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22 Mar 2006 : Column 131WH—continued

22 Mar 2006 : Column 132WH

Child Support Agency (Holly Mackintosh)

4.26 pm

Danny Alexander (Inverness, Nairn, Badenoch and Strathspey) (LD): It is a pleasure to return to the Chamber so soon after the last occasion on which the Minister and I were here. I hope that this debate will allow me to speak a little more slowly, because I have more time this time.

I am grateful for being granted this debate about the important issue of my constituent Holly Mackintosh. It is an opportunity to raise an unfair situation that affects a constituent through the operation of the Child Support Agency enforcement process. Although I have been an MP for less than a year, I have had the opportunity to discuss this case with colleagues and it seems to be unique. It is causing distress to my constituent, with whom I have had several discussions about it, and it is also damaging the welfare of her eight-year-old daughter. It raises issues about natural justice, to which I shall return.

It may be helpful if I set out the circumstances of the case. Holly Mackintosh is of good character. She is a very hard-working mother, struggling to make ends meet to support her family. She has a daughter—Joanna, who is now eight years old—with her former partner, Mr. Neil Hampson. They purchased a house in Harbour street in Nairn in October 1995. In 2002, they separated and Mr. Hampson stopped residing at the Harbour street residence. Up to then, Mrs. Mackintosh had paid all mortgage repayments and the deposit on the house. She has the documents to confirm that, and she has been in correspondence with the CSA about that matter.

In April 2003, an inhibition order was registered on the house by the CSA, as Mr. Hampson was in arrears to the CSA for £25,890 of maintenance payments. They were owed to his ex-wife, Mrs. Macpherson, for the two sons that he had from that relationship.

In 2004, the title of the property was transferred solely to Mrs. Mackintosh. That should have been done earlier, since it merely formalised the position that had obtained since their separation in 2002. It was only after the process was complete that she learned that an inhibition order was in place. At the time of separation, several issues were at play which caused the delay, not least the shortage of cash for paying lawyers' bills and so on. Indeed, as part of the agreement to transfer the property to her name, she also took sole responsibility for the £247 of monthly repayments on a joint loan that she and Mr. Hampson had taken to help repay debts that he owed to the Inland Revenue. That was done, as it were, in lieu of buying out his share of the property; although given that she had paid both the deposit and the mortgage repayments throughout the time that they owned the property, any interest that he had in it was not financial, but purely on paper.

Miss Mackintosh has now been served with a disposition order seeking to maintain the CSA's claim on part of the value of the property to recover Mr. Hampson's maintenance arrears. His arrears now stand at £55,093, according to a phone call that my office made to the CSA MP hotline today. The inhibition order seeks to recover the £25,890, plus legal costs.
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The case gets more complicated. In January 2005, Miss Mackintosh submitted a claim to the CSA to recover maintenance payments from Mr. Hampson—the same man—for their daughter. The Government try to encourage private agreements between partners before going to the CSA, but a private agreement that he made with Miss Mackintosh at the time of their separation in 2002 to pay £20 a week had not been honoured. As I discovered from a call to the CSA MP hotline today, Miss Mackintosh's claim has still not even been assessed, more than a year after it was first    made. She delayed the claim, perhaps quite understandably given what has happened since, because she simply had no faith in the CSA process. Any MP will know that that perception is by no means unique among our constituents.

To complicate matters further, Mr. Hampson recently left the United Kingdom and moved to New Zealand. Notice of the disposition order has not been served on Mr. Hampson, because he is resident overseas—for the moment, at least. That adds a further complication to the CSA's quite legitimate work to recover maintenance from Mr. Hampson.

The situation has had a quite devastating impact on my constituent, Holly Mackintosh. As she wrote in a letter to the chairman of the CSA shortly before she contacted me:

The situation impacts not only on Miss Mackintosh, but on her daughters—her elder daughter, whom she will be supporting as a student, and her eight-year-old daughter from her previous relationship with Mr. Hampson. When the CSA's enforcement action lets the absent parent off scot-free after he has left the country and damages the welfare of a child for whom the CSA has failed to collect maintenance, something has gone very wrong indeed.

I undertook correspondence with the CSA following a parliamentary question that I tabled on its use of inhibition orders. The deputy chief executive of the CSA wrote to me on 22 July 2005:

In a subsequent letter he clarified that his comment would not apply to Miss Mackintosh's case, as the inhibition order was in place before she took full possession of the property. I have explained the circumstances under which that took place. In all justice, she should be considered the complete owner of the property throughout.

However, given that Miss Mackintosh separated from Mr. Hampson in 2002, a year before the inhibition order was registered, it was only an accident of timing
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that has left her in her current position. It is understandable, given the circumstances of the breakdown of the relationship, that other matters would have been a priority.

