Child Support Collection and Enforcement (Deduction Orders) Amendment Regulations 2009

My Lords, it is a pleasure to follow the noble Lord, Lord Taylor of Holbeach. I am happy to concur with him that these orders should proceed. In his very important penultimate point, he asked what would happen with regard to the 2010 CMEC review. I certainly hope that it will be published. It is very important to debate these powers, particularly in the early years as we see how they pan out in practice. The commission should understand that Parliament does not provide administrative powers of this kind—I think that the Minister mentioned unprecedented powers—lightly. We will be watching very closely to see how they work and whether they achieve the policy aim and are used in a fit and proper manner, as was intended in Sections 22 and 23 of the Child Maintenance and Other Payments Act 2008. I concur that the House will want to keep a watching brief as these regulations start to be implemented. I remember vividly the good debates that we had when discussing Clauses 22 and 23 of the 2008 Bill, as it then was. I was very clear in my own mind that these powers were required for self-employed people. Non-resident parents who are subject to contracts of employment are much easier to handle if they are acting in bad faith in seeking to elide payments for their children. Deduction of earnings orders are a far easier, simpler, better understood and better controlled process. The evidence that was laid before the House last year certainly convinced me that the Child Maintenance and Enforcement Commission required specific powers where self-employed people were involved, as the quantification of where the money and the assets were was very much harder to ascertain and took time to establish. The people who suffer most as a result of that are the children who do not get the money to which they are entitled under the legislation. Self-employed cases represent only 8 per cent of the caseload. I have studied this matter since 1991. I keep saying that I have no alibi. I was there at the time and I feel deeply responsible for the legislation, which has been so fraught in its many manifestations. However, that percentage represents 96,000 self-employed, non-resident parents with liability outstanding. That is a big caseload which needs to be dealt with. I hope that these powers will be used proportionately. I agree that they are necessary but they must be used very carefully indeed. Non-resident parents who are in the sights of the commission using these new administrative procedures need to understand clearly what is facing them before it is safe to use these powers. In that regard I do not think that sending a copy of the interim order to the deposit holder does that by itself. The Minister may say that there will be a letter. It may be only one page of A4 but it needs to make crystal clear that the new system will be different. These parents may have struggled with the old CSA, now CMEC, for years. Indeed, a lot of them have. Some of them have acted in worse faith than others, but this is a different procedure altogether. Simply providing a photocopy of a legal document, which is probably quite impenetrable to people who are untutored in these things, is not sufficient in my view unless it is accompanied by something which explains in plain Queen’s English what is now facing the people against whom these powers will be arraigned. I also think that the accuracy of the system—I want to come back to this in a minute—still leaves a lot to be desired. I have real fears that although most of these orders will be used against people who deserve to have them imposed, some who do not fall into that category may get caught up in these provisions. Therefore, we need to be careful to make the system as accurate as possible. The Minister said that these unprecedented powers need to be used with care. I say amen to that. I like to think that they will be used only as a last resort; that is, when there is no other way to get the non-resident parent to face up to his or her responsibilities. Establishing a case against any such non-resident parent who is the subject of these orders must be done to the same standards that are used in assessing court cases under the current system. As I am sure noble Lords will know as we discussed this when the 2008 Bill was going through, at the moment the commission has powers to go to the court. My clear understanding was that very special care would rightly be taken before any case was taken to the court by the commission. I would not like to think that just because we were slipping into an administrative route rather than a judicial route the standards would be any less rigorous in terms of getting the evidence, presenting it clearly and making sure that the case against the non-resident parent was just and merited the use of these powers. I would also like to think that very clear guidance will be given to staff. The impact assessment tells us that 11 staff will be given three days’ training. I am a bit concerned about that. If they start to handle 500 cases a month, as the impact assessment statement tells us, I am not certain that they will have the capacity to be able to do that safely. I hope that the Minister, on behalf of the House, will satisfy himself that the guidance and training that these staff will get is fit for the purpose for which it is being given. I also note an increasing use by CMEC of ordinary bailiffs rather than court bailiffs, which concerns me. There are some safeguards in using bailiffs who are part and parcel of magistrates’ courts and the sheriff court system in Scotland. Just using a centralised system of bailiffs means that the same care in how some of these orders are prosecuted might not be guaranteed. Perhaps the Minister would prefer to write to me on this judicial point. I understand that, under the Court of Appeal case of Rowley v the Secretary of State for the Department for Work and Pensions, there is no right of compensation for an action when an administrative procedure of