John Penrose

Conservative Party | Weston-super-Mare

Child Maintenance and Other Payments Bill

John Penrose (Weston-super-Mare) (Con): The Secretary of State mentioned the importance of cost effectiveness. Will he clarify whether couples who have a voluntary agreement that breaks down can obtain enforcement of the agreement via the CMEC or will they have to get a CMEC agreement first? If the answer is the latter, it will be much harder to be as cost effective as I believe that he would like it to be.

Mr. Hain: As I shall explain shortly, an escape route back to the CMEC is important in the event of a voluntary agreement breaking down. We need to examine the precise way in which that will happen. It is important to ensure that the necessary safeguards are in place for the commission to play a statutory role in ensuring that the parent with care and the child or children are protected in such circumstances.
John Penrose: I thank the Secretary of State for that response, but I am trying to make the point that if one cannot enforce a voluntary agreement that breaks down other than by creating a new CMEC case, that will reduce the effectiveness of and public trust in voluntary agreements, and he will fundamentally undermine the basic principle of trying to give people an alternative to having to go to the CMEC.

Mr. Hain: I thought, at first, that I was agreeing with the hon. Gentleman, but I must flatly disagree with him—I do not say that antagonistically. The new commission will have enforcement powers and provide the necessary protection. I do not understand how it can reincarnate a voluntary agreement. Its role is to provide encouragement for voluntary agreements—that is the new feature of the system, which I know that the hon. Gentleman supports. However, its back-stop role is to ensure protection and statutory backing when necessary.

Chris Grayling: Absolutely. Having waited so long for these essential reforms on such an important subject, which affect the lives of so many families in the UK, it is essential that we get them right.
Let me return to the question of how much is really changing—the point that I made a moment ago in response to my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright). The creation of a new child maintenance and enforcement commission sounds like a brave new departure in this important area. A new body, a new location, a new team, new systems to improve on what we had before—a completely fresh approach to the service that will change the frustrations of the past few years. I have no doubt that that is what people will be expecting from this Government and this Bill, but if I am not mistaken, that is not necessarily what is happening.

It appears that the organisational side of the Bill involves unscrewing the CSA name-plate from the front of its building and replacing it with one saying “Child Maintenance and Enforcement Commission”. The Government are pretty good at changing name-plates. We have not forgotten the £600 bill for replacing the name-plate of the Office of the Deputy Prime Minister with one saying, “Deputy Prime Minister’s Office”. Of course, inside the new agency’s building, there will be the same team of people in the same offices using the same computer system—the one that has caused the Government so many headaches over the past few years.

Perhaps the Minister will be able to tell us in his winding-up speech what is being done internally to ensure that this is much more than just a re-branding exercise for the CSA. What is actually being done to ensure a real culture change within the organisation? Are the Government really planning to maintain the same internal systems, or will they need to spend yet more large sums of taxpayers’ money on yet another new computer system? And why is it taking so long for the transition to the new system to take place? The new approach, we understand, will not be fully operational until 2013—most of the way through the next Parliament. Why is the change to a system in which assessments are based on information from Revenue and Customs not being fast-tracked? After all, it will be dealing with one of the biggest sources of current frustration with the present system. If Ministers can accelerate that change, they will have our support in doing so.

When the Bill is in Committee, my hon. Friends will want to probe the Government in detail about whether they intend that there should be support for couples seeking to enter into voluntary agreements. Many interest groups, for example, would like a formal structure whereby the new agency can provide back-up support for couples as they negotiate with each other. In particular, we expect to discuss in detail in Committee whether the new agency should be able to offer to women information about the income levels of their former husbands or partners, in order to help inform those voluntary agreements. Given that these negotiations will be taking place at a very emotional, sensitive and difficult time for those involved, it is absolutely right that the Committee look carefully at the level of support given to those embarking on the task of reaching a voluntary agreement.

Likewise, there is an issue about how equipped the voluntary sector will be to cope with the advice that undoubtedly it will be asked to give. I know how hard pressed many such groups are at the moment. The citizens advice bureau in my constituency is facing more and more demands for its services, particularly with the worrying growth in consumer debt. I have no doubt that the welcome change to greater use of voluntary agreements will place an extra burden on such organisations in my constituency and around the country. What steps are the Government planning to take to ensure that the voluntary sector can cope?

John Penrose: It seems sensible that the advice functions should be outsourced, as CMEC will be focusing on enforcement. If so, and if it is to be an organisation with teeth, it is unlikely to have the right approach and atmosphere for people wanting a consensual advice service as well. If the services are to be outsourced, it is essential that the right organisations are chosen, and that the commissioning operation is sensitive to that. It must come equipped with sufficient money to fund these advice organisations even if they are not provided in-house.

Chris Grayling: My hon. Friend makes a number of important points, and we will look forward with interest to seeing what information the Government give us in Committee on that subject. This is another example of an area in which we have precious little detail about what the Government envisage for an important part of the Bill.

At the top of that list is the question of the benefits disregard. We understand the theory of what the Government are trying to do but we will need to discuss in Committee with Ministers the potential consequences of their plans—if they are prepared to provide details by then.

I know that some see the income disregard as an essential tool to motivate parents on benefits to participate in the system and to make sure that money actually gets to the child rather than the state. It has also been seen as a way of targeting funding on children to ensure that we can lift them out of poverty. But, as the Secretary of State rightly said, there is a counter-argument, which is that the disregard could end up providing a perverse incentive to separate. Although I do not for a moment believe that money is the prime motivator for people to stay together or to separate, the harsh reality is that in some cases it does make a difference, and we should not use either our tax or our benefits system in a way that encourages family break-up.

I am disappointed that the new Secretary of State does not have more information for the House today, and that he was not able to offer to provide the information sought by the right hon. Member for Birkenhead and myself. I appreciate that it is early days, but will he look at the issue again and come back with information as quickly as possible, as it is central to the viability, the cost and the working of the scheme? The Government are asking the House to debate the fundamentals of the Bill—in the Chamber today, and in Committee—without that information. That suggests that the Government are not being as full, open and collaborative with Members as they should be, given the supposed change of tone in the Government.

It is also important that the Committee examine in detail the issue of self-employment. We think that the previous-year assessment basis and the disregard of income changes up to 25 per cent. are logical for people in normal PAYE employment. But we need to understand how the Government intend to handle self-employment. I have lost count of the number of times that women have come to see me with the complaint that their former husband or partner is declaring a very low income to the CSA, but is self-employed and clearly hiding a much higher income; he may have a big house and a big car. The frustration of those women is clear; they say, “I know he’s better off than he says. He’s telling the CSA that he’s only earning £17,000, and the CSA says it will take his word for it.” That is obviously wrong and unfair.

The Secretary of State will know that while it is difficult to dodge factual information within the conventional PAYE system, there is greater flexibility for self-employed individuals to avoid the full force of the system. Will the Government explain in Committee in more detail how they intend to address the issue and tackle the potential problems that self-employment can create?