Previous Section Index Home Page

5.15 pm

Mr. Plaskitt: The hon. Lady raises an interesting point. One thing that has bedevilled the agency’s performance in this respect is what I sometimes refer to as reputational harm. Unfortunately, too many non-resident parents who do not have—shall we say—a high inclination to pay have come to believe that if they duck and weave for long enough and are canny enough about what they do, the agency will not get them. There has been a certain culture in that regard among a minority of non-resident parents who refuse to own up to their obligations; it has been the talk in the bar room, as it were. That has been damaging and harmful and has served only to encourage non-resident parents who do not want to face up to their responsibility. She is right: they need to understand that that is not an option. Yes, the relationship may have ended, but the responsibility does not. The agency—in future, the commission—is going to ensure that the culture changes and that there is not an option of walking away from that responsibility.

I think that that is already starting to happen. We do not have to wait for the commission to come into existence for there to be new and tougher enforcement powers or more effective action. That is already happening in respect of the agency, which, as the hon. Lady may well know, is taking a record number of actions against non-resident parents. In the last year, some 114,000 individual sanction-type actions were taken against non-payers. She will also know that, armed with the additional powers that we have already
3 Jun 2008 : Column 671
given it, the agency is collecting a record amount of maintenance. The maintenance collected has just passed £1 billion a year for the first time in the agency’s history. She will also know that it is collecting record levels of arrears—£120 million in the past year—and that arrears are now growing at the slowest rate ever.

Some of the new powers that we have already given the agency are quite simple ones, such as the ability to collect outstanding arrears over the phone. While the agency official is in conversation with the non-resident parent, they can say, “By the way, the arrears are such and such. We now have powers to come after you and get this. If you want to pay us now using your debit card, you can do so.” It is amazing how successful that has been. That simple measure has brought in more than £20 million in arrears already. Also, the fact that the agency can now inform non-resident parents who have not been paying that that power exists and could be used has encouraged them simply to pay up, in recognition of the fact that if they try to delay any longer, the situation will get worse for them. The mere arrival of a letter saying, “We might have to refer your debt to a private collection agency”, has caused them collectively to hand over £6 million, because they do not want the debt collection agency on them.

The hon. Lady is therefore right, in that the message has to be very strong to non-resident parents that non-payment is not an option. What makes that a strong message is their understanding and awareness that the agency—the commission to be—has very strong powers and they cannot escape its establishing their true income position. Moreover, once it has that knowledge, it has behind it painful enforcement powers, should the non-resident parent think that they can go on ducking. So the switch in credibility, backed with stronger enforcement powers, is already delivering far higher levels of compliance and payment, and the new commission will acquire even more powers on top of those already given to the agency. The message is therefore changing and will continue to change. Her point is well made.

Mr. Heald: Is it part of the thinking on amendments Nos. 118 and 119 that if national insurance records can be checked, the commission will be aware much more quickly that somebody has started work? Is that the reason regarding national insurance contributions, or is it locating people, or a bit of both?

Mr. Plaskitt: It is a mixture of both. Of course, one of the tricks that the unwilling non-resident parent sometimes gets up to is constantly moving employment, but also literally constantly moving. I see nods around the Chamber, and I have had such cases in my constituency. Such movement makes it incredibly difficult for the agency to catch up with people who are pulling every stunt available to avoid payment. The more the information is at the commission’s disposal to keep tabs on those individuals, the harder it will be for them to evade their responsibility.

Andrew Selous: Will the Minister give way?

Mr. Plaskitt: If it is on the point that we are discussing.

Andrew Selous: I have been listening carefully to the Minister. Perhaps I missed it, but I have not heard him say that he will examine the three specific cases I
3 Jun 2008 : Column 672
mentioned where non co-operation is taking place. He praised co-operation where it takes place and he expressed the reasons for it, but I cited three specific ways in which it is not working. I was told about them just this morning by an HMRC member who has been seconded to the CSA. I am greatly worried and would like to hear that the Minister will take some action and perhaps meet me to discuss the issues.

Mr. Plaskitt: I beg the hon. Gentleman’s pardon, because I meant to cover that point. The information that I have been given is that six HMRC tax inspectors have been seconded to the agency and they are in six different locations. I understand that they are helping agency staff to deal with the particularly vexed issue of working out how to assess the income of self-employed non-resident parents, which has been mentioned. He has raised specific concerns about areas where he thinks that that might not be working, and I shall examine those. I should have given him that reassurance, and I am happy to do so now.

Mr. Walker: Let us consider a situation in which a self-employed individual is declaring an income of £10,000, which is considerably less than they are probably earning, and they then realise a capital asset of £1 million but that cannot be included in the settlement. That asset has a notional income—if it is invested in the stock market or in a high-yielding savings account—of about £50,000 a year. Is there any way of taking such income into consideration when coming up with settlements?

Mr. Plaskitt: Yes. If the hon. Gentleman is able to stay for further considerations this afternoon, he will see that we are coming to that very point. I am grateful to him for raising it, but I offer him that little tempter to follow the proceedings even further.

