Welfare Reform Bill

Lord Mackay of Clashfern Excerpts

Wednesday 25th January 2012 Lords Chamber

[Baroness Howarth of Breckland]

My Lords, I shall speak briefly, following the noble Baroness, Lady Tyler, who is about to follow me as chair of the Children and Family Court Advisory and Support Service. I speak as someone who has dealt over many years with some of the families who are in greatest conflict and need. The Minister will know that, of the families who separate, 10 per cent go to court. Those 10 per cent are the most difficult families. Often they are very close to families who come through public law, which are the families who really have child protection issues. However, we find in assessment that many of the families who come through private law divorce proceedings may well have these issues.

I agree that there is some need for reform. I welcome the money being put into relationship work and hope that some of that will find its way to CAFCASS, which does a great deal of that work with those difficult families. There is a proportion of families, though, where it is clear that the level of conflict between the families is detrimental so continued contact with both parents—judges have said this—may well not be the answer for those few children.

I am interested, as the noble Baroness is, in who is going to make that assessment and at what point the mother—it is usually a mother, although occasionally it is a father—will know that she is not going to have to continue to engage with an extremely aggressive and often destructive person who has damaged not only her own relationship but that of her children, and when she will be able to bypass all those procedures and be sure that she can actually get maintenance. The likelihood of the man giving her maintenance is slim, but she needs to be able to get by the procedures.

[Lord Mackay of Clashfern]

My Lords, it will be fairly obvious to most of your Lordships that these amendments are not entirely unrelated to the amendment that I am going to move in a little while. I am not certain of this, of course, but I have a feeling that the proposed amendments regarding the test for the discretion to be used have arisen out of discussions that I have had, which my noble friend Lord De Mauley has been at too, about the effect of the test in relation to charging. I will not elaborate on that now.

I would just be interested to know on what basis this test was originally put into the Bill. It must have been the subject of instruction; parliamentary counsel are extremely creative, but only on the basis of what they are asked to do. They are very good at finding words to express what you want. I wonder, and my noble friend may know the answer to this, what they were asked to do in the first instance. Does this reflect a change in the underlying request or not?

The third amendment concerns the review. That was certainly mentioned to me by the Secretary of State when I met him a week yesterday. I am entirely in favour of that. However, I suggested to him that it would be fair to do it on my basis and that that would be a real test of how good my suggestion was. However, it was suggested, “No, we will test it on my basis”—that is, on his basis. Therefore, from my point of view there is not much of an improvement as yet, but who knows what may happen? At present, the amendment is very welcome but, so far as I am concerned, it does not help me at all.

[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.

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Moved by

[Lord Mackay of Clashfern]

62C: Clause 134, page 105, line 11, at end insert—
“(3) In section 6 of the Child Maintenance and Other Payments Act 2008 (provision to allow charging of fees by the Commission), after subsection (2) there is inserted—
“(2A) Nothing in regulations under subsection (1) shall impose a liability on a parent with care for the payment of fees to the Commission where that parent has taken reasonable steps to establish whether it is possible or appropriate to make a maintenance agreement (within the meaning of section 9 of the Child Support Act 1991), and where, having taken such reasonable steps, it is either not possible or not appropriate for the parent with care to do so.””

[Lord Mackay of Clashfern]

I move the amendment out of a sense of the need for fairness in these alterations. I should say at the beginning that I am a member of Barnardo’s and I thank others in the voluntary sector who have helped me in the work of contacting your Lordships.

After I sent my letter, one of my senior colleagues said to me, “I was surprised to receive a letter from a former Lord Chancellor inviting me to be a rebel”. I have thought about that. My primary motivation as Lord Chancellor was to get fairness and justice for our people, and I hope that I have not laid that motivation aside on laying down my robes for the last time.

My amendment is about a very simple matter of fairness. The government briefing dealing with the clause in its earlier form included the statement, which all of us may believe to be true, that,

“a significant proportion of parents will not be able to collaborate. For example, where an applicant has a former partner who refuses to engage or pay child maintenance voluntarily there would be no reasonable steps they could take”.

That is the group I am focusing on, because I do not believe that it is fair to require them to pay charges when they are not responsible for creating the need for the use of the service.

The obligation to maintain children is an obligation between the parent and the child which subsists for so long as the child needs maintenance and the parent lives. The mere fact that there has been disturbance and breakdown between the parents is in no sense a reason for not paying maintenance. Therefore, one of the key things that my noble friend Lord Newton and I thought, when this arrangement was being made originally in 1991, was that it was important to separate consideration of things such as contact and other detailed arrangements from the obligation to pay maintenance. That is a clear obligation which, as I said, subsists whatever the relationship between the parties.

