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The amendment requires the commission to consider further information or evidence that is or could be available to it, including by reference to information
that it is already in possession of, where it appears to the commission that to do so may affect its decision in respect of the variation. That will become particularly relevant once the data-sharing provisions with Her Majesty’s Revenue and Customs are in place, as the commission may well have better access to information that would support the variation than the parent with care. The commission will be able to conduct investigations using information already held, for example by HMRC, or to seek fresh information from other sources, such as accountants, employers or credit reference agencies. This adjustment to policy was made in response to representations from groups representing parents with care, who find the current system inflexible and open to manipulation by unscrupulous non-resident parents who seek to conceal their real income from both the parent with care and the Child Support Agency.
A further amendment enables the disclosure to the commission of information provided in the context of family proceedings in court that is likely to be relevant to the commission’s child maintenance functions. Currently, such disclosure brings with it a risk of contempt of court. That risk is removed by the amendment. This proposal was welcomed on both sides during the Committee stage in another place. To give a practical example of how it can help, there are cases—for example, in ancillary relief proceedings on divorce cases—where a non-resident parent discloses information on court documents about his or her income, or where the court makes a finding regarding the non-resident parent’s financial circumstances, property or assets that were not previously known. Currently, that information cannot be passed to the Child Support Agency, which has to seek it again from scratch. The commission, by contrast, will be able to receive and use that information without risk of contempt of court.
The final amendment is a drafting correction and ensures that the commission has access to information on contributions held by Her Majesty’s Revenue and Customs. That is to ensure consistency with arrangements already in place for the Child Support Agency. I commend the amendments to the House.
Andrew Selous: The official Opposition welcome the amendments in the second group, which, as the Minister said, cover three areas. Getting the assessments right is vital to the success of the commission. I am sure that the Minister will agree that the problems of the past were largely to do with the fact that the assessments were so ropey that they were disputed and delayed, and the parents who should have received the money did not receive it when they should have. The failure to get that right in the past has been at the heart of much of the CSA’s difficulties.
Lords amendment No. 6 is clearly sensible in ensuring that the commission will be able to consider additional information or evidence where that appears appropriate, before deciding applications for variations made by a parent with care or, in Scotland, by a child over the age of 12. That prompts one to ask why the amendment is needed. One would have thought and hoped that the Child Support Agency would always have available to it the latest relevant data when determining variations of maintenance, but, as we said in our discussions on the first group of amendments,
perhaps some of us in this place did not do our job properly in relation to previous legislation. We should have made sure that such information was available to the CSA.
The second sub-group of amendments in this group relates to the passage of information between the family courts and the commission. The amendments will allow parties to specified family proceedings to disclose relevant information to the commission, which is clearly sensible. I am sure that the absence of those provisions from current legislation has hindered the CSA’s work in the past. The general issue is about ensuring that the commission and the family courts work hand in hand and do not work against each other to undo their good work.
This is not the occasion on which to revisit the thorny issue of the 12-month rule—indeed, you would not allow it, Mr. Deputy Speaker—so I shall not go down that route. I hope that the Minister agrees that it is important to ensure that the family courts and the commission are not at war. They are basically in the same business: dealing with the tragic circumstances and trauma that occur when families split up, such as the need for specific care for children and, crucially, the need to ensure that the right amount of money gets through to the right parents. We support that.
The Minister was quite brief on amendments Nos. 118 and 119, which are, as he said, crucial to making sure that there is the fullest possible co-operation between HMRC and the commission. I have looked into the legislation that affects the information gateway between the tax authorities and the current CSA, and I believe that one of the most useful things that we can do this afternoon is to tease out why it has not worked in the past. We are not expecting any Divisions, so I ask the Minister to give maximum co-operation regarding my concerns on this issue.
