Danny
Alexander: Before the hon. Gentleman leaves that point,
may I ask him how his amendment would affect those people whom we
discussed under the previous amendment who are paying the minimum
amount of maintenance? As I understand it, currently if the
non-resident parent has care for one day a week, the minimum
maintenance figure is waived because that parent is taking a degree of
responsibility. Would that be the case under his amendment,
too?
Andrew
Selous: The hon. Gentleman has picked me up on something
that I should have mentioned. It was towards the bottom of my notes,
but I can answer his question directly. The amendment does not alter
the rules that apply when the non-resident parent is on benefit. Here
there is a fixed contribution which will go up to £7 a week. The
amount is waived completely if a child stays overnight with a
non-resident parent for at least one night. Given the low income of
NRPs on benefit, it would be inappropriate to raise the shared care
threshold of three nights for that group. Therefore, that would not
affect that group. I am grateful to the hon. Gentleman for raising that
point, which needs to be on the record.
On new clause 10, I want to
make a number of points that were passed on to me relatively recently
by a solicitor specialising in family law and an academic who works in
the area. The solicitor, writing about cases that she had dealt with
relatively recently, stated that
“the fact that child support would
be reduced once” the
parent with care “agrees
to the children staying with their father at least one night per week
can cause a reluctance to encourage contact.”
I have just made that point to the
Minister. The
solicitor then made an important point about the benefits system, child
benefit and tax credits—it is important to link tax credits with
this discussion
because they have significant effects on the finances of both the parent
with care and the non-resident parent and can have a significant
bearing on the issue of shared care. She
wrote: “The
problem with the tax credit system for these separated couples is that
tax credits are only paid to one parent and there is therefore no
recognition in the system for shared care arrangements...I
understand that tax credits are paid to the parent who claims child
benefit.” For the
Department, that is the determining factor for deciding which parent is
the parent with care and which is the non-resident parent. We
understand that that is the key decision. The solicitor
continued: “I
come across many fathers who may see their children up to 3 days a week
but get no financial support for them. In fact, if they are working
they could be doubly penalised by paying child support. I recall one
father in particular who was claiming jobseeker’s allowance and
showed a real determination and commitment to his children to maintain
a meaningful relationship with them even though their mother did what
she could to prevent it. The case, perhaps inevitably, went through
court and he was awarded shared residence of 3 nights per week. The
mother retained her child benefit and tax credits and the father
struggled to survive on his income based job seeker’s allowance,
receiving no additional monies for caring for his children nearly half
the week.” I
hope that you will forgive me, Mr. Chope, for putting that
on the record, but I think that it is important to come down to some
individual cases.
Danny
Alexander: The hon. Gentleman has highlighted an
interesting case, but clearly had the non-resident parent been in work
he would potentially have been entitled to at least some tax credits
through the working tax credits, so the system is not quite as black
and white as the hon. Gentleman is trying to make
out.
Andrew
Selous: The hon. Gentleman’s point about the father
I have just mentioned being in work is, of course, right. Nevertheless,
the facts that I have put on the record about the father being in
receipt of jobseeker’s allowance shows how that situation is
quite unfairly skewed, given that that father had been given residence
of three nights per week by the court.
Mr.
Mike Weir (Angus) (SNP): I am following what the hon.
Gentleman is saying with interest as I have had a similar case. One
thing that worries me slightly, however, is how income is to be
determined for tax credits when two people in separate households claim
them. It seems to me that there is a serious danger of overcomplicating
the system in that respect; there will have to be separate tax credit
applications for both parents in that
circumstance.
Andrew
Selous: The hon. Gentleman is right. We are certainly into
the area of complication, but we are trailing a refining of the system
for some particularly rough justice. The hon. Gentleman will have
constituents, as I will—as we all will—who will find
themselves quite aggrieved.
If the Committee will bear with
me for a few moments longer, I shall conclude shortly, but I want to
mention one other case that, again, was drawn to my attention by an
academic working in this area who is pretty exercised about the point.
