Child Support (Enforcement) Bill
Friday 19th May 2023
(1 year, 7 months ago)
Lords ChamberChild Support (Enforcement) Act 2023 View all Child Support (Enforcement) Act 2023 Debates Read Hansard Text Watch Debate Read Debate Ministerial Extracts
Baroness Redfern (Con)
My Lords, I am pleased to introduce the Child Support (Enforcement) Bill to this place. After gathering significant cross-party support in the other place—it was passed without Division—I am hoping that noble Lords will continue this and support these important measures. I am sure that, like me, everyone here recognises the important role this Government play in making sure that our children get the very best possible start in life. The Government’s impartial support through the Child Maintenance Service—CMS—is especially crucial when there is a breakdown in the relationship between separated parents which then impacts on their children.
While it is not about taking one parent’s side over another’s, in those situations where parents no longer live together, ensuring that parents without the primary care of their children make regular financial contributions towards the support of those children is so important in keeping children out of poverty. That is why the Bill is such an important measure: it will not only improve the recovery of arrears from parents who have failed to meet their financial obligations to pay child maintenance, it will help to ensure that the CMS continues to deliver a modern, efficient and reliable service in which parents can have confidence. Perhaps most importantly, it will help in getting money to more children faster, because children should not have to suffer.
Before I move on to talk about the Bill in more detail, allow me to provide your Lordships with some further background to the CMS and the introduction of the Bill. The aim of the CMS is to encourage co-operation and collaborative parenting, in the form of family-based arrangements for separated parents in bringing up their children, but where necessary ensuring that they have the option of statutory maintenance arrangements through the CMS. Once parents are in the system, the CMS manages child maintenance cases through one of two service types: direct pay and collect and pay. For direct pay, the CMS provides a calculation and a payment schedule, but payments are arranged privately between the two parents. For collect and pay, the CMS calculates how much maintenance should be paid, collects the money from the paying parent and pays it to the receiving parent. Cases in collect and pay tend to involve parents where a more collaborative arrangement has either failed or not been possible to achieve. Paying parents on collect and pay are therefore considered to be less likely to meet their payment responsibilities.
The difference child maintenance payments make to children’s lives is critical, so it is vital the Child Maintenance Service takes action to tackle payment breakdowns at the very earliest opportunity, to re-establish compliance and to collect unpaid amounts as quickly as possible. Where compliance is not achieved and the parent is employed, the CMS will attempt to deduct maintenance, including any arrears, directly from their earnings. Employers are obliged by law to co-operate with this action. CMS enforcement powers also allow for deductions to be taken directly from bank accounts, including joint and business accounts, either as a lump sum or a regular amount. This is a useful power where the parent is self-employed and taking deductions from their earnings is not possible.
Where such powers prove to be inappropriate or ineffective under current legislation, the CMS must apply to the magistrates’ or sheriff courts to obtain a liability order before the use of other enforcement powers, such as instructing enforcement agents or sheriff officers, or even more stringent court-based enforcement actions, such as forcing the sale of property, disqualification from driving or holding a UK passport, or even commitment to prison.
This Bill will amend uncommenced primary legislation to enable the DWP to take further enforcement action without the need to apply to the magistrates’ or sheriff courts, as obtaining a liability order through the courts is time consuming, instead allowing the Secretary of State to make an administrative liability order. This power, once enacted, will allow enforcement measures to be used more quickly against parents who have failed to meet their obligations.
While getting child maintenance to our children more quickly has to be of primary importance in introducing this power, it is also important that this Bill does not simply allow the CMS to forge ahead with its most invasive and stringent enforcement measures without there being some protections for paying parents. With that in mind, this Bill and any regulations developed in support of it will ensure that important protections are in place for parents. My noble friend the Minister will say more about that shortly, but it is important to reiterate that the provisions being introduced in this Bill and the supporting regulations will allow the CMS to move swiftly and appropriately to enforcement measures, without placing any additional or unreasonable constraints on a parent’s ability to seek an appeal.
Finally, I should like to add that this Bill extends to England, Wales and Scotland. Northern Ireland has traditionally maintained parity with Great Britain by mirroring child maintenance legislation. In respect of administrative liability orders, Northern Ireland has similar uncommenced provisions to those in Great Britain, which it plans to commence, thereby enabling it to use and enforce administrative liability orders. However, due to the suspension of the Northern Ireland Assembly, it will not be possible at this time for it to amend its legislation to match the changes being made through this Bill.
In conclusion, as I hope I have been able to make clear, this Bill is of great importance to the future of children in separated families, and I am therefore privileged to be able to present it to the House. I hope that noble Lords agree with me that the essential improvements to enforcement processes within the CMS that it makes, which will get money more quickly to children, are measures we need to give effect to quickly. I therefore look forward to working with the Minister as we aim to secure the Bill’s swift passage through the House. I beg to move.
