Commentary - BBC News 24 "Agenda" - 2nd March 2003
|Here is the basic
transcript plus further information about the programme and people.
||Comments below are by me (Barry Pearson) unless
stated otherwise. Comments (polite!) are welcome from anyone on the
Tomorrow sees a big change in the way the Child Support Agency
works. It is almost 10 years since it was created and its
been accompanied by controversy almost every step of the way. And
tomorrow is no exception, because a brand new system of assessment
is being brought in. Now, it may catch more absent parents in its
net, but some believe that it will result in many fathers, and it
is usually fathers, having to pay much more than they do at the
moment. The basic change is that most parents will pay a straight
percentage of their incomes depending on how many children they
have and no longer will they be able to negotiate special deals.
Well, in a moment Ill be joined from our Westminster studio
by former Social Security minister Frank Field, from Manchester
by Ray Mellor who set up the parents support group PALS and
who thinks he is facing a whacking 100% increase in the charges
hell have to pay to a former partner, and here with me is
Barry Pearson, a business analyst with a special interest in the
Perhaps "negotiate special deals" is a reference to "departures"
in the old scheme. They are replaced by "variations",
which although they have stricter criteria, are still a type of
Only perhaps one-quarter of NRPs will earn enough to reach the
well-known 15% / 20% / 25% "straight percentage". And
some of those will pay less because of shared care and/or more children
in their household.
But first, to Dudley in the West Midlands, and Michelle Counley.
Now, she chairs the National Association for Child Support Action,
set up to help parents like her who feel they are victims of the
[7-minute film with Michelle Counley]
Michelle Counley of the National Association for Child Support
Action. And her last point, I guess, is the crucial one: what
is in the best interest of the child? Frank Field, down at
Westminster there, do you think the children have been well served
by the Child Support Agency thus far?
Well, I dont think children have been well served, I dont
think most parents have been well served, I dont think taxpayers
have been well served, nor do I think the staff who are asked to
run the service have been well served. So there is a huge need for
radical change, but sadly I dont believe whats going
to be introduced tomorrow will actually fit the bill.
Here is a preview of the nature of Frank Field's contribution to
the programme from this point on:
His sole concern with the CSA was as a mechanism for minimising
social security expenditure in benefits cases. Nothing he said appeared
to have any relevance to private cases, for example getting money
to PWCs instead of recouping money for the Treasury.
In fact, by concentrating on benefits cases, he proposed a scheme
that would not work properly for private cases, even though the
latter are nearly two-thirds of all CSA cases.
Well come onto the change tomorrow in a moment. Ray Mellor,
would you agree with Frank Field that it hasnt served the
well, anybody, frankly?
[Response by Ray Mellor]
Well, well come onto as I say to the immediate change in
a moment. But just about the CSA generally, Barry Pearson youve
followed it closely, youve examined it closely, have you?
One of the criticisms made by Michelle in that film is that she
claims its Treasury driven its actually in the
interest of the Treasury first, before parents or anybody else.
Thats right. And in fact that is also one of my criticisms
of it. Until we can get the Treasury out of the loop we wont
be able to think of how child support should work for families and
children. Increasingly the Treasury has slightly relaxed its grip
on the Child Support Agency. First in the case of the Working Families
Tax Credit system, in which it said "we are not try and get
a linkage between the Tax Credits and the child support system",
and that was welcomed, almost universally I think. And the system
tomorrow relaxes it a bit more. But it needs to get completely out
of the loop, I believe.
In spite of what Frank Field says later, I stick with my view here
that we need to get the Treasury out of the loop. I have an alternative
proposal for reducing the amount of Income Support paid to lone
parents. My argument is expanded at:
"Child Support should
be for Children" - A proposal for reform
should be no Treasury saving or state compulsion
What about the suggestion that Michelle mentioned that we should
follow the Canadian system, where as I understand it the government
pays the money to the single parent with the child, and recoups
the money itself from the absent parent, rather than the parents
themselves being so heavily involved in it together.
