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Is it unfair or unreasonable to ask for a small contribution to the cost of running a child maintenance system against a backdrop of that financial support? I remind noble Lords that, as Frank Field said, there is no offset any more; it is money on top; it is disregarded. A lot of the debate we had when CSA started in the 1990s and was so controversial, and in the early 2000s, was framed by the concept that it was money going from the non-resident to the Treasury. Between 2000 and 2010, we moved to a 100 per cent disregard. That is the fundamental difference of which I remind noble Lords.

The next point is that we have committed to reviewing the charging powers and laying the review before Parliament 30 months after introduction. That is to ensure that we are able to test properly whether the intended incentive effects of the charges are realised and that we get the behavioural impact of the charging regime.

Again, simply, we are looking at a 1:2 charging regime in round terms, which is intended to incentivise both sides to reach agreement between them rather than going through the state system as the first option. One reason that it is so important that we encourage both sides to go independently is because research tells us that the children are better off if the parents can agree between them rather than using the state system.

I, and the Government, have the utmost respect for my noble and learned friend, Lord Mackay, and the intention behind the original amendment laid on charging for child maintenance services. The problem of asking for a test to establish when the parent with care has gone through a process is that it may not be a real test-anyone can say, "Yes, I have been through a process". If that is the case, we will end up with everyone using the system as the first option. If it is a real test, we will have to go through all the work of checking whether they have made efforts and the rights and wrongs, and we will be pulled down the slippery slope that we are so keen to avoid. Because we would be pulling people into the system, that would have a substantial cost because of the pure volumes.

Charging must have a role in the new system to ensure that we do not repeat the failings of the CSA. The proposed charges create an incentive for parents to collaborate and take responsibility.

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As a direct result of the concerns expressed in this House, we have also changed the fees to enter the system, to avoid the parent with care being deterred from using the state system. We have announced that we are reducing the maximum charge from £100 to £20 across the piece to ensure that it is not a potential barrier to entry. We are offering a very good service for that £20 in that we will be looking at the non-resident parent's earnings, and that will be a real benefit for the parent with care.

With regard to reducing the maximum charge and completing the review, when we know how the system has shaken out we can ask whether we have got the figures right and whether the charges are right. That is the point of the review: we can ask whether we are getting the behavioural responses that we need. I hope that I have laid out the issues adequately. I beg to move.

Motion H1 had been substituted by Motion H1A.

Motion H1A (as an amendment to Motion H)

Moved by Lord Boswell of Aynho

73BA: Insert the following new Clause-


In section 6 of the Child Maintenance and Other Payments Act 2008 (fees), in subsection (2)-

(a) in paragraph (d), at the end there is inserted "(including provision for the apportionment of fees and the matters to be taken into account in determining an apportionment)";

(b) in paragraph (g), "waiver" is repealed;

(c) after paragraph (g) there is inserted-

"(h) about waiver of fees (including the matters to be taken into account in determining a waiver).""

Lord Boswell of Aynho:My Lords, in moving this amendment in lieu, I am all too painfully conscious of the unavoidable absence of my noble and learned friend Lord Mackay of Clashfern. I am equally aware that on the occasion when he moved his amendment, which was dramatically endorsed by this House with an eloquent and decisive majority, I myself was unable to attend, not as a matter of self-absenting but because I was then engaged in Strasbourg on parliamentary duties with the Council of Europe. I seek to rectify that omission not only by studying the past amendment but by returning to the case which was so eloquently put by my noble and learned friend on an amendment to which, for the record, I had been a co-signatory. We have subsequently discussed the course of events. I also say for the avoidance of doubt that I have no difficulty at all with the alternative amendment in lieu, which is being put forward by the noble and learned Baroness, Lady Butler-Sloss.

This is one of the most difficult areas of social policy. Successive Secretaries of State, from my noble friend Lord Newton of Braintree-whom I have known for many years and with whom I have discussed this

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matter in extenso-onwards, regardless of their politics, have been united in their inability to find a satisfactory answer to situations where parental relations have broken down or where any suggestion of maintenance is aggravating that breakdown. We are all trying to find an approach which overcomes this. I say to the higher students of these matters that this is now my third version of an amendment in an effort to get some thoughts right. We want to meet the case of substance: how to help parents with care and their children. At the same time, we do not want to impose significant strain on the public finances or, taking up the point that the Minister made in explaining the case tonight, to set any perverse incentive towards intransigence on the part of either parent concerned. I know that Ministers are as anxious to avoid that as we all are.

8.45 pm

The case for excluding any charge on parents with care in cases where collaboration is clearly impossible was summarised by my noble and learned friend Lord Mackay of Clashfern in a single sentence:

"I do not believe that it is fair to require them to pay charges when they are not responsible for creating the need for the use of the service".