Baroness Stedman-Scott (Con)
My Lords, I thank my noble friend Lady Redfern for sponsoring this important Bill in this House. The Bill is important, as it will help to ensure that action is taken to get money to children who desperately need it sooner rather than later.
When I first arrived in the DWP as a Minister, I found that one of my responsibilities was the Child Maintenance Service. I quickly found out that it was not the portfolio area that many Ministers were clamouring to take responsibility for. I suppose you could say that in some cases it might have been the hospital pass. Having said that, once I understood how important it was and how much children and families needed this money, I tried to get to grips with it—and, as some would say, I became quite obsessed with child maintenance. My first ministerial visit was to Gingerbread, and what a baptism of fire that was. I learned more in the couple of hours I spent there than I probably would have just by reading books and papers.
It became very clear to me that some paying parents would do anything they could to avoid accepting responsibility for their children. Noble Lords would not believe the lengths that people would go to in order to avoid doing it. I toyed with the idea of giving some examples. I was not going to, but let me give your Lordships one: getting your brother to do a DNA test to prove that you are not the father so you do not have to pay. That is outrageous. Of course, some hide income in other accounts as well. There are some people who genuinely cannot pay, and there are some who can but who mess about a bit, delay it and cause havoc in the home. But there are some people who shamelessly do everything they can to avoid paying their maintenance. I was not going to have that, and I know that my noble friend the Minister is not going to have that either.
The Child Maintenance Service has a range of tools at its disposal to ensure that it gets the rightful payments that are due. Equally, I should say that there are many parents who do pay—let others follow their example. Exactly how will the Bill improve the experience of child maintenance customers and speed up the process? How much time will the introduction of this administrative liability order save?
I make another plea to my noble friend. For those paying parents who are in dispute with the Child Maintenance Service—there are a fair few of them—I ask that the new liability enforcement orders will not be applied until their appeals have been resolved. As I have said, the Child Maintenance Service has a number of enforcement powers at its disposal. Can my noble friend tell the House what is being done to ensure that existing powers are being used effectively and, if possible, can he share with the House how many orders the Child Maintenance Service currently obtains? Securing payments from paying parents has an impact on the reduction of child poverty. Can my noble friend tell us the effect that child maintenance has on children growing up in poverty?
The Child Maintenance Service is not perfect, but I ask your Lordships to understand and appreciate the effort and commitment of the child maintenance team in using all its powers to secure funding. Please, do not underestimate the effort that is put in. As Minister Tom Pursglove said in the other place, the Child Maintenance Service
“is committed to delivering service and support to the highest standard and is working hard to transform itself into a more customer-focused, digital organisation, which I am sure is something we all welcome. Although there is still much more we can do, the CMS should no longer carry the stigma with which its predecessors were associated”.—[Official Report, Commons, 17/3/23; col. 1119.]
I pay tribute to the child maintenance team, its leadership and its delivery, and especially to the financial investigation unit. If noble Lords spent some time with it, they would see how amazing it is at finding things that other people have not been able to find. At this point, I pay tribute to Arlene Sugden, who led the organisation and has now retired, Chris Smith, and Stuart Richards. If I owed money, I would not want him on my back—I can tell your Lordships that.
Finally, if your Lordships have not gathered already, I am fully supportive of the Bill. I hope that the whole House will stand four-square behind it. I know that there are many other changes that can be made to the Child Maintenance Service and lots of other things we wanted to introduce that have not got here yet. I hope my noble friend the Minister will get them here as quickly as possible, and then we will speed up the process to get more money to children who really need it.
Baroness Bottomley of Nettlestone (Con)
My Lords, what a formidable speech. I felt some sympathy for the Minister, having the previous Minister literally breathing down his neck. I think we know what this bodes for the future. I start with very warm congratulations to my noble friend Lady Redfern on the sensitive and thoughtful way in which she introduced the Bill. We should also thank Siobhan Baillie, the MP for Stroud, who has done a lot of work on it in another place.
We have heard a wonderful, magnificent example of a Minister who has become obsessed with her subject, which I completely understand. We know that, with my formidable noble friend Lady Stedman-Scott, she will not let this subject go; she will be making sure that this goes through. She was a Minister who, like many, did not govern by press notice but by heavy lifting, getting into the detail and seeing what really works. It is easy in government to think that a press notice is an implementation plan. That is not the case. Making something happen and making something change takes far more detail.
