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Baroness Buscombe: My Lords, I thank the Minister for her response and beg leave to withdraw the amendment

Amendment, by leave, withdrawn.

[Amendment No. 29 not moved.]

Schedule 2 [Substituted Schedules 4A and 4B to the 1991 Act]:

[Amendments Nos. 30 and 31 not moved.]

6 p.m.

Lord Higgins moved Amendment No. 32

The noble Lord said: My Lords, it may be convenient to discuss with this my Amendments Nos. 33 to 46, as well as Amendment No. 47, tabled by the noble Earl, Lord Russell, and also included in the list, which appears much later in our proceedings than I had expected, given the initial grouping.

The amendments are about variations. It is common ground across the House that there is an overwhelming case for simplifying the Child Support Agency arrangements. However, the more simple one seeks to make the system, the more important become the variations, or departures, as they are also called. The amendments spell out various items that need to be considered. Our aim is to enable the House to take a view on whether each item is an appropriate one to take into account.

I am confused by the lay-out of the Bill on page 102, where,

    "Part II

    Substituted Schedule 4B"

appears above,

    "Schedule 4B"

I presume that that is because of subsequent amendments at an earlier stage.

Amendment No. 32 deletes,

    "'special expenses' means the whole, or any amount above a prescribed amount, or any prescribed part, of expenses"

and replaces those words with,

    "'special expenses' means any expenses".

The other amendments specify what those expenses might be. The question is what one should deduct from the income of the absent parent when deciding how much he ought to contribute towards maintenance before arriving at the percentage that he will pay for each child.

Amendment No. 33 refers to,

    "exceptionally high travel costs, exceptionally high housing costs, travel to work costs, illness or disability costs."

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Some of those items are reflected in later amendments, such as Amendments Nos. 34 and 35. A number of those who have been asked to contribute to the maintenance of a child under the existing legislation have stressed that to earn enough to pay for that maintenance they have to travel to work. On some occasions, that can involve considerable cost. The question is whether those costs should be taken into account. I should be grateful for the Minister's views.

Amendment No. 36 would take account of relatives such as elderly parents and Amendment No. 37 relates to payment by the absent parent towards the education of children from the first or second marriage. The Bill says that the absent parent's income can be adjusted to take account of school fees, but only for boarding school education. No doubt the Minister will comment on that.

Another important issue is whether mortgage payments should be taken into account, even if the non-resident parent keeps a less than 50 per cent. interest in the matrimonial home. Expenses relating to handicapped children or debts incurred by the parents before the relationship broke up are other items that could be taken into account.

Our aim is to list the various circumstances that could be taken into account. Obviously, if they were all taken into account, we would almost be back where we started. Some of the possible items have greater merit than others. Debts incurred during the previous relationship and the situation with regard to the matrimonial home are two important examples.

At this stage, I am merely asking for the Minister's reaction to the various items that are specified. In the light of what she says, we shall consider whether we ought to return to the matter on Third Reading. I beg to move.

Earl Russell: My Lords, a good many years ago I had to attend a conference in the middle of Windsor Great Park. My host had obligingly provided me with a map, on which the route appeared to be easy to follow--it was a matter of first right and first left. After several hours driving round Windsor Great Park, I finally succeeded in arriving very late, very hungry and very irritated. I tackled my host about the map. He said, "Oh, but I left out all the turnings that you did not need to take for the sake of simplicity."

Lord Higgins: That sounds somewhat like the political thread that the Liberal party has pursued over a number of years, going left, right and left again.

Baroness Hollis of Heigham: And none of the electorate has been able to follow the map.

Earl Russell: None of the electorate?

Baroness Hollis of Heigham: Only a very modest proportion of the electorate.

Earl Russell: At the last local elections, it happened to be just about as big a proportion of the electorate as voted for the noble Baroness's party. Is not that also significant?

Baroness Hollis of Heigham: But most of the electorate decided that the maps produced by all the parties were not worth reading or studying.

Earl Russell: And that is a reproach to us all, which we must all accept equally. I am sure that the Minister

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understands the point of my story about simplicity. I have noticed over the years that governments get into trouble whenever they set out to produce a Bill that is driven by a single, isolated purpose. I think of football spectators and dangerous dogs. The Minister has explained today and on many other occasions that the whole of the Bill is driven by the desire for simplicity. It will not achieve that.

I have put my name to this group of amendments and tabled my own Amendment No. 47, which I understand to be consequential on Amendment No. 46, tabled by the noble Lord, Lord Higgins, which authorises the taking into account of any other circumstances. It is the proverbial "some other reason why".

In Committee, the Minister said:

    "We believe that parents should put children, not other expenses, first".".--[Official Report, 8/5/00; col. 1333.]

I do not think that she will dispute that that is a fair summary of her view. However, the situation is not that simple. In present law, we are legally obliged to put debts to the Crown before debts to anything else. That has been a legal principle since the reign of King John. I hear of no proposal from the Treasury that it should be changed. Frankly, I should be extremely surprised to hear of any such proposal.

