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8.16 pm
Mrs. Eileen Gordon (Romford): I thank the hon. Member for Meirionnydd Nant Conwy (Mr. Llwyd) for his thoughtful remarks on the CSA, and I, too, wish to speak on that subject.
As soon as it was created, it was clear that the CSA would never work properly or achieve its aims in the form in which it was set up. I know that we are starting a new millennium and that we are looking to the future, and I think that we are doing that tonight with these proposals for welfare reform. However, we take our history with us and we should learn from the past.
I speak from my experience as a case worker for a Member of Parliament at the time the CSA was set up by the last Conservative Government. This evening, I thought I almost heard an apology from those on the Conservative Front Bench for the way in which the CSA was set up.
We should not forget how bad things were in the beginning, and the impact was immediate and distressing. I worked for seven years as a case worker, and no other issue in that time came close to the chaotic situation created by the CSA. Our phones never stopped ringing from worried constituents, yet we could not get through to the agency. If by chance we got through, we never spoke to the same person twice and we did not know who we were speaking to. There was no useful information, and the agency did not get back to us.
I do not believe in special treatment for Members of Parliament. I believe in equality--everyone should receive the same service. However, it crossed my mind that if this was how the CSA treated the offices of Members of Parliament, how was it treating the general public? I am glad that proposals for the better use of telephones and face-to-face interviews are part of the reforms.
It became clear that the parents who were already supporting their children and who could be easily identified were being targeted--the easy targets. The assessments often did not make sense at all. We had one case where deduction of earnings was threatened, where the father would have been left with a minus income. It was obvious that the formula for calculating payments was so complicated that the staff did not understand it either.
I am sure that the staff were doing their best, but with such a complex system and duff technology they did not stand a chance of getting it right. Anyone who was
involved at that time knows the litany of problems, such as non-resident parents who received huge arrears demands because the form had gone in and payments were due from that day rather than from when the parent received notification of the amount. The delays caused by the system could be six months or more, yet it was the parents who were penalised. In some cases, forms were lost; in others, people received three letters on the same day saying completely different things. Unfortunately, these problems still arise.
Many people came into the advice surgery close to despair. It was awful. Some parents were no longer able to keep contact and visit their children because of the high payments demanded. My instinct at that time was that the whole system should be abolished. However, having thought about it since, I think that we would have to reinvent that wheel. I certainly do not want to adopt the Liberal Democrat solution of reinventing the wheel in favour of lawyers.
I have always believed that both parents should have responsibility for their children. A child is not a one-night stand--a child is for life, as is the responsibility for that child.
Mr. John Smith (Vale of Glamorgan):
I am very grateful to my hon. Friend for giving way, especially when time is so short. She mentioned one-night stands. Is she aware of the loophole in the current legislation whereby absent fathers who have had children as a result of one-off and clandestine relationships outside their marriage can evade paying any child support? My constituent, Mrs. Jane Jones from Llangan, has not received one penny from her former husband, a wealthy business man, even though a court order was made in her favour in 1992, because the Child Support Agency discovered that he had a child with a prior claim outside the relationship. Under the ludicrous rule of confidentiality, the CSA refused to pursue him. I hope that my hon. Friend agrees that the Bill should be used to remove that loophole.
Mr. Deputy Speaker (Mr. Michael Lord):
Order. That is far too long an intervention.
Mrs. Gordon:
I do agree with my hon. Friend. Such a loophole is a disgrace, and I hope that it will be considered in Committee.
The Child Support Agency was dealing with responsible parents, rather than tracking down the irresponsible ones--the opposite of its stated intention. Changes have been made since the agency's disastrous launch, but tinkering at the edges could not solve the fatal flaw of the complicated formula for payment, which tied everyone up in bureaucracy. That is why I welcome the simplified formula. Some may say that it is too simple, but people will know where they stand. They may even be able to calculate their payments, which they could never do in the past. The proposed system is much fairer and, with the use of reliable modern technology, should result in a more streamlined service.