This is the most gripping, intractable and difficult subject. I go back as far as the Finer report, commissioned by Barbara Castle in the 1970s—a Labour report, but Barbara Castle did not feel that she could quite swallow the recommendations. I feel that I must share with the House the comments of Margaret Thatcher—another force, like my noble friend—on the Child Support Agency in 1990. I would like the House to discuss where we differ from these objectives:
“We will set up a new child support agency … The whole process will be easier, more consistent and fairer. Our aim is to give the lone parent back her morale and her confidence. Then she will be able the better to use and develop her own abilities for the benefit of her children and herself”.
Those words are slightly quaintly expressed, but we have been struggling over the decades—both Governments—as to how we can make this work better.
I have long been committed to issues that affect children and families. I started work for the noble Lord, Lord Field, at the Child Poverty Action Group, earning £12 a week. That work was particularly about the budgeting behaviour of families at or below the poverty line, on social security benefits. Many of them earned in their poverty; there were lots of different mechanisms. The key lesson that I learned from that is that poverty is debilitating and difficult in many ways, but that unpredictable income is almost worse. You can manage on a low income if you can be confident of the amount that will come through. It is much easier to plan, even on a meagre budget, if the income is consistent. Being unable to rely on a regular source of income creates acute tension, unhappiness and resentment. That is why it is critical that we try to make the maintenance payments reliable, regular and not a source of endless anxiety and unhappiness. It is a reason why I have long been a supporter of child benefit; it is the one benefit that women can rely on—and it usually is the women.
I also oversaw the implementation of the iconic Children Act 1989, steered through this House by the former Lord Chancellor Lord Mackay of Clashfern. Much of the legal work was done by the noble and learned Baroness, Lady Hale. The purpose was to safeguard and promote the interests of children; their interests should be paramount. Lord Mackay used to say that a “natural adjunct” to the Children Act was the Child Support Act. The tension has been to try to make the two Acts, the financial mechanisms and care mechanisms, work in parallel. As all are agreed, we have not reached the destination, but it is still the right place to aim for.
We saw how the Child Support Agency made way for the Child Maintenance Service. It is estimated that there are 2.3 million separated families in Great Britain, with 3.6 million children in those families, and that 60% of separated families have child maintenance payments. Parents in separated families receive approximately £2.4 billion a year in child maintenance payments; we are aware that these are essential to those families’ well-being and financial security.
Children are expensive; children are demanding. They want what their peers have. Parents want to give their children the best they can. How well I remember when I worked for the Child Poverty Action Group how many mothers got themselves into terrible debt at Christmas shopping from catalogues. They would not let their children wear National Health Service spectacles. I from a more confident position was happy to buy nearly everything my children had from a jumble sale—second-hand bikes and toys—but the pride and determination that one’s child will have the best one can give them is deeply entrenched and it is why these financial payments are so important.
Many in this House have experience of working with disadvantaged families. I know that the noble Baroness—whom I like to call my noble friend—Lady Sherlock, who is going to wind up for the other side, has long-standing engagement and commitment, as does my noble friend.
Preparing for this debate, I wondered whether I was getting out of date, so I talked to the best constituency caseworker I know. She expressed in strong terms her deep concerns about the ongoing functioning of the Child Maintenance Service. Dedicated caseworkers inevitably become close to those they help and identify with their anxiety and pain in grievous situations. We all understand that the break-up of a relationship is not only about poverty; it is about the end of a dream and it is almost like an amputation for some. It is fuelled with suspicion, hurt and resentment. There are many psychological and emotional factors, but the fact is that poverty, not being able to rely on an income, compounds all those difficulties.
My caseworker noted a number of parents, usually fathers, doing everything they could to avoid paying maintenance, as my noble friend said: setting up companies to conceal income, refusing to pay, being devious and, in some cases, being absolutely dishonest. The children frequently then have the indignity and pain of seeing the absent parent driving around in a smart car, going on expensive holidays and treating subsequent children with relative luxury. All this reinforces why this Bill, while not being the total answer, has an important part to play.
Mention has been made of Gingerbread. The CAB is similar; it has endless evidence about these examples. In seeking redress or justice, the lone parent has to invest time, frustration and deep resentment, which can of course be cumulative and result in stress and even ill health. As I said, most mothers or fathers do everything they can to give their child the best possible upbringing.
The National Audit Office has said that it can take years before payments are made to receiving parents if the paying parent simply refuses to comply. Running on for years, it is a relatively Bleak House experience of fuelling emotions that nobody wants to have when trying to be a calm, civilised parent and creating a relationship, and one of respect, with the absent parent.
The House will be aware of the 2022 National Audit Office report on child maintenance. Encouragingly, parents now rely less on the state to help them to make maintenance payments—an objective of the 2012 reforms. It is estimated that one in three separated parents have a child maintenance arrangement for which the agreed maintenance is paid in full, but in 2022 the CMS reported that more than a third of parents paid no maintenance at all; of those who do pay maintenance, fewer than 45% pay more than 90% of the amount due. Cumulative arrears amounted to £493 million; the figure is estimated to reach £1 billion by 2031. It is evident that there has to be action and that there are ongoing problems with child maintenance collection and enforcement activities.
