PASSPORTED BENEFITS

HL Deb 08 June 1999 vol 601 cc1303-23

(" . Recipients of a tax credit under this Act shall be entitled to all the benefits to which, but for the passage of this Act, they would have been entitled had they been in receipt of, or had they been eligible for, family credit or disability working allowance.")

The noble Lord said: My Lords, this amendment stands also in the name of my noble friend Lord Astor of Hever. It seeks to insert the new clause as printed. We have debated the issue at earlier stages of the Bill. It arises because in the change from family credit to the new structure proposed by the Government with regard to working families', tax credit and so on, the position on so-called passported benefits is uncertain. That is the entitlement which those on family credit at present enjoy to a number of benefits: for example, prescription charges, the cost of travel to hospitals and a number of other benefits of one kind or another.

In successive debates at Committee stage, at Report stage and now on this occasion, we have sought clarification of the Government's position. Quite clearly, it is a matter of considerable importance to those who at the moment do not know where they stand with regard to the benefits, which may be of considerable value and certainly of considerable importance to individuals. In our view, it is an issue that ought to be resolved so that people know where they stand.

However, it is extraordinary that while, throughout the debates, the Minister has sought to be as helpful as she could she has not been able to clarify the position. So on this occasion, at this late stage in the passage of the Bill, because the position was totally unclear when it was debated in another place, we seek a degree of clarification. On former occasions, the noble Baroness said it was not central to the Bill, but it is certainly of consequence and we ought not to let the Bill pass without knowing the answer.

I have to say and have said throughout that it shows disregard for the parliamentary process that we have got this far without a clear answer. It also seems to be an extraordinary reflection of the way in which the internal workings of the Government operate. In giving, I am inclined to say, an excuse rather than a reason as to why the position was unclear on previous occasions, the noble Baroness pointed out that the matter involved a considerable number of government departments. But the fact that she has not been able hitherto to provide an answer suggests that the co-ordination between those departments and even the ability to convene a Cabinet committee meeting to decide the matter over a period of months has turned out to be beyond the ability of the Government. In my view it is an extraordinary situation.

The noble Baroness also sought to argue that it was not a matter for primary legislation, it is dealt with by statutory instrument. But the trouble is that if the matter is dealt with by statutory instrument, it is not possible to amend that statutory instrument. My understanding is, although I believe there are some variations of view between the Liberal or Cross-Benches and my own, that the general view is that in this House we do not vote against statutory instruments. So if this House wishes to take a view on whether what the Government propose is satisfactory, this is an appropriate moment to do so. The problem has been that we do not know whether the Government's proposals are satisfactory.

That brings me to the text of the amendment. We need to know whether people who are at present entitled to the benefits will continue to receive them in the future. I hope that, even at this late stage, the Minister can clarify the position. Originally her position was that we would know "before the Bill leaves Parliament"—a rather strange expression. We had been assured that we would know before Third Reading. Well, we have reached Third Reading and do not yet know, but one must hope that in replying in a few moments, the noble Baroness will be able to tell us whether that is so.

At all events, whether matters are normally dealt with by statutory instrument or by primary legislation largely depends on whether there is an opportunity with primary legislation to debate the issue, vote on it and, if necessary, amend it. We have such an opportunity here.

I hope that, even at this late stage, we can find out what the Government's intentions are and then consider in the light of that information, albeit at short notice because one will have to respond quickly, whether what the Government propose is satisfactory. It seems clearly the case that those who receive passported benefits at present ought to continue to do so. We also need to know whether people will have the same entitlement to benefits in the future if they qualify or. more accurately, would have qualified under the present legislation. That is the position. After all the debates when we have not had a single indication of the Government's intentions on the matter, I hope that we shall at long last manage to discover them. I beg to move.

Baroness Carnegy of Lour

My Lords, I fully support my noble friend's amendment. He has made it clear on a number of occasions why he thinks it is an important issue in relation to the Bill, probably the most important. For Parliament and, above all, for the House of Commons, the elected House, to assess just how families and individuals will be affected by the changes and what their incomes are likely to be in given circumstances if they take a low-paid job, they must know rather more than we know at the moment. By the same token, Parliament needs to know whether people will find the credits which come with the job sufficiently attractive.

