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Child Maintenance and Other Payments Bill

I turn to the amendments and I shall pick up some of the broader points that were raised. I welcome the interest in the transfer of cases to the new arrangements because that is very important, as indicated by all Members of the Committee who have participated. Planning for this transfer is one of the commission’s most significant early challenges. The scheme would have to be approved by the Secretary of State. Within Schedule 5 we have made provision for regulations to require the commission to develop a scheme for the movement of existing customers to the new statutory maintenance arrangements. The process by which cases transfer will commence in 2010 and take around three years. The provision is for negative regulations, but I hear the strength of the argument and will take this away. I believe that the Delegated Powers and Regulatory Reform Committee did not have any problem with what is proposed. It is usually focused on challenging when it believes that the affirmative procedure should be used. I might return to this, even if we change the procedure for the first set of regulations. I understand the point. Our intention is to be completely transparent about how this transfer process will work. The commission’s plan will be published and will be available to Members of both Houses, key stakeholders and, most important, parents, so that they can raise any concerns at that time and before the transfer to new arrangements begins. It is essential not only that Parliament can scrutinise the plan, but also that parents understand the choices that will be available to them during this transfer period. A communication programme to support parents through this process of transition will start in 2009, enabling the first case transfers in 2010. The commission will consult stakeholders on our plans for transition. Amendments Nos. 102 and 105 seem to have similar intentions, which is to keep existing maintenance liabilities running during the transfer process. The amendments differ in their effects, but I understand that they are probing by nature. By freezing ongoing case activity, we run the risk of not addressing any urgent changes of circumstances that may be required. For example, if someone paying an assessed amount of maintenance lost their job, all action on reassessing their case in line with their new circumstances would stop. I do not believe that this is a fair situation to present to anyone, nor do I believe that it is the intention of the amendment. Unfortunately, some incomes do not keep pace with prices; therefore, to base an assessment on what someone earns as opposed to what prices are is a much fairer way of doing things. Additionally, we know that there are many cases that have a current liability of nil. For these cases a percentage increase would have no effect and the nil assessment would remain in place for the length of the transition process. I am sure that this is not the noble Lord’s intention either. During the transfer period, any current assessment will remain in place and will not cease until a new assessment has been carried out under the HMRC assessment formula. This would remove the ability of parents to choose what is best for them, whether this is in or out of the statutory system. I am sure that that is not the intention of Members of the Committee but that would be the consequence. I confirm that the liability will not end before the new scheme liability begins where parents choose to stay in the statutory scheme. We know that a large number of voluntary arrangements are compliant and successful and have a real benefit for the child or children concerned. Therefore, to remove this facility could have a detrimental effect. This is also true of the cash transfer option, which enables those parents who are satisfied with the current arrangements to continue to have support. Amendment No. 104 stipulates that certain cases should be given priority in the move to the new HMRC data-based assessment during the transition period. In the White Paper, which has been referred to, we laid out guiding principles for the approach to transition. These are to focus on supporting the poorest families first; meet parents’ needs by empowering them to make informed choices; minimise disruption and provide a seamless service for the move to the new regime; and ensure that the approach is practical and achievable, learning from the past. As the Committee will be aware, we have consistently stated that it is right that the commission should consider the order in which cases are moved. This gives the commission time not only to plan but also to take account of the scale of the task and the nature of the cases involved. Only the commission will be in a position to know about its levels of other work and available staff resources. It would therefore be inappropriate for us, at this stage, to dictate to the commission how to carry out this major administrative challenge. We know from previous attempts at reform of the child maintenance service that a large scale movement of cases is a complex and time-consuming process. I am sure that the Committee will agree that it would be prudent to let the commission, having learnt the lessons from the past, assess for itself the right order for the movement of its customers, the right plan of action and the right point at which to begin the transition. It would not, therefore, be appropriate to dictate any priorities on the