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Lord Higgins: My Lords, the jargon is becoming more complicated. I have not previously distinguished as clearly as perhaps the noble Baroness considers that I should have done between assurances and undertakings. She seems to imply that an undertaking is somehow more certain than an assurance, in which case that casts considerable doubt on assurances given by the Government.

However, it is clear that the noble Baroness believes that she is giving an absolutely firm and watertight commitment on behalf of the Government. I note that she indicates assent to that. I accept her comments as regards the first two elements of my amendment. However, I am still slightly surprised at her explanation with regard to the third element; namely, the childcare element. I again quote the noble Baroness's words at col. 144 of Hansard of 23rd May:

"we do not want automatically to link the third element, which is the childcare element, to price inflation, because childcare costs do not necessarily follow those same trends".

I interpreted that to mean that they might go up faster than inflation. Indeed, I believe that that is likely to be the case given the usual underlying elements in the service sector.

However, the argument the noble Baroness now puts forward is not quite the same as the one she put forward in Grand Committee which was purely related to price inflation. She is now saying that the childcare structure is in any case being changed—

Baroness Hollis of Heigham: My Lords, I am trying to explain that we are discussing a different beast. We are talking about the purchase of a service. In response to the noble Lord in Committee and today I have tried to explain why it is a different beast. At the end of the day it is vital for this Government, if we are to seek to overcome child poverty, to encourage lone parents in particular into the labour market. They will do so only if they have childcare that they can afford, that they trust and that is convenient. I serve on a working party which is examining this issue. We need to keep that

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issue under review but the right way to tackle it is certainly not through automatic linking as the noble Lord suggests.

Lord Higgins: My Lords, the noble Baroness elaborates on the view that she expressed in Grand Committee. That is helpful. We accept the argument that she put forward; namely, that automatic linking would not be appropriate if one is not absolutely clear what one is automatically linking the price increase to, and that the structure of childcare benefit may change. That is not an unreasonable argument. As I said, the first two elements of my amendment have already been covered by an "undertaking". Therefore, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 20 and 21 not moved.]

Clause 42 [Persons subject to immigration control]:

Earl Russell moved Amendment No. 22:

Leave out Clause 42.

The noble Earl said: My Lords, there are two reasons for leaving out the clause: one involves drafting and one involves substance. The argument about drafting is that the clause is a classically open-ended clause. It states:

"Regulations may make provision in relation to persons subject to immigration control or in relation to prescribed descriptions of such persons"—

one is not sure what is lurking under that provision—

"(a) for excluding entitlement to, or to a prescribed element of, child tax credit or working tax credit (or both), or

(b) for this Part to apply subject to other prescribed modifications".

In other words, the clause says that if one is dealing with persons who are subject to immigration control, one can do with them exactly what one likes. They are like the medieval villain; they do not know in the evening what they will be doing in the morning. That is a statement in law rather than in fact; I suspect that medieval villains probably knew rather well what they would be doing in the morning.

There may be clear policy intentions behind the clause, but it will fall into the hands of other governments and other Secretaries of State; it will turn up in other atmospheres and situations. For Parliament to abdicate completely any control over how tax credits apply to persons who are subject to immigration control is a very big handing-over of power. If Parliament is perpetually in the business of abdicating power, it cannot complain—it has only itself to blame—if it has not got much left afterwards. The drafting of the clause alone would be a sufficient reason for objecting to it.

More specifically, the treatment of persons who are subject to immigration control is one of those subjects in relation to which a great fear occasionally sweeps over a country. When that happens, there is a strong tendency to look for scapegoats. It is absolutely vital that that feeling should never be appeased when it arises. When one starts trying to appease it, one finds that one can never do enough. That is always the trouble with appeasement: the other people always

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want more of it. As the noble Lord, Lord Healey, once said—I believe that he was Secretary of State for Defence at the time—"Offering defence cuts to the left is like offering herrings to a sealion". Appeasement is absolutely the wrong response to such racial panics.

If a clause of this sort was in the possession of a Secretary of State in any government—not just this Government—it would lead him into temptation. We should not lead people into such temptation. The clause makes it much too easy for future Secretaries of State to give way to cries of, "Let's be nasty to asylum seekers". It seems that they have now succeeded reds as what one looks for under the bed. This is a thoroughly dangerous clause and I hope that the Minister will consider leaving it out. I beg to move.

Lord Higgins: My Lords, I originally tabled the amendment because it seemed appropriate that there should be much more clarity about the Government's proposals in Clause 42 than is apparent in the Bill. It seemed more appropriate that the noble Earl should move the amendment because he feels very passionately—we all do—about the issues that underlie the clause. It is also appropriate for the matter to be debated in your Lordships' House; the other place may not have an opportunity to do so. It is certainly right that the Government's intentions should be made clear. I hope that the Minister will spell out the position and seek to allay the concerns that those of us on this side of the House have about the way in which the clause could operate.

On the other hand, important entitlements are involved and we need to be clear about which groups of people the Government have in mind either to include or exclude, and in what circumstances. I hope that the noble Baroness will give us an assurance that if asylum seekers are granted asylum in this country, they will be treated in precisely the same way as everyone else and that there will be no question of them being put at a disadvantage in relation to those of us who already enjoy the benefits of being in the United Kingdom. I look forward to the Minister's reply; the situation needs clarifying as much as possible.

Baroness Hollis of Heigham: My Lords, I shall try to do so. I remind noble Lords that we are talking about those who are subject to immigration control. It is worth spelling that out. I absolutely agree with the noble Lord: we should not confuse this issue with questions about the decency of treatment for asylum seekers, particularly those who have been granted refugee status or exceptional leave to remain. I agree with the noble Earl, Lord Russell, that we should in no sense seek to appease emotions that none of us would recognise as being in any way honourable or decent.

A person who is subject to immigration control is basically a person who is in the United Kingdom without permission or who has permission to be here but whose permission to remain is subject to the condition that he must not have recourse to public funds. That includes people with work permits, such as

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someone coming from Australia to the United Kingdom for a year to work in someone's house. It also includes those asylum seekers to whom permission to work is granted because they have not had a decision on their asylum application within six months. It does not include EEA nationals, those who are granted asylum or—I made this point to the noble Lord, Lord Higgins—those who are given exceptional leave to remain. With regard to those categories, I hope that I can give the noble Lord the assurance that he sought. We are talking about people who are not EEA nationals, who have not been granted asylum status and who have not been granted exceptional leave to remain; as I said, we are talking about someone from Australia or the old Soviet Union who has come here for a year or two and who comes on the condition that he does not have recourse to public funds.

The rules on immigration control are a matter for the Home Office and are set out in existing legislation—in particular, in the Immigration and Asylum Act 1999, to which the clause refers. That is why people who are subject to immigration control are not able to claim WFTC or DPTC—existing tax credits. Those are the grounds on which they come in, subject to immigration control. The clause provides for regulations to be made about the access that people have to tax credits.

A power to make regulations has been taken because it would not, in itself, have been sufficient just to insert references to working tax credit and child tax credit in the Immigration and Asylum Act 1999.

In Committee, the noble Earl, Lord Russell, expressed concern—he repeated it today—about the width of the vires. As I mentioned then, we will need to make special provision to ensure that couples are dealt with appropriately where only one person is subject to immigration control. In other words, at the moment, the rules are that no one who is subject to immigration control is allowed recourse to public funds. Should we wish to widen that at any stage—I may give examples—we need the clause to enable us to do so. Without it, the existing blanket rule—"no recourse to public funds"—remains.

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