The answer to those questions will obviously depend upon the eligibility for other benefits which people receiving the new tax credits will have. Otherwise one cannot tell how people will be placed as a result of the Bill, whatever the difficulties for the Government at the moment.

My noble friend's amendment would mean that some people who have higher incomes than those on the present credit system would become eligible for benefits to which they were not previously entitled. That is the snag with the amendment. It may or may not be necessary or right that that should be so, but at present we in this House cannot tell.

It seems to me that only by putting this kind of amendment into the Bill can we ensure that in the House of Commons the Government are made to answer this crucial question so that honourable Members can judge whether the Bill will be workable. I do not know what the Minister will say to us, but if it is not satisfactory I hope that my noble friend will seek the opinion of the House. If the Government continue to prevaricate in the matter, Parliament should not pass the Bill. We need to know what will happen to the people whom it is intended to benefit. It has a laudable aim—to help people off benefit into work—but what is the good of that if, as a result, people will be worse off, not better off? We need to know the answers and I shall listen with great interest to what the noble Baroness says.

Earl Russell

My Lords, I am glad the noble Lord, Lord Higgins, has raised the issue again. At Report stage he asked the Government's intentions. I admit that he did so somewhat in the manner of a 'Victorian heavy father—in fact, so heavy a father that perhaps he would not have been out of place in the previous Question. Nevertheless, it is an important matter of public policy on which this House and another place, as well as the world at large, are entitled to an answer. I hope that the Minister will give us one, and that she has been supplied with one by those whose consent she needs before she is able to give one. If she does not have one, T hope we may tentatively expect that other people who have not enabled her to give one might hear a little about it.

The noble Baroness, Lady Carnegy of Lour, is using somewhat of a nuclear deterrent to try to obtain an answer in suggesting that it be used to hold up the Bill. We do need to know, but whether we need to know to the point of holding up the whole Bill is another question. I do not believe that we on these benches would take that view.

When the noble Lord, Lord Higgins, refers to "this Government", I hope that he might perhaps be generous enough to amend his words simply to read "government". Government, independent of party, is an animal which does have certain institutional faults. Parties come and parties go, but the institutional faults tend to go on. I believe that if we blame any one party for them, we will tend to go astray.

Having said that, I believe that this is a bigger issue than has been suggested. The Minister said on Report: It is not a matter for this Bill".—[Official Report, 18/5/99; col. 242.] With respect, I do not find that view persuasive. This Government have shown considerable concern, rightly in my opinion, with the issue of poverty traps. This Government are concerned that work should be made to pay. While they may occasionally be a little obsessive in that aim, the aim itself is entirely justified.

For people who need dentures, spectacles or recurring prescriptions, passported benefits can be an important part of their income. The Minister may remember the Child Support Act 1991. Her noble friend Lord Carter, no less, put down an amendment that women who came off income support and received maintenance instead should continue to receive passported benefits. Had the previous government been wise enough to accept that amendment, the number of women willing to co-operate with the Child Support Agency might have been a great deal higher than it has in fact been. Passported benefits, if lost, may create a considerable poverty trap.

The effect of the Bill to get people into work will depend very heavily indeed on the answer that the Minister gives to this amendment. I therefore look forward to the answer with more than usual interest.

Lord Swinfen

My Lords, passing this amendment will not delay the Bill further. The Bill has been amended in this House already and, therefore. must go back to the other place and be discussed there. It will be an ideal opportunity for right honourable and honourable Members in the other place to discuss it. However, I hope that the Minister will be able to give us an answer this evening.

I support everything said by my noble friend Lord Higgins when introducing the amendment. It is important for those currently on family credit, for the very poor and for those with disabilities whose disabilities cause them additional expense.

Lord Freeman

My Lords, I support my noble friend Lord Higgins in Amendment No. 1. I follow the noble Earl, Lord Russell, in asking the Minister to enlighten your Lordships about the policy towards passporting.

