Child Maintenance Service

David Burrowes Excerpts

Tuesday 18th April 2017 Westminster Hall

[Marion Fellows (Motherwell and Wishaw) (SNP)]

I beg to move,

That this House has considered the Child Maintenance Service.

It is a pleasure to serve under your chairmanship, Mr Bone. I want to thank the Backbench Business Committee for giving us the opportunity to discuss this extremely important issue affecting families across the UK. I would also like to extend my thanks to my colleagues present, who may have had to cut short their Easter weekend to attend today. The fact that they are present highlights the importance of this debate.

Many constituents have approached my office regarding issues with the Child Maintenance Service. In their experience and mine, it is an extremely frustrating and inefficient service to deal with. When it is responsible for something as important as financial support for children, and quite often single-parent families, it must execute its duties properly and get it right. That is not happening.

The Child Maintenance Service is under-resourced, unfit for purpose and failing families across the UK. It has disregarded historical maintenance arrears. It allows non-resident parents to renege on their responsibilities by failing to collect current maintenance, and it imposes a tax on parents who desperately require its services. It fails to provide a service of the decent standard that should be expected of any Government agency.

Despite the length of time I get to speak, when writing this speech I was not thinking about which issues to speak about; I was thinking about what things I would have to leave out, as the maintenance system is so rife with issues. The CMS needs a radical overhaul to ensure that parents and their children can access the support they are entitled to. That support is not optional.

[Mr David Burrowes (Enfield, Southgate) (Con)]

I congratulate the hon. Lady on securing this important debate on an issue that is getting attention in lots of areas at the moment. A group that she may want to leave out is those who are able to reach agreement. The Minister will come back and say that family-based assessments have increased and that many more are reaching agreement. Will the hon. Lady drill into the detail of whether or not that shows the success of the current system?

[Marion Fellows]

The hon. Gentleman is right; I am not going to concentrate on that. Family-based arrangements are what everyone wants, but they do not happen in all cases. I am here to support and talk about those who are outwith that scheme.

The support that the CMS gives is not optional; it is a legal right for children. The Child Maintenance Service is failing to secure children and their parents with care their rights, or it is taxing them to gain access to what is theirs. Maintenance payments have had both a current and historical problem with underpayment, people not paying and arrears. To date, the outstanding arrears for child maintenance stand at an astonishing £4 billion. That figure alone shows the extent to which the Child Support Agency and the Child Maintenance Service are failing people. At this point, I should add my thanks to the charity Gingerbread, because I am drawing heavily on its work in its recent report. It is likely that that figure does not represent the full picture, as paying parents under direct pay are assumed to have paid their maintenance in full unless the CMS is told otherwise.

According to Gingerbread, which has been doing fantastic work to raise this issue and support families, during the transfer process from CSA to CMS many parents have been pressured into not transferring their historical arrears over to their new claim. The Department for Work and Pensions calls that a fresh start. However, no equivalent letter is sent to paying parents to encourage them to pay off their arrears. In 2013, the UK Government issued “Preparing for the future, tackling the past”, in which they outlined their strategy of disregarding past debts and instead focusing on the payment of current maintenance. In line with that strategy, between December 2015 and March 2016, debt collections per case dropped from £35 to £22.

The DWP has calculated that as little as 12% of CSA debts on both the CSA and CMS systems will actually be collected. Current arrangements are allowing parents to renege on their responsibilities. Even though these debts were accrued in the past, parents should still be held responsible now. Collecting historical arrears should not mean a trade-off with current arrears; both are a priority.

--- Later in debate ---

[Mr David Burrowes (Enfield, Southgate) (Con)]

Thank you, Mr Bone, for calling me to speak.

It is a pleasure to take part in this very important debate. It is a cross-party debate and quite rightly so, because this is a matter of cross-party concern; we all have constituents who have come to us and who are dealing with ongoing concerns about child maintenance arrears. So I congratulate the hon. Member for Motherwell and Wishaw (Marion Fellows) on securing the debate.

In many ways, I will echo the speech of my hon. Friend the Member for Eddisbury (Antoinette Sandbach), who has very personal knowledge of this issue, but I also want to bring to bear my constituents’ concerns. In some ways, this will be a dress rehearsal for the consideration of my ten-minute rule Bill tomorrow, although today’s events may prevent that from happening. Nevertheless, I am sure that everyone will want to wait and consider my ten-minute rule Bill before we finish this Parliament. It focuses squarely on equity and justice.

Let me mention a point of principle on which we can all agree—especially Government Members, as it was very much a creature of Margaret Thatcher’s Government, and we want to follow through on it. It is the principle of parental responsibility, which recognises that we have a statutory child maintenance system and that all parents have continued responsibility to make reasonable contributions towards the upkeep of their children. It is an important principle and it covers all children. Whatever system we have in place, whatever statutory arrangement exists and whatever administrative reasons are given by the Government—convenience, expeditiousness, or whatever—we must not lose sight of the overarching principle of ensuring that the ongoing responsibility of providing maintenance for all children is met.

This process is focused on the children and not so much on the parents. Whether a parent is employed or self-employed, there must be an equity in justice for the ongoing maintenance of children; that is at the heart of the debate and it must continue to be at the heart of the Government’s actions as they carry out their review. I am not sure what will happen after today’s news, but we are waiting with bated breath for the Government to lay their report before the House after the 30-month review. It was promised in the spring. We are in spring—spring has sprung—and so we look forward to that report being laid before the House, as it will set out the Government’s view. I know that they have an ongoing five-year review, but the 30-month review is of the current system.