He continued by explaining:

"The obligation to maintain children ... subsists for so long as the child needs maintenance and the parent lives".-[Official Report, 25/1/12; col. 1090.]

He added that this is a completely separate issue from other matters; for example, the issue of contact. I should also like to pick up the words of my noble friend Lord De Mauley, the Minister, who said:

"At the heart of the new scheme will be tough enforcement and collection measures when parents fail to pay maintenance".-[Official Report, 25/1/12; col. 1083.]

I add to that my gloss that he was emphasising the parental failure to pay maintenance, not the failure to receive maintenance.

The emphasis rightly of this House and its thinking is on pursuit of the delinquent absent parent, not on imposing charges on parents with care, which would therefore be netted off against their children's maintenance entitlement. To some extent I agree, as I did at the time, with the Henshaw report's recommendations on charging for what is a very expensive public service. However, I am anxious to spare those who suffer from non-compliance rather than those who perpetrate it. That is quite separate from wider issues about who was responsible for the failure of the relationship or other matters that are, if not responsibility of the courts, then maybe of the sociologists-so I shall leave that aside. This is simply about who is paying or not paying or complying with the system.

It follows that the Government, frankly, need to make a clearer case than they have done for their reason for proposing charging a collection fee-we are no longer talking about the gateway fee where they pay in advance-on the parent with care as well as the parent who is due to pay maintenance. At the very least, even if the principle were conceded, why should such a fee be set at a substantial indicative level? The suggestion, although it is not set in stone, is that it should be in the range of 7 to 12 per cent of the available

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maintenance. It is self-evident that on the kinds of sum involved this is a matter of several hundred pounds a year knocked off. The danger as I see it is that either the charge will be set so high as materially to affect the maintenance payable or conversely, if we argue it down, so low as not really to be worth charging in the first place.

I should like to offer the House a number of detailed points on this matter. First, I understand that maintenance direct-not a concept well understood other than by experts-which is clearly a better idea all round is nevertheless adopted by less than 20 per cent of agency cases. In addition, there are all the private arrangements that can now be made and are clearly desirable. However, within the statutory system only 20 per cent of the case load is going through the automatic, no charge, maintenance direct payment. I hope that with improved publicity and the advice structure that is being put in place, we could at least make a start on getting this figure up materially, although one is dealing with some people who have set their minds against this.

Secondly, I understand that there would be an option for people to switch in and out of maintenance direct depending on what happened in the course of the maintenance payments. This will need to be very carefully controlled because there could be unscrupulous, absent parents who would use it for future manipulation to the detriment of the parent with care.

Thirdly, I am worried about what one might call, from the constituency experience that many of us have had, parents who are outliers-whether they are parents with care or absent parents-and who will want to use the substantial charging system as a further vehicle for their intransigence and as a way of imposing further burdens on their hated ex-partner, even if it is to their detriment as well.

Fourthly, I will pass on a thought. Occasionally one's past experience is useful. As an employer I had once to operate a deduction from earnings order for a civil debt in relation to an employee. In the paperwork, I was surprised to find that I was entitled to-although I never claimed-a modest fee for handling the collection of this sum week by week. Of course, the charge was not imposed on the creditor. It may be that a system whereby the debtor pays for the service but the creditor does not pay to receive the sum owed has some moral bearing on the equity of the case.

The amendment in effect offers a new clause that is tied to regulations covering fees charged for the service. The effect would be to provide for the apportionment of fees on a basis to be determined. I have already made my preference clear. It will be for the Minister to argue his case for a split. It would continue to provide an opportunity for fee regulations to enable a complete waiver, so a parent might not pay anything in certain circumstances. This would provide a basis for further discussion.

I should like to put on record how much I have appreciated the discussions I have had with the Minister on this issue and how much I have appreciated the general progress of the Welfare Reform Bill. We have been very well served by the dialogue that we had. We have also had the promise of a review in 30 months' time of how the system is operating. I say to the Minister,

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with an emphasis on the regulations, which will have to be approved by both Houses, so we are not up against the privilege issue again-this is a free-standing chance to get it right-that I do not want us just to look at this in 30 months' time and see whether we have it right; I want us to use the process and the time that we now have for intensive discussions and consultations in the run-up to the regulations, in the hope that we can produce, as we have done in other cases, a broad consensus or agreement on how to balance the interests of the various parties. That kind of approach, taken outside the Chamber and at slightly more leisure, will be the best way to serve the interests of innocent parties and the paramount interests of children. Frankly, that is where most of us involved with the amendment started-and it is the clear view of the House. In that spirit, I beg to move.

