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Kitty Ussher: I realise that I am remiss; I said that I was delighted to be here but I did not specifically say that I was delighted to be here under your chairmanship, Mr. Fraser. [Interruption.] You may take it as read, as suggested by my hon. Friend the Member for Warrington, North—the Whip—because that was certainly my intention.
I shall answer the points that were made, which were all good, but there is a fundamental confusion, and I apologise if I have not explained the regulations correctly. We are not making new policy with the CSA diversion provision. There is not a loophole that we suddenly realised people are exploiting and we need to plug. It is simply that the intent of the regulations that we had was not legally what we honestly thought that it was. When the upper tribunal judge held that the legal interpretation was different from what we thought it was, we realised that we simply needed to draft the provision differently to maintain the original policy intention, under which we had been operating and successfully making decisions. It is not that we suddenly decided that we needed to move further on pensions. Indeed, as the hon. Member for Northavon said, we are specifying pensions in the measure, but I suspect that that is what it will be used for in the majority of cases. It is simply a reclarification of the law. We are running to remain in the same place. That makes our statutory instrument less interesting from a policy point of view, but I hope that I have made a useful clarification.
The issue of company cars was raised. It is difficult to reply precisely without knowing the individual circumstances of every case. I am happy to look at individual cases that hon. Members from both sides of the House know of if they feel that a decision has been made incorrectly. However, perhaps I can explain the principles behind which the powers can be used.
There are already regulations to deal with a situation in which income is diverted before it goes into a pay packet or if some other scheme is in operation. We are able to get involved in the decision in such circumstances to see whether a diversion has taken place. This SI deals has in its scope situations in which income is diverted after it has been received. Pensions are a perfect example. A person might decide, under the new Treasury rules, to put, say, thousands of pounds from their pay packet into their pension and live off their partner’s income. We always thought we could pursue people for doing that, but there is a legal interpretation that says we cannot, so we are simply correcting the provisions.
Andrew Selous: I am pleased to hear the Minister’s reassurances and I of course accept exactly what she is saying. However, I am puzzled. I should like to take her back to a written reply from her predecessor, the hon. Member for Warwick and Leamington, who said:
“Very little evidence exists to suggest that non-resident parents are exploiting the current rules on pension contributions in a way which unreasonably reduces their child support liability.”—[Official Report, 8 July 2008; Vol. 478, c. 1545W.]
I happen to know that the Secretary of State for Scotland raised the case of one of his constituents with the Minister. Does the Department for Work and Pensions recognise that there is a problem? Will it go out there and look at any outstanding constituency cases with some determination to ensure that it stops?
Kitty Ussher: Obviously, some people are still doing those things, or the case to which I referred would not have come to tribunal, and we would not have realised that we had to tighten the law and reclarify the legal intent of the measure.
Both Opposition spokesmen talked about company cars. We are always looking at the situation. We are not proposing to make changes in these regulations because—this is our general view—if someone is clearly making a choice to divert income in a certain way, we think it can be covered by existing regulations. However, we do not automatically presume that we need to come down on someone who is taking a car rather than an income as if they were a non-resident parent who is trying to divert their income. That goes back to the point I just made. Depending on the circumstances of the case, we believe that we probably have the tools at our disposal if we think that someone is unreasonably playing with their entitlement in that regard. I will be happy consider any cases known to the hon. Member for South-West Bedfordshire that we do not have the tools to deal with. It is not that company cars are never relevant—they often are relevant—but we do not automatically presume that people who have company cars are trying to avoid their responsibilities. As I said, I am happy to look at individual cases.
Andrew Selous: Before the Minister leaves the issue of cars, I mentioned another case, not involving a company car. What if someone is self-employed and has a range of deductions or runs a small business? In a case from my constituency, the parent with care tells me that the non-resident parent is paying £675 a month to lease a BMW M3 convertible that costs £55,000. The gentleman is a chef; he does not need a car of that expense to cook food. However, the mother’s maintenance liability is £27 a week. I have raised that matter repeatedly with some of the Minister’s excellent staff and senior tax inspectors seconded to the CSA, but they tell me that there is nothing that they can do about it because it is has gone through the HMRC rules as allowable. Where child support is involved, there should be a different set of criteria because, to me and to that mother, the gentleman to whom I referred is unreasonably depriving his children of income. Before we leave the issue of cars, I owe it to my constituent to hear what the Minister has to say on that.
Kitty Ussher: I congratulate the hon. Gentleman on raising a constituency case in this environment. The provision to deal with such cases is called the lifestyle-inconsistent variation. If the hon. Gentleman writes me a note on the matter, I would be happy to look at it. I have seen cases in my constituency where, anecdotally, one has the sense that somebody is perhaps living a more affluent lifestyle than one would expect from the amount of maintenance that they are paying. If the parent with care wishes to do so, they can get that looked at. I do not know the details of the specific case raised by the hon. Gentleman, but if he wants to drop me a note, I am happy to have another look at it.
On retirement ages, we would not have to reassess the CSA liability monthly, quarterly or however it is phased in. It either applies when the assessment is done or it does not. If there is a change in a particular case, that would be a one-off event, and the commission can review an application and amend the assessment if the tolerance rules are met. I hope that that answers the question. My notes say that I have answered all the questions, so I hope that hon. Members will agree to the regulations.
Question put and agreed to.
That the Committee has considered the draft Child Support (Miscellaneous and Consequential Amendments) Regulations 2009.
5.3 pm
Committee rose.
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