“Get Britain Working” White Paper

Baroness Manzoor Excerpts

Wednesday 27th November 2024 Lords Chamber

[Baroness Sherlock (Lab)]

Let me reassure my noble friend of two things. First, we are absolutely committed to tackling the scourge of child poverty, and the Government are completely committed to making sure that how the social security system works is part of that—so I can reassure her on that front.

Secondly, we often talk in terms of carrots and sticks, but I am not sure that that is very helpful. Most people want to get on: they want a satisfying job that will be rewarding in itself and that will also feed them and their family. People want the same things that we want for them, but lots of things get in the way. Our job is to set the system up so that it is aligned to go with that—to get barriers out of the way, to support people, to give them all the help they can get and to get them over the line.

Obviously, some people will not be able to work on grounds of severe disability or perhaps sickness, or maybe their caring responsibilities do not make that possible. The Department for Work and Pensions is there to support them, as it is to support pensioners and those who need our help. A small number of people really do not want to work and, frankly, they should. We are quite clear that we will support them and, in return, we expect them to do their bit. But, in between, surely we can design a system that is not just carrots or sticks but goes with the grain and helps people to be themselves.

[Baroness Manzoor (Con)]

My Lords, I welcome the White Paper and the Minister’s comments. I know her total passion for trying to unlock the potential of young people. In that spirit, my question is about education and the links between education and skills. She mentioned one GCSE. I am concerned that the financial literacy of our young people is very poor and we need to lay particular emphasis on that. I would also welcome the support of the Government to unlock apprenticeships, with better conditions for employers to take on young people much earlier than they currently do.

[Baroness Sherlock (Lab)]

I thank the noble Baroness, Lady Manzoor, and commend her for her work in the field of financial services over many years. She makes an important point about financial literacy. It is an interesting question. To give a simple example, if I go into a supermarket, I will sometimes see an offer on four cans of tomatoes which will actually be more expensive per can than the single cans sitting next to them. If people do not have basic maths, they will not even have the life skills they need when they most need them. If people do not understand what an APR means, how are they to know whether they are getting a decent deal, never mind beginning to think about pensions? I absolutely agree about the importance of that.

I also think it is really important to get apprenticeships right. One thing we are doing is putting money into more foundation apprenticeships, to give more young people the chance to get in much earlier. If people can get a foot on the ladder, or just get in the door, they can be inspired by something: it is a chance to do something, see something, achieve something, often to just be part of a team. After that, who knows where it can go? The noble Baroness raised two important points and I thank her for them.

Improving Lives: The Future of Work, Health and Disability

Baroness Manzoor Excerpts

Thursday 30th November 2017 Lords Chamber

[Baroness Buscombe]

My Lords, good work is about supporting people to stay in work as well as supporting them to move into employment; making them feel comfortable in healthier workplaces, while offering the right support for staff to help keep them productive and engaged in work; utilising the broad spectrum of the health system to promote good health; and helping individuals to better manage their conditions. We genuinely believe that people who are in work need proper support; otherwise, their roles will not be sustainable. Too many people are not staying in work once they are in there. Our true definition of good work is where people feel able to cope, continue to feel able to cope and can progress within the workplace. Good work for individuals is not being seen as having been given a job—that is good enough. That is not good enough for us, and that is what we must focus on.

On the issue of employment contracts and so on, we want to ensure that people are able to work in a way that is sustainable. Many people working on zero-hours contracts, for example, find that they are better able to cope with their work/life balance and so on in that environment.

[Baroness Manzoor (Con)]

My Lords, I, too, welcome the Command Paper. As the Minister has already said, it is a really important initiative and it is a holistic approach to tackling a very important issue. People with disabilities have a right to be able to access employment and to be supported in work. Therefore, I welcome the £115 million that the Minister has announced today for new models of working. I also liked, by the way, the aim of halving the disability gap by 2020, so I am keen that we continue to keep that focus in mind. What I am concerned about is that perhaps some employers may choose the less severe end of disabilities in focusing their efforts, rather than looking at the whole range of disabilities across the full spectrum.

[Baroness Buscombe]

I thank my noble friend for her question. The reality is that is why we are very pleased with the recommendations of the Stevenson/Farmer review. My noble friend is absolutely right that we have to encourage employers, large and small, to understand that what might superficially appear to be a lesser disability—or a more severe disability—should not enter the decision in terms of taking somebody on board. The reality is that we need to do more to work with people in occupational health and to find different ways to encourage employers to support those with disabilities. Also, one of the things we are very keen on is working with the third sector and charities—for example, the Samaritans, which is particularly close to my heart—to act as a backstop and support to employers so that employers can feel more confident about taking people with disabilities on board.

