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Dr. Lynne Jones: Is the hon. Gentleman suggesting that wealthy parents do not transfer a proportion of their wealth to their children by giving them, for example, tax-free donations to their savings or helping them through university? He is talking nonsense.
Mr. Pickles: The hon. Lady has missed the point completely. Parents may transfer wealth to their children of their own volition, but the proposals in the Bill would introduce a mechanism by which non-resident parents had to transfer their wealth to their former spouses, not their children. Financial settlements would be turned on their heads, and that makes no sense. The original recommendation of the Social Security Committee was that there should be an upper limit. My hon. Friend the Member for Daventry (Mr. Boswell) was right to warn of the effect that the proposals will have.
I have already told the House about Mr. Justice Kay's advice that the public must perceive the scheme to be fair, but it will be unfair if the income of the parent with care is not assessed when that person has a higher income than the parent without care. That will lead to great distress and great damage to public confidence in the system. The object is to ensure fair maintenance for the children, not to offer a further means by which wealthy parents with care can damage less well-off parents who do not have care. My hon. Friend the Member for Faversham and Mid-Kent (Mr. Rowe) was right to say that the system should not be used to extend conflict within the family. Our surgeries are full of people with stories about parents without care, usually men, who shirk their responsibilities and have a life style that is inconsistent with their declared income--they have new Porsches and take expensive holidays--and it is right that we should pursue them.
Increasingly, however, people come to our surgeries with relationship problems. Those people fit the lyrics of the American singer-songwriter Randy Newman, who described "uptown, uptempo women" and "downtown, downbeat guys." [Interruption.] The House will understand that I am a well-read product of the '70s.
When a child lives in a wealthy home, there is no justice in a policy that squeezes poor parents without care. That is oppressive and wrong, and we should do something about it. That is why, in the Australian system, if a parent with care has an above-average income, the prescribed figure is reduced dollar for dollar. As Mr. Justice Kay said, public confidence will not be bolstered if it is not recognised that a
Conservative Members believe strongly in people having dividend income. We want people to invest, to put money aside and enjoy dividends, but we want them to use the money to pay for their children's upkeep. The Bill offers a Bertie Wooster escape clause. The House will recall that Bertie Wooster led a blameless life, but he had many liaisons and was engaged to no fewer than six females. He was engaged once to Madeline Bassett, Honoria Glossop, Pauline Stoker and Vanessa Cook, and twice to Lady Florence Craye and Roberta Wickham.
What would have happened if those liaisons had been consummated and there had been issue from one or more of them? Wooster was a wealthy man who received dividend income but, under the Government's current proposals, the CSA would not have been able to lay a hand on a penny piece.
Another illustration might involve a plumber who decides to form a company and to take a dividend instead of wages. Under the Government's scheme, he would not have to pay a penny piece, and that surely makes no sense. The Secretary of State has powers to prevent payment evasion and to ensure that those who deprive themselves of a source of income will be liable. However, neither Bertie Wooster nor the plumber could be considered, under the Bill, to have deprived themselves of any form of income. There is much to put right in the Bill's proposals for pensions, to ensure that the interface between the various systems are improved, as the pension industry advises.
Finally, the debate has made clear the House's universal contempt for the idea of removing people's driving licences as a way of enforcing the requirements of the Child Support Agency. It is surely the daftest and most stupid idea ever to come from a spin doctor. I believe that our first job in Committee will be to remove this ridiculous idea.
I strongly urge my right hon. and hon. Friends to support our amendment tonight.
The Minister of State, Department of Social Security (Mr. Jeff Rooker):
There have been 20 Back-Bench speeches today, and I have heard every one. I missed a
At the outset--this is not meant as a criticism--I wish to refer to any hon. Member who raised any individual CSA case by mentioning the names of constituents. Before I or my ministerial colleagues do anything, we want written information and letters. We are not taking throwaway names in the Chamber and then going away to look up individual cases.
Mr. John Smith:
Will my right hon. Friend give way?
Mr. Rooker:
No, I will not. I am making that point so that nobody expects that just because someone's name was raised tonight, we will go away and deal with that case. We will not. We will require written instructions from the Member of Parliament.
