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Standing Committee Debates
Tax Credits Bill

Tax Credits Bill

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Standing Committee A

Tuesday 15 January 2002


[Mr. Jimmy Hood in the Chair]

Tax Credits Bill

10.30 am

The Chairman: It is a little warm in the Room so if members of the Committee feel uncomfortable, they have my permission to remove their jackets.

The Paymaster General (Dawn Primarolo): I beg to move,


    (1) during proceedings on the Tax Credits Bill the Standing Committee do meet on Tuesdays at half-past Ten o'clock and at half-past Four o'clock and on Thursdays at half-past Nine o'clock and at half-past Two o'clock;

    (2) the proceedings shall be taken in the following order, namely Clauses 1 to 26, Schedule 1, Clauses 27 to 32, Schedule 2, Clauses 33 to 43, Schedule 3, Clause 44, New Clauses and New Schedules relating to Part 1, Clauses 45 to 47, Schedule 4, Clauses 48 to 53, New Clauses and New Schedules relating to Part 2, Clauses 54 and 55, Schedule 5, Clause 56, Schedule 6, Clauses 57 to 65 and remaining New Clauses and New Schedules;

    (3) the proceedings on Clauses 1 to 22 (so far as not previously concluded) shall be brought to a conclusion at 5 pm on Thursday 17th January 2002;

    (4) the proceedings on Clauses 23 to 26, Schedule 1, Clauses 27 to 32, Schedule 2, Clauses 33 to 43, Schedule 3, Clause 44 and New Clauses and New Schedules relating to Part 1 (so far as not previously concluded) shall be brought to a conclusion at 11.25 am on Thursday 24th January 2002;

    (5) the remaining proceedings on the Bill (so far as not previously concluded) shall be brought to a conclusion at 5 pm on Thursday 24th January 2002.

Good morning, Mr. Hood, and welcome to the Committee. I am pleased that you will chair our deliberations and that you will get our consideration off to a good and businesslike start. I am sure that our debates will be constructive and sensible. The programme resolution was agreed yesterday by the Programming Sub-Committee. The end date of our discussions has been agreed as 24 January, as set by the programme motion passed by the House of Commons on 10 December.

The Bill is in three parts. Part 1 introduces the child tax credit and the working tax credit in place of existing systems of support. Part 2 transfers responsibility for administering child benefit to the Inland Revenue, as announced by the Prime Minister in June 2001. It also makes some minor technical changes to the law on child benefit to facilitate smoother integration. Part 3 makes supplementary provisions.

The programme resolution would allow the Committee to spend the bulk of its time considering part 1, which is the longest part of the Bill. It deals with the most significant reforms that the Government are undertaking and will be of interest to members of the Committee.

I am aware of suggestions that the official Opposition want to frustrate the progress of Bills that are being discussed in Committee, but I am

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confident that the hon. Member for Arundel and South Downs (Mr. Flight)—whom I welcome to the Committee—will, with the support of his hon. Friends and the hon. Member for Northavon (Mr. Webb), want to ensure that the Bill is scrutinised properly. I hope that members of the Committee will agree that our proposals are sensible. I ask them to support the motion.

Mr. Howard Flight (Arundel and South Downs): Welcome to the Chair, Mr. Hood. I am sure that our debates will be effective. I assure the Paymaster General that we have no intention to filibuster, but we feel quite genuinely that eight sittings will be wholly inadequate for such a major Bill. I question the Government's wisdom in introducing it at a stage at which obviously they have not made up their mind about expenditure and what they want.

The Minister may know that the Institute of Fiscal Studies considers that the consultation process was a scandal; some original papers that contained illustrative figures have since disappeared, and the consultation document did not cover all the issues. We are about to discuss a framework Bill in which the Government may make regulations in respect of many key areas—a phrase that we have come not to love. Such a process is not democratic, given the changes that will be made under the Bill.

The Minister may be aware that a Select Committee considered tax credits under the Heath Government and issued an important minority report. When the Labour party won the 1974 election, Chancellor Healey said that the Government believed that there were serious drawbacks to the tax credit scheme described in the minority report. The drawbacks highlighted were that there was insufficient flexibility, particularly for those most in need, and that the majority of the expenditure would benefit those who were not in poverty. Costs were too great when measured against benefits, particularly for those most in need, and there was concern, even then, about the increasing scope for fraud. It was suggested that the Select Committee should stop ill-considered and ill-worked-out solutions of tax reform before the then Government were rushed on to the legislative conveyor belt.