Its got some merits. The argument put against it, which also
has some merit, was that this would start to look to the father
that he was paying money to the government. Because although in
fact he was really paying it to the mother in arrears, it would
appear to him that he was paying it to the government, and this
would be a bad taste, probably.
This principle is typically known as "advanced maintenance".
The state pays the PWC a proportion of what the child support should
be, then attempts to collect from the NRP. The state then retains
from that the amount it paid to the PWC, and pays the PWC anything
more than that. This gives the PWC the security of regularly getting
at least a proportion of the child support due. This can be very
useful for a PWC trying to get into work and struggling with childcare
See: "Making child maintenance regimes work", Anne Corden
Family Policy Studies Centre & Joseph Rowntree Foundation
The following countries in Europe have some form of "advanced
maintenance": Austria, Belgium, Denmark, Finland, France, Germany,
So, Frank Field, the change that is coming tomorrow which is designed
to simplify the system for everybody for everybody, what is wrong
with it from your point of view?
Well, if I could just go back one moment, the Treasury has every
right to be involved, in that we are talking about the massive huge
bill that taxpayers foot because largely fathers dont meet
their responsibilities. So I disagree fundamentally with this soft
line that we somehow should get the Treasury out of it. The Treasury
is actually representing us, and for too long large numbers of fathers
have not met any of the costs of raising their children
I am a childfree taxpayer. In this matter, I don't accept that
the Treasury is representing me.
Note that Fank Field's comment about meeting the cost of raising
their children is clearly focused here on reducing the amount that
the Treasury spends for raising children, and he doesn't show a
concern for the private cases where the Treasury is already out
of the loop.
While about 70% of CSA cases start as benefit cases, only about
10% end as benefit cases. About 37% of all CSA cases, a little over
one-third, are benefits cases. The rest have no (current) Treasury
In fact, because of the £10 disregard in the new scheme,
probably well over half of the benefits cases won't yield any return
to the Treasury, because most CSA benefits cases will be calculated
at no more than £10.
But isnt the argument about the CSA - its track record over
10 years - they been very good at getting more and more money out
of those who are happy to pay but not very good at chasing those
people that it should be chasing who are not happy to pay.
Well, it isnt actually very good at getting more money out
of even that static group, and what I argued for and failed to convince
the government was that we should have a very simple tax system
where for example, we debate the point, whether it is 3p on tax
for 1 child, 6p for 2 and 9p for 3, and the Treasury would collect
that automatically. So the example we heard earlier on with the
barrister, who outrageously pays only £5 a week because he
knows the rules, that wouldnt rub. That when he put in his
tax form, once his taxable income was computed the very simple tax
formula would then apply in addition to any other taxation he paid.
Barristers are self-employed, so don't pay tax in the regular PAYE
manner. So what use would it be to the PWC if she was not on benefits?
The Inland Revenue would not collect the money until long after
she needed it for the children, then it would come through as a
lump sum much too late.
This reinforces my statement above that Frank Field was solely
concerned on this programme with reducing Treasury spending in benefits
cases, and he was not concerned the use of the CSA for private cases,
even though they represent nearly two-thirds of the caseload.
And, the problem we have had from the word go is that people who
design benefits have designed this reform yet again who are endlessly
trying to nuance the formula to take account of almost every need,
and what we ought to get back to is some might say a brutally rough
formula that says that you have responsibilities to look after your
children, the best way of doing that is through the tax system,
you pay additional tax, just as people pay additional taxes who
have taken grants out to go to university, and have to repay them.
Simple as that, and all the extra energy of the Agency can then
go in trying to increase, year by year, the number of parents who
at the moment refuse to pay, to get them to pay.
This is simply not true. The basic formula for the new scheme has
4 variables: NRP's net income; number of qualifying children; number
of nights of shared care; number of relevant children.
It is arguable whether "relevant children" (extra children
in the NRP's household) should be in the formula, but the other
three variables have a sound justification, and two of them appear
in his scheme.
