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Earl Russell: The Minister is quite right that I would prefer those cases never to be taken on. I notice that Miss Chant yesterday, giving evidence to the Public Accounts Committee, said that people resented the reopening of court settlements. I do not believe that the Government have ever taken on board quite how intense that resentment is. In fact, it led one person to write to me saying that the 1991 Act was unconstitutional. I explained to him with some care why those words could not be accurate but I understood the sentiment behind them. Those are dangerous sentiments. If the Minister wishes to avoid them growing, he should not attempt to override court settlements by means of a power which is itself inherently likely to be rather debatable. Therefore, in this regard the power is debatable and the policy intention is debatable. I object to the union of those two together.

If the Minister must insist on the take-on of previous cases and if he is still in a position to do that, I suggest that he should do it by primary legislation because this will be a major contentious issue. I still see some force in the old convention that regulations should deal only with minor matters. The Minister may wish to claim that this is a minor matter but it is not; it is contentious. If it must be done at all, this is not the right way to do it. I hope that the Minister will think again. However, I do not believe that he will do so this evening, and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

On Question, Whether Clause 18 shall stand part of the Bill?

Baroness Hollis of Heigham: I suspect that it is something of a record that at seven o'clock in the evening the Opposition begin to move their amendments. However, it may be worth making clear that we have not intervened on the vast majority of the amendments moved by the noble Earl, Lord Russell, because on these Benches we are not seeking to wreck the Bill or to substitute a different sort of Bill. We are trying to make this Bill work more equitably and efficiently than it has done so far. As my honourable friend in another place said, we are not engaged in trench warfare. I hope that the Minister and the Committee have had evidence of that this evening.

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I should like to ask a number of questions in relation to this debate. First, the noble Earl, Lord Russell, said on a previous amendment that Clause 18 will defer indefinitely the taking on of all maintenance cases where the parent with care is not receiving benefit. In those cases, the existing court settlement stands. On these Benches we have always said that we did not believe that the Act should have been retrospective. We believe that it should have started in 1991 with a clean sheet and with new cases only from then on.

Virtually all the problems which the Government have faced have been caused by retrospection, where settlements have been overturned which were entered into in good faith as a result of court decisions. Those settlements may have been generous or they may have been unreasonable, but people went on to shape the rest of their lives in the expectation that they would stand. Indeed, in consequence of that, we have urged the Minister to accept that court settlements in relation to property should be taken into account in the maintenance formula. Therefore, we start from the position that we do not believe that the 1991 Act should have been retrospective. It should have started with a clean sheet, as happened in Australia. The vast majority of the distress and concern may not have occurred had the Government gone down that road.

However, the Government have overcome one unfairness—that of making the law retrospective—by removing that but only for a particular class of absent parent. For some there is retrospection but for others there is not. That seems unfair because it depends entirely on whether the parent with care is on benefit. Therefore, by removing one unfairness the Government have created more unfairness.

Perhaps I may illustrate the unfairness. The Government made the point repeatedly that the old court system was unfair. It was erratic in relation to the awards made and was inconsistent. We do not disagree with the Government's assessment. Yet now they are allowing those court settlements to stand even though they have judged them to be erratic and inadequate where the parent with care is not on benefit. In other words, a mother on a low income who is in work and receiving maintenance is not eligible for the more realistic CSA maintenance figures or collection and enforcement role. She is dependent on a court settlement. In theory she may return to court to seek a revision upwards to bring the settlement in line with something more realistic, but unless there are new circumstances, and without legal aid, it is likely to be a fruitless exercise for her. Therefore, a parent with care who is on a very low income will be stuck with a court settlement which when it has suited the Government has been denounced.

The right answer may be for that mother with care to have the court order adjusted to a more realistic level, but there is a problem of inequity in that regard. In particular, it means that lone parents with care who have come through the CSA because they were receiving income support and then go on to work a year or two later will receive much higher maintenance awards than those who never received benefit. Therefore, it is

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advantageous to come out of work and move on to benefits so that the maintenance contribution is forced up through the CSA and then return to work. I suspect that that was an unintended consequence of what the Government have done. But I foresee that becoming a path that it will be in the interests of many parents with care to follow. That would be regrettable.

I turn now to my third point, where I believe I may have the support of the noble Earl, Lord Russell. It is the matter of retrospection for parents with care who are on benefit but not for those who are not on benefit. That is also unfair to many absent fathers, half of whom are in second families. The new partner of such a man is very likely to bring children with her—the absent father's new step-children. On that marriage, the new partner has lost her own right to income support as she is now in a new relationship. Therefore, she has lost her independent right to use the CSA to collect maintenance from her first husband. He may now get off scot-free.

