Welfare Reform Bill

Lord De Mauley Excerpts

Wednesday 25th January 2012 Lords Chamber

[Lord McKenzie of Luton]

My Lords, we support the amendment moved with the great passion and inescapable logic which we have come to associate with my noble friend Lady Lister. I say to the noble Lord, Lord Newton, that I prefer the noble Lord of Wednesday to the one of Monday. As my noble friend said, this is light-touch and effectively cost-free, so we should not have the usual argument about what this would do to the deficit reduction programme. Most noble Lords, with the possible exception of the noble Lord, Lord German, were pretty much on the same page, as the right reverend Prelate the Bishop of Manchester said. To the noble Lord, Lord Fowler, I say that this is not about trying to roll back the decision and retain the Social Fund as it is; it is simply trying to ensure that the money allocated through this process will be spent as it was meant to be. I should have thought that, in these times of austerity, the Government would feel it particularly incumbent on them to ensure that.

The amendment is intended to build on the useful reassurances we had from the noble Lord, Lord De Mauley, at earlier stages in response to concerns we raised about the localisation of the discretionary Social Fund. Those concerns primarily centred on the lack of a ring fence for the money that is to be transferred to local authorities to allow them to provide services that replace those that the Social Fund currently provides to some of the most vulnerable people when they are facing a particularly difficult situation.

Those concerns about the lack of a ring fence were raised by more than 40 per cent of respondents to the Government consultation on reform of the Social Fund. They have been raised by a wide range of charities, including Scope, Crisis, and Family Action, which state that they are seriously concerned that the abolition of the discretionary Social Fund and its replacement with a patchwork of local arrangements will remove one of the final safety nets for some of the most vulnerable and needy members of society.

Those concerns are so acute because of the degree of vulnerability of those to whom the Social Fund community care grant scheme provides support. Thirty-two per cent of those receiving a community care grant in 2009 were disabled, 26 per cent were lone parents and 10 per cent were pensioners. Many women fleeing domestic violence see community care grants as a vital lifeline when setting up a new home on exit from a refuge. The fear is that, without some way to ensure that local authorities use the money for the purposes for which it has been allocated, the needs of those groups will go unmet and the money will be diverted to other purposes—a lesson we learnt the hard way, as my noble friend Lady Lister pointed out, when we were responsible for removing the ring fence for the supporting people grant when we were in government. Crisis points out that councils are, on average, cutting supporting people services by 13 per cent, despite the overall supporting people budget being cut by only 2.7 per cent.

Local authorities themselves are worried about that possibility. DWP research published in December 2011 into local authorities’ plans to replace the Social Fund found that a number of authorities were concerned that without a ring fence and some level of reporting, funding would quickly become amalgamated into existing budgets and that, as a result, its identity, visibility and purpose would be lost. A second concern was that councillors or directorate heads would redirect the funding to plug gaps in other budgets. The most common example mentioned was the social care budget.

The amendment would not place a ring fence around the funding, which the Minister argued would be restrictive. He also argued that the settlement letter which accompanies the transfer of moneys to the local authority will be sufficient to ensure that those funds are used for the purpose for which they are intended—the meeting of often urgent need. If this is the case and local authorities intend as a matter of course to use the funds for this purpose, there should be no barrier to the Minister accepting the amendment, which merely puts in place a checking mechanism to ensure that what he is confident will happen takes place. We support the amendment.

[Lord De Mauley]

My Lords, during the passage of the Bill there has been much discussion of the reform of the discretionary Social Fund, and how we can ensure that the money intended for vulnerable people goes to them—an aim with which, as the noble Baroness, Lady Lister, generously acknowledged, I am completely in agreement. However, imposing restrictions on local authorities through data sharing, as the amendment seeks to do, would take us a little away from the central issue of how best to ensure that the funding achieves its intended purpose.

The noble Baroness’s Amendment 62BJA would mean that the Secretary of State would have to ensure that he was satisfied that a local authority planned to use the funding, which will replace community care grants and crisis loans for general living expenses, for the purposes set out in the settlement letter, before he could share information with a local authority about eligibility for assistance under the new local provision. The Secretary of State would also have to be satisfied that arrangements had been made to report on the use of the funding.

I appreciate the noble Baroness's intentions in moving the amendment. Despite its drafting, and despite what the noble Lord, Lord McKenzie, said, I read it as another approach to the issue of ring-fencing the funding that will go to local authorities. Although I do not think that it will achieve that, I will say, as I said before, that a ring-fence is not the best way to ensure that the money reaches vulnerable people. Ring-fencing would mean that local authorities could be constrained, for example, from investing in existing services, or pooling the money with funding from pre-existing services to provide a comprehensive and effective support system for the most vulnerable people in their communities.

The Government fully agree that it is very important to have adequate controls in place to ensure that the funds are used in the way intended. We have clear agreement on that point. However, I will explain why the amendment is unnecessary. Other controls are in place to provide checks and balances before, accompanying and following the initial allocation under the new provision. Perhaps I have not been adequately clear about these so far.