Local Authorities: Relationship Support Services

Baroness Manzoor Excerpts

Wednesday 5th April 2017 Lords Chamber

[Lord Henley]

My Lords, I cannot give precise details of what consideration was taken when assessing the bids, but I am fairly sure that the degree of co-operation that local authorities want to build with such organisations is a factor which would be taken into account.

[Baroness Manzoor (Con)]

My Lords, I welcome the Government’s commitment to continue with the troubled families programme, although there were some difficulties with it. Can my noble friend tell us how the outcome of that programme is to be monitored so that it delivers what it is meant to do?

[Lord Henley]

I am grateful to my noble friend for that question and I can give her an assurance that we will be evaluating phase one of the programme, which has been completed, and then phase two, about which I have just given details. We aim to publish an evaluation of phase one later in the summer, whenever that might be, and in due course we will consider an evaluation of phase two.

Universal Credit

Baroness Manzoor Excerpts

Wednesday 21st December 2016 Lords Chamber

[Baroness Manzoor (Con)]

My Lords, I thank my noble friend Lord Farmer for securing this timely debate, and I congratulate the noble Lord, Lord Macpherson, on his excellent maiden speech.

The universal credit system is one of the most radical reforms since the welfare system was set up 100 years ago. Today, as we have heard, is the Minister’s last day on the Front Bench, and I therefore take this opportunity to thank him for his tenacity, drive and commitment in ensuring that UC, despite the many challenges it has faced, has continued to progress and develop and to be rolled out successfully across the country, despite some of the delays. He has played a key part and leaves behind an important welfare reform legacy, and I congratulate him.

UC is, of course, the integration of six means-tested benefits and tax credits into a single payment. It simplifies and streamlines a complicated benefits system, along with improving its transparency, accessibility and accountability. It is worth remembering how far we have travelled. In 2010, the country was spending £4 for every £3 we were earning, the welfare bill had ballooned to unsustainable levels—£9 billion, as we have heard—and in-work poverty had increased to 20%. To address this, the UC system is designed to make it easier for people to move in and out of work, and it removes the benefit trap by tackling the financial disincentives to entering the workforce. This is to be applauded as, unacceptably, two-thirds of children in poverty live in working families. This must change.

UC is rightly designed to lift working adults and their families out of poverty by encouraging more people into work and ensuring that work always pays. However, had the cuts to tax credits gone ahead, they would have undermined this cornerstone policy. The Government must ensure that the effects of UC working allowances do not have a similar impact or unintended consequences; for example, discouraging single parents from working more hours. As we move forward and the reforms bed in, the Government must be ready to act to ensure they are not in danger of cutting the very aspect of UC that creates a work incentive.

In the meantime, UC is showing that people are taking up more employment and remaining in employment for longer than when compared with jobseeker’s allowance. In the first nine months, 71% of UC claimants moved from welfare into work with the help and support of Jobcentre Plus work coaches, and of course there is also the offer of help with 85% of childcare costs.

My noble friend Lord Freud leaves behind a huge, incentivising welfare-to-work agenda and a welfare system that must continue to be seen through the prism of work. He leaves a strong legacy for his successor to build upon, and I wish him and UC well for the future.

Improving Lives: Green Paper

Baroness Manzoor Excerpts

Monday 31st October 2016 Lords Chamber

[Lord Freud]

That is exactly the kind of focus that pulling the two systems together should start to address. As the noble Baroness says, if somebody needs a bit of help at a regular time every day to get to work, just putting that little bit of resource in is transformative for that person. That is something that the system has never really been able to do until now and one of the things that we can start to look at as we bring work and health together.

[Baroness Manzoor (Con)]

My Lords, I very much welcome the Green Paper, which is definitely the right direction for us to go in, as is having wide consultation. Has my noble friend the Minister thought about new technologies to support people with disabilities, both in the home and in the workplace as well, as part of the consultation and working with employers?

