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On Question, amendment agreed to.
Baroness Hollis of Heigham moved Amendment No. 34:
The noble Baroness said: My Lords, I believe that this wins the record for being the briefest amendment-moving speech this evening. Amendment No. 34 is a technical amendment to the subsection of Clause 27 which extends to Northern Ireland the repeals schedule to the Bill. In the light of additional material now in that schedule, that provision is now too restrictive and needs to be drawn in more general terms. I beg to move.
On Question, amendment agreed to.
Schedule 2 [Transfer of functions under subordinate legislation]:
Baroness Hollis of Heigham moved Amendment No. 35:
The noble Baroness said: My Lords, following my exchanges with the noble Lord, Lord Skelmersdale, in Committee, we have given further thought to the functions conferred on the Secretary of State in statutory instruments. As a result, this technical amendment adds to the list in the schedule a further instrument which confers functions on the Secretary of State in cases where contributions have been paid in error. I hope that the amendment will receive the full support of the noble Lord, Lord Skelmersdale. I beg to move.
Lord Skelmersdale: My Lords, I was delighted to see the amendment because obviously the object behind my probing amendments to Schedule 2 in Committee persuaded the Government and their advisers to have another look at the schedule. Clearly they have done that. They had a tiny look immediately before Committee stage which was possibly prompted by me, possibly not; I do not know. They made one small alteration at that stage. Now a fairly significant alternation has been made. Another statutory instrument has been introduced into the list in Schedule 2. In welcoming the amendment, I am especially pleased that column 3 refers to, "All the regulations".
On Question, amendment agreed to.
Schedule 3 [Transfer of other functions to Treasury or Board]:
Baroness Hollis of Heigham moved Amendments Nos. 36 and 37:
Page 15, line 4, at end insert--
("( ) section (Recovery of contributions where income tax recovery provisions not applicable) and Schedule (Recovery of contributions where income tax recovery provisions not applicable),").
Page 15, line 15, leave out from ("any") to ("and") in line 16 and insert ("enactment which extends to Northern Ireland,").
Page 27, line 31, at end insert--
("S.I. 1996/1245. The Social Security (Additional Pension) (Contributions Paid in Error) Regulations 1996. All the regulations.")
Page 36, line 8, at end insert--
(".--(1) In section 177 of the Social Security Administration Act 1992 (co-ordination with Northern Ireland), in subsection (3)(a), for "to make" there is substituted "to require the making by the Inland Revenue of".
(2) This paragraph shall cease to have effect on the commencement of the repeal by the Northern Ireland Act 1998 of section 177 of the Social Security Administration Act 1992.").
Page 37, line 9, at end insert--
. In section 88 of the Northern Ireland Act 1998 (the Joint Authority), in subsection (3), for the words from "power" onwards there is substituted "power--
(a) to require the making by the Commissioners of Inland Revenue of any necessary adjustments between the National Insurance Fund and the Northern Ireland National Insurance Fund, and
(b) to make any other necessary financial adjustments."").
On Question, amendments agreed to.
Baroness Hollis of Heigham moved Amendment No. 38:
After Schedule 3, insert the following new schedule--
1. In any provision of this Schedule "authorised officer" means an officer of the Board authorised by them for the purposes of that provision.
2.--(1) Any amount which--
(a) is due by way of contributions or by way of interest or penalty in respect of contributions, and
(b) does not exceed the prescribed sum,
shall, without prejudice to any other remedy, be recoverable summarily as a civil debt in proceedings commenced in the name of an authorised officer.
(2) All or any of the sums due from any one person in respect of contributions, or interest or penalties in respect of contributions, (being sums which are by law recoverable summarily) may be included in the same complaint, summons, order, warrant or other document required by law to be laid before justices or to be issued by justices, and every such document shall, as respects each such sum, be construed as a separate document and its invalidity as respects any one such sum shall not affect its validity as respects any other such sum.
(3) Proceedings under this paragraph in England and Wales may be brought--
(a) in the case of Class 2 contributions or interest or penalties in respect of such contributions, at any time before the end of the year following the tax year in which the contributor becomes liable to pay the contributions, and
(b) in any other case, not later than the first anniversary of the day on which the contributions became due.
(4) In sub-paragraph (1) above, the expression "recoverable summarily as a civil debt" in respect of proceedings in Northern Ireland means recoverable in proceedings under Article 62 of the Magistrates' Courts (Northern Ireland) Order 1981.
(5) In this paragraph--
"the prescribed sum" means the sum for the time being specified in section 65(1) of the Taxes Management Act 1970 (recovery of income tax, etc. in magistrates' courts);
"tax year" means the twelve months beginning with 6th April in any year. County courts
3.--(1) Without prejudice to any other remedy, any sum which is due by way of contributions or by way of interest or penalty in respect of contributions may--
(a) in England and Wales, and
(b) in Northern Ireland, where the amount does not exceed the limit specified in Article 10(1) of the County Courts (Northern Ireland) Order 1980,
be sued for and recovered from the person liable as a debt due to the Crown by proceedings in a county court commenced in the name of an authorised officer.
(2) An authorised officer may conduct any proceedings under this paragraph before a county court in England and Wales, although not a barrister or solicitor.
