Paul
Rowen: Given the Minister’s earlier comments, and
the comments that Stephen Geraghty made in the evidence sessions, what
step is he planning to make to ensure that the commission or HMRC have
employed the relevant people to enable those investigations to take
place?
Mr.
Plaskitt: This leads us back to the more general
debate. We do not want to burden the commission with
huge duties of investigation that it is not empowered to carry out. It
was that mistake that led to some of the current difficulties with the
CSA. However, there are particular circumstances—especially if a
parent with care reports and provides evidence—in which the CSA
can require information and carry out an investigation. The commission
will inherit exactly the same powers. It is important that it has the
ability to do that. How it does it, the resources that it brings to
bear in undertaking that task, and the skills set that it has to carry
it out, are all the responsibility of the commission. It must ensure
that that is part of its package, in order that it can act on the
authority that it has.
Paul
Rowen: I understand the Minister’s point, but given
the quote that I gave from Stephen Geraghty, where the onus is being
placed on the resident parent with care, does he not accept that it is
often very difficult to provide evidence? What we should require is
that when a complaint has been made, rather than evidence submitted,
the commission then investigates. That is a lower level of
responsibility than requiring evidence, which is what the Minister is
suggesting.
Mr.
Plaskitt: First, we have the switch to relying on
HMRC income data. That is a big step from where we
are now. It is far more robust and, as several hon. Members said, HMRC
is better equipped to extract that information and people will report
changes to it because they are fearful of the consequences of not doing
so. That is a quantum change in terms of the quality and robustness of
the information that the commission will have about parents’
income. However, it will still have the power to pursue an
investigation if, for example, a parent with care refers to it for
consideration evidence of a suspicion that the non-resident parent is
not giving the correct information—perhaps because there is a
mismatch of lifestyle information. We all accept that the CSA has not
carried out that function very effectively. There is a duty on the
commission, knowing that it has that power and an obligation to perform
it effectively, to ensure that it has the right equipment and skills
set to carry out that function. I suspect that there will be far less
need to do it, given that the essential body of information about
income is coming in from a more developed and robust source than is the
case at the
moment. 12.30
pm
Andrew
Selous: I must quibble with the Minister’s
arguments against new clauses 2 and 6. He used similar arguments
against both me and the hon. Member for
Rochdale, saying that our new clauses would weigh down HMRC and CMEC
with endless bureaucracy and unnecessary extra checking. I simply draw
his attention to the small word “reasonable” in both new
clauses, because it is neither my nor, I am sure, the hon.
Gentleman’s intention that HMRC and CMEC should waste a
millisecond on cases which are clear and which do not need
reinvestigating. Without a provision such as new clause 2, however, I
fail to see how we will place a legal duty on HMRC to take action in
cases that it is not currently investigating because they are not high
value.
Mr.
Plaskitt: I know that the hon. Gentleman wants to be
reasonable—he is a reasonable man—but the trouble is that
he is opening the door to the possibility of the commission being
swamped with references for investigation, and we do not want to get
into that situation. That would not be an appropriate response, given
that the income information from which the commission will work in
carrying out its functions will in future come from
HMRC.
Paul
Rowen: I hope that the Minister appreciates that this is
an important part of the Bill. Given what he has just said, what
assurance will he give us that the DWP will issue instructions to the
commission to ensure that the relevant arrangements are put in place?
As he has rightly said, the CSA can statutorily do the things that we
are talking about, but it does not. We therefore need to see that steps
will be taken to ensure that action is taken where people evade
payments.
Mr.
Plaskitt: I think that the hon. Gentleman knows that the
commission is charged with delivering in accordance with the criteria
set down in the Bill and that it remains accountable to Parliament
through the Secretary of State for doing so. We therefore expect it to
address all its functions and secure them in the appropriate way, which
is the whole point of setting it up. It is not for me, at this stage,
to prejudge or determine how it will do that, because that is a
commission responsibility. However, we obviously want to ensure that
that responsibility is met.