I do not think that there is the loophole that the hon. Member for Rochdale (Paul Rowen) fears, and I want to reassure him on that. The reason we think it important to include the word “reasonably” in respect of information from the parent with care is, as he might realise if he were to think about some of the cases that he has seen, that it is still an important safeguard to have in place. We are often dealing with individuals who have resentments against the former partner, for one reason or another, following the break up of the relationship. It is possible even for the parent with care sometimes to continue taking perhaps vindictive or vexatious action against the person who has become the non-resident parent.

If any submission could be made by the parent with care to the commission to further a dispute about a real level of income without there being any grounds to sustain it, there is a risk that the commission would be swamped with all sorts of initiatives to go after establishing true income levels when there is no robust evidence to suggest that the non-resident parent is trying to mislead the commission. It is sensible for us to require that the commission initiates investigative action of that sort, and we are strengthening its duty to do so, as I think the hon. Gentleman realises, but it is reasonable that we should in turn require the parent with care to put up reasonable grounds for suggesting that the commission should do that. That means that
3 Jun 2008 : Column 673
we will keep the commission efficient and its efforts concentrated on where they are likely to produce results.

Paul Rowen: I would accept that point if the word “reasonably” were in Lords amendment No. 6, but it is in Lords amendment No. 90, which amends information about proceedings available in family courts. They are a matter of record; the information will have been put before the family courts. We cannot introduce any more information, and I honestly do not see why there is a need to include the word “reasonably”. The information is either there or not there; it can be put before the commission, which can consider it or not. The word “reasonably” makes no difference other than to the other side if it wants to avoid that information being made available.

Mr. Plaskitt: I can reassure the hon. Gentleman that the inclusion of that word does not in any way water down the obligation on the parties for full and free disclosure of information during the court proceedings. Failure to do so would be a contempt of court.

I think that I have covered all the points raised and I hope that the amendments will secure the approval of the House.

Lords amendment agreed to.

Clause 21

Current account deduction orders

Lords amendment: No. 7.

Mr. Plaskitt: I beg to move, That this House agrees with the Lords in the said amendment.

Mr. Deputy Speaker: With this it will be convenient to discuss Lords amendments Nos. 8 to 85, 96, 98, 99, 102 and 122.

Mr. Plaskitt: This group of amendments relates to the powers available to the commission to tackle non-resident parents who continually fail to meet their financial responsibilities to their children. A particularly important suite of measures in the Bill allows the commission to target non-payers directly through their bank accounts, using deduction orders. The powers were discussed at some length in Committee, and I agreed then with hon. Members that it would be desirable to make the commission’s options in this respect as wide as possible.

The Bill as we debated it in Committee limited the powers to the use of periodic and lump sum deductions from personal current accounts, and to lump sum deductions from personal savings accounts. It therefore excluded deductions from business accounts, and from joint personal accounts. The amendments widen the primary provisions so that no type of account will be excluded on the face of the Bill. The details of accounts which will be excluded, if necessary, will be set out in regulations. That sends the right message to those thinking about trying to evade their responsibilities, and allows the powers to be exercised flexibly by the
3 Jun 2008 : Column 674
commission in the years ahead by making proposals to Ministers on the content of regulations. It also gives us the necessary flexibility to consult and co-operate with the financial services industry, to ensure that we take due account of its concerns about, for example, cost of administration, and to allow us to keep abreast of changes in the provision of financial services. Regulations under these powers will be subject to the affirmative procedure.

The Bill has also been amended to allow the commission to apply for a freezing order in relation to property or assets held by a non-resident parent where it becomes apparent that he or she is about to dissipate those assets. We have also added an additional power to allow the commission to make an application to the court to set aside a disposition made by a non-resident parent where it was made with the intention of defeating a claim for child maintenance. These are powers that were supported and, in some cases, proposed by Opposition Members, and I am pleased that there is so much common ground between us on the need to provide the commission with the powers necessary to bear down on non-resident parents who are not meeting their obligations.

Furthermore, following concerns raised about the recovery of historic debt, the Bill has been amended to ensure that all new and existing powers to collect child maintenance can be used on debt of any age. We have already amended regulations so that there is no longer a six-year time limitation for an application for a liability order on debt that accrued on or after 13 July 2000. However, there is some debt that had already reached six years of age before then and the amendment ensures that when the new administrative liability order comes into force, the same enforcement mechanisms can be used on all debt regardless of age.

Finally, the Bill will be amended to provide for a court-based mechanism for the removal of travel authorisation—passports and, in due course, the equivalent provision in identity cards—from non-resident parents who wilfully neglect or culpably refuse to pay their child maintenance. It is an equivalent procedure to that which applies already for driving licences.

5.30 pm

As my colleague Lord McKenzie of Luton pointed out when the amendment was tabled on Report in the other place, we proposed it in response to legitimate questions from the Select Committee on the Constitution of that House concerning the importance to the individual of holding a passport and the fact that decisions to withhold such documents are usually made by judicial determination.

