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Lord McIntosh of Haringey: I too rise to support the principle of the amendment moved by the noble Lord, Lord Freeman, because it is one for which the Government have the greatest sympathy. The noble Lord is seeking to require the Board of Inland Revenue to lay before Parliament a report after the end of the first year, setting out the various targets which it has set and the performance achieved. I agree absolutely with the spirit of the proposed new clause.

It is right that the board, taking responsibility for tax credits, should set targets and be seen clearly to monitor their performance. Every Member of the Committee

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who has spoken has confirmed that. We want to ensure that tax credits are paid quickly to the right people and at the right level. We are all in agreement about that.

The only difference that I have is in the requirement to lay a report before Parliament. That is not because I believe that the board should not do that but because it already does so. The board lays a report before Parliament every year. The report covers the aims and targets of the department spreading over all parts of its business. Clearly, in future, the report must cover separately WFTC and DPTC. That cannot simply be subsumed into the report on the operation of PAYE and the board's other responsibilities.

WFTC and DPTC will be the responsibility of the Inland Revenue, so tax credits will be included in the board's report, with figures on performance and amounts paid. The board's report is, therefore, the appropriate place to include details on the performance of tax credits.

Let us take the individual issues as set out in the amendment. First, as regards targets, the board will publish details of performance against targets set for the tax credit. The amendment refers to take-up targets. We have never declared a take-up target of that kind. The figures which the noble Lord, Lord Freeman, cited were simply a conservative assumption for statistical purposes in the Answer to a Parliamentary Question of 9th March. Obviously, we are keen to have as high a target as possible and targets are being discussed between the Board of Inland Revenue and Ministers. But we do not think it is a particularly good idea to set a target at this stage.

On paragraphs (b) and (c) in the amendment, the noble Lord asked about finally determining claims and full accurate determination of entitlement. If he means by that the position when the claim has been determined at the end of the possible appeals process--and that is the only thing it can mean--in practice, it would not be possible for the board to set meaningful targets as it has no way of knowing who or how many applicants may exercise their right of appeal.

As regards paragraph (d), the noble Lord asks about fraudulent claim. The board will certainly wish to monitor both the number of cases of identified fraud and the numbers of claim which are referred for further investigation or inquiry as part of the compliance regime for the new tax credit. The board's report to Parliament already includes details of compliance activity, and the board would expect to include details in respect of new credits in the same way.

On turn-around times, the board will publish its key operational targets for the credits and the performance achieved against those targets. It is considering with Ministers the extent to which turn-around targets are appropriate in the light of DSS experience.

The noble Lord referred to the follow-up to the fraud study. The Benefits Agency has shared the results of the pilot study and the emerging findings of the benefit fraud inspectorate with the Inland Revenue. Risk assessment is a part of the Inland Revenue's fundamental approach and a system is being designed to address the tax credits risk. The findings of both the pilot study and the follow-up

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study are helping with the design of the system, but some procedures designed for family credit will not be appropriate for working families' tax credit.

I hope that the noble Lord, Lord Freeman, will see that the targets and achievements on tax credits will be carefully monitored and reported on. The noble Lord, Lord Blackwell, is quite right that when making such a change in social policy, it is essential that there are adequate monitoring and recording procedures. In the light of what I have said, I hope that the noble Lord will feel that there is no need for this new clause.

Lord Freeman: I am grateful to the Minister and to other noble Lords for their support for this probing amendment. I shall certainly read the record carefully. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clauses 17 to 20 agreed to.

Schedules 1 and 2 agreed to.

Schedule 3 [Rights of employees not to suffer unfair dismissal or other detriment]:

[Amendments Nos. 64 to 66 not moved.]

Schedules 3 and 4 agreed to.

Schedule 5 [Use and exchange of information]:

Baroness Hollis of Heigham moved Amendment No. 67.