It worries me—I say this to hon. Members on both sides of the House—that we are in the habit in this place of passing legislation, not using it fully and then passing more laws when things do not work. I have uncovered information that is directly relevant to amendments Nos. 118 and 119. I do not know whether the Minister is familiar with section 80 of the Welfare Reform and Pensions Act 1999, which Labour passed two years after it came to power. He is not nodding, so I shall give him a gentle introduction to it. [Interruption.] Perhaps he is familiar with it; I am delighted to hear that, but for the benefit of the House, I shall point out that section 80 places a requirement on the tax authorities and the CSA to pass information to each other about the earnings of self-employed earners. The explanatory notes to the Act state:
“This provision allows the Inland Revenue, on a discretionary basis, to supply tax information it holds in respect of self-employed non-resident parents to the Child Support Agency (CSA). This is intended to enable the CSA to build up a financial picture of non-resident parents whose earnings either are not known or need to be verified.”
That sounds excellent and sensible, but the information that I have, from talking to HMRC staff who have been seconded to the CSA and who deal with my constituents’ CSA matters, is that that is not working. It worries me that Lords amendments Nos. 118 and 119 refer to this
very area of co-operation between HMRC and the Child Maintenance and Enforcement Commission, despite the fact that we have passed measures on precisely the same subject not so long ago, and that those measures are not working as they should do.
I should like to illustrate this argument with three points. First, HMRC has its own construction industry system of record keeping, to which the CSA should be entitled to have access in regard to self-employed parents. However, I have received information that that is not the case, and that when form 721—which could provide the relevant construction industry information—is filled in electronically, those data are denied to CSA staff, who cannot therefore make a correct assessment and make the child support system work properly. What is the point of having legislation on the statute book if there is imperfect co-operation—or none at all—between HMRC and the CSA?
I did not give the Minister prior warning that I was going to raise this matter today, but it is a serious issue and I ask him perhaps to meet me afterwards and to look into the matter. The premise of the Bill is largely based on having better and fuller co-operation between HMRC and the CSA. In a recent parliamentary question, I asked the Chancellor of the Exchequer
“what access HM Revenue and Customs staff seconded to the Child Support Agency have to HM Revenue and Customs data systems while on secondment”.—[ Official Report, 18 May 2008; Vol. 475, c. 1849W.]
The answer was that they have none, which was surprising.
Secondly, I have discovered that HMRC charges the CSA for information supplied on referrals—the charge is £3.79 per referral—whereas banks and other financial institutions have to supply that information for free. It seems pointless to have money going from one Government Department to another—that money has to be audited, and there are costs involved with that—when both the Departments involved should be co-operating fully with each other to ensure that the right money gets through to the right parents for the benefit of the children concerned.
Thirdly, will the Minister confirm with his colleagues in the Treasury that, when an IDG 43000 form is signed by a non-resident parent, it will trigger full co-operation between HMRC and the CSA? My information is that staff involved in the central policy information strategy at HMRC are not co-operative on this issue. There is no hope of Lords amendments Nos. 118 and 119 being successful if we do not get these co-operation issues sorted out. There is no point in passing more legislation when the present legislation is not being properly used. That does not fill me with confidence that the co-operation between HMRC and the staff at CMEC will be more effective in the future.
As I said earlier, I do not expect the Minister to have at his fingertips any detailed information on relations between his Department and the Treasury, or between the staff at HMRC and the CSA, but when he replies to this debate, I would be most grateful if he assured me that he takes the issue seriously and recognises that it is of the greatest importance that we get this right if we are going to make the CMEC work successfully. We both want the same thing—namely, to get the system to work—and, as I have said, I have current information
from HMRC staff seconded to the CSA and who are dealing with my constituents that the system is not working satisfactorily at the moment.
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Paul Rowen: I, too, welcome the amendments. I am sure the Minister recalls that in Committee we also raised concerns about ensuring that all income is taken account of when an assessment is being made, and we provided examples of cases.