Baroness Butler-Sloss: My Lords, I put my name to Motion H2-which is linked to Motion H1-and will speak to it now. The amendment was drafted by the noble and learned Lord, Lord Mackay of Clashfern, who is, as I am sure noble Lords will know, away on a well deserved holiday. He is very sad that he cannot be here today; I am literally standing in for him.

The noble Lord, Lord Boswell, has reminded us of 25 January on Report when there was overwhelming support for the amendment put forward by the noble and learned Lord, Lord Mackay of Clashfern, demonstrated by the very large vote in this House. Of course, that has been reversed by the Commons. This amendment is, quite properly, not a replica of the earlier one. The earlier amendment referred to the payment of fees to the CSA by a single parent claiming maintenance from the other parent for children living generally with her rather than with him. I welcome the Government listening about the cost of the initial charge, and the very substantial reduction of the charge to £20. They are very much to be congratulated on that.

This amendment has a much more limited function and deals with a much more limited situation in which all efforts have been made to obtain payments by the other parent and it is necessary for the single parent to use the CSA statutory mechanism. If money is received from the other parent by that method, there is a collection charge, which provides a deduction to be made from the maintenance received. As the noble Lord, Lord Boswell, has already said, that seems to be a levy of between 7 per cent and 12 per cent of the money collected from the parent with care of the children.

I take on board the points made by the Minister, and what Frank Field said, as well as the help given to single parents by state aid and the fact that a review of this charging regime is promised. However, I make no apology for repeating the quotation made by the noble Lord, Boswell, of the noble and learned Lord, Lord Mackay, who said:

"I do not believe that it is fair to require them to pay charges when they are not responsible for creating the need for the use of the service".-[Official Report, 25/1/12; col. 1090.]

I would like very briefly to make a few more points. The money is to help in the upkeep of the children and not for the parent. Many highly regarded charities

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support this limited amendment-time does not permit me to say which they are but there is a considerable number of them. We are looking at parents in the poorest section of society who may receive a very small amount of money from the other parent and upon whom the major financial burden of the care of children rests.

I understand that-unlike the Government's view-most cases are not very expensive, costing £350 a case if managed through the main computer system and £600 a case if managed off the main computer system. Of course, there are cases that cost significantly more, and sums of up to £25,000 have been mentioned, but I am informed that they are the exception, not the rule. According to the Government's own impact assessment, the future average cost of processing an application is expected to be about £220.

This amendment, if accepted, would have limited financial impact on the CSA for the majority of applications but would make a significant difference to this deserving group of single parents. I urge the Minister to think again.

Lord Newton of Braintree: My Lords, I am intervening-as usual, you might think-for two reasons. First, on the previous occasion I sat down there and declared that I was standing shoulder to shoulder with my noble and learned friend Lord Mackay of Clashfern, which indeed I was, and I was therefore part of the vote that has caused us to be having this debate this evening. I will say something about that in a moment. Secondly, when this got to the Commons, a person who I do not know, described as Mrs McGuire, who I take from the context is a Labour Member of Parliament, read out the list of Conservative former Cabinet Ministers who had voted, including my name, and went on to say:

"I do not think that any of these people were fully paid up members of the liberal tendency".-[Official Report, Commons, 1/2/12; col. 926.]

If it were not for parliamentary privilege, I would sue her! I just wanted to get that off my chest.

9 pm

Coming back to the Commons debate that I have just read, I could make several comments about some of the lines of argument there. I could also make several comments about the extensive discussions that my noble friend and I have had about this with the Ministers, up to the level of Secretary of State, but I am not going to because it is not productive. The hour is late, I am tired of having been good all day, and I believe that the House wants to come to a conclusion. I should make clear that, just as I operated in cahoots with my noble and learned friend on that occasion, I have operated in cahoots with my noble friend Lord Boswell on this occasion. His was the second name on the earlier amendment, even though he was not able to be here, and I was pleased that he was willing to take the lead on this occasion.

At the same time, however, I would like to thank the Minister, even though I did not agree with everything he said when he argued with me in private, for being

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very constructive about this, and not least for indicating that this amendment was one that he felt he could smile favourably on. Indeed, he has given us some help in making sure that it was absolutely right compared with our first draft.

However, the key point that I want to make is that at the end of the day, this is our judgment call about the best way to keep this issue on the table for further discussion, with full and proper consultation, for the regulations that must follow. All I can do is give the House my best judgment on that judgment call: that to press the matter further-certainly in the terms of the original amendment, or indeed probably, I say to the noble and learned Baroness, Lady Butler-Sloss, even in the terms of her more limited amendment-is almost certain simply to provoke the Commons to send it straight back again.

