(13 years ago)
Grand CommitteeRead Hansard Text Read Debate Ministerial Extracts
Lord Freud
“(2) In section 190 of that Act (parliamentary control of orders and regulations), in subsection (1), before paragraph (za) insert—
“(zza) an order under section 115A(3B);”.”
Baroness Drake
Baroness Drake
My Lords, I shall also speak to Amendment 104AA. In Clause 113, we see the Government’s intention to introduce a civil penalty for negligence in providing incorrect statements for all categories of universal credit claimants. The penalty will also apply to the failure to disclose information. This is a probing amendment to understand why and how these penalty powers will be applied.
The civil penalty will be awarded where an error is not being dealt with through fraud action. The power to award will not be restricted to the Secretary of State but given to any authority that administers housing or council tax benefits, so it is quite a significant power.
Although there is an existing tax credit civil penalty regime, such a principle will now be extended to all universal credit claimant communities, many of whom are very vulnerable, such as those with disabilities or illness. What exactly is the offence and how will it impact on the population of claimants?
In response to a question from my noble friend Lady Hollis and me, the department has kindly advised that “negligence” should be construed in accordance with the everyday meaning of the word: that is, not exercising the care that the circumstances demand—in this context, being careless about, or paying insufficient attention to, the accuracy of any statement or information given in a benefit claim. Not exercising care and not paying sufficient attention are not actions that can be assessed for negligence without having regard to the capacity and the capability of the individual when providing that information.
More than 4.2 million adults lack the basic, day-to-day competences of functional literacy, 6.8 million adults lack functional numeracy, and I understand that it is estimated that two-thirds of claimants on income-related JSA have the functional literacy of an 11 year-old. There will therefore clearly be a higher concentration of adults with limited numeracy and literacy skills in the claimant population. As I have said, many claimants will also be vulnerable for other reasons—disability, illness or whatever. All these characteristics add up to a greater propensity for errors to occur and mean that the most vulnerable will be disproportionately hit by the civil penalty.
However, my arguments do not stop there. The Government are assuming that 80 per cent of claimants for universal credit will fill in their application forms online, but evidence from charities suggests that a much lower number will be able to do so without error; a more realistic figure may well be 40 per cent. What plans will the department put in place in the event that it becomes clear that the percentage of applicants who can fill in their forms online is significantly below that forecast?
Universal credit will also bring a new set of rules and people will not always understand what is expected of them. People have complicated lives, and even if someone is sitting next to them they may still get it wrong. Even when individuals want to get it right but are not competent, cuts to the funding for legal advice and the winding down of the local authority-based benefit services will mean that those who would otherwise have helped the claimant to fill in the form will not be there. Claimants may want help from face-to-face contact at Jobcentre Plus, but many centres are being closed and they are likely to be in urban areas and so they are remote from rural claimants. Yes, call centre staff will be available, but they may not be sufficiently experienced in the new rules, certainly in the early years of universal credit, and their guidance may lead to errors in the filling in of the form.
We have layer upon layer of capacity, capability and complexity considerations that, once added together, reveal why non-fraudulent errors will occur in statements and information provided by vulnerable claimants. This indicates a systemic series of reasons for errors that will not be addressed by exhorting the most vulnerable to be more personally responsible and hitting them with civil penalties. The most vulnerable claimants are often scared of filling in their forms, but now we have the potential to make them petrified. One can imagine their anxiety at receiving some heavy-handed departmental letter telling them that they are about to be fined. Their ability to know that it is a civil penalty rather than a criminal one may be a subtlety that misses them when they receive such a letter.
Let me ask the Minister three questions. First, can he give an assurance that civil penalties will not be introduced before transparent criteria are set out to ensure that claimants are not penalised for making innocent errors and failing to understand the need to report changes within a required timetable, and that definitions of “reasonable excuse” will take account of a claimant’s individual circumstances? Secondly, how will decisions about when to issue a civil penalty be made, and how and when will good cause be considered? Thirdly, how does the Minister expect to ensure that the most vulnerable and the most prone to make errors will not be unfairly penalised by the civil penalty—not the exhortation that the most vulnerable will not be hit but how he expects to ensure that that exhortation is met?
The reason given for the extension of the civil penalty power is to reduce claimant error and increase personal responsibility. The savings from introducing the civil penalty power will be £19 million over the three years to 2014-15, but the application of that power could have a considerable impact on some very vulnerable people. I understand that the Government’s estimate of the volume of civil penalties is just under 600,000 a year, which seems very high given that, first, universal credit is intended to be a simpler, more transparent system; secondly, that the number of penalties for tax credit claimants last year was, I understand, 1,221; and, thirdly, that there were 7,249 administrative penalties for the benefits service.
That leaves me concerned as to how these civil penalty powers will be used in practice, because in the impact assessment, fraudulent and criminal activity is lumped together with non-fraudulent and non-culpable—or potentially non-culpable—error. However, they are clearly not the same thing. The same community of people is not being addressed, but they are being considered in an almost holistic way in the impact assessment.
It worries me that the department appears to be applying a common mindset to both, which in part is my reason for tabling Amendment 104AA, which seeks to prevent the Secretary of State allowing any targets to be set that would prove an incentive to increase both the number and the value of civil penalties issued. The stated purpose of these civil penalties is to improve claimant personal responsibility. However, we know over time from our own common sense and experience that organisational cultures can result in such penalty powers being abused for reasons other than their original purpose. The punitive intention increases, or they become an opportunity to raise money.
In a world where there is increasing competition for access to tax revenues, civil penalty powers will be vulnerable to abuse. They could end up being deployed more aggressively to improve revenues or to be punitive. One can think of examples of where ordinary people think that this may have happened. For example, are the approaches to catching people speeding and the margin of tolerance over the speed limit determined by a desire to incentivise good behaviour and avoid bad, or has it become a means of raising revenue? Did some local authorities deploy surveillance techniques against ordinary citizens for reasons never intended by legislation? Whatever the validity of people’s thoughts on these matters, they are an indication of concerns as to how civil penalty powers can be deployed in a way that was never intended.
I would prefer the civil penalty not to be there, but certainly I want to ensure that the powers to impose civil penalties set out in Clause 113 of the Bill are never abused. The recipients of that abuse are most likely to be vulnerable people who easily make mistakes, and who could come to fear the department’s staff as a sort of form of police force that is free to hand out fixed civil penalties at will. Any targets set would almost certainly be set by reference to national standards, and this amendment seeks to prevent the Secretary of State from ever allowing such standards to be set. The population does not conform to national standards. There are differences in localities, in regions, in demographics, in educational attainment, language skills, level of employment, labour market characteristics, which all have an impact on the volume of forms likely to be completed incorrectly. There will be a concentration of impact from these civil penalties if targets are applied.
In summary, I am a strong believer in public service and support, but I have a great antipathy to the deployment of bureaucratic power that frightens or abuses people. I have real concerns about the deployment of this civil penalty and I look forward to the Minister’s response to my questions.
Lord Skelmersdale
My Lords, I am glad that the noble Baroness, Lady Drake, has called attention to Clause 113, because it is easy enough for some people not to understand the form that they are filling in, even sometimes in the presence of a member of the Minister’s department in the jobcentre. My real problem with this clause is that it talks about negligence. If you fill in a form in a slapdash manner, that is negligent. I would far prefer something like “knowingly”: in other words, designing to commit some sort of fraud. That would be a much happier arrangement.
Baroness Hollis of Heigham
I support my noble friend’s amendment. Following on from what the noble Lord, Lord Skelmersdale, said, I would say that the test of fraud is normally—I think I saw a former Lord Chancellor who would know much better than I—associated with intent and ignorance of the law and is not a defence, but I think in this case it is because we are dealing with the interlocking of very vulnerable people and a new and very different system for people to understand.
There are three or four matters on which if I were asked now whether people needed to declare things, I could not guide them, and I like to think I have some nodding acquaintance with this Bill. For example, a lone parent has a boyfriend who works away. He stays with her overnight one or twice over the weekend. As a result, is she no longer a lone parent? Clearly it will not depend on their sleeping arrangements but on what contribution he makes to their financial arrangements. On a weekend basis, would that be sufficiently substantial to make her no longer a lone parent but part of a couple and therefore falsely declaring if she claims to be a lone parent? I am not clear what would happen in that situation under the Bill. Perfectly reasonably she might regard the fact that as she is getting universal credit she is not a lone parent and he is somebody who comes in as a boyfriend but not a partner.
With housing benefit, you could have a family with a student son who is living at home, going to the local university and working part-time. Should he be declared for housing benefit as a potential contributor to the rent so that non-dependent adult deductions come into play? I do not know. I think it would be quite difficult for that couple to assess.
Let me give another example that we discussed at considerable length and about which the Minister was rightly sympathetic—kinship carers. Conventionally, kinship carers are entitled to claim for child credit and so on if they have the equivalent of the child benefit book, which normally takes about eight weeks to come across. In future, given that child benefit will not necessarily be a separate benefit entitlement, if there is a rotating relationship in which the child goes back to its birth parents for a few weeks and then, because the father or the mother may be an addict of some degree, goes back to the grandparents, at what point and for how long a period of continuous care are the kinship carers entitled to claim the child elements in universal credit? I do not know.
In those three cases—and I could elaborate another six on disability benefits that are becoming clear to us—I would not be able to advise somebody on what they should declare on their forms as being relevant for the consideration of UC. It would be natural for them in those quite complicated situations not to declare things that appear to work against them. They would not be doing it with an intent to deceive. They may think it is a perfectly proper statement of their position as they see it, yet under this clause they could be caught for negligence and fined. That is completely unreasonable.
The one piece of advice I would give the Minister is that whatever he does, whether he claims that this is needed as a reserve power or not, he should not touch it for at least three years until after the Bill has come into practical effect because of the bedding-down issues that it will have. The Minister has to make only one mistake, such as his department suing somebody for penalties for negligence when the department was wrong—and there will inevitably be departmental error; there always is when you introduce new systems—and the whole of the good will behind this Bill will disappear overnight.
Baroness Lister of Burtersett
My Lords, my noble friend gives some very good examples of how easy it might be to make mistakes, particularly when the universal credit is quite low. I remind noble Lords that on 24 October the noble Lord, Lord Boswell, told us how easy it is to make mistakes. When he applied for his retirement pension, he got it wrong. Was he being negligent? No. It was an example of how easy it is to fill in a form wrongly. It is not necessarily negligence.
Apart from that little reminder of how any noble Lord could easily make a mistake, I also wanted to pick up a point made by my noble friend Lady Drake about the expectation that 80 per cent of claimants will be claiming online. Recently a piece of research, Increasing Digital Channel Use Amongst Digitally Excluded Jobcentre Plus Claimants, found that one group of those claimants were what the authors call the “uninterested”. The researchers said that this group will,
“require persuasion or compulsion before they will use digital services, possibly with the threat of a benefit sanction for non-use”.
I would be very grateful if the Minister could assure the Committee that there is absolutely no intention to sanction people for not using online procedures. Some people have a mental block against using computers and we do not want yet another sanction in the system. I know that it was researchers who said this, and not the department, but if he could give us that assurance now, that would be very helpful.
Lord Touhig
My Lords, my noble friend Lady Drake has made some very powerful points this afternoon, which the Government need to take on board or we will get into a mess when this is finally introduced. They should be indebted, too, to the noble Lord, Lord Skelmersdale. His point is that there is an implication that the person who makes this sort of mistake has been deliberately negligent. That would mark people out as trying to defraud the system. It puts them in the wrong to start with, when these things can happen by accident.
Noble Lords will forgive me if I remind them of a point I made in one of our earlier debates. When I sat in the other place, I had a constituent who came to see me because she had been overpaid a certain benefit, and the department was pursuing her strongly for repayment. When we got the papers, we discovered what had happened. There were some boxes she had to tick. One of the boxes asked, “Have you received income support?”. She ticked “Yes”. However, she had stopped receiving it about six months before, and so beneath her tick, she wrote, “But this stopped”, and she wrote in the date on which it stopped. When we got to the bottom of this we found that when the form was sent in to the department, its computer could not scan in anything that was not in the box, so it continued to overpay her. She was in a terrible state. A large amount of money was involved, and there was a huge problem as a result. It will go wrong.
Noble Lords will forgive me if I repeat something that I mentioned in the Chamber a little while ago. In the case of universal credit, a lot will depend on a new IT system. Every major IT system that the Government have introduced in recent years has gone wrong. I know, because I sat on the Public Accounts Committee in the other place for a number of years and we had to look at some of these issues as a result of inquiries to the National Audit Office.
My noble friend Lady Drake also made the point, as others have, about people filling in these forms online. Thirty per cent of the poorest families in this country have no access to a computer. It has been possible to claim jobseeker’s allowance online for 20 months. The take-up is 17 per cent. The idea that we are going to get to 80 per cent of people claiming benefits online will cause a huge problem for the system.
My noble friend Lady Hollis has just made the point that a lot of the good things that this Bill will seek to introduce will be damaged because of the kind of approach that this particular clause takes. The Government should really think again and take note of the points made by the noble Baroness, Lady Drake.
Baroness Meacher
My Lords, I, too, support the excellent contribution of the noble Baroness, Lady Drake. I am sure that we all understand that if someone really has filled in a form negligently and as a result has received extra pay, that needs to be dealt with. My problem is how on earth you word such a clause. There are people who clearly are incapacitated and so cannot work things out—they cannot read adequately or have had to have some help from somebody else who does not quite understand their situation. You can imagine all sorts of situations in which things would go wrong, certainly when it comes to people with severe learning difficulties, major mental health problems and so on. Unless the official dealing with these things really understands the individual and how they might have come to make these errors, it seems to me that the most appalling injustices will result, which I am sure the Minister would not be happy about at all. Will he think about the wording of Clause 113 and try to generate wording that distinguishes between people who have in some way been negligent or perhaps on the edge of fraud but you cannot quite prove it? One can imagine a lot of people who might fall within that clause but who perhaps belong in a clause that relates to fraud. They are quite different from a large number of people who are struggling, whether with literacy or other problems. I am sure the Minister would wish to make that distinction clear and fair. It was helpful to have this amendment, and I look forward to the Minister’s reply.
Baroness Turner of Camden
My Lords, I do not want to add much to what has been so well said already in support of the amendment. On the other hand, we have been talking about other Bills while discussing this one, and I note that some of the information that we have from, say, Citizens Advice, indicates that it gets a lot of applications from individuals who have no idea of their entitlement and need assistance with that. If people do not know what they are entitled to, it is easy for them to make mistakes in claiming. That may very well have happened in the cases that have been cited this afternoon.
Moreover, it does not say in the Bill exactly what the prescribed amount of penalty will be, so apparently in addition to giving back the overpayment a penalty would be involved. That would mean that somebody who is already very vulnerable and who has no money could be in difficulty on paying both the penalty and the overpayment. I suggest that the Minister looks at this part of the Bill as it could do with a bit of rewriting in line with what a number of Peers have had to say this afternoon.
Lord McKenzie of Luton
My Lords, my noble friend Lady Drake has opened an important probe on these provisions, and other noble Lords have emphasised some of the practical difficulties that they create. I hope that the Government will reflect on the intent, the wording, the timing and some of the practicalities that these provisions throw up.
I want to add to the questions in a modest way. The “appropriate authority” that can levy the penalties includes those that will administer council tax benefits. We know that in future several hundred authorities will be levying council tax benefits unless we can get some amendments to the Bill. There is a real issue of consistency and the systems themselves possibly being markedly different and administered in a different way. Precisely how is it proposed that consistency in council tax benefit will be achieved? What sort of value to engagement will there be with all those authorities? Indeed, is there capacity within the DWP to undertake that effectively?
I have two more questions. The briefing suggested that the penalty levy would be £50. What was that figure benchmarked against? Can I also have clarification of “due process” and whether rights of appeal are attached to this? It would be helpful to hear from the Minister. Subject to that, and to the many pertinent questions asked by my noble friends, I shall not raise further points. We have not heard the Minister’s amendments yet, so subject to that, those are my questions.
Lord Freud
My Lords, Amendments 104A and 104B, tabled in my name, are similar in intention to an earlier suggested amendment to Clause 102. These two amendments will ensure that where a claimant’s benefit is paid to a third party, usually a landlord, recovery of any civil penalty, along with recovery of the associated benefit overpayment, may be made by making appropriate deductions from that benefit payment. Currently, there is a slight difference in the wording used by this clause and Clause 102 when specifying that amounts are recoverable. This was unintentional.
Amendments 104A and 104B remove that difference and ensure a consistent read across. This will mean that, in the limited circumstances in which the third party benefit payment is the only one from which we can make a recovery, we can ensure that whenever a civil penalty is imposed, that penalty and the benefit overpayment may both still be recovered by deduction from that benefit.
In every civil penalty case there will always be an overpayment of benefit and we intend that the civil penalty will be added to the overpayment and recovered in the same way. Being unable to recover the civil penalty in the same way as the overpayment would mean that some claimants could evade the consequences of their negligence or failures to provide accurate and timely information and unnecessarily limit the methods of recovery available for civil penalties.
We want to make it clear that the civil penalty is always recoverable from the person at fault, even if in practice the claimant’s benefit is being paid to a third party. The process for recovery of the civil penalty needs to fit appropriately with debt recovery processes. Aligning the wording in new Sections 115C and 115D with that used in Clause 102 helps us to do that.
Amendments 104AA and 104ZA seek to prohibit the setting of targets for the civil penalty and limit our ability to impose a civil penalty to cases in which there has been a failure to provide information. The noble Baroness, Lady Drake, and my noble friend Lord Skelmersdale asked about negligence. We consider that the requirement of negligence in new Section 115C already implies that there is no reasonable excuse for the failure to take care of their award or claim. However, new Section 115C(1)(b) ensures that if reasonable steps to recover the error have been taken, the penalty will not apply. I certainly understand the possible ramifications if targets were attached to a penalty such as this. It is for exactly those types of reasons that we are not attaching penalties.