That means that the absent father of the first family is now supporting his own first children, his partner's step-children and any natural children of that second marriage. But, through her, he does not have any way of making the father of his partner's children contribute to their maintenance because the CSA has withdrawn from that collection role. In other words, he is being asked to support not just his present family and his second family; he is being asked to support three families: his present family, his first family and the first family of his new partner. That is financially impossible. That is what the Government have constructed in their, perhaps, hasty changes.

The Government found themselves in a position where many parents with care did not want the old system overturned. However, the Government overturned it whether or not they wanted it where they were on benefit. The Government also found that other parents with care would like the old system overturned, but that is not possible because they are not on benefit. In other words, the Government have gone not with the grain of what people want; they have gone with the grain of what the Treasury demanded—to claw it back when people are on benefit whether or not they want to do so and ignore it where they are not on benefit whether or not they want it.

We understand the Government's dilemma, but they put themselves in that position in the first place because of the inappropriateness of the 1991 legislation. What they have now done, while seeking to mitigate some aspects of it, is to create new unfairnesses. I await to hear what the Government say as to how they propose to address the new unfairnesses that they have created while addressing the old unfairnesses of the 1991 Act.

7.15 p.m.

Lord Mackay of Ardbrecknish: The background to Clause 18 is well known. Within the finite resources available it was clearly necessary for the Child Support Agency to take on cases in stages. The original programme was for those cases where the parent with care was not receiving benefit, and there was an existing maintenance arrangement, to be able to apply to the

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agency on a phased basis during 1996-97. Clause 18 defers the take on of those cases and ensures that the courts retain their powers to act in determining maintenance in those cases.

The measure will leave the agency free in 1996-97 to focus its attention on the introduction and smooth implementation of the departures system. I think that we are all agreed that everything possible must be done to secure the efficient operation of the new system. It would be extremely imprudent to overload the agency with a fresh tranche of cases during the same period, particularly as it is likely that many of those cases would want to apply for departures.

We have been criticised for not learning from our past mistakes. By deferring the take on of those cases we will ensure that the CSA will not be in the position of having to assimilate and deliver new procedures, at the same time as it experiences the increase in workload that would inevitably follow if a new group of people were allowed to apply to the agency.

The cases being deferred will only be ones that have access to the court system, although of course I fully accept, as the noble Baroness said, that that system is less than ideal. We are agreed on that point. That is why we are both keen on the idea of a child support agency: a consensus between parties which I thought might have appealed to some people in this country who are always saying that we are too confrontational and that there should be more consensus. But the moment we have a consensus on something—even if it is just in principle and not on some of the detail—they promptly start screaming and changing the word "consensus" to collusion. However, that is quite a different tale and perhaps I should not be tempted too far down that road at this time of the evening. But it is an interesting phenomenon that we are seeing and political correspondents may well take note of it.

As I said, those cases will be those that have access to the court system. Therefore, as well as protecting the taxpayer, our priorities must lie with the group of parents who have most to gain from applying to the CSA: those who currently have no child maintenance. If that is because there is no court order, or written maintenance agreement which was made prior to 5th April 1993 and the parent with care does not receive income support, family credit or disability working allowance, the parent may apply to the CSA immediately.

Where the parent with care is receiving one of those benefits and wishes to be taken on, she may ask the CSA for early take on and the agency will treat that request sympathetically. The only cases which Clause 18 defers involve those who are able to take action for maintenance through the courts. While some parents with care in that category would undoubtedly obtain more from a child support assessment, as the noble Baroness pointed out, they cannot be said to be the ones with the most to gain.

Therefore, the highest priority for take on are those people who have no access to the courts or those who are claiming benefit and who are being supported by taxpayers. Of course, as I said, I have some sympathy for those parents with care who receive only a small

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amount of maintenance through a court order while their current partners pay out a larger amount in child support maintenance. I believe that that was one of the examples mentioned by the noble Baroness. However, those parents with care are able to apply to the courts to have their orders varied.

As I said, I believe that that is an example of the Government doing what we have been encouraged to do on a number of occasions not only in this Committee but also in other committees; namely, to learn from our mistakes, from what went before and from our experience with the agency. We are doing that and we are attempting to ensure that the phasing arrangements of new people coming into the agency's care will in fact be such that the agency will be able to cope with the cases that it already has and, indeed, cope with the new departure system which is a recognition by the Government that some steps must be taken to improve the situation.

The noble Baroness mentioned Australia where there was no retrospection. I am afraid that my reading—and I must say that it is rather one-sided because it tends to come from a source hostile to agencies in principle—suggests to me that the Australian experience was not exactly painless. Therefore, I am not entirely sure whether that is the best case to pray in aid. The justification for doing so is the experience that we have had. We wish to be sensible and ensure that the system beds down with the new departures. I fully accept that some of the cases brought to my attention by the noble Baroness appear to be unfortunate and that it would be better if we could deal with them inside the agency. But the simple fact of the matter is that we must look at the wider picture of making the agency work eventually for everyone. That is why we have taken the powers in Clause 18.

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