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Baroness Hollis of Heigham: Yes, my Lords. In other words, the employer will know that an employee forms part of the perhaps two-thirds of his workforce who could be married, widowed, co-habiting or have children, as opposed to those who are single. The employer will know that a certain employee is simply not single; that is all he can know. He will not even know whether a person is disabled. That person may be entitled to a disability tax credit and be single. The employer will not even know that. I think that the noble Lord's example pushes at the very edges of reasoned information.

The noble Lord also argues that there is inconsistency between the Government's position on lone parents and the earlier amendments on employers. That is not the case. We have argued that the burden on employers is not disproportionate. That is why we are against an exemption. However, that does not mean that some employers may not take the opportunity to avoid any extra work that is involved

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if they can. There will always be some who will seek to duck and weave. We do not want to expose employees--particularly vulnerable employees--to that kind of pressure.

I hope that for all those reasons the House will affirm the decision of the Commons. I do not refer necessarily to the argument about the sparsity of attendance in the Chamber tonight compared with the sparsity of attendance in the Commons. I refer to the false argument that lone parents are not analogous to couples in this respect. They are in the same position as couples with regard to making a choice as to whom the money is paid. I refer to the argument that family credit has a relatively low take-up compared with other income-related benefits, as opposed to what we expect will be the relatively automatic payment of the working families' tax credit. I again make clear the point that work pays. We shall ensure that work pays without the taxpayer subsidising the low paying, unfair, exploitative employer. As I say, I hope that the House will affirm the decision of the Commons.

Lord Higgins: My Lords, before the noble Baroness sits down, I hope that she will answer the two points that I raised. First, does the suggestion of the Institute for Fiscal Studies that 250,000 extra people will be employed refer to the method of payment or to the extent that the working families' tax credit is a wage subsidy? Secondly, have any outside bodies supported the view that the noble Baroness has expressed with regard to the method of payment?

Baroness Hollis of Heigham: My Lords, on the first point, the noble Lord disappoints me. If he had read the report which he is happy to argue about, he would know the answer to his question. The report does not even seek to go into that level of detail. I am surprised that I have to tell the noble Lord this because I would have expected him to have read the report and to have shared his views on that report with the House tonight before engaging in this kind of debate.

Lord Higgins: My Lords, I am aware of that, but the answer is not in line with the argument which the noble Baroness expounded earlier in reply to the noble Lord, Lord Goodhart.

Baroness Hollis of Heigham: My Lords, the argument surely is that we know that only 79 per cent of those who are entitled to family credit take it up. We know that loan parents constitute the majority of claimants--about 51 per cent of those on family credit. We know that as a result there is money not going to homes, even to those in work. We also know that many lone parents in particular who want to enter work feel that they cannot afford to do so because they fear that they risk losing benefit. They feel that they are better off not being in work. We believe that the working families' tax credit will take care of all of those problems and will benefit lone parents. Therefore, I hope that your Lordships will acquiesce in the Commons overturning the amendments tonight.

On Question, Motion agreed to.

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Clause 6, page 3, line 35, at end insert--

("(1A) Any employer employing fewer than ten employees may elect that any tax credit to which an employee is entitled shall be paid by the Board instead of being paid by him.
(1B) For the purposes of subsection (1A), the Board may make regulations providing for--
(a) the method for making or revoking an election;
(b) the method for cancelling an election if the employer subsequently employs ten or more employees; and
(c) two or more connected employers to be treated in specified circumstances as if each of them employed the employees employed by the other connected employers as well as the employees employed by himself.")
The Commons disagreed to this amendment for the following reason:
3ABecause it is not appropriate for smaller employers to be exempted from paying tax credit to their employees.

Baroness Hollis of Heigham: My Lords, I have already spoken to the amendment. I beg to move.

Moved, That the House do not insist on their Amendment No. 3 to which the Commons have disagreed for the reason numbered 3A.--(Baroness Hollis of Heigham.)

