Examination of Witnesses (Questions 349
- 359)
WEDNESDAY 15 SEPTEMBER 1999
PROFESSOR JONATHAN
BRADSHAW AND
PROFESSOR JANE
MILLAR
Chairman
349. Can we welcome Professor Bradshaw and Professor
Millar of the Universities of York and Bath respectively, both
well known in the territory. We are delighted that you were able
to come and we are very grateful for your submissions which we
have studied with interest. I would be obliged if one or both
of you would say a few words in terms of what your perspectives
are and particularly if you have got any kind of even glancing
experience of the Australian experience. As the hearings have
been unfolding, we have been getting some quite interesting evidence
about some of the aspects and elements of the Australian system
and even if you do not have yourselves first-hand direct experience,
you must have academic colleagues and other contacts in Australia
who might help us with that. Anyway, Jonathan, perhaps you could
start with a short opening statement and we will take the session
from there.
(Professor Bradshaw) Thank you very much,
Chairman. I think that we have been asked to perform this duet
because Jane Millar and I were responsible for the first national
survey of lone parent families which was published in 1991 and,
by serendipity, contained data which helped to inform the White
Paper on the original child support scheme and subsequently we
both independently have done research on non-resident fathers
and, in particular, that research has focused on their financial
obligations, but we have not done the fathers research together
and I am not quite sure what Jane's view is of the White Paper
proposals, so you might find us diverging at some points. I had
the temerity in my written submission, the courage indeed, to
hope that the Social Security Committee would play a rather more
critical role of these proposals than your predecessor was of
the original proposals and as they were being reformed because
I think that one of the things which has been very unhelpful in
the whole process of thinking about child support policy has been
that Parliament itself has not been terribly responsive to feelings
in the wider community, particularly the feelings of fathers.
It has been very encouraging in this process that fathers have
been involved in discussions with ministers and have been invited
to these meetings, which is really the first time that they have
been incorporated into the debate. They are usually a kind of
silent body out there. My own memorandum is based on a survey
that we did of 600 non-resident fathers funded by the ESRC with
some supplementary funding by the DSS and a couple of qualitative
studies of non-resident fathers. A simple conclusion arising out
of that is that I think that a regulated scheme run by the DSS
is not going to work and I am afraid that I agree with the lawyers
and the fathers' organisation that it would be much better if
these things went back to a family court arena, that child support
was negotiated rather than an imposed obligation and, in particular,
that it was negotiated in the context of discussions about other
aspects of life following the breakdown of relationships, in particular,
contact with children. There is absolutely clear evidence from
our research that if fathers have contact with their children,
the chances of them paying child support increase exponentially.
I think it is a pity that we have not taken the opportunity of
the collapse of the information giving sessions and the mediation
sessions under the Family Law Act and the hiatus there is in that
area of legislation and the reform of this legislation to bring
the two parties together, to get the Lord Chancellor and the ministers
in Social Security together to work through a system that brings
these different aspects together. I am not saying that child support
should be linked directly to issues of contact but just that they
should be negotiated in the same framework. That is what happens
in most other European countries. The research that we undertook
at York, Anne Corden's research on European child support regimes,
shows that is how it works there and it works better than it does
here. That is the first main conclusion. The second thing I would
say in opening is that I think we have consistently over-estimated
the capacity to pay of non-resident fathers. They are a very poor
group, they are much poorer than normal fathers. Those ones that
are going to be particularly affected by the scheme, who are the
non-resident fathers of mothers on income support, are very likely
to be on income support themselves. Quite a lot of the energy
that is going into the legislation is really about transferring
£5 from non-resident fathers on income support to the lone
parents on income support. Is it worth it? My view is that it
is an unfortunate thing that we are thinking of transferring £5
from anybody on income support because income support scale rates
are inadequate as they are.
350. That is very useful. Jane, could you do
the same, just a short statement. If there are any lessons from
Australia that you know about that would be good to hear about
too.
(Professor Millar) Thank you very much. I must apologise
for not being able to get any written evidence in to you beforehand.
This really follows on from the last point that Jonathan was making
about transferring £5 across from one family to another.
One of the things I wanted to argue that the Government should
be considering is whether there should be a guarantee of some
child support. A number of other European countries do have a
system whereby the government guarantees an amount of child support
and then seeks to recoup that back from the separated parent.
That ensures that if one of the goals of the policy, and indeed
the goals of the Government more generally, is an anti-child poverty
goal then guaranteeing some money into the pockets of lone parents
seems to me to be terribly important. I think there is an argument
or a case for saying that on what is proposed at the moment, the
£10 disregard for families on income support, many families
will not benefit from that because they are not going to get the
£10 in the first place but a £10 guarantee would make
a substantial difference. That is the first point I want to make.
