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Lord Higgins: I shall say something later on about the very helpful attitude the noble Baroness has adopted as far as regulations are concerned. Of course it is right, as she said, that a number of the points which arise on these amendments have already been discussed in considerable detail on earlier amendments and I certainly do not wish to detain the Committee unnecessarily.
Having said that, these are not technical or drafting amendments in the normal sense. They are fundamentally restructuring the Bill. As the noble Baroness rightly pointed out, as the Bill stands at the moment there are contradictions between Clause 5 and some of the later provisions of the Bill; for example, Clauses 14 and 16. It is quite extraordinary that what is fairly apparent if one looks at the Bill did not become apparent earlier. I must ask the noble Baroness again at what stage it was apparent to the draftsman that the way in which the Bill had been structured involved a clear internal contradiction. We have been over the ground quite a bit already, but it is not a satisfactory situation and, as I suggested earlier, we obviously need to have a clearer investigation as to what happened.
I make one additional point. I am not clear—alas, I do not have the relevant document to my hands at the moment—to what extent, when the Bill returns to the Commons, it will be time-constrained. The Commons now has a passion for programming measures, and some of that programming involves the amount of time which may be spent on your Lordship's amendments. Can the noble Baroness give us absolute assurance, in the light of all that has happened on the various government amendments, that restraints will
not be put on the amount of time which the House of Commons may spend on considering government amendments?
Baroness Hollis of Heigham: I again defer to people who have more experience of the House of Commons than I have, but it seems to me that the timetabling of these matters is organised through the usual channels and it would be quite impertinent if the House of Lords tried to determine how much time the House of Commons should take to discuss their Lordships' amendments. I have every confidence that the House of Commons will decide for itself an appropriate amount of time for consideration of Lords amendments, given the number that I hope the Bill will receive.
Lord Higgins: Have any restraints already been imposed on the amount of time that the Commons will spend on the amendments?
Baroness Hollis of Heigham: No. At this stage I am not certain. We have an understanding between the usual channels about when the two Report days will be. I certainly have no knowledge of when a Third Reading may take place. The noble Lord, Lord Higgins, has the say on the timetabling of these things. He may be able to tell me when the Third Reading of the Bill is going to take place. Therefore, I do not know when it is going to another place. I am sure that the business managers cannot possibly have done any timetabling on how long the discussions may take. My understanding is that these things are arranged through the usual channels and I cannot be more helpful to the noble Lord than that.
Lord Higgins: Alas, that is no longer so. It used to be so, but, with their huge majority, the Government now impose programme Motions in another place, which curtail the amount of time available for discussing Lords amendments. That happens, not infrequently, against the will of the Opposition, against the usual channels' normal decisions and on a Vote. The noble Baroness can assure us in due course what the Government's policy is on these matters. Given how much time is inevitably going to be taken up in discussing the government amendments, it is important that there should be adequate time in another place in due course for the amendments to be discussed.
I am desperately concerned about the way in which, over the past few years, the programme and so-called modernisation process has resulted in the amount of time that the Opposition have to debate these matters being constrained. This is not an unimportant matter. It is beginning to result in legislation not being considered in the way it ought to be.
Having said that, the other two amendments in my name, as the Minister rightly points out, were probing amendments. I would certainly not wish to argue strongly in favour of them, but the way in which
matters are developing definitely ought to give concern to anyone interested in the proper consideration of legislation.
Earl Russell: The noble Lord, Lord Higgins, is quite right about the danger that he spies. On the other hand, the Minister would be extremely imprudent to attempt to give any answer, because this is simply not a matter within the Minister's responsibilities.
Baroness Hollis of Heigham: Or this House.
Earl Russell: I agree, it is not within the responsibility of any of us in this House. If the noble Lord, Lord Higgins wishes to pursue it, the press is an appropriate place to do so. I would join him in doing that, as long as he would be prepared to make clear that our complaint is of government and not of government of any one particular party. Meanwhile, it is not our business here and we might for the time being leave it where it is, but with recognition of its due seriousness.
