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Mr. Swayne: My hon. Friends the Members for Gainsborough (Mr. Leigh) and for Brentwood and Ongar (Mr. Pickles) seem to be most put out by the creation of the new right to a proportion of a parent's income. I am not sure whether my hon. Friend the Member for Brentwood and Ongar is more excised over the creation of that right in itself--I am not disposed to the creation of new rights in respect of the rights of the child, that whole area of political correctness, but we must meet people's legitimate expectations--or over the fact that it is available only to those children whose families are no longer intact. That does not strike me as such a reprehensible state of affairs. Children have a legitimate expectation of a childhood of a certain standard, and of parenthood during that childhood. That legitimate expectation has been denied, and I do not think it entirely inappropriate for compensation to be provided in the form of a new right--the right to a proportion of one parent's income in lieu of the legitimate expectation that has been denied.
Before my hon. Friend begins to fear that I shall enter the other Lobby, let me say that I thought he was on stronger ground when he said that there was no
mechanism for the delivery of payment to the child. That, I think, is the nub of the problem, and the strength of the amendments. There is a view, or a perception, on the part of those making the payments that they will be subsidising the living standards of the parent with care. That has created a burning sense of grievance, which is compounded when the income of the parent with care is higher than that of the non-resident parent.
I believe that the feeling of injustice created by the forces to which I have referred will lead to a reduction in compliance, which, after all, is one of the great targets of the Bill. For that reason alone, I support the amendment.
Angela Eagle:
We have rehearsed many of the arguments that were presented at length in Committee, but Bill Gates has now been prayed in aid. I assume that the £53 billion assessment made by the hon. Member for Brentwood and Ongar (Mr. Pickles) related to Bill Gates's entire wealth, rather than his annual income. We must remember that the child support mechanism deals with net taxable income, rather than the wealth that could be deemed to have accrued over an individual's lifetime.
Mr. Pickles:
At £53 billion, who cares?
Angela Eagle:
That is probably fair comment, but I thought I should point out that we are discussing net taxable income rather than the amount that a person is worth overall.
We should also bear in mind that there is a cap, in that a non-resident parent will in no circumstances have to contribute more than 25 per cent. of his or her net taxable income. The Government concentrated on that in trying to simplify the system. Lady Hollis shared some of her thoughts with the Select Committee, and the hon. Member for Gainsborough (Mr. Leigh) has cited them here, owing to their relevance to the Government's thinking. We have engaged in various debates, but we still believe that we are doing the right thing, and that introducing an upper limit would lead to an inconsistency between the treatment of non-resident parents with relatively high incomes and that of parents receiving more modest sums.
I think that the hon. Member for Northavon (Mr. Webb), who wrestled publicly with the difficulties with which we are all trying to deal, was right to concentrate on living standards rather than incomes for children. We are not talking merely about set incomes, and what goes to particular children. We are not talking just about food and clothing.
In Committee, the hon. Member for Gainsborough said that no children, even those living in well-off households, would, in a mathematical sense, have exactly equal shares of the income involved. I hope that the hon. Gentleman does not keep his children in the garage: I trust that they live in the house, and share in the general standard of income.
Mr. Leigh:
My kids are probably in the garage.
Angela Eagle:
They may prefer to play in the garage to get out of the hon. Gentleman's way, but I presume and hope that he does not keep them there permanently.
Amendment No. 88 seeks to reduce the amount of maintenance payable under the maintenance calculation when the net income of the parent with care exceeds that of the non-resident parent. Let me explain the basic structure of the incomes of parents with care in the current CSA case load. Of those parents, 677,000 have no earned income; 84,000 earn less than £100 a week; 6,900 earn more than £200 a week; only 580 earn more than £350 a week, and only 200 earn more than £500 a week.
The vast majority of parents with care have only a modest income, and have been left to look after the children. According to the CSA structure, the non-resident parent has a duty to ensure that the children whom he has fathered are looked after properly, and to be financially responsible for their continued maintenance--to the extent that he can be, given the test applied to his income. It is almost always women with low incomes who are left to look after the children.
