Child Support Fees Regulations 2014

Baroness Howe of Idlicote Excerpts

Tuesday 4th February 2014 Grand Committee

[Lord Mackay of Clashfern (Con)]

My Lords, I want to comment on Regulation 7(3) of the fees regulations and, incidentally, on Regulation 8(2). I have interests in children’s charities and care organisations, which may or may not be relevant to what I am going to say now but I declare them for caution.

It is rather remarkable that the Explanatory Memorandum comments on this provision and puts the point rather succinctly:

“The introduction of fees is politically significant. Child maintenance elements of the Welfare Reform Act 2012 had a difficult passage through the Upper House and charging persons with care, often single mothers of limited means”—

I do not know how many people are of unlimited means, but anyway it is quite clear that these are people of rather limited means—

“remains a controversial issue for stakeholder groups, service users and the wider public”.

I assume that I am included in the wider public.

I am entirely in favour of everything that can be done, and that this Government are doing, to try to help people who have had a relationship that has broken up. I am familiar from long ago with divorce cases; I did a lot of them but, as the Committee knows, that was a long time ago. However, the difficulties of interpersonal relationships were as formidable then as they are now, and I wish every success to the moves that have been made to try to help people by the Department for Work and Pensions, the Ministry of Justice and the Department for Education, which are involved in the Children and Families Bill, which is having its Third Reading tomorrow. I went to a meeting that Ministers organised in connection with that Bill, and I had to remind them that the DWP was also working in this area of trying to help people. Of course, they said that they work very closely together, so I am glad to hear that. The closer they get together, the more chance that their measures will be successful. As I say, I wish them every success in that. Unfortunately, so far those efforts have not produced universal success, and the regulations contemplate at least the possibility that they will not have universal success in future.

The point that I want to stress is that when it comes to the obligation to maintain a child, the parents’ obligation is absolute. It does not matter what sort of dispute they have had with the other party to the arrangements in the past. I accept immediately that there are many different types of squabble that can emerge, and it is by no means clear that the non-resident parent is always fully responsible. I entirely understand that for the question of the break-up of the arrangements, both parties usually have some degree of responsibility. When it comes to the payment of maintenance, though, that obligation is absolute and is not qualified by the fact that the other party to the arrangement has been terrible, difficult or whatever. That is what these fee regulations are concerned with.

The collection fee that I have referred to appears when the collection system comes into operation. That happens only when the Child Maintenance Service, not the other party, is satisfied that without the collection service, maintenance is unlikely to be paid. That is in Section 137 of the Welfare Reform Act 2012. The decision that the collection service comes into operation, with its charges, is entirely the responsibility of the Child Maintenance Service and has nothing whatever to do with any responsibility of the parent with care. In that situation, the imposition of the collection charge on the parent with care is unjustified in principle.

Of course, this is not by any means the first time that I have raised this issue, and I thank the departmental Ministers, who have changed over time, for the courtesy with which they have listened to the same thing being said again and again. That has not been an altogether unproductive process, because concessions have been made that I warmly welcome. The concessions are narrated in the Explanatory Memorandum; I will not weary the Committee by going over them but I agree that they are quite substantial. The most recent one was the reduction from the 7% to 12% charge that was originally thought of to 4% in the case of the parent with care. As I say, I welcome that very much and am glad that it has happened. However, as the Explanatory Memorandum says, this charge remains controversial, and I think it is unjustified in principle.

I did not feel inclined to table a Motion of Regret or a Motion to set aside the regulations, for pretty obvious reasons but primarily because the Government know what our House decided about this matter long ago. Of course, it was overcome by the financial protection of the House of Commons and therefore went through. But as the Explanatory Memorandum says, the passage through the upper House was not entirely easy. That vote is there and, as far as I know, opinion on that point remains.

I submit that the review that is to take place 30 months after the matter comes into force will take particular account of this point, which I am sure will remain controversial until the inquiry is completed, whether or not I am here to promote it—although that may be a matter of opinion. I do not intend to weary your Lordships further but I do wish to indicate the principled objection to this that remains.

[Baroness Howe of Idlicote (CB)]

My Lords, your Lordships may remember that I was one of those who supported the noble and learned Lord, Lord Mackay of Clashfern, in the very important amendment that he has just referred to. I, too, remain concerned that despite the concessions made by the Government in reducing the application fee for a child maintenance calculation to £20 and reducing the parent with care collection charge by 4% on every payment—on which I congratulate them—there is a real danger that the effect of the new charging regime will be that fewer children end up with fair and reliable child maintenance.

In this respect, I share the conclusion of the Secondary Legislation Scrutiny Committee, which found that,

“although the transfer scheme may make savings it may imperfectly achieve the overarching objective of providing financial support for children”.