(3) In this paragraph as it applies in Northern Ireland, "county court" means a county court held for a division under the County Courts (Northern Ireland) Order 1980.
(4) Sections 21 and 42(2) of the Interpretation Act (Northern Ireland) 1954 shall apply as if any reference in those provisions to any enactment included a reference to this paragraph, and Part III of the County Courts (Northern Ireland) Order 1980 (general civil jurisdiction) shall apply for the purposes of this paragraph in Northern Ireland.
4.--(1) In Scotland, any sum which is due by way of contributions or by way of interest or penalty in respect of contributions may, without prejudice to any other remedy, be sued for and recovered from the person liable as a debt due to the Crown by proceedings commenced in the sheriff court in the name of an authorised officer.
(2) An authorised officer may conduct any proceedings under this paragraph, although not an advocate or solicitor.
(3) Paragraphs 2 and 3 above shall not apply in Scotland.
5.--(1) Proceedings may be brought for the recovery of the total amount of Class 1 or Class 1A contributions which an employer has become liable to pay on a particular date and any sum due by way of interest or penalty in respect of those contributions without distinguishing the amounts which the employer is liable to pay in respect of each employee and without specifying the employees in question; and for the purposes of proceedings under any of paragraphs 2 to 4 above that total amount shall be one cause of action or one matter of complaint.
(2) Nothing in sub-paragraph (1) shall prevent the bringing of separate proceedings for the recovery of each of the several amounts of Class 1 or Class 1A contributions which the employer is liable to pay.").
On Question, amendment agreed to.
Baroness Hollis of Heigham moved Amendment No. 39:
The noble Baroness said: My Lords, on Second Reading and in Committee some concerns were expressed by the noble Lord, Lord Higgins, and the
Subsection (2)(c) states that an authorised officer shall have the power,
As I explained in Committee, we see the main justification for this power as a protection for an employee who might otherwise be subjected to pressure by an unscrupulous employer attempting to cover up fraudulent actions. As I said, if the employee "may" have the employer present, then we fear he "must" in that situation of possible duress. That is a valuable protection for contributors. But as a further safeguard, I shall also ask officials to consider the guidance given to inspectors to ensure that it reflects that intention and makes clear that if the inspector feels that it is sensible to be accompanied on an inspection visit, it must only be by an appropriate person such as, for example, a Benefits Agency officer; for example, in the case of suspected collusive employment or benefit fraud. I hope that your Lordships will accept those reassurances about subsection (2)(c).
The other wording which was queried was in subsection (3) which details the premises liable to be inspected. On this count we have decided to substitute the wording in Section 110B(5) of the Social Security Administration Act 1992 which was inserted by Section 12 of the Social Security Administration (Fraud) Act 1997 with the necessary addition of a line to include premises from which a personal or occupational pensions scheme is being administered. The revised wording, for which we may thank the previous Administration, so we hope it will be appropriately received today, makes clear that if business records are
I suggest that what is proposed substantially meets the point made by the noble Lord, Lord Higgins, about an Englishman's house being his castle. If he did not say that, I am sure that is what he meant to say. I am sure that he will agree with me that it should not be possible to drop down the portcullis if the house holds the only records relating to employees' national insurance or occupational pension records. But I hope these words reflect more clearly the principle that an inspector would only go to a dwelling house if it was absolutely necessary; in other words, if it was being used to divert information.
I emphasise again that there are no powers in Section 110ZA which give right to enter by force. Entry into any premises can only happen with the co-operation of the owner or occupier. Failure to allow access to the relevant records can lead to proceedings before the tax appeal commissioners being instituted and the imposition by them of monetary penalties. Continued failure can lead to further penalties imposed by the inspector but appealable to the commissioners.
I believe this strikes a fair balance between the need for the Revenue to carry out inspections which ensure that the NICs scheme is being operated as required by statute and the right to privacy. The amendment is in direct response to concerns raised in Committee so I hope that your Lordships will find it helpful. I beg to move.
Page 38, leave out lines 14 to 23 and insert--
("(3) Premises are liable to inspection under this section if an officer has reasonable grounds for believing that--
(a) any persons are employed there;
(b) a trade or business is being carried on from there;
(c) any records relating to a trade or business are kept there; or
(d) a personal or occupational pension scheme is being administered there,
but a private dwelling-house is not liable to inspection under this section unless an officer has reasonable grounds for believing that a trade or business is being carried on from the dwelling-house and that the trade or business is not also being carried on from premises other than a dwelling-house.").
"to examine, either alone or in the presence of any other person, as he thinks fit ... every person whom he finds in any such premises or whom he has reasonable cause to believe to be or have been a person liable to pay ... contributions".
Your Lordships were concerned that, on the face of it, this could lead in extremis to an inspector being accompanied by a business competitor or a representative of the media. An important point here is that if an inspector acted in that way he would almost certainly be in breach of his duty to keep the affairs of contributors confidential. That would in itself be a criminal offence. In other words, there is a legal protection to check the inspector from doing what the noble Earl, Lord Russell, feared. However, that is not covered in the new section but is covered by the inspector's duty of confidentiality.
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