Research shows that 60% of single families living in poverty and not receiving child maintenance would be able to escape poverty if they were simply paid the money they are owed. How difficult it is to be a balanced, affectionate parent, having a good relationship with the other parent, while going through all this impossible difficulty and complexity. We have to make it easier.
The Child Maintenance Service has experienced falling compliance figures since 2021, following what had been a period of improving compliance. I appreciate my noble friend’s comments about the Child Maintenance Service: the people in the organisation are dedicated and they care. They are at the receiving end of extremely emotional, often quite angry and maybe irrational people who feel that they have lost out, so they need the patience of a saint. I want to acknowledge the good work that the CMS is doing—but we have to do more.
Under current legislation, direct payment is the default option unless both parents request collect and pay. If the paying parent refuses to comply, as I have said, it can take years before payments are made to the receiving parent.
This Bill is not going to solve all the problems. We have discussed the different measures by which the CMS can ramp up enforcement and collection more quickly. Time is reduced pain; speed will reduce the agony faced by so many. Other measures in the Bill are not enormous but are important and will result in swifter, more effective action.
The Bill constitutes an important step to improve compliance and enable the CMS to do its work better. I doubt that it will be the last word on the subject but it is thoughtful, carefully prepared and practical. I certainly believe that it will improve the lives of affected children and families, up and down our country. I commend all those who have been involved.
Lord Palmer of Childs Hill (LD)
My Lords, I support the Bill and congratulate those who moved it in the other place and the noble Baroness, Lady Redfern, on moving it in your Lordships’ House. This important issue should not have been left to a Private Member’s Bill; I would have hoped that the Government would find government time to introduce it. But we are where we are, and I believe the Government support the Bill.
The debate in the Commons in December 2022 showed the need for the Bill. Members gave many examples from their constituency casework of the trauma in those cases. In your Lordships’ House, we get only the occasional casework, as the complainant rightly consults their local MP, but I think that what we have heard is the tip of the iceberg. There are other cases that we, and even MPs, do not know about.
The Bill is an important measure to aid recovery of arrears from parents who fail to meet obligations to pay maintenance. The Child Maintenance Service has a difficult job. It was launched in 2012 to replace the Child Support Agency and I welcome the anecdotal accounts of how it is performing.
I understand that the Bill is trying to speed things up and I welcome descriptions of how it will streamline matters. However, can the Minister say whether there is recognition of when an absent parent literally cannot pay maintenance? That raises the question of how often these claims are reassessed.
It was a pleasure once again to follow the noble Baroness, Lady Bottomley—we seem to have made a habit of it today—and her trips through history. We had Baroness Nancy Seear earlier and Baroness Barbara Castle in this debate, and others too. It was a pleasure, and I certainly agree with the noble Baroness’s words.
The noble Baroness, Lady Stedman-Scott, gave a virtuoso performance; she has been seriously missed from the Front Bench. She commented on how dreadful she had found child maintenance when she was a Minister. The thing is that most of us are not Ministers. We see some of this, but Ministers or even local MPs probably see a lot more than we ever realise. There were certainly many stories, all of which I believe, but they are all based on the breakdown of a marriage. When a marriage breaks down, there is often a lot of ill will. Who is guilty? Maybe both are, but there certainly is a problem. Who suffers? The children do, and the Bill is trying to rectify that. The noble Baroness, Lady Stedman-Scott, told us how it will work and gave us all the statistics, which means I can shorten my speech somewhat.
We on these Benches heartily support the Bill. There has to be care that when the absent parent cannot pay, there is recognition of that, not driving them into mental illness or bankruptcy when they are not hiding assets. There must be care in introducing the Bill with regard to how the Child Maintenance Service will work, but we on these Benches support the Bill.
Baroness Sherlock (Lab)
My Lords, I thank the noble Baroness, Lady Redfern, for introducing the Bill and all noble Lords who have spoken. As we are in the business of confessing past connections, I should probably remind the House of a very distant time when I served as the senior independent director of the Child Maintenance and Enforcement Commission, and my time as the director of the National Council for One Parent Families, now joined with Gingerbread.
The noble Lord, Lord Palmer, mentioned that this is a Private Member’s Bill but that it would have been nice for it to have found government time. It is not the only one. You wait a long time for a child support Bill, and at least two come along within the month. We currently have two child support Private Members’ Bills going—one more and they could easily have found time for one government Bill, I should have thought. None the less, I am glad it is here and we have a chance to debate it, and I pay tribute to the noble Baroness, Lady Redfern, for bearing the responsibility so firmly.
