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Lord Milverton: My Lords, I support the noble Lord, Lord Goodhart. If I remember correctly, I have supported the Liberal Party on some previous amendments of this kind to the Bill. We in the Conservative Party are being left to decide these matters for ourselves. That is a good thing but I would have supported this amendment even if that were not the case as I consider it is only right and proper to do so. I shall support my party as regards the amendment of the noble Lord, Lord Higgins, but as regards the amendment we are discussing I shall support the Liberal Party. That is becoming rather a habit for me lately. I might even find

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myself walking across to their Benches or even to the Benches opposite. As I have said, I support this amendment as I consider it is right, proper and sensible.

3.45 p.m.

Lord Hardie: My Lords, I assure the noble Lord, Lord Milverton, that if he wishes to cross the Floor of the House he will be most welcome.

I am grateful to the noble Lord, Lord Goodhart, for tabling this amendment. It gives me the opportunity to set out in some detail how the disputes and appeals process will work under the new arrangements. However--this is more important for the House--it also allows me to clarify an issue about the handling of disputes and appeals on which I have already written to noble Lords. As the noble Lord, Lord Goodhart, explained, there is a copy of the letter in the Library.

Clause 12 deals with rights of appeal to the new unified independent tribunal, and includes regulation making provisions on the manner and time limits for lodging appeals. The amendment tabled by the noble Lord, Lord Goodhart, would make it a requirement on the face of the Bill, for there to be a minimum period of at least two months, from the date of notification of a decision, for an appeal against that decision to be lodged. Regulations on time limits for lodging appeals could extend that period of two months, but could not shorten it.

If the amendment were to be accepted, it would limit our flexibility to set time limits for lodging appeals, in regulations. The amendment would give claimants a lengthy period of time within which to lodge an appeal. This would reduce the incentive for clients to act quickly, to ensure decisions are re-visited while the facts are still fresh.

We are all committed to improving the quality of decisions and ensuring that claimants can play an active part. We want claimants to understand the reasons why decisions are taken and to be able to seek redress within agencies in addition to a statutory right of appeal. This is why agencies will be setting up a new informal disputes process to allow claimants to seek additional explanations of a decision or to present new facts. Within this context, it is the overall time limit for claimants to lodge disputes which is important, rather than simply the time limit for lodging an appeal.

It may help your Lordships if I explain how the new arrangements will operate. Claimants will normally have a period of one month, from the date on which they are notified of a decision, to lodge a dispute or appeal. For decisions made by the Contributions Agency, the time limit will be 30 days, and for child support decisions it will be 28 days. A one-month limit will encourage claimants to exercise their rights promptly and will lead to a more rapid settlement of cases. I believe it offers a reasonable time within which the majority of clients can dispute their decision. Clients will be encouraged to seek explanations and to talk to the agencies in the first instance.

In practice, when a decision is made on an application, clients will be sent a notification inviting them to contact the agency if they are not satisfied with

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the decision or if they have a query. Therefore the letter notifying the claimant of the decision will encourage the claimant to approach the agency if he has any doubt or is dissatisfied. Claimants will be given an opportunity to discuss the decision with staff and to present any new relevant information that they consider appropriate. The intention is to ensure that where a decision is wrong it can be put right quickly and with the minimum of fuss and without the need for a time-consuming appeal. If a decision is disputed within the period and revised in a client's favour it will carry a fresh right of dispute and appeal. If, on the other hand, the original decision is confirmed, the claimant will be allowed a further month from the date that he is notified in which to lodge an appeal.

I believe that this will provide a real incentive for claimants to dispute decisions and talk to the agencies, rather than to appeal at the outset. The arrangements will offer a better and fairer service to clients and will give a means to resolve disputes speedily without in any way prejudicing appeal rights.

With the permission of the House, I wish to clarify one point concerning the disputes and appeals provisions which arose during our debate on Clause 12 at Report stage, and to which the noble Lord, Lord Goodhart, referred. On checking the Official Report I feel I may have given the House the impression that there was an automatic one-month dispute period built in, on top of the one-month period for appeal. However, for those clients who choose to appeal from the outset, the time limit will not be extended. There will be claimants who do not contact the agency about the decision within one month--either to dispute it or to lodge an appeal. Current legislation makes provision for late appeals in special circumstances and there will continue to be arrangements for accepting late appeals in the future. The current rules need to be reassessed. They may need to be more generous at taking on board the point that the noble Lord made: that often it is the more vulnerable members of society who fail to meet the time limits. We shall discuss the provisions of the new arrangements with interested parties, including claimants' representatives.