First, I turn to the current element of the steps that we are taking—what I might call the “before” steps. Departmental officials have already conducted a great number of meetings and workshops with local authorities to support them in preparing to deliver the new local provision. We will continue with this support by holding a series of workshops with all upper-tier local authorities over the coming months. The workshops will consider in detail how transferred funds could be used to maximum effect from April 2013. Through the sharing of ideas and best practice, they will assist the development of new services and will help local authorities identify how the funds can be used to best effect to support the most vulnerable. The participants and outcomes of the workshops will be published on the DWP website as part of our ongoing package of advice and information for all local authorities.

The settlement letter—what I might call the “accompanying” step, because it will accompany the funding that local authorities receive for delivering the new provision—will set out, as we discussed at some length last week, what the funding is to be used for and the underlying principles, and will describe the outcome that must be achieved. On 17 January this year, having further considered our debate of the week before, I laid out exactly what the settlement letter would contain. My noble friend Lord German made the point that local people and communities can hold their local authorities to account. The detailed settlement letter will help them do that. Furthermore, as I explained, in order to underline its purpose the funding will be distributed to local authorities through a specific revenue grant rather than being included with the rest of their general expenditure in the main revenue support grant.

I shall move on to the “following” steps. Following the introduction of localised assistance, the department has already made plans to conduct a review in 2014-15 to obtain appropriate information from a representative cross-section of at least 50 local authorities, which represents one-third of the total, in order to help inform future funding levels. We have committed to using this opportunity to gather further information about the way in which local authorities have used the funding. I contend that this review will be more valuable than the information required under this amendment. It will tell us about how the provision is working and what the funding is being used for, whereas this amendment would require a judgment to be made about the intention of a local authority before it delivers the new scheme. In addition—and this is critical—as local authorities will not know in advance which of them will be involved in the review, the risk of scrutiny and exposure from the review work will also help to drive their behaviours and, in theory, they may otherwise have been tempted not to comply in full.

Turning to the amendment itself, I suggest that it would be unreasonably burdensome to expect the Secretary of State to make a case-by-case check on every local authority that requires information about eligibility from the Department for Work and Pensions. As I said a moment ago, we estimate it would be approximately 150 local authorities. Indeed, the amendment presumes that local authorities will approach the department about eligibility for their local schemes, but this may not happen in every case. It will be for each local authority to decide which vulnerable people in its area would most benefit from the new local provision. This is the point. This is about trusting local authorities. They are best placed to make these decisions, as they will already be working with vulnerable people in their area through the other services that they provide. This local knowledge will help them to decide how to tailor support, and they may not feel that they need to approach the department for any information in order to do this.

Even if the obligation contemplated by the amendment were necessary, which, as I have explained, we contend it is not, primary legislation would not be the place for it. Regulations under Clause 129 will prescribe the purposes for which the department can share benefit information with local authorities, and the agreements reached with local authorities will make clear that the information is to be supplied only if it is for a prescribed purpose—in this case, determining eligibility for the new local provision.

We are already working with local authorities to make sure that they are ready to deliver this support. The settlement letter will make explicit that the funding is to provide a replacement provision for community care grants and general living expenses crisis loans. It will be clear that the funding is meant for vulnerable people and about the outcomes that should be achieved. The review will offer a check on what local authorities have done with the funding they received and will provide accountability.

The noble Baroness, Lady Lister, asked why a light-touch reporting system cannot be set up. Local authorities will be using money in a variety of ways, all directed towards meeting the needs of vulnerable people. Any system, no matter how straightforward, would, by its very nature, have to be complex to capture and assimilate all the money and the varied information.

The noble Lord, Lord McKenzie, and other noble Lords raised Supporting People as a demonstration, in their eyes, of how non-ring-fencing produces a risk. The Supporting People funding was deliberately incorporated into the main formula grant in order to provide local authorities with maximum flexibility. Our funding will not be included in the overall grant. It will be part of a special revenue grant. In addition, we are working and will continue to work with local authorities before the funding is allocated to devise plans for using and targeting the money and, as I have said before, we will review over one-third of them to ensure that the money has been spent appropriately.

My noble friend Lord German, who must have no idea how grateful I am to him for his very helpful words, asked the important question about Wales and Scotland. The funding will not be transferred under the Barnett formula; it will be allocated through a special grant. The funding will be based on the equivalent Social Fund spend for 2012-13, and it should be noted that Scottish policy is also not to impose a ring-fence.

The noble Baroness, Lady Hollis, asked about the tension between upper-tier and lower-tier authorities. The funding is allocated to upper-tier local authorities in order to provide the greatest possible flexibility to local areas. From our discussions with local authorities, we know that a range of delivery models are being considered, some of which will result in some funding being devolved to lower-tier services such as housing. Decisions about the ultimate funding for each area will be determined by a range of local factors, including the location and nature of existing services, and how these align with areas of deprivation and need and the level of funding that will be devolved. In some less deprived areas it may not be necessary or practical to operate a number of services.