Perhaps I may update the noble Baroness, Lady Drake, on the figures in the impact assessment and the number of penalties. Last week, on 22 November, a revised impact assessment was issued that reflects updated estimates relating to the new civil penalty. We are assuming that the changes based on assumed overpayments of above £65, rather than the overpayment of £15, which was part of the earlier working assumption, has led to a substantial revision, and the number of penalties that we will consider moves down to 400,000 a year. We expect to make only half of those, 200,000, which is a substantial decrease on the figures mentioned by the noble Baroness.
Baroness Hollis of Heigham
I warn the Minister that that is one of the biggest elephant traps he is setting himself in the entire Bill.
Lord Freud
My Lords, I have to make clear that we are taking powers to do this. We do not have to use them.
Lord Freud
Let me make this absolutely clear. There were concerns that we would have a kind of speed camera situation here. This is about behaviours and making sure that people pay real attention when they are filling in their forms. The actual figures—
The Countess of Mar
The noble Lord referred to new Section 115C(1)(b), which states:
“the person fails to take reasonable steps to correct the error”.
Is this after the person has been told that there is an error, or must he find out that he has made an error in order to correct it?
Lord Freud
“Negligence” and “reasonable steps” are legally bound words. There is a huge case law about what they imply. One needs not to be negligent when filling in an application and to take reasonable steps to correct mistakes. If you do not know that you have made a mistake, you cannot expect to be able to correct it. That would not be a reasonable step. However, there is a legal framework around these words. I go back to the point I was trying to make about the incentives on the system as opposed to on the individual. On the penalty rates that I gave noble Lords, we expect that the amount collected in a year, for example 2014-15, will be roughly £9 million and the cost of delivering that system of civil penalties the same figure, £9 million, so there is no incentive in the structure to have unnecessary civil penalties. That is not the point. The point is to—
Lord McKenzie of Luton
Will the noble Lord help me? Do the penalties accrue to the department or to the consolidated fund?
Lord Freud
That is as I would expect from the noble Lord. It is such a wicked question that I am baffled as to the answer. I think everyone is baffled. It is a magnificent question. It has bowled me out on my middle stump. I will have to find out the answer. I will not even hypothesise about where the different funds go. The right analogy for this is when you go to the dentist, having made an appointment, and you fail to attend. The dentist will charge you an amount in many cases in order to discourage that behaviour. When you are giving out a free good, it is very easy for the recipient to abuse it. You counterbalance that by making that somewhat expensive. When you go beyond a free good and you are giving out a positive good, that is even more the case.
Baroness Hollis of Heigham
My Lords, the point is that, on any reasonable analogy, the simpler it is for the individual to make an appropriate response such as telling the dentist they cannot come, the more reasonable it is to have a penalty if they fail to do so. The more complicated quantum of knowledge that they are expected to have about their entitlement, and therefore the easier it is to make a mistake or to have a misunderstanding, the more unreasonable it is to have a penalty. Would the noble Lord care to share with us an analogy in civil life as complex as knowledge of this Bill is for the complainant or applicant, rather than the dentist analogy?
Lord Freud
My Lords, I hope that it will be as simple as the dentist analogy. The whole point of introducing universal credit is that we get something as simple as saying yes or no with regard to your situation. The existing position is much more complicated than that. As some noble Lords will have seen when I did a presentation on the universal credit, we are trying to boil it down to simplicity. Where it is complicated, that is prima facie evidence that there is no negligence. The noble Baroness’s suggestion that we might take time to check out how the system is bedding in is not a bad one.
Lord Freud
Let us not bargain. It is not a bad suggestion. One of the things we want to do—
Baroness Meacher
The Minister said that if something is complex, you will not have negligence. Does he accept that what is complicated for one person might be not complicated for another? Certainly what is perfectly straightforward for somebody of average intelligence, for example, might be incredibly complex and difficult to follow for somebody with an IQ well below average. Is there any intention to check that sort of thing out? I know there is a later amendment on this, but it is relevant to this discussion.
Lord Freud
It is very relevant. One of the things that we are going to be monitoring as we look at the system is clusters of mistakes because, by definition, the system is not working properly where we are in that position. We will need to work this system in carefully. The noble Baroness, Lady Hollis, who is right on a lot of things, gives a warning, which is right. We cannot use this in an arbitrary way. We must have something, just as the NHS, HMRC and the train companies—I suppose everyone has boilingly paid the extra train ticket surcharge when they were on the wrong train—have systems to encourage people to comply with particular rules. It is particularly necessary where you have a system that is not even a free good. You are giving money out, so you have a positive incentive to shade a few inaccuracies without being fraudulent. We just want to keep people straight.
Baroness Hollis of Heigham
I thought it was very revealing when the Minister said the answers are yes/no. Most of these questions are binary—yes/no—but all the difficult ones, the ones people are going to appeal on, are not yes/no; they are shades of grey. When is a lone parent no longer a lone parent? Does a boyfriend stay one night, two nights or three nights? Does he contribute £20 for his weekend food or £50? Is he on the tenancy agreement? In that case, there is no question. That is a shade. It is a judgment call, not a negligence call. It is the same with the student son. It probably would not occur to parents in social housing that their son, who is at the local university and doing bar work at night, could be in the non-dependent adult deduction range. Why should they think so? It is a line, but they do not know where those lines are drawn.
The Minister is right that if somebody deliberately says, “I am not working and I want JSA”, but is actually earning £200 or £300 on the side in the building trade, that is a yes/no, but most of the issues that go to appeal—most of the difficult issues—are shades of grey, and many of us around this table would not be able to advise somebody. I really do not see how the client could possibly judge whether it was appropriate to tell the department or not.
Lord Freud
I do not think that we disagree on this. It would not be reasonable where there is clearly a lot of grey in the assessment, and I do not think a court in the land would allow us to say that someone was being negligent. That is not what negligence means. Negligence means not caring at all and just slamming down the wrong information or having information that you did not bother to put down. That is negligence. Getting something wrong on shades or “It didn’t occur to me” are not negligence and would not be construed as negligence in any court in the land. A lot of this is concern about things that the language does not support.
Lord Touhig
In my experience over years in the other place of dealing with cases in which people had been overpaid and the department sought to reclaim money, the department always took the line that the claimant was at fault and had been negligent. If we do not get away from that, we are storing up a huge problem. The line of the department has been that it is the fault of the claimant who has deliberately got this wrong, is in the wrong and therefore must repay some benefit they have had.
Lord Freud
I do not think that that is what is happening with overpayments, which are a separate category from these civil penalties. On overpayments, the department has taken the view that if people have received money they were not entitled to, that money should come back to the department, and there is no fault or blame attached in that requirement, so it is quite different from the civil penalty.
Baroness Lister of Burtersett
Is that also the case with any other penalty, not just the civil penalty? Is it a benefits sanction?
Lord Freud
We absolutely will not do that. The noble Baroness drew a comparison with current levels of JSA usage. The online facility that we offer claimants is so markedly inferior that people would not want to use it. We need to make sure that people will want to use the online provision, and we are taking a lot of active steps to look at how to encourage and help people to use it. Indeed, this is one of the discussions that I am currently having with the various groups and charities that are trying to get the most disadvantaged in society online, because that is one way in which they become a full part of the economic life of the country, and indeed of the whole life of the country. They and I see that this could be an immensely powerful force for getting that inclusion. As I said, we will work very hard to encourage people to use it. One does not encourage people to do something that could be life-transforming for them through some of the things which the noble Baroness suggests I might be doing.
The aim of the civil penalty is to reinforce the importance to claimants of providing accurate information that we require in order to administer their claims and awards in advising us when they have a change of circumstance. It is a different issue when someone does something knowingly. That is fraudulent, and we will target that behaviour by looking at tougher punishments than the one for missing a dental appointment—I had better not talk about my teeth. We want claimants to take more responsibility for overpayments and to encourage a positive change in claimants’ future behaviour so that they take proper care of their benefit claims and awards.
The noble Baroness, Lady Drake, made an important point about mental health. We will take that into account. Indeed, that is why we require the claimant to have acted negligently and to have no reasonable excuse. The department must satisfy itself that the claimant has failed to take appropriate care. Each case will be considered individually by the decision-maker, and the penalty will not be imposed if a claimant’s state of health or mental health is considered relevant to the error that has been made.
Amendment 147ZA would mean that a civil penalty could be imposed only on those who failed to notify us of changes of circumstances and the failure resulted in an overpayment, while a claimant who incurred an overpayment by virtue of their negligence and who failed to take reasonable steps to correct the error would evade a penalty. We already help claimants in Jobcentre Plus and, as I have said, we will reinforce that. We believe that everyone should take responsibility for the accuracy of the information they provide in order to receive a benefit, whether that be at the start of their claim or during the life of their claim when there has been a change of circumstances.
As for the question asked by the noble Baroness, Lady Drake, on legal aid, information on benefits and the conditions of entitlement for them is readily available to the general public. If claimants remain uncertain of which benefit is most applicable to them or have a question about their benefit entitlement, they can and should seek further advice from the department. New Sections 115C and 115D will therefore act together to remind claimants that it is just as important that they correctly report their circumstances at the start of the claim as well as report changes that occur within the life of a claim.
I will aim to answer the remaining three questions, having been bowled out on the fourth. On the ability of local authorities to impose fines, we consulted local authorities on the detail of the initiatives in the strategy and on our plans to implement them. Local authorities have provided input to the various projects that we have set up to implement the strategy. We have local authority staff collocated with the DWP and working on the strategy. That includes the sanctions and penalties project, which is doing the work on civil penalties. We will support local authorities in their work to implement the new penalty, which will include providing clear instruction and guidance on how to operate the new scheme. On the £50—
Baroness Hollis of Heigham
Perhaps that would not work. For example, in two side-by-side authorities, a family with two siblings lives with one sibling in each borough. One local authority may decide to exempt in such cases. They have to make 10 per cent cuts and are required to exempt pensioners, which would make 30 per cent cuts. One local authority decides to exempt disabled people all together, so they would have nil. The other does not and the matter is worked out on income. In that situation, how will two disabled siblings who live in two side-by-side boroughs work that out? How will the local authority work out what they should declare, what they should not and what the appropriate penalty could be? It is a complete minefield.
Lord Freud
Clearly, there are always difficult and special cases. I suspect that an old lady would not be eliminated entirely. The answer is that there is support for people with particularly tricky circumstances. We will work with local authorities that will be collocated in many cases, especially with the single fraud operation being set up. The shades of grey, which will start to rule out negligence, will be very evident in most of those cases.
In justification of the £50, that sum was chosen because we believe that this is a sufficient amount that will act as a punishment and make claimants more personally responsible for the overpayments they incur and encourage a positive change in their future behaviour. We have also set a significantly lower amount than the harsher punishments available for fraud offences, which reflects the fact that it is directed at the failure to take proper care of a benefit award and is not about fraudulent behaviour. Under the appeal process, the claimant will be able to appeal against the overpayments decisions, the civil penalty or both.
For those reasons, I urge noble Lords to reject Amendments 104AA and 104ZA.
Baroness Drake
I thank the Minister. Perhaps I may address some of the points that he raised because I still feel deeply concerned. I probably have slightly more concerns now than I did previously. I do not say that provocatively and I will try to say why. First, it should be made clear that this is a civil penalty that does not deal with fraud issues. There are separate clauses for that. The stated purpose of this civil penalty is to improve people’s behaviour in the accuracy of their form-filling. The concept of introducing the civil penalty worries me, particularly for a community of people with a greater concentration of the vulnerable and lower levels of numeracy and literacy, and when we are taking this means of a civil penalty to address behaviours, some of which are systemic and cannot be dealt with simply by handing out civil penalties here, there and everywhere—notwithstanding that the Minister said that that is not the intention.
The Minister said that Clause 113 goes on to say that there will be no penalty if you take reasonable steps to correct the error, but the point is that someone cannot take reasonable steps to correct an error if he does not know that he has made it. That is the problem. Someone could face the civil penalty before having the chance to put it right because he does not know that he has done something wrong. A concentration of people will be increasingly in the category of not knowing that they have made the error when filling out the form.
The Minister also said that I should not be worried about how the powers will be deployed, but he gave me one of the reasons why I am concerned. Quite rightly, and I do not disagree with him, he said that a civil penalty always comes at the same time as recovering an overpayment. If you issue a civil penalty, you have confirmed that there is an error, so it must follow that there is the recovery of an overpayment. If ever an incentive were articulated, that is it. You do not have to exercise discretion on overpayments; the awarding of a simple penalty puts you straight into going for that overpayment. No other considerations come into play. You make the easier decision to award a civil penalty because you do not then have to make the more complex decision about how to apply a discretion to an overpayment.
Lord Freud
My Lords, let me make this absolutely clear. It is the other way round. You can charge a civil penalty only when there has been an overpayment and you would not necessarily charge a civil penalty when there was an overpayment unless you associated that overpayment with negligence.
Baroness Drake
That is my point. If civil penalties and overpayments are inextricably linked, you would not award a civil penalty unless there had been an overpayment. You can almost produce an incentive to put something into the category of an error attracting a civil penalty because it makes it easier to justify chasing the overpayment.
Lord Freud
My Lords, I must make this absolutely clear—it is my third go at this. An overpayment happens when someone is paid something they should not have been paid. A civil penalty will be charged only when there is both negligence and an overpayment. I forget the logical post hoc, or whatever. We need to get it round the right way.
The Countess of Mar
Let me get this absolutely clear. The department finds that there has been an error. Does it then tell the claimant that there has been an error, who says, “Oh dear, I’ll put it right”, and that is it, or does the department say straightaway that it is negligence? Is there a step in the middle when it goes to the claimant?
Lord Freud
My Lords, in practice it will depend very much on the circumstances. Clearly, if one had a blanket rule it would be possible every time an error was uncovered to say, “Oh, just a mistake, I’ll put it right”, or, “It was negligence”. There will have to be occasions when it is pretty clear that there was genuine negligence. That will be testable and appealable on a set of definitions around what is negligent.
Baroness Drake
I am still not persuaded. I will stay with my point; I still remain concerned about targets. The Minister says that he has turned his back on targets. I accept that, but his assurance does not bind future Secretaries of State, who may not turn their backs on targets. Once this provision is in the legislation it is there for future Ministers and Secretaries of State to use.
I come back to the point that one cannot take reasonable steps to deal with an error unless one knows that one has made an error. This is the weakness with the example of the dentist appointment. With that example, you know that you have an appointment and therefore are in trouble for failing to meet that appointment. You do not necessarily understand, comprehend or know that you have made an error, or you may not necessarily have intended to make an error, in the form that you have filled in.
The Minister says that the Government have amended their figures by raising from £15 to £65 the level at which overpayment action would be triggered and that the number of penalties has been moved down to 400,000. I still think that that is a very large number. The Minister expects that penalties will apply to only half that number—to 200,000. I still think that that is quite a large number. That is his expectation, but once that power is awarded who knows what the figures will become, how the guidance in the department will be enacted and what the resultant figures may be? I do not think that noble Lords can be asked to express their approval or otherwise of a clause in a piece of legislation simply on the expectation of how a Minister would choose to deploy that power. One has to stand back and ask what the power is that the Government are taking to themselves. I am still left with concerns.
The Minister said that the Bill provides the powers but that you do not have to use them. That is not a compelling argument for not worrying about this clause. I am no lawyer, but I thought that one of the points of having rational legislation is that it protects the citizen against irrational political behaviour. An argument based on a disposition to use or not use a power at any particular time by a given set of Ministers does not really address the merits of whether there should be such a clause in the Bill.
The other issue is the £50 itself. The impact assessment says that,
“a £50 flat rate was determined as an appropriate starting point for benefit claimants to encourage better care of their claim”.
As that says, it is a starting point. Who knows how, over time, that level of penalty will evolve?
The Minister made the point that there will not be a scattergun approach to the civil penalty but that there will be clusters of mistakes on which the focus will be. That is good. If there are clusters of mistakes, it sounds dreadfully efficient to concentrate on them, but that is no reason for introducing a civil penalty; it is a reason for looking at managerial action or process or procedure, or focusing resources to address those clusters. Simply saying that every benefit claimant who does not fill out their form properly will now be subjected to the potential powers of a civil penalty seems a slightly over-the-top response to dealing with clusters of mistakes.
With all due respect, we have clusters of errors by the department and by local authorities. There are significant errors. I cannot believe that there would in the same way be penalties on staff who make those errors, and I would be completely opposed to that too. Errors often occur in the system for systemic reasons. That is different from fraud or from somebody knowingly tweaking their form or deliberately filling it in incorrectly in order to tip the benefit advantage in their favour.
Lord Touhig
Could my noble friend say—perhaps in response to the Minister’s answer to the noble Countess, Lady Mar, when he said that it would depend upon the circumstances, and following on the point just made by my noble friend—whether she thinks it would be helpful if the Minister, before Report, could provide us with the number of cases in which the department has accepted that an overpayment has been its fault and has not pursued it, and the number of occasions on which it has found that it has been the client’s fault and pursued that?
Baroness Hollis of Heigham
I think that the power exists for tax credits but not for other benefits. At a briefing session, I asked one of the Minister’s officials— I shall not land that person in it—how often it had been used. Their answer was that they were not absolutely sure. I asked whether it was 20 or 2,000 times. Nearer 20, came the reply—in which case, I wonder where that figure of 200,000 would come from and whether it suggests that a lack of clarity is expected in the forms rather than negligence on the part of the people filling them in.
Lord Freud
Let me quickly pick up three issues. First, when I talked about clusters, I meant that, where there are clusters and mistakes, something is clearly going wrong with the way in which we are presenting universal credit. In those circumstances, we would look very hard at fixing that problem and we would not be able to accuse anyone of negligence.
Secondly, I shall look very closely at the run-in to operating the universal credit system. I agree with the noble Baroness, Lady Hollis, on lots of things. She is absolutely right that we cannot have a system that demonstrates problems in its run-in phase.