[Lord Freud]

Yes, some of the technologies that one sees are remarkable. The noble Lord, Lord Low, who is not in his place at the moment, demonstrates that for the blind every time he stands up—I cannot imagine how he can do it—as did one of the members of my private office, who was also blind. There are amazing technologies to help support in that case; I know that it is also true elsewhere. We want to adopt and take on new technologies. One of the interesting and heartening things with Access to Work, where we have been a little concerned about the take-up, is that we have just introduced a digital offer there and we are encouraged by the response to it. There will be other areas where we can get a lot of benefit from going with new technologies.

Poverty

Baroness Manzoor Excerpts

Thursday 14th July 2016 Lords Chamber

[Lord Bird (CB)]

My Lords, I am very grateful to the many noble Lords who have put their name down to speak on this Motion, which is very simple. It asks whether we are going to identify the causes of poverty and, by implication, what we are going to do about ending that poverty.

I sent a very simple letter to the noble Lord, Lord Freud, which I hope he will let me share with noble Lords if they want a copy of it. In it I ask whether, when we spend our social pound, it is possible to identify whether the money that we spend, given by the Government, gets people out of poverty or whether it is a device for helping people to be comfortable in poverty and stay in poverty, and therefore not get out of it.

This year marks the 25th anniversary of the Big Issue. I have spent those 25 years trying to answer a question that affects the lives of thousands and thousands of people, not just in the United Kingdom but all over the world: how do you assist people to move on from poverty so that they can start to have a full life? Unfortunately, even that question moves into complexity, as I shall set out.

The Department for Work and Pensions, which operates our social security system, has to do two things at the same time, and that leads to enormous confusion. One thing that it has to do is to make sure that people who are entirely dependent are looked after. That means ensuring that, because they have no means of providing for themselves due to their physical or mental health, their age or any of the other reasons that lead people to being dependent, they are not shifted into work or into another situation. That is a really significant job and we do it pretty well, but we do not do a good enough job, because many people are stuck in a dependent life and live in poverty. Why must dependency necessarily lead to poverty?

So my first question is: why do we need to give people so little that they cannot even have a full life? In fact, what the DWP needs to do is give them more money. A friend of mine has absolutely no life because he is looking after his wife, who has MS. He cannot go on holiday or repair his car and so on. Would it not be wonderful if we gave them another £1,000 a month, or £13,000 a year, so that he could have a quality of life? One reason we do not do that is that there is confusion and complexity surrounding people who move into social security, and it has been like that since the days of Margaret Thatcher. We are told that she very much espoused small business, although not small government. In fact, when she was asked by Willie Whitelaw, “What do you do with nearly 1 million people out of work?”, she did not turn round and say, “Let them have cake”, although she might as well have done; she said, “Let them have benefits”. With that, the sluice-gates were opened and the welfare state—that wonderful, beautiful and profound system that was invented in 1948 and, in its original form, was full of dignity—was totally and utterly destroyed and anybody could be shifted into social security. Therefore, instead of investing to get people out of poverty, an enormous number of people were parked up and warehoused. The DWP therefore has the difficult problem of how to establish whether a person is dependent and what it should it do about it, and how can it move people forward and out of poverty.

When I ask this very simple question of how we move people out of poverty, the simple issue for me is whether we can find a way of dividing it so that we do not have what I call the Toynbee/Dacre syndrome. If you read the Guardian and those articles by Polly Toynbee and people on the left, they will tell you that we do not do enough for the poor, and they will go on and on for decades about it. They never, or very rarely—I am a Guardian reader and I love it, like we all do—seem to ask the question: “How do we get people out of poverty?”. And then of course you have the Paul Dacre school in the Daily Mail, which believes that people on social security are all scroungers. That is a mirror of what needs to be faced up to, when the interesting thing is that we could get together as a House and as a Parliament and begin the process of dismantling poverty.

I am involved in a conference next year, to which I hope all your Lordships will come, based on what we call the PECC principle, which is prevention, emergency, coping and cure—it is as simple as that. I have my lovely children up in the Gallery. What I do with them is prevent them falling into poverty, so I give them ballet lessons, violin lessons—you name it, they get it all; they go all over the world; their lives are enriched; I do not leave it just to the school. That is prevention and we do it. The house we live in is full of people whose parents have prevented them falling into poverty or, if they have been in poverty, have helped them get out of it.