I have not come prepared to talk about Australia particularly
but I can indeed find out quite a bit of information. Let me tell
you some of the things that I do know about the Australian system.
I am sure you know the basic background, as it were, that it is
a formula based system but it was not retrospective like the UK
system, so it did not have that element to it. It is based in
the tax office there. Some of the statistics that I do know are
first of all that the CSA, like our system here, does not cover
all lone parents, about 30 per cent are outside of that system
with private agreements and private payments and, therefore, we
know very little about those and about compliance in those cases
and so on. It is true that both the numbers in receipt in Australia
and the amounts that they receive have risen since the scheme
was started. It is estimated that the receipts among benefit recipients
have risen from about 26 per cent to about 42 per cent and the
average amount has risen from about 48 Australian dollars to about
68 Australian dollars. It has seen an increase. Australia collects
about seven dollars in child support for every dollar it spends
on administration. Their figures, where they make comparisons
with the UK, suggest that the UK only collects about one and a
half for every pound or dollar spent on administration. It looks
much more efficient. It is also true that, like here, a large
proportion have nil assessments because their incomes are too
low to pay. We have got about three in ten in Australia of separated
parents who have nil assessments. Most lone parents, about six
in ten, are still getting nothing, so it is still true that in
many cases they do not get anything. There were about seven reports
and reviews up to 1984 when there was a very major review of the
child support scheme in Australia and there were about 6,000 submissions
received to that review, about two-thirds of those from separated
parents, and the most common complaint was about the level of
payment. So the issue of legitimacy and so on is still a live
issue in Australia. What the government is proposing there, as
I understand it, are measures that will reduce the amount of the
separated parent's liabilities, so in a sense they are responding
to these issues that the separated parents have raised. They also
want to encourage more private collection, get people off the
scheme altogether and making their own arrangements and making
their own arrangements for paying. Some Australian critics of
these proposals have argued that this would undermine the anti-poverty
goal even further because it would drop more people out of the
net, as it were, and mean that the child support system becomes
even less capable of ensuring that lone parents receive adequate
levels of support. I think actually the Australian experience
reinforces some of the criticisms of the experience here. There
is not a pot of gold waiting out there and if the state does not
guarantee some form of child support for lone parents and their
children then in many cases it is not going to be transferred
to them.
351. Thank you very much. Can I ask each of
you, what do you think the main provenance of the White Paper
proposals is in terms of policy, of child poverty or restitution
to the taxpayer or whatever? If you are looking at the White Paper
proposals, what do you think is the main thing that is driving
them really?
(Professor Bradshaw) In my view there is the same
ambivalence about the principal objectives as there was in the
original scheme. I think the main thing driving the proposals
is an aspiration on the part of the DSS to sort out the mess they
have got in their department. I do not think the opportunity has
been taken to think fundamentally about what are the best interests
of children, what are the best interests of taxpayers, how can
we resolve this in the best interests of all the parties. If they
had sat down and asked those fundamental questions I am sure they
would have involved themselves in discussions with the Lord Chancellor's
office but, as I understand it, there has been hardly any serious
discussion between them. It is obvious that the Lord Chancellor
does not want to pick up this poisoned chalice. That is where
they would have looked if they wanted to start again and make
fundamental reforms. I agree with Andy Farquarson when he said
that what is happening here is we have got another Child Support
Act, not a fundamental rethinking of the principles of the scheme
from scratch. Also, if I may say so, I think the process has had
very little regard to research. There is hardly any research relevant
but there is a bit. In the Green Paper there were not any references
to any research and in the White Paper I think there are three
references at the bottom of pages which is quite surprising from
a Minister who has got two PhDs.
(Professor Millar) Two goals appear in the text of
the White Paper, one is the anti-poverty goal and the other is
the parental responsibility goal, that it is the business of Government
to ensure that parents take responsibility for their children.
Those seem to be the two goals that appear in the Paper. There
are questions then about how compatible those two goals are and
it might be argued that they are not particularly compatible.
There is certainly controversy over the parental responsibility
goal and how far it is the business of Government to be involved
in this area or how far using financial measures is actually the
best way. If you wanted to argue that it was a good goal for public
policy to ensure that parents are fully involved in the care of
their children after parental separation, whether you drive that
through financial measures or some other measure seems open to
question.
352. Are both of you really, really saying that
we should stop this process now, we should go back to the drawing
board and it might take, I do not know, a couple of years to do
adequate research, get the Lord Chancellor's Department involved
and meanwhile the existing system continues for another two years
and it might be a five or a ten year period before we get some
sensible long-term reform? Is that a price worth paying?