It was a delight to hear the speeches today. It is good to hear the noble Baroness, Lady Stedman-Scott, back in this territory, released from the confines of government. When they say, “Let Bartlet be Bartlet”, I say, “Let Stedman-Scott be Stedman-Scott”, and let us have more of this passion from the Back Benches. It was also good to hear from the noble Baroness, Lady Bottomley, who I very much regard as my noble friend. I pay tribute to her: for so many years she has had a passion for standing up for children and families who are living in poverty and an understanding of how it is often women at the front line who just hold things together. When the budget is too tight, it is the women who go without food themselves, track down the cheapest things and do all it takes. I commend the noble Baroness for all her work and understanding over the years.
Child support systems operate in sensitive territory. It is in the space between parents who are no longer together and, as the noble Lord, Lord Palmer, said, are sometimes no longer talking to each other, and it is difficult. The reality is that some parents simply do not pay what they owe for their children, as the noble Baroness, Lady Stedman-Scott, illustrated clearly. I know it is difficult having a break-up, but no matter whose fault it was, you may walk away from your marriage or your relationship but you do not get to walk away from your children. You retain responsibility for your children, and they have a right to expect the support of both parents. The state also has an interest, because, as the noble Baroness, Lady Bottomley, and others explained clearly, child maintenance has an important role in reducing child poverty. I will not rehearse that, but there is a public interest for all of us in having a well-functioning child maintenance system. We on these Benches fully support any measures that will help to get non-resident parents, the paying parents, paying what they owe to support their children.
Concerns have been expressed about the performance of the Child Maintenance Service both here and when the Bill was debated in the Commons, but I think there is general agreement that enforcement needs to be stepped up and, in particular, speeded up. Given that, we welcome the provisions of the Bill, which should give extra tools and speed up the use of tools that are already there.
The noble Baroness, Lady Redfern, explained very clearly what happens if a parent fails to make payments as directed: the CMS can use deduction from earnings orders, or DEOs, to try to get the money back in. If they fail, they have to go to a magistrates’ or sheriff court to get a liability order before going to the next level of enforcement agents, stopping people having passports, or whatever.
This Bill changes that situation by amending the uncommenced provisions in Section 25 of the Child Maintenance and Other Payments Act 2008. When those amended provisions are commenced, the Secretary of State will be able to make administrative liability orders which will certify the debt that is owed by the paying parent and allow the CMS to take those further enforcement actions without going to court.
I have some questions of clarification. I say at the outset that I am not asking these questions to make difficulties or because I do not support the Bill. Some of them are questions I might in other circumstances have asked in Committee, but Committee stage may prove to be an unnecessary delay to the passage of the Bill, so I hope the House will indulge me in asking some of those questions now.
First, the 2008 Act allowed for some of its provisions to be commenced by SIs at different stages, but can the Minister explain why these provisions were never commenced? Is there a reason why the Government did not do so, for example, when child support was reorganised wholesale a decade ago? Secondly, I am interested to understand the reasons for the change in approach from that set out in the uncommenced provisions of the 2008 Act.
I am sure other noble Lords will have found it quite hard to get to the bottom of what the Bill is doing. The Bill amends the provisions of the 2008 Act; those in turn amend the 1991 Act. However, the provisions that the Bill amends were never commenced. One of the results of that, I presume, is that, if you go on to legislation.gov.uk and look up the 1991 Act to try to trace through what this will do, you will find that the clauses being amended are not there; they do not exist. I can only assume that the reason for that is that they were never commenced. Perhaps the Minister could tell me that.
I had to get the help of a clerk. In the absence of that or a Keeling schedule, the only way to work out what the Bill will do is to take the 2008 Act, lay it on top of the 1991 Act, lay the Bill on top of the 2008 Act and then trace through what the end result will look like. I did that because I am sad.
Noble Lords
Baroness Sherlock (Lab)
A little less mirth at this point, if you do not mind; I am not that sad!
I suggest that if this happens again, although it is an unusual set of circumstances, offering a Keeling schedule to all the sad people around would be a good idea at the outset. It might save us all a lot of time.
There is an added complication, in that, at Second Reading in the Commons, my honourable friend Matt Rodda MP asked why it was necessary for the regulation-making powers in the Bill to be so broad. The Minister, Mims Davies, responded in Committee:
“I know that Baroness Stedman-Scott wrote to him on this point”.—[Official Report, Commons, Child Support (Enforcement) Bill Committee, 1/3/23; col. 10.]
