Child Support (Miscellaneous Amendments) (No.2) Regulations 2003

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Mr. Steve Webb (Northavon): My understanding is that there was already a set of transitional regulations from the old system to the new. Is the Minister going through a list of things that the Department got wrong, and putting them right because it did not think of them the first time?

Mr. Pond: We are ensuring that those transitional arrangements take account of changes in terminology and of the new elements that are introduced into people's incomes. As a contributor to the debate in another place concluded, it is also the sanding to ensure that the rough edges are taken off the current provisions and that there is absolute clarity in respect of how the phasing arrangements will apply. Those are the most significant changes in the package. I am aware that I have romped through them, bearing in mind that the hon. Member for Poole (Mr. Syms), who has just arrived, may prefer to be elsewhere listening to another speech.

I shall be happy to answer questions on any aspect of the matter. I apologise for being a little late with some of the regulations, especially that in relation to pension credit, which was introduced on 6 October and is already in place. However, hon. Members will agree that it is better to get things right than to do them quickly. The regulations support our continuing commitment to ensure that child support works for both parents and, most important, for children.

I am satisfied that the regulations are compatible with the European convention on human rights and I commend them to the Committee.

2.42 pm

Mr. Robert Syms (Poole): May I apologise for my late attendance in the Committee? Conservative Members have other things on our minds today, which is why the Front-Bench spokesman is absent. As a Whip, I know very little about the regulations, so the Minister has the advantage of not being asked any probing and detailed questions. However, I shall read the report of this important Committee's proceedings, and inform my hon. Friend who is not present what

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was transacted today. I thank the Minister for his courtesy.

2.43 pm

Mr. Webb: I welcome you to the Chair, Mr. Taylor. It is a privilege again to serve under your chairmanship.

As ever, the role of effective scrutiny in opposition falls to the Liberal Democrats this afternoon, and I shall raise some concerns about the regulations. It is the first time that the Minister and I have faced each other across the Committee Room since he was appointed, and I offer him my belated congratulations on his new post.

We have no problem with the elements of the regulations that tidy things up—for example, when a name has changed and a new one has to be inserted. I shall focus my remarks on the section of the regulations that deals with the transition, the phasing from the old child support system to the new one.

I draw the Minister's attention to something that is happening in practice that may circumvent the regulations. When someone, for example a non-resident father, has a small maintenance assessment under the present system and a large one under the new system, the intention of the regulations is to allow it to be phased in over a period of up to five years. However, the loophole is that if the parent with care, for example a mother, were to withdraw entirely from the child support system, tell the CSA that she did not want any more to do with it, and return 13 weeks later and say that she wanted to apply for child maintenance, the CSA would treat her as a new case. As such, the new assessment would come in immediately. The will behind the new regulations and the will of Parliament on the phasing of the move from the old to the new system would therefore have been thwarted.

In the past, I have raised with the Secretary of State in oral questions the fact that the intention of the regulations could be circumvented in practice, but he has dismissed that. He said that 13 weeks was long enough, but it is not remotely long enough. The Minister will know that the difference between an assessment under the old system and under the new system can be substantial precisely because the old system used to take account in some detail of individual circumstances, and the new system is rough and ready. It does not take much ingenuity to construct a case—I have come across actual cases, so I am not talking about a hypothetical issue—where the new assessment is substantially different from the old one, and where the father is not be expected to move immediately, or 13 weeks hence, to the new system.

The very fathers who will be penalised by the loophole—which the regulations do not cover, but should—are those who are paying regularly. A mother who is not getting much cash, or who gets it only sporadically, from the father will not want to opt out of the system and then try to start everything again because she will be worried that she will never get a penny. However, with a father who pays regularly

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week in, week out, perhaps through a deduction of earnings order or some other regular mechanism, the mother will know that she can come back three months later. It could also happen the other way around, although fathers are the ones making payments in the cases of which I am aware. I urge the Minister to ask his officials to find out how often parents with care are voluntarily terminating their contacts with the Child Support Agency, and then popping up three months later to go immediately on to the new system, rather than be subject to the phasing arrangements contained in the regulations.

My next point is the eye-watering complexity of the phasing arrangements set out in the regulations. Regulation 7(7) relates to the phasing process, and a helpful note from the Library explains:

    ''If, following a phasing decision, there is a 'subsequent amendment' to the target amount, and that amendment is itself subsequently amended, the revision to SI 2000/3186 will ensure that the earlier 'subsequent amendment' is disregarded in re-calculating how much should be paid during the remainder of the phasing period.''