The Bill's first concern is the child. I am pleased that second families will be taken into account, and that stepchildren will be treated the same as second family children. I think that all children from the various relationships should be treated equally--they all have the same needs, and should have the same opportunities. I hope that that will be discussed in Committee.
Unlike my right hon. Friend the Member for Birkenhead (Mr. Field), who is not in his place at present, I welcome the good cause provision. It will ensure that parents who are genuinely in fear of their ex-partners will not be penalised if they do not disclose information. I know that it can, as my right hon. Friend said, be used as a scam. However, when I visited the local women's refuge, I met women who were in deadly fear of their ex-partners. They feared for their safety and, indeed, for their lives, and those of their children.
It is estimated that more than 1 million children will benefit from the new system. Many children live in extremely complicated family structures. The Bill, and the reform of the CSA, will stop more children slipping into poverty. A child does not choose its parents, but bringing a life into the world is an awesome responsibility.
Mr. Ian Bruce (South Dorset):
This has been an interesting and enjoyable debate, and I am pleased to have been called to speak in it.
I want to apologise for anything that I have been involved in to do with the Child Support Agency. I was for two years Parliamentary Private Secretary to Alistair Burt; I listened to what colleagues said about the CSA before it was introduced, when it was introduced, and when we amended it. I am convinced that we never got it right. Having made that admission freely, I have to say that neither has the Bill got it right. It is going down the same wrong road, and I hope in my speech to show how it may be improved.
I am sure that colleagues will acknowledge by common consent that Alistair Burt was a decent Minister, who attempted to do his best. They will also acknowledge that when the Child Support Agency was promulgated, it had all-party support. The things that we worried would go wrong never did. All our predictions were unfounded. We worried about parents with care not wanting to co-operate, but in general they did. The problem was that the amount of money individuals were asked to pay was seen to be too high. People said that the amounts were unfair and that they could not pay. They were complaining not about the formula, but about the amount of money that the Government were attempting to take from them.
My job as a PPS was to go to all the meetings protesting about the measures--my Conservative colleagues were protesting just as strongly as others--and to listen to what was said. The Government responded by making things more complicated, by taking more into account. We tried to move away from a simple formula that we thought everyone could understand--such as the one that the Labour Government want to re-introduce and to establish other disregards. That tended to lower slightly the amount that we were trying to collect. Some cases solved themselves, but the vast majority of people
continued to say, "This is too much money--I cannot afford it". By trying to take that extra amount, we ended up by getting nothing for people.
If people can afford to pay £30 a week and are asked to pay £40, they do not pay anything and try to find ways of getting out of the system. They have been extraordinarily successful. According to the figures in the reports, 1.5 million children should be helped by the CSA, but only about 250,000 or 300,000 receive anything and only 100,000 receive the amount to which they are entitled. That shows that the system is not working.
I say to the Minister, with all the passion that I can muster, please, please, please consider what we shall be asking people to pay. For example, let us consider a couple who are probably living right up to their means, who break up and move to separate houses. All of a sudden a guy, who has perhaps left his home, has to find another quarter of his income to pay into the second household. If that was unacceptable and could not be done under the previous system, it will not be done in the future.
The figures are amazing. It is said that the average payment at present is £38 a week. That is derisory. Under these proposals, the amount will go down to £30 a week. What incomes are we talking about, if those are the low figures that are collected? People with an income of £20,000 a year after tax should be paying about £100 a week. Many people will apparently pay very little.
I make the same proposals that I made to my previous bosses--perhaps that is why I ceased to be a PPS--and to the Labour Government when they came to power. I admit my culpability in not realising that the Conservatives were taking the wrong direction--I certainly did not see where we were going. We can tell absent parents that there is a fair amount that they should pay to their children. That amount would probably be between £40 and £45 for the first child, about £50 for the second and about £75 for the third. I suspect that those are the amounts that absent parents would volunteer to pay if they knew that the amounts had been set and that they did not have to fill in a form. They would never have to declare their income; they would never have to tell anyone what they were doing. On the day that they broke up, they would know that they would be required to pay a certain amount. It might be uprated in line with earnings or social security benefits and so on, but that would be the amount that people would pay.