The Government's intention is to ensure there is no misunderstanding on these points. The new arrangements, when taken as a whole, provide claimants with a far more flexible and sophisticated system of redress than simply being able to appeal against a decision. I hope your Lordships will accept that the amendment is unnecessary. I hope that the noble Lord will feel able to withdraw it.

Lord Goodhart: My Lords, I am grateful to the noble and learned Lord, Lord Hardie, for his reply. It has helped to clarify the situation, which was not entirely clear at the end of debate at Report stage, as the noble and learned Lord admitted. I have still a sense of disappointment that there has not been a firmer commitment to extend the period for appeal. Nevertheless, I do not propose to test the opinion of the House. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

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Clause 40 [Child support: revision of decisions]:

Lord Hardie moved Amendment No. 3:

Page 26, line 27, leave out ("decision") and insert ("revision").

The noble and learned Lord said: My Lords, this amendment was spoken to in the first group. I beg to move.

On Question, amendment agreed to.

4 p.m.

Clause 51 [Class 1 contributions]:

Lord Higgins moved Amendment No. 4:

Page 35, line 39, leave out ("subsection") and insert ("subsections").

The noble Lord said: It may be convenient to consider Amendment No. 5 with this amendment. Considering the shape in which the original Bill arrived from another place, there is no doubt that your Lordships' House has fulfilled its functions as a revising Chamber. Somewhat different considerations apply to Part II of the Bill. I shall speak to those in a moment. However, we have considered a large number of amendments.

At Committee stage the first Marshalled List had 58 government amendments. The figure rose to 107. At Report stage, there were 40 government amendments. Now, at Third Reading, there are another 15. The fact that the Bill had spent many weeks in Standing Committee in another place, quite apart from the Report stage, suggests that it was not well prepared. We have certainly fulfilled our function as a revising Chamber.

We have been given an unusual task as regards Part II. That is an important fact. The noble Baroness, Lady Hollis, said earlier that it is not unusual for new measures to be introduced in your Lordships' House as part of a Bill. But to introduce an entire Part II--what in effect constitutes a Bill within a Bill, forming moreover an important, perhaps essential, part of the Chancellor's Budget proposals--is probably without precedent. Therefore we need to consider the matter very carefully indeed.

My view, which I expressed at earlier stages, is that the measure should either have been included in the Finance Bill or, if that were not possible, there should have been a separate social security Bill. The House, and I believe Parliament, have been treated with contempt so far as concerns the normal legislative processes. Another place has had no opportunity to discuss the measures in Part II in Standing Committee, on Report or at Third Reading. The first it will hear of them will be when the Bill comes from this House with the amendments that the Government moved at Report stage.

It is an unusual situation and it is not the way in which Parliament should be treated. I feel bound to say that not only is it wrong; it is also unwise. We know only too well that when legislation does not go through the necessary detailed scrutiny, the government of the day often repent at leisure.

Against that background, I turn to the specific amendment which stands in my name. Part II of the Bill effectively implements proposals which the Chancellor

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put forward in his Budget speech, but with one important omission. The amendment seeks to implement what the Chancellor said in his Budget speech and to give the other place an opportunity to debate the matter. That is the point I stress. If we do not pass the amendment, the reality is that the proposals will have been passed and another place will have had no opportunity to discuss the crucial issue that I wish to raise on the amendment.

I refer to the remarks of the Chancellor of the Exchequer on 17th March in his Budget speech. He said:

    "I am abolishing the perverse entry fee that every employee pays to be part of the national insurance system and, in doing so, I am cutting national insurance for every employee in the country".

The Chancellor continued:

    "Further reforms will also ensure that no one pays national insurance for the first £81 of their weekly earnings. All employees earning between £64 and £81 will have their rights to benefit protected".--[Official Report, Commons, 17/3/98; col. 1106.]

There is no doubt that the impression created by both those remarks and more specifically perhaps by spin doctors and others outside was that the Chancellor was going to make those two important changes. As regards abolition of the entry fee, that was so. Reports in, for example, the Daily Telegraph, under the heading, "Brown spares middle classes", and on radio and television, gave the impression that the lower limit was to be raised to £81.

However, while there was provision financially in the Red Book for the first of those proposals, there was no provision for the second. I believe therefore that the Chancellor's proposals have not been implemented; and it is right and appropriate--and I stress this strongly--that another place should be given an opportunity to debate the issue. It will not have that opportunity if we do not pass this amendment. It can discuss other amendments, but we believe that this specific omission from the amendments that the noble Baroness moved at earlier stages should be debated in another place, and, if necessary, voted upon.

That said, I turn briefly to the second sentence that I just quoted which relates to the contributory principle. The Chancellor said:

    "All employees earning between £64 and £81 will have their right to benefits protected".--[Official Report, Commons, 17/3/98; col. 1106.]

