Tax Credits Bill

[back to previous text]

Mr. Webb: One concern about the sort of regime under which each partner is told the details of the whole claim, which would include information about the other partner's circumstances, is that the desire of men and women for privacy drove the move to independent taxation. The Treasury always tells us that tax credits are about making the benefits system more like the tax system, so why is there a distinction about privacy on tax credits that does not apply to income tax?

Mr. Boateng: The distinctions exists for the very reasons that the hon. Gentleman outlined in his initial question. When people put forward a joint claim, they have decided jointly to claim. Once they have decided to do that, it seems right that both should subsequently be kept informed of decisions that arise as result of their joint claim. It is difficult to find a way around that without breaching another principle, namely that parties to a joint claim are entitled jointly to the information on which it is decided. A balance must be struck.

One is aware from one's experience of family law practice—other members of the Committee also have such experience—that trust may, sadly, break down between parties in the course of relationships. In those circumstances, it is important that both parties have available to them the information that informs decisions that affect them both. Without that, the situation is unlikely to improve, and it may be made worse.

Tax credits target support to families according to their circumstances, which helps to match support to changing needs. They provide a way for the tax system to recognise a family's needs and to take account of the resources available to them. To do that, communication with the family, as a unit, is required. In that way, we are better able to match a family's overall contribution to the Exchequer to the family's circumstances. The couple's contribution to the Exchequer and their shared circumstances are evidenced by their joint application. That is not a breach of independent taxation. Everyone continues to have his or her own personal allowance and to set his or her own personal set of rate bands—that does not change—but the couple make a joint application as a family. The circumstances of the family are taken into account, and it must be right that family members should know all that there is to know about the basis on which decisions that jointly affect them are made.

Column Number: 47

Sadly, some families break up. That leads to a change in circumstances, in that the family is no longer a family. The consequences will include changes to the couple's eligibility for tax credits.

Mr. Flight: I thank the Minister for his explanation. If there is to be a regime of deemed new claims for the following year to save administration, it would be prudent to require people to confirm to the Revenue that their circumstances have not changed. If the Revenue is to rely purely on a roll-over of information, that will be an incentive to people not to come clean if their circumstances change. That creates a need for care.

As I now understand why the words are in the clause, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Mr. Webb: I beg to move amendment No. 82, in page 3, line 30, after 'made', insert

    'or who may be entitled to make'.

The amendment would insert a phrase to include not only people who have made, but may be entitled to make, a claim in the context of the board of the Inland Revenue supplying information relating to the claim or any other information that is relevant to entitlement to tax credits. This is about take-up. We should provide the board with powers and encouragement to supply information to people who might be entitled to make a claim but do not realise it because they do not understand the system. The amendment would give the board powers to supply the sorts of information mentioned in clause 4 both to people who have made a claim and to those who might be entitled to make one.

People who are entitled to make a claim should be able to obtain from the Revenue ready access to calculations, face-to-face help, efficient and helpful helplines, clear forms and explanatory literature. None of those are cheap. What mechanisms does the Minister plan to put in place to help to ensure that not only those who know that they are entitled to make a claim, but those who might be so entitled, receive information and are helped as far as possible? The Minister and I share a desire to maximise take-up, and the amendment would do that by giving the board powers to provide information to a wider spectrum of people.

Mr. Boateng: I have no disagreement with the hon. Member for Northavon on take-up, and I recognise that it needs to be kept under constant review. We will have an opportunity later to reflect further on the issues involved. Several hon. Friends share with me an interest in take-up, and constituency experience demonstrates its importance. I therefore understand why the hon. Gentleman tabled the amendment.

At first sight, the amendment suggests a misreading of clause 4(2), which does not deal with conveying information for the purposes of take-up, but allows the board to disclose to a claimant or claimants any information relating to their award so that they are aware of the basis on which decisions have been made. Of course, the board has powers to disseminate general information about the overall nature of the scheme

Column Number: 48

and its regulations. It does not require the amendment to enable it to fulfil its responsibilities.