Thirdly, on targets, I need to write to noble Lords. I would not mind forbidding the DWP from ever using those targets in that way—and I could offer it as a deal any day—but a future Government might not want to be so constrained.
Baroness Lister of Burtersett
I thank the Minister for his clarification about clusters. How many £50 fines would there need to be before there was a cluster? If it was then accepted in the department that the problem lay in universal credit or in the way in which the form was designed, would the department then consider paying back any £50 fine?
Lord Freud
No, I meant a cluster of mistakes. When we begin to see a cluster of mistakes around a particular set of questions, it clearly means that we have not got it right and need to do something about it. But we will know very fast.
Baroness Lister of Burtersett
I accept and quite understand that, but the point is that, before the department realises that there is a cluster, a number of people might have been fined.
Lord Freud
My Lords, I buy the point about the delicacy of the run-in. I have a tool with which to monitor it very carefully. However, we must have a system that tells people that they must take care with their application. This is an application on which tens or hundreds of thousands of pounds are riding. It is no good people just putting in slapdash figures and not caring; this is really important information and it must be put down carefully. That is what we are trying to ensure with this relatively modest civil penalty.
Lord McKenzie of Luton
My Lords, I am very happy for the Minister to write to us on this rather than to spend more time today, because we need to make progress. This is about the practicalities. He has already indicated that the system could cost £9 million a year to operate. If a local authority seeks to collect both an overpayment and a penalty, the overpayment presumably reverts to the local authority. We do not know whether the penalty reverts to the Consolidated Fund or the DWP, but I presume that it is not to the local authority. The Minister will see that, in those circumstances, which may be quite common, one needs rules about how what is collected in respect of the two components is allocated between them. That presumably creates some administrative costs as well.
Baroness Drake
On the clusters point, clusters will presumably arise by type of error or a particular demographic of those filling in the form erroneously. I come back to my point that that issue should be dealt with not by civil penalties but by taking a more focused look at how one deals with those types of problem. I welcome the Minister saying that he is absolutely for the forbidding of targets. As to whether a future Government would be so constrained, no doubt noble Lords can argue with a future Government if they want them to be so constrained. We are trying to constrain this Government, so I certainly welcome any offers to constrain the way in which this civil penalty is used, although my preference is for it not to be there. I worry about the concept of a civil penalty and its deployment in the community of people whom we are discussing.
Finally, the Minister said that information is readily available, but you need to be able to understand it. No doubt he would say that if you do not understand it you should seek further advice from the department. However, I come back to the issues around the numeracy and literacy skills of this community of claimants. My point is that a new system of civil penalties is coming in. This partly goes to the point that my noble friend Lady Hollis made about trying to run a system of civil penalties when a new system is coming in. There will be less opportunity to find the people who this community of people normally approaches for support and help in filling out their forms because legal aid support through the advice system will not be there. We know that the local authority service will be run down, given the way in which benefits will be dealt with. We know that Jobcentre Plus venues are closing, and the jury is out as to how efficient a call centre system can be—certainly in the first few years—in supporting some of the vulnerable claimants who could be caught by erroneously filling out their forms. I beg leave to withdraw my amendment.
Lord Freud
“(4) A penalty imposed under subsection (2) is recoverable by the appropriate authority from the person on whom it is imposed.”
Lord Freud
“(4) A penalty imposed under subsection (1) or (2) is recoverable by the appropriate authority from the person on whom it is imposed.”
Lord Freud
“(2) In section 190 of that Act (parliamentary control of orders and regulations), in subsection (1), before paragraph (za) insert—
“(zzb) regulations under section 115C(2) or 115D(1) or (2);”.”
Lord Ramsbotham
“Means inquiry before sanctions, penalties and recovery of overpayments are imposed
(1) In respect of the imposition of an overpayment or sanction under the Jobseekers Act 1995 or any other provision or in the case of a penalty imposed under section 115C of the Social Security Administration Act 1992, the Secretary of State shall consider—
(a) evidence of the physical condition of the claimant and his or her state of health;(b) evidence of the psychological state of health of the claimant;(c) evidence relating to the means and income of the claimant;(d) evidence relating to the accommodation occupied by the claimant and the effect that the imposition of a sanction or penalty may have on the right to occupy such accommodation;(e) the family circumstances of the claimant and the impact that it may have on other family members and dependants;(f) evidence of the impact that a sanction or penalty may have on the ability of the claimant to fulfil obligations to third parties including those relating to the fulfilment of benefit entitlement conditions,before deciding whether to impose a sanction or penalty and shall only do so where, having considered all the relevant circumstances, it is reasonable to do so.(2) Regarding evidence as to means the Secretary of State must consider—
(a) the income of the claimant;(b) the capital of the claimant;(c) the expenditure of the claimant.(3) In order to facilitate the enquiry into the matters set out in subsection (1), the Secretary of State or authority may—
(a) arrange for a medical examination of the claimant;(b) obtain information from any agency holding relevant information on the income and resources of the claimant;(c) receive evidence from any other person or persons with a knowledge of the circumstances of the claimant.(4) A person who is subject to a penalty may appeal to a tribunal (lower tier) against the imposition of such a penalty.”
Lord Ramsbotham
My Lords, in many respects this amendment, which stems from the Zacchaeus 2000 Trust and 16 other organisations and groups, including Mind, Save the Children and the Church of England bishops, is complementary to the amendment in the name of the noble Baroness, Lady Drake, and the subsequent debate that we have just had. Its purpose is to propose that the duty on officials responsible for making decisions on sanctions or penalties against benefit claimants, or the enforcement of overpayment recovery, takes into account the facts and circumstances of the claimants in each case, and that that duty should be in the Bill. My list of what that evidence-gathering might include may seem long, but the facts and circumstances are as many and varied as the lives of the claimants themselves.
Baroness Lister of Burtersett
My Lords, I have happily added my name to this amendment because I think it is very important. The noble Lord, Lord Ramsbotham, has moved it so ably that I wish to make only one point.
The Minister constantly evokes responsibility on the part of claimants and, similarly, everything that is written about the Bill emphasises the responsibility of claimants. The amendment would help to ensure that officials exercise their powers in a responsible manner. There needs to be a quality in the contract between claimants and officials. I am not suggesting that officials should be fined or receive a civil penalty if they get it wrong. However, the amendment would help to ensure that officials consider the impact on living standards and the knock-on effects of likely debt and exercise their power as responsibly as possible.
Lord Mackay of Clashfern
My Lords, there is, in my view, a principled reason for having something of this kind. However, I am not sure whether the noble Lord has necessarily got it right and obviously he wishes to discuss the detail with the Minister and his officials. For instance, I wonder whether the amendment would have caught the two examples that he gave. Subsection (1)(f) states that the Secretary of State shall consider,
“evidence of the impact that a sanction or penalty may have on the ability of the claimant to fulfil obligations to third parties including those relating to the fulfilment of benefit entitlement conditions”.
We are saying that before imposing a sanction you should ascertain whether the obligations to third parties,
“including those relating to the fulfilment of benefit entitlement conditions”,
prevented the attendance or whatever it was that is being sanctioned. It is not the sanction that does it; it is the fact that the sanction should not be imposed because of the obligations the claimant already had.
Baroness Sherlock
My Lords, I would like to add just one point for the Minister to think about in his response. The noble Lord, Lord Ramsbotham, made a very powerful case. If the Minister does not like this way of doing things, could he help the Committee to understand how he can guarantee that his officials will undertake what seem to me to be the eminently reasonable strictures contained within the clause? If this is not the way, then what is?
Amendments moved by the noble Lord, Lord Kirkwood, and others in Committee have drawn the attention of the Committee to the fact that many of the people who will be receiving this benefit are living on the breadline. They are living on incomes which are so tight that what may seem to be relatively small sanctions can tip somebody into misery, as the classics will tell us. Could the Minister therefore consider how we in this Committee and in the House can have the confidence that nobody in that situation will be plunged potentially into despair by having a sanction applied without due consideration being taken of the impact on their physical and mental health, and indeed on the well-being of any children in their family, as described by the noble Lord, Lord Ramsbotham?
Lord McKenzie of Luton
My Lords, as has been said by my noble friend Lady Sherlock, the noble Lord, Lord Ramsbotham, has made a powerful case in principle. Like the noble and learned Lord, Lord Mackay, I am not quite sure that the formulation set down here is quite right, as it lumps together sanctions, penalties and recovery of overpayments, and there might be arguments for unpicking those. It would be helpful, in any event, if, following this debate, we could have in writing a note as to what information decision-makers would routinely have in front of them when they make the decision with regard to each of those various categories. That would help us as we move to Report.
We debated issues around the claimant commitment earlier, as has been said. My noble friend Lady Lister made the important point again about that being more about co-production rather than something that is delivered and given to the claimant. That is an important point. As my noble friend Lady Sherlock said, we are dealing with people whose resources are, almost by definition, incredibly stretched. In many cases they are on the edge. If we are going to further reduce the means that they have, then we ought to be very clear that we do that in the knowledge of all of the circumstances and the impact on their well-being.
Lord Freud
My Lords, I agree that it is right and proper that a decision-maker gives full consideration to all the relevant facts provided by a claimant when deciding whether to impose a sanction or penalty. It is also important that claimants have appeal rights when sanctions and penalties are imposed. I believe that the amendments are unnecessary because we have adequate protections in place, but I am very happy to meet the noble Lord on this matter. Let us go through it, because it is important that we get it right.
The essential difference between us—although, as the noble Lord, Lord McKenzie pointed out, we need to tease out three different things here—is that the noble Lord, Lord Ramsbotham, is looking for a specific process, whereas we are aiming, in the legal framework as it stands, at a general process of cover. The noble Lord will be aware that, if you have a whole load of specific things, you have a problem when you get the special case that is not covered, whereas if you have a general protection you are covered. I think there is a fruitful discussion to be had around that, and I would welcome a discussion to see that we have the right protections because, again, I do not think there is a huge difference between us here. We want to have the right protections for a vulnerable group. We do not want arbitrary behaviour; we want common sense. It is just a question of looking through. I will circulate the note on this matter to the noble Lord, Lord McKenzie, as well.
We are training decision-makers on a number of areas: retaining impartiality; identifying what constitutes evidence and where the burden of proof lies; on the concept of the balance of probabilities; and on an understanding of social security law. It is vital that we do this.
Baroness Hollis of Heigham
I trust this information is reliable, but in today’s press there were quite a lot of stories about how long appeals are taking and that the department—or, rather, following Leggatt, the tribunals system—is having to appoint a further 85 judges to sit on appeals tribunals because of the backlog, which is up to 12 months. Can I have an assurance—I am sure that this must be the case—that, while waiting for an appeal, no interest is ticking up on sanctions, penalties, overpayments or anything like that?
Secondly, checking with the law on tax credit as opposed to what may be the case on UC, I think that nearly all the difficulties with tax credits were not at the initial point of claim but were changes of circumstance and nearly all of them were associated with childcare changes. Half of all lone parents had more than a dozen changes of circumstances in a year, the system never caught up with itself and the computer nearly toppled. How is this going to work in this situation? People’s childcare circumstances inevitably change over half-term, a Baker day, Easter and Whitsun. By the time you keep reporting them or not reporting them—or feeling that you do not need to report them because there has been no reply to the previous report—you could be in a complete mess. I do not see how the Minister is going to manage this.
Lord Freud
The answer to the first question is that interest is not ticking.
On the second question, I share the noble Baroness’s concern about how the present childcare system works on reporting, which is why we are producing an entirely new system with a monthly report and a monthly payment system. Basically, how the system will work is that you put in the receipt for what you have paid, and then that payment is repaid on a monthly basis. The problem presented by a change of circumstances will go. Roughly 15 per cent of problems are caused at the initial stage of the original application. It does not seem sensible to privilege one set of mistakes against another when it is a reasonably substantial proportion.
I am very happy to meet the noble Lord, Lord Ramsbotham, to go through these issues in some detail, because I share his and other noble Lords’ concern that we get this right.
Lord McKenzie of Luton
My Lords, if the noble Lord, Lord Ramsbotham, agrees, might we join in with those discussions or reflections?
Lord Freud
I would be utterly delighted to invite noble Lords, but not too many. Perhaps the noble Lord, Lord Ramsbotham, will give permission for the Official Opposition team to join him. If he does, I would be delighted to see you all.
Lord Kirkwood of Kirkhope
If there are invitations floating around, could I add my name to the list? Two things worry me that we have not touched on. I support the amendment. I do not think that any of us really understands the full consequences of localism as it is finally rolled out. In terms of the public purse as generally described, if we do not have sensible means inquiries within the DWP provisions, we may just be handing on costs, charges and families in distress to our local government colleagues. That does not take us very far.
Another obvious point is that the legal aid changes that are coming are very worrying. If we look at some of the wider context in any such meeting, that would be extremely valuable, too.
Lord Brooke of Sutton Mandeville
My Lords, I reassure my noble friend the Minister that I am not asking to come to this meeting, but, as somebody who has sat through long hours in Grand Committee, I would diffidently make the suggestion that both matters might be treated at the same meeting.
Lord Freud
Yes, my Lords. I think, actually, I withdraw my offer of a meeting, because, given the level of interest, it is probably not appropriate. We should rather have a little seminar where the noble Lord, Lord Ramsbotham, is the leader, but I must welcome anyone who wants to attend that, because it does not make much sense to be too exclusive. Does that suit? Let us sit down and see whether there are any cracks in this, as some noble Lords are concerned about.
Baroness Hollis of Heigham
Sorry, if somebody puts the same information into their applications for universal credit and for localised council tax and the information is negligent or erroneous, though not fraudulent in both cases, are they exposed to two penalties?
Baroness Hollis of Heigham
Then who will get the money? Will it be the local authority or the department?
Lord Freud
When I have worked out the various recipients to the main fund and written, I will let the noble Baroness have a copy of the letter that I send to the noble Lord, Lord McKenzie.
Lord Ramsbotham
My Lords, I was not quite certain what we were going to end up with after all that. I was very grateful to the noble Lord, Lord McKenzie, for pre-empting me in suggesting that others should come to that meeting, not just those who put their names to the amendment but also those who have spoken, because I suspect that there is quite a lot to be done. I think that it might be sensible also to include some of the groups that approached me in the formulation of the amendment to hear from them on the ground as they have a great deal to contribute. I found it encouraging that the Minister agreed that this was an issue that really has to be tackled so we all start from a common ground.
As always, I am grateful for the wisdom of the noble and learned Lord, Lord Mackay. I absolutely accept what he says and indeed, I have looked at this process in Grand Committee as being a way of refining what we were saying. It was getting something done that needs refining, which I saw as the purpose of the Grand Committee. I entirely take the Minister’s idea that we take this on with a seminar. It is too important an issue not to be explored in detail. The noble Lord, Lord Kirkwood, has introduced the issue of localism, and so on, so there are other issues, as well as the Legal Aid, Sentencing and Punishment of Offenders Bill on the impact on legal aid and access to justice, which should all be taken into account. On that basis, and in thanking everyone who has taken part, I beg leave to withdraw the amendment.
Lord De Mauley
“Information-sharing between Secretary of State and DPP
(1) The Secretary of State may supply social security information to a person specified in subsection (2) for use for a purpose specified in subsection (3).
(2) The persons referred to in subsection (1) are—
(a) the Director of Public Prosecutions;(b) a person appointed under section 5 of the Prosecution of Offences Act 1985 (conduct of prosecutions on behalf of Crown Prosecution Service). (3) The purposes referred to in subsection (1) are—
(a) the institution or conduct of criminal proceedings which relate wholly or partly to social security matters;(b) the giving of advice to any person on any matter relating to criminal proceedings, or criminal offences, which relate wholly or partly to social security matters;(c) the exercise in relation to social security matters of functions assigned to the Director of Public Prosecutions under section 3(2)(g) of the Prosecution of Offences Act 1985;(d) the exercise of functions of the Director of Public Prosecutions under Part 2, 5 or 8 of the Proceeds of Crime Act 2002.(4) The reference in subsection (1) to the Secretary of State includes a person providing services to the Secretary of State.
(5) This section does not limit the circumstances in which information may be supplied apart from this section.
(6) In this section—
“social security information” means information held for the purposes of any of the Secretary of State’s functions relating to social security matters;
“social security matters” means—
(a) social security (including the payments and allowances referred to in section 124(8)), (b) tax credits, and(c) schemes and arrangements under section 2 of the Employment and Training Act 1973.”
Lord De Mauley
My Lords, this group of amendments deals with the sharing of data between the DWP and the Crown Prosecution Service on the one hand and the DWP and local authorities on the other. They build on the good practice and precedent that has been developed in the department and debated regularly by your Lordships to ensure that DWP information is used and reused efficiently, effectively, legally and securely.
Amendments 107A, 107B and 118A relate to data sharing between the DWP and the CPS and set out the legal basis for sharing information with the CPS in order for it to prosecute social security fraud. They also set out the manner in which the CPS can use that information. The DWP fraud and error strategy was published in October 2010 and the single fraud investigation service originated from that strategy. This will have two effects. First, it will bring together all elements of local authority, DWP and HMRC fraudulent benefit investigations. Secondly, it will result in an increase in the amount of DWP prosecutions handled within DWP’s prosecution division. This increase in the number of cases to be dealt with, the need for us to react flexibly to new requirements emerging from new social security benefits and provisions, and the emergence of the single service have led our prosecution division to review its capability. This in turn has led to the conclusion that the service would be provided more effectively if it were to be transferred to the Crown Prosecution Service.
Specifically, there are three data-sharing amendments that relate to this. Amendment 107A sets out what information may be shared and what restrictions will apply to the CPS when using that information. Amendment 107B places the same onus on CPS staff as exists for all DWP employees when handling personal data and imposes a penalty clause that may be invoked in cases of unlawful disclosure. Amendment 118A deals with the extent of the legislation in that the CPS operates only in England and Wales, so these provisions are not being extended to cover cases dealt with by the prosecuting authorities in Scotland and Northern Ireland.