In most cases, it is highly
likely that the additional effort that we have discussed would result
in no change, because the majority of non-resident parents do not
manipulate their income, and the information obtained from HMRC
regarding their financial position can, as I have said, be safely
relied on. The final
provision in the group is new clause 14, which also imposes obligations
in relation to obtaining information. It would require all Departments,
non-departmental public bodies and the courts to provide the commission
with information when a request is made. Such a request would have to
be made for the purpose of enabling the commission to make a
maintenance calculation or to locate the non-resident parent, but only
where maintenance is
unpaid. I want to
assure hon. Members that the commission will continue to be able to
request information from a wide range of sources, including employers,
accountants, local authorities, the Driver and Vehicle Licensing
Agency, the Prison Service and credit reference
agencies.
Andrew
Selous: On that point, I remember the hon. Member for
Hendon (Mr. Dismore), when he and I were on the Select
Committee on Work and Pensions in the last Parliament, putting to the
CSA’s then chief executive the point that mobile phone companies
knew non-resident parents’ addresses when the CSA did not.
Forgive my ignorance, but will anything in the Bill enable CMEC to
require a mobile phone company, or any other utility company, to
furnish a non-resident parent’s
address?
Mr.
Plaskitt: The matter of the address is important, and I am
glad that the hon. Gentleman has raised it. At present, the answer to
his question is no. I would not want to pursue the matter via the
mobile phone companies, but we are looking at the possibility of making
further amendments to the Bill to introduce an obligation to report
addresses, so the issue is very much in our mind, and I am grateful to
the hon. Gentleman for raising
it.
Mr.
Boswell: On sanctions, perhaps the Minister will elucidate
the following point. If somebody were to give inaccurate information,
they would clearly face sanctions. If, however, they were to refuse to
give information and did a vanishing act, although they were still
living in the house and the letter had been correctly delivered, would
that be a breach of the law? Of course, there might be indirect
sanctions against them in the form of the imposition of a maintenance
order. If such a refusal is not a breach of the law, is that another
area that should be tightened
up?
Mr.
Plaskitt: As I understand it, it is a breach of the
law—unless I am subsequently corrected. It is an existing power,
and there is a potential fine. That is already in statute, and that
power will transfer to the new commission. Therefore it is an offence
not to provide the requested
information. Schedule
6 will also allow the commission access to information held by Her
Majesty’s Revenue and Customs, the Department for Work and
Pensions and the Northern Ireland Office. Existing provisions already
enable parents to disclose information relating to certain proceedings
to the agency, if it is required for the purposes of making a statutory
maintenance
calculation.
Paul
Rowen: I have listened to the Minister’s
reassurances. On the amendments, I accept the information and
assurances that he has given, but I want to press new clause 6 to a
vote.
The
Chairman: We cannot have a vote on new clause 6 now, but
we can have one later on. I am grateful to the hon. Gentleman for that
indication.
Andrew
Selous: Similarly, at the appropriate moment, I would like
to press new clause 2 to a
vote.
Paul
Rowen: I beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn. Clause
16 ordered to stand part of the Bill.
Schedule
4changes
to the calculation of
maintenance
Andrew
Selous: I beg to move amendment No. 115, in
schedule 4, page 63, line 6, leave
out paragraph
2. Schedule 4 is
really what clause 16 is all about. Although we have had considerable
debate on clause 16, it is only two lines long. Schedule 4, to which it
refers, is the real meat of our discussions and gives effect to the
important changes that we have been debating within the last
group. Amendment No.
115 is a probing amendment. I do not want to remove paragraph 2 from
the Bill, but I want to use this opportunity to put a number of
questions to the Minister about whether the move from net to gross
income and the other measures in schedule 4 will achieve greater
simplicity and operational
efficiencies. One of
the big changes that schedule 4 gives effect to is the use of HMRC data
from the latest tax year for which HMRC has details, which is a
sensible move. However, as has been brought out in the previous debate,
much will depend on the sources of information within HMRC to which
CMEC has access and how that information will be accessed. It is worth
noting the number of different IT systems within HMRC, all of which
will have to work well and communicate seamlessly with CMEC, as I
believe happens in Australia where there is a direct data link with the
Australian transport agency. The Minister knows that Australia is one
of my favourite countries when we discuss child support. Perhaps the
Minister will tell us what he and his officials have learned that he
thinks will be of use with regard to data sharing and direct computer
links between HMRC and CMEC.