Local authorities have been enthusiastic and engaged with this process and I am confident that, given what I have said, they will continue to act in a responsible and fair way to protect the most vulnerable in their communities. I hope I have addressed the issues noble Lords have raised, and I ask the noble Baroness to withdraw her amendment.

[Baroness Lister of Burtersett]

My Lords, I am very grateful to all noble Lords who have spoken. I have to say, when I was calling for the cavalry, I had not expected its generals to be two former social security Secretaries, the noble Lords, Lord Newton and Lord Fowler. I am very grateful to them for what they have said. I particularly thank my new hero, the noble Lord, Lord Newton, for his strong words in favour of the amendment.

The noble Lord, Lord Skelmersdale, rightly said that the key is the settlement letter and what happens if a local authority does not abide by it. I do not know about the noble Lord, but I have not heard an answer to that question. In Committee, the noble Lord, Lord Kirkwood of Kirkhope, and I came to a great defence of the principle of the Social Fund. I would not say that we had been wrong at the time, but we accepted that the Social Fund had worked out better than we had expected. We all agree that it needed reforming. The problem is that reform is not the same as the partial abolition that is taking place now. I would still have preferred the old system of statutory single payments, but that is history and that is not what we are here to discuss.

I am very grateful to the right reverend Prelate the Bishop of Manchester for the point he made about accountability. It is interesting that the noble Lord, Lord German, made the same point in Committee, where I felt that he was not convinced that accountability would be achieved. I know a letter was written to him, and I was not convinced by that letter that accountability would be achieved. The noble Lord, Lord German, raised a question about the local electorate holding local authorities to account. The people for whom the Social Fund is so vital are the people who are least likely to vote in local elections and be on the electoral register. As much as I would like to think that other members of the community will put the interests of potential Social Fund users at the top of their concerns when voting, I am afraid that it is simply not going to happen. Local organisations should not have to prise the information out of local authorities to try to make them accountable at the ballot box.

Yes, we do trust local authorities. This amendment is not about bashing local authorities. This is not an amendment that says, “I do not trust local authorities”. However, local authorities are under huge pressure in terms of spending. We trusted them with the Supporting People grant, but, as I have said, they are making disproportionate cuts in it—not because they want to hurt vulnerable people but because it is easier to make cuts in the money that goes to marginalised groups than it is in, say, weekly bin collection.

I am very grateful to the Minister. I get the sense that his heart is not really in what he is saying today.

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Moved by

[Lord De Mauley]

62BK: Clause 133, page 104, line 16, after “information” insert “contained in a declaration made under section 9(1) of the Births and Deaths Registration Act 1953 or”

[Lord De Mauley]

My Lords, Tell Us Once is a cross-government programme developed so that people should be required to inform the Government only once of a change of circumstances, such as birth or death. Government Amendment 62BK allows the Registrar-General, superintendent registrars and registrars of births and deaths to transmit information from a birth declaration, as well as information entered in a birth register which is already covered by Clause 133, to the Secretary of State and to verify such information for the Secretary of State.

Birth declarations in England and Wales account for approximately 10 per cent of registrations. The impact can be considerably higher in certain local authorities where the location of the hospital where most births take place falls within a neighbouring borough. In some areas the local authority will be unable to provide the service to up to 80 per cent of customers unless the customer makes two separate visits to the local authority—one to make a declaration of the birth and another when they have received the birth certificate to use the Tell Us Once service.

To ensure that all new parents are able to access the service and to avoid the need for them to inform several government organisations separately of a birth at what is often a busy time for families, I ask noble Lords to accept the amendment.

[Lord McKenzie of Luton]

My Lords, I understand the amendment is to overcome a lack of vires on behalf of the Registrar-General in respect of birth declarations, and we are happy to support it.

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Moved by

[Lord De Mauley]

62BL: Clause 134, page 105, leave out lines 1 to 3 and insert—
“(b) in particular, before accepting an application under those sections, invite the applicant to consider with the Commission whether it is possible to make such an agreement.”

[Lord De Mauley]

My Lords, I shall speak also to government Amendments 62BM and 62CA. In doing so, I wish to put these amendments in the context of the reforms they relate to.

The Government are committed to supporting lone parents. We spend over £6.5 billion on income-related benefits for some of the poorest lone parents alone. Significant financial support is also offered through the tax credit system and child benefit. Our reforms to child maintenance build on this support that the Government already provide directly to lone parents. Our key aim when reforming child maintenance is to ensure that both parents take responsibility. That includes taking responsibility for paying maintenance and for making the right choices about maintenance. This should be seen in the context of our wider ambition to make it the norm that parents work together in the interests of their children, especially when they no longer live together.

Every family is different and the child maintenance system in Great Britain should reflect this. The truth is that the statutory scheme cannot be so detailed and individualised as to be able to deal with every possible circumstance. For too long, parents have been implicitly or explicitly told that the Child Support Agency is the default option. That approach has entrenched conflict and led to an overreliance on the Government providing enforcement action.

