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Baroness Hollis of Heigham: My Lords, this group of amendments, so clearly and ably spoken to by the noble Baroness, Lady Buscombe, concerns the relationship between the courts and the CSA and their relative jurisdictions in the context of child maintenance. It is important that the reforms we are proposing provide a service for all parents and children who need to settle child maintenance issues. The new relationship between the CSA and the courts provided by Clause 2 ensures that this will be a reality.

The simple and predictable rates of child support liability will help parents, regardless of whether they are on benefit, earning modest wages or are extremely wealthy. We are determined to ensure that there is no "two-tier" child maintenance system--namely, one for the rich and one for the poor--in which wealthy non-resident parents would be able to impose child maintenance arrangements that would not be in the interests of their children and would take no account of the child support rates.

Too often in the past--this is the precise reason why the party opposite established the CSA under the 1991 Act, with our support--that is exactly what happened in the courts. Inconsistent and unpredictable rates of child maintenance were imposed. There was an

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increasing trend for "clean-break" settlements where regular maintenance payments were traded for property or capital transfers. But the central point of our position is that non-resident parents cannot make a "clean break" from their children.

We accept entirely that there are conflicting principles in this area, but the result of those arrangements was that, too often, non-resident parents were able to avoid any ongoing responsibility for their children because once they had made over capital in the form of the matrimonial home, the taxpayer then had to pick up the benefit bill. It is for this reason that we propose to change the system.

Provisions in the Child Support Act 1991--which, as I have said, we supported--established an administrative mechanism for setting levels of child maintenance and, where required, for collecting maintenance payments on behalf of the children concerned. When the previous government introduced that Act, they clearly envisaged a time when all child support matters would be settled by the agency; that is, the agency would oversee all child support decisions and impose that figure on the courts. However, it quickly became clear to the Conservatives that the CSA was struggling to keep up with its caseload. As a result, in 1995 the then government deferred indefinitely the take-on of court cases, but the long-term aim was still that the CSA should eventually take away from the courts all jurisdiction for child maintenance matters.

Whether we should return to that principle--namely, that the CSA could present a fait accompli to the courts--was something that was raised during the consultation process on the child support Green Paper. Some respondents feared that this would create one law for the rich and another for the poor. Furthermore, we had our own concerns. While it is right that, in cases where arrangements for supporting the children do not involve the taxpayer--so-called "private" cases--the parents should be able to choose whether to apply for child support, equally, we could not allow parents with care on income support to regard child support as voluntary; otherwise the taxpayer would be supporting reluctant and irresponsible fathers. But--this is the key point here--every year at least 10 per cent of private cases move on to benefit and something of that percentage on benefit become private cases. It is clear that it is impossible to run parallel jurisdictions.

There is a great deal of movement in this area. Given our proposal that low earners--those on working families' tax credit--will in future be private cases, we must anticipate that during each summer holiday, some of those parents will need to move back on to income support because they cannot sustain their jobs. As a result, we are likely to see the movement between private and benefit cases increase rather than decrease. That would mean that in many cases--although obviously it will be less likely as regards the low paid--maintenance arranged by the courts would have to be overturned by the CSA as benefit became payable for the children.

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We also listened carefully to the views of lawyers, judges and others who wanted court jurisdiction in this area to remain as now. Some wanted more powers to be given to the courts. Many others wanted the courts to operate the child support rates, but to have the discretion to move away from them. In the end, we came to the conclusion that giving back to the courts some of the jurisdiction that they had lost, or alternatively the total removal of court jurisdiction (imposing a flat-rate CSA system on them), would be unsatisfactory as regards what we are seeking to do.

Following the original Conservative line and removing all power to set child maintenance from the courts would deny parents the right to agree to depart from the child support rate if that is in the children's best interests (where benefit is not involved) and to have the agreement converted to a court order, perhaps along with other financial arrangements. Parents could well propose to pay above or below the figure, for example, in order to meet school fees and so forth, which would be in everyone's best interests. Alternatively, they may wish to accept other financial responsibilities in lieu. If such arrangements can be agreed amicably so that neither side feels, so to speak, hard done by, that would, of course, be a proper way forward and the state would have no interest at stake as regards the taxpayer. We did not want to undermine the capacity of parents to come to a different arrangement where consent for that different arrangement remains in place because both sides see it as in the best interests of the children. That is why we are not seeking to impose CSA rates a priori directly on to the courts.