Today, we are to be rushed on to an inadequate legislative conveyor belt even though many major issues are still unresolved, particularly that of what expenditure and benefits are intended. We oppose the programming motion because it does not allow us to do a proper job of critiquing the Bill. We shall do our best to ensure that the most important clauses are dealt with, particularly those late in the Bill that deal with fraud.

Perhaps the most important issue, which was raised by the right hon. Member for Birkenhead (Mr. Field), is that the Bill threatens to open up enormous new scope for fraud just after the Government have set in motion measures to reduce social security fraud. Those measures are being torn up under the Bill. We shall endeavour to discuss those passages, although that may mean sacrificing others. It is a great pity not to allow sufficient time to discuss important new measures, particularly as the consultation process has

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been inadequate, as evinced by the comments of many charities, other bodies, lawyers and specialists.

Mr. Steve Webb (Northavon): Thank you, Mr. Hood, and welcome to the Chair. This is the first time that I have had the privilege of serving under your chairmanship, and I hope it is the first of many.

On the programming resolution, two weeks is clearly an inadequate time in which to discuss the Bill. When I queried the two-week time allocation, I was told that the Bill was not contentious and that no one had voted against it on Second Reading. However, that does not mean that it is not a complicated Bill, and that proper scrutiny would not benefit the people who will receive the tax credits. That is regrettable.

When the House passed the programming resolution, which indicated that debate would finish on Thursday next week, it did not mention when debate would start. If hon. Members had realised that it would not start until two weeks before that date, they might have voted differently. However, those are the circumstances, and I shall not take up the Committee's time by saying that we do not have enough time. We should get on with it.

My only query about the programme motion is that the second cut-off point mentioned in paragraph (4) is 11.25 am on Thursday next week. We have told the Government that we are concerned that that gives us more time than we might need on the last clauses of the Bill, which, although worth while, are uncontentious, and less time on earlier, more contentious passages. I hope that we can keep that under review.

Dawn Primarolo: The hon. Member for Arundel and South Downs made a point about the consultation. Responses to the consultation show that the Government, when developing their proposals, worked closely with outside organisations that were particularly interested in the subject. That can be seen in the summary of the responses, which, for those who are interested, can be found in the Library. Although the Institute for Fiscal Studies had something to say about the cost, and although groups are, of course, interested in the rates and tapers—they will be announced by my right hon. Friend the Chancellor of the Exchequer in the Budget—there has been extensive consultation on the framework.

The hon. Gentleman's second point was about a Select Committee in 1974. I will not guess the hon. Gentleman's age in 1974, but, I was considerably younger than I am now, and the world has moved on. [Interruption.] I am grateful to the hon. Member for Mid-Worcestershire (Mr. Luff) who continues to give me such sterling support from the Opposition Benches. The hon. Gentleman will help my general well-being in the Committee, if not my votes.

Points were made about the flexibility and certainty of the structure, about fraud and about transparency and accessibility. Those matters are the substance of the Bill. I hesitate to tell the hon. Member for Arundel and South Downs once again that the world has moved on since 1974. We all know much more and we may find solutions to problems that could not be solved at that time.

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The hon. Member for Northavon made a point that he has made previously about the programme motion. He asked how much time would be permitted to consider the end of the Bill, which he believes to be less contentious. We should see how we progress. If the Committee decides that it wants to shorten consideration of the end of the Bill to allow more time to consider other parts, we can reconvene the Programming Sub-Committee. If the Opposition agree that they wish to do that, I am relaxed about that. I am concerned about finishing our consideration by 24 January, and I want to aid the Committee as much as possible before that date to allow us to concentrate on the parts of the Bill that the Opposition particularly want to discuss.

With that indication of how our future business could be adjusted if we make progress, we should turn to the Bill. I hope that the Committee will agree to the programme motion.

Question put:—

The Committee divided: Ayes 8, Noes 7.

Division No. 1]

Cruddas, Jon Mole, Chris Pond, Mr. Chris Primarolo, Dawn
Sheridan, Jim Southworth, Helen Sutcliffe, Mr. Gerry Wright, Mr. Anthony D.

Clappison, Mr. James Flight, Mr. Howard Hoban, Mr. Mark Luff, Mr. Peter
Swire, Mr. Hugo Webb, Steve Younger-Ross, Richard

Question accordingly agreed to.


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