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Child Support (Miscellaneous and Consequential Amendments) Regulations 2009

My Lords, I thank noble Lords who have given the regulations their blessing. I shall deal first with the issue that has generated most of the debate with the noble Viscount, Lord Eccles, and the noble Lords, Lord Skelmersdale and Lord Kirkwood. I, too, offer a vote of thanks to the Merits Committee, which I know does sterling work. I served on the committee briefly—not with any distinction, I hesitate to say—and I know it does important work. I am sorry that it felt that the information it received in respect of these regulations was not sufficient. From the tenor of the debate it seems that they may have been taken somewhat out of context. The variation of income regulations, whether the old scheme ones or the new scheme ones, were not in any way changed by the legislation that we passed last year; they have been around for a little while. But there was a change in the tax rules and, until those tax rules changed, whether you were allowed to deduct 50 per cent or 100 per cent of your pension contributions, an effective cap was put on that because it was driven by the revenue rules; generally it was 15 per cent of your income. So the concept of someone pushing 100 per cent of their income into a pension scheme to avoid child maintenance obligations simply was not possible, and it was that which changed the landscape with which we are dealing. Notwithstanding that, it was assumed—wrongly as it turned out on the basis of the tribunal’s judgment—that the issue which arose because of the change of the tax rules could have been dealt with under the pre-existing regulations relating to diversion of income. This has now been cleared up. The judgment stated that that did not work because it was not a diversion of income—it was not paying a dividend or a salary to a spouse that you were not taking yourself—but a taking of income and diverting and deploying it in a certain way. That is the lacuna, the loophole, which has been fixed by these regulations. It is no more complicated than that.