If the Minister would allow me to widen the question slightly by raising the issue of what the ultimate aim is, on 27th May the Chancellor of the Exchequer was reported to have said to the Institute for Fiscal Studies that there is now a new mission for the Treasury which includes the further integration of tax and benefits, guaranteeing a minimum income for those in work and paid through targeted tax cuts and tax credits.

The principle of a negative income tax will be supported by many of your Lordships. However, the whole issue of passporting and integration raises fundamental questions which at earlier stages of this Bill your Lordships have addressed and to which we will doubtless return. For example, what are the implications for housing and child benefit? Are they to be paid via the working families' tax credit, as is mooted, certainly for housing benefit? Will the burden of administration be on employers from the beginning of the new financial year, 2000–01? Will the Treasury, as the Chancellor is reported to have said, work towards minimising the workload for businesses in paying passported and other benefits? Will the Government address the complicated issue of different tapers and different thresholds for different benefits—an enormously complicated area which will cost money to resolve? Finally, there is the element of compulsion. When we talk about "no benefit without work", is that really a principle that should be applied without due care and attention?

The Parliamentary Under-Secretary of State, Department of Social Security (Baroness Hollis of Heigham)

My Lords, I recognise the concerns expressed in the House this afternoon, particularly those of the noble Lord, Lord Higgins, and the noble Earl, Lord Russell, on behalf of the Opposition Benches, which have been joined by others of your Lordships.

I very much hope that the statement which I am about to make outlining the Government's proposals will fully address your Lordships' concerns. We are at Third Reading, and I realise that the convention is that when the Minister finishes it disposes of the issue. But, if the House agrees, I shall be happy to take a more relaxed view, because we have not had an opportunity to discuss this matter. Therefore, if any noble Lords wishes to come back to me, with your Lordships' consent, I shall be happy to seek to respond. I am in the hands of the House. If that would be helpful, it would allow the House a little more flexibility than would normally be the case at Third Reading.

First, we are not disregarding the parliamentary process. As I said at both the Committee and Report stages, the passporting issue is a consequence of the Bill. However, any legislation would still come before the House. Equally, any changes carried by regulations, which is the more usual way, would come before this House and the other House and would in the normal way be debatable.

What I was seeking to say was not that this is not an important issue, but it is not an issue handled by putting words on to the face of the Bill. In other words, it is consequential, not primary. That is the distinction that I was seeking to make.

We are all now familiar with the fact that recipients of income support, income-based jobseekers' allowance, family credit and disability working allowance qualify for help with certain other benefits, which we call passporting. The other benefits include, as the noble Lord, Lord Swinfen, told the House at Report stage, the NHS low-income scheme; welfare foods; the home energy efficiency scheme; the social fund; maternity and funeral payments; legal assistance and advice; court fees and remissions; and travel costs to visit relatives in prison. Of course, by far the most significant of these is the low income scheme for prescription charges. The income related benefits act as a proxy indicator of low income households.

WFTC and DPTC tax credits will replace family credit and DWA from October this year. The Tax Credits Bill will simply substitute references to family credit and DWA legislation for a reference to either WFTC or DPTC. This will have the effect that, unless amended, where other departments' legislation specifies that recipients of family credit or DWA should qualify for help with other benefits, the reference will in future specify that WFTC and DPTC recipients should qualify for help with those benefits. In other words, if one does nothing, the current status quo becomes imported into the new tax credit scheme.

However, the introduction of WFTC is a considerable policy change which, compared to family credit, leaves families very much better off. In that respect, with all courtesy, I challenge the noble Baroness, Lady Carnegy, when she suggests that families could be worse off. In fact, by moving on to WFTC, families will on average be £24 per week (or over £1,200 per year) better off.

Baroness Carnegy of Lour

My Lords, I say to the Minister that I did not suggest that they would be worse off if they received all the benefits that they already get. If passporting was withdrawn, the working families' tax credit might have a negative effect. That is what I meant, although I may be wrong. I was not assuming that all the other benefits would continue.