On Question, amendment agreed to.
[Amendments Nos. 41 and 42 not moved.]
Clause 5, as amended, agreed to.
Clause 6 [Notifications of changes of circumstances]:
Baroness Hollis of Heigham moved Amendment No. 44:
- Page 4, line 34, leave out paragraph (a).
The noble Baroness said: I shall be exceedingly brief. This is a drafting amendment, needed in consequence of the changes to Clauses 3 and 5 made by government amendments that we discussed earlier. Clause 6(3)(a) refers to Clause 5(3), which says that an award ends when a couple breaks up or a new couple forms. It allows regulations to be made requiring that such a change be notified to the Inland Revenue. The provision made by Clause 5(3) is to be moved to Clause 3 and recast in terms of entitlement. Because the equivalent provision in Clause 3 will refer to entitlement rather than to the ending of an award, it will be covered by the power to make regulations covered by Clause 6(3)(b). Paragraph (a) is therefore redundant and is removed by this amendment. I hope that the Committee will be happy to accept it. I beg to move.
On Question, amendment agreed to.
Clause 6, as amended, agreed to.
6.15 p.m.
Lord Higgins moved Amendment No. 45:
- Page 5, line 11, leave out subsection (2).
The noble Lord said: Amendment No. 45 stands in my name and that of my noble friend Lord Saatchi. Clause 7 is concerned with the so-called income test, and subsection (2), which this amendment seeks to discuss, is concerned with the way in which income is
determined in relation to people who are entitled to any social security benefit which is prescribed for the purpose of this subsection.Effectively, as I understand it, the purpose of this subsection is that in calculating income account should be taken of other social security benefits. What I am not clear about as the Bill now stands is the extent to which it is intended that these benefits shall be taken into account and which benefits should not be taken into account. We would be grateful if the Minister could explain this to us.
Baroness Hollis of Heigham: I shall do my best. This amendment would remove the provision for regulations to effectively suspend the tax credits income test for families in receipt of income support or income-based JSA.
Let me explain how the regulations will work. Clause 7 establishes the important principle that tax credits are based on the income of a tax year. This provides a fairer measure of income and is less prone to manipulation and fluctuation than the existing one for WFTC, which is every six months. It is also more closely aligned with income tax, enabling people to use the information which they already get or provide for tax purposes to be used for their tax credits claims.
For most families this provides the straightforward way of assessing entitlement to tax credits and targeting support according to need. However, we recognise that for the poorest families there needs to be a safety net. Currently that safety net is provided by IS or income-based JSA and both benefits include elements for children in the household.
From 2004, when existing IS and JSA claimants with children will be transferred to the child tax credit, the child-related elements of those benefits will cease. Families on IS and JSA will be brought into the single seamless system of support provided by the child tax credit.
However, the Government want to ensure that those families continue to receive at least the same levels of overall support as they do now. If these families were subjected to a test of their annual income while claiming IS or JSA, it is possible, although unlikely, that they would not receive the maximum CTC due to their income across the whole year, including periods when they may not have been claiming IS or JSA, being more than the £5060 income threshold announced in the Budget.
Therefore, regulations under subsection (2), in conjunction with Clause 13(1), will make clear that for any period of entitlement to income support or income-based JSA, entitlement to tax credits will be at the maximum rate and shall not be subject to a test of annual income. This will ensure that the poorest families continue to receive the appropriate safety net support on a weekly basis. For any other period in the same tax year where the family is not claiming IS or JSA, entitlement to tax credits will be based on annual income as usual.
This is what the regulations to be made under subsection (2) shall achieve. I am sure the Committee can appreciate the importance of this provision in ensuring that weekly support for the poorest families continues to be provided at the right level. I should point out that the subsection does not itself specify IS and income-based JSA because flexibility is needed for the regulations to include any other safety net benefits. For example, the safety net for pensioners is provided by the minimum income guarantee. In future that same purpose will be served by the pension credit but it is not listed as a possible renaming.
I hope that in the light of that explanation the noble Lord will not press the amendment further.
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