|Draft Child Support Regulations 2000
Mr. Steve Webb (Northavon): I should like to make some brief observations about the regulations, starting with the draft Child Support (Maintenance Calculations and Special Cases) Regulations 2000. The Minister cited £100 and £200 as the thresholds below which minimum payments apply and above which the standard percentage applies. Those figures have been in use for some time nowthey are nice round numbers and make the system sound simplebut, between their announcement in the House at least a year ago and their implementation, which will be in 2002 for new cases and at some unspecified date beyond then for existing cases, many years will have elapsed and their real value will have changed. Will the £100 and £200 thresholds be subject to statutory indexation or to the sort of fiscal drag that so often occurs in the benefits system? If the £200 threshold remains fixed for several years, as looks likely, more people will enter the 15, 20 or 25 per cent. regime than the concessionary regime for those on lower incomes. Will the figures be reviewed when the Department feels like it, or will they be treated to statutory indexation?
My second question relates to the process described by the Minister whereby the concessionary rate stands at less than £100 and the full rate at more than £200, with a tapering system in between. The Department has not addressed the implications of that banding for the marginal rates faced by people on incomes between £100 and £200 a week. Someone with an income of £100 and one child will pay £5 maintenance, whereas someone with £200 a week will pay 15 per cent.15 per cent. of £200 is £30. Therefore, in the band from £100 to £200, the maintenance liability rises from £5 to £30. In other words, there is a £25 rise over a £100 band of income. That is the 25 per cent. marginal rate.
That marginal rate is not the only one that people in that income band face. They face national insurance, income tax, and the potential withdrawal of other means-tested benefits. Will the Minister clarify whether those marginal rates, which are higher for larger families, will be in addition to the marginal rates of income tax, national insurance and the withdrawal of means-tested benefits, with particular reference to the working families tax credit?
There is a danger that people in those income bands will find that the combination of tax, national insurance, higher maintenance and means-tested benefit withdrawal will mean that it is not worth their while getting a pay rise or a better job. That runs counter to the Government's arguments about work incentives. Indeed, such a system could work counter to their objectives of the payment of more child maintenance. If non-resident parents do not receive an incentive to increase their incomes because of penal increases in combined rates of tax, benefit and maintenance withdrawal, they might not bother to increase their income and everyone will be worse off as a result.
Mr. Peter Bottomley (Worthing, West): The hon. Gentleman raises an interesting point. Does he agree that that applies to when moves are made from flat limits to percentages?
Mr. Webb: The hon. Gentleman is right. A move from a flat rate to a percentage will result in the phenomenon that I have described. The Government have not thought about whether another 25p in the pound on top of tax, national insurance and the withdrawal of means-tested benefit is too much. They have not looked into such issues, which will be a bigger problem for larger families. Such a scheme will mean a steeper phase-in, but will it be too steep?
Mr. Bottomley: If there is to be a transition, does the hon. Gentleman agree that it would probably be better to begin it roughly at the time when those involved go into full-time work, and not when they are considering whether to apply for a job at a higher rate than the minimum wageif they had an opportunity to do so?
Mr. Webb: I have an open mind about that matter. There are many labour market transitions, such as whether to work overtime at Christmas or to take a better job, and so on. To give the hon. Gentleman a fair answer, I would have to know more about the typical labour market transitions and the different types of non-resident parents.
Before we approve the regulations, I should like reassurance that the Minister has thought about such issues and that the rate of the phasing-in of the full rate of maintenance and the combined effects of that and other withdrawal rates in the tax and benefit system have been fully worked out. I should be grateful if she supplies the Committee with evidence that that has been done and gave us statistics concerning the number of people who will face relatively high marginal rates.
I referred earlier to the draft Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations 2000, and to my concern about the withdrawal of the driving licence as an alternative to prison. I shall not labour the point, save to say that the Minister said that going to prison was not a good way in which to encourage people to earn money. That was a fair point, but I am concerned about the breach of the principlethat the system, with its noble purpose of enforcing maintenance liabilities, can pick an arbitrary penalty.
The Minister's response is always that people should pay the maintenance. That is true, as is the fact that all those who break the law should be abiding by it. We are trying, however, to deal with circumstances when people do not keep the law and the punishments for such action should be relevant. For example, a sanction that can be applied to motorists, but not non-motorists, seems arbitrary. Once it is established that such a principle is acceptable, I have no doubt that the Department will wish to expand itaction that we view with considerable concern.
As the hon. Member for Beckenham (Mrs. Lait) said, the variation regulations are a departure, by any other name. The history of child support should teach us to worry about a regulation that provides such little scope for variation. As she will recall, the previous Government introduced the child support regime with what the present Government would call a complex formula. However, that that regime was found not to be sensitive enough to individual circumstances gave rise to such departures. The fact that the Government are now going for a much simpler system causes me to worry and expect that, whether in 2002 or beyond, people will say that the variation regulations are too narrowly drawn.