This is not something that the Commons did not debate; it did debate it, however scrappily. It is not something that it did not have a vote on, and it was a pretty decisive vote. We need to recognise that. More importantly, I must say that from my discussions with the Ministers involved, I see absolutely no prospect that the Government will back off, and another round will therefore mean that this House will have to back off with nothing more to show for it, if we abide by the usual conventions.

If the noble and learned Baroness wanted to press her amendment, I would obviously be pretty torn about what to do-it might be quite hard to vote against her. However, I am confident that she will not wish to press it, and that is a great relief to me. I am clear that in practical and realistic terms, my noble friend's amendment is now the best way forward, and I hope that the House will endorse it.

In saying that, and in conclusion, I would say that I have pressed my noble friend on the Front Bench to make absolutely clear, or as clear as he can, that this is not just going to be a set of regulations shoved in front of the House, with a yes or no answer at some point in a few months' time. We need an assurance of a proper consultation. I have not sought to achieve this mechanistically by an amendment but by a proper consultation and a willingness to go back to a first draft of the regulations as a result of that consultation-something more elaborate and participative than we usually have with statutory instruments. That is important, and it would help me enormously if my noble friend could make it clear that that is the way he will proceed. Subject to that, I hope very much that the House will go along with my noble friend's compromise amendment this evening.

Baroness Howe of Idlicote: My Lords, I am another of those who very much backed the amendment in the name of the noble and learned Lord, Lord Mackay. I was amazed and encouraged by the immense cross-party support for what he aimed to achieve. I remind noble Lords that the majority was, I think, 142 votes. However, I find this situation difficult. I certainly have been briefed again by Gingerbread and other organisations, which very much support the amendment in the name of my noble and learned friend Lady Butler-Sloss. She has told us that she will move the amendment on behalf of the noble and learned Lord, Lord Mackay.

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Looking at the scene as it is now, the statutory maintenance scheme exists because it is in the interests of society that all children are properly supported by both parents, including when they separate. It is right to encourage and support parents to do the right thing and to make the arrangements, which of course we have all heard about, as a means of people sorting out their own affairs. It is equally right for the state to step in to secure maintenance for children-the emphasis is on the children-if the non-resident parent, despite being given every chance, still fails to pay of his own accord.

With something like 46 per cent of parents with care receiving less than £20 per week in maintenance-I find that figure slightly at odds with the enormous figures that the Minister has given us today on the amount that will go to children and single parents-the risk is that those likely to receive only modest amounts of child maintenance will look at the collection charges and decide that it is hardly worth all the hassle from the non-resident parent to insist that CMEC collects the maintenance. However, is it in the best interests of the taxpayer if such parents are priced out of the system or money for their children is reduced by collection charges? Making children poorer in this way surely will not benefit children or society in the long run. It is all likely to cost us more, as we probably all recognise.

I have had an indication from my noble and learned friend Lady Butler-Sloss that she is unlikely to press her amendment. I must admit that my concern, and the concern of most of us, is for those families who are on their own and where possibly, if not certainly in too large a number of cases, there has been violence at home and the family is perhaps living in dread of any form of contact with the father. However, they are still expected to pay-what is it?-a 7.5 per cent or 7 to 12 per cent continuous fee as long as the money is collected. I really do not like that situation.

I have to admit that if there was a Division, I would certainly vote for the amendment moved by the noble and learned Baroness, Lady Butler-Sloss, but if there is to be no vote, I cannot exercise my right to do that. I think that I have said enough.

Lord Higgins: My Lords, after almost 10 years on the opposition Front Bench as spokesman on social security, and despite the attractions of debating intellectually with the noble Baroness, Lady Hollis, who was the Minister throughout the period, I decided never to speak on the subject again, but I fear I am provoked. Like others who were involved with the then Child Support Agency, I bear quite a number of scars. On one occasion I invited all those who had written to me about it in a constituency to come to a meeting. I must say that I have rarely experienced such bitterness as was expressed by a second wife who was determined that the husband should not pay anything either to the former children or to the former wife. This, I am afraid, underlies much of the problem.

I want simply to say a word or two in the context of the statement made by the Leader of the House earlier today with regard to parliamentary privilege. I think that I agree with absolutely every single word he said, but none the less it left a degree of ambiguity because

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he pointed out that amendments in lieu to a Commons amendment should not be put forward if they are likely to invite the same response. The problem with that, if the privilege amendment is claimed in the other place, is that it is essentially about quantity and money-and here we really do not know. Clearly if the amendment in lieu costs even more than the previous amendment, it is not likely to be accepted and therefore is probably inappropriate. On the other hand, if the amendment costs somewhat less, we really do not know whether it would actually be regarded as invoking the same response. Basically, we are in that situation this evening.