I could not track down the letter in the Library or anywhere else, but a letter was issued on Wednesday this week under the signature of the noble Viscount, the current Minister. I understand that it is to be placed in the Library; I would be grateful if he could confirm that for the record. I am grateful to him for sorting that out. It is a very helpful letter, now that I see it. I am simply saying this on the record so that anybody coming after me who wants to trace the proceedings through will know where to find the relevant papers if anyone else out there is as sad as me and wants to do this in due course.
The effect of all this is that I struggle to be completely clear about what the Bill is doing, so I will ask a few questions. They might be stupid questions because I might have misunderstood it, but I would be grateful to get clarity on the record for now.
As well as moving to administrative liability orders, the big change seems to relate to the process of appealing a liability order. Section 25 of the 2008 Act allows appeal against an order to the First-tier Tribunal. I think that the Bill changes that to a right of appeal to a court. Can the Minister set out the reasons for that change?
I am also not completely clear about the position in relation to a court being able to query the amount of a child support liability. In that letter to Matt Rodda dated 17 May, the noble Viscount said:
“It is also currently the case with court issued liability orders—the magistrate or sheriff cannot question the underlying maintenance calculation”.
Indeed, Section 33(4) of the 1991 Act says:
“On an application under subsection (2), the court or (as the case may be) the sheriff shall not question the maintenance assessment under which the payments of child support maintenance fell to be made”.
I am sorry; I did say that I am sad.
I think the reason for this is that, at the moment, the matter would need to be dealt with on appeal at the First-tier Tribunal. The letter also says:
“The quantum of the debt is dealt with via the Appeals Tribunal—a paying parent can ask the Child Maintenance Service to reconsider any calculation, within 30 days of the calculation decision being made, through the mandatory reconsideration process”.
I am not sure whether that refers to the current situation or to that which will obtain after the Bill takes effect. So I ask the Minister: at the moment—that is, under the previous Act—is it the case that, if the Secretary of State goes to court to get an order, the court cannot question the amount of the liability but the parent can go to the First-tier Tribunal to appeal either the amount or the imposition of a liability order?
I also need help working out what happens after the Bill takes effect. New subsection (4), to be inserted by Clause 4(2), says:
“On an appeal under regulations under subsection (3), the court must not question the maintenance calculation by reference to which the order was made”.
Can the Minister clarify whether, once the Bill takes effect, the parent can appeal the imposition of the liability order to a court but not the amount of the liability? If so, how will a parent be able to appeal the amount of a liability order in future? Will it be only through mandatory reconsideration, or will there be an appeal route thereafter? I am not objecting to these provisions, just seeking clarity on them.
Finally, Section 33(5) of the 1991 Act says:
“If the Secretary of State designates a liability order for the purposes of this subsection it shall be treated as a judgment entered in a county court for the purposes of section 98 of the Courts Act 2003”.
Can the Minister say whether that will still apply to administrative liability orders issued by the Secretary of State?
Having said all of that technical stuff, we certainly do not want to oppose the Bill. Labour wholeheartedly supports the principle that both parents should support their children, that non-resident parents should pay child maintenance and that there should be enforcement for those who fail to pay, especially those who go to the steps that the noble Baroness, Lady Stedman-Scott, reminded us of. I am sorry to say that a considerable number of other examples are out there.
It is clear that enforcement of child maintenance obligations needs to be improved. The Bill should make a contribution to that end by speeding up the process by which non-resident parents can be made to pay what they owe. I hope, with the noble Baroness, Lady Bottomley, that we will in future see a further reduction in those who are not paying all that they owe, and that more children will eventually get the support of both of their parents, as they have every right to expect. For now, I simply thank all noble Lords who spoke today for some excellent speeches. I thank the noble Baroness, Lady Redfern, for her work in this House and Siobhan Baillie MP in the other. I look forward to the reply.
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Viscount Younger of Leckie) (Con)
My Lords, I congratulate my noble friend Lady Redfern on her excellent introduction to the Bill and for initiating this important debate on Child Maintenance Service processes. As has been said, it has the full backing of His Majesty’s Government, and it gives me great pleasure to speak in support of it today. I will say something about my role, just to reassure the House: far from being a hospital pass, it is generally a great privilege to take on. There is a lot to do in this respect on the Child Maintenance Service, and I want to take forward many of the initiatives and changes that my noble friend Lady Stedman-Scott commenced.
There were a number of questions from the noble Baroness, Lady Sherlock, and I am very grateful for some advance notice of them. I may not be able to answer all of them, but I will do my best. I will answer most of them towards the end of my remarks.
As has been said, this is ultimately about helping children who have faced a particularly traumatic experience. Parental separation can be devastating for children. The work of the CMS cannot entirely put that right, but it can help to give those children a much better start in life that they otherwise would not have had. That is why the Child Maintenance Service exists. I am particularly grateful to my noble friend Lady Bottomley for giving us some history and context, going back to two redoubtable ladies, Barbara Castle and Margaret Thatcher.
