Examination of Witnesses (Questions 120-139)|
MP, MR TONY
14 MARCH 2007
Q120 Mr Breed: Reasonableness is
a bit subjective at times.
Dawn Primarolo: We are talking
about rights and responsibilities. The responsibilities of the
claimant are to notify the Department of the correct information
and have obligations on when to notify change of circumstance
and that is what should happen. If the error is on that side then
the reasonableness test, which is the test in the tax system,
I believe it was introduced in 1971 by the then Conservative Government
and has operated perfectly well in the tax system, which is where
the tax credits are, is the basis on which we do it. What we have
said, and I think it was in the note to the Committee, is that
we will run a pilot, the details of which we are still discussing
with the Adjudicator but I am happy to give the Committee a note
on it, on whether we could have an expressed appeals procedure
there that took something out of the Department and ran it straight
to the Adjudicator.
Q121 Mr Breed: We will come on to
that in a moment, that is the fast track mechanism. Essentially
we have had recommendations and evidence from huge numbers of
organisations, ourselves recommended, yet still the Government
resists that right of appeal.
Dawn Primarolo: There is a right
of appeal to entitlement.
Q122 Mr Breed: You have not really
explained to us why that resistance is there.
Dawn Primarolo: There is a right
of appeal to entitlement.
Q123 Mr Breed: Right of appeal to
an independent tribunal.
Dawn Primarolo: To an independent
tribunal on entitlement, that is present whether or not somebody
gets the tax credit.
Q124 Mr Breed: This is to do with
Dawn Primarolo: On the overpayments,
what went through the House of Commons in terms of the Bill put
certain arrangements in place for automatic recovery of overpayments
because of the flexible system and it is on that basis, given
the arrangements for recovery that are in the Bill, that the Government
continues on all the points about improving the different levels
of when a complaint is dealt with, making sure people have confidence
in the system, investigating and the Adjudicator point. That is
why the case rests on that basis. That was how the system was
designed and that is how it operates. It is in the tax system
and that is how the rest of the tax system operates.
Q125 Mr Breed: You have not actually
told us why.
Dawn Primarolo: I have told you.
Q126 Mr Breed: You have not told
us whether it is because you do not have any confidence in the
quality of your decision-making on your subjectivity on the reasonableness
test. Quite frankly, if you are prepared to stand by those why
were you not prepared to have them submitted to an individual
Dawn Primarolo: No, that is not
what I am saying. I am saying that the system is designed to operate
in this way. It is a sensible system given that it is flexible
to respond to people's change in circumstances. That was the way
the system was designed and accepted by the House. In terms of
making that system work properly, that is the work we are undertaking
Q127 Mr Breed: Experience has shown,
and all those people who have come to us, and indeed I suspect
to you, have said the system should have that in it yet you do
not take their recommendations, you have continued with your resistance.
Can we move on to the fast track process which you told us you
were going to pilot in a few months some few months ago. Where
are we? When is it going to start?
Dawn Primarolo: We are just in
the final negotiations with the Adjudicator on how to handle this,
I understand it is in the next couple of months. Exactly how it
will run I am happy to do a note to the Committee on. I understand
the pilot will run for three months to give us the information
and then I will be in a stronger position to send the outcomes
to the Committee as well.
Q128 Mr Breed: Is this not just a
means of you trying to avoid an independent tribunal? It is no
more, in effect, than a scheme through which a claimant can bypass
HMRC's complaints procedures by complaining directly to the Adjudicator.
Dawn Primarolo: No, it is about
making sure that at all levels the Department deals correctly
with complaints speedily and accurately. If it can be done better
through the Adjudicator on this type of procedure then that is
what the pilot is designed to inform us.
Q129 Mr Breed: Just to test its robustness,
what would be the effect of a decision by the Adjudicator which
is adverse to HMRC? Will HMRC be required to take action as a
result of what the Adjudicator says?
Dawn Primarolo: Yes.
Q130 Mr Breed: On all cases?
Dawn Primarolo: Yes.
Q131 Mr Breed: Is the Adjudicator
empowered to examine cases which you personally as Paymaster General
have considered already?
Dawn Primarolo: I never consider
cases, I am not empowered to do that, and that is protected under
taxpayer confidentiality. All of the consideration of cases is
done by HMRC and the Adjudicator will be able to look at cases
and her decision will then be binding on the Department.