[Baroness Manzoor (LD)]

My Lords—

[Lord Bird]

I am sorry. If somebody falls into an emergency, which is the “E” of PECC, and they end up in prison or on social security, they are often stuck there. Then there is the “C”, which is coping—so you have prevention, emergency, coping and cure. Eighty per cent of the money that the Government and charities spend is on emergency and coping. We do not get the big bucks in prevention and we do not get the big bucks in cure. I have joined the House of Lords because I am very interested in the idea that we should be a Chamber that not only looks carefully at the causes of poverty but begins to change the way in which we work with the poor and we give them support. If we could get the able-bodied, like certain members of my own family, out of social security, we could give more money to the people who are stuck and who need us.

We need also to start looking at the way in which the Government budget. I have asked the noble Lord, Lord Freud, whether he would consider doing our budgets in a different way. Why do we have this rather strange thing? We have these government Budgets and people balance their budgets but often, by balancing the budget, they are simply passing the problem on to another budget. I suggest that we develop an almost holistic view of budgeting, so that we can begin this process of dismantlement.

We must recognise the problem. If I had a wonderful chance tomorrow to help Theresa May with her upcoming work, I would say to her, “What are you going to do about the fact that we spend, and have spent, billions and billions yet we keep people isolated and lost in poverty?”. Millions of people in Britain love the idea that anyone on social security needs to be supported, and I agree with that. However, let us support the people who desperately need us and get the other ones mobile and moving. When we give a social pound, let us ask whether it gets people out of poverty or simply leaves them poor. I beg to move.

Poverty

Baroness Manzoor Excerpts

Wednesday 29th June 2016 Lords Chamber

[Lord Freud]

We do not collect those figures. There have been figures: I believe that the Trussell Trust put out some not so long ago, which showed those figures, from its perspective, flattening out. There has also been quite a lot of research on food banks, and the APPG did a very good piece of work, which showed that what drives people to this emergency support provided by the community—which one welcomes—is a very complex matter.

[Baroness Manzoor (LD)]

My Lords, no one chooses to be poor, but of course there are many people in the UK who experience poverty. We are moving into a global era when there is greater emphasis on technology, automation and robotics, and we need to upskill our workforce. What is the Government’s strategy to ensure that those who are trapped in poverty are given the skills needed to be able to contribute in that area? As we move forward, the gap between those who have and those who have not will get greater.

[Lord Freud]

There is a huge amount of work being done on the educational side, which is where this has to start—but clearly there is an element of remediation and later support beyond the school years. That is where, for instance, the apprenticeship programme, which is growing quite steeply, is really important.

Poverty Programmes: Audit

Baroness Manzoor Excerpts

Wednesday 4th May 2016 Lords Chamber

[Lord Freud]

The design of universal credit, which the noble Baroness is looking at, is very different from existing legacy benefits. It incorporates real incentives to work more and we are already seeing people who are on universal credit looking to work more, looking to do more hours and looking to earn more in a way that they were not on legacy benefits. At the same time as we have those reductions to which she referred, we are moving the basic national living wage up and increasing childcare very substantially in order to go to a low-welfare, low-tax environment.

[Baroness Manzoor (LD)]

My Lords, the Minister will appreciate the poverty issues that are likely to affect BHS employees if the enormous shortfall in the pension fund is not met. What assurance will the Government give on ensuring that this gap is closed for around 11,000 BHS employees and around 20,000 pensioners?

[Lord Freud]

We have a strong safety net for pensioners in failed companies, as the noble Baroness will be aware. It is important that we have a strong pension regulator behind that. I also observe that this story has shown the importance of having effective pension trustees when there is a change of ownership.

Welfare

Baroness Manzoor Excerpts

Monday 21st March 2016 Lords Chamber

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for repeating that Statement and for advance sight of it, and I welcome unreservedly the Government’s dramatic change of heart on this matter. However, I would like to know how we got to this point. Last Thursday, at Questions, I asked the Minister specifically about the fact that the single biggest revenue raiser in the Budget Red Book was a £4.4 billion cut over five years in personal independence payments awarded to people who need aids and appliances to get dressed or manage their continence. The Minister defended it, claiming that those people did not in fact have extra costs and, anyway, it was not really a cut because the total cost of PIP was rising, even though 370,000 people would have lost up to £3,500 each per year as a result of the change. Of course, the total cost of any benefit is a combination of case load, value and running costs. If the total cost starts to rise but a Minister then decides to change the rules so that some people will not be eligible any more, thereby saving £1.2 billion a year on the anticipated bill, that is undeniably still a cut, not least for the 370,000 disabled people affected.