"Variations" add more detail, but these are focused on
child-related matters, and not "almost any need". For
example, they cater for cases where the NRP's life-style exceeds
his income, which Frank Field's scheme doesn't.
Ray Mellor, are you happy with that, because the change that is
coming many would describe as brutally rough?
[Response by Ray Mellor]
But Ray, can I come back to you, whats happening at the moment
because there is no money coming in the taxpayers are footing the
bill. Its not free money, its money that my constituents
have to earn and willingly pay, to raise children who are in this
vulnerable position. When parents start to pay, it is quite proper
that the bill on the taxpayer should be reduced. It shouldnt
be on top of what taxpayers pay.
[Response by Ray Mellor]
Well, there is actually a disregard. But the basic fact is that
people get this money because their income is inadequate and its
made up to a minimum level through the benefits system. And the
rules are, for example if you are benefits and working, after a
small sum of money the money is clawed back pound for pound. And
we clearly cannot create and should not create a special category
for single parents whose father of their children wont pay
These are simply the current rules of the UK. They are not laws
of the universe. We can change them if there is good reason. WFTC
is also in some ways a form of benefit, and doesn't obey these rules.
The government does not consistently consider that the Income Support
rate is a "minimum level" needed to live on. For example,
it is prepared to take £5 per week off an NRP on benefits.
And, apart from the new £10 disregard (confusingly called
the "child maintenance premium"), there are other disregards,
variously of £5, £10, or £15.
We can create a special category if we choose to. (His last
sentence is misleading. I want a special category whether or not the
father won't pay his whack - the latter is a red herring).
OK, Barry Pearson?
I have to disagree to some extent on this one, simply because probably
more than half of the benefits cases will not actually result in
a calculation that exceeds this £10 limit. There isnt
enough money around in many cases for the Treasury actually to get
a significant amount of money back. It just isnt there in
the separated family. It is for a minority of cases, but for the
majority of cases it simply isnt there, yet they get sucked
into the system.
Guide: the average earnings of NRPs in CSA cases are less
than national average male earnings; and the average earnings of
NRPs in benefits cases are less than the average earnings for all
CSA cases. Higher earning NRPs are a minority.
At November 2002, 47% of NRPs were employed, plus 5% self-employed.
The rest are typically out of work or in sporadic work. About 58%
of NRPs are currently assessed to pay less than £10 per week.
CSA Quarterly Statistics
up to November 2002
A recent Parliamentary Question shows that CSA payments where the
PWC is on benefits are on average lower than where the PWC isn't.
The average amount where the PWC is on Income Support is £5.79,
while the average for a PWC on WFTC is £13.40:
question by Mr. Cameron; answer by Malcolm Wicks
Generally, Im not just talking for your benefit but generally,
will absent parents, largely fathers, as a result of this change
thats coming in, have to pay more than they did already?
About a third will have to pay more and about two-thirds less
thats the sort of estimate.
And the third who have to pay more, why do they have to pay more?
There are various conditions. One is if they currently have high
housing costs. That is taken into account in the current formula;
it isnt taken into account in the new formula. Thats
one case. Another case is that the new system has higher caps, higher
Further examples of NRPs who will pay more under the new scheme
are indicated in:
Premature conversion to
the new CSA scheme - A loophole that may thwart government policy
Another category of NRPs who are expected to pay more are those
who are non-compliant at the moment, but will become compliant (or
more compliant) under the new scheme. For example because there
are fewer escape routes, and because there is expected to be more
resource available to focus on compliance. In many cases, the liability
will decrease, but the payment will increase
Do you think its fairer the new system?
Phew - I dont know how to define fair in this
whole matter because youve got at least 3 points of view all
pulling in different directions.
|The only consensus I have seen about "what
is fair?" is "anything that will make me financially better
Ray, you dont think its fair?
[Response by Ray Mellor]
Frank Field, that doesnt sound, we mustnt get into
individual cases, but that doesnt sound entirely fair.