No one is more determined than I am to cut the government deficit; I think that that is crucial. The argument that we are going too fast and doing too much is simply not the case. Many of the proposals for cutting expenditure have simply not happened yet. It was estimated the other day that only around 20 per cent have taken place, so that is very important indeed. Having said that, we have to beware of the Treasury going for cuts which are in fact not likely to affect the economic situation or, as was suggested the other night on a trivial amendment from the Front Bench, which would result in our borrowing costs in international markets going up. We need to assess things within a reasonable range on the basis of the quantities involved.

I would be grateful if my noble friend the Minister could say what the loss to the Revenue would be if the amendment put forward by my noble friend Lord Boswell were to be accepted. I get the impression that there would be no costs at all, in which case it would certainly be a legitimate amendment for us to make. It is more difficult on the other amendment, so it would be helpful to have some figures on that. But I suspect, as my noble friend Lord Newton has said, that in the present economic situation we are likely to find that this will come back yet again, and I am not sure whether that is something we ought to undertake. Given that it is a difficult situation, it would be helpful to have a factual statement from my noble friend on the actual quantities involved.

9.15 pm

Baroness Sherlock: My Lords, I remind the House of my interests-which are in the Register-as a former non-executive director of the Child Maintenance and Enforcement Commission and a former chief executive of One Parent Families. I feel that I need to place on the record, irrespective of what the amendments' movers decide to do, a response to the argument that the Minister has made today.

This House voted decisively in favour of a previous Motion; indeed, as we left the Chamber that day, I heard a Conservative Peer express a complaint to the noble and learned Lord, Lord Mackay of Clashfern, that he just had stolen his record for the biggest ever defeat inflicted on the Government. It was a very big defeat indeed. So what has changed? The Minister has told us, first, that single parents get a lot of money from the state so it is not unreasonable to expect them to pay to use the CSA; secondly, that when the CSA was introduced, all the money went to the Treasury, whereas it now goes to the children, so the situation is

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different and parents should pay for it; and, finally, that charging is needed to deter parents from using the CSA when they can perfectly well make their own arrangements.

Allow me briefly to pick off each of those arguments. In the first case, yes, it is true that many lone parents get lots of money from the state. However, could the Minister tell the House what proportion of those lone parents who use the CSA are on out-of-work benefits? The briefing that I received from Gingerbread told me that the figure is 30 per cent, so 70 per cent of lone parents using the CSA are in fact in work. How does the distribution of that work? Are some people getting most of the money from the state and another in-work, poor, low-paid, low-income group making the payments? They may be a large group, but they may not be the same people.

Secondly, it is worth saying that when the CSA was introduced, the Government of the day made a decision that if somebody was on benefit, all the money would go directly to the state. However, it is my understanding that child maintenance has always been ignored for tax credits purposes and that a similar rule was introduced for out-of-work benefits in 2008. So there is a very clear, established principle that out-of-work benefit should not be treated in the same way, and the very good reason for that was that it was a dual measure to tackle poverty and encourage work.

Finally, it is argued that charging is needed to deter lone parents from using the CSA when they could perfectly well make their own arrangements. The problem is that the amendment tabled by the noble and learned Baroness, Lady Butler-Sloss, is targeted specifically at those lone parents who cannot make those arrangements because their former partner will not co-operate. It is designed precisely for those people who are not able to do the very thing that the Minister wants them to do. That leaves a position of rather rough justice. Those people must pay the price to enable the Minister to encourage other people to make their own arrangements when they can.

I am a new girl around here and do not even pretend to understand how financial privilege works-having listened to some of today's debate, I am frankly none the wiser. But the one thing that I do know about is the amount of money involved. The Minister has said that he would expect to save only between £50 million and £100 million over a period which I am afraid I did not write down quickly enough. I would be grateful if he could explain to us what he thinks he will bring in on a recurrent basis in a year. Will he also tell us what savings the Government expect to make in their running costs as a result of deterring parents from the system in the first place? This is very important, because there is a nasty suspicion out there, as I seem to recall mentioning in Committee, that the Government's main objective is not to raise revenue from parents but to save money by driving people out of the system. Let us suppose that that were to work; let us suppose that the effect were that far fewer people used the CSA. If a significant number of those make no arrangements at all, is there not a broader cost to society? Is there not a moral hazard question? Have we not moved into a position which the CSA was designed to address?

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Are we saying to people, "I'm sorry, you may leave your partner, but you may not leave your children and the state expects you to pay up"? Is there not a price to that, too?

Baroness Anelay of St Johns: My Lords, I hesitate to interrupt at this point and it is extremely unusual to do so. I do so with no hostile intent. There has been extremely generous use of time today on the important subject of the Welfare Reform Bill, on which some progress has been made. The generous time taken by the House on this matter, when we knew that the Scotland Bill had been programmed to start after it, has put those who have been waiting some time for the Scotland Bill in some difficulty. I know that the whole House will apologise to colleagues who have been waiting.

