Paul
Rowen: The hon. Gentleman has given a succinct review of
the issues and concerns addressed by the amendment. I remind the
Minister of the bold statement in the White Paper on the announcement
of plans for the new child maintenance
system: “Using
information from a single known source could significantly reduce the
time it takes to make a maintenance calculation. For parents, this
increases the prospect that they will receive child maintenance shortly
after the initial application. For the body responsible for
administering child maintenance, it offers the prospects of clearing
initial applications much more swiftly, so that a backlog of
applications does not build
up.” That is a
laudable aim. The hon. Gentleman has asked—I hope that the
Minister can give us a response—what will be done to the IT
systems to allow that process to happen. At the moment, as he has
pointed out, HMRC operates a number of IT systems that do not talk to
each other. What steps is he taking to ensure that a single gateway
will be operational as soon as the new arrangements are implemented, so
that information can be transferred from HMRC about various income
sources—whether tax credits, dividends or PAYE—to ensure
an accurate assessment? If we do not have that assurance, the
statement, although laudable, will end up like much else in the CSA in
the past—something aimed for but never
delivered. My
second point relates to the earlier argument about income data sharing.
The Minister stated that the parent with care should provide evidence.
Will he or HMRC permit the sharing of the non-resident parent’s
income data with the parent with care, or with one of the information
agencies advising and supporting them, to ensure that when an
application or claim is made, it will not fall between the stools, and
that the parent with care will be able to state clearly on the basis of
information provided by HMRC that a reassessment needs to be made? That
will give the parent with care much more confidence to pursue claims.
Often the forms and paperwork are complicated and not intelligible to
most people. If that information is revealed, it will make parents with
care much more determined to pursue child maintenance, where the
non-resident parent is clearly seeking to avoid it. I hope that the
Minister will update us on those issues and ensure that there will be a
workable
gateway. What
work is HMRC doing to ensure that its systems respond to one another,
which they do not currently do? Will the Minister ensure that the
information transfers to the Department for Work and Pensions in a
single stream? If that has to be done manually, as happens at present,
a backlog will accumulate.
My second
point is about HMRC sharing data, subject to certain privacy rules.
When a child is involved, there is a clear case for making information
available, so will the Minister ensure that HMRC makes data available
to the parent with care to assist them in the pursuit of their
claim?
Mr.
Plaskitt: Naturally, the discussion of the amendment
strays into the question of IT, because it is crucial to ensure that
that works. I am grateful to both the hon. Members for South-West
Bedfordshire and for Rochdale for their comments on the matter. It is
of course important that the connection works, and I shall attempt to
give reassurances.
There is
already a fair amount of data transfer between HMRC and the DWP and it
works smoothly, particular in respect of information received from
taxpayers
who have completed their self-assessment PAYE forms. I also reassure the
hon. Gentlemen that the discussions about evolving the system so that
the necessary platforms are in place for the transfer of data envisaged
under the commissioner arrangements are well advanced and have been
ongoing for some
time. Of course,
the Government seek the same reassurances as the hon. Gentlemen on the
robustness of the system. It is our duty to lay down the specifications
to ensure that there are no unnecessary barriers to prevent its
working. The issue of who is contracted to do the job is an entirely
separate issue on which I ought not comment. Contractors may have their
views about that situation, but they would say that, would they not? We
are clear about our obligations, the specifications and about ensuring
that the system is there and that the data transfer required to make it
work will function and run smoothly. All I should say at this
point—this is a public sitting—is that the discussions
are advanced. We
recognise the principle behind the amendment and agree that we ought to
consider whether the commission should have a means of dealing with
non-resident parents who intentionally deprive themselves of income to
reduce their maintenance liability. However, we must consider the point
at which it is most appropriate to take account of intentional
deprivation. If the power were included in the main scheme, the
commission would be required to decide whether an observed reduction
was intentional or reasonable in the case of every non-resident parent
whose income fell, which would cause significant delays in processing
of cases. Although
the Secretary of State currently has powers to make such regulations
and has done so for the 1993 scheme, the powers were not used for the
2000 scheme for the sake of simplicity. We believe that that remains
the right approach. To introduce regulations to tackle
the small number of non-resident parents who
successfully deprive themselves of income into the main scheme would
add unnecessary complication and additional delays to the process of
finalising a maintenance calculation and ensuring the flow of money to
children. If the powers were applied to the main scheme, we would risk
creating considerable additional work for the commission by, in effect,
casting doubt on the income information supplied by all non-resident
parents. However, if we decide to take a power to treat non-resident
parents as earning income when they intentionally deprive themselves of
income, the variations regime is the right mechanism by which to deal
with those rare and complicated cases.
