Child Support, Pensions and Social Security Bill

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Miss Julie Kirkbride (Bromsgrove): Sadly, I was at a Select Committee meeting this morning, and I missed the early part of the debate. I want to clarify whether we are trying to establish that the courts should be allowed to make child maintenance agreements if there is agreement between the parties? If so, what will happen if the parent with care subsequently starts drawing benefit? Would the CSA then have to investigate whether a reasonable child maintenance settlement had been made by the courts? How do we propose to deal with that?

Mr. Pickles: I can tell my hon. Friend that that point was put to Mr. Pirrie from the solicitors family committee--

Mr. Andrew Dismore (Hendon): The Solicitors Family Law Association.

Mr. Pickles: I knew that there was a benefit in a distinguished lawyer being a member of the Committee. I hope that that will not be the hon. Gentleman's only contribution. He should ignore his Whip and give us the benefit of his views.

Mr. Pirrie of the Solicitors Family Law Associations said that the parties should go into the process with their eyes open. If the circumstances mentioned by my hon. Friend the Member for Bromsgrove were to arise, something would have been wrong with the original settlement.

We missed my hon. Friend enormously this morning. I shall quickly summarise what we said then and how such circumstances might arise. The father may have accepted liability for school fees, which is covered by the Bill--the Government consider that a legitimate expense--or he may make a disbursement on mortgage liabilities on the former marital home, in which the child still lives. He may even make available a different proportion of his capital assets or his pension entitlement.

Today, I had lunch with a colleague who talked to me about her divorce. She was helping me with a drafting problem, so our meeting was not entirely fortuitous. She said that, under her settlement, it was agreed that the children of the marriage would retain private medical insurance, but that she would not. After 1,000 days of Labour's management of the national health service, many children might benefit from such additional protection.

It is such circumstances with which I wish to deal, because only under those circumstances would slight adjustments to child maintenance arrangements have to be made to allow all those other factors to be taken into consideration. However, if the parent with care drifted into drawing benefit, the original settlement would clearly need to be reviewed. I shall be more straightforward than the hon. Ladies sitting on the Government Benches, who say that that will happen in only a tiny minority of cases. We must be able to provide for such a minority. If it is obvious from the outset that the parent with care is on benefit, the CAS route is clearly the more sensible. Other calculations and changes will be singularly inappropriate.

As I was saying before my hon. Friend the Member for Bromsgrove sought clarification, parties entering into negotiations will do so knowing about the CSA. They will know that they have to arrive at an agreement, and if they diverge from the CSA formula, they will have to explain why.

The Bill will allow carefully worked out settlements, with a delicate balance between property rights, pensions and insurance. However, all that could be pushed aside after only 14 months--12 months after their coming into being and two months' notice. The Select Committee received evidence from Mr. Peter Watson-Lee of the Law Society's family law Committee, which appears on page 103 of the report in response to question 240. He said that if a party can break the agreement after as little as 14 months, he

    "can go back and say, 'Now I am going to the CSA'. Again, that is going to drive a coach and horses through fair settlements because, obviously, if the maintenance is higher than the CSA ordered, the father, when one year is up, is going to go straight back and say, 'I am going back to the CSA.' There may be many cases where a father should be paying more than the CSA says and, again, there will be cases where there have been trade-offs and maybe it is the father who has got the children and the mother is paid a lesser sum so that she does not get maintenance, and within a year the father will be going back saying, 'Tear up that agreement, I am going to the CSA,'"

We heard some of those arguments earlier, so there is no need to repeat them. The process will militate against private agreements, because people will say, "What is the point? Why should I make this disbursement with regard to mortgages, capital or pensions? If the trade-off will be based on a lesser sum than the CSA recommendation, I could be at risk in 14 months because the parent with care could turn round and say, 'I'm going back to the CSA.' All that disbursement would simply be thrown away and I would be in a worse situation." That is the problem that the amendments seek to overcome.

The amendments are about child maintenance and the sums involved under the formula, but we must recognise that the Bill does not contain a mechanism whereby we can ensure that the money goes directly to the child. It is fair to assume that many cases involve the minimum sum, and that parents may try to do a little better. We must remember that child maintenance may be a small part of a settlement. The disbursements between the parties who form a marriage are of assets.