Examples of the information that will be exchanged between the DWP and the CPS include files for consideration for prosecution and the execution of those duties. However, the DWP has a very wide range of legal requirements that relate to investigating and prosecuting fraudulent offences. To bridge the information gap that arises because the work was previously wholly contained within the DWP, the staff currently employed in the department’s prosecution division will be redeployed into the CPS. I assure your Lordships of our continuing commitment to handling personal information with the same level of protection that is currently standard within DWP.
Baroness Hayter of Kentish Town
My Lords, I thank the noble Lord, Lord De Mauley, for moving the amendment. It is never quite as welcome as his normal Motion, which is that we should have a tea break.
There is nothing between us on the amendments. As the Minister said, and as was contained in the helpful note issued by the DWP, it is anticipated that the volume of cases that the DWP wishes to prosecute will substantially increase. What additional resources are being committed, first, to the CPS to enable it to deal with the substantial increase in prosecutions; and, secondly, to advice agencies, which will inevitably face an increase in demand as claimants seek to understand why they are being prosecuted and what their rights are in this area? Given the absence of legal aid in future for many such cases, as we have already heard today, such generic funding will be vital.
As the Minister said, the second group of amendments relate to information-sharing between the Government and local authorities and sensibly use the generic term rather than the specific ones for each particular benefit. However, can the Minister clarify whether there are any duties on local authorities to share information in the other direction—that is, with the department—because, as we have seen and has been mentioned again in the case of the benefit cap, understanding the amount of help with council tax that the claimant is receiving may be critical to ensuring that the system proposed can be made to work.
Lord De Mauley
I am grateful to the noble Baroness for her questions. In order to hasten things, may I write to her with answers to those questions?
Baroness Hollis of Heigham
Is it not the case that local authorities and the department very sensibly share information on the ATLAS project and therefore that this would follow from that?
Lord De Mauley
I am grateful to the noble Baroness. I think I will include that in the written answer.
Lord Freud
“Unlawful disclosure of information supplied to DPP
(1) A person to whom information is supplied under section (Information-sharing between Secretary of State and DPP), or an employee or former employee of such a person, may not disclose the information if it relates to a particular person.
(2) Subsection (1) does not apply to—
(a) a disclosure of a summary or collection of information so framed as not to enable information relating to any particular person to be ascertained from it; (b) a disclosure made for the purposes of a function of the Director of Public Prosecutions, where the disclosure does not contravene any restriction imposed by the Director;(c) a disclosure made to the Secretary of State, or a person providing services to the Secretary of State, for the purposes of the exercise of functions relating to social security matters (within the meaning of section (Information-sharing between Secretary of State and DPP));(d) a disclosure made for the purposes of a criminal investigation or criminal proceedings (whether or not in the United Kingdom);(e) a disclosure made for the purposes of—(i) the exercise of any functions of the prosecutor under Parts 2, 3 and 4 of the Proceeds of Crime Act 2002;(ii) the exercise of any functions of the Serious Organised Crime Agency under that Act;(iii) the exercise of any functions of the Director of the Serious Fraud Office, the Director of Public Prosecutions for Northern Ireland or the Scottish Ministers under, or in relation to, Part 5 or 8 of that Act;(iv) investigations or proceedings outside the United Kingdom which have led or may lead to the making of an external order within the meaning of section 447 of that Act;(f) a disclosure made to a person exercising public functions of law enforcement for the purposes of the exercise of those functions in civil proceedings;(g) a disclosure which in the opinion of the Director of Public Prosecutions is desirable for the purpose of safeguarding national security;(h) a disclosure made in pursuance of an order of a court;(i) a disclosure made with the consent of each person to whom the information relates.(3) Subsection (1) does not apply in relation to information relating to schemes and arrangements under section 2 of the Employment and Training Act 1973.
(4) Subsection (1) is subject to any other Act or to an instrument made under an Act.
(5) A person who contravenes subsection (1) commits an offence.
(6) It is a defence for a person charged with an offence under this section of disclosing information to prove that he or she reasonably believed—
(a) that the disclosure was lawful, or(b) that the information had already and lawfully been made available to the public.(7) A person guilty of an offence under this section is liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or a fine or both, or(b) on summary conviction, to imprisonment for a term not exceeding twelve months or a fine not exceeding the statutory maximum or both.(8) A prosecution for an offence under this section may be instituted only with the consent of the Director of Public Prosecutions.
(9) In relation to an offence under this section committed before the commencement of section 154(1) of the Criminal Justice Act 2003 (increase in maximum term that may be imposed on summary conviction of offence triable either way), the reference in subsection (7)(b) to twelve months shall have effect as if it were a reference to six months.”
Lord Freud
““relevant information” means information relating to—(a) any relevant social security benefit, or(b) welfare services;“relevant social security benefit” has the meaning given in section 121DA(7) of the Social Security Administration Act 1992;”
““welfare services” includes services which provide accommodation, support, assistance, advice or counselling to individuals with particular needs, and for these purposes “assistance” includes assistance by means of a grant or loan or the provision of goods or services.”
Lord De Mauley
Lord Kirkwood of Kirkhope
“Social Security Advisory Committee
In section 173(5)(a) of the Social Security Administration Act 1992 for “coming into force of the enactment under which those regulations are made” substitute “enactment under which those regulations are made receiving Royal Assent”.”
Lord Kirkwood of Kirkhope
My Lords, this amendment is tabled in my name and that of my noble friend Lady Thomas of Winchester. I think I can dispatch this with as much speed as possible. It is an important probing amendment to try to persuade the Government to clarify the position of the Social Security Advisory Committee beyond doubt in the context of this Bill.
As we all know, the Social Security Advisory Committee sheds light on some of the more obscure regulations and regulatory powers that flow from primary legislation and has an important additional duty to give advice and assistance to the Secretary of State. I know that the noble Lord, Lord Freud, who I think is the responsible Minister, is very careful in his duty to the Social Security Advisory Committee, which is welcome. It is welcome as far as the committee is concerned as well.
After Royal Assent, there is a process that has been going on for some time. Members of the Social Security Advisory Committee—they are technical experts, in the main—can self-refer pieces of secondary legislation where they feel there is an important point to make, to explore or to advise Parliament of. They sift every statutory instrument, and they use their discretion to self-refer. It all works rather well. As far as I can recall, until the Social Security Administration Act 1992 primary social security statutes were much more expansive and descriptive and most had their own time limit at which the Social Security Advisory Committee could take charge of regulations and self-refer. It was usually after a period of something like six months, but sometimes different statutes made different arrangements.
After 1992, there was an understanding that six months was the most appropriate period because Parliament could in theory be considered to have introduced all the salient facts, discussed them and come to conclusions that would not change much in six months. I think things have changed since then, because we are now dealing with skeletal primary statutes. This Bill is no exception. There must be up to 200 regulations in here. In the past we have seen some regulations being scrutinised by the Social Security Advisory Committee only after six months of the implementation of the provisions in the individual clauses.
This is a probing amendment. I hope that the Government will go away and think carefully about this. In this Bill in particular, because it is a significant change of direction, regulations will start pouring out of the department, so we will have many hours of happy discussions downstairs in secondary instrument debates almost as soon as this Bill gets Royal Assent. I want to be clear about exactly where the SSAC fits into the future of that. The implementation of the Bill and the rollout of provisions will, in any case, take a long while, so circumstances could change quite dramatically not just financially but socially, culturally and in others ways as well. I for one would feel safer if we had an assurance—even if it was in the Bill—that there was no doubt in anyone’s mind that, six months after Royal Assent and when the ink was dry after Her Majesty’s pen had scraped the official signature— if that is what happens these days—across the goatskin, the Social Security Advisory Committee would immediately thereafter have access to the regulation-making power that flowed from the universal credit and all the other provisions in this particular legislation.
Obvious questions flow from that. Does the SSAC have the discretion, authority or interest in picking what regulations to concentrate on? Speaking for myself, I trust its judgment in doing that. If, for every 10 secondary instruments that it looked at, it said that Parliament should look at two, I would be absolutely content to leave it to make that decision and use its discretion in that way. That is based on years of working with the committee and being confident that its members know what they are doing and have regard to the public interest, as well as having the depth and knowledge of experience that they have arrived at over many years. I can give colleagues comfort that they could do that properly.
I am not even going to ask for more resources. I would like to, but in these straitened times it would be hard to say that as we could double the workload we need to double the staff. I am not saying that. I am asking for clarity about when its remit commences. I think that we will all need help in trying to understand. I know that the Minister has done his best to provide the Committee with draft regulations as soon as they become available, but there are still huge gaps. We are taking a lot on trust. As legislators, we could feel more confident that we were on top of what was being done in Parliament if the Social Security Advisory Committee had unfettered access to discretionary self-referral of statutory instruments after six months after Royal Assent. I beg to move.
Baroness Thomas of Winchester
My Lords, my name is also on this amendment. My noble friend has explained the six-month rule. I would say that the DWP has recently interpreted it creatively. The rule was originally brought in partly to allow for the quick implementation of regulations and partly to stop the wasteful duplication of the same evidence being produced for the statutory consultation undertaken by the SSAC as for the parliamentary debate on the Bill. It dates back to 1973 and the predecessor committee, the National Insurance Advisory Committee, but that reasonable rule has been stretched beyond reason when a year, say, after Royal Assent, whole sections of Acts can be activated, at which point the DWP starts the clock to begin the six-month exclusion period.
Lord McKenzie of Luton
My Lords, we have a good deal of sympathy for the amendment of the noble Lord, Lord Kirkwood, and the noble Baroness, Lady Thomas. My understanding is that draft regulations—or proposals for regulations—have to be submitted to the SSAC except in certain circumstances. One of them, which has been mentioned, is that regulations made within six months of the enactment of primary powers do not have to be submitted.
This amendment seeks to say that the six-month clock should start when the Bill becomes an Act, not when the particular provisions are drawn down. That could widen the scope of what the SSAC should review. I support that. It is sometimes uncomfortable as a Minister being on the receiving end of a report from the SSAC, but in a sense that is part of the process that we need to engage in. Clearly there would be issues of capacity if this change were to happen overnight, particularly given the Bill that we are now considering. It seems that Bills of this nature will inevitably be framework Bills. Our Bills were. There is always tension between working on the basis of draft SIs, trusting to luck or assurances as to what eventually comes through, and having a degree of certainty.
It is not our official position but it seems to me that one way round this would be for Parliament to be able to amend SIs. It would take us away from some of the debates that we have about trying to get stuff into primary legislation, but that is probably a debate for another day. We should take seriously the prospect of the SSAC looking at SIs more widely and not being pre-empted by the six-month rule. There is clearly an issue not only about the capacity of the SSAC but about its expertise. It is very important that that is maintained.
Lord Freud
My Lords, I am not alone, I know, in acknowledging the vast knowledge of my noble friend Lord Kirkwood in this area. He was, of course, chair of both the Social Security Advisory Committee and the Work and Pensions Committee in the House of Commons—I think I can say that now, if I am not pre-empting. His involvement in this important subject stretches much further than that. I welcome the probe and hope that I will be able to persuade him that the amendment is unnecessary.
The SSAC provides a valuable function and goes about its work very effectively. From my perspective and that of my ministerial colleagues, the relationship between the department and the committee is productive. We enjoy a similar relationship to the one that the noble Lord, Lord McKenzie, had. More specifically, the SSAC is currently working on a major study of passport of benefits in the light of the impact of these reforms. As my noble friend acknowledged, this is really the most significant ad hoc study by the committee that Ministers have commissioned for many years. It is a wish to look at situations in the widest possible way.
The committee’s current remit does not include the scrutiny of draft regulations made under powers recently enacted by Parliament. As my noble friend pointed out, this is for a period of six months, beginning from the commencement of the relevant enabling power. The amendment would therefore set the clock ticking from Royal Assent in all cases rather than from the commencement of the relevant enabling power. It follows that if an enabling power was commenced at a point more than six months after Royal Assent, regulations under that power would automatically be referred to the committee. I believe that that would be unnecessary. Informal arrangements are already in place in this area. As I explained when we debated Clause 1, we will continue to talk to the SSAC as we move to the implementation stage of this Bill and use the arrangements that are currently in place and that allow us to provide it with information on new powers and regulations made within six months of the commencement of those powers.
Noble Lords are aware that when the Government implement major welfare reforms, the relevant primary powers are sometimes commenced at different times, reflecting the staggered implementation process that can apply in such circumstances. Under the amendment, some of the regulations brought forward in this scenario—those brought forward within six months of Royal Assent—would not be subject to the committee’s scrutiny, but others brought forward subsequently would be, even though Parliament would have approved the primary powers applicable to the reform as a whole. That inconsistency would be undesirable and we do not believe that adding to the committee’s former role in this way would be warranted. Implementing the reforms in this Bill is an enormous undertaking.
A huge number of officials in the department are working on it, and others are working on changes to a very challenging timetable. It follows that the weight of draft regulations following the reforms would place an unreasonable burden on the SSAC if the Secretary of State were required to refer all regulations to the committee made six months after Royal Assent. That point was touched on by the noble Lord, Lord McKenzie, and I need to confirm that this is an overwhelming process, particularly right now.
I have emphasised that we already have effective informal processes in place in this area. I also believe that the application of the affirmative procedure to, for example, the first core set of universal credit regulations is another safeguard, making it less necessary to consult the SSAC on a formalised basis in respect of those regulations in particular.
Baroness Hollis of Heigham
I think we would all accept that there is a difference between this Bill and, for example, a pensions Bill and its draft regulations, on which the Minister, his officials and his staff need to consult what I would call the professional organisations. These are quasi-technical and may be associated with the process; they have their own exchange and interchange of information and of what they flag up, and so on. In other words, there is a professional body of interested but skilled parties who can negotiate with a department on an equal base, and, as a result, draft regulations may be improved before they subsequently become full regulations.
The trouble with welfare reform and a Bill such as this is that, apart from the charitable organisations and lobby groups that have a wealth of expertise, for the most part there are not the bodies that the noble Lord and his staff would expect to negotiate with in the same way as he would expect to negotiate with business organisations or the NAPF about pension structures. Therefore, the very fact that there might be 200 regulations coming our way means that Members too find that they have no input from professional bodies that are equivalent to those pension bodies but that deal with welfare, in order to help shape our thoughts and give us an extra resource of experience.
This is not necessarily appropriate for Bills for which there are bodies that can serve that function, but for framework Bills and where bundles of regulation are likely to cluster in a particular field—housing here, or the benefit cap there—it would be very helpful for all of us seeking to scrutinise those regulations in due course to have had the input of the SSAC before we commence, because otherwise there is nothing between us, the draft regulations and the framework Bill, and we will not get the appropriate input that we need.
Lord Freud
My Lords, what we are designing here is a massive undertaking. I know that I set a considerable challenge for the SSAC in the passporting arrangement alone. The noble Baroness and my noble friend ask whether adequate information flows are coming through to Parliament as we consider the regulations. We are in regular contact with the stakeholders on a wide range of issues. We have published a series of detailed policy notes. We are trying to have a very open process.
Baroness Hollis of Heigham
My issue is that there are no stakeholders as there are in other types of legislation. My argument hinges on that fact. In pensions legislation, and even in some of the disability legislation that is very specialist, such as the Disability Discrimination Act, which is a more legal framework, there are specialist organisations that can negotiate. We have no such organisations with this Bill. We have charities, but they are client-group representatives rather than bodies of equal professional standards, in the way that the Department of Education has teachers, the Department of Health has doctors and so on. The DWP has no equivalent.
Lord Freud
I accept the point. In practice, we face lobbyists and stakeholders, although one could argue that the pensions industry is also facing lobbyists, albeit slightly better resourced ones who are more interested. The core issue is what the SSAC can do with this Bill in its scale and size. The SSAC is a relatively small organisation. It has a secretariat of three or four, internal to the DWP. It has 13 or 14 members. When you look at the literally thousands of people who are creating this, it is very hard to imagine an ability to take this in its entirety, with all those regulations for the SSAC to deal with.
The SSAC has two functions. It deals with a regulatory rolling process, which is outside the major revolution that we are talking about. I hope that it will apply itself to particular issues on which we would really value its help. The first example is passporting. It was very much my own view that this would be a good way in which to start this process.
I think that noble Lords in this Committee underplay their own prowess in this area.
Lord Freud
It never failed in the past. They also underplay their ability to gather the views of stakeholders that have been coming and do come to them directly. I suggest that a major expansion of the powers of the SSAC, which this would represent in practice, is not appropriate. Any regulations for universal credit that rely on existing legislation relating to claims, awards, payments and joint claimants will still be subject to SSAC examination. I ask the noble Lord to withdraw his amendment.
Lord Kirkwood of Kirkhope
I do not know whether I am more frightened now than I was previously. I accept that there is a capacity issue, but I am looking for the comfort that I have heard in the past that significant matters will reach our desks as legislators faster. None of us can keep up with the flow of things. If you are just a guerrilla opposition Member, which I used to be, the default position was to table negative prayers against everything.
The Minister has to be careful that we do not get back to that safety default position where you could just give the Minister of the day a bit of a kicking at the Dispatch Box and go home. Sometimes you might hit lucky on something that the Government did not want you to know about, but that is not where we want to be. I absolutely accept that the Minister in particular has been transparent to a fault. You can see straight through him on things that are coming down the track. It is impossible to read it all, but I worry that he will struggle if these regulations come in in wodges and packages immediately after Royal Assent. I do not want people like me to be put into the position where I think, “Well, safety first. Let us just pray against it anyway”. That would not be sensible.
I would like the SSAC to say, “Of this batch, if you want to concentrate on anything, this is what you should concentrate on”. That would be massively reassuring to me. I would go home at the weekend thinking that I was earning whatever it is that we get to come here. Obviously, I will withdraw this amendment, but I hope that the Minister will reflect on that point. This is a probing amendment. I understand capacity issues and the importance of him using his expertise within the Government to get to a better place. I will read the record and try not to worry more than I did before I tabled the amendment. I beg leave to withdraw the amendment.