Q132 Mr Breed: So is the Adjudicator
going to be able to look at some retrospective cases or is it
only going to start from
Dawn Primarolo: No, it will start
from now in those disputed overpayment claims.
Q133 Mr Mudie: There is a very hard
Scottish football manager I admire. I am speaking about recovery
pauses. In your response to us when we said that you should have
a pause, you said, "We will try". This Scottish football
manager said, "There's no such as trying, you either do or
you don't". Are you going to do? Are you going to introduce
a pause or are you just playing for time with no intention of
doing it? We have now waited a year and that is a long enough
bloody pause as it is, is it not?
Dawn Primarolo: No, I am not playing
for time. If I had the information that told me it simply was
not possible I would tell the Committee now. I agreed that the
introduction of a pause was desirable. To date the Department
have told me that it is complex and may put at risk other releases
but I have not taken the principle of the pause off the table.
There would be no point in me stringing the Committee along, I
might as well just tell you, and I would. That is the position
now. Mr Todd made the point about IT releases and, given that
is not my field, if I am told it is complex and will put elements
of the system at risk I need to take note of that and to get the
information that substantiates that.
Q134 Mr Mudie: I am just thinking
of the amazing things we can do with computers and I am amazed
you accept what computer people are telling you and after a year
you are still not able to tell us when you are going to do it.
It comes back to either you saying it is going to be done or are
you just keeping the principle on the table to avoid an argument?
Dawn Primarolo: Well, Mr Mudie,
I do not think I have been avoiding an argument either this afternoon
or in my frequent appearances in the House and
Q135 Mr Mudie: It is always a pleasure
to see you, Minister.
Dawn Primarolo: I know! If life
was so easy that only I had to decide and it was done, it would
be wonderful. I want to assure you again that there is no point,
and I would not do it, in stringing the Committee along.
Q136 Mr Mudie: It is hard to believe,
but in your case, Minister. Let us take this business of appeals.
The Child Poverty Action Group say the Treasury in its response
to us are not exactly giving the full picture because they claim
that the DWP do not legally have a case under the Social Security
Regulations to take back overpayments, so there is never a need
to appeal. I would be happy for you to correct the Child Poverty
Action Group who have specified under the Act the only way you
can appeal when there is an overpayment is because the Department
thinks there is fraud or something similar so they are going to
take it back and the person can appeal, but if it is official
error they claim that DWP do not legally claim it back. That is
their evidence to us. If you want to take on the Child Poverty
Action Group be my guest, but I think they have made a very valid
Ms Walker: Let me try and explain
the legal position. The legal position is exactly the same for
tax credits as it is for the DWP benefits. There is no right of
appeal against a discretionary decision by DWP whether to recover
an overpayment or not. If they use their discretion not to recover
an overpayment or to recover it, there is no appeal against that
Q137 Mr Mudie: They say that section
71 of the Social Security Administration Act 1992 is the basis
on which Social Security operates and you operate under the Tax
Credits Act 2002, which is different. They, therefore, are not
looking at like-for-like and say under that the DWP do not take
it when there is official error because they have no grounds.
They are simply saying if you were to amend the Tax Credits Act
to bring it in line with the Social Security Administration Act
1992 we could stop this business of pauses and the overpayments
would not be claimed back if it were official error.
Ms Walker: I think the position
is that in both cases there is a discretion under the Act whether
to recover or not.
DWP may operate their discretion in a different way, and in the
past I think they have operated it in a different way from the
way that we have for good reasons, which the Paymaster has explained,
about the balance of responsibilities between us and the customer,
but I do not think the legal position is different.
Q138 Mr Mudie: That is a very important
point. There was some debate, if I remember correctly, as to whether
this should be administered through DWP or the Treasury. If you
are saying this discretion would have been exercised if the decision
had been taken to leave it in Social Security and DWP, claimants
are actually harmed by it being placed in the Treasury.
Dawn Primarolo: No.
Q139 Mr Mudie: That is what you said.
You both have discretion, they operate it and you do not. We are
saying why do you not operate it when they do?
Dawn Primarolo: The information
that I have been given, and I understand this was an exchange
between the Committee and Paul Gray in a written reply, is that
DWP's policy is always to seek recovery where it is reasonable
to expect the claimant to have been aware that they were being
5 Note by witness: For Tax Credits the discretion
to recover is set out in Section 28 Tax Credits Act 2002. For
Social security benefits discretion to recover overpayments caused
by official error is under the Common Law. Back