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Baroness Hollis of Heigham: My Lords, perhaps I was speaking too quickly or quietly, but the noble Lord seems to have missed some of my remarks. I apologise. As I said, a regulatory impact assessment

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does not have to be produced annually because the cost to employers is unlikely to fluctuate year on year given a constant set of legislative obligations. I also sought to remind noble Lords that the Government produce comprehensive impact assessments when legislation is either introduced or amended and there is a significant regulatory impact.

The noble Lord, Lord Freeman, raised the issue of take-up. There are quarterly statistical reports not only on disability credits, including DPTC, but on WFTC and all income support benefits. These reports contain detailed information on tax credits awards, breaking them down by family type, region, amount of award and other categories. I certainly use the reports in my own background research. The Revenue intends to continue to produce this type of information in relation to WTC and CTC. Furthermore, the information is available not annually, as the amendment proposes, but quarterly. One will therefore be able to track the statistics and see the correlation between support through tax credit and employment profiles, possibly in relation to the time of year and other factors. The information already provided is therefore more informative than that requested in the amendment.

To summarise, I have dealt with the points on regulatory impact assessment, the quarterly statistical reports, the board's report to Parliament, the Chancellor's report to Parliament and the Treasury Select Committee's scrutiny. We already provide all that information, and I believe that we do so more comprehensively than the noble Lord, Lord Saatchi, proposes in his amendment. He is asking for a "scissors and paste" version of information that is already in the public domain, simply to present it in a narrower format. I do not understand why we should do that.

The noble Lord, Lord Freeman, raised the issue of quarterly performance reports and may find the following information helpful. The Revenue will agree operational targets with the Treasury which are published in advance in the service delivery agreements. This information on performance as against performance targets also is additional to the information called for in the amendment.

The last point raised by the noble Lord, Lord Saatchi, was on the take-up of tax credits. I cannot agree with his view on take-up. As I said in Committee, I believe that the take up of WFTC is hugely encouraging: 1.3 million families benefit from it, over half a million more than benefited from family credit. Moreover, these families are receiving on average 40 per week more on WFTC than they were on FC. The credit is benefiting 2.5 million children, and I think that that is a success. Perhaps the noble Lord has been thrown by the statistics published in the January 2001 report analysing the effect of tax credits on low and moderate income families up to the end of 2000. However, the tax credit legislation was not passed until 1999. Consequently, in the first year, take-up of WFTC by expenditure was 76 per cent—which is close

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to the 81 per cent for family credit in its final year, and much higher than the figure of about 60 per cent for family credit in its first year.

As I said in Committee, all the research I have subsequently seen suggests that the number of families on WFTC has increased by another 160,000, or 14 per cent, since summer 2000. We expect that figure to grow over time. One is tracking both cash and cases, if I can put it that way. Those figures diverge as the number of cases of families claiming is somewhat less than the percentage of cash because the people who tend not to claim are those who are due small amounts, perhaps 50p or 1.

The new child tax credit creates a seamless system extending further up the income scale than WFTC, so the take-up of the existing children's tax credit is equally relevant. Again, that is hugely encouraging. To date, over 3.7 million claim forms have been received and over 90 per cent of eligible claimants have claimed.

In the light of that our assumptions for the take-up of child tax credit are that about 5.75 million families with children will claim and benefit from it. One advantage of the new system is that we already know who most of the potential claimants are; they are families currently claiming WFTC, DPTC and the children's tax credit. Therefore, we know fairly well already what the client audience is and what the take-up is likely to be. Those families will be sent a claim form directly later this year.

That direct targeting of claimants will be complemented by an extensive publicity campaign using various media. That will begin later this year and will focus initially on general awareness before we go on to more targeted campaigns, including, above all, people who have hitherto not come within the fold; that is, those over 25 without children who will receive working tax credit. I agree that there is more likely to be a problem in that area.