He drew to my
attention a case where two separated parents were sharing equally the
cost of bringing up their children. The children were spending an equal
amount of time in each parent’s home and the family court had
recognised their equality of rights and responsibilities by granting a
shared residence order. However, one parent was receiving almost 20 per
cent. more disposable income than the other as a result of the child
maintenance transfer even though both had identical costs and expenses
in relation to their children. The parent with care was obviously
receiving child tax credit and child benefit. The parent with care was the
father in that case. That gentleman wrote directly to the Minister to
raise the issue and got a reply from the ministerial correspondence
unit: “It
should be borne in mind the formula is designed to reflect the ability
of both parents to contribute to the maintenance of their
children”. He is quite
exercised about that and describes it as a significant
“injustice” about which he is concerned the Bill will do
nothing. I recognise that the issues are complicated, and that there
are fixed costs and variable costs, but the Bill is quite light in that
area. Given that we are setting up a system that we all hope will be in
place and robust for many years to come, I am not asking for detailed
answers from the Minister now. However, I ask him to go away and
reflect a little more on some of those shared-care issues, particularly
when child benefit and tax credits come in and where there is equality.
They can cut both ways for all our constituents, and we have not
considered them in sufficient detail. I would be interested to hear
what he says in response to this section of the
debate.
Danny
Alexander: I failed in my earlier intervention to welcome
you to the Chair, Mr. Chope. I apologise; I am delighted to
serve under your chairmanship once again. These are difficult and
complicated issues, particularly those to do with shared care. The
point that the hon. Member for South-West Bedfordshire made towards the
end of his remarks was right: there are a great many complications from
family to family in respect of what shared care and the degrees of care
that are shared mean in terms of the financial commitment that parents
make. A variety of other costs enter into the equation, both fixed and
variable. That is why the amendments highlight an important issue. I
will be interested to hear the Minister’s response to some of
the points. I am grateful to One Parent Families, among others, for the
briefing provided for this short debate. I hope that the Minister can
provide reassurance on some of the points that the hon. Gentleman has
rightly made about the
amendments. 5.45
pm The hon.
Gentleman did not particularly help the case with his comments on tax
credits and child benefit, not least because his party has been
particularly keen to highlight what has been described as the couple
penalty in the tax credit system. To have some sort of system whereby
tax credit payments are divided up on some basis seems to go against
the argument about the family that his party has
been
making on that point. I am not saying that it is right or wrong, but
that there is a degree of inconsistency in the points that are being
made. The right
approach is taken by new clause 18, which seeks to recognise the
complexities by trying to give a degree of flexibility in such issues
to the commission. It is unclear in the Bill—the Minister may be
able to clarify—whether instances of equal shared care, that is
50:50 or thereabouts, will require a maintenance arrangement or not.
David Henshaw’s report and that of the Work and Pensions
Committee recommended that cases of 50:50 shared care should be exempt
from third-party involvement, with no provision within the child
support formula for transferring funds between parents. As a member of
that Select Committee, the hon. Member for Weston-super-Mare might well
choose to contribute to this debate—it is a relevant
point. Equally, the
Department for Work and Pensions report entitled, “Child Support
Policy: an international perspective” showed that payment
obligations in many other countries, such as Australia, Canada, New
Zealand, Norway, Netherlands and France, on parents in cases of equal
shared care would be reduced to nil and that, in the majority of
countries, payments between all shared care couples would be annulled
completely regardless of disparities in parents’
incomes. The hon.
Member for Weston-super-Mare might wish to intervene, because I am not
sure whether that is correct, which is why we have proposed new clause
18, which would allow the commission a degree of flexibility. There is
a danger in assuming that where there is 50:50 shared care neither
parent needs any financial maintenance whatever. That does not follow.
One of the founding aims of the child support arrangements in this
country, inadequate though they have been, was that parents should have
a duty to share resources with their children when separated as when
they are married or in a
partnership. John
Penrose (Weston-super-Mare) (Con): Given that I have been
invited twice, in tones of increasing desperation, let me outline
quickly what the Select Committee recommended on that point. The report
stated: “The
Committee recommends that the statutory child support system moves away
from the current system of overnight liabilities which causes day
counting and diary keeping by parents and constant
readjustments”—
this is the point about the friction
between parents with care and non-resident parents, which my hon.
