Draft Child Support and Claims and Payments (Miscellaneous Amendments and Change to the Minimum Amount of Liability) Regulations 2013
The Committee consisted of the following Members:
† Anderson, Mr David (Blaydon) (Lab)
† Baron, Mr John (Basildon and Billericay) (Con)
Blears, Hazel (Salford and Eccles) (Lab)
† Blenkinsop, Tom (Middlesbrough South and East Cleveland) (Lab)
† Bradley, Karen (Staffordshire Moorlands) (Con)
† Cairns, Alun (Vale of Glamorgan) (Con)
† Drax, Richard (South Dorset) (Con)
† Fullbrook, Lorraine (South Ribble) (Con)
Hepburn, Mr Stephen (Jarrow) (Lab)
† McGuire, Mrs Anne (Stirling) (Lab)
† Mulholland, Greg (Leeds North West) (LD)
† Munn, Meg (Sheffield, Heeley) (Lab/Co-op)
Paisley, Ian (North Antrim) (DUP)
† Percy, Andrew (Brigg and Goole) (Con)
† Selous, Andrew (South West Bedfordshire) (Con)
Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)
† Webb, Steve (Minister of State, Department for Work and Pensions)
John-Paul Flaherty, Committee Clerk
† attended the Committee
Second Delegated Legislation Committee
Tuesday 18 June 2013
[Mr Charles Walker in the Chair]
Draft Child Support and Claims and Payments (Miscellaneous Amendments and Change to the Minimum Amount of Liability) Regulations 2013
2.30 pm
The Chair: Before I call the Minister to move the motion, anyone who would like to remove their jacket should please feel free to do so.
The Minister of State, Department for Work and Pensions (Steve Webb): I beg to move,
That the Committee has considered the draft Child Support and Claims and Payments (Miscellaneous Amendments and Change to the Minimum Amount of Liability) Regulations 2013.
As the Committee will know, the instrument was laid in draft on 20 May and I can confirm that I consider it compatible with the European convention on human rights. I hope that your injunction to take jackets off, Mr Walker, included putting thick coats on. I do not know whether everyone else is as cold as I am. In the spirit of its being freezing in the room and the regulations being relatively uncontentious, I will give the Committee the benefit of the short version.
Two main measures are contained in the regulations. The first relates to the flat rate for child support maintenance and the second relates to variations. The flat rate is an issue that we are familiar with. It has been £5 for a long time, but even normal indexation would have implied that it should have increased by now. We had originally thought to put it up to £10—the right hon. Member for Stirling and I have discussed that in Committee before, and she raised concerns that £10 was too much. Some stakeholders we talked to, even those representing parents with care, wondered whether £10 was too much. We reflected on those and other representations and concluded that £7 struck the right balance. It broadly keeps the flat rate at a similar percentage of the main jobseeker’s allowance rate as it was when it was originally announced. It is very much in the spirit of what has gone before. We have had to make consequential changes to the incremental rate that applies to income of between £100 and £200 a week to offset that change, so that when £200 is reached there are no strange kinks in the schedule. That is why the percentages will change in that range.
On the point about variations, as the Committee will know, in the 2012 system we take income data from Her Majesty’s Revenue and Customs. However, there will be occasions when we do not get those data from HMRC, or when they are out of date or are not supplied to HMRC. So, to give one example, someone who has significant savings income—up to £10,000, so below the tax threshold—might have their tax deducted at source and then never need to tell HMRC about it because it is being taxed properly. A parent with care might say,
“I want a variation, because there is so much unearned income not being taken into account in the assessment.” The regulations will allow us a variation to use such information that HMRC does not have. If HMRC had old income information, perhaps from a year back, and it was felt that that was not representative, we could use more recent data. Or if, as occasionally happens, the computer did not work and we did not get any information at all, we could use alternative sources of information. It is a matter of trying to get the assessment done promptly, which is part of the drive in the 2012 system.Finally, the regulations provide that if a variation would take the amount payable below the flat rate level, it should none the less be at least at the flat rate level, which seems fair to us.
