|Tax Credits Bill
Mr. Flight: Our amendment No. 106 essentially raises the same point but deals with it in a slightly different and simpler way, by substituting a social security tribunal for general commissioners, but leaving the option to go to the special commissioners. To be brief, the real question is how the Minister proposes to deal with the matter. In a sense, if the whole thing is being transferred to the Revenue, it is somewhat strange not to have an appeals procedure within the Revenue bailiwick. However, as the hon. Member for Northavon pointed out, a precedent has already been established by child tax credit being dealt with by the social security tribunal.
In short, I think that the Minister realises the issues: suitability, knowledge, experience and the fact that it is essentially benefit-type matters that will be raised. How will the Government address the issues raised?
Dawn Primarolo: I hope that I can reassure the hon. Member for Northavon and that he will agree to withdraw his amendment. At the heart of both amendments is whether those hearing the appeal have the appropriate experience and knowledge to adjudicate on the issues. I absolutely agree that that is a vital point.
The hon. Gentleman made several other points and I shall deal with them in order. I am, of course, conscious that the Government are undertaking a comprehensive review of the tax appeal system, as Committee members know, following the public consultation exercise. My right hon. and learned Friend the Lord Chancellor, when he launched the consultation, paid tribute to the effective and committed way in which the general commissioners of income tax discharged their public duties and the personal and professional competence that they bring to their work.
The Lord Chancellor also made it clear that he believed it possible to find significant improvements in the current system. Another factor of the review was the need to ensure that we have an effective tax appeal tribunal to hear tax credit appeals. We have discussed the new tax credits and the fact that they will work in a very different way, and it is important that the tax commissioners have sufficient expertise to handle that.
On the ability and expertise of the general commissioners to deal with issues other than tax, I point out that they deal with many issues. Since 1999, the commissioners have successfully taken on the responsibility of national insurance appeals, statutory maternity pay appeals and statutory sick pay appeals, which were all previously dealt with in the social security system. The commissioners received
Column Number: 252additional training to enable them to do that and will have similar training in connection with tax credits. Therefore, the Government are correct in wanting the appeals to go to the commissioners.
The hon. Member for Northavon also asked whether the commissioners were inquisitorial. Yes, they are inquisitorial, but not adversarial. They can and do seek clarification from all parties. He also asked—
Mr. Webb: What do the Government plan to do?
Dawn Primarolo: I am answering all the other points and will then come back to the question of what happens now. The hon. Gentleman may want to intervene at that point.
The hon. Gentleman also asked whether one could appeal the general commissioners on the question of fact. It is possible to challenge their ruling if their findings are so at variance with the facts that it is unreasonable. That is the test.
Before I turn to the facts, I want to deal with basic errors and disputes in the appeal and whether the Inland Revenue would be able to correct mistakes. Basic errors and disputes will not be dealt with only at appeal. A misunderstanding may have arisen of the new tax credits and the way in which the Inland Revenue works. Under statute, the Inland Revenue has a well-established care and management function in tax credits and national insurance, which gives it a sensible amount of management discretion. That is the appropriate use of the word ''discretion''. It does not give the Inland Revenue carte blanche, but it gives it the ability to correct in a responsible way simple, straightforward mistakes. The Inland Revenue's decisions about tax credits during the year will be provisional, as is set out in clauses 14 and 16. It would be pointless to have revisions of a provisional decision.
Clause 20 allows decisions that are subject to official error to be revised in the claimant's favour without the need for an appeal. Even if there is an appeal, that does not mean that the claimant will have to go to the commissioners if they are in agreement with the Inland Revenue about the facts. Part V of the Taxes Management Act, which is applied to tax credit appeals by subsection (6), allows such appeals to be settled by agreement.
To return to the heart of the issue, I had discussions again this morning with my colleagues in the Lord Chancellor's Department. While we have a desire, and it makes sense, to ensure that the tax commissioners hear the appeals, we also recognise that we will need to ensure that they have the appropriate experience to deal with them. The hope is that by 2003 that should be the case, and working families tax credit cases, as the hon. Gentleman pointed out, will go to the social security tribunals. If for some unforeseen reason that principle could not be delivered, we would ensure that the appeals were heard in a suitable way for the type of claim by adjudicators with the appropriate training and experience.
All that depends on the Lord Chancellor's review and recommendations being in place by 2003. I am not
Column Number: 253aware that I do not have that latitude under the Bill, but if the principle were not delivered and the Bill did not give me the latitude, I would need to return to the matter.
I understand and accept the principles advanced by the hon. Member for Northavon about the appropriateness of those who hear the appeals, but I do not agree that there is a problem about making the appeals relevant to tax commissioners, as long as they can hear the appeals, and that is subject to the review.
I hope that I have given the hon. Gentleman a strong enough indication that that important point will not be overlooked and that he will therefore seek to withdraw his amendment. It is not necessary, because we shall ensure that the tax commissioners are suitably qualified.
Mr. Webb: I am grateful to the Minister for going some way to respond to my points. When I sought to intervene earlier on the issue of inquisitorial, perhaps I did not explain clearly what I meant. Will they ask questions? Fine. Will they be proactive? I am glad that the Paymaster General nods in response to that. Being inquisitorial is not just about asking questions and checking; it is about thinking, ''Perhaps there is something that the claimant has not said which, if they had said or had been asked about, would have given us a more complete picture.'' It is a question of going out of their way to find those things instead of simply sitting back and saying—
Dawn Primarolo: My understanding is that the answer to the hon. Gentleman's question is yes, the commissioners would do that. He describes it as going out of their way. They will acquaint themselves with the facts to make sure that the case being presented by the claimant covers all the issues. That is what goes on at the moment and we have no desire to curtail that. There would be no reason to.
Mr. Webb: That is helpful. The Paymaster General said that that is what goes on at the moment, but she can only mean that that is what goes on at the moment in social security appeal tribunals that deal with working families tax credit cases. It is not what goes on in tax commissioners' cases, and they will need a culture shift. Given that the Lord Chancellor is reflecting on all this and will then need to put in place a training process, I am concerned about it.
I am grateful to the Paymaster General for her hint that, should there be any delay, other mechanisms, such as presumably the present system or something similar, would need to be in place to deal with those cases.
The Paymaster General did not address the issue that people will have to choose which set of commissioners to go to. It is not clear to me how, again, the unguided claimant of working families tax credit in a low-paid job, who is perhaps not very comfortable with form-filling and all the rest of it, decides whether to go to the general tax commissioners or the special tax commissioners and appreciates the consequences of doing either. I find that problematic.
The Paymaster General did not address the question of costs, which was raised with me by
Column Number: 254NACAB—that those who go to the special commissioners may make themselves liable for costs. That worries me.
The fundamental point is this: if a system works and fits the group, why are we changing it? The Minister is saying ''We will do our best to change the other system, which is not meant for these people, and train those who are dealing with it to make it look more like the one we have that works.'' If the Government can live with the paradox of having tax credits assessed by social security appeal tribunals now and they are still called tax credits, what has changed? Why is it any different? A little streamlining may be taking place, but we are simply merging bits of the benefit system in as well.
Therefore, I remain unhappy about the clause. I am struck by the unanimity of those who deal with the client group that they are not happy that the tax commissioners are to deal with these matters or with the whole process and culture. On that basis I shall seek the Committee's opinion on the amendment.
Question put, That the amendment be made:—
The Committee divided: Ayes 7, Noes 8.
Division No. 8]
|©Parliamentary copyright 2002||Prepared 24 January 2002|