Mr.
Boswell: The hon. Gentleman makes a powerful case, to
which the Minister should at least give an answer. In his experience of
the current formulas, does he agree that a great deal of the concern
that is expressed by parents relates to agreements about particular
payments that are not taken into account in a formula and might
therefore be said to have left a lasting sense of
unfairness?
Mr.
Weir: The hon. Gentleman is correct. We have all met
people in our surgeries who are paying for x and y and who have said to
the agency, “Look, I have done this”, but the agency will
not take it into account. To be fair, sometimes there is little
evidence of what people have been doing because the parties have
handled things in cash. I appreciate that that is a problem, but it
leaves a sense of bitterness in many relationships and poisons them
after the break-up. A
serious problem arose in respect of the Child Support Agency in that it
would in effect look only at the regular payments made by the
non-resident parent to the parent with care, irrespective of whatever
arrangements may have been agreed. In many cases, parties had entered
into a minute of agreement that might, for example, have transferred a
large capital sum or the whole matrimonial home to the parent with care
in exchange for a reduction in payments or instead of regular payments.
That may well have allowed the clean break, especially when new
relationships were being formed or other children were involved, which
is often the crucial point because the new relationship can start to
break down because of the pressures and payments in the old
relationship. Many of those agreements were overturned subsequently and
the CSA pursued the non-resident parent for increased child maintenance
irrespective of what had gone before. That was unfair and led to great
tension between couples.
If the 12-month rule continues,
what is the point of entering into an agreement other than of the
standard variety? In our evidence sitting, Lord McKenzie
said: “The one
key change will be that, once the section 6 compulsion goes, a claim
for benefits by one or other of the participants will not break the
agreement. It will continue, subject to the 12-month rule, under which
either party can elect to come out of the
agreement.”——[Official Report, Child
Maintenance and Other Payments Public Bill Committee, 17 July 2007;
c. 5.] In other words, a party
to an agreement cannot be sure that it will last for more than 12
months. The Minister assured the Committee
that “an application can
be made to the statutory maintenance service at any point by either
parent. That would override any existing voluntary
arrangement.”—[Official Report, Child Maintenance and
Other Payments Public Bill Committee, 19 July 2007;
c.125.] There is no
point in a party entering into a voluntary agreement that undermines
the essence of what the Bill is trying to do. As I said at the time, it
will undermine those who wish to make a clean break by agreeing to a
different method of dealing with ongoing support rather than periodic
payment. By implementing the rule, the Government are giving with one
hand what they are taking away with the other.
I do not suggest that such an
agreement would suit everyone; clearly it would
not.
Andrew
Selous: The hon. Gentleman’s point brings to
mind some of the questions that my hon. Friend the Member for
Weston-super-Mare posed to the Secretary of State on Second Reading
about the enforceability of private agreements. Would the hon.
Gentleman like the voluntary agreements to have legal force and for the
organs of the state to ensure that they are adhered
to?
Mr.
Weir: That is exactly my point. I cannot speak for
the English law, as I am not certain of the position in England, but in
Scotland once a minute of agreement has been entered into and
registered in the books it has legal force. It can be implemented in
the same way as a decree of court without any proper procedure for
going back to court. It is a very effective, clear way of dealing with
such problems. I
reiterate the point: most agreements would recognise that circumstances
change. If there is a material change in circumstances, the parties
could go back to court and renegotiate the agreement. Most parties to
these agreements have undertaken independent legal advice on their
interests. It is not a case of it being imposed by one party on the
other; the agreements are usually negotiated with independent legal
advice in respect of the future.
I tabled amendment No. 90 to
delete the clause that implements the 12-month rule. Resolution
approached me and pointed out that the effect of my amendment would not
be what I intended as deleting the 12-month rule may mean that someone
could go back to the court at any time; it suggested amendment No. 125
as an alternative. It made much the same point as I made, referring not
to the Scottish minutes of agreement but to the English system of court
order in which once a court order has been made either party can apply
to the agency for a calculation after a 12-month period, which only
serves to undermine the basis of agreements reached between the two
parties concerned. The
12-month rule clearly facilitates a non-resident parent to transfer
between the two state systems, using that as a delaying tactic for the
payment of child maintenance in the future. Practitioners say that it
has frequently been used as a tactical ploy, and has undermined any
trust that may have been created between the parties on reaching an
agreement.
