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Lord Higgins: If this were all cost free, that would of course be a highly desirable situation, but one cannot overlook the fact that this has to be paid for by someone. One needs to look at both sides of the coin.

Perhaps I may pursue one final point with the Minister. Until now, a large group of people has not been involved with the Inland Revenue at all. They do not fill in tax returns and consequently they are excluded from the system. How many people does the Revenue estimate it will now be dealing with compared with the number it was dealing with before the passage of this Bill?

Baroness Hollis of Heigham: I am not sure whether my response will answer precisely the noble Lord's question. At the moment, of the 5.7 million families with children expected to be in receipt of new tax credits, some 1.7 million currently are not liable for tax or NICs.

Lord Higgins: No doubt we will wish to return to some aspects of this later on, but for the moment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 59 not moved.]

The Deputy Chairman of Committees: If Amendment No. 60 is agreed, then I shall not be able to call Amendments Nos. 61 and 62.

Lord Higgins moved Amendment No. 60:

Page 6, line 41, leave out subsection (4).

The noble Lord said: At this stage, I shall not move this amendment.

[Amendments Nos. 60 and 61 not moved.]

Lord Freeman moved Amendment No. 62:

Page 6, line 42, at end insert ", with a view to ensuring that the amount of credit paid to all claimants supplements their household income to a broadly equivalent degree having regard to the different income levels and personal and domestic circumstances of different households"

The noble Lord said: In moving Amendment No. 62, which stands in my name, I shall speak also to Amendment No. 72 which is a mirror image of Amendment No. 62. Mindful of the hour, it might be helpful to the Committee—because this is something of a technical amendment in that it deals with the equivalency rules and relates to the anomaly between

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assessing individuals for income tax, but for social security purposes, households—I ask the Minister simply to put on record comments that the Government might have on this amendment. That may enable us to proceed fairly quickly and allow me, subsequent to the Minister's contribution, to return to this matter at a later stage, if the Minister is willing. I beg to move.

Baroness Hollis of Heigham: I need more help than that. Given that this is a wonderful Bill and set of proposals, I cannot possibly think what objections the noble Lord, Lord Freeman, may have to it, and therefore what additional clarification he may seek. I guess, but I could be wrong, that he feels there is an inequity of treatment between different types of family, for example, in which case it would be helpful if he spelt out for me where he thinks that inequity may lie.

Lord Freeman: I am grateful for the Minister's comment. In the circumstances I shall return to this matter at greater length perhaps at another time. I beg leave to withdrawn the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 63:

Page 7, line 8, after "person" insert "or according to any such other factors as may be prescribed"

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 64:

Page 7, line 16, at end insert—

"(7) If, in accordance with regulations under section 8(2), more than one claimant may be entitled to child tax credit in respect of the same child or qualifying young person, the prescribed manner of determination may include provision for the amount of any element of child tax credit included in the case of any one or more of them to be less than it would be if only one claimant were so entitled.
(8) "Claimant" means—
(a) in the case of a single claim, the person who makes the claim, and
(b) in the case of a joint claim, the persons who make the claim."

The noble Baroness said: I beg to move.

Lord Higgins: Have we had any explanation of this amendment?

Lord McIntosh of Haringey: It has already been debated with Amendment No. 57. It is grouped with Amendment No. 57.

Lord Higgins: I realise that; I just wondered whether we had had any explanation of it.

Baroness Hollis of Heigham: I spoke to it, and no Member of the Committee queried it at the time. What is the noble Lord, Lord Higgins, concerned about?

Lord Higgins: I cannot understand it, and I cannot recall us having discussed it.

Baroness Hollis of Heigham: At the time, the only person who spoke to it apart from myself was the noble

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Earl, Lord Russell, who responded warmly. I am sorry if it passed the noble Lord by. Where there was more than one claim received for a particular child or children, Amendment No. 54 enables us to pay a reduced amount of any element payable in respect of any particular child. It is part of a bundle on shared care. As I tried to explain to the Committee at that time, it is part of the Government's taking a reserve power to address this issue as and when necessary. I reminded the Committee that, given the complexity and read-across to other benefits such as housing benefit; given the problems of IT and given other developments, what we needed at this stage was a reserve power rather than seeking to spell it out. This is part of that group.

On Question, amendment agreed to.

Clause 9, as amended, agreed to.

7.30 p.m.

Earl Russell moved Amendment No. 65:

After Clause 9, insert the following new clause—

"PASSPORTING
( ) A person shall be entitled to—
(a) specified social security benefits;
(b) the maximum rate of certain social security benefits; and
(c) specified public services free of charge,
as may be prescribed.
( ) A person's entitlement under this section shall be subject to whether—
(a) he is entitled to maximum child tax credit and is not in full time work as prescribed, or
(b) his income is at or below a threshold as may be prescribed and he is in full time work."

The noble Earl said: I had not expected us to reach this amendment tonight. I am afraid it is going to take a little longer than perhaps Members of the Committee would wish to spend on it, but I will try to be as brief as I can. The amendment is of quite considerable importance.

The passported benefits between them, especially in the light of the continual and rather rapid increases in prescription charges, are a very important part of the value of social security to most claimants. It has been one of the weaknesses of the CSA that it did not carry passported benefits forward when people came off income support and came on to the CSA maintenance. That was a result of the failure of the House to carry an excellently drafted amendment in the name of the noble Lord, Lord Carter. I am sorry for his failure on the application, and I hope that he still remembers how good his arguments were.

I was a little taken aback to hear the Minister say a moment ago that it was not within the Bill's authority to deal with this. I appreciate that the Treasury cannot deal with social security matters, but the Bill has been managed by both departments throughout, and the Minister can hardly be in a position to deny that the Department for Work and Pensions has been very deeply involved in the Bill from the beginning.

Baroness Hollis of Heigham: I would not dream of denying that, and it is indeed the case that this is a joint

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Bill, though led, obviously, by Inland Revenue and Treasury. The point I was making is that quite a lot of benefits were not for DWP or Inland Revenue, they were for other departments. The big value one, which is pre-school meals, is the responsibility of the Department for Education and Skills, and others are the responsibility of the Department of Health. The DWP connection was not the problem; it was the fact that other departments have to rethink what income flags and income eligibility they are going to attach to existing bids for these passported benefits, given the new financial structure for tax credits.

Earl Russell: I was aware of the concession on pre-school meals, which I welcome and which I was just about to come to. For the rest, since we do have a sovereign Parliament, which may do whatever it likes, one ought occasionally to take advantage of that fact. While we have got it, let us use it.

Whether something is done about this will make a big difference to the success of the Bill in achieving the objectives that the Minister and I share. I appreciate the point that the Government have already made that because the tapers are so long, this will bring passported benefits to people far higher up the income scale than have normally received them, or than we would expect to have any reasonable, equitable claim to receive them. Some sort of clawback arrangement would have to be worked out.

I can see that the problem is extremely technical. I am rather glad that I am not in charge of trying to work out the answer. One possibility, which I am sure has occurred to the Government, although I do not know what they think about it, is making any passported benefit that comes to people who are higher up the income scale a taxable benefit at the higher rate of income tax, but not at the lower rate. That would be one way of making sure that we were not using such a benefit simply to subsidise the more prosperous upper middle classes. However, if it was not done for the people who are using the tax credit instead of income support, I think that the Bill, very sadly, would fail in its purpose. I beg to move.

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