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Mr. George Stevenson (Stoke-on-Trent, South): We are waiting to be convinced by the hon. Gentleman.
Mr. Pickles: I am grateful to the hon. Gentleman. It is good to see him in the Chamber.
I am pretty sure that the record will confirm what I believe the Minister said. However, an upper limit already exists. Is she suggesting that we are open to challenge? As leading counsel has said, we need to see that advice, because it goes against all the experts in family law. All the experts on the European convention on human rights say that that is not the case, but the hon. Lady seems to have found a lawyer to say that it is. If it flies in the face of conventional wisdom and all the advice that we have received, we should know. I look forward to hearing from her what the position is.
We are not unique in having such a system. The system in Australia has the same aim. In Committee, I quoted extensively from Mr. Justice Kay of the Australian court. I did not realise at the time how distinguished he was. Apparently, he is the senior judge in the family court of Australia, and the principal appellant judge after the chief justice, so he is a senior man.
Justice Kay was asked to give advice to the Select Committee, and stated:
In my book, 6,000 is a substantial number, and that does not take account of the effect on middle England. Once the measure becomes law, there will be a rush--nay, a stampede--of people seeking to overturn court judgments and to get a larger slice by way of spousal distribution.
Is it not absurd that we may be chasing a non-resident parent with a low income--as low, say, as £9,000 a year--when the parent with care is wealthy? Is it not absurd that we are giving children a right to a share of the income of one set of two parents? The amendments are intended to make sense of the CSA reforms.
Miss Anne McIntosh (Vale of York):
I am grateful to my hon. Friend for giving way. Where the non-resident parent has formed another relationship and the other partner to that relationship is making provision, should that not be taken into consideration?
Mr. Pickles:
Not in the context of the amendment, which deals with parents with care who are wealthy. It is ridiculous to suggest that the income of the parent with care should not be taken into consideration. It makes a mockery of the system to chase after someone for a relatively small sum, when the child is living with a parent who has considerable wealth.
Mr. Bercow:
Does my hon. Friend agree that it would be an accurate summary of his position to say that he was arguing on the strength of the principle, "From each according to his ability, to each according to his need."?
Mr. Pickles:
My hon. Friend is probably a keen fly-fisherman. I shall take no more interventions, as I want to make progress.
We should stop making the CSA a laughing stock. Without the amendments, we will create injustice and a new concept in law which has not been thought out. We will undermine the successful introduction of a set of measures which we sincerely hope will succeed. I commend the amendment to the House.
Mr. Field:
I shall speak to amendment No. 87. I confess that, so far, Bill Gates has not come to my surgery to discuss the sort of issues raised in the debate. [Interruption.] Of course, I live in hope.
I shall describe a real-life situation for some, but not many, constituents. I pose this as a question to the Minister, which she may answer now or in a letter later, about how the new Act will operate and the safeguards that it will contain.
As I understand it, the safeguard is that people will be required to pay only a certain proportion of their income in maintenance. I have had a number of constituency cases in which people had their first child when they were, let us say, 16. They have a court order for the payment of maintenance for that child. They have then married and had a second family. That marriage has broken up. It is on that second family that the CSA calculations will be undertaken.
Mr. Webb:
Amendments Nos. 87 and 88 raise two interesting issues. Amendment No. 87 provides that the absent parent, no matter how rich, continues to pay a percentage in child maintenance. Amendment No. 88--to which the hon. Member for Brentwood and Ongar (Mr. Pickles) referred, but not in as much detail as I expected--deals with the situation where the mother is better off than the absent father.
In considering the amendments, we were struck by the fact that they represent opposite logics. Our guiding principle in deciding which way to vote on an amendment is whether it would help to maintain what a child would have experienced had the parents stayed together. That seemed a reasonable way to evaluate the amendments. On amendment No. 87, the answer is no, and on amendment No. 88, yes. Let me explain what I mean.
Had the rich dad--for simplicity's sake--stayed with the family, the child would have benefited. Maintenance is not just about food and clothing; it is about living standards and quality of life. If a child loses the presence of the dad, is it reasonable to expect them to lose the living standard provided by a well-off dad, or a dad who becomes well off? Had the dad remained and earned a bonus or a good salary, the family might have gone to Disneyland, or wherever.
Mr. Pickles:
Is the hon. Gentleman concerned that the Bill provides no way of ensuring that such money is transferred to the child?
Mr. Webb:
Short of putting the money in trust, which would be a possibility, we have to assume that the parents will want to act in the child's best interest, so I have no particular problem with the lack of a mechanism for benefiting the child.
Different issues arise if the dad becomes rich after the break up, but if he was rich while the family were together, the child will have had a high material standard of living. Therefore, after a break up, not only does the child lose the dad but there is a slump in the standard of living, which is something else to adjust to.
Mr. Robertson:
The hon. Gentleman is right to question whether a child who loses a father also loses a certain standard of living, but the father loses the child, so should there not be some recognition of that?
Mr. Webb:
Obviously, the father does lose the child. We all encounter fathers in our surgeries who feel that pain greatly and have great concerns about access and other issues, but I am not convinced that a monetary adjustment is the right way to deal with that problem. Court decisions on welfare and access are important in that regard, but I am not convinced that tweaking the formula can compensate. I do not suggest that we compensate the child for the loss of the father through money either; I am simply trying to avoid further pain for the child.
Therefore, I am not convinced that a cap would make sense. There may be a few headline cases, although, as has been suggested, the Bill Gates of this world will have
good lawyers and, just as they will probably avoid paying much tax, they will probably find a way round provisions such as this, so they may never be affected.
