Select Committee on Social Security Minutes of Evidence


Examination of Witnesses (Questions 185 - 199)

WEDNESDAY 15 SEPTEMBER 1999

MR NICHOLAS MOSTYN QC


Chairman

  185. Can I welcome Nicholas Mostyn QC who is here representing the Family Law Bar Association. Thank you very much for coming and for your submission, we have got that and we have got the summary as well. I wonder if you could just say a few words about what your perspective is on the White Paper and some of the key issues that are concerning the Association that you represent.

  (Mr Mostyn) Our organisation has no objection to the principle of simplification for the reasons that I have endeavoured to explain probably at too great a length in my written submissions. We believe that the present formula has become labyrinthine and incapable of sensible management, so there is a compelling case for simplification. We believe very strongly that if there is to be simplification in order for it to be perceived to be a fair system it has to be accompanied by a more liberal departures regime than that which is presently proposed. As I understand it the departures regime that is proposed to follow when this is brought in effect in 2001 is going to be more restrictive than the departures regime encompassed in the 1995 Act which of course is meant to support a formula which is sensitive to almost every conceivable circumstance of the individual citizen. I do not understand how a more restrictive departures regime from that which presently exists is going to aid a more simple formula.

  186. That is helpful. I suppose the weight of the evidence we have had so far is that people are prepared to accept an element of more rough justice in order to try to get the administrative complexity run out of the system and make it more easily administered.
  (Mr Mostyn) When you say people are prepared to accept it, those are the people who are prepared to impose it on the individual payers. Is there any evidence that either payers or payees are prepared to accept more rough justice? I do not know, I rather doubt it myself. One of my principal points is that an awful lot of what is contained in the White Paper does not seem to be supported by any serious empirical research at all.

  Chairman: That is often the case in modern Government these days.

Mr Dismore

  187. Can I first of all touch on paragraph 11.5[54] of your submission because you comment there that the majority of clients you see are often well off but the people that we have been primarily looking at so far in this investigation and also in the White Paper has particularly focused on people who are not in that category to say the least and are the many thousands of people struggling on income support or whatever and they are trying to make one income spread to cover two families. To what extent do you think your experience of dealing with the millionaire class on separation is applicable to the families who are struggling on the housing estates to make ends meet?

  (Mr Mostyn) I have been doing this work for 20 years and when I started doing this work my income was entirely derived from Legal Aid and I only dealt with the latter wider class to which you have referred. I have been fortunate as my experience has progressed that my clientele has become the better off sector of society, so I feel I have a pretty universal view. More than that, as a commentator on child support I speak to a great many people outside my direct professional practice, so I do feel that I have a wide perspective of the impact of these proposed reforms. When you talk about paragraph five you are talking about a failure to include a cap.

  188. Paragraph 11.5.
  (Mr Mostyn) I thought you said paragraph five. 11.5 is, of course, under the rubric of no cap. Of course, no cap does not really impact if people are living at or near the poverty line, it is an irrelevance, but the fact that no cap may only apply to a small sector of the community does not make it any less bizarre or unfair.

  189. Can I pick up on the point that you made before that which was you said a lot of your submission is based on your discussions with other people in the preparation of your book or whatever.
  (Mr Mostyn) Quite.

  190. Presumably those sorts of people are the same sorts of people that we will be hearing from giving evidence to this inquiry both today and tomorrow in terms of the representative groups as well.
  (Mr Mostyn) I deal with the representative groups but I have also gone out and met individuals in the course of my researches and investigations from every sector of society who have attended meetings. It may be that because they are attending meetings and I have spoken to them and discussed with them the fact that they are at a meeting suggests that they have got an axe to grind in any event. Over the course of the history of the Child Support Act I have tried to make it my business to understand every nuance of its operation on every sector of society.

  191. The evidence we were getting this morning was that a lot of lone parents, particularly women, are simply opting out, throwing their hands up in horror and are not wanting anything to do with it.
  (Mr Mostyn) I am sympathetic to the view of lone parents who are opting out because it is an indictment of a system that is not working because of its complexity which is a product, as I say, of the maximum amount of compromises that were made in its development over the course of the last adminstration.

  192. The only point I wanted to follow up on that also was that you seem to be suggesting that the various pressure groups we have been hearing from, representing all the different interests, that their views may not be as valid as yours—
  (Mr Mostyn) I did not intend to imply that at all.

  193. When we hear from the various pressure groups involved, the various poverty groups, as it were, saying that they are happy with the compromise because they see that the benefits of simplicity outweigh the disadvantages, you are disagreeing with that?
  (Mr Mostyn) I think that there is a possible trap here about the so-called benefits of simplicity. I listened to the last witnesses who said that every prediction is that the consequence of simplification will be a higher rate of compliance. Now, Lady Hollis was kind enough to tell me when I attended the lecture in October of last year, when I suggested to her that there is a mature system in Australia which has been in place since 1989, it is based on a simple formula, nobody could deny that it is a simple formula, why does the White Paper not even mention the word "Australia", and why is the Australian experience not even discussed even if only to dismiss it, and she said that the Australian rate of compliance is much worse than ours and that maybe they had more to learn from us than we had to learn from them. If it is the case that in Australia where they have a formula of considerable simplicity that their rate of compliance is much worse than ours, then I think it is dangerous to assume that there is necessarily a causal connection between compliance and simplicity and I do not know on what basis or on what empirical research the assertion is made that simplicity is necessarily going to mean any higher rate of compliance with the consequential benefit to the taxpayer.