The CSA-based system has failed, with the statutory schemes costing around £450 million each year. That could be seen against funding for relationship support for separating parents of £30 million over four years. Furthermore, taxpayers support costs of up to £25,000 for some typical CSA cases and up to £40,000 where we need to take substantial enforcement action. That is money spent by the state chasing maintenance from one parent to give to another. This has led to a system where, overall, it costs about 40p to move £1 between parents. The system must change because it is not working properly for parents or children. It does not represent value for money for the taxpayer.

The reformed system of child maintenance will be based on the principle that collaboration between parents is best for children. We firmly believe that collaborative child maintenance agreements are longer lasting and parents are more likely to be happy with them. Furthermore, we know wider collaboration between parents is clearly associated with better outcomes for children.

I hope that noble Lords will also acknowledge that we cannot be overly simplistic as to where fault lies when it comes to problems establishing maintenance arrangements. In reality, one-third of parents in the CSA identified that they had a friendly relationship with their ex-partners and said there was frequent contact by non-resident parents with their children. Furthermore, these parents reported that their maintenance arrangements were not really a source of tension. The CSA said that it was fairly easy for these parents to discuss financial matters. Our reforms also reflect the fact that over 50 per cent of parents using the CSA told us that, with the right support, they were likely to be able to make a collaborative agreement. Groups working with parents also tell us this. Karen Woodall, director of the Centre for Separated Families, said that,

“the campaign around the proposed changes to the child maintenance system has been largely based on outdated stereotypes around parental behaviour. By offering support to both parents and to the wider family, we believe that the changes will bring about much better outcomes for children”.

However, it is surely not the state’s role to intervene and arbitrate in personal relationships between two adults. Instead we wish to support parents to make an informed decision. That was always the intention of the gateway we provide for under Clause 134. It has become apparent that Clause 134 as drafted, referring to reasonable steps, has been interpreted more stringently than we intended. We do not wish to require parents to take multiple steps determined by us before being able to make an application. That would risk establishing a new quasi-judicial function. It would require us to decide whether a parent had taken reasonable steps and is an impediment to making a collaborative agreement. This would be akin to the complex and intrusive bureaucracy that dogged the early days of the CSA. That is the antithesis of our approach and why we have brought forward Amendments 62BL and 62BM. I hope this clarifies our intentions.

The amendments make clear that our role is to inform the parent approaching us and invite them to consider whether they can make a collaborative arrangement outside the state scheme. This will normally take place when the parent telephones to discuss their options. Where parents wish to pursue it, we will direct them towards wider sources of support. To further make sure support is available for parents, we have announced today £20 million of additional funding. This will be spent working with voluntary and community groups on streamlining existing support and looking at what additional help is needed. This amounts to doubling government spending on relationship support in 2012-13. I hope that, on that basis, noble Lords will be prepared to support Amendments 62BL and 62BM.

Organisations as diverse as the Centre for Separated Families, Families Need Fathers and Relate have all welcomed this announcement. Sarah Caulkin, interim chief executive of Relate, has said that her organisation hopes that,

“this funding will not only allow parents to access support before problems become serious, but also enable as many parents as possible to make their own arrangements to become effective co-parents, which in turn will benefit the whole family”.

I can confirm to the House that this is indeed the Government’s ambition.

These reforms to support parents in collaborating are coupled with reforms to the state-run CSA system. Perhaps I should make it clear that under our reforms the system will still continue to be heavily state-subsidised. However, we want the state-run system to be smaller, enabling us to free up these resources to help separating families who really need that help.

We absolutely recognise that some parents will need to continue to use the state-run service, and we need to do better for them as well. Our starting point for reform is the review by Sir David Henshaw, which was commissioned by the last Government in 2006. The key reform is based around a new scheme recommended by Sir David to replace the Child Support Agency scheme. At the heart of the new scheme will be tough enforcement and collection measures when parents fail to pay maintenance. The Government have developed new processes for identifying those who might not pay and addressing non-payment when it first occurs. The new scheme will also ensure that non-resident parents cannot escape their true responsibilities by refusing to provide us with details on their income. Instead, we will generally access this information from HMRC, which will enable a smoother and faster flow of maintenance to parents with care.

The Government are also committed to ensuring that the most vulnerable parents continue to benefit fully from child maintenance. To this end, we are ensuring that child maintenance payments remain tax-free. In addition, we will guarantee that parents keep all the maintenance, even when they are on universal credit. When money is in payment, child maintenance averages around £32 per week, tax-free, under the CSA. This is a significant financial benefit to the most vulnerable mothers.

Sir David Henshaw also recommended that,

“charging is introduced for users of the administrative system”.

He went on to say that charging would,

“contribute to the objectives of the new system by incentivising private arrangements which can be more successful”.

We agree with Sir David’s findings. The then Secretary of State—now the noble Lord, Lord Hutton—told the Work and Pensions Select Committee at the time of the report that he thought that,

“in general and in principle”,

charging should form part and parcel of the commission’s approach. Subsequently, the then Government took a wide-ranging power to charge as part of the Child Maintenance and Other Payments Act 2008. It is Amendment 62C to that Act from my noble and learned friend Lord Mackay that we will deal with in the next debate. Let me not prejudge that debate, but I shall say something on the principle of charging before flagging an amendment that we propose to make to our powers.