If a parent owes a back payment of income tax of many thousands of pounds, they are not legally allowed to put their child's maintenance before it.

Baroness Hollis of Heigham: I am sure that the noble Earl will confirm that on every occasion I have said that people should pay their taxes and their national insurance first and then pay their child support from the net income. There is no difference between us on that.

Earl Russell: The Minister certainly did not say that on the occasion that I quoted. I invite her to check it. I hope that she will repeat what she has just said on every occasion in future.

The other exception is expenditure that is necessary to earn the income out of which the maintenance shall be paid. Someone who cannot earn an income cannot pay maintenance. The Minister knows as well as I do that there were a considerable number of such cases under the 1991 Act. We hope that there may be slightly fewer under the Bill, because the level of maintenance has been set lower for everybody, regardless of whether they have special expenses, in the hope of covering any special expenses. Of course, that means less money for children in some cases where it would not have been necessary. But it will not necessarily cover the special expenses of those who have them. For example, some people who commute to work in London have to commute considerable distances. Their expenses are not necessarily on a level with those who walk to work.

There is no allowance for payment for elderly relatives, and I am extremely glad that the noble Lord, Lord Higgins, has included that in an amendment.

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Beyond a point, very elderly relatives may be as totally dependent as children. It is not self-evident that the children necessarily, in all cases, come above the elderly relatives. There are many people, known personally to me, on whom it would be extremely difficult to enforce any such principle because they would believe that they were being asked to do something morally wrong.

Beyond that, there is the fact that circumstances may arise, as they have done since 1991, which no one now foresees. It is in the essence of the principle of the Bill that no variation may be prescribed unless it has already been set out in regulations. Anything which has not been foreseen by those who draft regulations cannot be responded to.

I am sure that the Minister remembers a case about which we corresponded. When we last heard, the facts were in dispute. But let us assume that they were as alleged, because in some cases, they could be. This was a woman, with a daughter, who had remarried. Her daughter eloped with her second husband, or so it was alleged. She felt a conscientious objection to paying maintenance in those circumstances.

Let us take the case of the man who made a large capital settlement on his wife. She remarried. Her husband invested in property bought at the peak of the boom in 1988 and then went bankrupt. The first husband was dunned a second time. I had a long correspondence about that with the Minister who was entirely sympathetic. But the legislation allowed no discretion. It was impossible to respond to the unforeseen circumstance. That simply is not the real world. If we do not delete that provision in Schedule 2, which says that nothing may be prescribed unless it is included in regulations, the Minister will find herself in Windsor Great Park without a map.

6.15 p.m.

Baroness Hollis of Heigham: My Lords, the amendments which we discussed earlier surrounded the more technical aspects of variations. These amendments relate to the grounds on which a variation from the normal rules may be agreed. We discussed many of them in Committee so I am rather surprised that some of the amendments have been retabled. However, I am happy to try to respond to your Lordships' queries.

We are replacing a complex formula with a simple system of rates which will lead to a better, faster, fairer and more transparent support system. A calculation will be provided in which we recognise that every parent has different kinds of commitments. But the new rates will leave most with at least 75 per cent and on average more like 80 per cent--given that the average lone-parent family consists of under 1½ children--of their net income to meet those expenses.

But we recognise that there will always be cases where it is inappropriate to apply the normal rules without some flexibility. Therefore, it may be worth reminding your Lordships what we are seeking to do.

Essentially, we are saying that there are to be two broad grounds for variations. One is where the information given to the CSA on the non-resident

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parent's income is incorrect and invalid and needs to be corrected. There may or may not be fraud. The second is where there are exceptional costs in supporting the children of the first family and where the maintenance payment, were that to come on top, unabated, would be unfair. There are those two simple grounds.

In other words, we are determined to keep a tight rein on the grounds on which that variation can be agreed. A shopping list of amendments has been suggested this evening--that is, to look at travel-to-work costs, housing costs, the costs of supporting elderly relatives, and other costs. It was said in the other place that,

    "if they load a new set of variations on to the simplified formula, the system will quickly revert to something approximating the present highly complex system".

That was said not by my right honourable friend Mr Jeff Rooker or my honourable friend Angela Eagle, who are the Ministers, but by a Conservative Member of the Committee, Edward Leigh. The noble Lord, Lord Higgins, made the point tonight that if the Government were minded to go in that direction, we should have taken all of the complexity out of the assessment and put it back in again in the form of variations or appeals. A very high proportion of current cases would thereby go on to appeals or variations because different assessments would come into play.

What is the point? Why bother with reforms of the agency at all if all we are doing is displacing complexity from the entry, which is assessment, to an exit point, which is variation? Why bother? Why not stay with the existing complexity of the current scheme? That is what it would mean. Let us be in no doubt. If you take into account housing costs, you must also take into account travel-to-work costs. We shall be reinventing the present complexity. For example, there are 50 different mortgage systems. Every time the rate changes, all those calculations will need to be redone. As a result, delays, errors and arrears will creep into the system. Why bother? We would be chasing paper rather than chasing the parents who should be paying the maintenance.

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