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Lord Higgins: I certainly agree with the noble Earl, Lord Russell, that this amendment raises very important issues. Two particular aspects give me cause for concern. One of them arises from the earlier debate we had on the extent to which individuals are notified of the whole range of benefits that are being provided by the Government.

The second point that gives me some cause for concern is partly about the level of income at which these benefits become available given the length of the taper. A third point, which has just occurred to me, is that the noble Baroness referred to the fact that many of these benefits are the province not merely of one department, be it the Department for Work and Pensions or Inland Revenue, but of a number of other departments as well.

In one sense, the Bill ought to adopt the same policy which Ministers in this House adopt; namely that they should speak for all departments. Presumably, we

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cannot leave the issue in the air and at some stage, if adjustments are to be made to other benefits as a result of the Bill, then we are entitled to know what will be those adjustments. They may be extremely important.

Because it is so important, perhaps we may return to the matter on Report. For the time being, I should like to ask her exactly which benefits does she think may have to be modified by the departments responsible for them as a result of the Bill? In what way are these changes to be made since, presumably, some of them may require primary legislation, or at least secondary legislation? If the Bill is going to have an effect on other benefits then clearly we shall need to know that, otherwise we will have a false understanding of the extent to which this legislation will affect individuals. It would be helpful if the noble Baroness could give us a brief list of which benefits will be affected by the introduction of the Tax Credits Bill.

Baroness Hollis of Heigham: It does not quite work like that. It is not that benefits will be affected by the Tax Credits Bill. At the moment, here is a system of financial support for out-of-work families, along with some for in-work families. Here too is a system of passported benefits, which I am happy to describe. There is a read-across between certain levels of benefit, entitling people to certain passported benefits which, for the most part—with only one or two exceptions—would not apply to in-work benefits.

Because we are seeking this structural reform, child tax credit will brigade the out-of-work and the in-work benefits. Therefore, the links through to the passported benefits have be reconsidered. What it does not do, however, is alter the passported benefits as such. Those will remain the responsibility of the individual departments which provide them. For example, free school meals are provided by the Department for Education and Skills, while free prescriptions and dental treatment are provided by the Department of Health.

Those are the big benefits, but some minor ones are provided by my department, including bereavement benefits, maternity allowances, funeral grants, social fund payments and so forth. Issues like that must be considered, but it is the big ones, about which noble Lords, including the noble Earl, Lord Russell, are most concerned. Those must include free school dinners, because that is a high value benefit. Those benefits, and many more, use entitlement to current key social security benefits and tax credits as a peg for deciding who should have access to them. They flag up an entitlement. This is a way of cutting down on administration and targeting passported benefits on those whom the department wishes to help.

Those passported benefits—the noble Lord, Lord Higgins is right in that we are revisiting an earlier discussion—remain the responsibility of the departments which administer them, not the Treasury or the Inland Revenue or, for the most part—except where specified—the Department for Work and Pensions. It is those other departments which set the rules for entitlement. They decide what level of income

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brings a family into entitlement for support and it is therefore usual for the department in question to set down eligibility in its own legislation.

The noble Lord, Lord Higgins, is absolutely right to point out that this is obviously a Government matter, not simply one for the Inland Revenue or the Department for Work and Pensions. Officials from the Treasury, the Inland Revenue and the Department for Work and Pensions have been in discussion with the departments responsible for passported benefits for some time. We are all aware that decisions need to be made and Members of the Committee will be told as soon as we have confirmation of the detailed proposals for entitlement. While I do not believe that it would be right for the Bill to determine entitlement to passported benefits, it does contain provisions to allow departments to make the administration of passported benefits run smoothly.

Schedule 5 to the Bill includes provisions to allow the Revenue to share information with the Department of Health and the devolved administrations for health purposes, for obvious reasons. In addition, Schedule 3 ensures that, where entitlement to passported benefits is set out in primary legislation and the departments concerned have agreed, amendments to their primary legislation are made so as to replace the links currently in place with WFTC or DPTC with links to the new tax credits.

I have already referred to funeral payments and maternity grants. I wonder whether my remarks have met the points raised.

As I say, I cannot be more helpful at this stage as to what precisely the income level will be for people to achieve entitlement to what are currently passported benefits. That I cannot tell the Committee. We are still in discussions on that. As soon as I have that information, I shall bring it to the Committee. Ultimately, it is for those departments to determine because it is part of their budgets and part of their responsibilities.

Lord Higgins: I understand that it is for those departments to take the lead on these matters. Am I right in understanding the noble Baroness to say that, following the consultations between the departments, if it does require changes in legislation, those changes will be incorporated in the Bill? I do not see where else it could be done.

There is also the issue that if someone now becomes entitled to a tax credit then, dependent on the extent that that raises their income, they will either be entitled to a lower level of benefit if that benefit is income-related or, if it is a free benefit at the moment, they may find that they are excluded from it altogether. Again, I am not clear how, following the consultations, this is likely to take place in practice.

The other point I am not clear about is whether the noble Baroness is saying that these consultations will be completed before Report stage and that we should

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get various government amendments at that stage which implement the very important issues that the noble Earl, Lord Russell, has rightly raised.

Earl Russell: I am most grateful to the noble Lord, Lord Higgins, for his support on this issue. He is right that we need to know the answers to these questions before the Bill becomes law, otherwise we are simply incapable of judging what will be the effect of the Bill.

I must apologise for keeping the Committee from its dinner, but if this matter is not settled a great many people will be kept from a great many dinners for a very long time.

The case I had most in mind was free prescriptions. From going into my local chemist since the latest increase in prescription charges, I have noticed that it has become over the chemist's counter an extremely contentious subject, and the chemist shows signs of visible anxiety whenever the subject is mentioned. That indicates a real difficulty of which we ought to be aware.

Can the Minister make a few slightly more precise comments? Can she first say that there will be an entitlement to passported benefits which will be connected with the Bill? Can she say that it will be settled before the Bill becomes law? Can she say that there will be a mechanism for a clawback so that the benefit does not go to people on incomes of £58,000 a year—which I believe we all agree it should not. If the Minster can say "yes" to all these questions, then we could rest in peace and go and have our dinner. Can she?

Baroness Hollis of Heigham: No—because on the third of those questions there would be no intention, certainly on my understanding, of an eligibility for free school dinners, for example, which takes a family up to £50,000 being clawed back. I am reasonably confident that one way of proceeding would be, in some cases, to use existing benefit levels—for example, the adult IS or JSA level might be one such trigger—otherwise one will have to go for a defined income figure at which the benefit cuts off. That would be one approach. That was the noble Earl's third question.

As to his other two questions, there certainly will be passporting. My dilemma is that I cannot tell the extent of the income scale to which passporting will go, whether it will be the same for all benefits or whether there will be a symmetry, partly to act as a form of taper, if I can put it that way. So one could go up the income scale for one benefit rather than another. How far up that income scale it will go, and whether it will simply replicate the existing income cut-off, that I cannot yet tell the noble Earl. That decision is awaiting further confirmation from the other departments.

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