I think these are relatively uncontentious regulations. The other place has already approved them, and I hope that they will simply lead to a more efficient, streamlined and fair child maintenance system. I commend them to the Committee.
2.33 pm
Mrs Anne McGuire (Stirling) (Lab): It is a delight to serve under your chairmanship, Mr Walker.
That was the shortest speech by a Minister from the Department for Work and Pensions since the Secretary of State’s opening contribution to the pensions debate yesterday. This must be a new trend in the Department. I thank the Minister for his opening remarks and for highlighting the details—well, some of the details—of the draft regulations. I am pleased that he has recognised not only our discussions in Committees but the representations made by stakeholders by reducing the proposed flat-rate contributions from £10, which was his initial view, to £7. It would be frankly bizarre if we opposed the regulations, as they are a step in the right direction and recognise the realities faced by many non-resident parents while also balancing the rights of children.
However, in order to make the Minister earn his crust this afternoon, perhaps I can put one or two questions to him which he might have answered in his long version. Some of them were raised in the other place, but it is important that we address them for the record here.
Paragraph 7.10 of the explanatory memorandum states that the regulations
“will come into force when the amendments made by the 2008 Act …are commenced for all purposes.”
Is it therefore intended that that will be when all new applicants are on the 2012 scheme? I should be grateful if the Minister would clarify what he expects to be the exact commencement date. I appreciate that in relation to the Child Support Agency, or what passes for it these days, the whole architecture of the process changes, but if he has some idea of that date perhaps he will convey it to the Committee.
I want to ask the Minister again about smoothing out the increases in liabilities. I know that the noble Lord Freud dealt with the regulations in another place, but there is still concern that there might be a cliff edge at the £200 a week level. Will the Minister give the Committee some confidence about whether a non-resident parent on £199 might be significantly better off than one on £201? He is well aware of the issue of cliff edges.
Will the Minister also elaborate on Lord Freud’s comments? He said:
“The Government are also committed to a wider review of the child maintenance calculation formula, with a particular focus on work incentives, once we have delivered the current raft of reforms.”—[Official Report, House of Lords, 12 June 2013; Vol. 745, c. GC377.]
It would be helpful to the Committee if he could at least share his thoughts on the stage of development that that has reached.
I thought that the Minister spoke quite nicely about the possibility of IT systems breaking down—those may not have been his exact words, but that was the implication. I wonder whether he wants to speculate on whether the DWP and HMRC systems are compatible enough to ensure that that would be an irregular occurrence. In the light of other DWP projects, I note that the pace of development of the new 2012 scheme has slowed somewhat. That has been held up as a virtue, which it probably is in this case. Given the history of child maintenance, slowing the pace may be a good thing. I hope that, after the long gestation period from 1993 to where we are now, politicians and officials can get things right; that would be helpful.
Finally, will the Minister share some of the information on the results of the pathfinders? Exactly how many cases were dealt with through those, and what lessons were learned? He knows that the closing of cases under the 1993 and 2003 schemes is still something of a cause for concern, and that there is a fear that children will be losers and will be plunged, along with their resident parent, into poverty or deeper poverty. The regulations have a narrow focus, however, and we welcome the fact that no charging will be introduced and that the 2012 system is open to all applicants and is seen to be working well. Those two things go hand in hand. We also welcome the reduction of the collection fee. That is certainly welcome and a step in the right direction.
As I have said, we have no objections to the regulations and will not divide the Committee, but perhaps the Minister can clarify those points.
2.38 pm
Steve Webb: I am grateful to the right hon. Lady for her constructive response, and that of her colleagues, and I hope I can answer her questions.
The right hon. Lady perfectly properly asked when the provisions would commence. As she said, it will be when everyone goes on to the new system. I remind the Committee that at the moment, new cases involving four or more children of the same non-resident parent will go on the new system. Later in the summer that will be extended to include cases with two children, and by the end of the year—that is roughly our time scale—any new child support case will go on the new system. Once that is all up and running the provisions will come into force.
