Previous Section Back to Table of Contents Lords Hansard Home Page



6 Dec 2006 : Column WS131

Tax Credits

Lord McKenzie of Luton: My right honourable friend the Paymaster-General (Dawn Primarolo) has made the following Written Ministerial Statement.

In the 2005 Pre-Budget Report, the Government announced a series of reforms to improve the tax credit system by increasing certainty for claimants. One of these changes was automatic limits on the rates of recovery where awards are adjusted in-year following a reported change. From February 2006, HMRC has widened the availability of additional payments to claimants experiencing hardship following an in-year adjustment to their tax credit payments. Making this process automatic has proved to involve significant changes to the IT system and, after extensive testing, HMRC has concluded that it is not possible to make a risk-free introduction of these automatic limits to the original timetable. Introducing fully automatic limits remains a key priority and I have instructed HMRC, from April 2007, to introduce an IT solution to ensure that claimants will benefit from reduced rates of recovery without their having to ask for this service.

Meanwhile, HMRC will do more to ensure that claimants can get access to the reduced rates now, and anyone who qualifies and contacts HMRC concerning their end-of-year adjustment will be given payments to ensure the reduced rates of recovery apply. HMRC has already taken steps to ensure that this facility is brought to claimants' attention. Furthermore, starting in January, HMRC will introduce an enhanced manual process to identify cases where a restriction is appropriate and apply a restricted rate of recovery without the claimant having to ask for this. In the majority of cases, the restriction will take effect at the same time as their payments are adjusted to take account of the reduced entitlement, thus achieving the same effect as the automatic restrictions.

The Government will continue to make improvements to the tax credit system, including those announced in the 2005 Pre-Budget Report, while minimising the risk of disruption to claimants. To minimise those risks and to ensure that some of the most vulnerable families are protected, the Government will not begin migration of the remaining IS/JSA recipients with children to the child tax credit in 2007. In addition, HMRC is putting in place special arrangements for a small proportion of claimants who may experience disruption in their payments following the processing of changes in their circumstances, and will update the IT system in April 2007 to prevent this.

Delivering a good service to tax credit claimants is, of course, the key priority for HMRC. It is committed to implementing the package of measures announced in the 2005 Pre-Budget Report and to delivering a high-quality service to claimants.

Third Sector Organisations

Lord Bassam of Brighton: My honourable friend the Parliamentary Secretary in the Cabinet Office is today, following the Chancellor's Pre-Budget Statement, publishing Partnership in Public Services: an Action Plan for Third Sector Involvement.



6 Dec 2006 : Column WS132

Third sector organisations play a number of roles in public life, from campaigning, building community cohesion and delivering services to giving voice to their users. They have an enormous amount to contribute to our public services, both in the ways those services are designed and delivered, and in the ways they are improved and held to account.

The greater involvement of the third sector in delivery must not be about the Government abdicating their responsibility to fund public services. Instead, it is about ensuring that, in the right circumstances, the sector can deliver services where it is best placed to do so. Many third sector organisations are already working very successfully with the public sector and there are significant areas of public service delivery where the Government are opening opportunities for the third sector. It is clear that we will not tackle the challenges of the coming years and continue to build the excellent public services to which we all aspire without the close involvement of the third sector.

Copies of the action plan will be placed in the Library for the reference of noble Lords and will be available in the Printed Paper Office. The action plan will also be available on the Cabinet Office website at www.cabinetoffice.gov.uk/thirdsector.

Transport: Heavy Goods and Public Service Vehicles

Lord Davies of Oldham: My honourable friend the Minister of State for Transport (Dr Stephen Ladyman) has made the following Ministerial Statement.

We have completed our consultation on the Government's proposals for streamlining and modernising the licensing system for operators of heavy goods vehicles and public service vehicles.

We proposed three key changes to take forward our commitment in the White Paper The Future of Transport to provide better regulation of the road haulage and passenger transport industries:

new arrangements for holders of more than one licence, involving the allocation of a lead traffic commissioner who will be responsible for all of an operator's licences;a simplified fee structure with most licence fees being merged with fees for annual roadworthiness tests; andabolition of windscreen discs and margin concession for goods vehicles.

We propose to implement the first of these proposals as planned, and the traffic commissioners will shortly be consulting the industries on the detail of the new arrangements with a view to their introduction in 2007.

In response to concerns raised by the road haulage industry, we have modified the proposed fee structure for goods vehicles so that only “O” licence vehicle fees will be merged with roadworthiness test fees. This will remove the vast majority of financial transactions but produce a fairer distribution of costs between

6 Dec 2006 : Column WS133

different sectors of the industry. For the PSV sector, all fees will be merged except for application fees for new licences or major variations. We plan to introduce the new structure in 2008. The Vehicle and Operator Service Agency (VOSA) will be consulting the industries on arrangements for giving credit for fees paid in advance under the current system.

We plan to go ahead with the abolition of windscreen discs for goods vehicles when we are satisfied that access to new technology is sufficiently advanced to ensure that existing levels of enforcement can be maintained. However, evidence has been presented to us that abolition of the margin concession could impose a much higher burden on the industry than we originally

6 Dec 2006 : Column WS134

thought. We therefore propose to carry out further work to evaluate the costs and benefits of this proposal before making a decision. We will also look at options for minimising the burden of an immediate notification requirement. These measures will cut significantly the administrative burdens of the licensing process and reduce costs for the road haulage and passenger transport industries while maintaining safety standards. They will also build on administrative improvements already made by VOSA.

An analysis of the responses received to the consultation is available from the departmental website (www.dft.gov.uk) and copies have been placed in the Libraries of both Houses.


Next Section Back to Table of Contents Lords Hansard Home Page