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Tax Credits Bill

3.8 p.m.

Read a third time.

Lord Higgins moved Amendment No. 1:

After Clause 1, insert the following new clause--


(" . Recipients of a tax credit under this Act shall be entitled to all the benefits to which, but for the passage of this Act, they would have been entitled had they been in receipt of, or had they been eligible for, family credit or disability working allowance.")

The noble Lord said: My Lords, this amendment stands also in the name of my noble friend Lord Astor of Hever. It seeks to insert the new clause as printed. We have debated the issue at earlier stages of the Bill. It arises because in the change from family credit to the new structure proposed by the Government with regard to working families', tax credit and so on, the position on so-called passported benefits is uncertain. That is the

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entitlement which those on family credit at present enjoy to a number of benefits: for example, prescription charges, the cost of travel to hospitals and a number of other benefits of one kind or another.

In successive debates at Committee stage, at Report stage and now on this occasion, we have sought clarification of the Government's position. Quite clearly, it is a matter of considerable importance to those who at the moment do not know where they stand with regard to the benefits, which may be of considerable value and certainly of considerable importance to individuals. In our view, it is an issue that ought to be resolved so that people know where they stand.

However, it is extraordinary that while, throughout the debates, the Minister has sought to be as helpful as she could she has not been able to clarify the position. So on this occasion, at this late stage in the passage of the Bill, because the position was totally unclear when it was debated in another place, we seek a degree of clarification. On former occasions, the noble Baroness said it was not central to the Bill, but it is certainly of consequence and we ought not to let the Bill pass without knowing the answer.

I have to say and have said throughout that it shows disregard for the parliamentary process that we have got this far without a clear answer. It also seems to be an extraordinary reflection of the way in which the internal workings of the Government operate. In giving, I am inclined to say, an excuse rather than a reason as to why the position was unclear on previous occasions, the noble Baroness pointed out that the matter involved a considerable number of government departments. But the fact that she has not been able hitherto to provide an answer suggests that the co-ordination between those departments and even the ability to convene a Cabinet committee meeting to decide the matter over a period of months has turned out to be beyond the ability of the Government. In my view it is an extraordinary situation.

The noble Baroness also sought to argue that it was not a matter for primary legislation, it is dealt with by statutory instrument. But the trouble is that if the matter is dealt with by statutory instrument, it is not possible to amend that statutory instrument. My understanding is, although I believe there are some variations of view between the Liberal or Cross-Benches and my own, that the general view is that in this House we do not vote against statutory instruments. So if this House wishes to take a view on whether what the Government propose is satisfactory, this is an appropriate moment to do so. The problem has been that we do not know whether the Government's proposals are satisfactory.

That brings me to the text of the amendment. We need to know whether people who are at present entitled to the benefits will continue to receive them in the future. I hope that, even at this late stage, the Minister can clarify the position. Originally her position was that we would know "before the Bill leaves Parliament"--a rather strange expression. We had been assured that we would know before Third Reading. Well, we have reached Third Reading and do not yet know, but one must hope that in replying in a few moments, the noble Baroness will be able to tell us whether that is so.

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At all events, whether matters are normally dealt with by statutory instrument or by primary legislation largely depends on whether there is an opportunity with primary legislation to debate the issue, vote on it and, if necessary, amend it. We have such an opportunity here.

I hope that, even at this late stage, we can find out what the Government's intentions are and then consider in the light of that information, albeit at short notice because one will have to respond quickly, whether what the Government propose is satisfactory. It seems clearly the case that those who receive passported benefits at present ought to continue to do so. We also need to know whether people will have the same entitlement to benefits in the future if they qualify or, more accurately, would have qualified under the present legislation. That is the position. After all the debates when we have not had a single indication of the Government's intentions on the matter, I hope that we shall at long last manage to discover them. I beg to move.

Baroness Carnegy of Lour: My Lords, I fully support my noble friend's amendment. He has made it clear on a number of occasions why he thinks it is an important issue in relation to the Bill, probably the most important. For Parliament and, above all, for the House of Commons, the elected House, to assess just how families and individuals will be affected by the changes and what their incomes are likely to be in given circumstances if they take a low-paid job, they must know rather more than we know at the moment. By the same token, Parliament needs to know whether people will find the credits which come with the job sufficiently attractive.

The answer to those questions will obviously depend upon the eligibility for other benefits which people receiving the new tax credits will have. Otherwise one cannot tell how people will be placed as a result of the Bill, whatever the difficulties for the Government at the moment.

My noble friend's amendment would mean that some people who have higher incomes than those on the present credit system would become eligible for benefits to which they were not previously entitled. That is the snag with the amendment. It may or may not be necessary or right that that should be so, but at present we in this House cannot tell.

It seems to me that only by putting this kind of amendment into the Bill can we ensure that in the House of Commons the Government are made to answer this crucial question so that honourable Members can judge whether the Bill will be workable. I do not know what the Minister will say to us, but if it is not satisfactory I hope that my noble friend will seek the opinion of the House. If the Government continue to prevaricate in the matter, Parliament should not pass the Bill. We need to know what will happen to the people whom it is intended to benefit. It has a laudable aim--to help people off benefit into work--but what is the good of that if, as a result, people will be worse off, not better off? We need to know the answers and I shall listen with great interest to what the noble Baroness says.

Earl Russell: My Lords, I am glad the noble Lord, Lord Higgins, has raised the issue again. At Report stage

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he asked the Government's intentions. I admit that he did so somewhat in the manner of a Victorian heavy father--in fact, so heavy a father that perhaps he would not have been out of place in the previous Question. Nevertheless, it is an important matter of public policy on which this House and another place, as well as the world at large, are entitled to an answer. I hope that the Minister will give us one, and that she has been supplied with one by those whose consent she needs before she is able to give one. If she does not have one, I hope we may tentatively expect that other people who have not enabled her to give one might hear a little about it.

The noble Baroness, Lady Carnegy of Lour, is using somewhat of a nuclear deterrent to try to obtain an answer in suggesting that it be used to hold up the Bill. We do need to know, but whether we need to know to the point of holding up the whole Bill is another question. I do not believe that we on these benches would take that view.

When the noble Lord, Lord Higgins, refers to "this Government", I hope that he might perhaps be generous enough to amend his words simply to read "government". Government, independent of party, is an animal which does have certain institutional faults. Parties come and parties go, but the institutional faults tend to go on. I believe that if we blame any one party for them, we will tend to go astray.

Having said that, I believe that this is a bigger issue than has been suggested. The Minister said on Report:

    "It is not a matter for this Bill".--[Official Report, 18/5/99; col. 242.] With respect, I do not find that view persuasive. This Government have shown considerable concern, rightly in my opinion, with the issue of poverty traps. This Government are concerned that work should be made to pay. While they may occasionally be a little obsessive in that aim, the aim itself is entirely justified.

For people who need dentures, spectacles or recurring prescriptions, passported benefits can be an important part of their income. The Minister may remember the Child Support Act 1991. Her noble friend Lord Carter, no less, put down an amendment that women who came off income support and received maintenance instead should continue to receive passported benefits. Had the previous government been wise enough to accept that amendment, the number of women willing to co-operate with the Child Support Agency might have been a great deal higher than it has in fact been. Passported benefits, if lost, may create a considerable poverty trap.

The effect of the Bill to get people into work will depend very heavily indeed on the answer that the Minister gives to this amendment. I therefore look forward to the answer with more than usual interest.

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