance, but will engage with the wider agenda associated with all the issues of family breakdown. Yes, the information and support service will have a contact centre, a range of literature and a website, but, yes, it will have to have a face-to-face component for people who cannot readily access or make use of those other means of communication. The information and support service is being constructed on a basis that draws into the system—through their contact with Jobcentre Plus or when they claim tax credits—those who are potentially most disadvantaged, so there is a route to reach those people when they become lone parents who are potentially in need of child maintenance. The right reverend Prelate argued for a higher disregard. Of course, the disregard will increase to £40 in April 2010; that is a significant advance. There is a 100 per cent disregard for housing benefit and council tax benefit purposes. That is another important issue. The noble Lord, Lord Northbourne, welcomed the Bill, but said that it was inadequate because of its scope. The noble Lord, Lord Skelmersdale, made the same point. The purpose of the Bill is to focus on child maintenance, not to disregard all the other important issues that were raised. The noble Lord, Lord Northbourne, said that it was important that non-resident parents had a greater understanding of their responsibilities and that that would help to collect maintenance. Clause 4 specifically imposes an obligation to promote the importance of child maintenance. That is a powerful element of the legislation. The noble Lord asked where the responsibility of parents to children was set down in law. I shall have to get back to the noble Lord on that, because I cannot readily answer him. He asked whether parents or the state had responsibility to children. This Bill deals with maintenance and it is clear under the Bill that parents have financial responsibility for their children, and it seeks to ensure that non-resident parents meet those responsibilities to the fullest extent. The noble Lord argued for a broader children’s Bill, but we are working across government to make sure that all of the issues, particularly those relating to family breakdowns, are dealt with in a co-ordinated way. My noble friend Lord Dixon spoke eloquently and passionately about Part 4 on mesothelioma. The House of Lords’ decision was that pleural plaques were not compensatable and the Government have decided that they will not seek to legislate to overturn that decision. I have met colleagues from another place, in particular Mick Clapham. We had discussions on whether setting up some register at this point might be a helpful starting point. That is under examination. On Scottish government, the civil legal systems in Scotland and England and Wales are completely separate and it would be entirely up to the Scottish government as to whether they legislated to overturn the judgment. That might raise some interesting issues of juxtaposition. We will seek further discussions on that matter with Members of Parliament who have raised it directly with us. We agree with the view of the noble Lord, Lord Addington, that the CSA has not worked and that we have created a climate of non-compliance. I welcome his support for the proposals for change. The noble Lord asked what we could do to tackle those who are determined to avoid paying. I believe fundamentally that the Bill will tackle that problem because of the basis of assessment that does not rely on data produced by the non-resident parent and because of the strengthened enforcement powers embedded in the Bill. I hope that the problem will be tackled in part because, if there is an obligation on the commission to promote the importance of parents financially supporting their children, the creation of that climate will put some peer pressure on at least some. We know that it will not work for all. This Bill is a key stage in a journey towards a new, improved child maintenance service that is truly focused on tackling child poverty and helping children. If noble Lords give their consent to the Bill, the commission will assume its functions and responsibilities as a legal entity in 2008. People working for the Child Support Agency will move to the commission and the work of building the new child maintenance service will begin in earnest. By the end of 2008, the requirement that parents with care claiming income-related benefits be treated as if they had made an application for maintenance will be repealed, giving all parents the ability to set up their own voluntary arrangements if they choose to do so. Allied with this, the Information and Support Service will begin providing support to parents to help them to make the best possible maintenance arrangement, whether privately or through the commission. Also by the end of 2008, the £10 per week disregard for new scheme cases will be doubled to £20 a week and will be extended to old scheme cases. As I outlined previously, a full disregard in housing benefit and council tax benefit will be introduced. From April 2010, the disregard will be doubled again to £40 a week for all parents claiming income-related benefits. The first applications to the new assessment regime set out in the Bill will be accepted in 2010. Existing clients will also begin transferring to the new scheme. By the end of 2013, the journey will be complete, as all clients will be on a single set of rules. That journey and the Bill mark a transformation in the way in which child maintenance is organised in this country. The Bill will lift many thousands of children out of poverty, while giving parents the power to arrange the maintenance that is right for them personally. The Bill will provide help to those who accept their responsibilities, while using an effective collection and enforcement power on those who do not. It will get more money to more children. The Bill also provides much needed support to the many victims of mesothelioma, ensuring that they receive compensation during their lifetime and are able to provide for their loved ones after death. On Question, Bill read a second time, and committed to a Grand Committee.