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Lord Mackay of Ardbrecknish: My Lords, I am grateful to both the noble Lord and the noble Baroness for welcoming the Statement. I suppose it would have been too much to expect them to resist the old adage about glasshouses and throwing stones, and they threw a few. I suppose I could almost excuse myself as regards being in the glasshouse in that I was not in your Lordships' House when this particular Act was passed. However, I will not take refuge in that safety valve.

My colleagues in the Department of Social Security have looked long and hard at the workings of this Act. I do not think either of the two speakers spoke in any way against the principles of the Act this afternoon in that we are still all agreed—as the noble Baroness, Lady Hollis, said —that it is right and proper that the parent in a particular case should make a contribution to his, or indeed her, children. However, it is more often a case of his children. That is something which does not divide us and we continue to want that. We want it done effectively. As I said, one of the problems with the working of the Act was that many absent parents were opposed to it and the money which ought to have flowed to the parent with care did not. I hope that what I have outlined today will mean that the money will begin to flow.

I am grateful for the welcome given by both the noble Baroness and the noble Earl for the changes to the formula and for the principle of having an appeals system which will allow departures from the formula. I am particularly grateful to the noble Earl, Lord Russell, for his kind words about my honourable friend Mr. Alistair Burt, who I know has spent many months deeply engrossed in this subject trying to see how we can improve the position.

I shall answer some of the particular points raised today. I was asked about the cases which will be deferred and about when they will be taken on. The proposal currently is that they should be deferred indefinitely in order to allow the new departure system to be introduced and to clear the agency's books. Quite frankly it would be pointless for me to commit myself to a date at some time in the future if the agency had not cleared its feet, so to speak, and was then overwhelmed by another bunch of cases coming in on top of the work it already had. I cannot remember who mentioned this point but I appreciate that that may not be the answer wished for and that that person would have preferred me to give a date. Dare I say that I think that is the sensible and pragmatic answer when dealing with that question?

The noble Baroness, Lady Hollis, asked me about maintenance disregard. I believe the noble Earl also raised that point. Disregard in income support would, of course, make it more difficult for the parent with care to be better off in work than out of work because clearly she would have to earn more to lift herself and her children out of the benefit in those cases. It would also be very costly. While I appreciate that some Members of your Lordships' House do not seem to mind that, I

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think there are others who know that that is a major determinant of all Government policy. Indeed, even Members of the Opposition in another place seem to think that making promises about spending more taxpayers' money is no longer in fashion. We hope that maintenance credit will provide a helpful sum of money when someone moves from being out of work to being in work. I thought one of the things we were agreed on was that there is a difficult bridge between being out of work and being in work. We hope that this particular maintenance credit will help a parent with care to cross that bridge.

On the same subject, the question then arises of parents with care being worse off when the maintenance floats them off benefit. In this regard maintenance is treated no differently to other forms of income which, of course, can also float the parent with care off benefit. But they can still qualify for help with such matters as National Health Service charges; for example, dental and prescription charges. Family credit rates, when they were originally set, included an amount to reflect the cost of school meals. Therefore, there is help in that regard.

The noble Earl, Lord Russell, asked how the formula changes were to be brought in. I said that they would be brought in this coming April; that is, April 1995. The measures will be introduced by regulations, using the power in Schedule 1 of the Child Support Act to make regulations relating to exempt income. I shall certainly—as I always do—study the remarks of the noble and learned Lord, Lord Simon of Glaisdale, on transitional powers, to which I was referred by the noble Earl, Lord Russell. However, I do not think there are any transitional powers involved in this regard.

The noble Earl asked an interesting question about the cost of going to and from work. This is a difficult matter. We are proposing a broad brush approach because it would be far too complicated to do otherwise. When the departures I have mentioned arise, some of the detail of this matter may then become an important point as regards the appeal for a departure. I cannot say whether that may or may not involve the cost of a motor car, but certainly I can envisage cases where that might be prayed in aid as a reason for the departure.

I hope I have answered most of the points raised. I have little doubt that when the legislation I have foreshadowed comes to your Lordships' House we will be able to look at it in greater detail. I am grateful for the welcome which both speakers gave to this Statement and I very much hope that we can proceed to make this agency run properly for the benefit of the absent parent, the parent with care, the children and the taxpayer.

4.16 p.m.

Baroness Faithfull: My Lords, I hope I may ask my noble friend the Minister two questions. The first concerns the staff. Will the staff in the Child Support Agency be trained, as I think they have a heavy load? I would suggest that there are not enough staff and that this Bill cannot be properly implemented without good and adequate staff. Secondly, as regards parents with care, are we basing much of our work on the Australian

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pattern or are we considering the European pattern? In France, for example, the parent with care is given the equivalent of a teacher's salary to stay at home and look after her very young children. Are we considering what is being done on the Continent—in as much as we are, so to speak, in Europe—or are we basing our work on the Australian pattern which I understand is not a great success?

Lord Mackay of Ardbrecknish: My Lords, I assure my noble friend that we are well aware of the importance of the staff of the agency. Indeed, additional staff were taken on to deal with the problems which were arising. We are equally aware of the need for the staff of the agency to be well trained in the procedures to make sure that some of the hiccups that have occurred do not occur again. I can give my noble friend the assurance that we will be considering the numbers of staff and the important matter of their training. In the months leading up to this Statement my honourable and right honourable friends and their advisers have considered many of the systems of support around the world, including the Australian one.

I listened to what my noble friend said about paying the parent with care to stay at home and look after the child. However, I must tell my noble friend that while I understand that argument, it goes a good deal wider than just the parent with care in a divorce case and would also encompass all mothers who would prefer to stay at home and look after their children. I think my noble friend is perhaps opening a much wider question than we are addressing in this Statement.

Lord Simon of Glaisdale: My Lords, when your Lordships were debating the Child Support Bill was it not clearly foreseen and prophesied that that piece of bureaucratic aggrandisement at the expense of the magistrature would cause exactly the sort of hardships, injustices and expenses which are now at last being recognised? In view of that, would it not be desirable to recognise that the previous system was superior; namely, trial by magistrates' courts close to the people concerned, using the judgment and discretion, which seem now to be claimed as a statutory innovation, in order to take account of all the multifariously different circumstances that arise in these cases?

Finally, I should like to ask the noble Lord about the expenses. When we discussed the Bill, large sums were paraded as being likely to inure to the Exchequer by way of savings. Will the noble Lord remind your Lordships' House what those were? How do they compare with any savings which are likely to inure under the system as modified, including the modifications by use of the transitory regulations?

Lord Mackay of Ardbrecknish: My Lords, with some reluctance I must disagree with the noble and learned Lord, Lord Simon of Glaisdale, about the previous system. It was not by any means a perfect system. The assessments were made very much at the discretion of a variety of courts. The result was uncertain and inconsistent and in many cases resulted in failure to deliver payments. Only one third of parents with care actually received maintenance regularly. The costs fell on the taxpayer. I explained a few moments

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ago that I was not a Member of this House when the Bill was debated. Therefore, I am afraid that I cannot remind the noble and learned Lord—although I suspect that he does not need to be reminded—how much it was claimed would be saved by the Child Support Agency.

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