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Session 2006 - 07 Publications on the internet General Committee Debates childmain |
Child Maintenance and Other Payments |
The Committee consisted of the following Members:Hannah
Weston, Committee
Clerk †
attended the Committee Public Bill CommitteeTuesday 9 October 2007(Morning)[Mr. Christopher Chope in the Chair]Child Maintenance and Other Payments BillWritten evidence to be reported to the HouseCM 4
Association of Personal Injury
Lawyers CM 5
Memorandum (Name and address supplied)
10.30
am
The
Chairman: I understand that it is the wish of the
Committee, agreed through the usual channels, that this
afternoon’s sitting should take place between 5 and around 6.45
pm. I have made that announcement so that members of the public are
aware of it, and also for members of the Committee who were not privy
to the earlier
discussions.
Clause 15Repeal
of sections 6 and
46 Andrew
Selous (South-West Bedfordshire) (Con): I beg to move
amendment No. 18, in clause 15, page 7, line 10, at beginning
insert— ‘(1) Subject to
subsection
(2),’.
The
Chairman: With this it will be convenient to discuss the
following amendments: No. 19, in
clause 15, page 7, line 10, after
‘(c. 48)’, insert
‘shall’. No.
20, in
clause 15, page 7, line 18, at
end insert— ‘(2) When
applying section 57 of this Act the Secretary of State shall only bring
the provisions of subsection (1) into force on such day as he by
regulations amends the provisions set out in subsection (3) below, so
as significantly to increase the amount of child maintenance which is
to be disregarded when calculating income other than earnings for
income support or jobseeker’s allowance
purposes. (3) The provisions
referred to in subsection (2) above
are— (a) paragraph 73 of
Schedule 9 to the Income Support (General) 1987
Regulations; (b) paragraph 70
of Schedule 7 of the Jobseeker’s Allowance Regulations
1996.’. No.
45, in
clause 15, page 7, line 18, at
end insert— ‘(2) Subsection
(1) shall not have effect until the Secretary of State has, by
regulations, amended the provisions set out in subsection (3) below so
as significantly to increase the amount of child maintenance which is
to be disregarded when calculating income other than earnings for the
purposes of income support or jobseeker’s
allowance. (3) The provisions
referred to in subsection (2) above
are— (a) paragraph 73 of
Schedule 9 to the Income Support (General) 1987
Regulations; (b) paragraph 70
of Schedule 7 to the Jobseeker’s Allowance Regulations
1996.’.
Andrew
Selous: I welcome you back to the chairmanship of our
Committee after the long summer break, Mr. Chope. I am sure
that the Ministers have had the same joy as Opposition Members in
getting back to speed on our earlier discussions. I am sure that
we will all get back into the swing of our deliberations, which
proceeded in a focused and constructive manner in previous sittings.
The hon. Member for Rochdale will, no doubt, discuss amendment No. 45
in due course. The
clause makes a major change to the current system of child support by
repealing sections 6 and 46 of the Child Support Act 1991. Section 6
requires those in receipt of benefit to lodge an application for child
maintenance with the Child Support Agency, which is, in broad terms, a
reform that the official Opposition support. It will provide equality
of treatment to all sections of the population and will not force one
section to go down a route that they might not want to go down.
However, as with any change of this nature, that inevitably raises a
number of other questions, which I hope will provoke a debate and a
response from the Minister.
It is worth putting on the
record a few facts relating to the abolition of section 6. At the
moment, only 31 per cent. of parents with care who are on benefit
received child maintenance in the previous three months. That comes
from the CSA’s quarterly statistics of March 2007, table 13.1.
Therefore, the requirement in section 6 is not working, as 69 per cent.
of parents with care who are on benefit are not receiving child
maintenance to start with. Two thirds of the cases that are taken on
because a parent with care has claimed benefit never reach the stage of
an initial calculation and payment set-up. That information is also
from the CSA’s quarterly statistics of March 2007, table 2.2. We
also know, as was explained by the Minister’s colleague Lord
McKenzie in our evidence-taking session, that many parents with care
also withdraw before a calculation has been made, because they go off
benefit, so we understand and are broadly sympathetic to what the
Government are
doing. Mr.
Tim Boswell (Daventry) (Con): Does my hon. Friend agree
that another important motive in the initiation of that structure was
saving public funds by recovery from the parent without care? Can he
advise the Committee, or hazard a guess, as to the amount of public
money that ought to be recoverable and is not or, conversely, the
amount that is scored in benefit and that is either reclaimed against
individuals or is not eventually recovered from the parent without
care?
Andrew
Selous: I am glad that my hon. Friend has raised that
point, and he is absolutely right to do so. It is worth putting on the
record that the change is major, because one of the original objectives
was to ensure that the public purse did not lose out—he will
have sat through those earlier debates with my hon. Friend the Member
for North-East Bedfordshire (Alistair Burt) and others who were
Ministers at that time. We have to say that that intention has had a
chequered history, as some of the statistics that I have read out have
shown. That point is worth making, so that we are all conscious of the
change that we are bringing about.
Above all, we need to focus on
a system that works and that gets money to parents who are looking
after children. We must ensure that there is a focus on lifting those
children out of poverty and on ensuring that they have the income to
which they are entitled. My hon. Friend the Member for
Daventry—indeed, the whole
Committee—could regale you for some time with endless statistics
about how things have gone wrong in the past, but you would not allow
it, Mr. Chope. There is agreement on that issue, which is
why the Government have introduced the legislation. However, my hon.