I hope that your Lordships will agree that the proposed new clause is unnecessary. I argue that essentially it does a scissors-and-paste job on information that is already in the public domain. Plans are in place to monitor take-up of tax credits and the Inland Revenue and Treasury are working hard with their advertising partners to ensure that publicity will be maximised. The outcome will be open to scrutiny. As regards scrutiny, the amendment is rather less comprehensive than the scrutiny that currently exists in the ways I have described. I hope that your Lordships will accept that the amendment is unnecessary. To seek a scissors-and-paste annual report of information that is already available in the public domain in a fuller, more comprehensive and contextualised way is simply redundant.

Lord Saatchi: My Lords, I am most grateful for all that the noble Baroness said. I hope that I may paraphrase it. I think she said that in order to find out how the new tax credit system is working I shall have to study the regulatory impact assessments—which may or may not be published from time to time—certain pages in the Red Book, the Inland Revenue's

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annual report and the report of the proceedings of the Treasury Select Committee. When I have done all that, I shall have to study some quarterly reports that the Government publish.

We cannot accept that that is an adequate way of presenting information. We believe that it should all be brought together. After all, I do not believe that it was clear until the Committee stage in this place that the total amount of money involved in tax credits was a staggering 15 billion. That figure does not appear in the Budget Red Book 2002. It was not clear until the proceedings in this House that 90 per cent of that amount will not be paid as a reduction in tax liability but will be paid, in effect, as a benefit payment, as the Government now concede. It was not clear until the proceedings in this place—as the noble Baroness told us on the second day of Grand Committee—that, apparently, the Government have carried out research. The noble Baroness stated:

    "From our research, we also know that those people not claiming [WFTC] are those who are due very small sums, perhaps 1 or 2".—[Official Report, 21/5/02; CWH 87.]

Baroness Hollis of Heigham: My Lords, the noble Lord may not have read it but it is published research.

Lord Saatchi: My Lords, it may be published research but the point of the amendment is that we should like to see all the research brought together in one place so that people who want to study the impact of this vast scheme will be able to find the answers that they seek. For example, the forecast in the Budget Red Book for 2002 is that the tax credits will cost 4.6 billion next year. It emerged only in the proceedings in this place that that figure was based on the assumption that 85 per cent of those eligible would claim. In other words, the total cost of the two tax credits in the Bill—if there were 100 per cent take-up—would be 5.4 billion and the Government would save 800 million through non-take-up. I do not know where I could find the figures for the saving that the Government have made through non-take-up since 1997. I do not know where I could find the figures for any aspect of the tax credits scheme. I do not know where I could discover what happens to the money that has not been taken up.

For all those reasons we believe that it is valid and reasonable to ask for information on all those aspects of this important scheme which may, as we have said from the beginning, do all that the Government hope that it will—as we also hope—to help the poorest people. That is a fine and worthy aim. I do not understand why the Government are not proud to produce an annual report pulling all the information together in one simple form for a simple reader to examine. I am sorry not to be able to accept what the noble Baroness said. I wish to test the opinion of the House.

4.56 p.m.

On Question, Whether the said amendment (No. 16) shall be agreed to?

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Their Lordships divided: Contents, 121; Not-Contents, 118.