It is not for me simply to come here and set out the facts of the case; I am interested in the Minister's view on it. There are several matters that he might consider in relation to it. I appreciate that my constituent will have the Minister's sympathy, but one or two things could be done in addition to giving sympathy.

Section 42 of the Child Support Act 1991 makes allowances for special cases to be addressed. Subsection (1) states:

Subsection (2) states:

Subsection (2)(d) gives one such special case:

This case is so unusual that I urge the Minister to consider using that power in relation to this case. It would be unfair of me to expect him to respond to that now. I do not expect him to promise to use it, as I understand that the matter requires some investigation and consideration, but I ask for his assurance that he will consider the case closely and thoroughly investigate the possibility of using that power. Assuming that he is willing to do that—I look forward to his response—I would be grateful if he kept me informed. He may certainly call on me to provide whatever assistance he requires to ensure that he has all the necessary information regarding the situation faced by Holly Mackintosh.

The Minister might be able to help in another way. I hope that he will clarify this point. The Secretary of State is named as the pursuer of the inhibition order. Is the Secretary of State required by the Act to take that form of enforcement action or does he have discretion to use that power? If the latter is the case, I request that he should proceed by other means and remove the inhibition order on Holly Mackintosh's home.

Now that there is a review going on of the CSA and the broader question of its reform—the Minister and I have debated that issue in previous circumstances, and I do not intend to go into that debate now—the Secretary of State has suggested that a substantial amount of the debt owed to the CSA will inevitably have to be written off. I understand the reasons for that, given the broader debate on reform of the CSA, but if that is to be the case, the most unfair debt and unjust consequences, such as those faced by Holly Mackintosh, should be amongst the first to be addressed.

Having said that, I want to make it clear that it is neither my intention nor that of Holly Mackintosh that Mr. Hampson should escape his maintenance liabilities or his responsibilities. Indeed, the main purpose of the whole debate on the CSA and its reform is to make it more effective in dealing with absent parents and making them live up to their responsibilities and pay out for their children. My purpose is to ensure fairness for Holly Mackintosh and, most importantly, her daughter.
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If the inhibition order can be removed, Holly Mackintosh and I—and, I am sure, the Minister—would like Mr. Hampson to be vigorously pursued to pay his debts and discharge his responsibilities. That option might be harder for the CSA, but expecting the mother of a child to pay the debts of the absent father seems to me exactly the opposite of what the Child Support Agency was set up to do. It goes against justice in this case, against the spirit of the legislation and, indeed, against the spirit of what Parliament would wish to do to see the reformed CSA, or whatever may follow it, continue in its work. I would be grateful for the Minister's response and, I hope, persistence in seeking a fairer outcome for Holly Mackintosh.

4.40 pm

The Parliamentary Under-Secretary of State for Work and Pensions (Mr. James Plaskitt) : Mr. Weir, it is a pleasure to appear before you a second time this afternoon and to continue to debate with the hon. Member for Inverness, Nairn, Badenoch and Strathspey (Danny Alexander). I congratulate him on securing this debate on a subject of obvious importance to his constituent, who is fortunate to have such an assiduous local Member who will pursue her case to such a degree and bring it to the attention of Ministers in the House of Commons.

The agency has fully briefed me on the particular case, which is indeed very complex, as the hon. Gentleman has rightly set out this afternoon. I am more than happy to discuss it with him, but I am sure that he will appreciate that I am subject to some constraints on how far I can go. I also welcome the opportunity to debate child support issues more broadly, and to draw on the problems that Holly's case illustrates and to discuss, in the context of that, how we plan to take further steps towards improving the agency's operation.

As the case illustrates, the CSA often finds itself trying to deal with the complex and changeable personal circumstances of its clients—both parents with care and non-resident parents. In some cases, such as this one, we have to strike a balance between the competing needs of children from two or more families, which can be quite difficult. Ms Mackintosh is rightly concerned about making sure that her ex-partner meets his financial responsibility to her family. I appreciate that the hon. Gentleman emphasised that point. She is also caught up in the consequences of her ex-partner not meeting his responsibilities to his children from a previous relationship.

Ms Mackintosh's ex-partner had children from a previous relationship but failed to pay the maintenance for those children that had been assessed by the CSA. The agency attempted to recover the money owed and eventually, as part of the enforcement action, a bill of inhibition was gained against any property that her ex-partner owned, including the property he jointly owned with Ms Mackintosh. A bill of inhibition stops the future sale or transfer of any heritable property. Heritable property includes houses, garages, business premises and land. The non-resident parent cannot sell or transfer the heritable property until they pay the debt.

Such a method of collecting debt is not exclusive to the agency. Many other financial institutions use the method to ensure that people meet their obligations.
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The measure is clearly not the first that anyone would use to recover outstanding debts but it is an important tool in getting people finally to face up to what they owe.