Friend has made an important point and I am grateful to him for putting
it on the record. The
Child Maintenance and Enforcement Commission will be able to focus on
applications from parents who actively want to use its services, which
should make a difference. It will not be plain sailing, because there
is often severe antagonism between the parents, and there may be
recalcitrant non-resident parents who do not want to pay. Part of the
challenge for the Bill, and for the changed culture that we hope will
go with it, is whether there will be a change of heart as far as those
non-resident parents are
concerned. Section 6
of the 1991 Act provided a mechanism to bring parents with care who are
on benefit into the child maintenance system. There is a worry that
there may be parents with care who will not pursue a voluntary
arrangement when, perhaps, they should. My hon. Friends and I have
tabled an amendment that will allow us to debate that very point later.
However, there is an issue about the decision to delay the introduction
of a higher maintenance disregard until 2010. With the Bill likely to
gain Royal Assent and come into effect next year, there is a worry that
there will be problems between the later implementation of the
maintenance disregard and the Bill coming into effect. That is a timing
issue, and it is possible that the number of lone parents on benefit
seeking maintenance will decrease, because the current £10
disregard is not a great incentive as far as they are
concerned. I do not
know when the Government will announce the level of disregard for child
maintenance income, but I hope that it will be sooner rather than
later—I understand that discussions are ongoing with the
Treasury and others on that point. Projections have been made about
higher levels of disregard, the number of children that would be lifted
out of poverty and the cost that would result from a higher level of
disregard. One Parent Families and other groups maintain that this is a
cost-effective means of lifting children out of child poverty. However,
we also need to look across the piece to see what the effect will be as
far as parents are concerned, and I will say more about that later. A
full maintenance disregard would cost about £230 million.
According to some analyses, that would be cost-effective in terms of
lifting children out of poverty, compared with an increase in tax
credits, for
example. On the
notification by Jobcentre Plus of the current £10 disregard,
Jobcentre Plus must notify the agency, which must then split the
maintenance payments made by non-resident parents, so that only
£10 goes to the parent with care and the rest is diverted to the
Secretary of State. When the parent with care goes back into work,
Jobcentre Plus must notify the agency again to redivert all child
maintenance to them. Those are some of the practical problems that
amendments Nos. 18, 19 and 20 seek to
address. Empirical
evidence from the United States, which can be found in the
Department’s own research report No. 402 of 2007, shows that
increasing the level of the
disregard has not had an adverse effect on the employment rate. I would
be grateful if the Minister would comment on that and let us know when
we are likely to have that key information, which is critical to the
future successful transfer of child maintenance, because, in a sense,
we are discussing this part of the Bill with a big hole in front of us.
I will be interested to hear the Minister’s response to this
debate. Paul
Rowen (Rochdale) (LD): I, too, welcome you back,
Mr. Chope, after what has been an unusual break. Some of us
did not know whether we would be completing this process
today. I want to
discuss amendments Nos. 18, 19 and 45. We are considering the repeal or
abolition of sections 6 and 46 of the 1991 Child Support Act. Although
that move might be welcome, we have tabled the amendments, because we
are concerned that the it may have some adverse effects, as has been
mentioned by the hon. Member for South-West Bedfordshire, and not
necessarily be of overall benefit. We are also concerned about the
delay announced by the Government to the point at which an increased
child maintenance disregard can come into
place. 10.45
am The abolition
of child poverty is something that all three political parties can sign
up to. I shall quote the Prime Minister in July
2004: “the great and
unacceptable concentration of poverty amongst households with young
children—is the greatest indictment of our country in this
generation and the greatest challenge of
all.” That sums up what
we all perceive to be an important target. If the Government are to
meet their 2010 target of halving child poverty, child maintenance and
its payment has a part to play. We are concerned that the £10
disregard, which will be introduced next year, will only affect some
47,000 parents. We know already from this year that the number of
children in poverty has grown. We also know, as has been mentioned,
that only 31 per cent. of parents with care on benefit have received
child maintenance. If section 6 is abolished without the increased
child maintenance disregard, the number of children who receive child
maintenance will fall. The figure of £10 that has been quoted
may be the maximum amount paid by the non-resident parent.
We must accept that section 6
has not been good value in terms of the amount of money recouped. Last
year, £110 million was recouped, yet the administrative costs of
the agency were around £425 million. Section 6 has not been
successful in its original purpose, and it has acted as a disincentive
for the formation of voluntary arrangements. That point was
acknowledged in the Government White
Paper: “reclaiming most
of the money for the State, rather than passing it through to children,
still means that neither parent has a strong enough incentive to
co-operate. This undermines the extent to which child maintenance can
contribute to the eradication of child
poverty.” That is a key
point. If we are serious about eradicating child poverty, we must use
the child maintenance system as a
tool. Consider the
comparison between the tax credits system and the child maintenance
system. If the Government were, for example, to introduce a
total
higher maintenance disregard, it would cost in the region of £230
million. That is what we would like to see, and I know that the
Chancellor has received a letter requesting that he announces such a
change in today’s pre-Budget statement. Using the child
maintenance system, it costs £2,875 to lift a child out of
poverty. Using the tax credits system, however, the cost to the
taxpayer is £4,300. Whichever way one looks at it, if the
Government are serious about eradicating child poverty and meeting
their 2010 target, they should consider the rapid introduction of the
full maintenance disregard.
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