As I said earlier, the Government cannot fairly and should not try to apportion blame between parents. Therefore we firmly believe that, to reform the system and maximise the number of effective child maintenance arrangements, we need to have an affordable but clear financial incentive on both parents to collaborate. With such high numbers of parents who use the CSA saying that it is likely they could collaborate, an affordable financial incentive for both parents is a necessity. The application charge and collection charges proposed by the Government meet these criteria. However, noble Lords will remember that when an application is made and maintenance payments are subsequently made directly, no collection charges are applied. This is the option to pay that is often called often called maintenance direct and is dealt with under Clause 135.

The Government are convinced this approach to charging is the right one and wish to formalise a requirement for us to review based on an evaluation. This would be achieved through Amendment 62CA. We will review charging within 30 months of its introduction. Thirty months will allow a proper sample to be evaluated, including the impacts of collection charges. Within that timescale we will lay a report on the review and the Government’s conclusions on charging before Parliament. I ask noble Lords to support this amendment and the commitment to review.

Child maintenance needs major reform. Fifty per cent of children of separated families have no maintenance arrangement in place at all. We will provide improved statutory child maintenance for those who really need it, and we will of course continue to support lone parents directly through benefits and tax credits. However, we need a fundamental change so that wherever possible parents think twice, take responsibility and do not depend on the state. I beg to move.

[Baroness Sherlock]

My Lords, I will speak briefly to Amendments 62BL and 62BM, and in doing so I draw the attention of the House to my interests, which are in the register. I am a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of the National Council for One Parent Families.

I want to ask a specific point about these government amendments, which seem to be producing a new formulation that would require an applicant wanting to apply for child maintenance through the CSA to consider with the commission whether it is possible for them to make a private arrangement before being allowed to make such an application. Can the Minister please make it clear to the House just what the applicant would have to do? If I am making an application and I simply say, “I wish to make an application”, and the agency says, “Have you considered making a private application?”, and I say, “Yes, but there is no way that he is ever going to agree to it”, is that enough? Am I then allowed to proceed, or is it intended to be a bigger hurdle than that?

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[Lord McKenzie of Luton]

My Lords, when the noble Lord, Lord De Mauley, introduced these fairly specific amendments, we had a bit of a broad sweep about the background to where the Government were going on child maintenance. I start by welcoming the £20 million of additional funding that has been announced. The noble Lord said that the Government were seeking to introduce tough enforcement and collection, with non-resident parents not being able to escape their obligations, and with HMRC gross data being used for the relevant calculations. We can sign up to that. In fact, we dealt with that in the 2004 child maintenance legislation, so that is in place; it is not new.

The noble Lord referred to the cost of the scheme—£450 million a year. One of the problems is that three schemes are operating side by side through a transition. I think it was originally planned that by 2012—this year—we should be down to one scheme based on gross data, which should significantly reduce costs. However, I think that has been somewhat delayed by the Government.

As regards tough enforcement and collection, following a question that I raised in Committee, the noble Lord wrote to me indicating that not all the powers included in the 2008 Act had been brought into force. If I am wrong on that, he may take the opportunity to correct me.

Amendments 62BL and 62BM appear, at first reading, to make it harder for parents with care to access the statutory maintenance service. The Bill as it stands provides for applicants to take reasonable steps to establish whether it is possible or appropriate to make maintenance agreements outside the statutory system. A key part of the Government’s reform of child maintenance was supposed to be the introduction of the gateway referred to by the noble Lord, the purpose of which is to ensure that all clients consider the range of their child maintenance options so that they can be directed into the family support services where appropriate. The Government’s White Paper states at paragraph 10 on page 18:

“In some cases the gateway will be a step towards an application to the statutory scheme. Where the parent wishes to pursue that and states clearly the reasons why, the conversation about other options available will be closed and they will be assisted in moving to make a full application”.

There were concerns that this process would be a way of screening out parents, particularly parents with care, from the statutory scheme. These were heightened by the potential loss of the statutory requirement to maximise the number of children benefiting from effective maintenance arrangements, which is an obligation of CMEC but is not to carry over to the successor—the executive agency—when that comes into being. Just a few hours ago we received a letter that purports to provide further clarity to the Bill. The noble and learned Lord, Lord Mackay, touched pertinently on that point. I am bound to say that it is regrettable that once again this information is released so close to our Report sitting. A crucial paragraph in that states:

“Therefore, we are now in a position to provide further clarity to the Bill by making it clear that the only engagement required prior to accepting an application to the statutory scheme will be to invite the applicants to have a telephone call with an adviser to discuss their options”.

Like my noble friend Lady Sherlock, I would like better to understand what that means.

If this is the interpretation that the Government put on the two amendments, it will be important to have this on the record. However, I am bound to say that such an interpretation does not flow readily from the wording, which requires the applicant to,

“consider with the Commission whether it is possible to make such an agreement”.