No. But of course it is the individual cases that in the end build
up and make the rules. The argument I put forward again is for simple
tax rates. There will be some people who for various reasons decide
to spend more of their income on housing and less on holidays. Some
will spend more on holidays and less on housing. I dont think
thats relevant to devising a formula to actually try and foot
part of the bill that currently taxpayers meet. I come back therefore
to the simplest of all formulas which we know could work would be
an additional tax rate with the Treasury running that because that
is the Agency that collects money. The Department of Work and Pensions
has great expertise, but it is actually in paying money out, not
in collecting it.
The Inland Revenue indeed is experienced at collecting money. But
could it pay it out to the PWCs of private cases regularly and reliably?
The new scheme ignores housing costs and holidays, just as Frank
Field's scheme does. So while that comment may be relevant as a
response to Ray Mellor, it is not an argument for Frank Field's
simple tax system instead of the new scheme.
I believe the main problem that Ray faces is not necessarily totally
incompatible with what youre saying. The problem is that because
of the loophole it is all happening much too fast too fast
for people to adapt. The governments intention was that where
there was a big difference in the payment, it could be phased in
over 5 years. Then the loophole that Ray is about to be subjected
to is going to suddenly give him no time to adjust his housing costs,
which takes a long time to do.
This is what I have been informed about how the NRP can block this
"If the parent with care cancels the case and the non-resident
parent makes a counter claim using "CSA Form 1 (NRP)"
within 13 weeks, as the status of all concerned has not changed
the old case will be re-opened and will remain on the old system.
There is also another way to close the loophole. That is by the
right of appeal the non-resident would have when they receive notification
of the closed case. The appeal would need to be brought under section
1 of the 1991 Child Support Act ("the duty to maintain").
In addition the appellant would need to prove that the parent with
care's action was to use the loophole to enter the new scheme. This
would be very easily done if there is no maintenance payments in
place and they could not explain why (i.e. no private agreement)."
The CSA may claim they can't send out the form quoted above. But
they should, and sometimes have done so.
For further advice on this matter, try: Durham
Frank Field, is there a system
is this part of the role
of the system to try to ensure that the relationship between the
parents, the separated or divorced parents or partners, is not made
worse but is actually made better in the interests of the children?
Is there a role for the CSA in that, and does it do it?
I dont think there is a role for the CSA in that, and they
certainly dont do it. Clearly, what we have to bring home
to people is that, while it may be convenient for grown-ups to break
up, it is a hugely devastating experience for most children. Particularly
then if one partner denies access to a husband who the courts say
is a perfectly proper person that should actually be seeing their
children. Now that is not a role for the CSA to try to mediate or
do anything about that
No, but the system shouldnt make to worse, should it?
the sad fact is that when
someone breaks up and moves off and starts another family, their
primary loyalty will be to that new family and not to their first
family. There will be honourable exceptions, but thats the
general rule. And therefore what weve got to have is I think
is a simple tax system which says to people how you run your lives
in this respect, your grown up thats nothing to do with us,
but you shouldnt put the whole bill of your changing preferences
While it isn't the role of the CSA to mediate, there is a strong
case for trying to ensure that the CSA does not make matters worse
(as indicated by Chris Lowe).
Frank Field then switches back to Treasury-saving, which appears
to have been his only concern during this programme.
Ray Mellor, briefly would you settle for that?
[Response by Ray Mellor]
Barry Pearson, last word?
I would like to comment on something that Frank said there. He
talked about the court system and how contact is arranged and enforced
and so on. I actually believe that some of the key problems of the
child support system are in areas which are not directly to do with
child support. The Working Families Tax Credit system changed the
rules and actually improved the child support system without changing
the child support legislation. Change the court system, improve
the benefits or do the sort of things that Frank is talking about,
and do some changes to the formula, and gradually move forward like
Fair old shopping list, Barry. Thank you very much indeed. Plenty
to think about.
That Im afraid is all from Agenda this week. Thank you to
my guests Frank Field, MP, in Westminster, to Ray Mellor in Manchester,
and Barry Pearson here.
That "shopping list" is further described at:
Support Agenda for the 21st Century