3.30 p.m.

Baroness Hollis of Heigham

My Lords, it would be hard to conceive of a situation in which even if someone moved on to WFTC or came on to WFTC for the first time and did not receive passported benefits, he or she would be worse off. In any one week, in exceptional circumstances, there could be someone, I suppose, but the structure is so much more generous that that seems extremely unlikely.

There is no direct read-across to the income levels of those on family credit and WFTC. Simply and straightforwardly passporting all tax credit recipients would have extended the help provided by passported benefits much further up the income scale. In other words, had one done nothing or had one simply replaced WFTC and DPTC for the existing family credit and DWA, one would have taken free prescriptions well up the income scale to levels which most of your Lordships would think inappropriate. That would have been unfair on other households with low incomes not receiving passported help. That would be costly and the money could be used in other and, in my view, better ways.

The issue, which I think your Lordships have accepted from the beginning, is where to draw the line between tax credit recipients who would receive passported help and those receiving WFTC who, by virtue of a relatively high income, are not given childcare credits and are not in the same financial need, and to do so in a way that is fair, identifies the appropriate target groups, is simple to operate and does not impose extra administrative burdens on the public or government. The issue is how to strike that balance.

Our proposal is that tax credit recipients with net incomes of less than £11,250 a year or, gross, £14,300 a year will have rights to passported benefits while those with net incomes above that point will not. I shall go on to explain why we have decided on that figure in a moment. This will ensure that tax credit recipients with less than half the average family income will be guaranteed rights to passported benefits broadly replicating the existing system under family credit. In other words. the figures that currently apply in family credit will be broadly replicated within the new tax credit scheme. We expect other departments, in terms of the other passported benefits, to take this as the same income indicator.

The new scheme will work very simply. Households in receipt of tax credits and with a net income below a specified level will continue to receive passported benefits. Those with net incomes above the specified level will not. The net income point will not depend on family size. There will be a single cut-off point, because of course the benefits do not concern children, as all children receive free prescriptions anyway, but affect only adults. It is the provision of free prescriptions for their parents that we are concerned about. We are proposing that the cut-off point will be set at £11,250, which represents a gross income of around £14,300 and broadly replicates the financial passporting figures within family credit.

A cut-off at this point will mean that more than 1 million people of the WFTC caseload of 1.4 million or 1.5 million will receive passported benefits. However, it is fair to add, so that the House has a full account, that just under 400,000 of the full WFTC caseload will not receive passported benefits—those comprise families with moderate incomes but also include those families with relatively higher incomes who are eligible, because of high childcare costs, for WFTC.

Lord Higgins

My Lords, will the noble Baroness kindly read the last paragraph again? It really is quite difficult to catch it. In particular, can she indicate how many people at the moment receive passported benefits? That will give us some idea of where we are in relation to that I million or 1.5 million people.

Baroness Hollis of Heigham

My Lords, at the moment everyone on family credit and disability working allowance receives passported benefits. That is about 800,000 people. We are going up to a total client load of 1.4 million. The low-income scheme would break at about 1 million. Because WFTC is much more generous, particularly with childcare help, and very many more people come into it than come into family credit, we are saying that an estimated 1 million of those will be eligible for passported benefits and that 400,000 on WFTC will not be eligible. Does that help the noble Lord? I am sorry to throw figures at your Lordships, but I hope that you will understand that because we are moving to a differently structured but very mach more generous scheme, more people will come into the scheme even though those on higher incomes will not. We believe that this will represent help to low-income families broadly analogous to family credit figures without taking up resources which would be better spent elsewhere.

I am sure that your Lordships will want to press me on how in practice such a scheme would work. From October 2000, the tax credit award notice will include a simple paragraph notifying recipients whether they qualify for help with passported benefits. In the interim, we are proposing that tax credit recipients will be able to establish their eligibility for passported benefits on the basis of the figure on the WFTC award notice showing the amount of tax credit withdrawn. That will work as follows. The notice will, as family credit notifications do now, show the maximum tax credit to which the recipient is entitled and how much of that has been withdrawn on the basis of the family's net income. The maximum credit a family is entitled to depends on factors such as age and the number of children. However, for a given net income the same amount of credit would be withdrawn for every family regardless of their maximum entitlement. The amount withdrawn, therefore, provides a unique proxy for any given level of net income.