The term “consider” at least implies a more deliberative process than just a phone call. The process being “with the Commission” suggests the two parties having to agree on some sort of basis. However, if this is not what is intended, it would be very important to have that on the record. Given the lateness of this item in our deliberations, we may have to return to this matter at Third Reading.

The cynic might say that this changed position is an attempt to undermine the amendment in the name of the noble and learned Lord, Lord Mackay of Clashfern, by removing, in relation to Section 9 of the Child Support Act 1991, a requirement for an applicant to take “reasonable steps” to establish whether it is possible to have voluntary arrangements. We would not accept that, and the noble and learned Lord’s amendment continues to have our full support and stands separately from these amendments.

However, perhaps the Minister will tell us what the future of the gateway service is to be. To be fair, it was always envisaged that it would start by a telephone offering, but is that now to be its steady state? If not, and if it is to be developed into a more extensive engagement, how would that sit with the new government amendments?

To be clear, we have acknowledged the benefit of voluntary arrangements and the prospects of them being more sustainable. We support the development of family support services. We legislated to remove the requirement for benefit claimants compulsorily to use the statutory system and provide what has become the option service. Our strong concern in doing so was not that thousands would rush to use the free statutory service, but that parents with care would drift out of the system and fail to make arrangements at all.

As to Amendment 62CA, we would support a review of fees regulations. That does not mean we accept the structure of the fees proposed. We would prefer it to be done on the basis of the noble and learned Lord’s amendment.

[Lord De Mauley]

My Lords, I am grateful to all noble Lords who have spoken. Let me turn directly to the issues raised by noble Lords. The noble Baroness, Lady Sherlock, asked, under the amendment, exactly what will happen during the gateway conversation. This also addresses the point made by the noble Lord, Lord McKenzie. We want parents to pause for thought when contacting us, before deciding whether to proceed with making an application to the statutory service.

We believe that the best way to achieve this is for parents to undertake a telephone call with a specially trained adviser. The only requirement on the parents contacting us before entering the statutory scheme will be to engage in this conversation and to discuss whether they have considered their alternatives. The adviser will be able to provide advice and signpost the parent to other support available, if required. Parents can then, if they wish, take time to consider the alternatives and discuss collaboration with the other parent. However, I stress that engaging in the conversation when first contacting us is the only requirement to enter the scheme. Everything else is voluntary. There is no question of us seeking to direct parents to take any specific steps. Where a parent identifies during the conversation that they need to make an application to the statutory service, the adviser will help them to do so. I hope that that addresses the point of the noble Lord, Lord McKenzie.

[Lord Cormack]

Can my noble friend assure the House that the telephone will be answered by a human being and that there will be a direct line to an individual, not to an automated “press this, press that” system?

[Lord De Mauley]

I share my noble friend’s horror at being asked to “press 1” and so on for different things. I cannot absolutely guarantee that the very first answering of the call will not be that, but the key point is that it will be possible to have a conversation with a human being. That is the gateway.

My noble friend Lady Tyler has much experience in this area and I am extremely grateful for her supportive comments, particular about the additional resources.

The noble Baroness, Lady Howarth, also has a lot of experience in this area. I hope that my answer to the noble Baroness, Lady Sherlock, has addressed the nub of what the noble Baroness, Lady Howarth, was asking. Our reforms will mean that maintenance flows more certainly and more quickly. If someone presented and told us that they had an aggressive partner, we would immediately help them to make a maintenance application.

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[Lord McKenzie of Luton]

My Lords, this has been a powerful, passionate and extremely well informed debate. If the debate has not been quite unanimous in support of the noble and learned Lord’s amendment, one thing on which there has been unanimity is the esteem in which he is held. On charging and the Henshaw report—which the noble and learned Lord mentioned, as did the noble Lord, Lord Kirkwood—as the report made clear, any charging regime should not dissuade vulnerable and low-income parents with care from seeking maintenance in the first place. That was translated into a White Paper of the Labour Government, which said that charging should be based on three clear principles: it should incentivise non-resident parents to meet their responsibilities; the clear burden of charging should fall on the non-resident parent and not the parent with care; and cost recovery via CMEC should never be prioritised over payments to parents with care.

A host of points have been made. I agree with what the noble Lord, Lord Cormack, said—supporting this amendment will not torpedo the Bill. If it would, I would doubly support it. But even on the basis that it will not, it should be supported. We have heard testament from a number of noble Lords, particularly the noble and learned Baroness, Lady Butler-Sloss, about the complexity and possible difficulty of people’s lives. We have to recognise that people just do not live tranquil, routine lives where you can easily come to agreement. As someone who briefly had ministerial responsibility for the CSA, I saw some horrendous cases about non-resident parents, mostly men, who would do anything to avoid meeting their obligations.

