| Child Support, Pensions and Social Security Bill
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The Parliamentary Under-Secretary of State for Social Security (Angela Eagle): Is the hon. Gentleman arguing that, although he favours a simplified system, that system should in all cases include travel costs and high housing costs? Mr. Pickles: If the Under-Secretary would care to read the selection of amendments, she will see that we shall argue that point later, and we shall look to her to tell us why we are wrong. However, I do not want to try your patience, Sir David, by raising matters that relate to a subsequent amendment, as the hon. Member for Kilmarnock and Loudoun suggested that I might be. We want to protect our position and that of other hon. Members to be able to say that those variations will start off being fair, so that we do not have to face at another time in another place a new set of variations. If we do that, we start on the basis of examining them through proper scrutiny, line by line. Mr. Browne: If I have understood the hon. Gentleman's argument correctly, he is calling for prospective scrutiny by Parliament of variations before their implementation. Unfortunately, the amendment does not call for that. It merely requires the Secretary of State, having made a variation, to report annually to Parliament about the number and qualifications involved. It is retrospective, rather than prospective. As yet, we have not heard an argument from the hon. Gentleman about the amendment. Mr. Pickles: I am embarrassed to say this; I do not know how to say it nicely. We are debating two amendments. The hon. Gentleman should read the second amendment. You, Sir David, and the usual channels have selected the amendments with great skill, to enable us to take the two together. I politely point that out to the hon. Gentleman, who was wondering about it. If he looks at the selection list, he will see that there are horizontal lines, and sometimes plus signs, which mean that amendments can be debated together. Mr. Browne: Yes, I see. Mr. Pickles: I am, as they say, here to help. Mr. Rooker: The hon. Gentleman is a born teacher. Mr. Pickles: It is a gift. We are giving folks a choice. We want to argue our points in Committee and to scrutinise matters in the Bill, as we come to them. But we are also saying that we would settle for the second best option, which is the issue of the annual report—the retrospective stuff. Although I do not think that that is a good way of going about it, we are reasonable people and we are here to accept what the Committee wants to do. Despite the interventions which have been made, our hand of close friendship is held out to the Labour patty on these issues. I look forward to hearing the Minister and, if she can go some way towards allaying some of my fears, she will find that we are even more co-operative than we were on the previous group of amendments. Mr. Edward Leigh (Gainsborough): This is a crucial area and I appreciate the fact that we shall return to the issue of variations. I am making a sort of hors d'oeuvre speech—a taster of what might follow. Therefore, my remarks necessarily will be rather short. The variations issue is one of the most interesting that we have had to discuss in our consideration of the Bill. I am convinced that the devil is in the detail and the devil in the proposed legislation is in the variations. When the Select Committee visited Falkirk, which is a Child Support Agency centre, we were told that the agency supported the concept of a simple formula, but the staff said, ``Please don't load any variations on us, because that is when things will start to go wrong.'' I am sure that it is the Government's intention to resist the amendments and to say that they do not need to report annually to Parliament, nor do they want to have such matters approved beforehand, as suggested by the amendment. They know that, if they load a new set of variations on to the simplied formula, the system will quickly revert to something approximating the present highly complex system. As time passes, the Government will be forced to make variations and the system will start to break down. Unless such an amendment is passed, there will be no proper parliamentary scrutiny. How will the variations be introduced? It will be interesting to tease out of the Minister what she intends to do. Obviously, neither officials nor the chief executive of the CSA will be introducing variations. They will have to come from the Minister, and she will have to make them. Before talking about the variations that she might be forced to make and which might be discussed in Parliament, I shall refer to the point made by the hon. Member for Hendon (Mr. Dismore), who mentioned to the Australian system. He said that, if there is virtue in the Australian system, it is that it is a simplified system. It may be a simplified system, but there is a sophisticated departures system, which, although it has lasted for a decade, has a problem. We have much to learn from the Australian system; we are moving to a simplified formula, albeit with a sophisticated departure system. The non-resident parent's gross income is worked out and eventually a percentage is taken from it—just as we are doing. But in Australia, from that gross income is subtracted a self-support allowance, plus an allowance for each dependent child in the parent's care. So far, so good, but it becomes more difficult. The allowances are the unpartnered social security rate if the person has no dependent children. If he has dependent