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Baroness Anelay of St. Johns: Obviously, my noble friend is a little more combative than I but I defer to his experience. He has served as a Minister in the Department of Social Security and I have not. The Minister is worried that I may encourage my noble friend. I must inform the Minister that I shall be delighted to defer further to my noble friend but on this occasion, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8 agreed to.

Clause 9 agreed to.

Clause 10 [Appeals against decision of Board]:

Baroness Hollis of Heigham moved Amendment No. 36:

Page 5, line 37, at end insert--
("( ) This section has effect subject to section 121D of the Social Security Administration Act 1992 (appeals in relation to personal liability notices).").

On Question, amendment agreed to.

Clause 10, as amended, agreed to.

Clauses 11 to 14 agreed to.

Clause 15 [Decisions under Pension Schemes Act 1993]:

The Deputy Chairman of Committees (Lord Murton of Lindisfarne): If Amendment No. 37 is agreed I shall be unable to call Amendment No. 38 because of pre-emption.

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Lord Goodhart moved Amendment No. 37:

Page 7, line 43, leave out from beginning to end of line 24 on page 8 and insert--
("(4) Provision may be made by the Inland Revenue by regulations as to the making by their officers of any decision under or in connection with this Act which falls to be made by such an officer.
(5) Subsections (2) and (3) of section 8 of the Social Security Contributions (Transfer of Functions, etc.) Act 1999 and sections 9 to 12 of that Act shall apply to relevant decisions as they apply to decisions under section 7 of that Act."").

The noble Lord said: My great moment has arrived and I now have an amendment to move. Having looked through the Marshalled List I find that the noble Lord, Lord Higgins, and the noble Baroness, Lady Anelay, have together tabled some 25 amendments plus 10 objections to stand apart. That makes me feel like an ordinary worker in a soviet factory faced by a couple of Stakhanovite champions who have greatly exceeded their norm.

The effect of Amendment No. 37 is to transfer from social security tribunals (if I may be forgiven for using that expression because I am aware that technically that is no longer their name) to the Commissioners of Income Tax appeals from certain decisions which under this Bill are to be taken by officers of the Inland Revenue. The background to this particular amendment has involved me in a lengthy paper chase. It is an example of the extreme complexity of legislation in this field. I agree with the earlier comments of the noble Lord, Lord Higgins, about the remarkable and excessive complexity of this matter.

One begins with Section 17 of the Social Security Administration Act 1992 which provides that contribution questions are to be decided by the Secretary of State. Those questions include matters such as whether a person is an earner and, if so, the category to which he belongs. It also includes a large number of other contribution questions. Section 170 of the Pension Schemes Act 1993 adds certain other questions to those which fall to be decided under Section 17 of the 1992 Act by the Secretary of State for Social Security. Those questions relate to contracting-out; for example, the amount of guaranteed minimum pension to which the member of a pension scheme is entitled. But the question whether employment is contracted-out employment, which is a particularly important matter here, and some other questions are to be decided not by the Secretary of State but the Occupational Pensions Board. Section 170 was amended by the Pensions Act 1995. That abolished the Occupational Pensions Board whose functions in determining these questions were transferred to the Secretary of State for Social Security. That became effective on 1st April 1997. Therefore, questions relating to contracting-out have been decided by the Secretary of State for less than two years.

The next step was that Section 170 of the 1993 Act was replaced entirely by paragraph 131 of Schedule 7 of the Social Security Act 1998, which this House debated late in the previous Session. That provided for the review of decisions on contribution questions to be dealt with under that Act and for appeals to social

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security appeal tribunals under Section 12 in terms that are more or less identical to Clause 15(6) of the present Bill.

I turn to the present Bill. Clause 15(1) transfers to the Inland Revenue decisions on questions arising under Section 170 of the 1993 Act in its original form--as it relates to contracting-out--and Clause 15(2) transfers to Inland Revenue officers decisions on all questions, with an insignificant exception, under Part III of the Pension Schemes Act 1993. Part III concerns decisions on certification of schemes as contracted-out, the consequences of contracting-out on contributions and rights to benefit and the consequences of termination of contracted-out status.

Under Clause 15(4), reviews of those decisions are to be made by officers of the Inland Revenue. Under Clause 15(6) an appeal lies to the social security appeal tribunal. The purpose of our amendment is to treat decisions under Clause 15 in exactly the same way as all other powers of decision transferred by the Bill to the Inland Revenue, both for the purposes of variation and for the purposes of appeal. It seems logical and obvious that if the primary decision is to be taken by an officer of the Inland Revenue, an appeal should lie with the commissioners of income tax through the appeal procedure of the same department. So, why is it that appeal to the social security appeal tribunal is being preserved?