On those different IT systems,
it is worth putting on the record that there are different systems
within HMRC for dealing with self-assessment cases, pay-as-you-earn,
repayment of taxes owed, national insurance and tax credits, of which I
will have more to say later in our
discussions. Questions
arise from the combination of earnings from self-employment and from
employment. How will that work? What will happen when someone has more
than one job on which they pay tax through PAYE? HMRC does not
routinely link PAYE records in cases where a person has one or more
jobs simultaneously. HMRC collects information on employment-related
benefits that form part of gross income, but, again, that is collected
from employers through a different process from
PAYE.
Mr.
Boswell: Will my hon. Friend give consideration to
circumstances that may still apply—although there are rules to
deter the practice—for individuals who park their income into a
corporate structure that may not actually be recorded as their personal
structure, although it may be available to
them?
Andrew
Selous: My hon. Friend is absolutely right to raise that
point, but I think that you would rule me out of order, Mr.
Chope, if I went into a detailed discussion of it now. In future
sittings, the Committee will discuss a series of amendments that
address those issues. However, as ever, my hon. Friend is absolutely
right, and he has yet again put his finger on a key issue
that we must get right, namely the ability of some non-resident parents
to structure their affairs in a way that may be perfectly legal as far
as the tax authorities are concerned, but is frankly morally wrong, and
should, in my view, be legally wrong when it concerns the avoidance of
maintenance payments to children who need them and are entitled to
them. Returning
to the IT challenges that will face both HMRC and CMEC, paragraph 4.9
of child support White Paper, which was published in December 2006,
states: “Discussions
between the Department for Work and Pensions and HM Revenue &
Customs about the precise configuration of the data gateways to support
the necessary movement of information to C-MEC are under
way.” Can the Minister
give us an update on those discussions? I appreciate that due to
commercial confidentiality there are limits to what he can say, but it
is important to get it right. It is also important that members of the
Committee are fully briefed as to the Minister’s intentions and
what work has been undertaken in this area so
far.
12.45
pm Amendment No.
115 touches on issues regarding what the rules will be as far as HMRC
is concerned, and the sharing of income information from a non-resident
parent with the parent with care. At the moment, HMRC quite properly
has a duty of confidentiality to all taxpayers. Will that be the case
going forward with its new role where the parent with care is
concerned? It is a perfectly legitimate argument to say that the parent
with care has an interest in having information about the non-resident
parent’s income. That is particularly true given that the
standard line at the moment from the CSA to parents with care in cases
of suspected under-declaration of income to reduce maintenance is,
“Go and find it out yourself. Be your own private
detective.” Those are the sorts of conversations—perhaps
not those exact words, but along those lines—that the CSA has
with our constituents. Those issues are important and need to be teased
out. If I may make my
final comments on the amendment. I recently met officials from EDS, a
company that will be familiar to the Minister, as it is on the verge of
being a wholly owned subsidiary of the Department—there is
certainly a close working relationship between them, although there is
nothing necessarily wrong with that. Some 3,000 of its staff work for
the Department. In a recent letter to me, EDS said
that “until the Bill has
received Royal Assent and the commission is established, it is unclear
what system will be needed and who therefore might choose to bid for
the contract (or contracts).”
That is legally correct. Of
course, no one would expect EDS to say anything else, because there is
legal form, but I would be incredulous, as would all Committee members,
if detailed advance discussions were not held about the IT that we will
need to make the system work. I am not asking the Minister to breach
commercial confidentiality, but given that a range of
Departments—not just the Minister’s—have a
chequered history with large-scale IT contracts in recent years, I
cannot overemphasise how fundamental that is to CMEC’s
functioning smoothly and being the success that we all want it to
be.
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