However, while consent remains, either parent will be able to apply to the CSA to calculate and collect child maintenance if court-based arrangements prove to be unsatisfactory. They can return to the CSA and accept instead the CSA-calculated formula. Crucially, Clause 2 will not apply to existing court orders and use of the CSA's child maintenance service by such parents will not be available until after a new court order has been in place for at least a year. Parents who wish to transfer to child support will have to give at least two months' notice. Picking up the point identified by the noble Baroness, Lady Buscombe, we want to allow parents and their lawyers time to mediate and renegotiate new voluntary agreements which are satisfactory to all involved.

The trigger might be that one partner or the other has new family arrangements and as a result agreements are no longer satisfactory. They may want to return to the CSA being unable to resolve the matter by mediation. Knowing that either party can go to the CSA, the additional two months' grace might allow them to go to mediation and not involve the CSA. That is the point of the provision.

We believe that it is a sensible proposal which will encourage parents, lawyers and the courts to come to child maintenance arrangements in the shadow of the CSA. All parties will know that either parent, having been to court, can turn to the CSA in future and that

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it would therefore be sensible to determine child maintenance broadly in line with the simple and predictable child support rates.

In response to the noble Baroness, Lady Buscombe, perhaps I may ask what the lawyers would advise their clients to do in such a case. The lawyer of a non-resident father would say to him, "Don't go below the CSA rate and reduce your property or spousal maintenance because if she becomes greedy"--and I use that word advisedly--"she will up the child maintenance by going to the CSA". He will advise the father not to go below the CSA rate because if he does the settlement may be revisited. What will the mother's lawyer say to her, the parent with care? He will say, "Don't go for more than the CSA rate and reduce your spousal maintenance or property accordingly because if he becomes greedy he will go back to the CSA".

So what have we done? Instead of arguing between the two of them about child maintenance, it will become "forgiven" because both lawyers will know that, unless they can be absolutely confident that their clients will continue to agree into the far distant future, they protect their clients' best interest by adopting the CSA rates and debating all the other elements; for example, the property, the pension, spousal maintenance, the savings, the PEPs and the TESSAs. They will depart from the child support arrangement only when both parties agree and when both lawyers are confident that they will remain in agreement. The result will not be more conflict, as the noble Baroness, Lady Buscombe, suggested, but less. There will be more mediation rather than less; more negotiation rather than less.

In Committee, I said that we were trying to set up a Mexican stand-off. Yesterday, I was talking to some senior family lawyers who gave--I was going to say "support", but that might be too strong; they accepted the basis for the provision and made it clear to us that with certain conditions they could make it work. They said to me, "You said that you were setting up a Mexican stand-off. We have decided that you are setting up a Mexican wave!" I thought that was rather nice and I agreed entirely. All parties will agree a common basis.

Clause 2 will ensure that a two-tier system between the courts and the CSA will not develop. It will encourage courts in the future to make consent orders in the shadow of our rates because after a year either parent will have the option of turning to the CSA. I am sure that as a result their lawyers will agree to stick with it. Amendments Nos. 10 to 14 would take us back to the past and therefore I hope that the noble Baroness will accept our arguments.

The noble Baroness went on to explain Amendment No. 15. It appears to be designed to remove a non-resident parent's ability to apply for a child support calculation if there is a court order, made after the reforms are introduced, in force. Parents with care would still be able to apply to the CSA, but only where the non-resident parent was not complying with the court order in terms of regular, reliable maintenance. It cannot be right to give access to child support solely

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to a parent with care; and why should she be prevented from seeking a child support calculation when the non-resident parent continues to make payments under a court order which she now thinks is unfair?

However, I should like some elucidation from the noble Baroness. Is she suggesting that the CSA must collect whatever formula the courts have determined for child support? If that is what she is proposing--and I believe that it is--every person who comes to the CSA from a court settlement will have applied to him or her, not the CSA rate, but an individually determined CSA figure which the CSA will have to chase. Arrears must be calculated, as must any other considerations which come into play; for instance, another child. I believe the noble Baroness is saying that for a raft of cases manual transactions must be done. Whereas everyone else will receive 15, 20 or 25 per cent, this person will receive 8 per cent, this person 10 per cent, this person 16¼ per cent and that person 18¾ per cent, according to whatever the courts have decided. The staff of the CSA would have to chase those percentages on the basis of an income which may continue to change because of the court agreement. That would totally undermine the simplicity of the CSA in collecting its rate; the 15, 20 or 25 per cent.

The amendment seeks to limit the role of the CSA to a collection agency, including collecting amounts which we do not believe are adequate and which the parent with care may not believe to be adequate, resulting perhaps in unreliable payment.

5.15 p.m.

Baroness Buscombe: My Lords, I thank the Minister for giving way. My understanding of the amendment is that if the parent with care is dissatisfied with the court arrangements because payments are not being reliably made, he or she can have the option of going to the CSA to have the court order overturned. That is the meaning behind Amendment No. 15.

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