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Baroness Hollis of Heigham: My Lords, as does the noble Lord, Lord Higgins, I regard the clause as a belt-and-braces provision. It gives the Inland Revenue the flexibility that it needs to issue notices in the most appropriate form and manner. I am self-conscious about using the word "appropriate" after our earlier debate. None the less, every argument that I shall advance will insist that what we are doing is appropriate.

To take the substance of the question of the noble Earl, Lord Russell, for the most part, notices will be given in writing. That is the most common way of contacting claimants, especially at the end of the year

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when issuing notices under Clause 17. However, when a claimant wants to be contacted electronically—in the same way as some people now fill in their tax returns and submit them electronically—it is only right that the Bill should provide the flexibility to do so. Obviously, there is no intention to force claimants to deal with the Inland Revenue electronically, but it is right to have the flexibility to encourage electronic communication with those who wish to utilise it.

The clause also relates to notices that may be given to employers under Clause 25. Again, it is important to have the flexibility to send notices in a manner that suits the employer—electronically, by facsimile or by post.

I can only assume that we need the provision in the Bill because there has been some previous challenge as to whether a notice that was sent had due legitimacy given its mode of communication. I am certainly aware of cases in which a fax has been used but has not been held to be a valid form of communication. I am assured that the clause is a belt-and-braces provision that makes clear that notices can be sent in whatever form is convenient to the claimant or the employer, but the presumption will for the most part be that that is in writing. I hope that the noble Lord will be content with that explanation.

Lord Higgins: Yes, my Lords, the clause seems to be a belt-and-braces provision and, I should have thought, otiose, but I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Higgins moved Amendment No. 136:


    After Clause 45, insert the following new clause—


"Annual report by Board
After section 13 of the Inland Revenue Regulation Act 1890 (c. 21) (commissioners to keep accounts) insert—
"13A COMMISSIONERS TO REPORT ANNUALLY
(1) The duties of the Board are to include a duty to set forth in an annual report a full analysis of tax credits, by reference to racial groups as defined by section 3(1) of the Race Relations Act 1976 (c. 74), distinguishing in each case between awards of the child tax credit and shall include—
(a) the number of claims received;
(b) eligibility for the respective claimants of tax credits;
(c) the number of rejected forms;
(d) the number of appeals;
(e) the number of successful appeals; and
(f) a summary of the main reasons for the failure of appeals.
(2) The report referred to in subsection (1) shall be published no later than 31st July following the end of each tax year.""

The noble Lord said: After a series of probing amendments and points of rather nitty-gritty detail—which it is of course right that the House should consider, as we have now done—we come to what is an important amendment of substance. It proposes after Clause 45 to insert a new clause entitled,


    "Annual report by Board".

We have already discussed annual reports by the board—indeed, provisions have now been made for such a report regarding certain matters as a result of

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the Division that took place yesterday. But the annual report with which we are here concerned is of a rather different nature.

We have received representations from several bodies. The originators of the amendment have a good pedigree—we understand that it is proposed not only by the Law Society but by the Disability Alliance, the Low Pay Unit, the Child Poverty Action Group and the National Association of Citizens Advice Bureaux. Many of those will be at the forefront of the Bill's operation. All of them have expressed concern that there should be a mechanism for monitoring the ethnic origin of tax credit applicants to maximise take-up and ensure that every section of the community benefits from it where available.

In discussion of earlier amendments, we have been concerned with the whole issue of take-up. For example, I understand that some offices of the Department for Work and Pensions have to deal with a considerable number of individuals in a wide variety of languages. Given some of the complexities of the Bill, that may make it especially difficult for individuals to succeed in claiming what, with our support, it is the Government's intention that they should receive.

But if the monitoring is to be done effectively, it is appropriate that records of it should be kept and that the House should be made aware of them. That is why we suggest that the board should make an annual report.

I can recall that previously—perhaps 20 or 30 years ago, especially with regard to the form in which a census form should be made out—the sensitivity was that there was something wrong with saying, "What particular ethnic group does this or that individual come from?" That was—and, to some extent, perhaps still is—a sensitive matter.

It is probably true to say—I express a purely personal view—that that sensitivity has tended to be replaced by the view that one ought to make sure that no particular group is being discriminated against. Attitudes change over time. Given the pedigree of the amendment, quite clearly a number of those who are very much concerned with these issues have come to the view that it would be helpful to race relations, and to the administration of the Bill when it becomes an Act, if such a record were kept.

The specific provisions in the amendment are concerned with the number of claims received, the eligibility of the respective claimants, the number of rejected forms, the number of appeals, the number of successful appeals and a summary of the main reasons for the failure of appeals. The report should distinguish between child credit and working tax credit so far as concerns the ethnic origin of the various claimants and the success that they have in order to discover whether any group is not receiving the benefits that this House, another place and the Government have decided are appropriate for them.

That being so, I am hopeful that I may receive a somewhat sympathetic response from the noble Baroness, or at least an indication of what is the

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Government's thinking on this issue. The noble Earl, Lord Russell, did not move his amendment to Clause 41 but it may be that some of these issues arise also on that clause. We may return to it at Third Reading.

I thought it appropriate at Report stage that I should ask what are the Government's feelings about these issues, which clearly are of considerable concern to the various people who have made representations. I understand that the Cabinet Office Performance and Innovation Unit published a report in 2001 entitled Ethnic Minorities in the Labour Market which highlighted the difficulties with existing survey data. It would seem that there is an argument that, rather than carry out surveys which statistically are always open to a variety of views, reference to actual cases rather than sample cases might be a more effective way of dealing with the matter.

There are varying views on this issue. I merely bring it forward because some outside bodies have taken the view that this would be helpful to ethnic minorities rather than otherwise. I shall listen with interest to what the Minister has to say. I beg to move.

9 p.m.

Lord Northbrook: My Lords, I support the amendment of my noble friend Lord Higgins for the following reasons. First, it would be useful statistically; secondly, it would give a good indication of whether any racial group has difficulty filling in the forms; and, thirdly, it would be helpful for refining the forms to make them easier to understand and to increase the take-up rate. I approve of subsection (2) which states that the report should be published by 31st July following the end of the tax year.

Earl Russell: My Lords, I entirely agree with the analysis of the noble Lord, Lord Higgins, that there has been a historical change on the question of ethnic monitoring. On the whole, I agree with his reasons for why it has changed and I believe that it is a good thing that it has. It is assumed now that the motive for desiring the information is benevolent.

While the noble Lord was speaking, I remembered a conversation that I had back in the 1960s with my noble friend Lady Williams of Crosby, whose then husband was one of my colleagues. She said then that it was often quite useful to be able to say that one did not have the information. She was assuming that the information was being solicited for the purposes of causing trouble. Now we much more often assume that the information is solicited for the purposes of being helpful. That is a change entirely for the better. I hope that it is permanent.

As always with these changes, there are always some people left behind. When ethnic origin information is requested there are always some people who either express a conscientious objection to filling in the required information, or think it is wanted for malevolent purposes, or occasionally object for the perfectly good reason that the only honest answer they can give is the good old answer "mongrel".

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If the amendment is accepted, I hope that there will not be a penalty for refusing to fill in one's ethnic origin. That should also be counted as a right. If we do not count it as a right, we shall create only martyrs where we do not want to create them.


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