(Professor Bradshaw) I have said in my evidence that
I would not have started from here, but we are here with the White
Paper and I think probably the much more sensible strategy for
the Government to pursue now is to take up some of the ideas that
have been expressed by the lawyers and take out non-income-support
cases from the scheme and let them carry on being dealt with privately.
The way in which private settlements are being made is roughly
what I think is what we need for the whole system, but in the
absence of that for the whole system, I think it is madness for
the child support system to even begin to think of taking on private
cases and allowing people to come into the system after a court
order has lasted a year—I think it is just asking for trouble—and
concentrate on the income support cases. That is where the state
has got most interest in the issue and there are lots of good
things in the new White Paper, better things than the previous
scheme for income support cases, of which the disregard is of
course the most important, but I do think that there remain problems
and you get away from the problem of the resources of the parent
with care being an issue if you just concentrate on income support
cases, but I still think that there ought to be some means within
the child support scheme of the clients of the child support system
being able to negotiate and discuss. It is the imposition without
regard to circumstances that has lost the consent of fathers.
(Professor Millar) I do not know the answer to that
actually. I am not sure really. I think there are good things
in the White Paper and there are certainly reforms which are necessary
and should have been part of the scheme from the start. I do not
know whether we can go back to a private scheme which deals with
each case on an individual basis; even under the old system there
were sort of guidelines and so on. I think though that it would
be helpful perhaps if we thought more carefully about child support
as a process, if you like, in which there are stages. One stage
is about accepting the amount of child support which needs to
be paid, there is another stage which is about collecting that
money in and there is another stage about paying that money out
and ensuring it gets to the lone parent and the children. I think
it might be fruitful to think more carefully about when the state
should be involved and in what way in each of those stages and
indeed what government department might appropriately take responsibility
for those stages, so I think there is more unpicking we could
do. I am not sure I would say that we should go right back to
where we were before child support.
Mr Pond
353. You know the feeling when you are late
getting somewhere, you are badly late, the engine is starting
to splutter and you are lost and you ask somebody by the side
of the road where you should go and they say, "You certainly
should not start from here". I suspect that is how the Minister
is going to feel reading Professor Bradshaw's evidence which does
have a great deal of very valuable information in it, informing
the process, but I think it would also be fair to say that in
putting together the proposals, the Minister has consulted quite
widely and in that process of consultation has had access to quite
a lot of the research available. I wanted to probe some of the
elements in particularly Jonathan's written evidence, if I may,
Chairman, and first of all this point that what this is all about
is that much of the energy is going into transferring that £5
from the non-resident parents to parents with care. In your evidence
you say that on the basis of the research, two-thirds of non-resident
fathers were in employment, which is admittedly much less than
the four-fifths of resident fathers, but does that not imply that
we are talking about rather larger numbers and that these are
not all people on income support from whom we are transferring
the £5?
(Professor Bradshaw) No, certainly not, you are right,
but initially anyway the new scheme is going to be focusing on
the non-resident partners of caring parents on income support.
Our sample covered all non-resident fathers. The non-resident
fathers with lone parents on income support are much more likely
to be on income support themselves. We actually do not know what
proportion of non-resident fathers with lone parents on Income
Support are on income support, but I would guess that about half
are[18].
Even though only 30 per cent of the fathers in our sample are
on income support or disability benefits, those people who are
in work tended to be in very low paid work, so a larger proportion
were poor. I am not sure if they come under the £100 a-week
cut-off, but they certainly come under the £200-a-week cut-off.
354. I think that is very valuable research
to feed into the process. I would like to explore a bit further
the issue about their ability to pay and one of the points that
you have just underlined is the fact that they do not have very
much income. We have to make a distinction here, do we not, between
increasing the number of non-resident parents who are paying anything
at all and the amount that those who are paying do pay, so is
there not a balance here, that under the proposals it is expected
that the amount paid by an individual non-resident parent will
be less than they are paying now on average even though more non-resident
parents will be brought into the system?
(Professor Bradshaw) Yes, Baroness Hollis
and I corresponded about this. They will be paying less if they
are paying the CSA assessment, but most are not and most of them
will be paying more. If compliance works and if it increases the
proportion who are paying, most of them are going to be paying
more and a very large group of them who will be paying more are
those people who are on income support with second families to
support who in the past were not expected to pay anything and
who are now being required to pay £5. They are actually a
very, very substantial body of losers who are new losers. So true,
if people were paying what they should have been paying under
the Child Support Act, they are going to be paying less, but most
people, if they comply to this scheme when they did not comply
before and as a result of the £5 minimum, are going to be
paying more.
355. And on the shared care issue that we talked
about at some length in the last session, you say in your evidence
that in particular financial obligations cannot be separated from
the issue of contact, so you would be much in support of the idea
of, for instance, reducing the assessments for non-resident parents
where that non-resident parent had at least an average of one
night a year with the child?
