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Standing Committee Debates
Child Support, Pensions and Social Security Bill

Child Support, Pensions and Social Security Bill

Standing Committee F

Thursday 27 January 2000


[Sir David Madel in the Chair]

Child Support, Pensions and Social Security Bill

10 am

The Chairman: Before we begin, the Committee may wish to note that the House authorities have not received Hansard for the afternoon sitting on Tuesday 25 January. If copies of Hansard are received during the sitting, they will be brought to this Room. Otherwise, we hope that Hansard will be available for this afternoon's sitting.

Mrs. Jacqui Lait (Beckenham): On a point of order, Sir David. Could I ask the Minister when we can expect the tabling of amendments which will cover the structure of the rebates of the state second pension, as indicated in the explanatory notes on page 55, paragraph 218? It states:

    ``The Government hopes to bring forward legislation to implement the preferred way forward during the Bill's committee stage.''

The consultation finished on 14 January. I acknowledge that it is only about 12 or 13 days since then, but I should be grateful if the Minister could tell us whether he is planning to introduce these regulations and when we can expect to see them on the amendment paper.

The Minister of State, Department of Social Security (Mr. Jeff Rooker): I am grateful to the hon. Lady, who telephoned my office this morning to alert me to the fact that she would raise that point. We intend to deal with the matter during Committee, and we hope to table the amendments early next week when we may reach the beginning of the part on the state second pension. They may be starred, but we have had the consultation and we have had a result—if I can put it that way. It is a question of obtaining clearance through the Government machine. Work is in hand, and we intend to deal with this matter in Committee rather than at a later stage of the Bill.

Mrs. Lait: Further to that point of order, Sir David. Could Minister possibly avoid starring the amendments? It would be helpful if we could receive little more notice, as this matter is complex. It is one of the keys as to how the system will work, and we would prefer not to have to deal with it right at the last moment. I should be extremely grateful if we could receive as much notice as possible.

Mr. Rooker: That is my intention. We may start on the four relevant clauses and the schedule before we reach these amendments, as I assume that we will not deal with stakeholder pensions in one sitting. I am not aware of any discussions that have taken place through the usual channels, but we are moving as quickly as we possibly can to get the necessary inter-government procedures completed between ourselves and the Treasury and achieve clearance through the various sub-committees. I should like the amendments to be tabled by Tuesday of next week, so that they are cleared and available for selection on Thursday. It would be ideal if we reached the provisions on the state second pension by next Thursday.

Schedule 1



Amendment proposed [25 January]: No. 67, in page 71, line 32, at the end to insert the words—

    `(3) The regulations shall in any event provide that the net weekly income of the non-resident parent shall be reduced in the circumstances mentioned in sub-paragraph (4) and by the method mentioned in sub-paragraph (5), but subject to the limit mentioned in sub-paragraph (6).

    (4) The circumstances referred to in sub-paragraph (3) are where the parent with care has a gross annual income from all sources for the most recently completed financial year of more than £25,000.

    (5) The method referred to in sub-paragraph (3) is that for every pound by which the gross annual income of the parent with care exceeds £25,000 the net weekly income of the non-resident parent shall be reduced by one penny.

    (6) The limit referred to in sub-paragraph (3) is that the net weekly income of the non-resident parent shall not be reduced by more than 50 per cent.

    (7) The regulations shall in any event provide that net weekly income shall include both earned and unearned income.'.—[ Mr. Pickles.]

Question again proposed, That the amendment be made.

The Chairman:. I remind the Committee that with this we are taking amendment No. 116, in line 18, at end insert—

    `(e) the income of the parent with care is high'.

Mr. Andrew George (St. Ives): I was moved to speak—although we do not have the benefit of a copy of Hansard for Tuesday afternoon's sitting—following the contribution made by the hon. Member for Brentwood and Ongar (Mr. Pickles). I felt that amendment No. 67 brought an issue into focus. I am sure that many hon. Members will have had similar cases brought to their attention in their surgeries and elsewhere. A particularly vindicitive separation may occur when a parent with care through a lottery win, a partnership with someone wealthy or the receipt of an inheritance, is able to bring up the child without the support of the non-resident parent, while the non-resident parent is struggling to meet his responsibilities and to pay his own contribution.