So, for a cut-off point of £11,250, tax credit recipients would have lost £70 of their maximum entitlement, and their maximum entitlement could go well beyond that if, for example, they had a large number of children and heavy childcare costs. But they would lose £70 of their maximum entitlement. That is why it is being done that way round. Where the award notice specifies that they have lost less than that £70 cut-off figure, they would qualify for passported benefits; where they had lost more than £70, they would not.

Earl Russell

My Lords, I thank the Minister for giving way. Can she give a commitment that the cut-off figure will be annually uprated for inflation?

Baroness Hollis of Heigham

My Lords, I cannot give a commitment but I would expect that to be sympathetically considered. That is all I can say at this point. It is not a matter on which I have any authority. It is for the Chancellor to determine in his Budget, in discussion with the appropriate Secretaries of State, what he will do with all such benefits. But the figure would be sympathetically considered and reviewed, as are all other figures at the time of Budget Statements. The noble Earl knows what the Government's policy on family credit has been in the past.

On the form there will be a figure showing the loss from maximum entitlement—and £70 is the cut-off figure in practice. If you lose more than £70, you would not qualify; if you lose less than £70, you would. This kind of negative image serves to allow people to know what their entitlement is. The noble Lord, Lord Higgins, looks baffled. Does he wish to intervene?

Lord Higgins

My Lords, it is merely the paradoxical way in which what is now proposed will operate. Does the Treasury expect to gain or lose with regard to passported benefits?

Baroness Hollis of Heigham

My Lords, this will cost extra by virtue of the fact that another 200,000 people are coming into the scheme. We expect the cost to be anywhere between £10 million in the first year, increasing to £40 million subsequently. Noble Lords can see that the scheme is more generous and more people are brought into it. That is why we are trying to get the right balance between how far up the income scale it goes while trying to avoid creating the situation that was feared by the noble Baroness, Lady Carnegy.

I go on to explain how the system will work in practice. A tax credit recipient who wants a prescription will go to the pharmacist with an award notice, as he or she is now obliged to do theoretically with the family credit form. The pharmacist will check to see whether the amount of tax credit withdrawn is greater or less than the specified amount. A table will be available and the figure of £70 will be known to every pharmacist in the country. The pharmacist will decide whether or not to give a free prescription on that basis.

Where the patient has physically lost the award notice a duplicate can be obtained from the Inland Revenue. Where the patient does not have an award notice at the point of seeing the pharmacist—perhaps he or she has forgotten it, or whatever—the pharmacist will tick the box on the prescription entitled "Evidence not seen". To combat false claims to exemption the Prescription Pricing Authority will carry out post-dispensing checks in appropriate cases. Checks of this kind are nothing new; they are carried out now for recipients of social security benefits who do not have evidence of an award at the point of dispensing. Those interim arrangements will last for only one year. From October 2000 tax credit recipients will receive notification automatically on their award notice of whether or not they will get help with passported benefits.

Lord Freeman

My Lords, the Minister has explained the position very clearly. Can she give noble Lords any indication that she will ask officials to look again at bringing forward to the beginning of the tax year, when employers take on responsibility for payment of working families' tax credit, what appears on its face to be a complicated arrangement rather than wait until October 2000, which is almost a year and a half from now? I would have thought that it was possible to save the double complexity between commencement of the obligation on employers and full integration of the system.

3.45 p.m.

Baroness Hollis of Heigham

My Lords, I hope to be able to come back to that point. These arrangements last for one year. From October 2000 tax credit recipients will receive notification automatically on their award notice as to whether or not they will get help with passported benefits. All they have to do is show the pharmacist the relevant paragraph of their award notice. We must ensure that the arrangements are properly and clearly explained to tax credit recipients, especially in the interim period. The Revenue will be discussing with the various departments how best to provide such information.