The history of the CSA/CMEC has evolved, and this is perhaps not the occasion to rehearse it. The fundamental point that the noble and learned Lord made was that this is about fairness; it is not about seeking to attribute blame to the challenges that couples find themselves in when they separate. I thoroughly agree with that. I am aware that the noble and learned Lord does not press this matter lightly. As we have heard, he has endeavoured to persuade his colleagues at the highest level in government on the proposition that he is advancing today. We should be guided by what is best for children and whether supporting this amendment would make it more likely that they will benefit from maintenance arrangements. We consider that it will, which is why we support it.

I suggest to the noble Lord, Lord De Mauley, that it would be really good if he could accept the amendment, particularly because so many noble Lords from his own Benches have spoken in favour of it. The clear and overwhelming view of the House is that the amendment should be accepted, which would be the right thing to do, without having to reinforce that with what would clearly be an overwhelming vote.

[Lord De Mauley]

My Lords, I have enormous respect for my noble and learned friend Lord Mackay, which I know all noble Lords, including the noble Lord, Lord McKenzie, share. I am grateful to him for his amendment and to all noble Lords for their contributions. I have listened carefully—and not, I have to say, without trepidation—to the detailed points made by my noble and learned friend and all other noble Lords who have spoken. I am glad that we have also had a debate within the debate about charging.

I emphasise again that the Government’s reforms and particularly charges need to be seen in the wider context. Perhaps I may start by setting out some of the historical contrast. When the Child Support Act was taken through Parliament in 1991 one of its primary aims was to recoup the money that the Government spent on benefits. This was achieved by reducing lone parents’ benefits by the sum that we were able to collect from non-resident parents. Parents on benefits had to use the scheme in order to further this aim. That was a scheme of its time and was set up with the most noble of intentions, namely reforming a court-based system that was not working.

Today we start in a different place. Lone parents no longer have their benefits reduced at all when child maintenance is received and this Government have been proud to announce that we will extend this to universal credit. We have greater ambitions. We see a key part of the reforms as expanding the support for parents to collaborate. We no longer require parents to use the CSA. We do not want it to be the default option. Where they can collaborate, we believe that that is fundamentally better for parents and children. That is why we cannot accept my noble and learned friend’s amendment.

The proposal would set up a system where the state would be obliged to try to arbitrate. We specifically think that that is what will happen if we use the reasonable-steps test, which surely requires some sort of judgment as to whether an applicant has done all that could be expected to reach a family-based arrangement with the ex-partner.

We cannot see any way to collect hard evidence to show that a parent with care had taken reasonable steps without an inappropriate degree of intrusiveness. We do not believe that the state should try to monitor whether a conversation has taken place about collaboration between two private individuals, the parents. We cannot see how to make this work, not least because parents could quite fairly challenge the state’s discretionary decisions, leading to delays in maintenance flowing and acrimony in the system.

[Baroness Howarth of Breckland]

My Lords, I find that surprising when, on a daily basis, the guardian ad litem in a court case can be expected to make similar sorts of judgments between two people as to whether contact should be awarded to one parent or the other. These are the same families, so surely there must be some way in which this kind of assessment could be made. Indeed, it has to be made because the noble Lord said previously that there would be some discretion in relation to marital violence and child protection. How are those assessments going to be made if no assessment is made at all?

[Lord De Mauley]

Perhaps the noble Baroness will permit me to come to her specific questions in a while.

My noble and learned friend proposes that this could be handled by allowing a CSA staff member to make what I am suggesting would be a subjective decision, and for that decision to be appealable. I ask your Lordships to consider whether legislation that confers on officials a subjective decision and then asks for an appeal system to police those decisions is the right way forward. It is not the Government’s position that that is the case. It would add to the costs for the taxpayer and complexity for parents and staff. One lesson we have learnt since 1993 is that legislation, with the best of intentions, will not work if it is highly complex or subjective in delivery. This approach with its subjective decisions and appeals again risks conflict, and surely none of that is in the interests of the child.

However, to offer your Lordships some views on the costs involved, we have also looked at an alternative approach to delivering the amendment. This would be based on a self-declaration from the applicant that reasonable steps had been taken. This is obviously a porous test that could be open to false reporting. Even then we estimate that the amendment would increase costs in the statutory schemes by over £200 million to the end of March 2019, making these reforms unaffordable. I hope that my noble and learned friend will therefore understand that, in our view, there is a tension at the heart of the amendment. It applies either a test we cannot police or a test that everyone can pass because we are not able to police it. Further, however the amendment is applied, it undermines the core of why we want to introduce charging. To reform the system and maximise the number of effective child maintenance arrangements, we must have an affordable but clear financial incentive on both parents to collaborate. We discussed in Committee what the noble Lord, Lord McKenzie, also mentioned, which is that the concept of charging was introduced in the 2008 Act.

Parents who can collaborate outside the statutory scheme will be provided with the help and support they require. Correspondingly, an application charge for all provides a clear incentive for parents with care to consider collaboration outside the statutory service, with all the benefits that has for children. Without a financial incentive in the form of an application charge, we risk recreating the CSA caseload we currently have, with parents using it despite ultimately telling us they could collaborate. The evidence is clear that we have a system at the moment where 50 per cent of parents using the CSA believe they could make a collaborative arrangement with the right support.