The hon. Member for South-West Bedfordshire (Andrew Selous) talked in particular about the construction industry and examples involving self-employed people in which it was quite clear that not all the information was being made available to the CSA. Therefore, the parent with care was not getting their full entitlement. Any steps that the Minister can take to ensure that when further information is made available it is not just accepted but properly investigated will be pertinent to the success of CMEC.
The hon. Member for South-West Bedfordshire made some relevant points about the operation of the CSA and the arrangement with HMRC. In Committee, we strongly laboured the point about the lack of consistency between the two Government agencies in ensuring that such information is made available. The Minister assured us that that would take place. I hope that the amendment and the new arrangements achieve proper follow-through on that. He knows as well as I do the figures on the amounts of money that are not being collected and the effect that that has on child poverty.
It is clearly important to all of us in the House that we have proper arrangements in place, so I welcome the amendment, which recognises that a parent with care can put forward more information and that the commission will properly investigate it. As the hon. Member for South-West Bedfordshire said, we need assurances on how the gateway between departments is working, because clearly it is not working at the moment and there is no point putting new legislation in place if we are not going to get it working.
On amendment No. 90, I again welcome the way the proposals are going with regard to disclosure of information through the family courts. As has been said, it is important that the family courts and the commission work closely together. Those are often difficult times for families, particularly the parent with care. Emotions are running high and lots of things are going on, so it is clearly important that the commission has access to information that will be revealed during any divorce settlement and that could materially affect the assessment that CMEC makes.
I want to question the Minister further on a matter that my noble Friend Lord Kirkwood raised in the other place. It relates to amendment No. 90, proposed new section 49AA(2)(c) and the use of the word “reasonably”. The amendment says:
“This section applies if...the party reasonably considers that the information is relevant to the exercise of the Commission’s functions relating to child support in relation to the child.”
If the commission was seeking information from the court, I could understand that it ought to act “reasonably” and not go on a wild goose chase, but we are talking about “the party”—that is, the person who may well want the commission to look at information revealed
during family court proceedings. I do not want a clause in the Bill being used as a loophole for the parent without care to get out of supplying information that could lead to a better settlement being provided for the parent with care.
I would have thought that the parent with care, acting as the guardian of the child, would clearly be acting reasonably because they would want to put before the commission all information that would enable them to get a proper settlement, which would enable them to bring up the child properly. Conversely, the parent without care may not want to act reasonably, because he or she will not want to provide such information.
While the word “reasonably” may itself sound reasonable, it rings alarm bells for me. I can imagine the parent without care going to the court and saying, “It is unreasonable for that information to be provided.” It should be for the commission to decide what is reasonable. The Bill states what information it can and cannot seek. We are not talking about debt collections, or information that could allow third parties to gain access to people’s financial affairs. I agree with my noble Friend that the amendment is unnecessary, and sets alarm bells ringing in relation to why it is there in the first place. I hope that the Minister can clarify the issue, because I do not think that it was dealt with satisfactorily in the other place.
Mr. Heald: How will the data-matching proposed in Lords amendments Nos. 118 and 119 take place? Will it be possible to match records on the Inland Revenue and national insurance computers electronically with the commission’s records on a “class” basis? Would the records of a class of absent parents who had not been making payments be run against the records on the national insurance recording computer?
How will this power be used? Have any contracts yet been let to computer companies or similar organisations? What will be the scale of the matching, in terms of numbers? Does the Minister envisage thousands of cases being matched each year, or will only a small number of individual cases be involved? Will he tell us a little more about the Government’s thinking? What has been agreed with the Revenue, and what contracts are in prospect?
Mr. Charles Walker (Broxbourne) (Con): I did not serve on the Committee, but I was interested in the comments of my hon. Friend the Member for South-West Bedfordshire (Andrew Selous).
Obviously, when a divorce and separation take place the situation is extremely traumatic and emotional for all parties, but too often the need of the child is lost in the feuding between the two adults. I am especially concerned about the under-declaration of income by the self-employed. Divorced constituents have come to see me, women—usually—whose husbands were in well-paid jobs earning upwards of £50,000 a year, but whose annual income has suddenly and miraculously dropped to £10,000. Clearly their payments towards the upkeep of their child or children do not reflect either their earning potential or their actual earnings.