Amendment No. 88 would require a huge increase in means testing, and the Conservatives have already told us that they are opposed to that. In seeking to simplify the CSA formula, we aim to abolish means-testing of the parent with care and, perhaps, the means-testing of her partner, the non-resident parent's new partner and so forth. If amendment No. 88 were adopted, the CSA would have nearly 1 million cases on its books by the time that the reform was introduced. The amendment requires the CSA, instead of applying one simple, quick means test to the non-resident parent, to apply four means tests per case to establish the income of the new partner of the non-resident parent, as well as that of the new partner of the parent with care if such a person exists.
The amendment would reintroduce a huge amount of means testing in a very few cases, and would destroy all the simplicity that has been introduced. It would return us to the problem that we face now: the problem of ensuring that the right balance exists between the need to make a maintenance assessment quickly and simply, and the need to spend time enforcing it.
The Liberal Democrat proposals deal with the basic payment of £5 that the Bill introduces for all non-resident parents, regardless of whether they are receiving benefit. I understand the worries expressed by the hon. Member for Northavon about people on low incomes: that is why the Bill introduces different levels of payments, including a minimum payment for those whose incomes are below £100 a week. It does not specify percentages, but it provides for that £5 minimum. We think that all fathers, except in a few circumstances--when they are still at school or in prison--should make some payments.
Amendments Nos. 2, 3, 4 and 5 seek to introduce a radical change. They require a nil rate of liability when a non-resident parent or his partner receives a benefit prescribed for the purposes of the legislation. They also provide for the flat rate to be specified in regulations when a non-resident parent has income of £100 a week or less and has a partner who is also liable for child support.
I can reassure Members that special provision will be made for the flat rate when a non-resident parent on an
income-related benefit has a partner who is also liable for child support. The intention is for the flat rate payable by each member of a couple receiving income support, or income-based jobseeker's allowance, to be half the standard flat rate. The £5 minimum is a maximum as well: it can be split equally and £2.50 can go to each child. However, it cannot become £10. I hope that that offers some reassurance.
The exemptions in respect of payment of contributions for maintenance have been removed. The current scheme exempts some people with quite high incomes. All fathers, whether on benefit or in work, have a responsibility to contribute to their child's upkeep, but we recognise that a simple percentage calculation does not adequately reflect the difficulties that are faced by those on low incomes--hence the £5.
It is important to keep in mind another key part of our child support reforms: the introduction of the child maintenance premium, ensuring that the money that is paid--all £5 of it--goes directly to the child. It is not, in that sense, a Treasury support agency, which has been one of the major objections and reasons why people on benefits do not pay.
The hon. Member for Brentwood and Ongar mentioned social fund users. He was gracious enough to admit that the vast majority--in fact, it is not the vast majority, but a large proportion--of social fund users are women on income support, who will benefit from the £10 maintenance disregard when benefit is paid. Under his amendments, they would not: they would not receive the maintenance disregard because they would not receive any maintenance. There is an evening out.
I hope that Members will oppose all the amendments.
Mr. Pickles:
I beg to ask leave to withdraw amendment No. 87, but with your permission, Mr. Deputy Speaker, to divide the House on amendment No. 88.
Amendment, by leave, withdrawn.
Amendment proposed: No. 88, in page 83, line 7, at beginning insert--
' "( )(a) Following the calculation of the amount payable by the non-resident parent the Secretary of State shall determine the net weekly income of the parent with care in like manner to the determination of the net weekly income of the non-resident parent.
(b) Where the net weekly income of the parent with care exceeds the net weekly income of the non-resident parent of the Secretary of State shall in such manner as may be prescribed reduce the amount of child support maintenance payable by the non-resident parent.
(c) Where the non-resident parent is liable to pay child support maintenance to more than one person the provisions of (a) shall apply to each parent with care and the reductions in the amount payable provided for by (b) shall apply to the amounts payable to each of those parents with care in receipt of a net weekly income greater than that of the non-resident parent.".'.--[Mr. Pickles.]
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