I respond to the point raised by the noble Lord, Lord Freeman. The matter has been explored. The best advice that I can give the noble Lord is that the practical arrangements cannot be brought forward before October 2000. Given that, I am afraid that I cannot give the commitment that he seeks. Obviously, I shall pursue this further with officials. If in the course of the next year there is any possibility of this being done obviously it will be a sensible and worthwhile point with which to deal. If we can do it we shall do so, but I am not now in a position to give such a commitment.

The arrangements for income-limited passporting that I have announced will not, however, apply to Social Fund maternity and funeral payments administered by the DSS. At the time of the Budget the Chancellor announced that maternity payments would be doubled as part of the Government's commitment to supporting families when they need it most. These payments are made to help parents meet the essential costs of new-born children when they are at their most vulnerable. It is also the time when families are likely to experience a considerable drop in income as parents take time out of work in the months immediately following the birth. In addition, the Social Fund operates separate capital rules which restrict eligibility for these payments even among families in receipt of qualifying benefits or tax credits. Therefore, I am happy to say that the Government have decided to continue to make all tax credit recipients eligible for these Social Fund payments.

To conclude, the Government believe that the arrangements that I have outlined will provide a simple and fair scheme to identify the appropriate target group for passported benefits targeted specifically on low income families. Their strategy will not undermine the message that work pays, impose extra administrative burdens or require more forms to be filled in by either tax credit recipients or the Government; in other words, it builds on the paper practices that currently exist for family credit. It will provide transparent and fair support to those families that need it. I hope that all noble Lords will agree that the Government have struck a decent and fair balance in trying to devise a scheme that protects those on low incomes without passporting those, going all the way up WFTC, who might otherwise be eligible. In the light of that, I hope that the noble Lord, Lord Higgins, will feel able to withdraw his amendment.

Earl Russell

My Lords, with the leave of the House, I should like to thank the Minister very warmly for the care with which she set out the detail before us. It is one of the disciplines of opposition that when asking questions one must try to think what one might have done in the Minister's position. I am not in a position to answer that finally; I do not have the kind of information that is available to the Minister. But the kinds of problems that the noble Baroness has identified and the principles on which she has solved them are ones about which, in the light of those remarks, I do not feel in any position to complain. We are therefore in any further debate arguing about detail within a fairly narrow area.

As to how many people would be worse off if they lost passported benefits, I ask the Minister to consider expenses such as dentures and spectacles where payment may be required all at once in a lump sum. That may be difficult for some people. Especially in the light of the difficulties of NHS dentistry, new dentures may on occasion cost up to £500 a time. If they and new spectacles should be needed at the same time, somebody even on a perfectly reasonable income may be in considerable difficulty.

I have been trying to work out in my own mind whether it would be possible to use the kind of system of instalment credit that is employed on ordinary benefits. I can see a lot of difficulties in the way of that. I am in no position to say whether or not those difficulties are insuperable. I hope that the Minister will consider that question with the range of information that is not available to me.

As to uprating, I understand why the Minister had to say what she did. I ask a question to which I hope she can respond. Will the Minister draw our exchanges about uprating to the attention of her right honourable friend the Chancellor of the Exchequer, remind him that she has had many such exchanges in this Chamber in the past and that, if his ears are weak, she might have many more to come? I hope that she does not.

Baroness Gardner of Parkes

My Lords, I do not know whether it is in order for me to intervene. As a dentist I cannot accept the statement just made about the cost of dentures.

Baroness Hollis of Heigham

My Lords, I am aware that the present arrangements for dentistry under family credit will apply also under WFTC to those who qualify for passported benefits by virtue of the low income scheme.

Lord Higgins

My Lords, we have become familiar with the way in which the noble Baroness replies to these debates. I believe that even by her high standards, admittedly with a brief in front of her, the Minister has given a virtuoso performance. I cannot offhand think of any Minister who would be likely to be able to do it as well. Having said that, the noble Baroness has had an extremely difficult task over recent months in getting any decision—I was going to say "any sense—out of her colleagues in other departments. While, as the noble Earl, Lord Russell, points out, the system as between one administration and another tends to work much the same, it is quite clear that in this case the system appears to have broken down, with the result that we have had to wait to this late stage in the Bill—iterally the eleventh hour—before we have had an answer. The answer is extremely complicated.