However, everything has changed since our debate last Thursday. What a difference a weekend makes. Since then, the boss of the noble Lord, Lord Freud, Iain Duncan Smith, has resigned as Secretary of State for Work and Pensions, saying that repeated cuts to working-age benefits,

“just looks like we see this as a pot of money, that it doesn’t matter because they don't vote for us”.

I will not even start on what his junior Ministers said about him, or indeed about each other, with the notable exception of the noble Lord, Lord Freud, who has behaved with considerable propriety in this. The House should commend him for that. However, to offer him one small piece of advice, it might be wise to stay indoors during break time over the next week—just until the storm passes. I hope that he is having an entertaining time in the DWP at the moment, if not an easy one. Joking apart, caught in the middle of all this chaos are some confused and worried disabled people, in work and out of work, who depend on PIP, so I hope that we will be able to get some clear answers to questions today.

First, does the Minister now accept that it was wrong to propose taking £4.4 billion from disabled people to fund tax cuts that mostly benefit those on higher incomes and those with much greater wealth? Secondly, disabled people will be relieved to hear that the cut in PIP announced by the Government has been cancelled, but I think we all want to know where the money will come from to plug the £4 billion hole in the budget that it leaves. Can the Minister assure us that it will not be taken from anywhere else in the DWP budget? I am very glad to hear that it will not come from benefits, but will he assure us that it will not come from the department’s budget elsewhere—for example, from the Work Programme, or other important activities the department will undertake? Also, the Minister has been trailing for a long time a major White Paper on disability. Can he confirm that this Statement means that no changes to benefits payable to disabled people will be considered in that White Paper?

The Statement says that support for disabled people rose in the last Parliament. It does not say that spending on disabled people is falling in this Parliament. The IFS says that it has fallen by 3% in real terms, and House of Commons Library research shows that, taking all disability benefits into account, the fall is over 6%.

Disabled people have suffered greatly at the hands of this Government. They remain among the poorest and most disadvantaged people in the country. If the new Secretary of State is indeed a one-nation Conservative and committed to helping disabled people to thrive, should he not start by reconsidering the repeated cuts that his predecessor made to their benefits? Perhaps he could help those who have lost their Motability cars, those suffering because of the closure of the Independent Living Fund, the two-thirds of bedroom-tax victims who are disabled, or those who will get £30 a week less in ESA in future because of legislation that we recently passed. I welcome this change unreservedly, but until those questions are addressed, it is very hard indeed to believe that we really are all in it together.

[Baroness Manzoor (LD)]

My Lords, I wish the new Secretary of State for Work and Pensions every success in his new role—I mean that sincerely—and I am sorry that the Government find themselves in a difficult place. In fairness, however, they have had significant notice that there was much wrong with the way the welfare reforms have been tackled and are to be implemented.

As the Minister knows, we on these Benches have seen the welfare reforms through the prism of work, so we opposed cuts to tax credits, cuts to universal credit, the removal of support for people with disabilities, and measures that increased child poverty. We on these Benches want to ensure that government policy enables a fairer and more compassionate society, where the weak and the vulnerable are protected and people are supported to work, and supported in work when their incomes are low.

The Government have led us to believe that the weak and the vulnerable are being supported, but the events of the weekend say that this is not only about ensuring adequate support for disabled people but has been—as Iain Duncan Smith’s letter says—about unnecessary cuts to hit a politically motivated target. If that is the case, I am sad to say that the Government may have lost their moral compass. Do the Government accept IDS’s criticism, and do they not therefore owe disabled people an apology for being used as pawns in a cynical political game? I am pleased to note that the reassessment for PIPs will now be kicked into the long grass, but that is not good enough. The entire PIP cuts plan should be stopped. Will the Minister confirm exactly what the intentions for changes to PIP are? Are they to be fully stopped, as the Minister indicated, or just paused for the next six months or so?

Finally, given that the Government consulted on these proposals and until last Friday were saying that they were about giving the right support to disabled people, what is the Government’s actual view on the use of aids and adaptations by disabled people? If they have changed their mind for political reasons, does that mean that the foundation for the Government’s original claims was false, and—as IDS says—just an excuse to cut money? I am concerned about how the Government have treated the consultation process. Should there not be a review into whether they have made misleading claims in order to justify the cut, while ignoring the outcome of the consultation process?

