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Earl Russell: If the Minister has avoided Scylla, has she not charged straight into Charybdis? If she avoids discrimination, is she not therefore, by the very act which avoids discrimination, taking herself straight into the face of the charge that she is discouraging freedom of movement of workers within the EU? Those are both legitimate objectives in European law.
Baroness Hollis of Heigham: I suspect—though I may well be wrong—that the logic of the noble Earl's position is that if tax credits were to follow a British citizen to a long-term placement in Germany or France, we would have no grounds to stop us paying to German and French citizens the same tax credits, otherwise we would be distinguishing in favour of British citizens working in Germany. I do not think the noble Earl wants to take us down that route.
Earl Russell: I hope that the Minister will take further advice on this. I cannot see that the present position will stand up to legal scrutiny. I should like to see the Bill drafted in a way that does. I am not capable of doing that entirely on my own; I doubt if the Minister is either. I hope we will discuss this matter further. Meanwhile, I have taken it as far as I can at present, and I am content to leave it there.
Baroness Hollis of Heigham: I shall write to the noble Earl.
The Earl of Northesk: I am grateful for the two specific answers given by the Minister. Perhaps I can press her a little further on one specific point. Is it the intention that the circumstances in subsection (5) are to be horrendously complicated or relatively simple? Perhaps she would clarify that point.
Baroness Hollis of Heigham: I am sure the intention is that they should be relatively simple. The noble Earl would not expect me to give any other answer. This is
being carried by regulations. The regulations are obviously in the process of consultation with the relevant bodies. This is rather technical and I should like to follow it up by writing to the noble Earl, Lord Northesk. Again, if he feels that my answer is not full enough, or if he feels that there are still obscurities, I invite him to probe it on Report.
The Earl of Northesk: I am grateful to the Minister and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Claims: supplementary]:
The Earl of Northesk moved Amendment No. 31:
- Page 3, line 12, after "manner" insert ", whether or not before an official of the Board who is satisfied that all facts necessary to establish the claim have been made out,"
The noble Earl said: I should begin by acknowledging that Amendment No. 237 in the name of my noble friend Lord Freeman in this grouping achieves my intended purpose far more effectively and elegantly than Amendment No. 31. Nonetheless, there are issues here of underlying principle that I hope the Minister will comment upon in due course.
Self-evidently, the purpose of the amendment is to make allowance for a claimant, or someone acting for him, to meet an official to provide necessary information to establish a claim. It would, of course, be inappropriate to commit officials to having to conduct face-to-face interviews in all cases. Nonetheless, there are a number of reasons why it is important that the lines of communication between claimants and officials need to be buttressed.
I start with Clause 3(1) of the Bill, which states:
- "Entitlement to a tax credit is dependent on the making of a claim for it."
The logical inference of this is that, notwithstanding the increased use of means testing, the Government could be said to be moving towards a system of self-assessment of benefit entitlement. The responsibility and onus of proving a right to and obtaining a tax credit is, in the main, imposed on the individual claimant. No doubt the Inland Revenue will be proactive in offering assistance to those seeking to submit their claims. Indeed, the assurances offered in this respect by the Paymaster General and the Financial Secretary in another place afford some comfort. It is a source of anxiety, however, that there is little enough on the face of the Bill to this effect. Here we should not lose sight of the Government's stated determination to instil a greater focus on customer service and satisfaction, as delineated in the Performance and Innovation Unit's report, Reforming the Public Services: Principles into Practice, which states on page 11 that:
- "The starting point must be that the public has a right . . . to income support, and that it is the duty of the Government to secure these rights on their behalf".
Of course, the logic of face-to-face interviews is underpinned by the two important issues of take-up and fraud. The system of tax credits introduced by the Bill is undeniably complex, especially for the client groups at whom it is aimed. Of itself, this argues in favour of proactive involvement by the Revenue to enhance take-up. Here the significance of the Government's proposition to integrate benefits with the tax system should not be under-estimated. It opens up the possibility of deploying the supposed boon of data matching and the myriad other analytical tools that are now possible, provided of course that the relevant software is programmed and written properly. In passing, I merely make the point that at the same time it introduces the potential bane of infringement of rights to privacy. It is intriguing that the Government feel able to cite figures on the take-up of tax credits with relative precision, however they may be calculated. Indeed, as the Minister observed last week:
- "We know already who many of the recipients will be. They are families who are currently claiming WFTC, DPTC and the child tax credit. Those families will be sent a form directly later this year. We also know, obviously, the families on IS and JSA who will be eligible. So there is a lot of automaticity in the process". [Official Report, 16/5/02; col. CWH51]
Be that as it may, there is legitimacy in the argument that against this background, face-to-face interviews would work to the benefit of both claimants and the Revenue. It would empower claimants who are uncertain or confused as to their eligibility and would afford the Revenue a valuable filter to establish the legitimacy of claims. I beg to move.
4.45 p.m.
Lord Freeman: I shall speak to Amendment No. 237, standing in my name. As this is the first amendment that I am speaking to, I refer the Committee to my declaration of interests already registered, although none is pertinent to this debate. What is relevant is the fact that I salute and march alongside in sympathy with the views of the low incomes tax relief group, from which I have sought guidance and advice on this Bill and, as the Minister will recall, on the working families' tax credit Bill two years ago.
I very much agree with what my noble friend has said about Amendment No. 31. My amendment deals in part only with what my noble friend said, but it is a matter of principle, not procedure. It may look like procedure but underlying it is an important point.
The background to the point is that a great number of additional claimants—and this is most welcome—are being drawn into the right to claim these tax credits. An even larger number of claimants will need their rights re-assessed because they are already claiming one of the predecessor tax credits.
We are dealing with a large number of people and a matter that is quite complex, as the proceedings of the Committee have already borne out. Where one has a large number of people—and therefore a lot of money and complication—there lies the seeds not only of misdirection by the claimants but of inequity.
I raised a number of issues prior to and during Second Reading and the Minister kindly wrote to me on 8th May. In her letter the Minister referred specifically to the subject matter of the amendment. She stated:
- "As well as the comprehensive guidance notes that will be supplied with the form, help in filling it in will be available over the phone or on-line"—
- "Claimants will also be able to get help at their local Inland Revenue Office."
That is not enough with legislation of this complexity. It is directly at odds with the system that prevails in the social security offices that I have to deal with for my former constituents where there is, de facto, a right of audience with an official. Indeed, those who served in another place will remember going with constituents to help them in their discussions—and, indeed, negotiations—with officials.
That is not the case with Inland Revenue offices. I refer to an earlier answer given by the Minister to my noble friend Lord Northbrook. She said that there will be an extension of the network of local Inland Revenue offices, but I wonder whether we are doing the claimants proper justice by not giving them an absolute right to a face-to-face interview to answer some or all of the points that I have put in my amendment. There is a big difference between the procedure which we are now abandoning and the system to be administered by the Inland Revenue.
I hope that the noble Earl, Lord Russell, will help me. I cannot conclude my brief contribution without seeking to emulate him, very badly, with a quote. I suggest that we should move from the situation—I
believe that I am referring to the American revolution—of no taxation without representation to the one which I believe should apply now—that is, no completed claim without explanation. That would protect both the claimant and the Government.
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