But we have not received the slightest indication as to how the Chancellor of the Exchequer proposes that that should be so. Indeed, the measures as a whole tend to undermine the contributory principle, which has in many ways been the bedrock of the social security system ever since Beveridge; namely, one receives certain benefits only if one has contributed towards them.

The Government now seem to be saying that, for a certain level of income, people will be entitled to contributory benefits even though they have not contributed towards them. That is very mysterious. We have no idea at all what the Government propose to put in the place of the contributory principle. Yet, as I say, it is a matter of the greatest importance and must cast some doubt on the Government's position as regards the future of the national insurance pension. It is a matter on which there is increasing concern.

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However, I know only too well from my own experience as a Member of Parliament in another place the way in which the contributory principle is regarded as being of great importance. There are those who say: "We have contributed and therefore we are entitled to certain benefits". The Government have stated that the position will be protected, but it has not been made in the least bit clear how that is to be done.

Finally, I wish to turn to another related point which gives me considerable cause for concern. It may seem on the face of it to be a detailed, even pedantic point. Nonetheless, it is important, because in many ways it casts doubt on the whole position taken on this issue by the Chancellor.

Let me remind the House that the Chancellor said:

    "Further reforms will also ensure that no one pays national insurance for the first £81 of their weekly earnings".--[Official Report, Commons, 17/3/98; col. 1106.]

That is what he said. It clearly created the impression that that is what would happen. That is why we believe it appropriate to move this amendment so that the matter can be given further consideration.

Although there has been no discussion of the Bill in Standing Committee--it is in fact a Bill within a Bill--or at Report stage or Third Reading in the other place, the matter was raised when the Treasury Select Committee took evidence from the Chancellor of the Exchequer on 31st March. I refer to page 71 of the Treasury Select Committee's report. Mr. Quentin Davies raised this issue in relation to the statement made by the Chancellor.

Perhaps I may stress this point. The words used in the Chancellor's Budget Statement were:

    "Further reforms will also ensure that no one pays national insurance",

and so on. It is inconceivable that that was not a correct record. Had it been said in an ordinary debate, it may have been that Hansard was "not quite there", that the Minister's PPS did not go up to the office in time to correct the report, and one way or another the Chancellor's remarks were not correctly reported. But many Members of this House, certainly those who have been at the Treasury, will know perfectly well that the report of the Budget Speech is most certainly what the Chancellor actually said. The text goes to the Hansard office and is accurately reported; those were indeed the words that he used.

The extraordinary thing is this. When the Chancellor came to give evidence to the Treasury Select Committee on 31st March, he was questioned by Mr. Quentin Davies, who had some difficulty pinning him down on the point about the £81 limit rather than the question of the abolition of the entry fee. Mr. Davies pressed the Chancellor, who replied that the Budget Speech had stated:

    "I am abolishing the perverse entry fee every employee pays to be part of the National Insurance system".

It is true, as stated, that that is a relief, and we welcome it. The Chancellor of the Exchequer then went on to say:

    "We are agreed that is what the Budget did. Then I said: 'Future reforms will also ensure that no-one pays National Insurance for the first £81.' The word is 'future'. These are reforms we want to make".

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The Chancellor did not say "future"; the Chancellor said "further". The statement in the Budget Speech is clearly correctly reported. There is a clear distinction between the impression given to the national press and so on by using the word "further", particularly in the context into which I have correctly put it, and that given by the word "future". Had the Chancellor used the word "future", we should not for one moment suggest that this matter ought to be debated in this House this afternoon and that amendments ought to be made in relation to it.

What gives me cause for grave concern is that the Chancellor, when appearing before the Select Committee in another place, sought in effect to rewrite history. He must have known what he had said. He had only to look at Hansard. Yet he sought to get off the hook by going before the Treasury Select Committee and making a statement which is clearly and deliberately untrue. He is now saying that this is something the Government will do in the future, that it will depend on the contributory principle, and so on.

The reality is that the Budget Speech stated quite clearly what was the Chancellor's proposal. We therefore believe it right that, at the very least, this amendment should be passed, so that it can be discussed by Members of another place--it may well be appropriate for the matter to be discussed by your Lordships, but we have not had the option. This part of the Bill has been introduced not in any revising sense but ahead of any consideration by the Commons of the detail. We believe it right that that should be so. It is in no way inappropriate that your Lordships should do this, given the way in which the matter has been brought before this House and the way in which Parliament has been treated by the Government. We ought to pass this amendment, so that further discussion on a detailed basis can appropriately be undertaken. The Chancellor's Statement on Budget Day should be one to which he is held and for which he rightly ought to stand accountable. I beg to move.

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