That may be straightforward to Labour Members, but it is not to me. I rather doubt that it is straightforward to most of our constituents. The explanatory memorandum—the document that is supposed to make everything clear—states:

    ''This ensures that where, following a conversion, phasing applies and there is a sequence of changes to the new amount, only the appropriate amounts are taken into account for the purposes of re-calculating the phased liability.''

I do not understand that, and although, understandably, the Minister did not want to go into excruciating detail, I do not sense that the Committee fully understands that either. Will the Minister flesh out what regulation 7(7) is all about?

There is fundamental issue here. The more complicated the transitional arrangements are, the more CSA staff time will have to be devoted to calculating transitional liabilities and the less time will be available for the Government's stated aim of the policy: enforcement. The Government have told us that we are talking about a new, simple system whereby CSA staff will move from spending 90 per cent. of their time doing sums and 10 per cent. enforcing to the converse. However, if these regulations come into force as they stand, how many hours, weeks and months will CSA staff spend making obscure byzantine calculations about phasing instead of carrying out the enforcement that we have always intended that they should do? I have grave concerns about such complex transitional arrangements.

Regulation 7(5) relates to making an initial calculation of the gap between the old assessment and new assessment, and staging the right phasing for that. However, if somebody's income changes over the phasing period, a further calculation must be made on whether phasing can be quicker or slower. All of us know of constituents who have had a dozen letters from the CSA arriving on the doormat on the same day, all saying different things. The scope for chaos under the regulations is huge. All the publicity will say, ''You've got two kids, so you pay 20 per cent.'' One or other partner will then say that it will not be 20 per cent., but such-and-such per cent. for this year, and if

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the other partner's circumstances change it will not even be phased as we were originally told. I can see the whole nightmare starting again.

One helpful contribution that the Minister could make to calm my anxieties about the matter would be to tell the Committee what proportion of the roughly 1 million CSA cases will be subject to the transitional process. Will it be a tenth? I imagine that it will be no more than that. How many thousands of people will face transitions? How many will go straight on to the new system? How many will be phased? That will tell us the scope of the regulations. How many people will they affect? Unless I missed it, the Minister did not give us such information in his introduction.

The regulations highlight why the move to the formula-based system was so mistaken. We would not need such a transitional arrangement if we were moving to a system whereby the assessments reflected individual circumstances, which is, to some extent, the way in which the previous system worked. One problem is that, because the new system is so crude, rough and ready and independent of people's actual family circumstances, there will be huge differences between new assessments—flat-rate percentages—and old assessments that are heavily tailored to individual circumstances.

By definition, there will be a big distribution for any two-parent family. Assuming a certain level of income, the new figure is 20 per cent., but under the existing system there will be a huge distribution of assessments for a two-parent family. Therefore, there will a big lot of gainers and a big lot of losers, and much transition. If the new system reflected individual circumstances, we would be far less likely to experience huge, crude changes that need to be phased over five years because they are so unfair. We cannot expect people to move to the new system in one go. Of their own making, the Government have a complex problem with the regulations.

A further issue that the Committee should consider is the extent to which the new regulations will prevent the CSA from providing the quality of service that we want for our constituents. For example, recently a constituent wanted a face-to-face interview with the CSA. The CSA told him that it was trying not to undertake such interviews at present because it was pulling back staff from such matters, so that they could spend their time sorting out the new computer because it did not work properly. I dread to think what will happen when we bring 1 million cases in on one day, 100,000 of which perhaps have phased rules. How many CSA staff will be called back from doing everything that we want in terms of quality of service to administer the work and do the sums involved?

The thought of someone appealing against a transitional change makes my eyes water. The Minister will confirm matters, but I presume that the changes are appealable because they are all just part of the assessment. If I am given a basic assessment, I assume that I could appeal against it. If the rules on phasing had been applied by regulation and I believed that they had been applied wrongly, I presume that I could appeal against them, too. There is great scope for the whole system to become bogged down. There

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will be big gainers and big losers as a result of the changes, and the losers will want to do all that they can to thwart the transitional process.

What preparations has the Department made to provide for additional appeal staff and to provide for CSA front-line staff to give the quality of service that we need them to continue to provide during the transitional process? Has the Department made an assessment of the work load that will come about as a result of the changes? Is it prepared for that or will we see yet another series of CSA cock-ups and chaos stories because the whole procedure is so complicated?

Phasing, we can understand; transitional arrangements—moving from one system to another—we can understand; however, fiendishly complex arrangements made worse by a move to a rough justice system with big gains and big losses is asking for trouble. I fear that my words today will be followed, when the Government finally get their computer to work, by chaos for many of the people we represent. I hope that the Minister can reassure me that I may be mistaken.

2.53 pm

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