I have had a discussion in usual channels and it has been thought a better way of treating those who are awaiting the Scotland Bill to announce now that it would be better if the business on Scotland did not proceed this evening but continued as scheduled on Tuesday 28 February. Therefore, once the business on the Welfare Reform Bill has concluded, the House will rise. I know that, with the help of the Clerk of Parliaments, that information will be put on the annunciator. I apologise again for intervening at this stage.

Lord Kirkwood of Kirkhope: My Lords, I am sure that is for the convenience of the House and I am grateful to my noble friend for making that clear. I could see the long faces on some of my Scottish colleagues getting longer by the moment. It is only fair to them that I apologise to them, because I have an interest in the Scotland Bill as well. However, I am sure it will wait until next Tuesday.

At this time of night I want to make a suggestion rather than a speech. Before I do that, I will say that I agree with the analysis of the noble Baroness, Lady Sherlock, about the money. I was a little dismayed at the way my noble friend opened this debate, because dealing with quantums of money and global amounts does not make an awful lot of sense unless there is some context. I much prefer to look at percentage shares of the benefit spend over time, and look at trends, rather than global amounts, because they sound like colossal sums of money. I agree with the noble Baroness on that point. It does not help the debate, because any of us who have been studying these things know that many single parents struggle on low incomes.

That point has been made and I will not pursue it, but I want also to make clear that in terms of the budget impact-which we have seen and which was referred to a moment ago-only 20 per cent of the cuts have attached themselves to household domestic spending and income. That will get worse. The Institute for Fiscal Studies, which has been quoted, has done some valuable modelling work that suggests there is going to be downward pressure on household incomes in single-parent families in future. That has to be borne in mind. Indeed, the Government's own impact assessment on the ultimate rollout of universal credit from 2013, as I read it, shows that 500,000 working single-parent households will have a lower entitlement under universal credit. It is wrong to say that we are

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dealing with a category of rich people. There is a mixture, which I want to come on to in a minute in the main question I want to ask.

I have always been against charging. I was against it when the noble Lord, Lord McKenzie, was considering it. Along with the noble Lord, Lord Skelmersdale, we spent many a happy hour trying to resist charging, simply on the basis that it is a disincentive. I still believe that is likely to be the case. All developed western European nations now have various iterations of state-sponsored collection and enforcement services. We should-and will-have a new one, and one that will actually be cheaper as we will be using HMRC data. As my noble friend said, the service will be better and more efficient. There will be annual reviews and the data will be cleaned up as people are asked to come off the existing system and reapply-although that will be a much bigger undertaking than I think people imagine, and I hope that the department is prepared for that. However, it will be a cheaper and better service-£93 million cheaper, if my memory serves in respect of the impact assessment statement and other bits of information. It is important that we cherish the role that it plays and the impact that it has on lower-income families.

Looking at the figures, there are two dimensions to this-the low-income one and the high-income one. I remember an exchange when we last discussed this and have been reflecting on it since. The Government's position is absolutely arguable for those who have an income of £50 or more per week via Child Support Agency maintenance. Twenty-two per cent of the case load gets 50 per cent or more, per week, of the maintenance delivered through the CSA. That is a big amount of money and gives us some options. Those kinds of families and households have much more flexibility in terms of options and choices. In those circumstances, it is perfectly reasonable to try to affect behaviour. The point I want to make is that 40 per cent of single parents receiving maintenance via the CSA receive less than £10 per week.

It is that category of transfer payment recipients that I am really concerned about. They do not have any options; they are in a very difficult place. The Government's attempt to get behavioural change is much harder to argue reasonably in that context. I support the amendment of the noble and learned Baroness, Lady Butler-Sloss, but if we are stuck with charges and are reviewing them in 13 months' time, would the Minister look urgently and robustly at the case for variation in the charges? If somebody is getting £10 per week, 12 per cent of that is quite a load of cash. If there were some way of getting the £75 million that the Government believe they need to fund the system going forward from fees, then they could do that by taking a little bit more out of households and families with a better take and a better return from the CSA than those who are at the bottom of the income distribution pile. If some thought could be given to that-and it is a bit of an ask at this time of night to get a reaction to that idea without notice-or even if the Minister were prepared to say that he would take it away and consider it in the course of the review, I would be happier about the results of the debate. If the noble and learned Baroness is thinking of taking

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her case to a vote-and that would also be a difficult ask at this time of night-her case has merit and I would support it. If we are stuck with charges, however, we should be looking at variations to try to cushion the effects on some of the low-income households that I think will suffer as a result of the imposition of these charges as currently cast.