As the hon. Gentleman anticipated, I do have sympathy with Ms Mackintosh as the bill of inhibition on the property where she lives does not relate to anything she has done wrong. I believe that Ms Mackintosh contacted the agency through her solicitors both before and after the transfer of the property into her sole name to ask if the bill of inhibition could be removed. On both occasions she was informed that the bill of inhibition would still stand. Our legal advice was clear: transferring the property was against the terms of the bill of inhibition. So, even though she has my sympathy, I believe that the agency took the only realistic action. We have to balance the interests of Ms Mackintosh with those of the children of the earlier relationship.

The reason we use a bill of inhibition in Scotland, or a charging order in England and Wales, is to recover money that is owed for child support. Non-resident parents, such as Ms Mackintosh's ex-partner, should not be allowed to avoid their responsibilities to their children simply by transferring assets to someone else. If we allowed that, it would be even more difficult for the CSA to collect money owed and, consequently, even less money would be provided to support children.

The hon. Gentleman may want me to deal with the section 42 points. I am coming to those. In my view, the agency is not doing anything wrong in this case. It is using the same methods as other financial institutions in trying to recover an outstanding debt.

The hon. Gentleman referred to section 42 of the Child Support Act 1991, which allows the Secretary of State to make regulations in prescribed circumstances for special cases. That section applies to cases in which a non-resident parent has more than one child and those children live in different households, so I can understand why the hon. Gentleman was interested in it. However, section 42 is used in the ongoing assessment of child maintenance payments—that is, when there are concurrent claims for maintenance. Therefore, the section would not apply to arrears of maintenance built up by Ms Mackintosh's ex-partner before he was living with her. Section 42 would be used only to assess the ongoing maintenance entitlements of Ms Mackintosh's children and those of her ex-partner's former family.

I understand that Ms Mackintosh has a child support application of her own outstanding and that there has been delay in getting that assessment under way. I believe that the delay is due to the fact that it links with existing claims in respect of Mr. Hampson and his former wife. Added to that is the question of jurisdiction, because the non-resident parent is located in New Zealand. Furthermore, no address is held by the agency for Mr. Hampson, who has failed to provide more details despite express requests made to him before his relocation to New Zealand.

Danny Alexander : Clearly, this is a very unusual and distressing case, but I am disappointed by what the Minister said about section 42 and by his analysis—perhaps he will address this point later—of Mr. Hampson's interest in the property, given the evidence that Ms Mackintosh has provided that she
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paid the mortgage payments throughout and that she paid the deposit on the property. There was a time difference between her separation from Mr. Hampson and the change in ownership. It seems to me that she is being made to pay an incredibly high price for what is perhaps only a relatively small oversight.

When I last spoke to Miss Mackintosh, she put it something like this. What is the point of someone such as her continuing to work and to try to bring up and support their children when the system that is supposed to protect them lets them down? Would she not be better off going on to benefits and allowing the state to support her?

Mr. Plaskitt : As I tried to say to the hon. Gentleman earlier, this is a question of striking a very difficult balance. As he acknowledged, it would be inappropriate for either him or me in any way to condone an attempt by a non-resident parent to evade, in this case, his responsibilities to support his children from a previous relationship simply because he had the device for transferring ownership of an asset. That is why the agency has taken the action that it has.

I shall give the hon. Gentleman an undertaking. I have already looked at the scope in section 42 for doing something exceptional in these circumstances to see whether we can help his constituent. The conclusion that I have reached to date is that section 42 does not offer us such a route, for the reasons that I set out. However, I do undertake to have a further look at it in the light of what he has said this afternoon and to write to him. I do not want to offer false hope, however. I am simply saying that I am more than prepared to study the potential for opportunity under section 42. I am not making any promises, but I certainly undertake to look at it.

In respect of the point that the hon. Gentleman now raises, the critical issue is the ownership of the property and not, alas, who bore responsibility for meeting any particular costs associated with that property. The critical question is ownership; that is what was transferred, and that transfer was in conflict with the bill of inhibition.

I understand that the agency is considering the permanence of the non-resident parent's absence from the United Kingdom. If he is found to be no longer habitually resident in the United Kingdom, he is outside the jurisdiction of the Child Support Agency. However, there are still arrangements in place to help Ms Mackintosh recover maintenance payments. Reciprocal enforcement of maintenance orders are international claims for family maintenance, handled by UK courts. The UK has arrangements with more than 100 countries and territories—including New Zealand, where we understand the non-resident parent lives—to allow a person living in one jurisdiction to claim maintenance from an ex-partner living in the other.