Lord Kirkwood of Kirkhope
“( ) After section 1 of the Child Support Act 1991 there is inserted—
“Effective maintenance arrangements
(1) The main objective of the Secretary of State in applying the provisions of this Act shall be to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place.
(2) The Secretary of State shall prepare and lay before Parliament a report on a bi-annual basis giving details of the progress achieved under subsection (1) above in maximising the number of children who live apart from one or both parents for whom effective maintenance arrangements are in place.””
Lord Kirkwood of Kirkhope
My Lords, given the hour and the fact that we are turning to a completely fresh, but very important, subject, perhaps I can be allowed to introduce skeletally the first clutch of four amendments. Amendment 113B, which stands in my name and the names of other noble Lords, inserts a new section into the Child Support Act 1991 to maximise the maintenance payment of money to children separated from their parents.
I would like to get to the second group of amendments as fast as we can. In trying to contrive a debate that made sense, it was necessary to tease out some of the important themes relating to child support, and the only way I could sensibly do that was with these four amendments: Amendment 113B, which deals with a duty to maximise benefit; Amendment 113C, which deals with the level of services; Amendment 113D, which looks at equality of treatment in gateway access; and Amendment 113F, which deals with legacy cases and how they relate to the new gateway. If we can deal with those expeditiously by way of introduction, we can then get on to some of the more apposite provisions in terms of charging. I hope that we will be able to do that in good order.
I do not know why I am so personally wrapped up in child support legislation. I think it is partly because I was around in 1991 when the first Act was introduced, and I have seen it through all its stages: the 1995 Act, the 2000 Act, 2007, 2008 and here we are in 2001—
Lord Kirkwood of Kirkhope
It feels like 2001. I beg the Committee’s pardon. It should have been 2011, and it may even be 2012 by the time we get there.
These two or three clauses have deep significance, and they have to be read. I took the trouble to reread them at the weekend. They differ quite substantially in tone from the rubric and narrative that the Government are advocating for this change. They insert quite dramatic hurdles, particularly for parents with care. They introduce a new level of fiscally driven tension between getting the savings that CMEC and the department are looking for and the maximisation of the flow of benefits to parents with care and their children.
This is the new, new CSA—CSA 2.5 or CSA 3—that we are heading for in 2012. I will go to the great Parliament in the sky a very unhappy bunny if this one goes wrong as well. It is not a question of allocating blame; I am as responsible as anybody. I thought that the provisions that were introduced early on were fit for purpose. However, there is a huge gap between policy creation and the implementation of this very difficult area of public policy. It is a deeply troubled area and we need to be very careful that what we are doing is apposite and right for the people it is designed to serve.
It is important to mention the staff who laboured under the introduction of these provisions. I think that the Minister in the Commons, Maria Miller, mentioned them rather glancingly in the Public Bill Committee. She said that the actions of the staff resulted in the measure not falling flat on its face, particularly around 2003 when everything was going wrong. If it had not been for the dedication of the professionals who ran the CSA centres and worked through the stuck cases that went into manual administration, the whole thing would have collapsed. I want to make clear that although I think that in the past the policy has been totally inadequate, I do not mean in any sense to criticise the professionals who were asked to administer it. By and large, they played a great game and without them we would have been in a much worse situation.
The background political context to this is slightly worrying as well. It would be helpful to be told why there has been no response to the Select Committee report that was published in July. As colleagues know, Governments have to respond to Select Committee recommendations within a two-month period, although there is a bit of a purdah period over the summer. For a set of important recommendations that are absolutely apposite to this group of amendments to be published and to have no government response is indicative of something: either something very good or something very difficult is happening.
My noble friend has now been invited to enter the trench of child support and maintenance. I cannot think of anybody more appropriate to man a trench than my noble friend Lord De Mauley. I welcome him to the task. I hope he is not considered to be expendable infantry—perhaps the noble Lord, Lord Freud, has neatly side-stepped the graveyard pass. Can we be told what is happening with the Select Committee report? Furthermore, the draft regulations were supposed to be made available to the Committee by the end of 2012. Perhaps we will get them soon, very soon or very, very soon, but there are only days left before these regulations are due. I am picking up in the corridors here at Westminster a general political unease—this unease crosses parties and is felt not just by one side or the other—about the family implications of some of these changes, particularly around charging which we will come to in a minute. Some of us are old enough to remember when a £44 charge was introduced in 1995, which did not last very long. I wonder what has changed. I think that that £44 charge lasted about 18 months before it was realised that it cost more to collect than it brought in and the whole thing collapsed, but here we are again with charging. I ask myself what is different.
My next question impacts on all four of the amendments we are discussing. Is the 2012 CSA 3 or CMEC 3—or whatever the new, new system is being called—on track? The annual report of the CMEC/CSA that was produced earlier this year noted that the major projects authority was asking some very searching questions, and raising doubts, about challenges that were being faced with yet another new computer system. I do not know whether the system is in Warrington or whether it is an agile system. I hope that it is both, but I hope that it works. If we could get an assurance about the readiness of the 2012 relaunch, it would be valuable in our consideration of all three groups of amendments around this policy.
I also want to ask about costs. I looked at the Work and Pensions Select Committee report on the rest of the comprehensive spending review period and am puzzled about what exactly the costs are. At paragraph 75, the report states:
“Noel Shanahan indicated that CMEC’s aim was to achieve at least a 30% reduction in costs, in common with other parts of Government”
over the CSR period. We all know that the previous annual report, for 2009-10, indicated that the CMEC was spending £572 million. At paragraph 76, Noel Shanahan is quoted as saying that the transition to the new system in 2012 would cost,
“in the region of between £150 million to £200 million in terms of additional costs”.
Could some clarity be introduced as to over what period that refers to? How is that money being spent and how does it measure up to the 30 per cent reduction that Mr Shanahan was talking about? I am not clear as to the spend profile and the business case for charging—we will come on to that later. A reduction of 30 per cent on a budget of £572 million will put immense cost pressures on the agency through 2012 and beyond. It is very important, in order to make sense of this group of amendments, to know what the Government are planning to spend and what the business case is.
We have all had the benefit of the excellent work that has been done by Gingerbread and other groups that have been briefing us. Amendment 113B would make sure that the principal objective available to CMEC in its previous non-departmental-public-body status, to maximise the number of those children who live apart from one or both parents for whom effective maintenance arrangements are in place, was enshrined in law. CMEC is being abolished as a non-departmental public body and being taken into an executive agency, and therefore does not have that objective. All we have now is assurances from Ministers. The Minister, Maria Miller, gave rather a weak assurance to the Public Bill Committee, saying that we could rely on ministerial assurances. I am sure that we can, but that is not my experience with all Ministers all the time. I should like to hear what the Government have to say about the prospect of trying to put back that basic overriding objective into the work of the commission. As a consequence, a two-yearly report on progress on meeting that objective would be valuable.
I wonder whether we could use Amendment 113C to ask the Minister to explain to us a little bit about how the new support services will be rolled out and, again, how much money is involved in their provision. A £30 million fund is available through the Department for Education, which oversees a range of grant-funded relationship and family support services.
Baroness Sherlock
My Lords, I rise to support and speak specifically to Amendment 113B, to which my name is attached. In doing so, I remind the Committee of the interests which I have in the Register, in particular that I was a non-executive director of the Child Maintenance and Enforcement Commission, having stood down from that position shortly after my introduction to the House. I am also a former chief executive of the National Council for One Parent Families, which has now merged with Gingerbread. I am very grateful to Gingerbread and other organisations for their briefing.
It is a huge disappointment to me that this issue has come at the end of the Bill because, along with the noble Lord, Lord Kirkwood, and many other noble Lords, this is one of my favourite subjects. Frankly, I could happily talk about child support for a very long time. However, as the noble and learned Lord, Lord Mackay, is looking sternly at me, I shall limit my remarks to only one of the amendments and then speed on to allow him to offer an infinitely more informed view.
The noble Lord, Lord Kirkwood, has explained why the amendment is necessary. In particular, it would re-establish the notion of the objectives that are currently the main objectives of the commission, which will disappear as a result of its being abolished and brought back inside DWP as an executive agency. No doubt in due course these will become objectives of the Secretary of State, but I want to explain why it will be a problem if they vanish altogether from legislation.
At the moment, the commission’s main objective is to maximise the number of children who live apart from one or both of their parents for whom effective maintenance arrangements are in place. There are two subsidiary objectives, the first of which would encourage the support and the “making and keeping” by parents of voluntary maintenance arrangements. The second would support the making of and compliance with statutory arrangements. A further objective of the commission is:
“The Commission shall aim to pursue, and to have regard to, its objectives when exercising a function that is relevant to them”.
Not only must it do that but it must also have regard to those objectives in deciding how it discharges its various responsibilities.
As the noble Lord, Lord Kirkwood, said, Maria Miller, in the House of Commons, as I may now say, has said that the Government remain committed,
“to maximising the number of effective … arrangements”.—[Official Report, Commons, Welfare Reform Bill Committee, 24/5/11; col. 1103.]
That is welcome but I should like to explain why it is not enough. When I was a member of the board, we discussed and debated the priorities of the commission, what we should do and how we should do it. We came back repeatedly to the objectives set out by Parliament. Those were very much in front of us at all times.
If we were tempted to forget them, the very able civil servants who worked for the commission and the department would remind us of them at relevant moments, which they were right to do. They carried considerable weight. In fact, they carried far more weight than the assurance of the Minister of the day—distinguished though he was, of course. It is right that the objectives set down by Parliament should carry more weight than the views of any Minister who happens to hold office on any particular day. That is what Parliament is for. There is a big diminution in weight in moving from having clear objectives set out in legislation to having simply the assurance, however welcome, of the Minister of the day.
CMEC was beginning to make some significant improvements. It was created in 2008. Last year, 970,000 children benefited from child maintenance, including more than 100,000 from private arrangements, which must be due considerably to the CMEC option service and the fact that the commission had a statutory obligation to go out and pursue private arrangements. In March 2008, the figure was 750,000, so there was quite a big jump.
The noble Lord, Lord Kirkwood, mentioned possible cost reductions of the order of 30 per cent. This is important because—I am sorry to bring this to the attention of noble Lords—there are people with suspicious minds who fear that the Government’s primary aim is to save money, rather than to move to a better system of child support. Like other noble Lords, I would not dream of having any truck with such a notion. But perhaps the Minister could help Members of the Committee to make sure that they are in a position to understand and to rebut these claims when they are made by people outside this Chamber.
It is important because, if there is no broader objective to maximise the number of effective arrangements in place, Ministers might feel that they have done their job simply by deterring people from using the statutory system of child maintenance. They do not have any obligation to make absolutely sure that those people are going elsewhere and making arrangements, rather than simply not making any arrangements at all. If the Minister were willing to accept that this is an important objective, he could reassure us all. In the absence of that, there is a very real danger that these charges will come to be seen—we will go on to discuss them in detail—not simply as a means of raising money but primarily as a means of deterring people from using the statutory system in order to save considerable amounts of money in administration to the state. Frankly, it is hard to see how savings of the order that have been described by the noble Lord, Lord Kirkwood, can be achieved otherwise.
I am delighted that the noble Lord, Lord Freud, has given the noble Lord, Lord De Mauley, the opportunity to step into the breach on so important an occasion. Should the noble Lord, Lord De Mauley, hear at any point someone saying, “I am right behind you”, I suggest he takes a look behind him to be sure that that is true. I am delighted to see him at the Dispatch Box on such an important occasion. Perhaps he will take the opportunity to reassure the Committee, first, on whether the Government accept the content of the amendment. Are they committed to maximising,
“the number of those children who live apart from one or both of their parents for whom effective maintenance arrangements are in place”?
Is the principle acceptable? If it is acceptable, is he happy to put this into legislation? After all, it is likely that the Official Opposition are supportive since it was their Bill which brought these words into legislation in the first place. If we are all in agreement, perhaps this happy outbreak of unanimity can be celebrated by having an amendment accepted in Grand Committee. I look forward to that. If he is not able to do that, will he explain why not, what he believes the consequences will be and how else we can go out and give assurances to the cynics in that difficult world?
Baroness Tyler of Enfield
My Lords, I will speak briefly to Amendment 113B. In so doing, I declare an interest. I am currently the chief executive of Relate, which provides a wide range of services to separating families. I am also part of an advisory group of people from the voluntary sector which advises DWP Ministers on what a network of integrated support services might look like. From that point of view, it is important that that is clearly stated on the record.
I want briefly to support the case that has been put forward by my noble friend Lord Kirkwood as to why it is important that we incentivise non-resident parents to engage in the gateway process, as well as parents with care. There are two points I want to make. First, the gateway and the application charge—and I know that we will come to the charge in a later grouping—bite at the moment on parents with care wishing to use the statutory child maintenance system. The aim of this is to incentivise them to try to negotiate a voluntary agreement with the other parent instead. I support that. It is right and proper, where it is practical, that incentives to do so are built in. But there is no equivalent mechanism pushing the non-resident parent actively to engage in the process of trying to reach a mutually agreeable arrangement. As the legislation is currently constructed, it is only after a parent with care has paid an application fee of £100 and a statutory calculation has been made that any incentive will be given to the non-resident parent to reach a private agreement. That is basically very unfair.
My second point is a more positive one: the gateway stage is an opportunity for meaningful conversation between both parents. It aims to explore the scope for reaching collaborative arrangements, to assess what help either or both parents might need in order to arrive at such arrangements and to signpost and refer one or both parents—and, indeed, the children involved—to suitable provision and the help that exists for separating parents and families. Non-resident parents who are responsible for paying child maintenance should, I feel, be especially involved in this process.
I conclude by saying a couple of things that come very much from my experience at Relate. It is very important to children that both parents after separation continue to be involved as co-parents of those children. The relationship between the adults may be completely and utterly at an end, and indeed new relationships may well have been formed; but for that child, the active involvement—of course, where safe—of both parents is absolutely critical, emotionally, in practical ways, financially and in a range of other ways. It is critical that these new arrangements, however they are finally constructed, put the maximum possible incentive on both parents to see how they can discharge their responsibilities to be effective co-parents after separation—a responsibility which I think that most of us think is for life.
Baroness Lister of Burtersett
My Lords, I, too, shall speak in support of Amendment 113B, although what I have to say is also relevant to Amendment 113DA in the next group. I, too, thank Gingerbread for its help.
I want to concentrate on how Clause 131 in particular, coupled with the wider government proposals to charge parents for use of the statutory child maintenance scheme, will disproportionately impact on women who, according to the Government’s own analysis, make up around 97 per cent of parents with care who are eligible for child maintenance. It seems very surprising that, at a time when the Government are worrying about the erosion of their support among women, particularly so-called C2 women, they should be proceeding with a policy on child maintenance which will unfairly impact on this group.
The Government say that the new gateway and the proposed charges are intended to drive behavioural change—yet again—yet in the brief circulated last week, the DWP acknowledges that a significant proportion of parents will not be able to collaborate and that there are circumstances where there will be no reasonable steps that they could take. Therefore, echoing a question I asked last week in relation to the benefit cap, what behavioural change are they trying to achieve in such cases? Is it really fair to subject this group to charges, particularly in the name of behavioural change?
Baroness Hollis of Heigham
My Lords, the speeches that we have heard so far have been extremely powerful and I very much supported the amendment moved by the noble Lord, Lord Kirkwood. I shall refer to Amendment 113B in the name of my noble friend Lady Sherlock, as well as Amendment 113DA in the name of the noble and learned Lord, Lord Mackay. I feel strongly that structures should follow the objectives and not that we should adapt the objectives to be the outcome of whatever structures we think we can best achieve, which is what is going on, I fear, in Amendment 113B. Amendment 113DA is simply wrong and I am frankly amazed that the DWP has come forward with this proposition. It is morally offensive and I do not know from where it has come.
Like others we have the CSA engraved on our hearts. The 1992 legislation was a catastrophe primarily because it insisted on overturning existing court objectives and becoming retrospective, which means that the new system never caught up even though it was entirely well intentioned. I remember defending our intentions on the 2000 legislation in front of the committee chaired at the time by the noble Lord, Lord Kirkwood. We found it difficult to persuade the Treasury to budge beyond a £10 hand-back to women, so we could never get women to co-operate in setting the CSA on their old partners, as there was little in it for them.
The moves established by my noble friend in 2008 to allow women to keep all their maintenance was a triumph, but the problem with voluntarism, which also accompanied it, meant that it became a charter for bullies who did not want to pay, as indicated by my noble friend Lady Lister. We know that the people who pay are the men who need to pay most, not the men who need to pay least. They are the men who have been married, divorced, are older, earn more, have a profound attachment to their children and expect and want to pay. They are honourable and decent men and they are the ones who pay most. They pay and behave admirably. We also know, however, the ones who do not pay. They are the young, feckless men who have never actually lived with the child, who is perhaps the result of an overnight relationship, if we can dignify it with that term—a casual sexual act. They think that they were trapped.
There are the chaotic self-employed who never get their accounts right and never find the money to pay for their children. A group that surprised me are the men in uniform who are often very bitter, judgmental and followers of the language of fault—“She had an affair so it is her fault and I don’t pay”—with little regard for the children. Finally, there is the group mentioned by my noble friend Lady Lister—the men who have remarried, with second families whose new partner is often very hostile to any payment. These men change their address, their job, their name, and even their country to avoid paying.
Add to those problems a flaky computer and the problems of HMT, which is not only unwilling for women to keep their money but refuses to share key information so that NRPs can be tracked through their current records. We were not allowed to deduct even a £5 benefit payment at source. It would have been obvious for HMT computers to talk to DWP computers, but that was not possible either. It is no wonder that there has been a struggle ever since.