My question is simply: is it fair to charge a parent in that group? The suggestion is that the use of charging will create an incentive on both parents to enter into an agreement. I agree that in many cases that will be so, but the quotation I have just given explains that that is not true in every case. I use the example of where the man declines to pay maintenance. It is usually the man as 97 per cent of the cases under the CSA are initiated by the mother as the parent with care. There are one or two where it is the other way round, but I use the mother for illustrative purposes, as long as your Lordships understand that that is not the universal situation. In my view, the only question that arises on application to the CSA—the names have changed once or twice but the name CSA is used in the letter that was kindly circulated this morning—is whether the parent, the father, is prepared to pay maintenance: is he paying maintenance and is he prepared to pay maintenance? That is all. He is not asked anything else.

The idea that I want to have an adjudication of whose fault it was that there was a breakdown is absolute nonsense. Those of your Lordships who have been here long enough will remember that I had some trouble getting through this House a law reform Act of 1996, which introduced divorce without fault. No-fault divorce seemed to me to be the only answer. I do not believe that any tribunal on earth is able to make an absolutely just appraisal of who is responsible for a breakdown in a relationship. I certainly do not want to put that task on the CSA—not at all. I want the CSA to be concerned solely with the question of maintenance, and the obligation of maintenance clearly arises when one is a parent, nothing else. It does not matter what else has happened. As long as I am the parent and the child is still in need of maintenance, the obligation subsists. That is the only question that arises at that stage. The idea that I want to have some kind of quasi-judicial bureaucratic process that will take a great deal of money out of the system is nonsense. I have no such desire.

Those of your Lordships who were here will remember the debate about the Bill—which, as I say, is still on the statute book, not yet implemented. The time will come when it is, probably; at least, I hope so. I am also very keen on what the Government are now saying about the need to try to get voluntary agreement. I am 110 per cent behind that. I believe that voluntary agreement on all the arrangements needed on separation is vital. If we could get that in every case, there would be no need for the CSA and very little need for a good lot of the family court arrangements that we have to have. Sadly, we are in the real world and that is not always possible.

That is the simple point that I wanted to make. I suggested when I had some of these meetings how this could be handled. My idea is that when somebody applies to the CSA and is serious about it, the application should be taken into account and immediately a letter would go to the non-resident parent—the NRP as we tend to call him—to ask whether he is paying maintenance at the moment or is willing to pay, and giving him something like a fortnight or a month to reply. There is no need for any quasi-judicial function or anything of that sort. That is what I want. On that basis, if he says, “I will certainly pay and set up a direct debit tomorrow”, there is no question of the CSA being involved. However, if the CSA is involved to force him to pay, he has the responsibility for bringing that about and the fees should be adjusted. The fees are still subject to discussion. There is no question at present about a strict standard of fee; the fees are subject to discussion. They should take account of the fact that this is the way the scheme operates.

The motivation of the Government for these charges is said to be to try to bring people to voluntary agreement. I am entirely in favour of that. But if that proves impossible, when the woman is at the stage of having nothing more that she can to, she has to pay. What does that do? If anything, it might make her not go to the Child Support Agency at all and the child will lose the maintenance. I cannot see that asking for that is an incentive to do anything that the Government want.

There are other considerations that I would like to mention briefly. As I say, I am entirely in favour of putting as much money and effort as possible into getting people to reach agreement when they fall out—if possible, repairing the relationship, and if not, trying to sort out the consequences of its breakdown. The Government propose an exception to this in respect of domestic violence. I believe that my amendment would take them out of the hole of trying to define domestic violence by reaching the conclusion that where there is the threat of that sort continuing at the time, any kind of agreement between the parties on maintenance is just not possible and therefore not appropriate in terms of my amendment. Your Lordships will notice that the terms of my amendment came out of the terms of the clause before the amendment that was proposed a few minutes ago. It has the full approval of parliamentary counsel obviously, and a very excellent draft it is. This would deal with the question of the exception in favour of those who have been the subject of domestic violence. I do not think that the Government have yet worked out exactly how they will establish that. I have every sympathy with them and offer them an easy way of dealing with the matter.

The statutory provision for charges came in as a result of Sir David Henshaw’s report. He makes it clear that he did not want to see charges as a disincentive to the use of the system. At the stage that I am dealing with and for the group I am dealing with, that is the only possible purpose of it. This does not carry the approval of Sir David Henshaw in his advice to the then Government to bring in the power to charge. This seems to be the situation. It is simple and I am extremely sorry to find myself in a position of opposing the Government. I was anxious if possible to reach an accommodation with them but so far nothing has been offered to me that would be an explanation to your Lordships of why I withdrew from this very principled position. I beg to move.

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[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.