If, as in the case before us, there is no existing Scottish court order for maintenance, a solicitor can help to prepare the appropriate papers for a provisional order. Those papers are then forwarded through the courts group to the appropriate foreign country to begin the recovery of maintenance. If Ms Mackintosh has not
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already taken up that option and wishes to find out more, she should contact her local sheriff clerk's office or courts group. Details of that process are also available on the Scottish Executive's website. There is a broadly similar process for England and Wales, which is managed by the Department for Constitutional Affairs.

Enforcing maintenance has always been a crucial issue in child support. Although it is true that the real problem is parents not facing up to their responsibilities, I would not attempt to claim that the agency has always been the most effective organisation in securing debt. The question is what should be done to improve the situation. As I said yesterday in a similar Westminster Hall debate, last year we asked the new chief executive of the agency, Stephen Geraghty, to conduct a root-and-branch review of the agency's operations. From his findings, we concluded that the current system was incapable of delivering the outcomes that we all desire from the Child Support Agency. The problems are not just with how the agency operates but with the policy and legislative framework that is supposed to support it. Therefore, we have also asked Sir David Henshaw to consider a complete redesign of the whole child support system. The terms of reference for his redesign have been drawn as widely as possible to allow all options for reform to be fully considered.

I know that the hon. Gentleman's party has also put forward its own proposals for a child support system, and that Sir David Henshaw has met the hon. Member for Yeovil (Mr. Laws). However, I am bound to say that I have not seen anything in the Liberal Democrats' proposals that would have made any difference to the case that the hon. Member for Inverness, Nairn, Badenoch and Strathspey raised today.

Some have said that by asking for a redesign we are just putting off taking any action, and so children are continuing to suffer from a poorly performing agency. That would only be a fair criticism if it were true, but it is not. Mr. Geraghty's review identified a number of areas where improvements could be made in the short and medium term. That formed the basis of our operational improvement plan, which sets out how the agency's performance will be improved over the next three years. The £90 million investment for the next three years will support the recruitment and deployment of more staff to processing work and, particularly, enforcement. Over the period of the plan, we will quadruple the number of staff dedicated to enforcement activity from 500 to 2,000. We aim to increase levels of compliance from 65 per cent. to 80 per cent. by March 2009.

Danny Alexander : I appreciate that the Minister wishes to move on to make more general points about Child Support Agency reform, and indeed to make some partisan remarks about the Liberal Democrat position on the subject, but that is not a debate that I particularly wish to get into today. The nub of his response to my constituent's inquiry is effectively that the transfer of ownership was a device on the part of the non-resident parent to avoid his responsibility. I think that I have made it quite clear that my understanding, from my contact with my constituent, is that it was not such a device; it was, as it were, a tidying-up exercise from a
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separation that occurred much earlier. To argue that my constituent is trying to get round the rules on behalf of the non-resident parent is not right.

Mr. Plaskitt : The hon. Gentleman is entitled to interpret private decisions taken by his constituent and her former partner and will receive their interpretation of the situation. It is not for me to get involved in that. What I have to do—and what the agency has to do—is consider the facts of ownership and operate, as we must, in the interests of collecting maintenance owed to children.

In that context, the agency is bound to look at a non-resident parent's assets and what may or may not have happened to them. It will not want to accept a situation where assets are transferred, for whatever reason, when that has the effect of taking them beyond the reach of the agency and removing their value in circumstances where they could contribute towards a debt owed to children. That is and always has been the dominant factor; it is enshrined in the original legislation that brought the agency about and I am sure that that would be the principal objective of any successor organisation.

I recall, from reading the hon. Gentleman's party's document on this matter, that it too enshrines as a founding principle that the purpose is to pursue maintenance for children. It is in that context that the current law is drafted and why the agency has taken the decisions in respect of his constituents' case. Having said that, I am more than willing, once again, to look at all
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the existing powers that we have at our disposal, and options for discretion, to see if we can do anything differently in this case. I will write to the hon. Gentleman about that.

Returning to how we are trying to solve problems in the longer term, such as the ones that this case illustrates, we will also be considering the use of data from credit reference agencies and HM Revenue and Customs. In addition to the £90 million investment that I have already mentioned, a further £30 million will be invested in using private debt collection agencies to recover the £100 million of historic debt over the three years of the plan. Work has already begun on introducing these improvements and this will continue while Sir David is producing his redesign.

In conclusion, I believe that we all continue to support the original objectives of the Child Support Agency to make sure that parents who did not live with their children still face up to their responsibilities to support them. As we have often said, relationships may end, but responsibilities do not.

Although I understand that Miss Mackintosh finds herself in an unenviable situation, I think that the actions of the agency in this case have been correct. The ultimate aim must be to make sure that non-resident parents cannot avoid paying the money that they owe to their children.

Question put and agreed to.

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