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27 Jan 2003 : Column 576—continued
Mr. Smith: Yes, indeed. As I have said, as a consequence of the simplicity and greater efficiency of the new system, we shall be able to devote more resources precisely to that. Moreover, it will be possible for a parent with care who believes that the lifestyle enjoyed by the non-resident parent is inconsistent with the income declared to draw that to the CSA's attention. If parents with care are still dissatisfied, they are ultimately able to take the matter to appeal at a tribunal.
Chris Grayling (Epsom and Ewell): May I amplify the points about not only companies but all aspects of self-employment? I have examples in my constituency of people managing to hide the true extent of their earnings by clever accounting through partnerships or companies. The fixed formulas described by the Minister may not necessarily help such cases. How will the CSA deal with those who hide their true earnings through self-employment, and how will it manage to extract the information when it appears to have no clear responsibility for taking draconian action to find out what people really earn today?
Mr. Smith: We will collaborate closely with the Inland Revenue on these matters. It has had the task on occasions of identifying the true level of income or profit that people earn. We will pursue that closer collaboration and will act on the information available. We shall also pursue liabilities and accrued debts that much more vigorously because our staff will not have to spend so much more time perpetually assessing and reassessing cases as a result of circumstances never catching up with the string of appeals and procedural devices exploited by those who want to put off payments. I am sure that some will try to hide their true income and so on, but it will be progressively harder for them to get away with that.
Dr. Nick Palmer (Broxtowe): I very much welcome the Secretary of State's announcement. As someone who has introduced quite a few IT systems, I am aware that the prediction of completion dates is more an art than a science. We should simply accept that as a fact. Will he advise the House, however, on the precise implications of his assertion that about 30,000 cases a month will be brought into the system? How does that compare with the number of new cases that arise? Does the figure represent the capacity of the system—in other words, when we start to deal with new cases, it will take about 30 months to transfer 900,000 cases? Will he elaborate a little on that?
Mr. Smith: The 30,000 figure is the flow of new cases into the CSA. It is not constrained by the ability of the system to cope with them; it is the number that the system has to be able to cope with. It will be added to, as I explained, as more and more linked cases come on stream.
Mr. Simon Thomas (Ceredigion): Will the Minister give some reassurance on enforcement, especially of current cases? My constituent, Mrs. Gowman, is owed
£50,000 by her ex-husband, Mr. Bruce, because the agency sat on her enforcement and took no action for 15 months. Will the Minister assure my constituents and others that agency staff will not use the introduction of the new system to take their eyes off the ball on current enforcement cases, and that enforcement will be considerably improved?
Mr. Smith: Current enforcement cases will also benefit from the ability of staff to concentrate more on collecting existing liabilities and debts. For reasons that the hon. Gentleman will understand, I cannot discuss an individual case on the Floor of the House, although I shall be happy to look into it if he sends me details.
Mr. Paul Tyler (North Cornwall): The Secretary of State laid great stress, rightly, on levels of compliance. Will he give a precise figure for the level of compliance among self-employed non-resident parents? He has already answered a number of questions from Members who are clearly worried about the level of it. If we are to measure the extent of the existing problem with this category of parents, and to measure any improvements under the new system, which he is confident will be achieved, we need that figure.
Mr. Smith: I think I can remember the figure, but I am not certain, so I shall let the hon. Gentleman know what it is. His question is perfectly reasonable. The figure will be well short of the 68 per cent. for cash compliance and 71 per cent. for case compliance, on average. I will let him and the House have the figure, so that we can assess progress against it.
Mr. Tony McWalter (Hemel Hempstead): I congratulate my right hon. Friend on the statement today and on loosening the Gordian knot that was left to him by the Opposition. Compliance is essential. My former constituent, Mr. Barr, has been evading his responsibilities for 10 years. The Department has thrown the book at Mr. Barr and tried to seize his house and everything else, but still failed. Our noble Friend Baroness Hollis, who is sitting not a million miles away, has tried extremely hard to try to solve the case, but as long as self-employed people with large private pension schemes can get away with violating their obligations, the entire system is brought into disrepute. Will my right hon. Friend assure us that compliance will be dealt with properly at last?
Mr. Smith: Yes, I am determined that that should be done. For the reasons that my hon. Friend and others have pointed out, it is crucial both to confidence in the system and to people's basic sense of fairness that self-employed people, like employed people, meet their responsibilities.
I now have the figure that the hon. Member for North Cornwall (Mr. Tyler) asked for. The compliance rate for self-employed people is 34 per cent.—as I said, well short of the average.
Angela Watkinson (Upminster): What can be done under the new IT system to check the accuracy of the information provided not just by the non-resident
parent, but by the caring parent, to avoid the sort of injustices about which we have heard—overtly successful business people who are able to produce books that show that the business is not in profit, and at the other extreme, people such as a postman in my constituency, who is paying CSA payments for one child which represent 33 per cent. of his gross income and 50 per cent. of his net income? Clearly, both cases are unjust.
Mr. Smith: Yes, indeed. That is why the new formula is so much fairer, as well as being so much more straightforward, and why it was widely supported in the extensive consultation. Just about the only information that parents with care have to supply is how many children they have and whether they are on benefit. The only other factors that it might be material to take into account is whether, for example, the non-resident parent is contributing towards the costs of accommodation or education. There is provision in the new system to take that into account.
Mr. Desmond Swayne (New Forest, West): Members of Parliament will have an increased case load of complaints consequent upon the very simplicity to which the Secretary of State has drawn attention, as a result of the fact that the new system takes into account far fewer individual circumstances. The pay-off will be the increased number of payers who are not paying now. What targets has the Secretary of State set for that?
Mr. Smith: The target for compliance, both for cases and for cash, is to be 75 per cent. I agree with the hon. Gentleman. The pay-off is money getting to the parents with care and the children who need it, and what the system does more generally to reinforce people honouring their responsibilities as parents, whether as parents with care or as non-resident parents. The hon. Gentleman points to more complaints. Putting the new cases on the system will result in some complaints—we would get complaints about the introduction of any system—but by and large, given that for many people their payments will be less and the new system will be more straightforward, I should have thought that they would welcome it. What we must prepare for and explain carefully is conversion of the existing cases. However, as I said, with regard to MPs receiving more inquiries from constituents, I shall remind them tomorrow of the dedicated helpline that they and their staff can access.
David Cairns (Greenock and Inverclyde): I am very grateful for the reminder about the helpline.
One of the things that will prevent the CSA from working full-time on calculating compliance will undoubtedly be its having to answer the many thousands of calls that it will receive from those in existing cases, who have, understandably, been left none the wiser following my right hon. Friend's statement. Do we not owe it to those people, who have been long suffering and patient, to contact them directly and explain what we are trying to do, be honest about what
has gone wrong and express our firm commitment to move them on to the new system as soon as the computer will allow us to do so?
Mr. Smith: My hon. Friend makes a very good point; for the reason that he gives, we shall write to those in all existing cases, explaining exactly what is going on.
Andrew Selous (South-West Bedfordshire): The Secretary of State will know that all of us in the House would want payments by non-resident parents to be both fair and reasonable, but as a third of non-resident parents are not making any payments at all, the question of enforcement is on the minds of my constituents who are parents with care responsibilities. On the sanctions that it is open to him to use, where no payment is made both persistently and wilfully on the part of the non-resident parent and no attempt is made to establish contact with the children, what further steps will his Department take to remove driving licences? He already has that power. How many driving licences have been taken away, and does he plan to increase the number under the reforms?
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