I am left in something of a dilemma. One is up against the buffers, which is always a difficult position in which to find oneself. I remember lain Macleod saying that he agreed with Enoch Powell on everything but always got off one station before the train hit the buffers. We are up against the buffers in terms of reacting to what the Minister has said.

I am somewhat influenced by one point: will it cost the Treasury more or less as regards passported benefits? The answer was that it would cost the Treasury more. I am prejudiced initially to believe that it is a good rather than a bad deal. (I no longer hold my Treasury halo!) If I understood the Minister correctly. it is likely that more rather than less families will benefit. I am glad that the noble Baroness indicates that that is so.

Baroness Hollis of Heigham

My Lords, perhaps I may give the noble Lord the figures. We expect at least another 115,000 families to benefit.

Lord Higgins

My Lords, that persuades me not to press this matter to a Division. I am reinforced in that view by what the noble Baroness said about maternity payments and the Social Fund.

While it is always dangerous to give an answer on a matter of this kind off the top of one's head, I believe at present that we should let the matter pass in the hope that the Government implement what they have said. As the noble Baroness rightly points out, we shall have statutory instruments. I put in a tiny caveat. I am slightly unnerved to discover that your Lordships do not vote against statutory instruments. If the instrument turned out to be wrong, I should not like to have second thoughts. By putting down the earlier amendments I sought to assist the Minister to get decisions from colleagues. In the same way, I hope that that comment may encourage them to produce satisfactory statutory instruments.

It is a highly complex matter. As my noble friends said—my noble friend Lord Freeman raised other points—these are matters of great importance to individuals who cope in their everyday lives with illness or whatever it may be. None the less, in the light of what the Government have said, and with some slight trepidation—I hope that I am making the right decision—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 2 [Transfer of functions relating to tax credits]:

Lord Astor of Hever moved Amendment No. 2:

Page 1, line 18, after ("(2)") insert ("and section 5(1A)")

The noble Lord said: My Lords, in moving Amendment No. 2, I speak also to Amendment No. 9.

The Minister told the House at Report stage that the Government regard this issue with great concern. However, the reality would seem to be somewhat different. First, I had assumed in the light of the Minister's offer at Report stage, which I accepted, that the Lord Privy Seal would write to me. Twenty-one days later, I have received nothing. This seems surprising since the noble Baroness, Lady Jay, is the Minister for Women and sits on the ministerial committee overseeing the Violence Against Women Crime Reduction Programme. Although the Government claim to be making the issue of violence against women a priority, it requires far more than words; it requires practical attention to detail.

This pattern of empty rhetoric has a precedent with this Government. In June 1996 the Labour Party published a policy document, Governing for Equality, in which they promised on their assumption of office a Minister for Women in the Cabinet with a clear and powerful mandate, a strong monitoring role and a commitment to take women's interests seriously at the highest level. Despite all that, this Minister for Women appears, certainly to me, to regard the threat posed by hereditary Peers as a greater priority than taking women's interest seriously at the highest level.

Secondly. I have read Hansard carefully. The Minister did not address the point of our amendment at Report stage: that it should be made clear on the application form that the Inland Revenue may accept a form without the man's signature where domestic violence is feared. Recent authoritative research has found that money paid directly to mothers is more likely to meet family needs, while men use some of their income as personal spending money. No sensible person can possibly disagree with these findings.

So far the Government's answer to this problem is to give couples a choice as to which of them receives the payment. If one believes that this is a solution, one must assume that those men who would misspend the money will suddenly recognise their failings and agree that the money should be paid to the woman. Would the most overbearing and violent men agree to such a rational and progressive stance? Surely this is highly unlikely. I have been shown a large number of heartrending cases by the professional organisations which are advising us, working in the field of domestic violence. They witness these problems every day.