We have more sympathy with the rich mum, poor dad situation, where there is more obviously a potential sense of injustice when a dad with a modest income pays maintenance when the mother is well able to provide the child with all that it needs. The loss of money from the dad leaving may be small and there will be one less mouth to feed. I am aware that research shows that, after a split, the family with the children is usually the worst off, but we are dealing here with the opposite case, where the mother is relatively well off, where, after the split, there is one less mouth to feed and the loss of only a modest income, so the family may be better off. It is not unreasonable that that may be taken into account in the maintenance assessment. Therefore, we have some sympathy with amendment No. 88 but not with amendment No. 87.
Amendments Nos. 2 to 5, tabled by the Liberal Democrats, relate to one issue and touch on the different set of circumstances of the absent parent, typically the dad, who is on benefits. Schedule 1 says that dads on benefit would probably pay a fiver, which they would not presently be paying. If I am wrong, I hope that the Minister will stop me, otherwise I shall assume that that is the case.
Is it right to take that fiver a week from an absent parent on benefits? The Government's approach is to say that pretty well everyone should pay something, as much for the symbolism of it as anything else. It is a point of principle, but my problem is that the Government, in so many things that they do, cause people to live below the poverty line by digging away at their basic benefit level.
I would argue that the £50 a week received on income-based jobseeker's allowance is an extraordinarily minimal sum on which to live. It is certainly not enough to save with, so lump sum purchases require a social fund loan, or something like that. A fiver may not sound much to us, but it could be 10 per cent. of a weekly income. I am not convinced that the symbolism of saying that everyone must pay something justifies the poverty that will be created for absent parents in such a situation.
The effect of amendment Nos. 2 to 5, on which we shall divide the House because they represent an important and distinct issue, is to move absent parents on benefit from the category of those who have to pay a fiver into the category of those who are subject to the nil rate.
I give the House an illustration of why we are particularly concerned about deductions from benefits. The "Income Support Statistics Quarterly Enquiry February 1999"--perhaps not the latest, but the latest that I have to hand--gives the number of people on benefits who already have something deducted at source. In other words, they are already getting by on a weekly income below basic benefit levels.
The astonishing figure here is that more than 1 million income support claimants are already living below basic income support levels because something has been taken away at source. Various categories of money are taken away at source, some of which tell one something about the standard of living. For example, in some cases mortgage interest comes from income support at source, and that is just an accounting feature. The money goes direct to the lender instead of it going to the claimant and
the claimant paying it out, so that does not directly mean that they are living below the poverty line. About 600,000 people on income support have social fund loan repayments deducted from their basic benefits. One might say that they have had the money with which they bought the bed, cooker, fridge or whatever, but that money has gone on those purchases, so it is not then available for buying food, clothing and basic necessities. The basic income support level is minimal enough as it is, with no slack in it, so many people on income support end up going to money lenders and loan sharks. Pushing them further below income support by schedule 1 is a cause for concern.
Categories are always being added to such deductions, which take people below the income support line, and the social fund line in the table has been shooting up. In his Budget statement, the Chancellor told the House that there has been year after year of continuous economic growth. One would therefore assume that the numbers would start to drop as jobs were created. Unemployment decreased substantially over that period.
Yet, according to the table, in the past four years, the number of people who live below the poverty line because of social fund loan repayments has increased from approximately 450,000 to 600,000. The number has increased in each of the past four years. There is an underlying serious problem: more and more of our fellow citizens live below the poverty line because of deductions from benefit. Without our amendments, schedule 1 will exacerbate the problem. That is the kernel of our argument.
We have reached a position in which people cannot get social fund loans because they are deemed too poor to repay them. That is extraordinary, yet the system works in that way. People are becoming deeply indebted to the social fund and to loan sharks, yet we are considering a schedule that will deduct another fiver. I accept that not many of the dads whom we are considering are in those categories. However, many are lone parents who are repaying social fund loans, and some are pensioners or disabled. Some dads will be on incapacity benefit and repaying social fund loans.
I hope that the Minister will explain how those people are supposed to live. I presume that the fiver a week will be paid indefinitely. The problem with inadequate benefits is not living on them for a week. Members of Parliament often do a stunt and live on benefit for a week. Lo and behold, they can do it for that time. The problems arise when, for example, a consumer durable has to be replaced. The deduction of a fiver a week will make matters even worse.
I hope that the Minister can clarify a further point. When an absent parent has a child in a new benefit unit, will the deduction of a fiver continue? The Government talk about eliminating child poverty completely in 20 years. They envisage a time when the Secretary of State for Social Security will say that no child in this country lives in poverty. Yet children who are in benefit units and live below income support levels because of deductions for social fund loans or child support maintenance premiums will suffer. Even a fiver means that those children will live in poverty.
Placing a cap on administrative assessment of child support and factoring in some income of the carer are seen as being entirely consistent with two underlying essential bases of the scheme.
The first principle is
that children have their proper needs met from reasonable and adequate shares in the income, earning, property and financial resources of both of their parents.
The second is
that parents share equitably in the support of their children.
Justice Kay was asked whether those principles would meet with public acceptance. He commented:
The success of the scheme may well depend on the extent to which the public perceive it to be fair. Assessments which throw up $550--
the sums are given in Australian dollars--
a week for a baby or ignore the fact that the carer is earning $100,000 per annum whilst the payer is struggling to make ends meet do little to bolster public enthusiasm for the scheme.
The Government's proposal is entirely consistent with the Labour party's pre-election pledge, which stated:
We are determined to establish clear principles, in the context of changing times, and to devise policies that are as fair as possible for all the parties concerned, including mothers and fathers.
I anticipate what the Minister will say. She will speak about rough justice and tell us not to worry, because the system is to be simplified. She will say that some people may be disadvantaged, but too bad. She will tell us that 96 per cent. of parents with care have net weekly incomes below £100, and that only 6,000 people will be affected.
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