We all have a duty of care to protect the most vulnerable in our society, to preserve their dignity and to help them live full and independent lives. All Governments should take that responsibility very seriously. To that end, I am pleased to note that the Statement says that the Government have no plans to make any further cuts in welfare, but can the Minister confirm that this applies throughout this Parliament? I am also pleased that they are re-setting the conversation, which is vital. I hope that this new conversation about welfare, health and social care will benefit the majority.

[Lord Freud]

There were a number of questions there. One of the main questions is about what is happening to PIP in terms of costs—various claims have been made. I reassure noble Lords that in this Parliament we are seeing an increase in the DLA PIP budget in real terms. I accept what the noble Baroness, Lady Sherlock, said; namely, the contrast between the PIP process we were undergoing last week and the tax cuts was wrong. This is almost history, but the reality was that we were looking at the issue in its own terms, following a report by an independent review that said there was a problem in the PIP process. Fundamentally, putting the two together has caused a great deal of upset. Indeed, Iain Duncan Smith raised that very point himself.

I shall not spend the whole time going through the PIP issue. I assure noble Lords that we have now stopped the PIP adjustment, full stop. It is not being delayed; rather, it is not happening. The question—a suspicious question from the noble Baroness, Lady Sherlock—is: where is the money coming from? I see. The answer is that we are not seeking to replace that money within the welfare budget. That is the point of the very explicit statement, which was made twice, that, looking ahead, we are not looking for welfare savings.

The noble Baroness asked about the White Paper process. That would be a reform process; there may be changes in the way we do things and how we support people, but that is following a consultation on what will work best and is not to do with the savings process that I described. There is no intention to use it in that way.

I shall pick up some of the other issues raised by the noble Baroness, Lady Sherlock, including, for instance, whether we will reconsider other things. There are 24,000 more people on Motability than at the start of 2013. They may be different people, but the process is being directed at the people who need it. The independent living fund was a transfer. The noble Baroness uses one set of statistics on who is disabled and the RSRS. The numbers come down very considerably when one looks at them on ESA. The final issue she raised was the ESA and WRAG. I remind noble Lords, and her, that that was voted on repeatedly in another place.

On the points made by the noble Baroness, Lady Manzoor, I reiterate that there is a full stop here; we are not moving things around on PIP changes. I defend the consultation process that we undertook. We made some changes as a direct result of the consultation, although we did not use four of the options. We went to one and then adapted option 5. I think I have now dealt with the Front Bench questions.

Child Support (Deduction Orders and Fees) (Amendment and Modification) Regulations 2016

Baroness Manzoor Excerpts

Monday 14th March 2016 Grand Committee

[The Minister of State, Department for Work and Pensions (Baroness Altmann) (Con)]

My Lords, these regulations were laid before both Houses on 8 February 2016. They enable the department to waive collection and enforcement fees on the 2012 child maintenance scheme for a specific group of cases for a limited period of time. This is to support a process that provides a safety net for parents with care. It will require non-resident parents with a poor history of meeting their child maintenance obligations to demonstrate a change in behaviour and prove that they could reliably be allowed to access the direct pay service on the 2012 scheme rather than having to pay collection fees in the new scheme. We will also introduce minor technical amendments to the existing powers to improve the effectiveness of regular deduction orders and lump sum deduction orders.

A comprehensive reform of the child maintenance system began in 2012 which aims to incentivise parents to collaborate in the best interests of their children and move us away from the idea that state intervention via a statutory child maintenance scheme should be the default option for separated parents. To achieve these aims, a programme to close all existing Child Support Agency cases began in June 2014. Closing cases gives parents the chance to consider which arrangement best suits their circumstances for the future, while access to Child Maintenance Options, a free and impartial service, ensures that they have relevant information available to help inform this important decision.

Where parents believe a statutory solution would be best for them, they can apply to the new 2012 scheme, which is operated by the Child Maintenance Service. New, simplified calculation rules and improved IT systems are delivering better outcomes for parents and children. At the same time, fees and charges are helping to incentivise parents to consider closer collaboration and use a direct pay service, while also providing a contribution towards the cost of running the service. This policy change is predicated on the view that encouraging parents to co-operate when arranging child maintenance payments is likely to lead to less confrontation between parents, and this is ultimately normally in the best interests of the children.

When approaching case closure, we are of course mindful of the need to take careful steps to reduce the risks of child maintenance payments being disrupted, particularly for those cases where money is flowing only as a result of enforcement action being undertaken on the old CSA cases. We want to address concerns raised by stakeholders following the public consultation on case closure undertaken in 2012.