Lord McKenzie of Luton: My Lords, I shall be brief. I agree with pretty much everything my noble friend Lady Sherlock said about the proposed charging arrangements. We certainly support the amendment of the noble and learned Baroness, Lady Butler-Sloss, because it does the right thing. It is dealing with those people who have no choice but to use the statutory system and cannot now use maintenance direct of their own will, because that depends on the non-resident parent applying to use it and on compliance by the non-resident parent. They have no other choice, and it is therefore wrong that they have to suffer a collection charge.

Will the Minister confirm-in respect of the reduced application fee of £20, which is welcome-that it is not going to be recycled to produce increased collection charges from mothers as well? It is important that we have clarity on that. To the noble Lord, Lord Newton, I would say that we will be in touch with our honourable friend Anne McGuire and tell her that she has misunderstood you. I am sure she would welcome that. The noble Lord, Lord Higgins, said that he thought the amendment of the noble Lord, Lord Boswell, had no cost. If that were right, I would be very worried about it because it presumably means that it is not going to affect the proposed arrangements, and I would not agree with that.

I say to the noble Lord, Lord Boswell, that I am disappointed in a sense with the proposition before us. I understand it is done with good intentions; I accept that because I know his commitment to these issues. However, if at the end of the day that is what is on the table, then that is what we would go with.

I say to the Minister that I do not think it was helpful to have some of those early statistics. Comparing the figure of £16 billion, which I understand is benefits and tax credits paid to all lone parents, with the fees that might be derived by those who use the statutory system of CSA is a nonsense idea. It does not make any sense at all. It is almost as though the assumption was that maintenance was money provided by the state. Maintenance is money that flows from non-resident parents-and we hope in increasing amounts in the future-to the parent with care. It is their money, not money provided by the state. So we probably have limited choices before us tonight. I hope the noble Baroness will feel able to press her amendment, but understand if she does not. If she does not, with a degree of reluctance I think we would support what is on the table from the noble Lord, Lord Boswell. Looking at it, though, I am not sure that it actually achieves anything that cannot be achieved from the existing framework of regulations. If it does, perhaps the Minister can tell us, but if we did not have that amendment, I am not sure that anything the noble Lord seeks to do under it could not be done anyway under the 2008 Act.

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9.30 pm

Lord Freud: My Lords, I shall start by addressing Amendment 73C, tabled by the noble and learned Baroness, Lady Butler-Sloss, which relates to limiting collection charges for parents with care. This is a substantial amendment that is similar to my noble and learned friend Lord Mackay's, and it would represent a similarly substantial level of cost.

Before I get into the figures-I know that my figures have not been popular today-I want to highlight an element of the proposed charges that I do not think we have conveyed with sufficient clarity to noble Lords: parents have the option of avoiding collection charges altogether by using maintenance direct. My noble friend Lord Boswell asked a series of questions on this.

Lord McKenzie of Luton: Is it not right that under the new proposals the non-resident parent makes the decision to use maintenance direct but that is no longer available to the parent with care? The parent with care cannot opt for that arrangement.

Lord Freud: I think it is clear that the way that maintenance direct works is that the two parents have to agree on it. That is the point of maintenance direct. Under that system the Government calculate how much child maintenance is payable, but the payments themselves are made directly by the non-resident parent to the parent with care. If the payments are made in that way, no collection charges apply. It is a mutual decision.

The Government will ensure that a service is provided that enables maintenance direct to be used without the need for any contact to be made or personal information to be divulged. By using this system, the parent with care has the security of knowing that where it is established that payment has not been made in full and on time by the non-resident parent, the case will be moved into the collection service and swift action can be taken to reinstate payments. They can switch back and forth into that system. I take my noble friend's point that there is a lot of attraction in that system and it may be underpublicised. To the extent that it is, we need to do something about it.

Where the payments move back into the collection service, charges will then be imposed for its use and they are heavily weighted on the non-resident parent. That acts as a real incentive for non-resident parents to pay in full and on time, and indeed by the charge-free method of maintenance direct. On the question of some non-residents wanting to go on punishing their ex, the parent with care, that would be a very expensive way of doing it-it costs the non-resident roughly twice as much as it does the resident.

I want to come back to the noble Baroness, Lady Sherlock, who said that she would deal with my argument piece by piece. I did not particularly agree with her. I was adding up the benefits system but also the tax credits system, which presumably many of the others who were not on the benefits system would have been on. Tax credits were invented in the early 2000s. I am talking about what it was like in the 1990s. The process by which the state supplied money for lone parents grew gradually through the 2000s until there was a total disregard. Early on, that was in the form of tax

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credits. From 2008, a proportion was in the form of benefits. The full disregard came in 2010. Therefore, I do not particularly buy the dismantling of the noble Baroness, Lady Sherlock.