this kind is used as opposed to any other kind of procedure. It would be helpful if the noble Lord, Lord Taylor, anyone else who is interested in this debate and I could be reassured about that important point. There is also a feeling that the recovery process is mechanical—that it is a steamroller operating automatically. Once the initial series of appeals, reviews and the rest of it are over and it is in the statutory recovery process, there is no avenue for anyone to consider again whether the amount of debt due or the liability is right or whether the assessments have been conducted properly. I have some concerns about that. Noble Lords will know that there is now a welcome introduction to things like the so-called options service, which sometimes give the possibility of a face-to-face interview. More than anything else, people who are subject to this statutory machine for recovery of debt feel that they do not have a chance for someone to listen to their case. I notice that DWP report 503 on relationships, separation and divorce, by NatCen and co-authored by Professor Nick Wikeley and others, found the pursuit of debt to be a remote processing system. If we are using this new administrative heavyweight machinery and there is some evidence that there is a remoteness in the processing system, there is a potential flaw that some people could fall through some of the systems and get hurt in a way that is disproportionate to the liabilities that they were allowed to owe. Accuracy continues to concern me about the whole operation of the CMEC proposal. Will the Minister ask the department to get the commission to explain how the accuracy figures are supposed to work? I have studied them for some time. The latest figures, for March 2009, show that on the basis of the "right to the nearest penny" test—I do not understand how that test is conceived and put together—84 per cent of the current system was right to the nearest penny, as was 91 per cent of the old system. That does not equate or relate to the evidence on the ground of people saying that their assessments are inaccurate. On the so-called "cash value" accuracy test in the March 2009 figures, 96 per cent of the current system is said to be accurate in terms of its cash value and 98 per cent of the old system is supposed to be accurate. These data are impossible to fathom. I can make no sense of them because they are meaningless. The Minister is careful about these things. Perhaps he will go back and try to make sense of these figures. A letter to explain what is going on to me and, possibly, the noble Lord, Lord Taylor, would be very welcome. As far as I can see, the last CSA standards report was published in 2003-04. It said that 65 per cent of liability orders were wrong. That was some time ago and I know that there have been improvements, but 65 per cent of liabilities being inaccurate is not a strong base on which to start using administrative powers of this kind. I think that the Minister will continue to take an interest in accuracy. I think that just short of £4 billion of debt is still to be collected; we will not know until the commission’s next annual report is published. It would be helpful if the Minister could say when that is likely to be. In the past, annual reports of the commission and the CSA have slipped by sometimes for not weeks but months. I just hope that we will get the annual report in July as expected. Only then will we be able to discover what the trends and the outstanding debts are. Knowing when the annual report is to be published would be useful information which might reassure some of us. In addition to that, the commission has commissioned two reports from PricewaterhouseCoopers. One report is on the age of outstanding debt and the other is about collectivity of the debt. I hope that by now they have been received by the commission. If they have, I trust that they will be published. I hope that the Minister will insist that they are published so that we can all look at the exact trends in relation to the debt. Finally, the Minister said something about the appeal process which caused a question mark to appear in my mind. I understand perfectly that the Explanatory Memorandum says that there will be an appeal process, which is welcome so far as it goes. Perhaps the Minister will confirm that the appeal process is only about the correctness or otherwise of the laying of the order to the deposit taker. I do not think that it is about the merits of the liable debt. If an appeal is lodged within the 21-day period, can the non-resident parent then say, "Well, I am appealing not because the order has been laid incorrectly to the wrong bank, for the wrong reason or for the wrong amount, but because I cannot afford to pay this because it will affect my second family"? Does the appeal process stretch to a non-resident parent being able to appear in court and say, "Well, actually I do owe X thousand pounds, but for the following 16 reasons I can only afford to pay it back at a reduced rate other than that in the draft order which has been served on me"? If that is true, it would obviously encourage a great many non-resident parents to avail themselves of that appeal. Allegedly, in many cases, some of them have been trying to establish that for a long time. I know that I have given quite a list of concerns, but I finish by saying that I support the view of the noble Lord, Lord Taylor, and that these orders are required. I hope that they will be used carefully and as a last resort. I hope that they achieve the £2.1 million that they are set to try to recover for children. That is an ambitious target and I will be very surprised if it is reached. But in a year’s time, come 2010, whenever the commission reviews the success or otherwise of these orders, the noble Lord, Lord Taylor, and I, and no doubt other Members of the House, will want to continue to have this discussion to make sure that the orders are being used efficiently and successfully, and to the benefit of the children who, ultimately, are those we are most concerned about.