On Second Reading the noble Baroness, Lady Hollis of Heigham, said that it was not appropriate to refer those appeals to the general commissioners of income tax, with which I agree. She also said that it was not appropriate to refer the appeals to the special commissioners because they do not necessarily have pension expertise. However, in a letter to the noble Lord, Lord Higgins, which has been copied to me, the noble Baroness has given a different reason. Perhaps I may just explain what that is. The noble Baroness said:

    "Such disputes as there are in contracting-out matters generally arise in connection with an individual's SERPS entitlement. SERPS is administered by the Benefits Agency and appeals on SERPS matters will go to UATs"
--what I call the social security appeal tribunal--

    "The issue at stake in such appeals is very much to be whether someone was in contracted-out employment and, if so, what amount of Guaranteed Minimum Pension should be deducted from the amount of that individual's SERPS entitlement. It is extremely rare for a dispute to centre on, for example, the refusal to issue a contracting-out certificate or to be about the terms of such a certificate. So on balance we felt that any such appeals about certificates should also go to a tribunal with SERPS experience, rather than the tax appeal Commissioners".

I do not find that argument any more convincing than the first argument. I suspect that there will be very few appeals on rights to SERPS. The amount of SERPS is conditional only on the number and amount of payments. Those are ascertainable facts and matters of record. They are quite different, for example, from the question of whether a claimant is entitled to a disability benefit. It is extremely unlikely that there will be more than a handful of SERPS appeals and it seems to me doubtful that any social security appeal tribunal will be able to build up any degree of expertise in that subject.

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In my view, it is awkward and illogical to have most decisions of Inland Revenue officers on contribution issues subject to appeal to the commissioners of income tax, but a small category subject to the social security appeal tribunal. I believe that can be justified only if the appeal tribunal is plainly a more appropriate body. I suggest that the special commissioners of income tax are at least as capable of deciding questions under Part III of the Pension Schemes Act as the social security appeal tribunal, and probably more capable. They have wide experience of deciding the course of the appeals that they hear with exceedingly technical questions on a wide variety of subjects. I would regard the issues under this clause as wholly within their capacity and, therefore, I believe that that is a much more appropriate body than the social security appeal tribunal.

6.30 p.m.

Baroness Anelay of St. Johns: It may be convenient if I speak to Amendment No. 38 which is grouped with Amendment No. 37. As the Chairman of Committees has pointed out, if the amendment of the noble Lord, Lord Goodhart, were accepted, mine would not be called. I begin the New Year in the extraordinary position of having to agree with virtually every word that the noble Lord, Lord Goodhart, has uttered so far and I support what he has argued with regard to his amendment.

Amendment No. 38 was tabled as a probing amendment on the advice of the Public Bills Office and as a peg on which to hang some questions about the composition of the tribunal which will hear the appeals, regardless of the argument of the noble Lord, Lord Goodhart, that it may not be the appropriate tribunal in this case.

On Second Reading, I referred to the fact that appeals on contracted-out issues had been left with the UATs and I sought clarification about the implications of that for the appellants. I was interested particularly in the Government's view about the number who would sit on the UATs to hear appeals. I thank the Minister for her letter of 17th December, to which the noble Lord has already referred. Further on in that letter, the noble Baroness gives an explanation, to some extent, about the way in which the UAT will function in regard to appeals.

I asked questions on Second Reading with regard to waiting times that appellants may anticipate. However, I was concerned also about the number of people who will sit on the tribunal. In the letter, the Minister refers to the fact that:

    "The current statutory requirement for three person tribunals makes hearings difficult to arrange and contributes to delays. So appeals to the current social security tribunals take, on average, seven months to be heard".
I appreciate that that is nothing new; it is a matter of fact. It is difficult to empanel three member tribunals. On the other hand, three member tribunals have a valuable part to play. During discussions on the Social Security Act last year, several noble Lords, of whom I was one, were concerned that we might be drifting or

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being pushed by the Government to end up with UATs--as they are now--routinely sitting with fewer than three people.

The reason for speaking to Amendment No. 38 today is to elicit from the Government an explanation of whether they expect the appeals which are left with the UAT under this Bill to be heard routinely by three person tribunals or by tribunals of fewer than three people. The Minister's answer to that would give me some guidance as to whether I raise further matters at a later stage.

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