Page 26, line 43, leave out (""121F"") and insert (""State)"")

The noble Baroness said: The purpose of Amendments Nos. 67 and 68 is to up-date cross-references to other legislation and the purposes referred to in Schedule 5. The references are to provisions in Section 110 of the Finance Act 1997. Those provisions were recently amended by the Social Security (Transfer of Functions) Act 1999. For the information of the Committee, the provisions referred to in the schedule relate to exchanges of information between the Board of Inland Revenue and the DSS. Schedule 5 as a whole contains provisions to allow the necessary exchanges between the Revenue and the DSS to take place to ensure that the business of the two departments may proceed.

The amendments are technical and seek to ensure that the cross-references are correct. I ask the Committee to accept them. I beg to move.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 68:

Page 26, line 44, at end insert ("(supply to Inland Revenue for purposes of tax credit of information so held)")

On Question, amendment agreed to.

Schedule 5, as amended, agreed to.

Remaining schedule agreed to.

House resumed: Bill reported with amendments.

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Local Authority (Stocks and Bonds) (Amendment) Regulations 1999

10.53 p.m.

Lord McIntosh of Haringey rose to move, That the draft regulations laid before the House on 30th March be approved [15th Report from the Joint Committee].

The noble Lord said: My Lords, these regulations are part of a series of six that accompany the transfer of responsibility for the Central Gilts Office (CGO) from the Bank of England to CRESTCo. Their purpose is to ensure that investors in certain local authority stocks can continue to use the CGO system to transfer their holdings after the merger has taken place. They amend the Local Authority Stock and Bonds Regulations 1974 and are necessary because the 1974 regulations contain a definition of the CGO which assumes that it is the responsibility of the Bank of England.

I would not normally expect to have to trouble your Lordships with what is by any standards a routine and technical matter. However, the power to amend the 1974 regulations was repealed in 1989 when the law relating to the raising of capital by local authorities was changed. The repeal was understandable at the time but leaves the Government in the awkward position of needing to amend the 1974 regulations but not being able to use the negative resolution power under which the regulations were originally made.

The only option now is to use the wide-ranging powers to amend the law relating to security settlement which the Treasury has under Section 207 of the Companies Act 1989. Because these powers are wide ranging they are quite properly subject to the affirmative resolution procedure. I am pleased to be able to say, however, that the regulations themselves are mercifully short and simple and seek to do two things only. First, they omit a definition of the CGO which will be redundant after the merger; secondly, they amend the definition of those who are entitled to use the CGO service to one that is consistent with it being the responsibility of CRESTCo. I commend the regulations to the House.

Moved, That the draft regulations laid before the House on 30th March be approved. [15th Report from the Joint Committee].--(Lord McIntosh of Haringey.)

Lord Higgins: My Lords, there is no limit to the versatility of the noble Lord, Lord McIntosh of Haringey. At the beginning of business today he was discussing whether or not 70 year-olds should be allowed to hire cars. He concludes with these regulations having survived a large number of exchanges in the course of the day. Indeed, I am beginning to wonder who was responsible for the regulations in 1974. It depends where they were in relation to the general elections of those days. I myself may have been responsible.

I have one or two points to put to the noble Lord. Essentially, as I understand it, the regulations transfer responsibility for these matters from the Bank of England to CRESTCo Limited. I am not clear what the

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statutory status is of CRESTCo as against the Bank of England, which obviously has a unique position. But what concerns me particularly--it is always helpful when the explanatory note is longer than the order itself--is that the arrangements made effectively switch the transfer of these stocks from a situation where they may be transferred in writing to one where they are transferred by computer. I believe that that is one of the implications of the regulations. If so, one should be a little concerned, given all the problems associated with the millennium bug.

Many problems may arise in that context. If the only record of whether a stock is owned by a specific organisation or person is on a computer, which may go wrong at the millennium, many difficult questions are raised. If that is so, is there a case for at least some written record to be printed out of the computer just ahead of the year 2000? That is my only major concern. Other than that, the noble Lord referred to six other orders. Perhaps he can give some indication of what they are going to cover.

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