Child Support Agency

Heather Wheeler Excerpts

Wednesday 11th July 2012 Westminster Hall

[Heather Wheeler (South Derbyshire) (Con)]

It is a pleasure to serve under your chairmanship, Mr Weir. I, too, congratulate my hon. Friend the Member for Loughborough (Nicky Morgan) on securing the debate—so much so that I have ripped up half my speech; but here we go. Hon. Members have given excellent examples and covered key issues in the debate, so I shall go straight to the heart of the two things that I think changes to the CSA should deal with, to make the agency truly effective. There are two loopholes that need to be addressed.

The first is undoubtedly the 12-month rule, which 87% of family lawyers say causes difficulties, because it enables the CSA to overturn court orders after just 12 months. What is the point of going to court to seek an order, when after only a year—and without the need for any substantive change in circumstances to be demonstrated—the order is void? As my hon. Friend the Minister has said before, the rule is open to abuse, and has become a tool whereby non-resident parents, especially the self-employed, can hide income to avoid paying the full level of support. Furthermore, family lawyers tell me that the existence of the rule skews divorce negotiations, with solicitors increasingly relying on spousal maintenance as a backstop because of the inevitable consequences of the CSA’s ability to scupper a court order after 12 months. The rule likewise promotes hostility, as after 12 months the parent with care returns to court to seek a pound-for-pound increase in spousal maintenance to compensate for what has just been lost through child maintenance under an agency review.

Finally, the 12-month rule is used as a tool for blackmail. I have been shown a shocking but sadly typical case, evidenced by the e-mail exchanges between the parties, of a woman who, having spent considerable sums in legal costs to secure a financial settlement, was threatened with having her children’s maintenance halved unless she agreed to dispose of a joint overseas asset that remained unresolved from the divorce. Her lawyers advised her against short selling. At exactly the same time as her ex-husband, a wealthy accountant working in risk management and financial services, was funding private education for his other children, he was threatening to use the 12-month rule to reduce his maintenance payments by 50%.

The rule was not designed to be used as a tool for blackmail. Indeed, correspondence between the lady in question and the Minister, which I have seen, showed that the Minister regarded that use of the rule as abusive. Therefore, I have to agree with the findings of Henshaw on the rule. It is used as a means of securing a better outcome for the non-resident parent, not the child, and the Government should consider scrapping it, or at least extending it to four years. That would give security and certainty for both parents, and prevent the current abuse.

The second issue that reforms must address is that of spurious zero assessments. It is perfectly illustrated by the case of a lady whose ex-partner, a Porsche-driving former executive who lives in a luxury docklands apartment and who she says has an extremely luxurious lifestyle, is assessed as having to pay less than someone on benefits. Despite his extravagant lifestyle, he simply claims he lives entirely on his new wife’s earnings. The mother however, forced to provide evidence to the contrary, lives in poverty, works full time in low-paid work, and last winter, at the height of the cold snap, was forced to accept charity food parcels and to beg £300 from a friend to put heating oil into her boiler when the tank ran dry. Often the only way the parent with care can attempt to secure some maintenance is through a lifestyle inconsistency appeal, where they can demonstrate that the lifestyle of the non-resident parent is inconsistent with his declared income.

It therefore causes me considerable dismay that the Government have now made clear their intention to scrap the only two effective measures—including the lifestyle inconsistency appeal—by which parents with care can secure support for their children from non-resident parents who seek to hide their real income and capital. Curiously, in the case I have just mentioned, despite claiming to have no income or assets, the child’s father is still able to fund expensive legal proceedings against the mother on a separate issue. It is bizarre.

The CSA needs to be reformed. That is self-evident just from the three examples I have given. I therefore ask the Minister to consider extending the 12-month rule to four years; to examine the issue of zero assessments; and, in particular, to maintain the right of parents with care to mount a lifestyle inconsistency appeal. Lastly, we need to ensure that the CSA has a duty of care. In this era of increased accountability, we need to ensure that Government agencies are held to account.

--- Later in debate ---

[Mrs McGuire]

If the hon. Lady is not a lawyer, she should get a Bachelor of Laws degree, because she certainly sounded as if she had that sort of hinterland; studying an LL.B, perhaps part-time, might be an opportunity for her to take. Anyway, she highlighted some of the issues about how people try to manage these things.

Having said that, I must say to hon. Members that some of the situations that have been described today are hopefully not quite indicative of the changes that have happened in the CSA. I will just refer to a comment from a former Chairman of the Public Accounts Committee, which I think some hon. Members will probably agree with. The BBC reported:

“The public accounts committee said the CSA had a catalogue of complaints, a backlog of cases, and poor enforcement of uncollected payments”

and that the PAC said the CSA was one of the

“greatest public administration disasters of recent times”.