I fear that increasingly—with these measures, I am convinced of it—the concept of child support has taken a wrong turning in this country. Unless we accept the amendments moved so ably by the noble Lord, Lord Kirkwood, and my noble friend Lady Sherlock, that wrong turning will become a highway down which the failure to pay child maintenance will rapidly escalate. I strongly believe that statutory payment should be not the last resort but the first. That is how we establish the appropriate level of money that should be paid; you establish a speedy pattern of payment. We know from Australia and all the international research that unless you establish payment early and ensure that it is paid regularly for at least a year, it dies within 18 months or two years. Establish payment early and get it paid regularly and there is a hope that you will get amicable contact arrangements. Then the whole thing becomes a virtuous circle.
Having voluntary payment in which the father can bully his way out of payment, as he too often has done, means that it never gets established. If instead we had statutory payment to begin with and then after six months or a year following regular, reliable payments the reward was voluntary negotiations, that would be wonderful. That would combine the best of all worlds. You would establish the pattern of payment, and then, if the father co-operates in that activity, you could allow that couple to make their own future arrangements. That way the child does not suffer. This way, I fear that the rights of the child to income and support from the father—it is the father in all but 3 per cent of cases—are going to get lost in what I have to say is the department pursuing cost cutting rather than ensuring adequate support for children.
We know that regularly paid maintenance is not only good for children in the signal that it sends from fathers about being committed to their children’s lives, but that it can be the payment above all—all the Alan Marsh research shows this—that lifts a lone parent with a couple of children from below the poverty line to above it. It can be transforming. It is like privatised, old fashioned family credit if it is paid and paid regularly. It will be so paid only if it is established early, and that means through a statutory system in which good behaviour allows you to go on to the voluntary path. I very much fear that in going down the path not just of voluntarism but of trying to get rid of CMEC, which at least was trying very hard to ensure that money was paid to children, we will lose the real benefits that are available to children through the poverty objectives and we will be overcome by the structural problems of seeking to reduce costs. That is highly unfortunate.
Baroness Howe of Idlicote
My Lords, I apologise for not being here the whole time. I had to chair quite an important meeting on stalking, but that is another matter. I had not realised until just now that the amendment tabled by the noble and learned Lord, Lord Mackay of Clashfern, to which I have put my name, is in this group.
Lord McKenzie of Luton
I thank the noble Lord, Lord Kirkwood, for introducing this group of amendments and acknowledge his long-standing interest and expertise in issues of child maintenance. Like him, I pay tribute to the staff of the CSA and CMEC who, over many years, have stuck with the various iterations of child maintenance that they have had to deal with and sometimes struggle with.
My noble friend Lady Hollis gave us a brief history of child maintenance. It is right that one of the problems and the reason why the first of these amendments in particular—I support them all—is so important is that along the way the CSA has sought to be different things and to achieve different objectives. In 1991, it was substantially focused on the clawback of benefit, so no benefit accrued to children. The 2004 amendments recast that and focused the CSA on child poverty in particular, but, as my noble friend said, it was stymied to a certain extent by not being able to make progress on the disregards. I defend the 2008 changes—noble Lords would not expect me to do otherwise—for a number of reasons. It potentially gets round the problem of those who do not want to pay by the assessment being on the gross income of the non-resident parent, which is obtainable from HMRC. That has not yet been implemented, but it was a key issue in stopping non-resident parents messing up the system, which is what happened to the two previous systems. Voluntary it might have been, but there was an absolute right for either parent to make use of the statutory system with charges, which we are going to come to, that did not deter people on low incomes.
Lord De Mauley
My Lords, it might be helpful, if noble Lords will allow, if I spend a little time setting the scene for this group and the next two groups of amendments. As noble Lords have mentioned, they are closely interrelated.
Let me say at the outset that one thing on which I am sure we can all agree is that the really vulnerable people in all this are the children. They are the people we most want to protect. I agree with the noble Lord, Lord McKenzie, and others who have made similar comments. It is our strong view that the best outcome for the children of separating parents is generally obtained when both parties can reach a voluntary agreement. Evidence from the Relationship Separation and Child Support Study in 2008 showed that more than half of CSA parents with care and nearly three-quarters of non-resident parents felt that they would be likely or very likely to make a family-based arrangement with help from a trained impartial adviser. So the central thrust of what we are trying to do is to establish a new system for reaching voluntary agreements. That system will work by providing parents with more information and support about how to establish an effective maintenance arrangement than they have had before.
Previously parents had to choose between the courts, the CSA, trying to work out how to set up a voluntary agreement or having no arrangement in place at all. All too often—in fact for half the children concerned—it has been the last of these. For the first time we will be offering real help to families to consider whether they can collaborate and establish a more effective family-based arrangement without heavy state involvement. We of course understand that reaching a voluntary agreement is not always going to be possible, although we think it could be achieved much more often than it is at present. Where it is simply not possible, there has to be a fallback option, and that will remain the statutory system.
The last Government introduced, through the Child Maintenance and Other Payments Act 2008—to which the noble Lord, Lord McKenzie, referred—the concept of charging, and we turn to this in more detail in the next group of amendments. I take this opportunity to say that we agree with the last Government that the concept of charging is acceptable, but if people are to be asked to pay they are entitled to ask for a better service. That is why we will radically improve the statutory system with a stronger, more reliable IT system and a strong suite of enforcement measures.
The first part of Amendment 113B seeks to place an objective on the Secretary of State through the provisions of the Child Support Act 1991 to maximise the number of effective maintenance arrangements for children who live apart from one or both parents. This is the current statutory objective of the Child Maintenance and Enforcement Commission. The commission also has a number of statutory functions, one of which is to provide the statutory service currently delivered by the CSA. When the commission is abolished, its functions will transfer to the Secretary of State exactly as they now stand. Its statutory objective will not, however, transfer to the Secretary of State as the objective was specific to the commission in a way that the functions are not. So the issue that noble Lords are raising is what will happen when the commission is abolished and its functions transfer to the Secretary of State.
The Government’s position is unequivocal, and I am glad to have this opportunity to reiterate for the record our commitment to the objective of maximising the number of effective maintenance arrangements for children who live apart from one or both parents. I hope that that satisfies my noble friend’s request for a strong assurance. When the delivery of functions has been given to an arm’s-length body, as is presently the case with the commission, then clearly good governance and clear accountability suggest setting the organisation an objective in statute against which it can be held to account. However, legislation is not necessary in order for the Secretary of State to work towards his own objective. The whole thrust of the Public Bodies Bill, of which the abolition of the commission is one instance, is to increase ministerial accountability.
Baroness Sherlock
I thank the Minister for explaining what will happen to the options service. I confess that I have had the opportunity to listen in to the options service in action in a previous role and, as I understand it at the moment, when a parent with care phones the options service to ask for advice and information, it would steer her towards making an arrangement—because that is the objective—but it would not try to steer her to make it in one direction or the other; it would give her the information she needed to make a choice. Is it the Government’s intention that these replacement services will steer that parent with care away from the statutory service and to another service, irrespective of whether the best interests of herself and her child might be served by it?
Lord De Mauley
No, my Lords. I shall come to that, if I may, in a moment.
The purpose of the “gateway” clause is to give all parents the opportunity fully to understand their range of choices and the support that is available to overcome barriers to family-based arrangements. It is in no way intended to prevent them accessing the statutory service if that is the best option for them. We simply want that to be a considered choice. Parents can come back to the statutory service at any time if a family- based arrangement does not work out.
The “gateway” will take the form of a telephone conversation with an agent who will simply explain the available maintenance choices to the prospective applicant and signpost them to any associated help they might need. At the end of that conversation, if the parent feels that the statutory service is the best option, they will be transferred to the statutory service to begin the application process. We will develop an analogous approach for parents wishing to apply online.
We are also aware that a variety of support services for separating families already exists in the voluntary and community sector. However, we all know that there is a multitude of complex issues to be addressed during separation and it can be difficult, especially at a time of distress, for parents to find the information and support that they need. The gateway will also help signpost parents to such support so that if, following the conversation with an agent, they decide that they want to try to establish a family-based arrangement, we can help them find the support they need to do so.
Lord McKenzie of Luton
Will the Minister explain the difference between what he has just described and the current options service, other than the related charges that come through? The charges will need to be explained before somebody can make an application but, apart from that, in terms of the support and information that are given, how does the new arrangement differ?
Lord De Mauley
I shall come back to that if I may.
With the right support in place to help parents collaborate better, more children will be able to benefit from effective family-based maintenance arrangements. Outcomes for children across a range of measures are almost always best when parents work together. We want to make it easier for parents to access support by ensuring that it is available in a more co-ordinated way.
We want the people who know families best to shape these plans. That is why we asked a steering group of academics and voluntary sector experts to help us develop proposals for better coordinating support at a local and national level and as to how most appropriately to measure success. I am pleased to be able to say that we will look to act on this advice and to commit increased funding as detailed proposals emerge. This could include, for example, a web portal or a helpline that would provide an entry point to the wide range of services which are already available but parents may not be aware of. The helpline might, for example, offer a “triage” conversation to help parents identify their priority issues and obstacles and then advise on how and where to get support on them. The web portal would provide a framework to help co-ordinate the wide variety of online services already available, ranging from interactive advice and support from experts to forums where parents can talk to others in the same situation to share learning and information. The steering group will also consider how best to co-ordinate face-to-face local services to offer help and support. We will also look to test which interventions are most effective in helping parents overcome any obstacles to collaboration. This will be critical in helping us to decide where best to direct funding.
Amendment 113D would appear to create a period within which the prospect of an application being made to the statutory service against the non-resident parent would act as a stimulus to the NRP to engage in conversation with the commission. The conversation would encourage the NRP to consider taking action towards a family-based arrangement. This is a welcome intention, but one drawback is that it would impose a delay on processing the application where there was no prospect of a family-based arrangement, which in turn would delay the flow of maintenance. The Government’s view is that it is preferable to get parents talking at an earlier stage in the separation process to maximise the chances of them acting collaboratively and to provide them with access to services that will help them overcome any barriers to doing this.
The commission also has the objective of promoting financial responsibility. It should not be only the threat of an application to the statutory service that forces non-resident parents to be mindful of their obligations. The commission will continue to work to produce the cultural change outlined in the Green Paper so that the statutory service is the last resort rather than the default option. This will not happen overnight but this rebalancing of approach away from state intervention to parental collaboration must be the right approach.
Amendment 113F would exempt existing CSA clients from the need to take reasonable steps before applying to the new statutory scheme. It is just as important that these parents consider the possibility of reaching a family-based arrangement as parents entering the child maintenance system for the first time, particularly as they will be treated as if they are making a fresh application. Research tells us that 51 per cent of CSA parents with care feel that they would be likely or very likely to make a family-based arrangement were they to receive the right help and support. In addition, many CSA clients were compelled to apply to the CSA as a condition of applying for benefit.
Therefore, it is surely right to give CSA client parents who feel that they can make an arrangement and who may have been required to use the CSA the scope to consider whether a family-based arrangement could work for them. I challenge the view that the only way to have an effective arrangement is to have the state manage it. That approach has been shown not to work. Our proposals will provide more support for family-based arrangements and more options for reaching effective arrangements.
My noble friend Lord Kirkwood asked about the costs of transition, which will be effected over a three-year period. Estimates of cost will accompany consultation on the regulations covering case closure and charging, which will set out the spending profiles. The policy has not been finalised, so costs have not yet been firmed up.
In the context of Amendment 113D, my noble friend Lady Tyler referred to there being no charge on the NRP, to which I will turn when we deal with the next group. The noble Lord, Lord McKenzie, asked how the gateway is different from options. The conversation is basically the same. The difference is that we would expect applicants to have the options conversation before applying to the statutory service. At present, they go straight to the CSA. Earlier, I mentioned that we want to make the statutory service more effective. He also asked whether there is capacity to cope with case closure and how support will be structured. Yes, there are no concerns about capacity and support will be structured along similar lines as CM options.
The noble Lord, Lord McKenzie, also asked whether the same fee structure would be applied generally and, if not, what it will be. There will be one application charge only. He asked whether there would be an appeals process, if I understood him correctly. I think there is no need for an appeals service because the gateway is simply a phone call. He asked whether, if access is denied, an individual can apply again. Yes, they can. He asked how soon they can get on the statutory scheme. The answer is immediately. He asked whether both parents need to interact with the gateway. No, it requires just one telephone call, which generally is from the parent with care but both parents are free to seek advice.
With that rather lengthy response, I hope that I can persuade the noble Lord not to press his amendment.
Lord Kirkwood of Kirkhope
I am sure that the Minister wants the Committee to make progress. I have to confess that I am disappointed that we have not been able to get a quantification of the costs for the maintenance and support system to which the Minister referred. If I have understood what he said— I will read his words carefully tomorrow, as I am sure we all will, and I am grateful for his reply—it looks to me as if we are going to get to Report stage and the later stages not knowing what investment and what timescale we will be dealing with in terms of the proposed support systems in this new iteration of the Child Support Agency. We still do not know whether the families and relationships funding scheme from the Department for Education will be replaced in 2013. That involves a substantial sum of money, £30 million. If we do not get at least £30 million and then some, it could be construed as an effective cut.
Lord Mackay of Clashfern
“( ) In section 6 of the Child Maintenance and Other Payments Act 2008 (provision to allow charging of fees by the Commission), after subsection (2) insert—
“(3) Nothing in regulations under subsection (1) shall impose a liability on a parent with care for the payment of fees to the Commission where that parent has taken all reasonable steps to establish whether it is possible or appropriate to make a maintenance agreement (within the meaning of section 9 of the Child Support Act 1991), and where, having taken all such reasonable steps, it is either not possible or not appropriate for the parent with care to do so.””
Lord Mackay of Clashfern
My Lords, in view of the Prime Minister’s speech, to which the noble Baronesses referred, I thought it right to write to him to give notice of the amendment which I am moving. I copied the letter to the Secretary of State, to Maria Miller and to my noble friend Lord Freud. I got a very substantial reply from Maria Miller quite recently, explaining to me first, that the Government’s point of view was to try to get people to reach agreement; secondly, that various improvements were to be made in the system for getting money off the recalcitrant parent; and thirdly, that the amounts likely to be charged to the parent in question in my amendment would be rather small. Unfortunately, on the main point the letter appeared to hold to the previous position, which is why I am moving this amendment.
So far as I am concerned, I am perfectly happy with an arrangement in which, in the words of the statute, before the commission or its substitute accepts a person as an applicant, the commission may,
“before accepting an application under those sections, require the applicant to take reasonable steps to establish whether it is possible or appropriate to make such an agreement”.
I am entirely in favour of that: the less that the CSA, or its successor, has to be used, the better.
Unfortunately, experience has shown that there are some people with an obligation to their children who are not willing to make such an arrangement. When I first became Lord Chancellor I distinctly remember receiving a number of heart-rending letters from people who had obtained decrees in the magistrates’ court and the defendant had disappeared. The people writing could not do anything about tracing the defendants. They did not have the necessary resources. It is difficult enough for a large international group to trace somebody who wants to hide. For a lady on her own—and usually it was a woman who was writing, although that does not necessarily follow—to try to find somebody who wants to hide from his obligations is an impossible task. That was one of the motivations I had in supporting, with my noble friend Lord Newton of Braintree, the 1991 Act which set the CSA on its rather troubled course.
The principle of it was perfectly reasonable. The only difficulty was to implement the full policy, because some additional policy considerations were put on to it, which made the formula and its application rather difficult. The situation we are in now is that the Government are supporting the view that, if possible, parents should reach agreement about their children. As I say, I entirely support that. It is the principle behind the Family Law Act 1996, which I was responsible for bringing to Parliament and which went on the statute book, but so far, as far as this part of it is concerned, remains unimplemented. I entirely agree with that. However, when a woman, as a typical example, has taken all reasonable steps and done all that she can to reach an agreement but cannot manage it, I do not agree that she should be charged by the CSA for her application. I entirely agree with the power given in the 2008 Act to require fees to be paid—that was perfectly reasonable and was to be done by regulation—but I want to make an exception to that power which would prevent fees being levied on a woman in the position I have just described. That is utterly unfair. If anyone is to pay for that, surely it should be the person who has caused the difficulty by trying to escape from his moral obligations. There is no question of the woman getting benefit from this—she is acting on behalf of her child.
In her letter, Maria Miller mentioned that they were raising the level of child support. So be it, but the last thing you would want to do with the enhanced level of child support—which, I assume, is considered necessary for the support of the child—is to use it to pay a fee to the CSA. I do not understand how this can be justified. It is purely a matter of justice and fairness and nothing else. It is a short point and very easy to state. With that, I move my amendment.
Lord Newton of Braintree
My Lords, I know other noble Lords have attached their name to this amendment but I crave the indulgence of the Committee for a few minutes. As my noble and learned friend Lord Mackay said, we were in cahoots on this 20 years ago. We are in cahoots on it today and I support him totally in what he has said and what he is proposing.
At one stage I thought it was a pity that this group of amendments had not been placed with the next group. I did not agree with everything that was said on the previous group, but I do not have the courage to say who I disagreed with and so I will keep my head down on that. I should like the Minister to explain to me sometime—not tonight—the overarching coalition philosophy that links the Public Bodies Bill proposition that Ministers should take all decisions and the NHS Bill philosophy which says that Ministers should take no decisions. He can think about that and come back to me at his leisure—which might be in about three years’ time.
I, too, am grateful to Gingerbread for some helpful briefing. I wish to cover some historical points, one of which indicates that I have some sympathy with one of the noble Baronesses facing me—namely, the noble Baroness, Lady Sherlock. My noble and learned friend has used characteristically more emollient language than I, but the original CSA proposals were made difficult by two things: one was that the Treasury wanted too much money out of it too soon; the second—and there have been echoes of this in the discussions today—was that the political classes, and I include myself in that, did not understand what they were dealing with.
There are four people in this Room who are former MPs—one of whom is in a Trappist position because she is the Deputy Chairman—my noble friend the former Member for the Cities of London and Westminster; my noble friend the former Member for—I forget what it was called but it was the Borders.