(Professor Bradshaw) Yes. I am not sure that our findings
are authoritative on shared care because we did not get a lot
of shared care cases in our sample as a result of the way we drew
it, so I would not say that I could be very authoritative about
it, but on the whole I think that the present formula is too rigid
on shared care and I think that the proposals in the White Paper
would be fairer than the present scheme with the proviso that
I think there are going to be caring parents and non-resident
parents who attempt to manipulate caring arrangements in order
to maximise their benefit from it which I think will be a very
bad behavioural result, and not the only unintended behavioural
result of child support policy, which we do not really know anything
about because no one has done any work on it.
356. Can either of you tell us anything about
the likelihood of there being shared care arrangements by the
income of the non-resident parents, not in precise income bands,
but is it more or less likely where the non-resident parent is
on income support that there would be shared care arrangements?
(Professor Bradshaw) Shared care is much more likely
when there has been a period of residence with the father and
so out of wedlock births and cohabitation break downs are less
likely to lead to shared care arrangements and they tend to be
the poorer non-resident fathers. That evidence would suggest that
the shared care arrangement is more prevalent among better off
parents.
357. Finally, if I may, we had some discussion
earlier, which I am sure one or both of you can throw light on,
on this issue about costs of the child. The 15 per cent is based
on the assumption that it takes 30 per cent of the parent's income
if a child is living in a household full time. Is there any evidence
that would support or deny that figure?
(Professor Bradshaw) In the Green Paper there was
no reference to that and I wrote to Baroness Hollis after the
Green Paper saying "what is the evidence for this assertion?"
In the White Paper they put in a reference to Sue Middleton's
study at Loughborough on the cost of a child. I have since been
in touch with Sue Middleton to find out whether her findings support
the proportions in the White Paper and she finds it very difficult
to discern how anybody could have drawn these proportions from
her research. It is a curious statistic, is it not, 30 per cent
at average income? I honestly do not see how anybody from any
source of data available in this country could have calculated
the cost of a child at average income.
358. But there is plenty of other evidence.
(Professor Bradshaw) There is lots of evidence on
the cost of a child but, of course, the cost of a child varies
with income, or rather expenditure on children varies with income.
The Family Budget Unit has attempted to produce the most sophisticated
estimates of the cost of a child based on two levels, modest but
adequate and low cost. I do not think either of the cash figures
they came up with could have led to a 30 per cent at average income
figure.
Mrs Humble
359. We have had two alternatives presented
to us to having a radically restructured CSA. One of them is to
look again at the court system and you have mentioned that yourself,
that you are sympathetic to some of the cases put to us by lawyers
this morning. The other suggestion is that the CSA should be incorporated
in the Inland Revenue and that I understand is the way that the
Australian system operates. I would like your comments on the
pros and cons of that given the scenario now of the Working Families
Tax Credit coming in to replace Family Credit, the Inland Revenue
running it and the Inland Revenue taking over the Contributions
Agency. If we are looking at hopefully more people coming off
benefit and into work and perhaps being helped by WFTC that might
be an ever growing group. I just wonder what your comments on
that are.
(Professor Bradshaw) My view is that the adjudication
process should be separated from the enforcement and collection
process. The Inland Revenue can certainly collect and enforce
on the basis of a formula or an agreement which has been adjudicated
but I do not think that the Inland Revenue will be any better
than the DSS in the adjudication process. I think there is a case
for going back to negotiated child support agreements, okay with
the formula guiding those discussions but yet there being some
flexibility at the margin, that is what we need. There are two
alternatives. One is to go back to the courts and the other is
to develop much more the role of tribunals within the CSA arrangements.
In my evidence on the Green Paper I urged the DSS to expand the
role of the tribunal system and make it have this capacity to
provide flexibility, individualised justice within a formula driven
scheme, but they have not budged at all on that, the role of the
tribunal is still going to be very rigidly limited which I think
is a pity.
(Professor Millar) I would tend to agree with what
I think was implicit in your comments, that some of the arguments
about why the Inland Revenue did not want to take this on board
when the child support was first introduced was that it was not
part of their business and they were not involved in those sorts
of things. I think things like the Working Families Tax Credit
and the way in which the Contributions Agency is organised now
will change the Inland Revenue. I think those arguments are much
weaker and there is indeed a strong case for considering whether
the Inland Revenue should be involved in the collection of this
money. In Australia it is indeed within the tax office there and
they also use information about taxable income, ie information
from people's tax returns, as part of making assessments. There
is some sense to having it based on taxable income measures to
determine incomes and there is also some sense in putting it in
the tax office.
18 See Ev p 145. Back
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