I am horrified that people can simply walk away from their responsibilities to their children. I know of one case in which two sets of lawyers are going at
each other hammer and tongs trying to ascertain an individual’s genuine earnings. The Child Support Agency cannot take any further action to recover meaningful amounts of money for the child’s mother because it cannot prove that this gentleman’s earnings are in excess of £10,000, although only weeks before the divorce they were £50,000 per annum.
I hope that, when income levels are in dispute, it will be possible for Her Majesty’s Revenue and Customs to produce tax records so that a realistic amount can be paid towards children’s upkeep after a separation.
Mr. Plaskitt: We have had a useful debate. I agree with the hon. Member for South-West Bedfordshire (Andrew Selous) about the importance of co-ordination between the courts and the commission. As he said, they are ultimately in the same business, and we shall seek to ensure that there is sufficient co-operation between them.
We have had a fair amount of discussion on the exchange of information between HMRC and the CSA, or the commission in the future. I hear the concerns that have been raised about the way in which the exchange operates currently. The collaboration and exchange of information is critical and the links have to work. HMRC data are important to enable the agency now and the commission in the future to deliver the kind of effective maintenance agreements that we all want to see in place. Already HMRC data are being deployed and, in many cases, are helping the agency to establish the whereabouts of the non-resident parent.
The information is also helping the agency to establish the real income levels of a non-resident parent because, as the hon. Member for Broxbourne (Mr. Walker) has indicated, many non-resident parents sadly will resort to all sorts of tactics and subterfuge to try to conceal income and, let us be blunt, will tell barefaced lies to the agency about what they earn. HMRC may have more robust information on income that is much harder for the individual to conceal. The exchange of that information will clearly be crucial to help us ensure in future that we have robust maintenance agreements in place that deliver.
The hon. Member for North-East Hertfordshire (Mr. Heald) asked about the extent of data matching and the exchange of information that will be required. This will be a matter for the commission, once it is established as a proper legal entity, to discuss with HMRC. They will want to draw up a protocol about how they will achieve the exchange of information. He asked on what scale the exchange will be. I anticipate that it will be on quite a large scale because we are looking for a robust system that ensures that we have accurate information about non-resident parents’ true levels of income. There will be hundreds of thousands of people in the system, so I imagine the exchange will be on a significant scale, but the technicalities as to how that will be done will be caught in any protocol agreed between the commission and HMRC once the commission is in a position to initiate these negotiations.
Andrew Selous:
There is also the issue of expenses. Section 80 of the Child Support Act 1991 did not mention charging. My information is that HMRC
charges £3.79 per referral. In answer to my hon. Friend the Member for North-East Hertfordshire, the Minister said that the exchange could be extensive. Has CMEC in its preliminary budgets put in a couple of million pounds to pay HMRC? Is that sensible? Do we really want money going from one Department to another in this way?
Mr. Plaskitt: Interestingly we are now going back to the discussion from the first group of amendments on the extent of ministerial involvement. One of the reasons for going for a NDPB was that negotiations of that sort no longer require ministerial approval. The commission will be anticipating the need to have a provision in place to meet that requirement. The extent of it and the terms of any negotiation between the commission and HMRC will be for the commission. I cannot anticipate what it will say about that. It is very much an issue that the commission will have to sort out with HMRC, but it is aware of the context in which that exchange will operate.
Mrs. Dorries: I am delighted to hear that the cross-referencing of data will be robust, but one way of using that information less would be for the Government to get the message out to absent parents that it will be difficult in future to avoid providing information or making payments. Many of my cases are fathers who do not feel that they should be paying at all for their children and feel they are being unfairly charged. As well as putting these systems in place, should there not be some method of providing a wider message to the general public to let them know that the system will become much more robust and tougher?
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