That was the view of the PAC in 2007, when it was under the chairmanship of the hon. Member for Gainsborough (Mr Leigh).

In May of this year, the PAC said:

“The Commission has made real progress in recent years but the challenges it faces”—

and hon. Members have illustrated some of those challenges today—

“in supporting separated families and securing maintenance payments for children are serious.”

So there have been significant changes, and the hon. Member for South Swindon remarked on the range of enforcement actions that exist and that were supported across the board; the Minister was in the House at the time. We had to realise that sometimes the carrot might not work and that sometimes it is about the stick. We can argue about whether six weeks is an adequate sentence, but the difficulties that people would face if they had their driving licence withdrawn, as well as all the other issues relating to enforcement, would really focus the minds of many people.

As a constituency MP, I have had nothing like the volume of CSA cases recently that I previously had. Ten years ago, I would have had a little queue of parents—both with care and non-resident—complaining about all the issues that have been highlighted today. I can now count on one hand how many live cases about the CSA that I have. I do not know if there is a particular problem in Loughborough, but I am just being frank with hon. Members in saying that I have seen a significant change. That is not to say that I do not occasionally have cases where somebody has had a wage deduction charge that has been wrongly applied—

[Heather Wheeler]

I am sure that my constituency of South Derbyshire is as fragrant as it always is, but I get three CSA cases a week—three a week.

[Mrs McGuire]

Mr Weir, I hope that you will agree with me that there must be a change in the atmosphere in Scotland, although I have to say that it is nothing to do with your political party. My experience is not the same as that of the hon. Lady. I can only put my experience on the table, in the same way that other colleagues have done.

Since the range of enforcement actions have been introduced, I have seen a significant downturn in the number of CSA cases. That is not to say that there have not been occasions when people have come to me and complained about the administrative errors at the CSA, which are unforgivable, or about the fact that the wrong assessment has been made. Those are the types of problems that have been highlighted in the debate today.

The comments that I quoted from the two distinguished Chairs of the Public Accounts Committee are intended to show that there have been changes in the CSA. The reality is that all of us have to wrestle with the legacy of a flawed initial approach; that includes the Minister, who is doing so quite admirably. The introduction of the CSA had joint-party support at the time, but it was rushed. The technology was not up to it and the scale of the problem in those initial years was grossly underestimated. Perhaps because we always want to believe the best of humankind, the idea was that if we suddenly introduced the CSA, everybody would conform. That was not the reality, as we know from individual experiences.

I am sure the Minister could tell us how many connections have to be made just to reach a conclusion in a single CSA case. Reaching a conclusion is quite a complex business; everything has to be tested. As MPs, we all know that someone can have a perspective on a particular case that might not fit with what another person thinks, whether that case is about the CSA, a housing complaint or any other complaint. So, all those checks have to be made in each case. I am trying to illustrate that this problem is not easy to solve, and there are some questions that I hope the Minister will address, which have been raised by colleagues in her own party as well as by my hon. Friend the Member for Edinburgh East.

I echo the advert that the hon. Member for Romsey and Southampton North gave for the Scottish legal system. Minutes of agreement are a good vehicle for getting parents to come to an understanding and to recognise that such an agreement is not something they can sign off and then just park; it is legally enforceable. That makes a significant difference to how those agreements are seen in Scotland.

The hon. Lady also suggested that such an approach could be exported, or perhaps transferred—I do not think we are quite into exports yet, Mr Weir, from Scotland to England—into the English legal system. I echo that suggestion, which the Minister might like to consider, although I appreciate this issue is not totally within her domain. Such an approach is an excellent example of how the legal system can formally—but almost informally—make something happen. Things are done between lawyers, and as a lawyer yourself, Mr Weir, you will know that in Scotland one always trusts the word of a Scottish lawyer. The Minister should look at that issue, which I know the Law Society of England and Wales and the Law Society of Scotland have highlighted in their response to the consultation. Interestingly, the Law Society of England and Wales has said that family-based agreements are unable to command support because they are not enforceable, and that they add to the existing uncertainty.

We have all seen examples of how difficult it is to pin somebody down about their lifestyle and what they tell the CSA is their income. Before there was investigation and enforcement within the CSA, I had a long-standing case involving a woman who was married to a high-profile person who was returning an income of almost zero. Frankly, everybody and their dog knew that that was not the case, but the woman had difficulty in dealing with the situation. I think that is why there is some surprise that, given the Minister’s views on trying to get a consensual approach to arrangements, regulations 18 and 20 will, I understand, be withdrawn, and I hope that the Minister can throw some light on that.

