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Child Maintenance and Other Payments Bill

moved Amendment No. 86: 86: Schedule 4, page 64, line 23, at end insert— ““Accuracy of calculation In Part 1 (calculation of weekly amount of child support maintenance) the accuracy of the assessment of income shall be accurate within a tolerance of plus or minus 2%.”” The noble Lord said: I am lost in admiration for how the noble Lord, Lord Skelmersdale, can make up amendments before introducing them. That is a wonderful precedent, which I might adopt in the future. It took a lot of style, but he got away with it beautifully. We now turn to the calculation of maintenance. These are probing amendments. They are all in my name and that of my noble friend. They seek to do no more than to look at questions that arise from the calculation of maintenance. I want to spend some time on Amendment No. 91, but briefly I shall refer to Amendments Nos. 86 and 87. The provenance of Amendment No. 86 is the tolerance limits that are required for public prosecution and court proceedings. The chief executive of the Child Support Agency has a really difficult task if the courts ask him to be penny perfect in every assessment before he takes on a prosecution or enforcement. I am not trying to introduce any slovenly, casual attempts at getting assessments right, but getting things right to the nearest penny, and having cases sent back because they are a few pence or pounds short, one way or the other, has been an enormous cause of delay in the past and I do not think that is fair. This amendment is far from competent or technically correct, but it is an attempt to say to colleagues that maybe we should take a deliberate decision to achieve the benefits of expediency and getting things done in a sensible way. Is there not a tolerance limit that we would be prepared to accept? This amendment is designed, as much as anything, to help the organisation to get things more or less right. I am reminded of the old highland ““ATHINE”” principle—““Ach to hell, it’s near enough””. As far as I, as a lowlander, can make out, that is the way in which much highland life is lived. I am not trying to put inaccuracy into the system, but there comes a point when parents with care and non-resident parents would be prepared to accept an amount to within 1 per cent or 2 per cent, or anything up to 5 per cent. It would make sense to consider at least the potential for giving the prosecution and enforcement arm of this new organisation some wiggle room when it comes to clearing cases in magistrates’ courts. The sheriff in the Jedburgh sheriff court hated taking cases for local authorities and other public bodies, as I had to do from time to time. One always had a very hard time because when the sheriff had any discretion available to him, naturally enough, he would always take the side of the defender and not the pursuer, so I got the rough end a number of times. My career was short lived, but not just for that reason—I was elected. Perhaps some consideration should be given to leaving a little more room for manoeuvre for the enforcement mechanisms. Perhaps I can attach to Amendment No. 86 a further question, which arises from page 35 of the annual report of the CSA. The 2006-07 report talks about the standards committee’s work in the previous year and about the committee being relaunched. We are still talking about the accuracy standards of assessments. The annual report says: "““This committee was re-launched mid-year under a new Non-Executive Chair and met twice in the latter half of the year””." It goes on to talk about acknowledging and endorsing, "““the new approach to accuracy checking and quality assurance, which is expected to result in measurable performance [improvement] during 2007/08””." That is very welcome. However, the reports of the old standards committee used to be put on the website and published in summary in the annual report. I have noticed that that seems to have slipped. Perhaps I could have some reassurance about that. Amendment No. 87 is a probing amendment. There is an argument which says that if we are moving away from the quintessential simplicity of 10, 15 or 20 per cent in the net system that is used currently to 12, 16, 19 per cent gross and we have the change if the income is between £800 and £3,000 a year—of course, there are reductions in the hands of non-resident parents for relevant children—perhaps we cannot be as confident as the proposals in front of us that these will be equivalent amounts. It is a difficult judgment. You are trying to mirror the net system that we have now in the new system and do it accurately. That looks a little rough and ready to me. I do not know how we should do it. I make no complaint about that. All that Amendment No. 87 seeks to do is to say, in case we get that wrong and in case it needs to be fixed quickly, we should look at putting the percentages into secondary and not primary legislation, so that they can be amended at the pleasure of both Houses of Parliament. There are other reasons as well besides just getting the equivalent net/gross figures. We could find that some of them are too high and that there were interferences with tax credit regimes and so on. There is a case for putting the basic rate percentages into secondary legislation so that they can be more flexible. I need to get a series of questions clear in my head. I am not complaining about anything or advocating anything, but I am trying to ensure that I understand the future role that Her Majesty's Revenue and Customs will have in calculating child maintenance. They are important questions so I hope that the Committee will bear with me. It is true to say that there is much to be gained in using HMRC data in terms of spitting out the calculation and looking at ways of dealing with non-co-operation by non-resident parents. That is all understood. I want to get it clear in my head that we are talking about a system in