Lord Newton of Braintree
Yes. The noble Lord, Lord Wigley—he was lurking—and the noble Lord, Lord McAvoy. I am sorry. I had looked only at the Front Benches and included myself. They may care to chip in. If their experience was anything like mine when the CSA came into effect in 1992, for a lad who came from a middle-class 1930s family, it was a real eye opener. There are signs that one or two people who have been pontificating on the subject have not realised that this is a much more complicated world than they thought.
There are still those who seem to think that it is all a matter of feckless youths going out on a Saturday evening, or feckless male partners deserting women as single parents irresponsibly. It is hugely more complicated than that. I remember people coming to my surgeries who had children by multiple fathers and often did not know who they were, or were living in fear if they identified them. I seem to remember that Edwina Currie got into trouble for talking about a woman who had children by five different fathers. She made some critical comments. I do not know whether they went down well or not but they certainly struck a chord. We have to realise that it is much more complicated.
I have not too many more points to make. I share the general view articulated by my noble and learned friend, and earlier by the noble Baroness, Lady Tyler, that it is much better to come to an amicable arrangement. I probably ought to acknowledge that I have been divorced and I came to an entirely amicable arrangement with my ex-wife 25 years ago, or more. It ought to be possible and it was possible in my situation, but there are many situations in which it is not possible which I have already touched on, and to which my noble and learned friend has referred. The notion that such an arrangement was either feasible or reasonable to expect in some of the cases in my surgery, and no doubt in others in the mid-1990s, is to live in a dream world. It is totally ridiculous. The proposition that my noble and learned friend is getting at, that if it is not practicable, people should be charged for getting justice and reasonable support for their children, is bordering on the indefensible.
That is about all I want to say but a question was put into my mind by what the Minister said. If there is to be no appeal against these decisions, which on the basis of what he said will be Secretary of State decisions, what kind of world are we living in? Did he say that there will be no appeal system? That stirs up all the worries I explored last week—unsuccessfully in the event—about the Government’s attitude to administrative justice and fair dealing between the citizen and the state. That needs looking at again or we shall have more trouble. I know that the Minister cannot answer all these questions tonight but I hope that he will look at them, otherwise he will have big trouble on Report.
The Lord Bishop of Blackburn
My Lords, I am grateful to the noble and learned Lord for his amendment and for this group of amendments. Noble Lords will know that the Church of England has for many years keenly supported a just welfare system as one of the key building blocks of a civilised society. We have always been concerned to ensure that the welfare of children is maximised in any system of benefits and I believe that that must include times of economic challenge. Some noble Lords may know that in the consultation period we said that an effective and sensitive child maintenance system is one that should seek to help parents negotiate their parenting and financial responsibilities towards children. The system should also be operated in tandem with appropriate support services and not discourage people from using it by levying charges. If there are to be charges, surely those charges must apply only where parents can afford it and where maintenance is being paid. I have no difficulty over means testing if the end result is that the very poorest single parents will not face the £50 charge.
Baroness Howe of Idlicote
My Lords, I was more than happy to put my name to this amendment because the noble and learned Lord, Lord Mackay of Clashfern, seemed to be making the right point in this amendment. I am only sorry that my noble friend Lord Northbourne is not in his place because the important parenting responsibility of fathers is one of the areas which he has been pushing for years. As has been stressed, sadly, we are really talking about single parents, 97 per cent of whom are mothers, who are in this position. There was a hope that the citizenship classes which the previous Government introduced would be about your responsibilities to your future children, not about sorting out disputes between you and your own parents, and thinking that the responsibilities of parents ought to be shared.
I am not going to repeat everything that has been said, but I agree that it is wrong in principle to charge single parents, mainly women, who have no alternative, when the other parent refuses to pay maintenance. That is not only unjust; it is, as has already been said, indefensible.
Gingerbread has given us a considerable number of quotes. As the right reverend Prelate said, they are very moving. I shall end by quoting a letter that Gingerbread sent to me, for which I am grateful. The writer was clearly quite sympathetic, in theory, to the Government.
“While I can understand many of the government’s cuts and tax rises—a number of which will directly affect me—I cannot understand these proposals. If only you knew how driven single parents have to be to even apply to the CSA. When I first turned to the CSA five years ago I eventually gave up. It was in such hopeless disarray … Fortunately, a judge laid out maintenance in my divorce agreement and my ex-husband paid up. But two and half years ago he stopped paying and I was forced, with many misgivings, to turn to the CSA. Luckily for me it had been reorganised and was able to progress my claim second time around, although it still took months. When the payments finally started coming via the CSA—you cannot imagine the weight that was lifted off my shoulders. I finally felt I could plan ahead for school trips, clothes and other essentials. The relief has been immense. The truth is that the proposals will only penalise the children the CSA is meant to help. Women generally only turn to the CSA when they have exhausted all other avenues. It’s an act of desperation. Those in government who preach about mediation and private agreements mean well, but they have no idea how difficult some ex-partners can be—some years ago, I would never have believed it myself. My message to the government is this: you will be hurting the very people you are trying to help. And, I fear, partners who only receive small payments will just give up altogether. It will be their children who will suffer. For me it will mean the worry returns—I will have to cut back and I already know that negotiating with my husband is an impossible task. So I will face having money intended for my children taken from me by a government which I trusted to come to my aid, and incurring his wrath over the fees he in addition will have to pay”.
That says it all. It is sad indeed that, although so many of us around this table and outside, would agree “Yes, let’s get everybody to sort out their own arrangements if humanly possible”, there really are situations where it is not going to happen. Until we get education on early intervention going in the way that the noble Lord, Lord Northbourne, hoped that one day we would be able to encourage the Government to provide for, I fear that we are going to have to fight arrangements like this. It is with that that I happily endorse the amendment in the name of the noble and learned Lord, Lord Mackay of Clashfern.
Lord Wigley
My Lords, I support the noble and learned Lord, Lord Mackay of Clashfern, in what seems to be one of the most important amendments that have come before this Committee in our long hearings. If it is not successful tonight—and no assurance is given—I very much hope that we will return to it on the Floor of the House on Report.
As the noble Lord, Lord Newton, said, those of us who had to deal with some of the Child Support Agency cases in the 1990s will know how desperately searing they were. It was not just one or two, but dozens, and sometimes even hundreds. I used to try to sort out problems with the local officers, either in Caernarfon or in the office that was administering the CSA in north-west England. It came to the point where I started writing to the Minister about each case because I thought that was the only way in which the message would get home. Poverty was referred to a moment ago. If one quotes the figures for the difference between south-east England and other parts, the average GVA per head in Kensington and Chelsea is over nine times that in Anglesey, and that is an average figure. Within Anglesey, there will be poorer people, as of course there will be in Kensington and Chelsea. It does not really matter where they are; it is what they are suffering. We want a system that can be sympathetic towards them; we certainly do not want a system which prevents people making appeals when things are going wrong. It must be our responsibility as a Committee to get that sorted out; if we cannot, then it will be decided on the Floor of the House.
Lord Skelmersdale
My Lords, my noble and learned friend has produced a very cunning amendment indeed. It is cunning because it follows and detracts, just slightly, from the worst effects of the Government’s policy announcement. However, is the Government’s policy announcement the right one? Who is the sinner in this situation? It is the absent parent. My noble and learned friend is absolutely right that to fine the parent with care who has done everything possible to get to an agreement is quite wrong. The real sinner in all this is the absent parent. Surely the charges ought to be reflected on him and it ought to be for the state to chase him, which has always happened through the CMEC arrangements. That would be my preferred solution.
Baroness Sherlock
My Lords, I convey my thanks—and I suspect those of many other noble Lords around me—to the noble and learned Lord, Lord Mackay of Clashfern, for having brought this before the Committee and having done so in so eloquent, powerful and almost irrefutable a way.
I want to add only two things. One is a question to the Minister. We have talked a lot in this Committee about behavioural effects. I want to understand the point of this charging. If we think it through rationally for a moment, if the aim of the new system is to encourage absent parents to pay up, the logical thing to do would be to charge them if they do not. Why then would one charge the parent with care? The only possible reason to do that would be to deter them applying to the CSA in the first place, because as the noble and learned Lord, Lord Mackay, explained so clearly, the parent with care can do nothing to affect the outcome the Government say they want. Therefore to penalise her for failing to do so would obviously not be fair, so that cannot be the aim. Will the Government please explain to us what is the aim of charging the parent with care?
Lord Kirkwood of Kirkhope
My Lords, just for completeness I shall speak to Amendment 113E. I will be grateful if the Minister will respond to the prospect of, if everything else fails, having a waiver system for low-income families facing some of these fees. I want to know whether the Government have thought about this carefully and looked at the operational and other implementation arrangements that might be necessary. I look forward to the Minister’s response.
Baroness Tyler of Enfield
My Lords, I would like briefly to add a few comments to those that have been made so powerfully around this Committee. We have heard some moving quotes today, but the one I want to give is not from someone who has been part of this process as an end user but from Sir David Henshaw who, back in 2006, came up with the report that is often cited as being the genesis of the idea of charging. We have heard his name referred to on a number of occasions as his policy has been explained. Sir David Henshaw himself recognised the limits to charging when he said:
“I do not want to create a disincentive to use the service for those parents who have no other option for agreeing maintenance”.
We know, because DWP estimates tell us, that about half of all eligible families have no child maintenance arrangements at all. The danger is that even more children in poorer families will go without child maintenance as a result of the proposal to charge the parent with care. This is my final point, which I want to link to the one I made on the previous group of amendments. Not only will the children be worse off—we have heard some graphic and moving accounts of the real hardship that some children could be in—but more will grow up without a role model of a father who contributes, however modestly, to the cost of raising his own children.
Lord McKenzie of Luton
My Lords, like all noble Lords, I am indebted to the noble and learned Lord, Lord Mackay, for tabling the amendment. His being in tandem with the noble Lord, Lord Newton, is an irresistible combination. I do not envy the Minister having to reply.
There have been some powerful and moving contributions. I should start by putting clearly on the record where we are in relation to charging. It has been suggested that what the Government are bringing forward is just based on the previous Government’s proposals, but that is not so. It is absolutely correct to say that charging is permitted under the 2008 legislation, which is supported by the noble and learned Lord, Lord Mackay. But that is enabling legislation like so much of this Bill. It certainly did not envisage proposals such as those advanced by the coalition Government. It should be recognised of course that there were charging arrangements under the original 1991 legislation, but I believe that that was stopped in 1995 because the CSA was not delivering.
Our position on charging is clear. It is reflected in the White Paper entitled, A New System of Child Maintenance, dated December 2006. It cites in part what the noble Baroness, Lady Tyler, has just said and makes reference to Sir David Henshaw. Paragraph 5.48 states:
“We recognise the importance of having a charging regime that does not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. Therefore, the future charging regime will be based on three clear principles. First, that the charging structure should incentivise non-resident parents to meet their responsibilities. Second, that the clear burden of charging should fall on the non-resident parent and not the parent with care. Third, that cost recovery for C-MEC should never be prioritised above payment of outstanding debt for the parent with care”.
Those provisions were not debated particularly extensively when we considered the Bill in 2008, although there was some discussion. At that time, we made it clear that it was for CMEC to advise and recommend to Ministers the detail of any charging regime but that such advice would be subject to CMEC’s overarching objective of maximising the number of children benefiting from effective maintenance arrangements, a point made by my noble friend Lady Sherlock a short while ago.
Although the clear focus on any charging should be on the non-resident parent, CMEC was not precluded from considering a small application fee to both non-resident parents and parents with care where voluntary arrangements might be more effective for them. We also made it clear that any charging structure should not commence until the service was fit for purpose and that this would not be before the launch of the new scheme then planned for 2010, which I think is now planned for 2012.
The Government have proposed a range of charges, including an upfront application fee of £100, which would be reduced for parents on benefits, and an ongoing collection charge on both non-resident parents and parents with care. The latter would be avoided for each if maintenance direct were used. However, whether maintenance direct is a secure and sustainable method of payment is wholly dependent on the non-resident parent. The Government’s proposals for charging fall foul of our criteria in a number of respects. An upfront fee of £100 is bound to act as a deterrent for lower-income households. It is payable not only in circumstances where a voluntary arrangement might be possible but in circumstances where it is not, for whatever reasons. That seems highly likely to increase the prospect of circumstances where no maintenance arrangements are entered into. Penalising parents with care with a collection charge, which depends on the NRP acting responsibly, is wholly unjust. The proposals allow for a reduction in the case of those on benefits but there is no exemption. Neither is any relief proposed for the collection charge.
That is why we are fully supportive of the amendment in the name of the noble and learned Lord. In short, it states that there will be no fees charged to parents with care where they have taken all reasonable steps to enter into a maintenance arrangement and it is not possible or appropriate to do so. There may be a multiplicity of reasons why it is not possible or appropriate to do so, some of which are particularised in later amendments. My noble friend Lady Sherlock has just spoken to one, as indeed has the noble Lord, Lord Kirkwood. In such circumstances, the only prospect of obtaining arrangements is the statutory system. There should be no charge which precludes this, which is what the noble and learned Lord’s amendment seeks to secure.
Amendment 113E, in the name of the noble Lord, Lord Kirkwood, seeks to introduce a reduction or waiver of fees where the income of a parent falls below prescribed levels. We have already indicated why we consider an exemption to be appropriate, although we acknowledge that the scope of Clause 6 is already wide enough to accomplish this.
Amendment 113EA has been spoken to powerfully by my noble friend and sets down circumstances where voluntary arrangements would clearly be inappropriate. The Government, I am sure, will be sympathetic to this given that they already acknowledge that individuals experiencing domestic violence will by-pass their new gateway.
Government Amendment 114 prompts me to raise questions relating to issues of enforcement. Can the Minister give an update on the various measures contained in the 2008 Act, including the use of deduction-from-earnings orders; regular deductions from accounts; lump-sum deduction orders; orders preventing avoidance; administrative liability orders; disqualification for holding or obtaining travel authorisation; curfew orders; and disqualification from driving? Can he say which of these are in force? If it is about getting sensible arrangements, it is also about making sure that those people who are responsible non-resident parents meet their commitments. We put in place a raft of enforcement measures which should have facilitated that and I would be grateful for an update on their progress.
Lord De Mauley
My Lords, I start by addressing my noble and learned friend’s Amendment 113DA. This would exempt from any charges parents with care who have taken all reasonable steps to make an arrangement outside the statutory scheme. In the debate on the previous group of amendments I said that we are seeking to promote collaboration between parents and to encourage them to consider their child maintenance options instead of taking the statutory service as the default. Research shows that more than half of parents with care in the Child Support Agency say that it is likely that they could make a collaborative arrangement with the right advice and support. We believe that it is generally in people’s best interests to focus on developing family support services for separated parents to enable them to consider their options and access help in overcoming barriers to collaborating where this is possible.
The introduction of charging is fundamental to our reforms to encourage parents to consider their options. Of course, not every parent will be able to make a family-based arrangement and so some parents will need to use the new statutory scheme. We believe that it is reasonable to ask them to make a contribution to the cost of the service they receive. We have spent some time considering the issue of value for money in the context of an application and it is worth pointing out that the average yearly Child Support Agency maintenance award is around £1,800 and an average case can be expected to last nine years. This equates to more than £16,000 of child maintenance. It is also worth pointing out that, unlike the situation until quite recently—the noble Baroness, Lady Hollis, mentioned this in the debate on the last group of amendments and I pay tribute to the previous Government for changing it—the receipt of maintenance does not now result in a reduction in benefits. I can confirm that this will remain the case with universal credit. Every penny of maintenance received is on top of whatever benefits the recipient has qualified for.
Noble Lords will, I hope, be able to see that, in the long-term, making some contribution towards the cost of the application in order to expedite this will be a good deal for parents given the significant on going financial benefit of child maintenance and the support offered if there should be any cessation of payment.
The noble Baroness, Lady Sherlock, asked whether the application charge will be used to discourage people from using the service. No. Our aim is that where relationships break down, both parents continue to take responsibility for the welfare of their children. This includes collaboration on issues of finance and, where appropriate, on going involvement of both parents in their children’s lives. We feel that it is fair for those parents who use the statutory service to reprioritise some of their spending towards the cost of their application and ongoing maintenance collection.
Baroness Hollis of Heigham
Could I therefore ask the Minister a question to which his noble friend responded on a previous amendment? If he is making a power to impose charges, would he at the very least agree that it would be unwise—as well as indecent, as some of us might think—to introduce them for at least two years or so, until the new system has settled down?
Lord De Mauley
My Lords, I take the general point that they should not come in immediately. We are in fact proposing to introduce the new service and run it for six months before we introduce charges.
The behaviour that my noble friend’s specific amendment would take into account on the part of the applicant is consistent with one objective of the application charge—pursuing alternatives to the statutory service before applying to it—so in that sense it is consistent with our thinking. I would argue, though, that there would be difficulties in collecting hard evidence to show that a parent with care had taken reasonable steps without an inappropriate degree of intrusiveness. However, the amendment does focus our attention on the fundamental issue of access to the statutory service for those who need it.
Baroness Sherlock
The Minister thinks it will be very hard to get evidence as to how an applicant had made reasonable steps. New subsection (2A) of Section 9 of the Child Support Act 1991, as inserted by Clause 131(1), says:
“The Commission may, with a view to reducing the need for applications under sections 4 and 7 … take such steps as it considers appropriate”,
and,
“before accepting an application under those sections, require the applicant to take reasonable steps to establish whether it is possible or appropriate to make such an agreement”.
How does he propose to enforce that?
Lord De Mauley
I agree that that is a good question. The Government will accept that making a phone call to the gateway is taking reasonable steps.
I said earlier that I agreed with the last Government that it is acceptable to charge for the statutory system. I am, however, very sympathetic to the concerns that have been raised today and I have listened very carefully to noble Lords’ views. What is critical is the amount that the applicant is charged to access the service. Concerns have been raised about the figure that has been mentioned. The noble Baroness, Lady Lister of Burtersett, in the last debate, and the noble Lord, Lord McKenzie, in this debate, mentioned a figure of £100. Both of them suggested that that figure is too high. I sympathise with this view, so I undertake to the Committee to have discussions with my ministerial colleagues and to make that point very vigorously. I thank noble Lords for their contributions today because they will strengthen my hand in those discussions. I also remind noble Lords that we will also consult in due course on our charging levels and debate the regulations in Parliament.