face of the Bill. Amendment No. 106 would remove the facility to allow for a set of prescribed adjustments to be applied to the new formula assessment in certain cases, where the new calculation based on HMRC data differs significantly from the existing liability. This could have the effect of either a marked increase or a marked decrease in maintenance paid or received for either parent. By removing that facility, we run the risk that either parent may not have sufficient time to adjust to a change in their maintenance payments. That could create significant hardship and is not consistent with our intention to minimise disruption during that period. I think that the noble Lord, Lord Skelmersdale, raised the point that some adjustments could be quite significant, as some of the assessments are based on data that are quite old. That is right, so it is important to have a mechanism to potentially smooth the impact of that. Similar arrangements were introduced when the current system was changed from the first one, although they turned out to be quite complex and difficult to manage. A good deal of thought needs to be addressed to this. Without such a mechanism, some parents with care and non-resident parents could hit difficulties. I recognise that the prescribed adjustments regime currently administered is a complex and lengthy process that is difficult for staff and parents to understand. That is why the commission will need time to develop detailed plans to introduce a new and simple way of handling such instances. However, to have no facility and no flexibility would be in no one’s interests. It is for similar reasons that I cannot agree with Amendment No. 107, which would make all regulations made under Schedule 5 subject to the affirmative procedure. Once the transfer process is under way, the commission will be able to see how it is taking shape and may need to make changes at fairly short notice. As any changes will require regulations, making them subject to debates in both Houses could introduce unacceptable delays, which could have detrimental effects for the parents involved. Notwithstanding that, we ought to think seriously about changing the initial set of regulations, but I will revert to that matter on Report. Finally, Amendment No. 220 would require the Secretary of State to set out in regulations the strategy for informing parents of the details of the timetable and arrangements for transfer to the new arrangements. It is our intention to be completely transparent about how the transfer process will work. We will make that information available to honourable Members so that they can raise any concerns at that time and before the transfer to new arrangements begins. Honourable Members and noble Lords, I should say—I saw the Chairman bristling at that. You can see where this speaking note originated. It is essential not only that Parliament can scrutinise the plan but also that parents understand the choices that will be available to them during the transfer period. We are committed to minimising the disruption to parents in that period by providing a seamless service for the move to the new arrangements. We are also concerned that this amendment, were it to be accepted, could build delays into beginning the process of moving cases to the new maintenance arrangements. That could prevent children from benefiting from the movement to new maintenance arrangements at the earliest opportunity. I shall try to pick up some of the other points that have been raised. The noble Lord, Lord Kirkwood, asked about the computer system for the old scheme cases. He said that he thought that the contract ran out in 2010. He is pretty well informed, as usual, but there is a right to extend that as required, which it almost certainly will be. Cases will remain on that system until, possibly, 2013. The noble Lord also asked about the releases under PR1 and how that will affect things. It is vital, and the CSA recognises this, that any new releases should be fully tested. To date they have been extensively tested and we believe that PR1 will be delivered in time to ensure that the indicative timescales in Section 6 that I referred to last time can be adhered to. I stress that it is not just CSA systems that need to be adjusted; Jobcentre Plus is being worked on as well because of the changes around benefits and the removal of Section 6 compulsion. Those systems have to cope as well. I shall take a little step back. It is implicit in the discussion that we have already had that the transitional process proceeds as follows. The first issue is the removal of Section 6. By the end of 2008, on the basis of current plans and timing, there will be a choice for all parents as to whether they stay in the system or enter the system. In 2010 the transition of cases from the first and second schemes to the new scheme, for those who wish to stay in the statutory scheme, will then begin. It means that, for a period, three different schemes will run, but we will end up in 2013 with one scheme, in which everybody will be on the same basis of assessment. The transition is not brief, but it is right to build in time to make sure that it can be done effectively and that we avoid some of the difficulties that have been encountered in the past. It is currently proposed that people will have formally to opt in to the statutory system. That is being looked at by the commission but, if that is where we end up, it is important that parents who wish to stay in the system are supported in doing so.