the new regime which will arrive at a total gross income. The phrase ““total gross income”” is important. If the new commission is to take the first income figure that is available and that comes through the pipeline—the data gateway from HMRC—and is to use it to get on quickly and do an efficient calculation, that is one thing. It is not what I understand should happen, but it may be what is in mind to happen. The first question is: to what extent are we able and willing to alter and upgrade the systems that HMRC and CMEC will have to get the information that CMEC needs to make a proper assessment of total gross income? We need to know more about the systems. We also need to know what information CMEC understands is held by HMRC and what systems it is held on. There are different sets of systems. I do not know much about HMRC, but I know that there are different work streams to deal with PAYE, self-assessment, repayment of taxes, national insurance contributions and others. There are a lot of sophisticated systems which, for HMRC’s purposes, are in silos. We are asking them, in this important set of cross-examinations we will conduct on CMEC’s behalf, to cost-cut bits of information that will need to be taken from each of these silos. It is important that we understand exactly what processes will be able to do that. There will inevitably be people with combinations of earnings in different silos at different times. A total picture of a non-resident parent’s income from all of these sources must be extracted as a matter of routine if the new system is to work successfully. Some of the basic questions revolve around the concept of a consolidated return. I understand that it is possible, on cause shown, for the HMRC to do this, but it is a special procedure which it does not do unless it is required and has a purpose. I think we are asking it to do a whole set of consolidated returns. Maybe we are not, but I would like to know whether we are or not, or are using some other techniques to drill in to the information there. We must ensure that we get it all out. For example, I am not an expert on employment-related benefits, but I know that the Treasury has workflows, streams and systems that collect information from employers on employment-related benefits. We must get access to that silo as well. The key question is whether CMEC staff in the new regime will be able freely to access all of that kind of data to find out whether the non-resident parent possesses any of these kinds of income. It is important that we understand that. On processes and systems, what systems will we use to transfer data? The regulatory impact assessment statement with the Bill said: "““There would be some initial set-up costs met by the Department for Work and Pensions””." There is also a commensurate, equal and opposite, reference to the Revenue’s provisions, where it says that relatively minor start-up and ongoing monitoring costs for HMRC will also be put in hand. Can we find out more about the costs of the set-up? Are they minor? Are they ongoing? How much will they cost? What significant investment is being made so that the CMEC staff can have proper access via electronic gateways to all of the data held by HMRC? Could we get the latest progress on all this? We got some information from Mr Plaskitt in the Public Bill Committee, when he talked about discussions evolving and being well advanced. It looks as if everything is in hand and we are on top of it all. I would like some reassurance that that is true. Finally, I shall ask a question about when a determination has been made that a non-resident parent has significantly underreported his income. During the Public Bill Committee, Mr Plaskitt gave the impression that that will be picked up in the next year’s fixed-term maintenance agreement. I understand that that is the current position, but I do not think that it is right. If you tried to persuade the Inland Revenue that you would start sorting out your tax arrears next year when you do the sums again, it might tap you on the shoulder and say that the tax arrears are due and you are liable. There should be an in-year reassessment of the non-resident parent if he has been found to have significantly underreported his income. A reconciliation should be made there and then. Then there is the question of arrears. Will there be such a thing as arrears when underreporting is subsequently discovered? Will it be possible to take an historic view of the years of underreporting that have just been discovered? That could amount to a big sum of money. Are we simply going to say that that will be sorted out when the reassessment comes up next year and then everything will be all right again? I do not think that the parent with care would take kindly to that treatment, if that is what is in hand. I am sorry to labour the Committee on this, but it is essential that we all clearly understand the processes of exchange by the time the Bill gets Royal Assent. My experience is that HMRC and the DWP are very unhappy—that is not the right word. The DWP has had a subsidiary role to the Treasury in anything that I have been involved in in the past 10 or so years in Parliament. The Treasury usually charges for access to its time-and-line system. Its position in the Whitehall hierarchy is pretty high and mighty—we all know that from a political point of view—but there may be difficulty in the department getting access and proper positive reactions in future communications with the Treasury. If this fails, and we cannot get the income assessments that we hope we will achieve under the new system, a big part of this change in policy will be unavailable, which would be a great shame. I am asking all these questions and I do not know the answers to them—it is always dangerous to ask questions when you do not know the answers. They are important questions, so I hope the Minister will forgive me for asking them in such a long-winded way. I beg to move.