In evidence to the Select Committee, Mr. James Pirrie said that the CSA tail was wagging the dog. He suggested that the much greater disbursements for children were agreed on under the various settlements, and that the CSA tail was merely a small part of the process. He suggested that there was a great problem with the tail but nothing wrong with the dog, and that several problems may occur. On page 97, in response to question 222 asked by the Committee chairman, the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood), Mr. Pirrie said:

    "In summary, we say Parliament is looking to fix the CSA because it is broke. The divorce dog is not broke, it is alive and it does not want to be wagged by its tail. What we fear is that the White Paper reforms will fix it and they will fix it good and proper."

I take it that he meant that it will not be fixed in an especially pleasant way and that the system will not come off well.

A draft amendment proposed by Mr. Pirrie from the Solicitors Family Law Association appears on page 97 of the report. Its provisions are, essentially, replicated in new clause 8. Its purpose is to give the court, in exercising its powers to make spousal orders in a lump sum or by transfer of property orders, exclusive powers to make orders for maintenance of children where the parent with care is not in receipt of benefits. The amendment would not prevent the court from dismissing such orders and referring the matter back to the CSA. My hon. Friend the Member for Bromsgrove asked about that, and she could vote for the new clause with a clear conscience.

The amendment recognises that the Bill will extend the CSA's operation to all families, which is a new departure. The Solicitors Family Law Association's briefing, which all members of the Committee will have seen, states that specialist family law practices arrange for the court to regulate the payment of child maintenance. It suggests that imposing the CSA's jurisdiction on all separated families is a leap in the dark. We have all grasped that fact. The CSA does not have the experience of dealing with that amount of related complex cases, as we know from the volume of correspondence and from our surgeries.

Mr. Swayne: I disagree with my hon. Friend. The CSA has tremendous experience of dealing with complicated cases. We seek to abandon that system, do away with all the complications that naturally reflect ordinary life, and impose a simplistic formula.

Mr. Pickles: I am obliged to my hon. Friend for making that point, but he was obviously in a combative mood because I do not believe it was entirely inconsistent with what I said. Nevertheless, I am grateful for those comments and agree with them. I am trying to make that point. The CSA will not be able to cope because the process will be "administratively complex", to use the telling phrase--it used to be "social justice" or "relief of poverty". It will cause complex problems and probably give Ministers nightmares, as it will mess up the system and make it look untidy. Something should be done about that.

Miss Kirkbride: My hon. Friend may not be able to give me the information I seek, but perhaps the Minister or the Under-Secretary will discuss the matter. As we all know, one reason for the CSA's failure has been the volume and burden of its work--the sheer numbers involved--perhaps exacerbated by its administrative complexity. Are any figures available showing what difference the proposal to make all families subject to the provision will make to the CSA's caseload?

3 pm

Mr. Pickles: I have no doubt that, as we speak, the Minister is making a note of my hon. Friend's point. Ministers are rather good at figures, and I dare say that the Under-Secretary will be able to supply us with a figure, down to the last decimal point. The Select Committee recognised that the outcome will depend on how the system is phased in while the two systems are in operation, and on how cases are prioritised. I am worried that such cases will be prioritised, and that ultimately the Under-Secretary will stand at the Dispatch Box and claim to have saved money and that the provision is a great success. There will be a temptation to move the CSA to middle England, which will cause problems.

The Solicitors Family Law Association contends that there is no evidence to suggest that the court system operating under the Child Support Act 1991 has proved inappropriate. Families will continue to have to use the legal system to regulate issues of capital division and spousal support, as the White Paper recognises. According to the association, there will be two types of case involving payments to children--those of people who rely on welfare benefits, in which the system must balance the opposing interests of the parent and the taxpayer, and those in which the family provides the resources. The Bill proposes that the best means of dealing with the former, the benefit case, is by a formula that is sufficiently simple to enable the CSA to be effective.

According to the association, the Bill will result in unwarranted interference and may stand in the way of families finalising arrangements that best enable them to fund the two parts of the separating family. On divorce, the legal system crafts a package of measures that includes capital distribution and spousal maintenance. Payments for children form only a part of that complex mix.

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