Family Law

Debate between Mike Amesbury and Jim Cunningham

Tuesday 11th June 2019 Commons Chamber

[Mike Amesbury (Weaver Vale) (Lab)]

May I first welcome the Minister to his place?

These regulations are a series of changes and clarifications designed to make it easier to collect arrears and maintenance payments under the child maintenance scheme. The Opposition do not want to obstruct the measures, and we will support them today. We agree with the Minister that it is extremely important for parents to fulfil their obligations towards paying for the cost of bringing up their children. If parents fail to fulfil this obligation and fall into arrears, it is right that Government Departments step in to pursue them—and, as a last resort, through the social security payments system. In supporting this change, we are mindful that having £8.40 a week deducted from benefits for child maintenance arrears can be extremely difficult for somebody on a low income, which may be as low as £73.10 a week if they are claiming jobseeker’s allowance.

We are also too aware of the Government’s rather chaotic approach to our welfare and social security system, and the unacceptable levels of debt, poverty and growing food bank use that are largely driven by the universal credit reforms. However, this must be weighed against fairness towards the care-giver, who has to bear the additional costs of food, clothing, school expenses, childcare and other day-to-day costs of bringing up children. Child maintenance payments can be vital to families—especially those on low incomes—and to protecting children from poverty. According to the single parent charity Gingerbread, child maintenance alone lifts a fifth of low-income single parents out of poverty.

It is important to remember the context in which separated families are living. Lone parents are particularly vulnerable to poverty. According to the Joseph Rowntree Foundation, one in four lone parents is in persistent poverty—twice as many as any other group—and the inadequacy of the current social security system arguably makes child maintenance an even more vital source of income for struggling lone parents. Austerity cuts have driven lone parents further towards the brink, with the two-child limit and the benefit cap pushing three quarters of children in lone parent households further into poverty. The value of child benefit and child tax credit has not increased since 2015 due to the benefits freeze, making it harder to cover the costs associated with bringing up and looking after children. Meanwhile, the cost of childcare grows, according to the Child Poverty Action Group. The full cost of bringing up a child for a single parent has increased by 18% since 2012. Using social security as a vehicle for cuts is a political choice—and the choice has consequences, with over 4.1 million children now living in poverty.

Although we support the Government’s intention to continue making deductions from paying parents to pay off arrears after they have no maintenance liability, as stated by the Minister, I note that there has been no impact assessment of these regulations. Will he commit to a full impact assessment, and commit to monitoring this policy to guard against any unintended consequences of the change?

[Mr Jim Cunningham]

My hon. Friend makes a point about childcare. I do not know whether he has seen the reports today about the Government paying something like £5 an hour for childcare although the costs are a lot higher than that. That means, in effect, that a lot of families are being excluded from childcare. Does he agree that the Government should do something about that?

[Mike Amesbury]

I certainly do. I thank my hon. Friend for that intervention. This case has been highlighted in the media today by the shadow early years Minister, my hon. Friend the Member for Batley and Spen (Tracy Brabin).

We agree with the regulations’ intention to extend deductions from universal credit to include cases where the paying parents’ household has earnings, but will the Minister provide clarification about the commencement of this policy? The Department for Work and Pensions consultation in December 2017 said:

“Changes to UC deductions would be implemented when UC is fully rolled out.”

However, it appears from the commencement regulation of the draft statutory instrument that the changes in respect of universal credit will take effect before roll-out has been completed. Is the Minister able to clarify that? Given that universal credit has been beset by so many problems and delays so far, will it be able to cope with yet another change to the system?

We welcome the DWP’s intention to reduce outstanding arrears. Indeed, its consultation on this issue said that its changes

“would send a clear message to paying parents that failing to pay for their children is not an option. We will recover the arrears eventually, even if we have to wait until they claim State Pension.”

However, that appears to be slightly at odds with the Department’s actions of December last year when it wrote off billions of pounds in arrears in child maintenance. Will the Minister supply an update on the progress of this arrears write-off and how many receiving parents have made representations asking for their arrears to be collected?

Alarmingly, according to the latest statistics, the level of arrears under the new CMS system appears to be creeping up, just as it did under the old system. Since the CMS began, a total of £259.2 million of child maintenance has been unpaid and should now be paid through the Collect and Pay service. That is 11% of all child maintenance due to have been paid since the service began. Although I do not doubt the commitment of the new Minister to tackling non-compliance and arrears, these figures start to make his words on the issue seem rather hollow. Does he have a performance target on the amount of child maintenance remaining unpaid?

Arrears can be compounded by the failure of enforcement in Direct Pay, where parents manage payments directly with each other. In its report on Direct Pay, published this year, Gingerbread reported complaints from parents that arrangements are prolonged by unclear thresholds of enforcement, and that there is inconsistent follow-up and very poor communication from caseworkers. It is very difficult to track enforcement in Direct Pay. Despite its being a central plank in the child maintenance system, the DWP does not track whether payments are made. As Gingerbread says, this means that the Department cannot report on compliance in 70% per cent of cases. Given its centrality to child maintenance arrangements, does the Minister not think it is now vital to track whether payments are being made under Direct Pay?

Labour Members would not contend with other measures in these regulations, including changes to information gathering—which will make things simpler and save the taxpayer money—powers of entry and the calculation change. However, I will finally raise an issue that is not dealt with in these regulations but is a major concern to separated families. Fees were introduced under the new system to encourage more family-based and Direct Pay arrangements. However, the evidence shows that, far from increasing collaboration between parents and prompting compliance, fees are deterring parents from using the CMS, and where parents do pay, it is a struggle to afford it. The Department for Work and Pensions itself has said that some parents are staying in an ineffective Direct Pay arrangement rather than moving to Collect and Pay. Does the Minister agree that it unfair to charge single parents for using the CMS system when often it is the only option available to them? Will he commit to reviewing the impact of fees on receiving parents who have experienced financial coercion and abuse? I look forward to his response.