Friend the Member for South-West Bedfordshire was making earlier. The
report
continued: “In
the Committee's view the ideal solution is that there should be an
initial agreement between the parents and C-MEC on the approximate
amount of time the children spend between the two households. This
should govern the assessment for the remainder of the year and not be
adjusted unless there are major contact changes. For arrangements with
close to 50:50 shared care the Government should consider the case put
by Sir David Henshaw for having no child support liability at all
between
parents”. The
Committee did not recommend necessarily that the Government should take
up that recommendation outright, because of the concerns about fixed
and
variable costs. Clearly, however, the recommendation contains a degree
of sense, which we hoped that the Government would take up. I point out
also that it was adopted unanimously in Committee, including by the
hon. Member for North-East Derbyshire, who is sitting behind the
Minister
today. Danny
Alexander: I am glad that all of those points, including
the final one, have been put on the record.
I am worried about going down
the route of saying that there should be a nil assessment in such cases
because of the point that the hon. Member for Weston-super-Mare made
about friction. It could equally well be the case that where not only
50:50 shared care is the most appropriate arrangement, but where there
is significant financial disparity between parents, the most sensible
arrangement cannot be reached because one parent objects on the grounds
that if they went for the shared care arrangement, the sharing of
income that should take place would not.
New clause 18 seeks to ensure
that the commission would maintain the flexibility necessary to assess
such cases. I think that that is the right way to go, and I would be
interested to know whether the Minister agrees and, if so, whether he
feels that it should be done through the new clause, or that the Bill
contains the necessary provisions. Certainly, however, that needs to be
teased out a bit further so that he has the chance to put on the record
the Government’s intentions in relation to those cases. No doubt
the commission will look to his words during our discussions on the
provision of guidance to it when it seeks to make arrangements in such
cases. It is
important that where shared care arrangements are in place—be it
50:50 or a variation of that, such as 30:70 or some other
proportion—there remains some ability to take into account the
financial disparity that might exist between parents, in order to
ensure financial fairness as well as fairness in relation to care. Both
those things are important in ensuring that the children, who should be
the focus of our attention, get the arrangements that are most suitable
to there
needs.
Mr.
Plaskitt: Once again, I am grateful to the hon. Members
for South-West Bedfordshire and for Inverness, Nairn, Badenoch and
Strathspey for tabling the amendment. I am also grateful for the
helpful intervention from my hon. Friend the Member for Wirral, West
and for that of the hon. Member for Weston-super-Mare—it was
helpful to me, but I am not sure whether it was helpful to those on his
Front Bench. As
everybody acknowledges, this is a very difficult and sensitive area and
one in which we must tread with great care. I begin with some of the
thoughts that we had from the hon. Member for South-West Bedfordshire
in moving the amendment. Listening carefully to what he said, he
demonstrated the extreme difficulty and the risks that we would take
were we to go down the road that he suggested. Let me explain why I
think that. In the
hon. Gentleman’s approach, there was a tendency to be rather
mechanistic about the matter. We almost arrived at a sort of daily rate
for looking after a child, and that departs from the reality in which
most separated couples live.
There is, of course, a certain
amount of continuous cost involved in having children. However, for
most parents who have separated and who are dealing with the costs of
children, the real contentions are found on the sizable one-off costs
that arrive at intermittent intervals—the school uniform, the
new shoes, and these days there are iPods and that sort of stuff. That
is where the difficulty arises, rather than the daily charge and how
much it costs to have the child at home for one day or one night. It is
not territory that I think most separated parents get into, and for
that reason I would not want to see the commission try to get into it
either, just as the CSA would not have been advised to do so. That is
one reason why we must treat the issue with considerable
care. The
other potential danger, which it is crucial to avoid, is the risk of
turning access into a bargaining counter between separated parents. We
must do everything that we possibly can to avoid that happening, as
that would never be in the interests of the children and their
long-term upbringing or emotional stability. Those are important
warnings against some of the arguments that I think the hon. Gentleman
was using in support of his amendment. We must proceed more cautiously
in this area.
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