We have a power to introduce
grounds for a variation to cover intentional deprivation of
income. Paragraph 9 of schedule 4 to the Bill will carry
forward powers to estimate income when information relating to a
non-resident parent’s income is believed to be inadequate or
unreliable.
Mr.
Boswell: I was just wondering about circumstances in which
the Inland Revenue may have a taxpayer under investigation because it
feels that their income has been systematically under-reported. The
amendment is mainly about the system for the automatic transfer of
data. To put it simply, will there be powers for the Inland Revenue
to tip off the Department in order to generate the examination of a
variation of a maintenance
order?
Mr.
Plaskitt: That matter will be dealt with
by the annual settlement part of the regime, because the assessments
will be based on the previous year’s tax liability. If Her
Majesty’s Revenue and Customs were investigating someone and
found that there had been an irregularity or underpayment of tax, it
would recoup that by bills in subsequent years. There will be a
carry-over from the tax assessment into the maintenance assessment by
the mechanism of fixed-term maintenance agreements, which we envisage
the commission operating based on the previous year’s tax data.
There should always be automatic catch-up of any correction that HMRC
is
doing.
Mr.
Boswell: I am grateful to the Minister
for elucidating that process, because I was not aware of it. Does he
agree that there is huge sensitivity, which has been exemplified by
constituency casework, about the build-up of arrears of maintenance? It
occurs to me that if the Inland Revenue is looking for a substantial
recovery of unpaid tax, the recovery of unpaid maintenance will equally
be at issue. Will he give some consideration to the relative priority
of those two claims in relation to whether the revenue will go to the
children or
elsewhere?
Mr.
Plaskitt: I do not want to get the two things tangled up
too much. It is important to remember that moving to a system of annual
awards based on gross income will automatically fold
information that HMRC gains about income into the maintenance system. I
do not want to over-complicate the system, because we have been there
and know the problems that that creates. I think that the degree of
automaticity between HMRC data and maintenance that we envisage in the
new system will cover the hon. Gentleman’s
concerns. We
are currently meeting stakeholders, including One
Parent Families, to discuss the best way to deal with such cases and
whether we can make such a power work in practice. We will also take
advice from the new commission before coming forward with secondary
legislation. Depending on the outcome of those discussions, we will use
existing powers to make regulations to deal with cases in which
non-resident parents intentionally deprive themselves of income as part
of the variations regime. Having given what I hope are sufficient
reassurances, I hope that the hon. Member for South-West Bedfordshire
will withdraw the
amendment.
Andrew
Selous: As I have said, this is a probing amendment. I beg
to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn.
Paul
Rowen: I beg to move amendment No. 65, in
schedule 4, page 63, leave
out lines 23 to 27 and
insert— ‘12%
where the non-resident parent has one qualifying
child; 16% where the
non-resident parent has two qualifying
children; 19% where
the non-resident parent has three or more qualifying
children.’. Schedule
4 deals with the basic rate that a non-resident parent will pay from
their gross weekly
income. It being
One o’clock, The Chairman
adjourned the Committee without Question put, pursuant to the Standing
Order. Adjourned
till this day at Five
o’clock.
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