Child Support (Miscellaneous Amendments) Regulations 2007

I was interested to hear the Minister’s introduction to these regulations, and was listening carefully in the hope that some of my questions about the amendments would be answered. I have found myself with many questions about this legislation. The Minister has explained that one of the amendments it contains is a response to the case of Smith. It was found that the agency’s calculations of taxable profits for the self-employed were ambiguous and had been applied incorrectly. It seems important, therefore, that in addressing this problem the Government take care to ensure that their legislation is not ambiguous, but is instead well thought through and fully assessed. That appears, however, not to be the case. I am sure Members will be assured by the Minister that the regulation does not meet the conditions that require a regulatory impact assessment, but does he not think that faith in the ability of the Child Support Agency would be better restored if changes to the assessment of maintenance, let alone its collection, were given such an assessment none the less? As it is, we have been given no estimate of how many children will be affected by these changes or how many maintenance payments will be changed. Given the Government’s stated intention of addressing child poverty, I am surprised that there appears to have been no analysis of how many of the 3 million-odd children living in poverty will see their families’ income rise as a consequence of these measures. Of course, regulatory impact assessments are useful not only for the information they deliver about the impact on the public, but also for the assessment of the costs and feasibility of the changes. The Child Support Agency already has an unfortunate reputation for the number of cases waiting to be assessed. Will the Minister explain how many more will have to be reassessed because of these regulations? How much longer will it take for the backlog to be cleared because of them? Quite a lot of these regulations deal with non-resident parents, a minority of non-custodial parents. Although there will always be unusual difficulties in assessing and collecting maintenance from a person who does not live in the country, has there really been no analysis of whether the costs of the resources that the Government intend to throw at the problem are justified by the benefit that will result? I also have some queries about the level of interdepartmental co-ordination that will be needed to implement some of these changes. Using Her Majesty’s Revenue and Customs data to assess the taxable income of self-employed parents will require a great deal of Treasury co-operation and input. It will need to be effective joined-up government to persuade the Treasury to use resources for identifying abuses that will not greatly improve the amount of income tax that it collects, but will instead be used to the benefit of another department. Can the Minister assure the Committee that the Treasury has been fully liaising on these regulations, and that they have the Treasury’s full support? Calculating capital allowances for the purposes of macroeconomic policy and international trade will surely have a knock-on effect on child maintenance. How do the Government intend to stop these unintended consequences? Another aspect of these regulations that has not been fully explained is how a parent without custody will challenge any changes that are made to their child support liability. As I understand it, these regulations move the responsibility for providing evidence away from the parent with custody, who always used to have to show why a reassessment should be made, to the parent without custody, who will now have to challenge HMRC’s reassessment of his or her income. What evidence will be required of them to do so, and what support will be available for them while the challenge is being processed? According to evidence given to the Work and Pensions Select Committee in February 2006, 65 per cent of cases where a liability order is sought have an error in them. That must lead to an enormous number of challenges, many of them successful, the cost of which to the CSA and the involved parents must be considerable. That shockingly high number of errors is no doubt partly because of the overtly complex assessment system the CSA uses. We on these Benches have been proposing for a long time that this system could be simplified by being based on a previous year’s income. I am very pleased to note that the Government have taken up our suggestion on the Child Maintenance and Other Payments Bill, although it is disappointing that they do not intend to implement that much-needed proposal until at least 2010. Yet this secondary legislation implements precisely that simpler method of assessment for the self-employed immediately. Why are the Government implementing the new system for 7 per cent of the caseload now, but delaying it for so long for the majority? Are the Government content that the vast majority of CSA clients will have to struggle on with the existing discredited system until 2010? My colleagues in another place have made it clear that we on these Benches will support legislation that fast-tracks these changes for all CSA clients. The families who are struggling to work with the CSA need a speedier, more accurate assessment to process immediately. I look forward to hearing the Minister’s response to my questions and to the comments of other noble Lords who will speak in this debate. There has been far too little information on these amendments and the wider problems that they are intended to resolve. I hope that the Minister’s response might go some way to filling in the blanks, as well as explaining the Government’s extraordinary method of improving the CSA’s assessment process.