Under subsection (2), the board can disclose to a claimant information relating either to the claim or to an award of tax credit made on the claim. That is important because the Revenue needs to react to the information that it receives, contacting claimants to check details and adjusting awards to ensure that the correct amount of tax credit is paid out. In doing so, it must ensure that claimants understand why any changes are made. For example, if a couple have made a joint claim and one member of the couple notifies the board of a change of circumstances affecting the award, the board will need both to amend the award to reflect the change and to explain to the other member of the couple why the award has been amended, to ensure that both parties agree.

The subsection is designed to deal only with that narrow purpose, but the amendment would widen its scope so that the board could disclose such information to any person who might be entitled to make a claim, as well as to claimants. That would make no sense in the context of the purpose of the clause. I do not denigrate for one moment the importance of take-up, but the amendment, in my respectful submission, is not the right way to deal with it. Where people have yet to make a claim, there is no claim or award about which to disclose information, so the proposed extension of powers is redundant.

I assure the hon. Member for Northavon and all members of the Committee that the Inland Revenue will make information about the new tax credits widely available so that people who are entitled to claim are able to do so. Work is already under way to ensure that people are helped to submit accurate claims and that clear, accurate and user-friendly information is provided. The Bill does not need to be amended to achieve that. There will be a dedicated tax credits helpline and publicity. Households entitled to income support or income-based jobseeker's allowance will be able to access the new credits at the same time as they claim their social security benefits.

People will need to provide information only to a single agency—jobcentre plus. That should assist in take-up. People moving into work from benefits will be able to ask staff at jobcentre plus for assistance in completing their claim for new tax credits, and information on tax credits will be provided by jobcentre plus when a person moves into work. That addresses a concern expressed by citizens advice bureaux and other organisations that have written to us. They want to ensure that people are fully aware of their entitlements and, where necessary, that they receive assistance in completing their claims. Jobcentre plus will then pass on their application to the Revenue, so people need to deal with only one Department and will not be pushed from pillar to post, as our constituents undoubtedly sometimes feel they are. Similarly, people will be able, if that is what they need, to obtain face-to-face help from Inland Revenue officers.

Mr. Clappison: Before the Financial Secretary concludes his remarks, will he say a little about the circumstances in which a person would have a face-to-

Column Number: 49

face interview? If not, I should be happy to receive a letter from him about it, if he wanted to deal with it in that way.

Mr. Boateng: I should be happy to write to the hon. Gentleman about that and to inform other hon. Members of the contents of that correspondence.

5.15 pm

Mr. Flight: I thought that subsection (2) was a statement of the obvious and was in the Bill for data protection reasons. Is that the case?

Mr. Boateng: Data protection is taken into account in the wording, but the Bill must make it clear, partly for the reasons outlined in our previous debate, that when people make joint applications, there will be communication as to outcomes and reasoning jointly with the parties to that application. Everybody should be aware of that from the outset.

Mr. Webb: I am grateful to the Minister for putting on record some of the strategies that the Revenue will adopt to try to enhance take-up. I am particularly concerned about take-up of the working tax credit, as to some extent we are dealing with a client group that has had no experience of claiming means-tested benefits: the childless or the low paid may never have claimed means-tested benefits. If they have gone through the Jobcentre Plus process, some of the mechanisms that the Minister has described will reach them. I am aware, however, that a proportion of previously unemployed people and people who change jobs never come into contact with a jobcentre. I hope that the Minister can reassure us at some point, not immediately, that other take-up mechanisms for that group, which has less contact with officialdom, are also being put in place.

However, I accept what the Minister said about the specific purposes of this part of the clause and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 4 ordered to stand part of the Bill.

Previous Contents Continue

House of Commons home page Parliament home page House of Lords home page search page enquiries ordering index

©Parliamentary copyright 2002
Prepared 15 January 2002