Mr. Smith:
Will my right hon. Friend give way?
Mr. Smith:
On a point of clarification.
Mr. Rooker:
There is no need for clarification. I am asking for letters if cases need following up.
I want to respond to some of the points raised in the debate, although it is impossible for me to do justice to all of them. On child support, there were many references to the well-off being required to pay a lot of money because of the percentage assessment--we must make it clear that the percentage figures of 15, 20 and 25 per cent. for one, two and three or more children apply only to net incomes above £200 a week. There was only one oblique reference to that. Anyone earning between £100 and £200 a week will pay a lesser percentage. For anyone earning up to £100 a week, it will be almost a token payment. These are net incomes. Reference was made to a salary of £20,000 a year and a payment of £100 a week.
Mr. Ian Bruce:
That is £20,000 net.
Mr. Rooker:
The hon. Gentleman now says that it is net, but he did not make that clear before. The salary necessary to give a net income of £20,000 a year would be substantially more than £20,000. There are not only fixed percentages--there are built-in hurdles in the system before they are reached.
It is true that there is no upper limit, but there is a limit in terms of the percentage. The limit of 25 per cent. of net income is less than that which can be reached under the present system--under the current system, the limit can hit 30 per cent. of net income. That must be taken on board. It is not possible for us to produce a genuine assessment of losers and gainers, although we have been criticised for that. Given the fact that there is such a default in the current system, it is not possible genuinely to assess changes in people's behaviour.
To their credit, the previous Government instituted a cultural change with the introduction of the CSA. It has not worked out as expected, even with the changes. I was present when it was introduced, along with other hon. Members, and the matter was not scrutinised enough. Everyone thought that it was a good idea and that there was a problem to be addressed. There was a general consensus. However, the detail was not looked at properly in the regulations, in Committee or on the Floor of the House. I hope that the details of the Bill will be looked at in Committee.
This time we have the added advantage of greater consultation and the Select Committee report. We have learned from the errors of the past. We are not claiming perfection, but we are claiming that we will have a system that will meet public demands, that will be fair and transparent and that can be operated by our officials.
The hon. Member for Vale of York (Miss McIntosh) spoke about charm schools. It works both ways. I cannot tell my constituents when they are angry and banging on the table, and odd relatives who claim that I set it all up when I was on the Back Benches, that they must be charming when they speak to the CSA staff. One has only to be on the receiving end on the telephone for an hour in a CSA office to realise the sort of things that the public say to the staff. That is why the staff are extremely stressed and turnover is running at 27 per cent. It is not simply a question of not paying them enough--the job is extremely stressful. Part of the stress is to do with the system they have to work with. We hope that the new system will enable them to be more user-friendly, that there will be less stress because of the clarity of the calculations, and that the public reaction will also be different. It works both ways.
I should like to respond to some of the points of the hon. Member for Havant (Mr. Willetts). I shall, if time permits, deal with the points on pensions. The general thrust of the hon. Gentleman's message and his criticism of our proposals was that he wanted one law for the rich and one for everybody else. We are not prepared to countenance that. The idea of putting a fixed cap on absent parents is nonsense.
However, we agree that we want the two systems to operate together for as short a time as possible. There must be two systems--there cannot be a big bang. It will not be possible to switch off the system one Friday, to put the existing case load of more than 1 million on the system the following Monday, to accept new claimants from that date and expect the system to work effectively. That will not happen, and we would be irresponsible to suggest otherwise. We want the gap to be minimal, but we have to make it work.
It was argued in a debate on the Queen's Speech that new information technology is required and it will take some time. We regret the delay, but we will not allow the system to operate with the new formula unless we are satisfied that it will work. There is no benefit in rushing it by either three months or six months just for the sake of a headline or to meet any self-imposed dates. This is the last chance for a CSA-type operation, as I am sure all hon. Members will appreciate.
"carer is earning Australian $100,000 per annum whilst the payer is struggling to make ends meet."
However, there remains a glaring omission in the Bill--the question of dividend income, which was raised originally by my hon. Friend the Member for Havant (Mr. Willetts). People who receive unearned income will not be eligible to be assessed by the CSA. There is neither sense nor logic to that.
9.40 pm
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