Amendment 113E explores the idea of relating the waiver or reduction of fees to the level of a parent’s income. In a simple way, this is already built into the proposed application charges, with a different, lower rate for those applicants on benefit. Rather than attempt to build further complexity into the IT system, I would prefer, as I have said, to take another look at the overall level of the application charge.
I understand that the matter of an ongoing collection charge is also a concern. The right reverend Prelate the Bishop of Blackburn referred to this. I will take this opportunity to point out to noble Lords that such a charge will be incurred only if maintenance is actually being received; by definition, therefore, people will have to pay for a service only if it is working. I have explained some of the improvements that we plan to make to the service. I am sure noble Lords will agree that it badly needs improvement.
Furthermore, collection charges can be avoided at any time if maintenance direct is selected. The noble Baroness, Lady Sherlock, asked whether victims of domestic violence will pay collection charges. I will come back to victims of domestic violence in a moment, but in the context of collection charges I must say that I do not think it is unreasonable to levy a charge for a service. What is important is the quality of the service and the level of the charge. I hope that I have gone some way to demonstrating that the service will be an improvement on what it has been.
Turning to victims of domestic violence, I reiterate that, as outlined in the Green Paper, Strengthening Families, Promoting Parental Responsibility: the Future of Child Maintenance, we are committed to exempting victims of domestic violence from the application charge. I reiterate that we will honour this commitment. Victims of domestic violence will not have to pay an application charge and they will be fast tracked through the gateway. We accept that applicants who have been victims of domestic violence cannot be expected to make family-based arrangements and so should be exempt from the application charge. However, we do not think it is unreasonable that they should make a contribution, as I have just said, to the cost of the statutory service once they are in it.
To assist them wherever possible to move into maintenance direct and so avoid collection charges and recognising that applicants in these circumstances will not want to have direct dealings with their ex-partner, we are developing a payment support service so that payment can be made outside the collection service without the parent with care having to divulge any personal details to the non-resident parent.
The noble Baroness, Lady Sherlock, asked about the definition of domestic violence. The commission has been working with the Home Office, which has the lead on domestic violence across government. In 2004, the Home Office replaced the 14 previous definitions of domestic violence used across government with a single cross-government definition. We will, of course, be using that definition.
We are still considering how the parent with care can prove that they have been a victim of domestic violence, but I can assure noble Lords that what is designed will not be onerous or burdensome.
Finally, I turn to Amendment 114. In the current child maintenance schemes, the Government have the ability to collect child maintenance by deducting it directly from the benefits of non-resident parents, which is an effective method. The purpose of this amendment is to enable us to continue to do this upon the introduction of universal credit. The amendment will allow, where necessary, for deductions in respect of child maintenance to be made from a non-resident parent’s universal credit award.
We envisage allowing most non-resident parents in the new statutory scheme the opportunity to pay their child maintenance directly to the parent with care—that is maintenance direct, which most noble Lords are familiar with. This should mean that in most cases use of the collection service and deductions from universal credit will be necessary only if the non-resident parent fails to pay by this method. In the current scheme, the ability to make such deductions is limited to where the non-resident parent is liable for the flat rate of maintenance, which could potentially rule out this option for a significant proportion of universal credit claimants who could be liable to pay more. The amendment will remove that restriction.
The amendment also makes clear the position in relation to charging. In the new child maintenance scheme, it is proposed that ongoing collection charges are payable by non-resident parents on top of the maintenance due where it is necessary for the maintenance to be collected using the collection service. The amendment ensures that any charges payable by non-resident parents can also be deducted directly from their benefit payments or universal credit, where this is appropriate. It also allows arrears to be deducted.
My noble friend Lord Newton asked about the appeals system. I should clarify that when I said there was no appeal with the gateway, it is because no one will be stopped from applying to the statutory service, so there is nothing to appeal against. The parent with care just needs to make a phone call and will be granted access to the statutory service.
The noble Lord, Lord McKenzie, asked for an update on the powers taken in the 2008 Act. The Government remain committed to pursuing arrears and will continue to use all their expanded powers to this end while the Child Support Agency schemes remain open. We frequently use deductions from earnings orders, lump sum deductions and deductions from accounts. Parents who fail to pay now face tougher sanctions, including having money deducted directly from their bank account or having their home seized. Primary powers enable the Government administratively—without application to a court—to disqualify a non-resident parent from holding a driving licence or passport where we are of the opinion that the non-resident parent has wilfully refused or culpably neglected to pay child maintenance. These powers are not yet in force. Prior to any final decision being made to commence them, there would need to be public consultation on the detail of how they would work. If the noble Lord so wishes, I can write to him detailing exactly what powers we currently use and what we still plan to bring forward.
Lord McKenzie of Luton
That would be helpful, but could the Minister also indicate the extent to which those powers are going to be transferred to the Secretary of State?
Lord De Mauley
I shall include that in the letter I will send out. In the light of what I have said, I hope that I can persuade my noble and learned friend not to press his amendment.
Lord Mackay of Clashfern
This is Grand Committee and therefore there is no other option open to me at present. However, I must confess to not understanding how it is thought to be just that an absent father’s neglect of his obligations to his children should be paid for to any extent by the children, which is ultimately what it amounts to. That is unfair in principle. I raised it with the Prime Minister—I could go no higher than that—as going against his own speech. As has been said, that speech was very clear. As I understood it, the Fathers 4 Justice people were inclined to think that it was extreme, but I think that its kernel was entirely justified. I cannot see for the moment—I expect to remain of this view—that it is fair to charge the children when one of the parents neglects his or her responsibility. The other parent is left with the children, looking after them, I am sure, to the best of their ability. I cannot see why they should be charged once they have complied with the Government’s new condition of going to the CSA.
I accept entirely that that is a very useful condition and I think that it is very reasonable. However, once it has been complied with, I cannot see that the person who has complied with it should, on behalf of her children, be punished by having to pay. I have no option but to withdraw my amendment tonight, but I think the noble Lord will understand that unless some change of heart occurs, I may raise it again. I beg leave to withdraw the amendment.
Lord Kirkwood of Kirkhope
“(c) the non-resident parent has not agreed to collection arrangements by the Commission under subsection (2A)(a), but has subsequently failed to make full payment of any maintenance due to the parent with care by the date it was due to be paid.(2B) Where subsection (2A)(c) applies, the Commission shall forthwith (and within no more than seven days from the date of notification of non-payment by the parent with care) make arrangements under subsection (2)(a) for the collection of the child support maintenance payable.”
Lord Kirkwood of Kirkhope
My Lords, I still have the will and resolve to continue. Amendment 113G seeks to get fast access to the collection service when the non-resident parent fails to pay. I have a series of questions, which I hope the Minister will help us with, about what happens in these circumstances—they are clearly set out in the amendment—if the non-resident parent fails to pay. The suggestion is that the statutory system would kick in within a seven-day period. I think the Government accept that there could be a gap if that situation was not addressed with dispatch. Seven days might be too high a target to set by way of getting a quick response. Certainly there is concern that a gap, which could be as much as a month, would have a serious impact on the family’s circumstances. Indeed, the Work and Pensions Select Committee noted that,
“unpaid maintenance or late payments can have a devastating impact on parents with care and the wellbeing of their children”.
This amendment tries to identify the fact that there is a gap and tries to get the Government to think about ways of resolving it in order to protect children’s welfare.
I have three basic questions. How quickly does the Minister think that the commission will intervene in these circumstances? What verification of non-payment will they require, which is an important question? Finally, how will disputes be resolved where the non-resident parent argues that payment was made? They are not of the same order as the amendments with which we dealt earlier but it would give some assurance to colleagues if the Minister can say what the Government plan to do in these circumstances. I beg to move.
Lord McKenzie of Luton
My Lords, I will be brief in saying that we support the thrust of each of these amendments.
Lord De Mauley
My Lords, turning first to my noble friend’s Amendment 113G, the Government are determined to ensure that non-resident parents meet their child maintenance responsibilities. That is why we have already committed to bring cases into the collection service as soon as we have evidence that payment has not been made through maintenance direct. Where a parent with care informs us that payment has not been received and the non-resident parent is unable to provide evidence to the contrary, such as a bank statement showing credits to the parent with care’s account, we will swiftly move the case in to the collection service and act quickly to ensure payment is reinstated.
This could include the use of enforcement tools where necessary, such as deduction from earnings orders, where maintenance is deducted directly from an employed non-resident parent’s earnings, and deduction orders, which enable deductions to be made directly from a non-resident parent’s bank account. Where the parent with care alleges that further payments have been missed during the maintenance direct period and there is no evidence to the contrary, we will ensure that these arrears are also paid when we bring the case into the collection service. It is unacceptable for non-resident parents to neglect their child maintenance responsibilities and build up arrears, which the Government are determined to tackle. To that end we will take a more robust approach to collection and enforcement in the new scheme and will use all avenues available to us to ensure outstanding arrears are paid and new arrears are not allowed to accrue.
We will not give up on cases. Following the introduction of the new scheme, the commission will continue to pursue non-resident parents for any arrears of maintenance that they may owe, which will include arrears from the schemes currently in operation. Where arrears have been accrued prior to the introduction of charging, no charges will be payable by either party in relation to these amounts.
On victims of domestic violence, as raised under Amendment 113H, let me put it on the record that we are committed to ensuring that victims are protected. They will be fast tracked into the statutory scheme; they will not be expected to make a family-based arrangement; and will not be required pay an application charge. Clause 132 provides non-resident parents with the ability to choose to pay their child support maintenance by maintenance direct within the statutory scheme. When designing this provision we considered carefully how to protect victims of domestic violence. Therefore, we will provide a service to enable direct payments between the parties without the need for any direct contact to be made or any personal information to be disclosed. This will be known as the payment support service. We will also provide appropriate support to help clients to use this service effectively where necessary.
We believe that the provision of this service and the support we will provide to clients in using it will ensure that victims of domestic violence are able to use maintenance direct safely, without any risk of harm to the parent with care or the child. As I have explained, as soon as we have evidence that payment has not been received we will bring the case into the collection service and take appropriate action to re-establish payment. With that explanation, I hope that my noble friend will agree not to press his amendment.
Lord Kirkwood of Kirkhope
Perhaps my noble friend will expand on one detail. The amendment seeks an expeditious response within a seven-day period whereas the Government seem to be working to a four-week response time. Is there any way in which I can persuade the Minister to think about at least setting some targets? A month is a long time in a challenged household. It is a gap that we have identified and it will exist. These things will happen. I might be being too ambitious with seven days but my noble friend is being very complacent if he is sticking to 28 days.
Baroness Hollis of Heigham
I shall be brief. I have a question that we should have asked on the previous group of amendments. What moneys do the Government expect to collect as a result of the £100 fee?
Lord De Mauley
My Lords, in answer to my noble friend’s question, given the admonishment of my noble friend Lord Freud in an earlier debate I can hardly utter the word “target”. I do not know where he got the figure of 28 days from—it is not familiar to me—but I will answer his question in more detail in writing.
Will the noble Baroness repeat her question?
Baroness Hollis of Heigham
I was going through the impact analysis statement on the changes in CMEC and I cannot find the figures anywhere. We should have asked this on the previous group—it is our fault—but can the Minister tell us how much the Government expect to garner by way of the £100 charge?
Lord De Mauley
Given what I said in the debate on charging, I would prefer to write to the noble Baroness about that in due course.
Lord Kirkwood of Kirkhope
I am grateful to my noble friend for the offer of a letter and I am happy to withdraw the amendment on that basis.
The Deputy Chairman of Committees (Lord Geddes)
My Lords, there is a misprint in the Marshalled List. Amendment 114, which is to insert a new clause, clearly must be put after Clause 133.
Amendment 114
Lord Freud
“Recovery of child support maintenance by deduction from benefit
In section 43 of the Child Support Act 1991 (as substituted by the Child Support, Pensions and Social Security Act 2000), for subsections (1) and (2) there is substituted—“(1) The power of the Secretary of State to make regulations under section 5 of the Social Security Administration Act 1992 by virtue of subsection (1)(p) of that section may be exercised with a view to securing the making of payments in respect of child support maintenance by a non-resident parent.
(2) The reference in subsection (1) to the making of payments in respect of child support maintenance includes the recovery of—
(a) arrears of child support maintenance, and(b) fees payable under section 6 of the Child Maintenance and Other Payments Act 2008.””
The Deputy Chairman of Committees
Again, there is a technicality here in that Clause 136, on which the question will be that it stands part, has been grouped with Amendment 114B which, according to the instructions of 15 September, comes after Clause 136, so Clause 136 stand part cannot be grouped with that amendment. The question therefore is that Clause 136 stand part of the Bill.
The Deputy Chairman of Committees
My Lords, I apologise for my voice. I have nearly lost it.
Schedule 13 : Social Mobility and Child Poverty Commission
Amendment 114B
“( ) The Commission shall advise Ministers on how to eradicate child poverty within the UK.”
Baroness Hayter of Kentish Town
I am going to apologise because I think that I now stand between the Committee and what I gather is the custom that the Minister buys drinks for the whole Committee at the end.
Despite the late hour, this is a really important issue that needs raising, but I fear that because of the hour we may need to return to it later. The Child Poverty Act 2010, which established the Child Poverty Commission, was passed with cross-party support, and we believe that there is now similar support for the proposal to expand its remit to deal with social mobility, a move which the Opposition certainly welcome. However, we have serious concerns about what will happen to child poverty in the coming years. It has been mentioned several times in the Committee. The Institute for Fiscal Studies has predicted that the number of children in poverty, which had fallen to its lowest level for 25 years by the end of the previous Labour Government, will now under this Government rise to its highest rate since 1999-2000 by 2020, by which time one in four children will be poor, measured in relative terms.
I am going to raise the main points. The main point is the duty. The potential rise in child poverty over the coming years makes the work of this commission essential. The debate about its function—whether it is simply going to help count numbers or whether it is going to give advice about the impact of the numbers—is crucial. If we look at the role of the commission, one of the most important things has been the proposal that it should have a duty to advise Ministers, but this is now to be taken out. It will therefore have no duty to advise Ministers on the preparation of their strategy. It has meant that this is only the responsibility of government.
Surely the commission should not just look at technical issues around the measurement of poverty and social mobility, but should also look at advising on the results of that measurement—to advise the Government on its role. If it was only measuring it, the commission itself would neither attract a high level of membership nor would it be able to do its role properly. We therefore ask why should there not be a requirement that it advise Ministers on the policy itself? Also, how can it be that this commission could be put together without a requirement that people so appointed should be expert in its field? The final question is that it should have to have the ability to get its own research otherwise it would be dependent simply on research from the Government, which it is meant to be scrutinising. I beg to move.
Lord Freud
My Lords, I will speak first to Amendments 114B, 114C and 114D, which would require the Government to consult the commission on the development of child poverty strategy, and for the commission to provide advice to the Government on eradicating child poverty.
We believe that unelected public bodies should be established only in cases where there is a clear need for their role to be carried out by an arm's-length body rather than within government. The new commission, with its remit to objectively assess government progress towards improving social mobility and reducing child poverty, is just such a case. A commission established to provide advice is clearly not. There are already a variety of consultation mechanisms by which the Government can obtain independent advice on child poverty and social mobility policy. Indeed, the consultation on the current child poverty strategy received 280 responses. Moreover, it is a fundamental principle of this Government that Ministers are accountable for the policies and strategies they put forward. These amendments put this principle at risk. They offer a degree of scope for Ministers to shrug off responsibility for any lack of success of their strategy.
Amendment 114E requires that the Government publish a response to each of the commission’s reports. By giving the commission the power to publish annual reports, we are actively ensuring that progress on social mobility and child poverty remains a priority for government. The legislation requires that the commission reports be laid before Parliament, providing the opportunity for parliamentary debate.
Amendment 114F reintroduces the requirement from the original Child Poverty Act that the commission should have a particular balance of child poverty expertise. This requirement has been removed because it is clear that the new commission will require a different balance of expertise. It will monitor progress towards both reducing child poverty and improving social mobility, meeting the child poverty targets and implementing the child poverty strategy. I can assure you that Ministers are fully committed to creating a commission with the right combination of expertise. To ensure that this is the case, the recruitment process for all members of the commission, including the chair and the deputy chair, will be carried out in accordance with the code of practice of the Commissioner for Public Appointments.
Finally, Amendment 114G would give the commission the right to request Ministers to commission research on its behalf. It would also require Ministers to provide a reason if they decide not to meet the commission’s request. We do not believe that this provision is necessary. This is because the commission’s new role means that there will be no need for the commission to be able to access new research as it will not be responsible for developing new policy or strategy. Instead, the commission will produce annual progress reports, and we would expect the vast majority of the evidence needed to fulfil this role to already be available either in the public domain or from the Government. If the Government need more and need to access new research to fulfil their duties, the new legislation already enables Ministers to provide the commission with such resources,
“as the Minister may determine are required by the commission in the exercise of its functions”.
Baroness Hayter of Kentish Town
The noble and learned Lord withdrew his amendment and said that he had no choice in Grand Committee. Because of the time, I will also have to do that. We will come back on Report as we have not made the case, particularly about the duty and the need to respond to the annual report.
Can I just say that it has been one heck of a learning experience for me? This is the first Bill I have worked on, and I shall take a moment’s indulgence to thank our leader. Being led by my noble friend Lord McKenzie is an extraordinary experience. In addition to thanking the Minister for his incredible patience at times, through him I thank the Bill team. They have been here night after night, day after day. We have had written briefings but also oral briefings—probably a bit above and beyond the call of duty. We thank them for that. Having said that, I beg leave to withdraw the amendment.
Lord Freud
Lord Freud
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Lord Freud
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