As to the cliff edge, I assure the right hon. Lady that the point of the flat rate and the revised tapers is to avoid there being one. For example, at £199, with a flat rate of £7 and 17% on the bit above £100, someone would pay £23.83, whereas 12% at £200 is £24. That is precisely the smooth progression that she would want.
She asked about longer-term review; I would emphasise “longer-term” rather than “review”. Those in a band of earnings between £100 and £200 have a taper, so that
every extra £1 means a significant amount of extra maintenance, and there are also benefit tapers, national insurance and other things. We need to consider all those things in the round, but it is fair to say that while we are rolling out a new system and closing cases on an industrial scale, the appetite for a major review is limited. However, we will come back to the matter.The right hon. Lady asked about the IT systems. As she said, we are doing a pathfinder. In the early days of our new system talking to the HMRC system, there were times when the data did not come across. I am advised that the connection now works well about 90% of the time, but as she rightly said, the whole point is to be confident that it works before moving on to the next stage. There are clearly occasions when it does not work, but we are learning from those and trying to minimise them.
The right hon. Lady discussed the slowing of the pathfinder. We were about six weeks late starting the provision for four-child cases to go on the new system; perhaps that is what she is referring to. We envisage that by the end of this year, all new cases will go on the 2012 system.
The right hon. Lady asked about information from the pathfinders. I find myself slightly torn. I am keen to give the House as much information as I can, but because the data that we have involve management information for new computer systems, they are not robustly tested. There are those who occasionally criticise us for pumping out statistics before they have been robustly checked.
Steve Webb: I know it is shocking, but there are those who do. We will publish a strategy for how we will tell the House about that information. I am pressing for us to tell the House as much as possible as soon as possible, while reflecting the fact that the data are not terribly robust. As the right hon. Lady can imagine, the number of new cases coming in each week involving four children by the same non-resident parent is pretty small. However, the system will gear up to cases involving two children in the summer, and eventually to every new case. She will know from her ministerial experience what scale we are talking about.
Finally, the right hon. Lady asked about case closure. I am acutely aware of that concern. The point about case closure is that people will be in the child maintenance system—the CSA. We will close their case there, and they will have the option to make a fresh application to the new system, but ideally, if possible, they will make a family-based arrangement. Case closure is an attempt to trigger fresh thought, particularly where things are working, relationships are in place and money is flowing, so that the CSA can get out of the act.
However, the right hon. Lady is absolutely right: in hard-fought cases involving a lot of enforcement action, we are keen to ensure that we do not disrupt the flow of maintenance. I am sure that she will have read our case closure strategy, which sets out meticulous strategies—for example, asking for someone to authorise us to take a debit card payment, so that if they miss a month’s payment, we have a month in the bank while we get on with enforcement in the meantime. Also, the general
idea on case closure is to give people who have not been reliable payers a chance to prove that they are reliable payers. If they do not prove that, we will not give them the opportunity to go outside the statutory system.I entirely share the right hon. Lady’s concern. The last thing that we want—and that all hon. Members who have worked hard with their constituents on CSA cases want—is for us to come along and disrupt the lot of it.
Mrs McGuire: Would the Minister therefore consider creating a forum for that detailed information to be exported to Members of Parliament, who have to deal with such cases and who might not appreciate the various elements of the process that the Minister has described?
Steve Webb: I am happy to do so. None of this will arise until case closure starts. We will not be doing any of it until next year. After next year—provisionally, in principle, early next year—we will identify cases that will close six months thence, in the autumn. Before we start writing to people, we will ensure that hon. Members know what is coming.
I sense a good deal of consensus on the regulations, which will bring the flat rate up to date with current values and tidy up some of the issues about ensuring that absent or inaccurate HMRC information can be replaced by something else. I welcome the fact that the House seems to support them, and I commend them to the Committee.