The amendment means that the commission will have to apply to the court for an order to disqualify the non-resident parent from holding or obtaining travel authorisation, rather than being able to take the action administratively. However, I hope that we can all continue to reflect on which decisions need to be made by the courts and which could be made more effectively by administrative action. To that end, we reserve the right to come back to the House to reconsider which decisions should fall within the commission’s remit. However, this arrangement is appropriate for this Bill.

3 Jun 2008 : Column 675

I hope that when we return to the matter, Opposition Members will approach it in the same spirit of consensus that we have seen with other tough enforcement measures, such as the powers to enter bank accounts that I described. The amendments are in many cases a welcome strengthening of the powers that we originally proposed for the commission, and many of them pick up suggestions from Opposition Members. I commend them to the House.

Andrew Selous: The third group of amendments that we find before us, which relate to deduction orders and preventing avoidance—the issue that was rightly raised by my hon. Friend the Member for Broxbourne (Mr. Walker)—and travel restrictions, are all amendments with which those on the Conservative Front Bench find favour, not least because some of them are our very own.

Amendments Nos. 7 to 23 are clearly sensible. They relate to the setting up of regular deduction orders. It is important to note that there is a right of appeal to the court should there be a problem with CMEC taking money from someone’s account. If that is wrong or unreasonable in any regard, people have a right to go to court. It is important to mention that. The amendments are an additional useful part of the toolkit that we are giving CMEC. We welcome them because they are necessary.

In particular, I want to congratulate my hon. Friend the Member for Forest of Dean (Mr. Harper), who served with me on the Conservative Front Bench during our scrutiny of the Bill. In relation to clause 10, I think that it was my hon. Friend who spotted in Committee that current and deposit accounts needed to be specified on the face of the Bill to cover every type of bank account to ensure that those parents who owed maintenance did not set up accounts that were not touched by the regulations. It is good to see that specification.

Amendments Nos. 24 to 49 relate to lump sum deduction orders. The Minister has already spoken a little about people paying by credit card and paying off arrears that they owe. The orders will be another means by which those arrears can be paid. The Conservatives continue to take the issue of debt very seriously. It weighs heavily on those parents to whom child maintenance is due. They feel that the money is owed to them, that they have been cheated of it and that their children have not had the benefit of it. We will certainly be vigilant in ensuring that the commission is fearsome in collecting that money, which is owed to many children up and down our country.

Amendments Nos. 50 to 52, 96 and 98 are very important and deal with the precise point raised by my hon. Friend the Member for Broxbourne. They can both prevent and then set aside afterwards the disposal or transfer of assets in order to avoid legitimate child support maintenance payments. That is important. All too often, money is transferred into different accounts—perhaps into a new girlfriend’s account—so that it cannot be touched, and someone then says, “Look at me. I’m penniless. I’ve got a couple of pounds in my bank account and no income.” Such things happen. As the Minister said, people are pretty savvy and have worked out ways to avoid their obligations in the past. The important message that needs to go out is that the
3 Jun 2008 : Column 676
net is closing, as was suggested by my hon. Friend the Member for Mid-Bedfordshire (Mrs. Dorries), who is another of my parliamentary neighbours.

Lords amendments Nos. 53 to 82, 99, 102 and 122 will put the removal of passports or identity cards on to the same basis as the removal of driving licences and the imposition of curfews. The commission will be required to go the courts in the first case to take away someone’s driving licence or to impose a curfew on them. It was therefore pretty surprising to me, my hon. Friend the Member for Forest of Dean and my noble Friend in another place, Lord Skelmersdale, that the Government intended to remove passports purely by administrative order and, moreover, not just by the commission’s staff. Let us remember that, as we heard earlier, many of CMEC’s functions could be contracted out, properly, to private businesses. So an individual, perhaps relatively lowly, employed by a private business somewhere could have the power to take away someone’s passport.

We understand the need to have the threat of taking away passports. Indeed, I was conscious of the fact that the Australian Child Support Agency was doing that some time ago, when the Select Committee on Work and Pensions visited Australia in the last Parliament to look at how its CSA seemed to work rather better than ours. I welcome that power—it is important—but I hope that it never has to be used. No one takes any joy in the fact that someone’s passport or ID card is taken away, but the threat of doing so is important to bear down on those people who try to avoid their responsibilities.

The Minister is right in that he and his parliamentary colleague the Minister in the Lords, Lord McKenzie of Luton, were rapped over the knuckles by the House of Lords Select Committee on the Constitution. The Committee’s report states that the Minister in this place was trivialising the removal of passports. He said that the holding of a passport

Many of us thought that that did not take into account the fact that we are a trading nation and have been for hundreds of years. Many people need to earn their living by going outside these shores to provide an income to their families and to the children of their former families. I am pleased that, after some persuasion by the House of Lords Select Committee on the Constitution, the Government changed their mind. However, I have a couple of questions about the removal of ID cards, which the Minister referred to earlier.

Next Section Index Home Page