The ongoing collection charges will promote collaboration both outside and within the statutory scheme, and will create a real incentive in the non-resident parent to pay the parent with care direct, in full and on time. If, under Clause 135, the non-resident parent chooses to use this option, which is known as maintenance direct, neither parent will pay collection charges. Furthermore, the parent with care can be safe in the knowledge that if payments are not made, their case will be brought straight back into the full statutory enforced collection service.

The Government also believe that following the introduction of a demonstrably better future scheme it is fair to ask for a contribution to the costs of what, as I explained in the last debate, is a heavily subsidised service. To reiterate, I mentioned that the cost of a typical CSA case is up to £25,000, and that can rise to £40,000 where we need to take substantial enforcement action. It is a system that on average costs around 40p to move every £1 between parents. Furthermore, we will not start collecting charges until the scheme has been running for at least six months to allow the new system to demonstrate that it is delivering an improved service for parents.

We have had a fairly spirited debate on the principle of charging. However, I hope that noble Lords will reflect on the principles I have described and the assurances I have given. We do not want to return to the days when the state was encouraging parents to blame each other since we know that is the worst thing for children. We have a coherent package of reforms starting from a very different place to the 1993 CSA, and charges have a role to play within it.

I turn now to the questions raised by noble Lords. I shall paraphrase what my noble and learned friend said: “I do not want an adjudication. I just want a test of whether the father will pay”. I accept the intentions of my noble and learned friend, but his plan is for a letter to be sent to the father to ask if he will pay outside the scheme. That would be costly and complex. We have over 100,000 applications each year, and the most difficult element is finding the father. Mothers often do not have the father’s latest address, and often that is not the father’s fault, so importing the trace aspect of the application is costly and complex, and will delay us being able to start to process applications for those who need it most.

My noble and learned friend referred to Henshaw’s intentions. The Government agree that we do not want to dissuade those who need it from accessing the scheme. That is why we are carefully considering the level of the charge. But Henshaw was clear in recommending that charging should be introduced to users of the administrative scheme because it,

“would contribute to the objectives of the new system by incentivising private arrangements”.

The noble Baroness, Lady Howarth, asked a number of searching questions. She referred to the risk of the non-resident parent demanding contact as a condition of maintenance. That is a key part of what we have been addressing and we agree entirely with her. If a case enters the system we will use data, for example, from HMRC. There will be no need to obtain this direct from the non-resident parent. A calculation will be made based on that data and he will be required to pay, if necessary by order on his bank account or from his benefits. There will be no requirement, particularly for victims of domestic violence, to have any contact or to reveal their contact details.

The noble Baroness asked about the people who take the calls. Advisers will be using training which has been developed with the input of a large number of voluntary and community experts. Self-declaration of domestic violence will be sufficient, and no application charge will need to be paid. The noble Baroness also asks who will arbitrate on whether the non-resident parent has to pay. What I am trying to get across is that there will be no need for arbitration. The non-resident parent will have to pay based on the calculation. She intervened to ask about discretionary decisions. As I have said, there are around 100,000 applications each year and the nature and scale of the judgments are issues which, I am afraid, fundamentally flaw the amendment.

I am grateful to my noble friend Lady Berridge for her intervention, and of course I contend that she is absolutely right. I do this with trepidation, but I ask my noble and learned friend to consider withdrawing his amendment.

[Lord Mackay of Clashfern]

My Lords, I am grateful to all those who have supported me, as well as to those who have spoken but who have not supported me, of whom the number was fairly small. I pay as strong a tribute as I can to my noble friend Lord De Mauley, who, as I said, has been with me at all the meetings in recent times. The noble Lord, Lord Kirkwood, and I had a meeting with the Minister in the Commons, Maria Miller, way back in July. I intimated then, to the highest level of the Government, that I intended to table this amendment, so there is no question of an ambush or anything of that sort.

I re-emphasise that the question that we are debating is whether the non-resident parent will pay maintenance—that is the only question—and the simple way to find out is to ask him. I do not for a moment want to adjudicate on who is to blame for non-payment—that would be idiotic. Apart from anything else, it would be very difficult, just as it will be difficult to police agreements in domestic violence cases unless the Government kindly accept my amendment as a way of doing it. The amendment proposes a very simple, straightforward way of doing it, because, under it, a factor would be whether it was “appropriate” to make a maintenance agreement.

I thank all noble Lords who have supported me, particularly those who have put their names to my amendment. I thank also my noble friend Lord Newton of Braintree, who made it clear in our discussions with the Secretary of State that many of his views were based on constituency representation, of which I have none. Fortunately, three of my ardent supporters have a great deal of such experience.

I regret that I have no real option but to press the amendment. If one is a supporter of a coalition, as I am thoroughly of this one, one has a duty if there is a slight deviation from the norm to do one’s best to bring the situation back on to the correct pathway. It is in that spirit that I invite the House to give its opinion on the amendment.