The hon. Member for Beckenham said that the Government have given in by capping the amount that the very, very rich will have to pay, accepting that there was something different about that category of people. I suspect that we shall be debating these matters time and again as the variation regulations are shown to be much too narrow. The Liberal Democrat view is that the child support system should have a systematic starting point but then allow for variation for individual circumstances. Clearly, there is not enough scope in the regulations for variation, and we have particular concerns about the third and fifth sets of regulations.
Mr. Peter Bottomley: I start with a simple point. I hope that the Minister, if she has not done so, will ensure that someone produces a leaflet that explains the driving licence provisions to those who are likely to be affected. When for the first time people hear that their driving licence may be taken from themor its use suspendedthey will have several questions but will not know whom to ask. A leaflet would therefore be useful. I will not at present turn my mind in detail to whether it would cover the complications of someone whose driving licence is suspended for other reasons during a period when it is withheld under the regulations, but that issue will clearly arise. Another issue is what happens if someone's driving licence is returned during a period when it might have been suspended if it had been available.
The hon. Member for Northavon (Mr. Webb) is probably right to say that the regulations will be amended in future, but that is the nature of life. In trying to achieve what the Child Support, Pensions and Social Security Act 2000 intends, there will be some degree of rough justice and some response to the injustices that are seen. However, there is no way of achieving anything like the kind of contributions and support from those who can and should be paying without some degree of awkwardness at the edges. In part, the job of this House is to respond to some of that awkwardness, but it is not possible to abolish every instance of it. The nature of the families involved precludes that.
Many of the families affected by the regulations are those who have, apparently, the least number of options, the greatest number of stresses and strains, and who deal with more Government Departments on their own account than most Members of Parliament deal with in a week on behalf of 70,000 constituents. The difficulties for those who are moving in and out of employment, relationships and their own homes, and who are probably trying to go to court, at least for reasons of divorce, separation, child maintenance or other child issues, are legion. I pay tribute to many who manage to survive those difficulties; others do not survive them.
I shall not be tempted to consider which prior debts should qualify and which should not. A line of rough justice is involved, and I shall spare the Minister and other advisers from considering too many of those in too much detail.
The most significant point that I want to raise is in relation to schedule 1 of the procedure regulations. At the bottom of page 17, a definition is given of ``advanced education'', which I take to mean as education such as A-level. I link that with the definition of ``student'' on page 5 of the calculations regulations. As I understand it, there will continue to be a gap in provision: young people who are not subject to the Act and regulations.
I have encountered two cases in my current constituencythe issue no doubt existed under the previous Government, but I was not aware of itof what happens to a child who is above the age of 19, is in non-advanced education and lives at home with a parent on income support. For a lone parent on benefit who has a child doing A-levels at college or school who has reached the age of 19, all social security money is cut off. As I understand it, the liability of a non-resident parent to contribute to the support of that child will also be cut off.
I am not arguing for a change in the regulations now, as that cannot be made. However, will the Minister write to me to say who she thinks should provide for the drop of about £70 a week in income support when a child is in non-advanced education, which, in school terms, means that they are studying A-levels? In my correspondence with Ministers, I have not yet encountered a Department that is willing to say anything more than that the local education authority may be able to help with travel costs or, possibly, books.
My understanding is that the family income would drop by about £70 under the regulations if payments were being made by a non-resident parent. I think that I have spotted the right part in the regulations. I do not argue that it would affect large numbers. I may have misunderstood the situation but I do not believe that I have. I would be delighted to discover a way in which a child of a non-resident parentor the state in the absence of a non-resident parentwho had lost a year and a half of schooling as a result of ME or some other physical condition, would still be able to make progress.
My final point is a totally different one. Regulation 35(7), on page 5 of the draft Child Support (Collection and Enforcement and Miscellaneous Amendments) Regulations 2000, relates to making inquiries and serving an order. It states:
As I understand it, people on whom an order is served but to whom a constable says that he is serving an order, without having one in his hand, are supposed to knowthere needs to be massive advertising of the regulations for that to be knownthat they can say to the constable, ``Where is the order?'' The constable can then say, ``I haven't got one, but believe me, I could get one if asked for it.'' How ``practicable'' is the time limit? Will it be five or seven days, which people are normally given to produce their driving documents at a police station? Is the order supposed to be served the next day? I am not suggesting that this is a matter of judicial review, but it would be useful if the Minister told us, today or later, in what circumstances a constable is likely to be knocking on my door saying, ``Here is an orderexcept I haven't got it with me.'' Will the constable have a duty to say to the person on whom an order is served, ``You may ask me to produce it if you don't believe what I am saying.''?
|©Parliamentary copyright 2000||Prepared 18 December 2000|