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The Deputy Chairman (Viscount Allenby of Megiddo): My Lords, Clause 14, Amendment No. 38: the noble Lord, Lord Higgins.
Lord Higgins: My Lords, I beg to move Amendment No. 38 standing in my name—I believe that I am right in saying that we should be debating Amendment No. 38A.
Noble Lords: Amendment No. 38.
Lord Higgins: My Lords, I beg to move Amendment No. 38. I apologise for the confusion.
Baroness Hollis of Heigham: My Lords, perhaps I can help the noble Lord. My understanding is that Amendment No. 38 has already been debated and therefore needs formally not to be moved. We have moved on to Amendments Nos. 38A and 43 dealing with initial and final decisions.
Lord Higgins: My Lords, that is what I understood. I thank the noble Baroness. I think that we are in agreement. We are now on Amendment No. 38A, as I understand it, not having moved Amendment No. 38.
Lord Higgins moved Amendment No. 38A:
- Page 10, line 22, at end insert—
The noble Lord said: My Lords, I should explain that Amendment No. 38A is effectively in place of Amendment No. 43, which was wrongly drafted.
The amendment suggests that the Inland Revenue should not require information already in the board's possession. We discussed this matter in Grand Committee on 23rd May. My noble friend Lord Saatchi moved the amendment, then I intervened to complain about Inland Revenue form P161, which demands a reply from individuals to provide information that it already holds. That undoubtedly happens from time to time. The amendment seeks to ensure that it does not, particularly in regard of tax credits.
On reading the debate I was somewhat puzzled by the Minister's reply. The amendment states that the board shall not ask for information it already possesses. The Minister rejected the amendment on the grounds that the Inland Revenue did not yet have a great deal of the information it would need, which is the mirror image of my amendment. She said,
She pointed out that under Clause 17 the Inland Revenue will send claimants details that it already holds, which is to be welcomed and will no doubt assist in filling in the form, but that is not the point. I merely suggest that if information is already available—a national insurance number or whatever it may be—the board should not ask for it again when its records should show that the information is available on the official record. The amendment still has substance. The Minister's reply in Committee is not really relevant to its rejection. I beg to move.
Earl Russell: My Lords, I know that a body corporate has a legal personality, but it does not necessarily have a physical personality. Information known to one part is not necessarily known to another part. One part of a body corporate is not necessarily culpable for the behaviour of another part. Within my college I occasionally have to explain to people that I am not personally to blame for the behaviour of a warden of a hall of residence. Information in the possession of one part of a college is not necessarily in the possession of another part of the college.
So it is not always possible to be certain what information is in the board's possession. At times it may not be possible to access the information at great speed. There have been times when I knew some information existed within my own papers, but I found
Baroness Hollis of Heigham: My Lords, I am sorry if the noble Lord did not find my answer helpful, illuminating or relevant to the amendment. In that case, I am puzzled as to why he did not pursue me harder at the time. Perhaps he was busy doing other things.
I can see where the noble Lord is coming from and why the amendment appears to have a shallow logic. I put three problems to him. First, the Inland Revenue has information on individuals, but these claims are joint claims. Someone has to collate the information. Because tax credits are based on joint household income, it is right that both parties who are jointly and severally liable for the correct information need to co-sign the form and provide the information.
A partner may not even be paying tax because his earnings are so modest. He may not be known to the Inland Revenue in that capacity, but his earnings will still come into play in terms of household income and therefore we need that information.
That is the first point. We are dealing with household income, not individual income. The Inland Revenue may be able to match partners, but if they are of different names the Revenue would have to do it by reference to address. There would then be added complications of working out whether those two people represented a cohabiting household for Inland Revenue purposes. The Inland Revenue will also not know whether they have children. I could go on about a series of complexities for some time as the imagination catches hold.
The second point is the one that I tried to pursue with the noble Lord at the time. When a claim is made, the Inland Revenue will have only partial information. Claims may be made at the beginning of the financial year, but even so, a lot of my information about books and royalties comes in several months late. I suspect that the same applies to the noble Earl, Lord Russell, and to the wife of the noble Lord, Lord Higgins. As the Inland Revenue will possess only partial information for the individual, it is probably safer on the initial claim for working tax credit to ask the individual or the couple to fill in a complete across-the-waterfront form about their income rather than presuming that the Inland Revenue has some information that it may or may not have, according to the efficiency of banks and other savings bodies in providing it.
The third point is that this is not as big a problem as the noble Lord seems to think. Only on the first claim for working tax credit are we dealing with piecemeal information. Thereafter, the basis will normally be the preceding year's income, which is reflected in tax forms. The applicant will be asked to confirm only that the figures are still valid for them. Payments in subsequent years will be made only as part of the end of year reconciling process. The problem should be fairly minuscule after the initial year.
For those three reasons—that we are dealing with joint claims, not individual claims, which is the information that the tax system has; that the Inland Revenue will have only partial information about income at any point in time; and that after the initial year the amount of work involved is minimal, because the previous year's income figure is simply being uprated or confirmed—I hope that the noble Lord will think that this reply is slightly more relevant and helpful, if not more persuasive, than the previous one.
Lord Higgins: My Lords, two thirds of the reply was more relevant. The other third is the noble Baroness's previous reply, which was not relevant. She was also rather more persuasive this time.
I am intrigued by her point that Clause 17 will set out the details of all the family circumstances and income that are currently held by the Revenue and the claimant must then check the notice and correct any details that need correction. If we are working on a household situation, I assume that the Revenue will send out all the details that it has on both individuals and ask them to correct it jointly. That may lead to some surprises for one partner or the other. However, that is a separate point.
I shall think about the noble Baroness's reply. I gave an example in Grand Committee to show that the Revenue seems inclined—I put it no more strongly than that—to ask for information that it clearly ought to have had in the first instance. Subject to that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16 [Other revised decisions]:
[Amendments Nos. 40 and 41 not moved.]
[Amendments Nos. 42 to 53 not moved.]
Lord Higgins moved Amendment No. 54:
The noble Lord said: My Lords, there are a considerable number of other amendments linked with this one. We have had a series of discussions about what I have called restructuring amendments. The Grand Committee agreed to categorise them to simplify our discussions. This group of amendments
If I understand correctly, this series of government amendments were not foreseen, but are not of the same kind as the previous ones. They are effectively simplifying amendments rather than being crucial to the operation of the Bill. Some of the previous government amendments that we considered were designed to ensure that the Bill worked. No doubt the noble Baroness can clarify that for us. I look forward with interest to her reply. I beg to move.
"( ) The Board shall not require the person or persons making a claim to provide information which is already in possession of the Board"
"It takes time for the income tax system to get all that information. Employers must return details".—[Official Report, 23/5/02; col. CWH 150.]
and so on. She argued that, as a result, people would not receive their tax credits on time. That is all fascinating, but it has nothing to do with the amendment, and that is true of the general thrust of the Minister's reply on that occasion.
Page 12, line 36, at end insert—
"(8A) Where the person is, or persons are, within paragraph (a) or (b) of subsection (8), the Board must decide again whether the award was correct and, if not, may decide to amend or revoke it; but a decision must not be made under this subsection—
(a) before a statement has been made in response to provision included in the notice by virtue of subsection (8), or
(b) if that has not happened by the date specified for the purposes of that subsection, before that date."
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