I thank the Law Society of Scotland for its excellent comments in highlighting this problem. It is concerned that a change in the regulations, whereby the parent with care, and the CSA, could challenge the lifestyle of the parent without care,

“could allow non-resident parents with well-informed advisers to be navigated out of the child support system to the detriment of the children concerned.”

I suppose that that is the flipside of the lawyer. The lawyer will act in what he or she sees as the best interests of their client and, in those circumstances, that might be to try to navigate their way around—that is the sort of neutral term I would use.

Finally, I have one or two points to put to the Minister, which have arisen out of the recent Public Accounts Committee report. One is on the charging of parents, and a Member has already asked: if it is only £20, what is the point, because it will not even cover the costs, and there could be an element of tokenism? I certainly agree that that aspect would perhaps have been better left as it was. There is a view that the introduction of fees might well make child poverty worse, and that it might act as a deterrent. Given that some people will be on extremely low incomes, £20 might just be the deterrent that will put them off.

The Public Accounts Committee also identified that the IT system that has been introduced to save money is already running late, and every month’s delay will cost £3 million. [Interruption.] The Minister smiles in that enigmatic way that most Ministers before her have smiled about IT and Departments. Given that IT systems have been the bane of the CSA’s life, we need some—any—reassurance that she has this under control. The other related issue is whether a new IT system can be installed and tested while an existing programme is still being delivered. Those of us with accounts in the Royal Bank of Scotland and NatWest have perhaps seen an example of things going wrong when an incident happens during the running of a new system. I seek the Minister’s reassurance on that matter.

My hon. Friend the Member for Edinburgh East asked what would happen to the case load. Is it a zero-sum game? Will the current case load just be wiped, and will people have to say, “I want the CSA to be involved again”?

I hope that this has been a good discussion for everyone here. We have constantly to monitor the CSA. This is not an easy problem, and none of us should ever think that we can invent an IT system or an organisation that will solve the complexity of the emotional problems resulting from the break up of a relationship where children are involved. We only need think of our own families’ and friends’ experiences to see exactly what the pressures are, even in the most amicable of circumstances. In some ways, we are asking the CSA staff to work miracles in very difficult circumstances, and although they have come in for some criticism today, I think the majority of them work efficiently, to a high standard, and as compassionately as they can, within the parameters set by politicians.

--- Later in debate ---

[Maria Miller]

I think the right hon. Lady misunderstands me. I mean the introduction of the future scheme, which was considerably delayed under the previous Administration.

I am also somewhat surprised that Stirling seems to be atypical. Although the right hon. Lady might have only a handful of cases or fewer troubling her postbag, the statistics say something considerably different, which is that the Child Support Agency receives more than 20,000 complaints every year. I know that the agency’s chief executive is absolutely unhappy about that and is doing a great deal, working with staff, to do something about it, but it is indicative of the situation facing us.

[Heather Wheeler]

I hope that my hon. Friend will get around to talking about the duty of care, because if the CSA mucks up, there is nowhere else for the parent to go.

[Maria Miller]

My hon. Friend is right that as a Government we have a duty to ensure that we have a system that operates correctly for families. I would like to take her back a step, though, to look at the fundamentals.

The reality is that every child in this country has two parents who have a commitment to that child for life. For too long, the evidence has been conveniently ignored that children who live in a stable family do better than those who do not, and the most stable families that we have are married ones. This Government do not ignore the evidence. My hon. Friend the Member for Sherwood (Mr Spencer), who is no longer in his place, was right to say that both parents have a right to stay involved in their children’s lives. I applaud the work being done by my colleagues in the Department for Education to make sure that that will happen more readily in the future.

Children thrive when both parents take an active role in their lives, and evidence from elsewhere in Europe underpins that. If adult relationships break down and parents do not work together to ensure that they both continue to play an active role in their children’s lives, it is the children who suffer. For me, that is the starting point for today’s debate. Having the opportunity to reframe the subject is important for all of us here.

The hon. Member for Edinburgh East (Sheila Gilmore) got it wrong, I think, when she said that we are trying to say that the CSA causes animosity. The Government are not saying that; we are saying that the CSA is making the situation worse not better, and at a cost of almost £500 million a year that is completely unacceptable. For too long, the child maintenance system has played a one-dimensional role—pretty badly—focusing almost exclusively on money transfer. IT breakdowns apart, perhaps that is why it has fallen so short of the mark and why so many Members have taken part in today’s debate. In the past, the Government have spent almost 10 times more on the CSA, its IT systems and administrative processes for money transfer and enforcement, than on supporting families to work together to fix their relationship problems, which the evidence indicates is a more successful approach. We have to change that.

As right hon. and hon. Members have said, more than half the parents who use the current system say that they would like to make their own arrangements if they had the right support to do so. That is not to say—