We all accept that we should base the Bill on the principle of the ability to pay. However, the legislation and the agency has been brought into disrepute when a settlement has seemed vindictive. A parent with care may have some wealth but is being supported by a contribution from the non-resident parent, who is finding it difficult to meet his financial obligations. The parent with care may be able to manage with a lesser contribution, but is insisting that the non-resident parent should struggle to meet those payments. The hon. Member for Hendon (Mr. Dismore) suggested, perhaps rightly, that such cases are very few in number. I do not know whether the statistics can be relied on, whether they come from the Child Support Agency or—

The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): The hon. Gentleman must take it on trust that when the statistics I give to him are quoted, they are a best attempt. If there is a question of accuracy, I always let the Committee know.

Mr. George: I do not doubt the Under-Secretary's integrity, but some Committee members have not always found statistics from the CSA to be reliable. This is a fundamental point. Even if we assume that the statistics are accurate and there are very few such cases, the principle is still worth pursuing. I am not qualified to comment on whether the amendment is appropriately worded, but I agree that it is appropriate to consider the issue raised by the hon. Member for Brentwood and Ongar, because the CSA could in the future be brought into disrepute by a few such cases.

Mr. Desmond Swayne (New Forest, West): I have had my doubts about certain aspects of the Bill because I believe that the decision we made earlier to do without a maximum payment—a cap on the payments of the absent parent—will exacerbate the situation under certain circumstances, given the decision not to take into account the income of the parent with care and the decision to exclude consideration of earnings from investment income.

Many people will command a significant income, and will have enough financial sophistication to take what they would consider to be legitimate action to protect their income from being paid out in maintenance for the child. As a result of the assessment of their substantial income, they would estimate that they were paying more than enough to maintain the child. They would therefore engage their accountants and advisors to ensure that a significant a proportion of their income was payable in the form of investments— what we would call unearned income. That is the prerogative of wealthy people who are able to pay for such advice.

Poor people may be poor, but they are not stupid. We have all had people in our surgeries telling us about the ingenuity of their former spouse in concealing his income. I had a case recently of an absent former husband who had ensured that he enjoyed a substantial lifestyle with money from his own company, but had put the company, property and its assets in the hands of his mistress. He was her lodger, so the income was almost entirely secured against the partner with care receiving any of it.

I believe that this provision will have a further impact on the question of—I have lost have my train of thought momentarily.

Angela Eagle: The hon. Gentleman needs more sleep.

Mr. Swayne: As the Under-Secretary says, perhaps I need more sleep. The decision to do without any consideration of the income of the parent with care will have a knock-on effect. Despite the clear intention to portray any payment as a payment to the child for the maintenance of the child, there remains a pervasive perception that an element of the payment is for the maintenance of the former partner. The money is paid to the former partner. We must always bear in mind the fact that former partners often view each other with loathing and intense passion.

If the wife has an income, the roles may be reversed. I had an extraordinary case recently of a lady who had made considerable provision for her family, who now reside with her former husband. She was the single, absent partner and the husband was the parent the care. She had paid off various debts and had made arrangements for the mortgage. She complained that a substantial proportion of her residual income was now being paid to maintain the children, even though her former husband had a substantial income and was able to maintain them himself. The complaint was from the woman. In many ways, it was a legitimate complaint.

Clearly, the principle in the Bill, which is a good one, is that a parent must make a contribution towards the maintenance of the child. That is entirely proper, and we must protect that. However, is it enough to say that the contribution that parents with care make is entirely accounted for by having the children with them? The parent with care may benefit from a certain lifestyle. She provides the home and so on, but is that enough if she has a significant income? Undoubtedly, the parent with care benefits from having the children. Often the absent parent believes that he is denied proper access to the children.


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