children, the allowance is double the partner's social security rate of just more than 15,000 Australian dollars, and for each dependent child, he is allowed a social security rate. An additional adjustment is made for what is called the custodial parent's excess income, which is calculated by first taking the custodial parent's disregarded income, which is the state average weekly earnings figure, plus social security allowance for the children in her care. I do not know whether you are still following me, Sir David, but it is difficult stuff. We are reaching almost as complicated a position as we have now. The disregarded income is then subtracted from the actual gross income of the parent with care, giving her excess income. That is subtracted from the non-„resident parent's income. Has anyone in the Committee understood what I have been saying for the past couple of minutes? I know that the hon. Member for Colne Valley (Kali Mountford) has several degrees, so she understands it, but I am not sure that I do. The resulting product is then divided by simple percentages. The Australian system may have been running for a decade, but it is already becoming apparent to them that although they started with a fairly simple system, they have had to move towards a more sophisticated one. The other reason why Parliament will have to get involved is because it will be impossible to run with a simple formula. It will not be sustainable. On Tuesday, I read out a list of the current departures. I do not want to do that again, but they encompass all the sorts of problems that non-resident parents are likely to face. I well remember when the Bill was first introduced, just as the Minister came to Parliament. The hon. Member for Colne Valley said that the formula was very complicated. She said that it was impossible for anybody to understand. The formula introduced by the 1991 Act is AE = Z × Q × (A/A+C). I agree that it is difficult, though not for my hon. Friend the Member for Beckenham, who was educated in Scotland, and understands such things. We had a rather inadequate English education. The problem is not with the formula because the system is computerised anyway. When the income details have been fed in, the computer can work out in a micro-second the exact assessment. The problem was never with the formula, but in collecting the information that went into making the formula. People started descending on our surgeries in a great mass in the summer of 1993 because no account was taken of the efforts that they were making, such as travelling to see their children or their housing costs, whether they were disabled or the cost of supporting other children, capital settlements or non-income producing assets, diverted income, and so on. There was a simple system, but under political pressure, which was not party political but pressure from our constituents, we had rapidly to introduce a much more flexible system that was based on these departures. I hope that the hon. Member for Colne Valley accepts what I am saying. The mistakes of the previous Conservative Government are being repeated. Because the CSA has to spend so much of its time on calculations, it has too little time for enforcement. That has almost become a cliché in the arguments that are going backwards and forwards on the Bill. The CSA has to spend too much time calculating people's income, so we must simplify the formula.
3 pmDoes not the hon. Member for Colne Valley accept that we are repeating the mistake of going back to where we started in 1991? We are deluding ourselves that we can create a simple system that will stick. It will not because no two people are alike. Very soon, there will be a massive political row. It will not be a party political row; it will be engendered not by us but by all the people who feel that they are being treated unfairly. They will pour into our surgeries and there will be pressure on the Minister from her hon. Friends. She will have to bring in various variations. That is all very well, but it is crucial and central to everything we are talking about. My hon. Friend the Member for Brentwood and Ongar (Mr. Pickles) is saying in his amendment that if the process is going to start up all over again and if we are to learn nothing from history, Parliament should have a chance to discuss these variations as they are introduced. Otherwise in 10 years' time the CSA will spend not, I hope 90 per cent., but possibly 70 or 80 per cent. of its time calculating people's income and only 20 or 30 per cent. of its time enforcing payments. I have made my point. We can return to variations in future. But I challenge the Minister's ability to create a unique system that does not take account of all these factors to which I have referred both today and on Tuesday. When it comes down to it, a non-resident parent could rightly complain that, unlike his neighbour, he is making the effort to drive 300 miles every other weekend to see his children and that no account is taken of that. Another could complain that he lives and works in a part of Essex where housing is particularly expensive and is being forced to move. All those practical human problems will start to derail the perfectly sensible proposals that the Minister is making. I hope that when she replies to the debate she will treat it as a serious amendment and will convince us that she is prepared to work with Parliament and Members who will meet these problems on the ground and that she will consult us before she makes any variations.
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