Let me start by giving the Bill some of my own context. The purpose of the CMS is to facilitate the payment of child maintenance between separated parents who cannot reach their own agreement. In the financial year ending 2022, it is estimated that there were 2.5 million separated families in Great Britain. In the three-year period covering the financial years from 2020 to 2022, it is estimated that parents with care in separated families received a total of £2.6 billion annually in child maintenance payments, through both private and CMS arrangements. These payments helped to keep around 160,000 children out of poverty each year, a subject raised by my noble friend Lady Bottomley. I hope this has helped to answer one or two points she raised.
I understand how complex and traumatic separation can be for families, and we know that the vast majority of parents want to do the right thing and provide financial support for children they no longer live with. This is a challenging job undertaken in very difficult circumstances; these points have already been made by some other Peers in this short debate. CMS staff work incredibly hard to collect maintenance so that separated families receive the financial support they are due.
My noble friend Lady Redfern so eloquently explained how the CMS manages cases through one of two service types, and how it will take action to re-establish compliance and collect any unpaid amounts that have accrued. For parents who choose not to comply with their obligations, the CMS will attempt to deduct their maintenance and any arrears directly from their earnings. This is done via a deduction from earnings order or request, and employers are obliged by law to take this action. Where parents are self-employed, deductions can be made directly from solely held, joint and business bank accounts.
The aim of enforcement is to recover money needed to support children, as mentioned earlier, not to punish paying parents. However, where parents refuse to pay and all other avenues have been exhausted, the CMS can apply to the magistrates’ court, or sheriff courts in Scotland, to obtain a liability order. This enables the use of more stringent enforcement powers, such as instructing enforcement agents and other court-based enforcement actions.
However, the liability order process is now outdated, and making an application to court in each case is administratively burdensome. Currently, applications to court for liability orders typically take about 20 weeks to process, meaning five months where no tangible activity can take place to get that money where it is needed. Moreover, the debt will accumulate, putting the parent further into debt and making it harder to exit that spiralling situation.
This Bill, through my noble friend, amends existing powers which, once commenced, will allow the Secretary of State to make an administrative liability order where the paying parent has failed to pay an amount of child maintenance, without the need to make an application to court. This means that the CMS can react quickly and start those crucial first steps on the enforcement journey much sooner, which will substantially speed up the enforcement process, as was raised by my noble friend Lady Stedman-Scott in her eloquent speech. I applaud her, adding to the complimentary comments made by my noble friend Lady Bottomley. She has made vital important improvements to the CMS. She was a staunch advocate for its work securing money for children, as she said.
Most paying parents want to do the right thing and support their children, but we recognise that some of those parents might be struggling. I was struck by the important comments made by the noble Lord, Lord Palmer, who highlighted that some of them genuinely struggle and that there is a sensitivity involved in ensuring that we remember that. The noble Lord asked how often assessments are revalued if paying parents are struggling. Parents can report changes of income at any time. Where the change is greater than 25% of the income recorded in our system, we will alter the liability. He will know that the calculations are reviewed annually. In these tragic cases where parents cannot afford to pay their arrears because of other debt, which does happen, in most circumstances the CMS will aim to agree an affordable and sustainable payment arrangement which settles the outstanding arrears within two years. The CMS can also signpost paying parents to relevant organisations if there is a declaration of hardship. I say again that these are very sensitive issues. I add my comments to those of noble Lords concerning those on the front line for the Child Maintenance Service, who do their best in these difficult circumstances.
However, rest assured, as I know that the noble Baroness would wish me to say, we will not hesitate to use our enforcement powers wherever necessary for those relatively few parents who will find every which way not to pay. We are targeting our use of enforcement agents and liability orders more effectively, and the processes are more efficient. To answer a question raised by my noble friend Lady Stedman-Scott, in the year to December 2022, the CMS was granted 9,600 liability orders in England and Wales. The CMS has worked to target the use of liability orders more effectively. Processes are now more efficient and on average the CMS is collecting more money per liability order in process. To ensure that these powers are used proportionately, the Bill will stipulate that they will only be used where a deduction from earnings order is inappropriate or has been ineffective. The Bill will also allow the liability order to be varied if, for example, the amount of arrears upon which the liability order is based is subsequently found to be incorrect because investigations have revealed further details about a paying parent’s finances which were divulged to the CMS previously.
Further protections will be made available through secondary legislation, which will give parents the right of appeal while setting out some parameters around the appeal process—including the period within which the right of appeal may be exercised, the powers of the court in respect of those appeals, and for a reliability order not to come into force in specified circumstances. I will say more about secondary legislation in response to the questions raised by the noble Baroness, Lady Sherlock.