Division No. 1


Addington, L.
Allenby of Megiddo, V.
Ampthill, L.
Anelay of St Johns, B.
Astor of Hever, L.
Avebury, L.
Barker, B.
Beaumont of Whitley, L.
Blackburn, Bp.
Blatch, B.
Boardman, L.
Bowness, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnham, L.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Campbell of Croy, L.
Carnegy of Lour, B.
Chalfont, L.
Cope of Berkeley, L.
Craig of Radley, L.
Crathorne, L.
Cumberlege, B.
Dahrendorf, L.
Dean of Harptree, L.
Dixon-Smith, L.
Dundee, E.
Eames, L.
Elton, L.
Falkland, V.
Fearn, L.
Feldman, L.
Flather, B.
Freeman, L.
Gardner of Parkes, B.
Geddes, L.
Geraint, L.
Glentoran, L.
Goodhart, L.
Gray of Contin, L.
Greaves, L.
Hanham, B.
Harris of Richmond, B.
Henley, L.
Higgins, L.
Hodgson of Astley Abbotts, L.
Holme of Cheltenham, L.
Home, E.
Howe, E.
Howe of Aberavon, L.
Howell of Guildford, L.
Jenkins of Hillhead, L.
Jopling, L.
Kilclooney, L.
King of Bridgwater, L.
Lane of Horsell, L.
Lang of Monkton, L.
Lester of Herne Hill, L.
Lindsay, E.
Linklater of Butterstone, B.
Livsey of Talgarth, L.
Lucas, L.
Luke, L.
Lyell, L.
Macfarlane of Bearsden, L.
Mackie of Benshie, L.
Maclennan of Rogart, L.
McNally, L.
Maddock, B.
Maginnis of Drumglass, L.
Mar and Kellie, E.
Marlesford, L.
Michie of Gallanach, B.
Miller of Chilthorne Domer, B.
Montrose, D.
Moynihan, L.
Newby, L.
Noakes, B.
Northesk, E.
Northover, B.
Norton of Louth, L.
O'Cathain, B.
Park of Monmouth, B.
Peel, E.
Pilkington of Oxenford, L.
Plummer of St. Marylebone, L.
Reay, L.
Rees, L.
Rennard, L.
Renton, L.
Rodgers of Quarry Bank, L.
Roper, L.
Russell, E. [Teller]
Russell-Johnston, L.
Saatchi, L.
Sandberg, L.
Seccombe, B. [Teller]
Selsdon, L.
Sharman, L.
Sharp of Guildford, B.
Sharples, B.
Shaw of Northstead, L.
Sheppard of Didgemere, L.
Smith of Clifton, L.
Soulsby of Swaffham Prior, L.
Strathclyde, L.
Swinfen, L.
Thomas of Gresford, L.
Thomas of Walliswood, B.
Thomson of Monifieth, L.
Trefgarne, L.
Tugendhat, L.
Vivian, L.
Waddington, L.
Walmsley, B.
Weatherill, L.
Wilcox, B.
Willoughby de Broke, L.


Ahmed, L.
Alli, L.
Alton of Liverpool, L.
Andrews, B.
Archer of Sandwell, L.
Ashton of Upholland, B.
Bach, L.
Barnett, L.
Bassam of Brighton, L.
Billingham, B.
Blackstone, B.
Borrie, L.
Boston of Faversham, L.
Bragg, L.
Brennan, L.
Brooke of Alverthorpe, L.
Brookman, L.
Bruce of Donington, L.
Burlison, L.
Campbell-Savours, L.
Carter, L.
Chan, L.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Corbett of Castle Vale, L.
Crawley, B.
David, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Desai, L.
Dixon, L.
Dormand of Easington, L.
Dubs, L.
Elder, L.
Erroll, E.
Evans of Parkside, L.
Evans of Watford, L.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Fyfe of Fairfield, L.
Gale, B.
Gibson of Market Rasen, B.
Gilbert, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grenfell, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Harrison, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howells of St. Davids, B.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Janner of Braunstone, L.
Jay of Paddington, B.
Jeger, B.
Jones, L.
Judd, L.
King of West Bromwich, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Lofthouse of Pontefract, L.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Milner of Leeds, L.
Mishcon, L.
Morgan, L.
Morris of Aberavon, L.
Morris of Manchester, L.
Nicol, B.
Palmer, L.
Parekh, L.
Pitkeathley, B.
Plant of Highfield, L.
Prys-Davies, L.
Radice, L.
Ramsay of Cartvale, B.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Sawyer, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Simon of Glaisdale, L.
Smith of Leigh, L.
Strange, B.
Taylor of Blackburn, L.
Temple-Morris, L.
Tenby, V.
Thornton, B.
Tomlinson, L.
Turnberg, L.
Turner of Camden, B.
Uddin, B.
Walker of Doncaster, L.
Warwick of Undercliffe, B.
Whitty, L.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord Privy Seal)
Williamson of Horton, L.
Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.

12 Jun 2002 : Column 295

5.7 p.m.

Clause 3 [Claims]:

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