I want to go into the costs. We estimate that the cost of Amendment 73C would be around £190 million, although it would depend on the exact level of the collection charge. There are assumptions around that. Therefore, in response to the question of my noble friend Lord Higgins, I say that it would be only a little less than the cost of the original amendment tabled by my noble and learned friend Lord Mackay, which was £220 million.

I also acknowledge the serious and considered concerns that have been set out by noble Lords both today and in our previous debate on this. I am prepared to make some specific commitments to the House on the development and oversight of the regulations, along the lines suggested by my noble friends Lord Boswell and Lord Newton. Later this year we will bring forward the regulations. At that point, other Ministers and I would like to offer Peers the opportunity to meet in a special session in Parliament to gather their views. We envisage an agenda based around the regulations, covering those that relate to the key concerns expressed during the passage of the Bill. I will of course take direction from interested Peers-there are a lot of them-as to the structure of that session. We will set that up as required.

We will also conduct a public consultation on the regulations. Following the finalisation of regulations after consultation, we will bring them back to the House. At that point, we will again offer a session for Peers to complement consideration by the committees of the House. That will not be the last time that the House debates charging; we will bring the affirmative regulations forward for debate.

We also acknowledge the need to evaluate and review constantly the impact of charges on parents. In respect of that, we have already amended the Bill to ensure that the review is published within 30 months of its introduction. Again, I here commit that we will seek the input of Peers during the course of that review in advance of a report being laid before Parliament.

Let me also be specific about what we intend to look at as part of that review. We will want to look at the impact of the application and collection charges on the behaviour of both parents and at the outcomes in terms of establishing effective maintenance arrangements. In our report to Parliament, we will make clear our intentions, including a specific view on the position of the poorest parents.

Lord Newton of Braintree: Briefly, may I just-in the form of a question, as I think is appropriate-ask my noble friend whether he is aware that I think that is a significantly generous response to my request for proper, genuine consultation and a real opportunity for the House to have a say?

Lord Freud: I am very grateful to my noble friend for that. In that spirit, I turn finally to my noble friend Lord Boswell's Amendment 73BA. In doing so, I thank him for his contribution to today's debate, which,

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as one would expect, was thoughtful and wise, as many other contributions have been, even those I have not necessarily agreed with.

We absolutely acknowledge the concerns around vulnerable groups, particularly parents with care. Although we will not further amend our current proposals, we want to ensure that, going forward, especially at the time of the review, we have the powers to evolve charges in line with evaluation. As I have stated, we especially want to consider the behavioural responses of parents and the outcomes they reach as part of our review. If in the light of evaluation and review we need to change our approach, I believe that Amendment 73BA clarifies that we would have the ability to do so under the 2008 Act. Therefore, I welcome Amendment 73BA and the Government wish to accept it.

Lord Boswell of Aynho: My Lords, in view of the tenor of this debate, and specifically what has just been said, I can be very brief and merely express my thanks. Our thanks go first to all those who have participated in this debate and to the non-government organisations and other interested parties that have briefed us and encouraged us on our way. We are grateful to the Minister for the way in which he has set out a response to my noble friend Lord Newton in relation to the consultation exercise and, more specifically, because he has gone even further than his earlier "sweetness and light" and has now actually accepted an amendment from the Back Benches. I am very grateful to him for accepting my amendment. It is not something I do very often, or at least I do not succeed in getting an amendment accepted, although I may try.

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There is a real concern about getting this matter right and not disadvantaging vulnerable parents or children. We need to have a fairly intense dialogue about that and a much clearer understanding of the rationale of what is being done. We want to make sure that we do not do the wrong thing and then regret it later because that has been-with respect to all those in this Chamber who have been involved-something of the history of the CSA and CMEC to date. We have a chance to build on that. We start in a very good spirit. We have even had the indulgence of the usual channels and the Scottish interests in enabling us to prolong not just our consideration of this amendment but our detailed consideration of all these Lords amendments.

In conclusion, I wish to say two things. First, I approached this issue by putting a pair of gloves in my pocket which I was prepared to leave on the Bench as a gesture of dissatisfaction if we had to fight our way through to the regulations. I have now metaphorically repocketed them because I think that we can now have a constructive discussion which will lead to a satisfactory outcome. Secondly, and finally, I express my thanks to my colleague in this endeavour-the noble Lord, Lord Newton of Braintree. I dedicate this minor success to our noble and learned friend Lord Mackay of Clashfern in his absence. He took the House with him and got something done, for which we are very grateful. In that spirit and to enable a positive response, I commend the amendment.

Motion H1A, as an amendment to Motion H, agreed.

Motion H2, as an amendment to Motion H, not moved.

House adjourned at 9.44 pm.

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