My guess is that people who said that they could not afford even those amounts would still tend to pay a higher amount than the state would allow them to get away with. My suggestion is that by implementing a fixed figure that is seen to be reasonable, we would, at a stroke, get rid of two thirds or three quarters of the CSA's load. The only people who would have to fill in a form would be those who genuinely said, "I cannot afford to pay this, I am making my bid to pay less". Perhaps the percentage of people who had to fill in a form would be the one that Ministers are expecting; I hope that it would be lower. There should be a system that is as simple as possible to assess whether people could really pay. The system should have some flexibility, because people find it difficult to work with absolute formulas.
We know already that many couples who have broken up have given some excuse to the CSA. They do not want to play; they have gone off and made their own deals outside the CSA. People have accepted that. We are about to reopen all the cases in which we bullied people into giving us information. No matter how easy the formula is, some people will always try to avoid revealing their income. It could be that, at the end of the year, the income tax collector will ask people how much their income was after tax. However, that almost begs the question whether people will try to change their income so as to pay less income tax and national insurance. They will hide the details of their income.
I understand that Ministers have been considering the possibility of people not including under income the investment income or dividends that they receive. People with a reasonably large income can generally make arrangements through their employer or switch between salary and unearned income. Thus, they could avoid their liabilities. To have a situation in which there are absolutely no limits, where everyone is to be pursued for every last penny of 25 per cent., or 20 or 15 per cent., of their income will simply add to the work load of the CSA. Surely, we are trying to avoid giving it such additional work.
I plead with the Minister to consider setting a fairly low limit so that we can start to achieve what we set out to achieve out in the first place. Parents should make a reasonable contribution towards their children. However, many people will say, "Hang on a minute. If people are terribly rich should not their children receive more money." That is absolutely right. If I were separated from my wife and my children were still of school age, I would feel duty bound to pay more money than the Government insisted I paid. However, that is what any normal human being should do for his or her children. The Government should merely be involved in setting the minimum amount of money and they should insist that people pay that sum if they can afford it. They should not say that they will continue to increase the figures.
For two years, I had to listen to complaints and interpret them for Ministers. However, I woke up one night and asked whether it would not be better to cut out the vast majority of cases by setting a simple base figure. People were committing suicide but, on average, we were getting only £20 a week from people for child support. That was nonsense, so we should create a practical system that will work.
I am sure that Alistair Burt is not too busy these days, but I suggest that Ministers pay his rail fare, buy him lunch and ask him to consider the proposals in the Bill. He has heard all these arguments in the past, so I am sure that it would be worthwhile to have lunch with him. In fact, if one gave him a £50,000 consultancy--incidentally, I am not his agent--to advise the Government, I suspect that that would mean that a lot of money would be very well spent.
I have not referred to my notes, but I have said what I wanted to say about the Child Support Agency. I now wish to refer briefly to pensions. Again, I am concerned that the Government are going down the wrong route. Governments have proven to be the most unreliable provider of pensions. If one compares what Governments have done to pensioners with what Robert Maxwell did, Robert Maxwell seems a saint. Each time Governments have offered guarantees to pensioners by telling them that
they will receive certain benefits for their contributions, the promises get kicked into touch. What people put in is not in any way related to the money that they get out. We have talked about the contributory principle, but no court of law would suggest that the amount of money going into a scheme and the amount coming out reflected any sort of natural justice. We must consider the proposals for pensions very carefully.
I began work as an apprentice with a limited company and when I changed my job years ago, one had to have one's pension contributions back. We tried to amend the law so that people could transfer their money, but we left a problem for this Government to deal with. When people change their scheme, they try to take too much money and do not put enough into the next scheme. That problem needs to be tackled.
I then went into self-employment, but I am not allowed to continue the pension scheme that I started as a self-employed person. I have to make it paid up and I cannot switch it over. The Government suggested that they might start to do something about that. I also have a limited company that has a pension scheme. I do not take any income from that scheme, so I must have that as a paid-up pension scheme, too. The system is very complicated.
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