11.15
am I have raised
this important point on numerous occasions and I would like the
Minister to reconsider it. The Government are trying to get parties to
agree between themselves, which is the way forward, as agreement can
defuse much of the tension and bad feeling in the break up of a
relationship. However, if there is uncertainty and a period when either
party can simply go to the agency and overturn any agreement after a
period of 12 months, it will undermine the good work done in other
parts of the Bill. The proposal needs to be reconsidered and I shall be
interested in what the Minister has to say about
it.
Mr.
Plaskitt: I acknowledge the hon. Gentleman’s
determination. As I think he knows, the existing 12-month rule applies
where parents have a consent order, or a minuted agreement in Scotland,
made on or
after 3 March 2003. It operates to prevent parents from applying for a
maintenance calculation for the first 12 months that a consent order or
minuted agreement is in place, but either parent may apply for a
maintenance calculation once the year has expired, thus overturning the
order. Amendment No. 90 would mean that parents who had consent orders
or minutes of agreements in place would be prevented from having access
to a maintenance calculation made by the Secretary of State or the
commission. We do not
wish to restrict any effective and agreed maintenance arrangements, in
whatever form, to 12 months or any other period. In fact, the repeal of
section 6 would break the link with the benefits system, so that any
existing maintenance arrangements will not be overturned simply because
the parent with care claims benefits—only the action of one or
both of the parents can do that. We want to encourage dialogue and
agreement between parents that leads to effective maintenance
arrangements providing ongoing support for children. We hope that
parents will not need to turn to the commission for a calculation under
the statutory
scheme. The agreements
will continue and benefit the children for as long as both parents want
them to. However, if things go wrong or a parent decides that another
type of arrangement would be more suitable for their children, they
need a readily available route into the commission. Children must not
be left for considerable periods with no maintenance or inadequate
arrangements, and we should not lock parents into agreements that are
no longer working. The 12-month rule is an important component of the
overall child maintenance system. It encourages settlements that
contain fair levels of child maintenance that are broadly consistent
with the amount calculated under the statutory scheme and discourages
old-style clean break agreements that divide property and assets
between adults but leave children without regular ongoing payments of
maintenance.
Mr.
Boswell: For clarification, when the Minister was talking
about the various circumstances in which the agreement may no longer be
appropriate, did he primarily have in mind cases where the agreement
had not been complied with by one of the parties and in that sense had
broken down, or where the agreement between the parties was no longer
fair? Those are somewhat different circumstances. If one could
introduce a sort of judicial process, one would like to be friendly if
the situation were unrealistic and perhaps more intolerant if the
situation was simply
non-compliant.
Mr.
Plaskitt: I understand the hon. Gentleman’s point.
A number of circumstances can lead to a breakdown of an arrangement
and, whatever those are, it is important that we give parents the
chance to come to the commission, if they have to, to get the issue
sorted out. We must remember that the overriding interest is the flow
of maintenance to the children. Any number of circumstances can lead to
a breakdown. We want a system to be behind the parents to provide
support in resolving a disagreement and to put an alternative agreement
or arrangement in place to get
the maintenance flowing again. If parents are stuck in a court agreement
without the option of coming to us, that is not working in the
interests of the child or children who are being
supported.
Mr.
Weir: These agreements are enforceable. If one party is
not implementing the agreement, there is a route whereby that could be
enforced relatively quickly. It is not a case of there being no flow of
maintenance. The danger in what the Minister proposes is that, if an
agreement is entered into and one party suddenly decides after 12
months, for whatever reason, that they want to overturn it, it can be
overturned by going to CMEC, irrespective of whether it is fair. That
will lead to a dispute between the parties that will lead to people
being reluctant to enter into agreements in the first
place.
Mr.
Plaskitt: It is fair enough for the hon. Gentleman to
mention risks, but there are risks in what he is proposing as well.
That is why it is important that we try to strike a balance. We are
anxious not to have a situation where we revert to encouraging
clean-break arrangements with no account being made of the flow of
maintenance for the children. That has to be balanced against what he
says. John
Penrose (Weston-super-Mare) (Con): I am intrigued by what
the Minister says about trying to discourage clean-break arrangements,
because the whole tenor of the rest of the Bill is to try to encourage
voluntary agreements between parents. They will understand what is best
for the ending of their relationship and for the children who have
resulted from it. The Government do not seem to trust them that far,
and seem to believe that if there is a division of assets, which may
then have an impact on income and therefore the ability to support the
children and provide child maintenance in future, that is not an
acceptable arrangement. I wonder why the Government
want to draw a boundary around that.