I want to press the Minister for assurances that the Government will closely monitor what happens to maintenance for children whose CSA cases are closed during the next three years. After all, the department has details of the parents and children so can track what happens to them, case by case, in terms of future maintenance arrangements—or the lack of them.

It will not be enough for the Government to congratulate themselves if fewer parents apply to use the statutory maintenance service, unless they know for certain that the parents concerned have made private arrangements for maintenance that result in regular payments of realistic amounts for the children concerned. Similarly, it will not be enough to be satisfied that fewer parents are asking to use the collection service and have opted for a direct payment arrangement—again, unless they know for certain that those direct payment arrangements are resulting in regular payment of the liabilities that have been calculated by the Child Maintenance Service.

In the past, the department has said it can assume that every direct payment arrangement is paid in full and on time because, if not, parents with care would ask to use the collection service. Even if this assumption were true now, it will certainly not be true in the future, given that the collection charges are expressly intended to deter parents from asking to use the collection service, regardless of the circumstances. I therefore seek full assurances from the Minister that the department will track in detail how children fare as their CSA cases are closed down and charges are brought in.

[Lord Kirkwood of Kirkhope (LD)]

My Lords, it is a pleasure to follow my two colleagues in this important debate. My noble and learned friend Lord Mackay led the House in earlier stages of the Bill in a commanding and profoundly serious way. His weight being added to this question is something to which I hope that the Minister and department will pay careful attention; that is also true of the noble Baroness, Lady Howe.

I underscore what my noble and learned friend Lord Mackay emphasised at earlier stages of this discussion: the fee money that we are talking about is actually the child’s. My noble and learned friend is right to point to the clause in the memorandum that says that this is controversial; that is why it is controversial. This money which is being taken out of the system should be going to the assistance of, mainly but not exclusively, poorly paid families who are doing their best to struggle to bring up children in very difficult circumstances. That controversy is not going to go away. I pay tribute to my noble and learned friend Lord Mackay and the noble Baroness, Lady Howe, for the work that they have done in the past.

I also acknowledge that there have been concessions, and I do not think that my noble friend the Minister needs an alibi. He has other fish to fry; this is none of his business. It is a very bad change. I actually take a more fundamental view. I have been of the opinion since 1991, when I started on all of this, that charging was wrong in principle. I am long enough in the tooth to remember the period during 1993 and 1995 when we tried charging. I have said this before: it was a disaster. Why? Because nobody collected any money. They were not collecting fees or enforcing debts, so people were saying, “Why are we paying these fees when we are not getting any money?”. The scheme was quickly abandoned. We need to learn lessons about that. I do not believe that even the new, all-singing, all-dancing Child Maintenance Service—while the improvements are welcome—can offer guarantees that the enforcement will be effective.

Changing the balance of my concern, because I have always been really worried about the parents with care more than anything else, some of the charges which are going to be levelled at the non-resident parents are eye-wateringly high. There are a lot of non-resident parents out there who do not understand the difference that will be made with the combination of a recalculation and a collection fee. I wait with bated breath to see where this new co-operation which is going to break out all over the place is going to start. It is fantasy. A long time ago I was a divorce lawyer, and I know what people can do to one another when they separate. It is sometimes quite unbelievable. I am sure that my noble and learned friend Lord Mackay, with his previous distinguished legal career and all his work with children’s charities, would reinforce that. I object to fees in principle. I do not think that they will work. I hope that I am wrong, but that has always been my position and it is worth restating.

Secondly, this system that we have used for charging fees is flawed. Again, I agree with everything that my noble and learned friend Lord Mackay has said, but I want to add a point which has been drawn to my attention by Gingerbread, which is right in saying that if the Child Maintenance Service has the weight of decision in testing the question of “unlikely to pay or not”—to allow the parent with care to join or stay in the service—that is a contestable decision. It is an important decision for both parents. It is an administrative decision which is taken out of both their hands. I do not know what assurances have been given, or whether there is anything that I have missed in the regulations which makes it a requirement to explain in detail why that decision has been taken, but it seems to me contrary to natural justice. In any other area of public life where such an administrative decision is made an inbuilt independent appeal is automatically attached to it. That is entirely absent from this new system. I appeal to my noble friend to go away and look at the provisions in the Child Maintenance and Other Payments Act 2008, Section 6(5), where, I think, the Secretary of State is given discretion about introducing an appeal. As part of the undertaking that I hope my noble friend will give to the Committee to continue to monitor all this carefully there should be the possibility of the Secretary of State making that discretionary decision, so that we can have an appeal available, if it becomes obvious—as I believe it will—that it is necessary.