On Question, Motion agreed to.

Greater London Authority Bill

8.41 p.m.

House again in Committee on Clause 80.

[Amendment No. 223 not moved.]

Lord Whitty moved Amendments Nos. 223A to 223D:

Page 46, line 15, leave out from ("sections") to ("calculations") in line 17 and insert (" 70, 71 and 73 to 75 above and Schedule 6 to this Act and sections 47 and 48 of the Local Government Finance Act 1992 would be different from the last relevant").
Page 46, line 20, leave out ("sections") and insert ("provisions.
( ) In subsection (5) above, "the last relevant calculations" means the last calculations made by the Authority in relation to the year in accordance with--
(a) sections 70 to 75 above and sections 47 and 48 of the Local Government Finance Act 1992, or
(b) sections 70, 71 and 73 to 75 above and Schedule 6 to this Act and sections 47 and 48 of that Act.").
Page 47, line 11, at end insert ("under section 73(3)(b) of the Greater London Authority Act 1999 (in relation to item P1) or under section 74(5)(b) of that Act (in relation to item P2)").
Page 47, line 15, leave out from ("with") to end of line 17 and insert ("the appropriate Greater London provisions in making the calculations.
( ) For the purposes of subsection (11) above, "the appropriate Greater London provisions" means--
(a) in the case of calculations required to be made in accordance with sections 70 to 75 above and sections 47

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and 48 of the Local Government Finance Act 1992, those provisions; and
(b) in the case of calculations required to be made in accordance with sections 70, 71 and 73 to 75 above and Schedule 6 to this Act and sections 47 and 48 of that Act, those provisions.").

On Question, amendments agreed to.

Clause 80, as amended, agreed to.

Clause 81 [Provisions supplemental to section 80]:

Lord Dixon-Smith moved Amendment No. 224:

Page 47, line 25, leave out ("35") and insert ("15").

The noble Lord said: The amendment is very short, very brief and very simple. It seeks to change the number "35" to "15". Before dinner we had a considerable debate around the question of the funding of the Metropolitan Police and the procedure to be followed in the event that the Secretary of State advised that the mayor's proposals were not adequate and that the mayor should do something about it. He is given a considerable period of time to do something about it. We do not think that that period of time is necessary. We think he should perfectly well be able to do it in much lesser time. After all, if he is a competent mayor he will have all the details of the Greater London Authority Bill at his fingertips, so to speak, and he will know what is and what is not possible and that if adjustments can be made he will be able to make them. For the peace of mind of the people of London, that prolonged period of time should be diminished. The amendment seeks to do just that. I beg to move.

Baroness Farrington of Ribbleton: This amendment would require the GLA to make substitute calculations in 15 days rather than 35 days. We believe that this is too short. The GLA will have to follow the procedure set out in Schedule 6, which involves both the mayor and the assembly. It is essential that any changes to the budget are considered carefully, especially where cuts are being made, as might be the case here.

In general, when a local authority is designated and has to set a new budget requirement it is expected to do so in 21 days. To insist that the GLA, which has to involve both the mayor and the assembly in the process, completes its substitute calculations in a shorter time is unrealistic.

There is no prospect of any gap in funding for the MPA unless the GLA failed to make substitute calculations within the 35-day period. After receiving a direction, the mayor will continue to receive grant income from central government and council tax income from billing authorities as usual. Once the substitute calculations have been made, income from billing authorities will be on the basis of the substitute rather than the original calculations. It is only if the GLA does not meet the deadline that it will cease to receive income from billing authorities. So reducing the deadline to 15 days would not reduce the risk of a shortfall in funding for the police. It would have the opposite effect.

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The GLA will, in any case, wish to complete these substitute calculations as quickly as possible as it may need to adjust its spending plans or rebill the local taxpayers. Therefore I ask the noble Lord to withdraw the amendment.

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