The last segment of cases that we will close—segment 5 —will include those cases where money is flowing as a result of enforcement action. But to try to give clients an opportunity to avoid charges, as well as giving a chance for future co-operation between parents who may have been in conflict previously, we want to introduce a new positive test of compliant behaviour for these previously recalcitrant non-resident parents. This is known as a compliance opportunity. The compliance opportunity will take place during the first six months of the 2012 scheme case for this group. During that time, the non-resident parent is required to pay half of their maintenance liability via the collection service by a non-enforced method of payment such as direct debit.

In order to ensure that the parent with care is protected, we will issue a deduction from earnings order to the non-resident parent’s employer to collect the other half of the ongoing maintenance liability directly from the non-resident parent’s wages, wherever this is possible. This payment safeguard aims to minimise disruption for the parent with care during the compliance opportunity. Where the non-resident parent misses even one payment, they will fail the compliance opportunity and prompt action will be taken to resume collection of the full amount of maintenance by the enforced method of payment already in place, with the collection and enforcement charges applied. Only in circumstances where the non-resident parent is not at fault will an exception be made.

If all payments are made, the non-resident parent will pass the compliance opportunity and have a chance to continue paying child maintenance directly to the parent with care in future. So the outcome of the compliance opportunity will inform a decision over whether a 2012 scheme case should be a direct pay arrangement, which does not attract collection fees, or a collect and pay arrangement, where CMS manages collections and the usual fees are charged.

The initial proposal, outlined by the previous Government, was to offer the compliance opportunity in the final six months of the closing CSA case. It would be offered to all clients regardless of whether they intended to apply to the new 2012 scheme. This would have meant expending resources unnecessarily, including significant investment in the CSA computer systems close to their retirement date. However, it is now our intent to move the compliance opportunity to the first six months of the new case. It will then be offered to those who choose to apply to the 2012 scheme before their CSA case closes and cannot agree between themselves on whether their new case should be managed on the direct pay service or the collect and pay service. We have consulted with stakeholders and they are supportive of this approach.

We will administer cases on the collect and pay service type for the duration of the compliance opportunity, which will allow us to use an enforced method of payment as a payment safeguard. Ordinarily these actions would attract collection and enforcement fees on the 2012 scheme, but we are committed to delivering a compliance opportunity as it protects the interests of the parent with care and can help to maximise the number of effective arrangements on the new 2012 scheme. The fee waiver that will be introduced under this instrument is required in order to be fair to both parents while testing the reliability of the non-enforced payments. That is considered necessary for the successful delivery of this essential measure.

The instrument will also make some technical amendments to clarify the existing rules governing regular deduction orders and lump sum deduction orders to allow them to include collection and enforcement charges. RDOs and LSDOs are enforced orders that are used to secure child maintenance liabilities by deducting money directly from non-resident parents’ bank accounts. The provisions in these regulations will put beyond doubt that we are able to collect the fees and charges associated with the new 2012 scheme, as well as the maintenance liability, and collect CSA arrears that have been moved to the 2012 system. This is in line with existing policy, and these provisions aim to put the legal position beyond doubt.

I am satisfied that the instrument is compatible with the European Convention on Human Rights, and I commend it to the Grand Committee.

[Baroness Manzoor (LD)]

My Lords, I have a couple of questions for the Minister. First, there is no mention of CSA arrears in the new compliance opportunity in these 2016 regulations. Will the Minister expand on how those cases will be dealt with? Secondly, what does the Government’s analysis show about subsequent child maintenance outcomes where cases involving children have closed, particularly as the Minister has mentioned that IT systems were providing much better outcomes?

[Baroness Sherlock (Lab)]

My Lords, I thank the Minister for her explanation of the draft order. I remind the Committee of my historic interest as a former non-executive member of the board of the Child Maintenance and Enforcement Commission, and my decidedly historic interest as a long-distant chief executive of the National Council for One Parent Families. I am going to raise points very similar to those raised by the noble Baroness, Lady Manzoor, although, I fear, in rather less concise a manner, so the Minister is warned now.