Everything is coming together. The Select Committee on Work and Pensions is also conducting an inquiry on the subject, and the Public Accounts Committee has been waiting to do further work on it with the National Audit Office. The spotlight is very much on the Minister; I hope she feels the heat. It may be the case that when previous Ministers appeared in Westminster Hall and before the rest of Parliament in many debates about the Child Support Agency, child maintenance was the main issue in our constituency casework. That is not the case now, but I would not want the Minister to feel in any way that the situation has been sorted and that she can tell us all, as I am sure she will, that family-based arrangements are on the up, and there were 70,000 or so in 2014-15; that, as I know from her evidence to the Select Committee, and her written evidence, there is a view that the CMS is performing well, with seven out of eight parents now addressing their child maintenance liabilities; and that things are improving. Nevertheless, I would not want her simply to go away and say that she can move on to all the other areas of her brief, because this issue remains a genuine concern.

I want to draw attention to a constituency case that amplifies my point. There is an issue with arrears. For example, my constituent went through the old CSA system and she battled hard. When people come to us as MPs, they are at the very end of their tether, and they come to us only because they have the wherewithal to do so. They have probably been through trauma and conflict in their relationship and they now have to face further trauma and conflict to try to get the just deserts for their children. Eventually, therefore, they come to MPs; we only see a snapshot of the issues that people face.

Many others have given up. In fact, the Minister may need to reflect on the issue of the £20 fee, to establish whether some people have given up because they see that £20 as money that would be better spent on putting food on the table rather than seeking maintenance—they might have heard bad stories and they might not have the confidence to go through the process.

Although the Minister might say there is some good news out there, we must reflect on the deterrent effect, as Lord Freud did when he said that we would have this review. He said that if there was an impact, particularly on the poorest families, as a result of any changes, we would need to reflect on the deterrent effect. I would like the Minister herself to reflect on it.

My constituent went through the whole process, went to a tribunal and eventually got an assessment, as she knew all along she would. Our constituents know that effectively assessments are being made that are completely out of step with what they themselves know about the lifestyle of the non-resident parent, and that are totally out of step with what that parent is contributing, if they contribute anything at all.

In the case of my constituent, there were accumulated assets of some £600,000, which the tribunal eventually found and which plainly needed to be tapped into regularly to support her teenage son. That has now left arrears of £40,000, but she asks, “Where will that come from?” At the end of the day, will she see that money going to support her son?

My constituent has told me, and I have referred to it in correspondence with my hon. Friend the Minister, that the reality is that the variation grounds that she had been able to rely on have now been abolished. She could rely upon those grounds to get through to the tribunal and eventually to get through that interrogation or inquiry because she was able to get that redress. However, that option has now been taken away from her and from anyone in her position. That rug has been pulled away from them, and so they are very much reliant on, let us say, what is in some ways the “cheap and cheerful” CMS system, but the CMS does not allow—in fact, it actually stymies—redress being pursued through the courts. That redress must be there, particularly in high-value and complex cases, of which there is an increasing number.

My constituent, along with others, is no longer permitted to seek such redress. The reality is that the variation grounds, which allowed for a parent with no apparent income to be treated as having a notional income, have been abolished, and we need to consider whether they should be restored. The issue of jurisdiction is relevant, because it is so limited now within the family courts for child maintenance—dealing with consent orders, and also with top-up payments, but only when there is in excess of £156,000 a year. In all other cases in which the parents cannot agree, this statutory child maintenance system is the only way to seek redress, so we clearly need to consider whether there should, at least, be another option, another way for constituents such as mine, who are not seeing justice, to have the redress they need.

In the case of my constituent, under the current system the non-resident parent would legitimately be able to have a nil maintenance liability. That is the reality. From £600,000 of assets, a £40,000 liability would now be nil. That is madness. It is ridiculous. It does not make sense. It is woefully unfair and goes against the principles that started off the system back with Margaret Thatcher, and now today under the 2012 scheme.

[Ian Paisley in the Chair]

We need, therefore, to look at the situation properly. Since 2012, any review or variation of the calculation can take account only of taxable income on the basis of Revenue and Customs data, primarily from tax returns and pay-as-you-earn. Without the opportunity to interrogate through tribunals, we are reliant on that data. In Select Committee evidence, the Minister has said that she is working hand in glove with HMRC. There is now a financial investigation unit amassed with 50 investigators, and she has stated that she is homing them in on this challenging area of self-employed non-resident parents. I want to see evidence of that, because in some ways it is too little too late for many people who have been through the system.

It really is not good enough. At the moment, there is the invidious situation for many parents of saying, “You go off to HMRC, to their tax hotline, and there will be an investigation of whether it is fraud”. The Minister needs to reassure me that her investigators will bridge the gap regarding something that is not technically fraudulent but is seriously and scandalously avoiding liabilities. But it is almost too late. The system needs to be front-ended not back-ended, with the opportunity of redress. I hope that the review will bring some of that.

We have had the whole debate about national insurance contributions, and we now recognise the larger numbers of people gaining their income through self-employment. The system does not properly cater for the children of traders, company directors or those with financially complex affairs. I pay great tribute to Gingerbread, which gives the example of a haulier who had his tax return assessed for child maintenance liabilities in a year when he had bought a truck. That truck took away pretty much all his liability—the truck was being put before the children. That is a scandal. It is unacceptable. We must have a system in which we are real as to the situation facing parents today and to their different employments. We do not want to prevent people from being self-employed, but there must be fairness. If we are going to have fairness on national insurance we must have it for child maintenance. I look forward to the Government taking advantage of the Matthew Taylor review to get it right before it is too late for many more parents, with the Minister leading the way.

In conclusion, as time is moving on, we need to see how the £20 fee is affecting poorer families. I ask the Minister to do something about that. I want to reiterate the words of my hon. Friend the Member for Eddisbury and to use the parlance of the Prime Minister: we need a child maintenance system that works for everyone, not just the privileged few.