The appeal provisions through secondary legislation will be reflective of powers already in use and working well for other child maintenance enforcement measures, such as those which allow for deductions directly from a parent’s bank account. Where a valid appeal has been made, the CMS will not act on a liability order until the appeal has been resolved by a court. I hope this answers the question raised by my noble friend Lady Stedman-Scott. They will also reflect current provisions for liability orders by preventing the court questioning the maintenance calculation as part of the enforcement process. Where a parent disagrees with the calculation, there are already alternative routes they can take. They can ask the CMS to reconsider it through the mandatory reconsideration process and subsequently appeal to the Tribunals Service if they are dissatisfied, or they can report a new change of circumstances, which could lead to a new calculation.
To develop the secondary legislation on the Bill, my department will consult and engage with stakeholder groups, as well as other government departments, such as the Ministry of Justice, and the devolved Administrations, where appropriate, to ensure that parents are suitably supported. The secondary legislation will follow the affirmative procedure, so this House will be able to debate the proposals put forward.
My noble friend Lady Bottomley touched on enforcement improvements, and I shall go a little further and reassure her. The House will know that the CMS has made improvements to enforcement processes to increase the effective use of powers. This includes simplifying deductions from earnings and increasing efficiency by reducing the manual intervention required, and the CMS is also making better use of deductions from bank accounts. This has increased the volume of deductions and means that money is being collected more quickly for children even before the Bill. Working in partnership, the CMS has improved court processing times by introducing virtual court presenting and electronic exchange of documentation. Only 8% of the total maintenance due to be paid since the start of the CMS remains to be collected through collect and pay. Just to put this in context, this was as high as 17% in March 2015.
My noble friend Lady Bottomley also touched on paying parents—there was a theme anyway about paying parents and some of them avoiding their obligation to pay. I say again that we are aware of a small number of parents whose maintenance liability is inconsistent with their financial resources. Cases involving complex income or suspected fraudulent behaviour can be looked into by the FIU, the financial investigation unit. This is a specialist team that can request information from a wide range of sources to check the accuracy of information that the CMS is given.
The noble Baroness, Lady Sherlock, asked about Section 33(5) of the 1991 Act. I can give her some assurance—it may be that I have to follow up with more detail—that this power is not used because, since 2015, regulations have allowed the CMS to share information directly with credit reference agencies. The Bill does not affect those data-sharing provisions and the CMS will retain the means of disclosing information to credit reference agencies when required.
The noble Baroness also asked why the provisions that the Bill amends are not shown in the 1991 Act on GOV.UK. I may have to follow up with a letter on this, but they are not on GOV.UK in the 1991 Act because they are uncommenced. I think that is what the noble Baroness said, but I will look at my reply and see if I can enhance what I have just said.
I have a very short reply to the noble Baroness’s very important point about the missing letter to Matt Rodda: yes, we have written and, yes, it is now deposited in the Library, so I hope that is helpful for the House in general.
The noble Baroness, Lady Sherlock, asked a broader question about what the Bill actually does. I think she knows what the Bill does, but she focused on the commencing of administrative liability orders and the appeal routes, and I will say a little more about that. One of the questions was why the provisions were not commenced in 2012. We considered commencing these powers in the past, but the powers as originally drafted included a right of appeal to the First-tier Tribunal. This would be an expensive option for the Child Maintenance Service and would create unnecessary demand for the Tribunals Service. Linked to that is the question of why there is a change to the appeal route; I think this is central to the questions she raised. Our intention is now to commence these powers with certain changes we are making through the Bill, including replacing the requirement to create a right of appeal to the First-tier Tribunal with a more appropriate court-based appeal. Provisions relating to appeal rights will be set out in regulations, so there is more discussion to be had on this and I hope that provides some help.
I am aware of the time. I hope the House recognises the importance of this Bill; it has the full support of His Majesty’s Government and I very much welcome it.
Baroness Redfern (Con)
My Lords, I thank all noble Lords who have contributed to this important debate and the Member for Stroud, Siobhan Baillie, in the other place. Importantly, I also thank the Public Bill Office and officials in the Department for Work and Pensions for their guidance. This Bill will achieve administrative efficiencies for the Child Maintenance Service, not just for the taxpayer. It will introduce a quicker and cheaper process to pursue enforcement for people who are waiting for money. That money will be collected for more children, providing them with the financial support they need to get a good start in life, although we must do much more. I acknowledge that the CMS does an incredibly challenging job in very difficult circumstances.
I thank my noble friend the Minister for his contribution and direct responses to the queries posed today. I also thank all noble Lords who have spoken. I hope that, with continued cross-party support, this Child Support (Enforcement) Bill will continue through the House. I beg to move.