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Earl Russell: My Lords, I thank the Minister for a long and careful reply. However, there is rather more to be done here than she suggested. In order to have any serious tracking of what happens to people who are disentitled to benefit, we will obviously have to have joined-up use of records between different government departments. We must, for example, break down the Chinese wall between the social security statistics and the criminal statistics; and we must break down the Chinese wall between the benefit statistics and the health statistics. It is only when we can see what correlation there is, or is not, between disentitlement to benefit and effects in either health or criminal matters that we can really know what we are dealing with.

I accept that I have received a very serious and sympathetic reply, but I do not believe that it has met what I am asking for; indeed, I do not think that the Minister really expected that it would. This is not the

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right moment to take the matter further, but the noble Baroness can take it for granted that I will do so on other occasions--I fear, on many other occasions. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 10 not moved.]

Clause 62 [Incapacity benefit: persons incapacitated in youth]:

Baroness Hollis of Heigham moved Amendment No. 11:

Page 71, line 37, leave out from ("to") to ("notwithstanding") in line 39 and insert ("incapacity benefit shall, in prescribed circumstances, be entitled to short-term incapacity benefit under subsection (1)(b) above").

The noble Baroness said: My Lords, this amendment makes a slight revision to an amendment to which the House agreed on Report. It is entirely beneficial. The changes that we introduced to Clause 62 were intended to protect two specific groups of people. The two groups were those who take up employment and earn below the LEL for a lengthy period before becoming incapable again of work, and those who return to the UK after a long period abroad. In neither case would they have had the opportunity to establish a contribution record to qualify for IB in the normal way.

The amendment will improve the original wording to reflect our intention that, in addition to new claimants who are awarded IB as a result of Clause 62, existing SDA recipients aged under 20 at the point of change who will transfer to IB a year later, will also be covered by this concession. I hope that noble Lords will be happy to agree to the amendment. I beg to move.

Earl Russell: My Lords, I thank the Minister warmly for the exemplary care and courtesy with which she has kept us informed of the content of government amendments at all stages of this Bill. That has done a great deal to save the time of the House and, in order not to refute myself, I shall sit down.

On Question, amendment agreed to.

Clause 80 [Transitional provisions]:

Baroness Hollis of Heigham moved Amendment No. 12:

Page 84, line 12, at end insert (", or under section 31(7B) of that Act if the marriage was dissolved by a decree granted in proceedings so begun").

The noble Baroness said: My Lords, in moving Amendment No. 12, I wish to speak also to Amendments Nos. 18, 19 and 20. This is a small group of technical amendments relating to pension sharing. As pension sharing is extremely complex, I hope that noble Lords will allow me to seek their agreement to some final important touches to the legislation.

Amendment No. 12 is required to make clear the policy intention that pension sharing should be available only where divorce proceedings begin after the pension sharing provisions come into force. As the Bill is currently drafted, there is no provision for

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pensions which have been shared and then uprated to be paid at the new rate. Amendment No. 18 puts this right.

Amendment No. 19 is necessary to ensure that any additional administrative expenditure of the Secretary of State in connection with the supply of information for pension sharing can be met from the appropriate vote. Amendment No. 20 extends Section 178(a) of the Pension Schemes Act, with which I am sure your Lordships are entirely familiar. The amendment extends to earmarking cases in Scotland the power under Section 178(a) to say who are the managers of an occupational pension scheme. I hope that your Lordships will accept these amendments. I beg to move.

On Question, amendment agreed to.

Clause 84 [Commencement]:

[Amendments Nos. 13 to 15 not moved.]

Clause 85 [Extent]:

Lord Higgins moved Amendment No. 16:

Page 86, line 28, leave out from ("70") to end of line.

The noble Lord said: My Lords, the amendments in this group are not only technical but are also consequential. They remain in the Bill rather like the smile on the face of the Cheshire Cat in Lewis Carroll's Alice in Wonderland after the cat itself had disappeared.

I shall not detain the House more than a moment or two but I shall make just two points. First, at Report stage I expressed some concern at a particular passage in an employees' bulletin issued by the chairman of the Inland Revenue. He has with great courtesy written to me about this and stated in the clearest terms that it was certainly never intended that the statement should be read in any other way than as a factual statement. I fully accept what he says and would like to place that on the record.

Secondly, as regards the cat which has disappeared, it remains to be seen what steps the Government now propose to take with regard to IRS35, whether in the Finance Bill or by way of further amendment. Clearly some of the consultations in which the Government took part have been helpful in improving what was originally proposed. However, there is still quite considerable concern among smaller operators in the IT industry, in particular that they may find themselves disadvantaged by what was further suggested in relation to their larger competitors. All I say at this stage is that I hope very much that the Government will carry out further consultations, because everyone has the same objective; namely, to ensure that tax avoidance does not occur. However, it is important that that should be done in a way which does not damage industry or the state of the economy. I beg to move.

7.45 p.m.

Lord McIntosh of Haringey: My Lords, I accept that these amendments are consequential on the removal of Clauses 71 and 72 and we shall not oppose them. However, in view of what the noble Lord, Lord

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Higgins, has just said, I should say a little more about the Government's intentions. I sent a letter to the noble Lord today which he will not have received because he has been on duty in the Chamber. I have sent copies of the letter to all other noble Lords who took part in the debate on this subject, including the noble Lord, Lord Goodhart, who also probably has not seen the letter. We shall seek to reverse in the other place the vote at Report stage on the service companies measures. I shall not repeat the debate any more than the noble Lord did but I wish to respond in public to a point that he made about the use of a Finance Bill because, although that point is mentioned in the letter I have sent to him, it is important that that should be placed on public record.

The reference that the noble Lord, Lord Higgins, made to an Order in Council of 1987 concerned a specific and limited circumstance which has not been regarded as creating a precedent. It was in the context of what is now Section 649 of the Income and Corporation Taxes Act 1988. Briefly, this section covers the delivery of tax relief on minimum contributions from the National Insurance Fund to personal pension schemes under Section 86 of the Social Security Act 1986. It provides that the Government should make the payments to the pension scheme grossed-up to take account of basic rate tax, and that the National Insurance Fund should be recompensed for the tax relief from the Consolidated Fund. So it covers a payment in respect of tax from the Consolidated Fund into the National Insurance Fund. That seems to be a very specific circumstance of NICs legislation being included in a Finance Bill. It is completely different from the current case, which is a substantial and important change to the rules governing NICs.

I am advised that the House authorities would not agree that such an example provides a precedent for including other NICs changes, such as the NICs service provision proposals within a Finance Bill. In the meantime, as I said, I accept the amendments which the noble Lord is moving.

Lord Higgins: My Lords, the House will be grateful for the noble Lord's clarification as regards both Finance Bills and also the Government's intention. I repeat that as regards this clause our objectives are the same as the Government's. However, we are anxious that the matter should be even-handed as between various participants in any particular industry. Technical points have been made which suggest that this is not the case. However, I very much hope that before the measure reaches another place the Government will have further discussions. I have received a document from the Professional Contractors Group which states,

    "All we have ever asked for were meaningful discussions and we still believe that given the opportunity we can with good will arrive at a solution that will address the Government's concern without damaging the knowledge-based sector".

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I hope very much that it is possible to achieve that objective. We shall of course watch with interest what happens in another place and then consider the situation carefully. I beg leave to withdraw the amendment.

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