Mr.
Plaskitt: With respect, that is not quite the point that I
am making. The clean-break arrangements to which I am referring have
come out of the court system in the past, whereby the terms of the
divorce or separation settlement deal only with assets and property,
and do not deal with, or make provision for, ongoing child maintenance.
That is a different point. The hon. Gentleman is right: of course we
want to encourage parents to come to their own arrangements, and I
believe that the vast majority are capable of doing so. Some will need
support to do it, and that is why the support service is there. Some
who cannot do it, for whatever reason, need a statutory scheme to which
to refer in order to put the maintenance in place.
John
Penrose: If, for example, there were a situation in which
a parent with care had a modest income that would not be sufficient to
provide a decent upbringing for the children because he or she would
have to make mortgage payments on the family home, it is possible that
the parent who is leaving would say, “You take over the family
home. You might be mortgage-free.
That would therefore free up a lot of your income and you will be able
to provide for the children, and that capital sum is the equivalent of
an endowment instead of an ongoing income payment.” Why do the
Government not accept that? Why are they actively undermining it and
preventing it from
happening?
Mr.
Plaskitt: I would not go so far as to say that that is
what we are doing. What we are saying under the CMEC arrangements is
that parents might want to come to their own arrangements or
agreements. They may come to an agreement of that nature, but the point
is that part of the advice and support service that we are setting up
gives separating parents an indication of what is reasonable to expect
and what they should be going for if they are not certain. We had a
lengthy discussion about that before the recess. It is not for us, at
the end of the day, to say that that is what people must do. We are
turning towards people’s sense of responsibility, but we are
saying that there is guidance as to what we would put in place if
people were to refer to the statutory scheme. People could infer that
that is deemed to be a reasonable settlement, but it is important for
us to have in place, behind all those voluntary arrangements, a
statutory scheme that will put an arrangement in place if parents
cannot reach agreement.
Mr.
Weir: In effect, the Government are saying that people
have to go down this route. Otherwise, why would anybody do it? Why
would anybody enter into an agreement where, in effect, the Government
are saying that that is what they expect? One party can go to CMEC
after 12 months, overturn the whole agreement, and go down the
statutory route. In effect, the Government are saying exactly what the
Minister seems not to be
saying.
Mr.
Plaskitt: We are getting stuck on this, because I do not
agree with the hon. Gentleman. It is about striking a balance between
the various risks that are at play, and we believe that by sticking to
our position on the 12-month rule, that is exactly what we are
doing.
John
Penrose: Can the Minister give an example of an occasion
when it would make sense to suggest to a parent without care that they
should make some sort of up-front capital grant to the parent with care
in lieu of ongoing maintenance payments in, for example, the situation
that I have described where a family home is encumbered by a mortgage?
Why would that ever make sense under the situation that the Minister is
describing?
Mr.
Plaskitt: This is not as difficult a concept as we are
making it. It is the case that in some instances where couples separate
they might try to come to an arrangement about the asset that they have
jointly owned and contributed to. We know that that is a common
feature, and we have all dealt with such cases. However, the point is
what is done with that asset when the couple separates. Most people
will not assume that an arrangement about that is adequate to cover
child maintenance, which could be ongoing for many years. Most couples
would not want to see that as part of an accepted settlement and would
not feel it to be an
appropriate arrangement. That arrangement is made at one point in time
when couples break and is a decision about how to divide jointly owned
assets. There is then the ongoing issue of what provision is to be made
for the maintenance of children. At the point of separation couples
might need to buy separate homes. All sorts of other issues might occur
in the future that cannot be anticipated when the assets are divided
up. What couples want
to do—and what the vast majority do—is to decide on the
split of assets and then decide on ongoing child maintenance. Most see
those as entirely separate things. If parents are unable to reach an
agreement on that, there is a statutory scheme under the CMEC plan to
which they can turn and an advice service on which they can build any
agreement to which they are trying to come. That is an advance on the
current
situation. Mr.
Mark Harper (Forest of Dean) (Con): It is not the case
that an asset transfer is a one-off event? With a significant transfer
in assets, there is an ongoing income stream or a non-expense stream of
payments that have been avoided. It is an ongoing thing. No
professional adviser in this country would advise somebody to make a
capital payment if somebody can then come after them for income. No one
is going to advise that because it would be a failure of their
professional
duties.
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