As I understand it from what the Minister said, these regulations are aimed at non-resident parents in segment 5—people whose cases are facing closure on a legacy system but who are the subject of some CSA enforcement action. The idea is that they will get this compliance opportunity, or chance to show willing. These are people for whom, in the past, we have had to use enforcement, but they will now be able to show that they will do it. Their success in doing so will decide whether or not they end up on direct pay or on what is known as collect and pay under the CMS. I can see the Minister nodding, so I know that I have got that much right. I gather this came about because concerns were expressed about the Government’s original plans to move people on to direct pay; this is a way of testing it out. That seems a sensible idea and we have no objections in principle. However, I do have a number of questions.

The first is a really simple question. I found it impossible from the draft regulations or the memorandum to understand what regulation 2 does. It may be that the last paragraph of the Minister’s opening remarks told me that, but I wonder whether she could clarify it. The EM says of regulation 2 that,

“These provisions are likely to attract minimal public interest”.

That may well be because nobody, myself included, has the slightest idea what the regulations are doing, so it would be helpful if the Minister could clarify that. In particular, will the Minister set out for the record what powers the regulation will give the Government that they do not have now and in what circumstances they envisage using them? If the answer is in her last paragraph, she can point to that. Secondly, will the Minister confirm that all the cases covered by these regulations will still have statutory maintenance arrangements, not voluntary or family-based arrangements?

Next, I want to pick up the point raised by the noble Baroness, Lady Manzoor, about arrears under the legacy system. I understand that there is going to be a cleansing process to make sure that any arrears liability that is transferred across to the CMS is solid and accurately recorded. The intention is to move the ongoing liability across first and then to cleanse the arrears; once they have been verified, the arrears will follow. However, the Minister mentioned that the Government have decided to delay the compliance opportunity until the end of the process rather than have it at the start. Therefore, I am worried about whether the Government have considered what will happen. Under the compliance opportunity, the non-resident parent who has previously shown him or herself not to be able to pay without enforcement action will be tested only on their ability and willingness to pay ongoing maintenance liability as determined by the CMS system. Therefore, they will not have been tested on their ability and willingness to pay arrears, which they may or may not be happy to do. Why did the Government make that decision in the light of that? Would it not have been better to leave it right until the end so that, by the time the compliance opportunity came along, the arrears would have gone across and it could then be applied to both? Can the Minister explain that some more?

Will the Minister tell the Committee whether any arrears still within the CSA which are awaiting transfer across at the end of the cleansing process will continue to be collected by the same enforcement method, whatever may be going on with the compliance opportunity? In other words, will that be enforced in the way that it was under the CSA?

If an NRP passed the compliance test, it seems that they could opt to use direct pay to pay any arrears, as well as any CMS maintenance due. Is that correct? However, given that we do not know that they would be willing to pay CMS, would it not have made more sense, when the arrears do come across, for them simply to carry on with the same enforcement mechanism in the new system as was there in the old system? Since there are no fees for the parent with care for arrears collection anyway, that would not have had any implications for him or her.

On a separate point, will the Minister explain what enforcement methods will be used during the compliance opportunity for the bit that is being enforced alongside the voluntary partial payments? She mentioned using deduction from earnings orders, but there would be cases, such as self-employed non-resident parents, where a DEO was not appropriate. What other tools will be used for the enforcement part of that payment if a DEO is not appropriate? For example, will deduction orders or freezing orders or setting aside of disposition orders be available during the compliance period?

This is the first opportunity we have had to question the Minister about the progress of transition to the new system, so I would like to ask her some questions about how that is going. Can she tell the Committee how many cases have been closed in each segment so far? When does she expect to complete the bulk closure of segments 3 and 4? Can she tell us when the programme of closing all the CSA live cases is now expected to finish?

To come on to the point raised by the noble Baroness, Lady Manzoor, about child maintenance outcomes, will the Minister tell us how many parents affected by CSA case closure have transferred to CMS or made a private family-based arrangement or made no arrangement? This is crucial information. We want to be sure not only that people have decided not to move across but that they have some maintenance being paid. The figures in the public domain suggest that, up until the end of December 2015, around a quarter of a million CSA cases had received final notice of the ending of their CSA case. However, figures between January 2015—when the case closure started—to August 2015 showed that during that time only 22,000 applications had been made to the CMS from cases affected by proactive case closure, plus another 6,800 from reactive closure. That means that only 28,800 CMS cases had been started from January to August, when around a quarter of a million had had notice of the ending of their CSA case. I hope very much that does not mean that hardly anybody is using the new service, but the noble Baroness will understand why we would like to know that.