  194. The evidence we were given yesterday was that the simplicity would mean that the calculations could be done more swiftly and quickly and that the staff would then be able to devote far more of their time than the 10 per cent that they do now towards ensuring compliance and equally that the parties involved would know where they stood much earlier on and, therefore, would not get saddled with £10,000 or £5,000 or whatever of unexpected arrears several months later which they could not possibly meet, for example.
  (Mr Mostyn) Yes, but that does not answer the question of why in Australia where assessments are made very quickly there is a higher rate of non-compliance, unless it is something to do with our respective national characteristics.

  195. Well, I will not get into stereotyping, but could I also go on to a point you were making to the Chairman about the discretionary extensions and also the point that you make about the potential breaches of the European Convention on Human Rights because I think there may be some non sequitur there. As I understand your position, what you would like to see is much broader discretion to depart from the basic formula and that those departures should be dealt with not administratively by the officials, but in every case by the social security tribunals. Is my understanding correct?
  (Mr Mostyn) That is correct.

  196. Would that not, therefore, mean that the parties involved in the first place would have far less clarity about where they stand, particularly bearing in mind that paragraph 18, chapter 6, says that the discretion would only rest with officials when the facts were objective facts—
  (Mr Mostyn) Where the facts were known, yes.

  197. Would that not also potentially result in far more cases going to the tribunals—and we have had evidence before in a different inquiry about the workload of the tribunals—with inevitably much, much longer delays and uncertainty and, therefore, putting us back to square one where we take much, much longer to make a determination, the uncertainty continues and all the benefits proposed by the White Paper simply disappear? Is it not simply a recipe to create more work for the lawyers and advocates at tribunals rather than producing a much quicker and easier formula?
  (Mr Mostyn) Well, I do not know whether it would create more work for lawyers and there is no legal aid in these tribunals at the present time and I am not suggesting that they should be legally extended to these tribunals, but it seems to me that it is a self-evident proposition that if you have the unitary formula, it is going to produce the same results for two people whose circumstances will be extremely different. It was a point that was made as well as it could be made in the debate before the House of Commons by Mr David Rendel which I quoted at paragraph 8[55] of my submissions and it is a point which is made even better than I could do it in the penultimate paragraph[56] in the letter from Mr Justice Kay who is possibly the most experienced Australian commentator on the subject. He gives just an example which is this: "Consider two separated fathers occupy adjoining duplexes", or flats, "They are both in the same employment, earning exactly the same income. One owns his apartment outright. The other is a tenant. One can clearly afford to pay more child support than the other", because one has no housing costs and the other will have significant housing costs by way of rent. Now, under our proposal abnormally high housing costs is not going to be a ground for departure and so the formula is going to treat those two fathers in exactly the same way even though the result of the formula is going to mean that one father has significantly less disposable income as a result than the other father and, as Mr Rendel said in the House of Commons, "The Act's basic failing is that it rests on a rigid formula. It is supposed to treat people living in equal circumstances equally, but any formula will treat equally only those people for whom the circumstances that the formula takes into account are equal". That was his speech following yours, Mr Chairman, on 9th February 1998.

  198. Is the logical consequence of what you are saying, therefore, that we should get rid of the formula altogether and simply go back to the age old system of the two parties thrashing it out in the courts without necessarily taking the taxpayers' interests into account at all?
  (Mr Mostyn) No, that does not follow at all because what this formula will provide is a very firm starting point and it should be a finishing point unless there are exceptional circumstances, but the exceptional circumstances that are being proposed are, in my respectful submission, too restrictive. They are even more restrictive, as I have already said, than the existing grounds for departure which are meant to make fair, and this is what it is all about, the existing system which is meant to be sensitive to almost every individual's particular individual circumstances, and so I do not understand how a departure system that, for example, does not allow as a ground of application for a departure abnormally high housing costs or abnormally high travel-to-work costs or abnormally high costs relating to your own illness or disability or abnormally high costs other than illness and disability of supporting other children in your family—that is over and above the allowance you are given in the proposals already—I do not understand how it could be said that this formula is going to be working fairly. At the end of the day my fundamental point is that this system will only work if it is perceived by the public to be fair.

  199. So you think that the public will not perceive this as fair. Extending that argument, ultimately where do you draw the line between the things that should be taken into account and should not? For example, you refer to private school fees in your report that one parent may be picking up the bill for. I have to say I have not come across any of my constituents in that position, but would you, for example, say that that is an abnormal expense that should be taken into account?
  (Mr Mostyn) When I referred to school fees, the new regime says that you are entitled to have maintenance costs of children who are at a boarding school taken into account as a ground for departure, so the Government itself has proposed as a ground for departure under the new system the costs of supporting children while they are at boarding school, but it has gone on to say in those circumstances that that should not extend to the cost of their fees. I do not quite understand that if you are talking about the cost of their tuck box at boarding school, but not the cost of their fees. The Government is going to concede part of it, but not all and I do not understand why they do not concede all of it. It seems to me that you are either going to allow some of the costs of boarding school or none.


54   See Ev p 64. Back

55   See Ev p 66. Back

56   See Ev p 74. Back


 
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