That is why we move the amendments. They require the Government to make clear on the forms that an application can be made by the woman alone if she fears the threat of domestic violence. There is a similar recognition of the problem of domestic violence in the system of child support maintenance. If a parent with care fears domestic violence she can argue that she should be exempt from the requirement to co-operate with the CSA.

I was particularly grateful that the noble Lord, Lord Goodhart, supported at Report stage the spirit behind our amendment and agreed that there may be exceptional cases where it would be desirable to have the possibility of applying without reference to the working partner. The noble Lord was concerned that if our amendment were adopted, there could be the risk that it would merely postpone rather than avoid incidents of violence to the point where the working violent man discovers that his partner has already claimed the credit. This was a valid point. However, the clear advice that we have received is that the mother is the person to decide whether this approach will make the matter worse.

The Labour Party manifesto stated the laudable objective to keep under continuous review all aspects of the tax and benefits systems to ensure that they are supportive of families and children. The Minister said at Report stage that the Government recognise that domestic violence occurs and do what they can to ensure that children are protected and enjoy a decent quality of family life. In the light of this, surely in families where the man is potentially violent the payment choice should be made in the interests of the children. I very much hope that the Minister will recognise that there is a problem and will accept our amendment which addresses the issue. I beg to move.

Earl Russell

My Lords, the Minister will probably say that this is not the best way of doing this. I sometimes suspect that Ministers say that in their sleep. The trouble is that they are sometimes right. If the Minister says that this is not the best way of doing it, I shall listen carefully if the noble Baroness at the same time can show us a better way in which the objective of the amendment can be achieved.

In general, on the subject of domestic violence this Government have shown a heart in the right place, although they have not always remembered the reverse biblical maxim: where thy heart is, there should thy treasure be also.

The other trouble—it is a constant trouble in cases of domestic violence—s that even where among the authorities there is the best will in the world, the ordinary bureaucratic requirements of the state assume that people live in stable habitations in stable arrangements. They simply do not fit a situation in which the woman's safety is at considerable risk if she makes contact with the man with whom she has been living. That happens in many bureaucratic contexts and it happens in the requirement to produce documents before obtaining benefit. It happens in the requirement to produce a partner's national insurance number. If the Bill goes ahead in its present form, inevitably, it will happen in the requirement to obtain two signatures, one from each partner.

It is not a satisfactory situation if, when you leave home in a state of intense physical fear, you cannot get any money for yourself or your children except by making a personal approach to the object of that physical fear. Even communication through an intermediary carries risks. Women's refuges tell stories of violent partners discovering their former partners' whereabouts through the most respectable means of communication. There were people who with the best will in the world simply did not realise how important it was to keep the victim partner's whereabouts secret. That is inevitable and one understands it. But it is the duty of people in responsible positions to try to guard against it. This amendment is an attempt to meet that danger. Whether it is the best attempt that can be made, I do not know and I do not presume to say. But if it is not, I hope that the Minister can show us a better one.

4 p.m.

Baroness Carnegy of Lour

My Lords, I do not believe that the Government and, sadly, the noble Baroness the Lord Privy Seal, the Minister for Women, have taken on board the problems that exist. Frankly, it is dodging the issue to say that the requirement should not be on the face of the Bill. Anyone who sits on, or has sat on, the Bench knows how often the situation arises that, for whatever reason, a man insists that he should receive the tax credit and then proceeds, perhaps, to spend the money on, say, drink. That is especially the case when the wife is too frightened to stand up for herself because of the frequent domestic violence that occurs.

I do not believe that noble Lords need to read all the briefing material they have received in order to know that the problem occurs often. They are probably familiar with it among acquaintances in the area in which they live. In fact, if the problem arises the Bill may fulfil part of its purpose; the tax credit may well induce the man to come off benefit and to take up work. However, the only benefactor will be, say, the drinks industry.

The enormous disadvantage to a family of gaining a tax credit and it being spent on, say, drink by the man—the wife being too frightened to do anything about it—would carry huge social costs as well as costs in misery to the family.

I believe that the provisions should be put on the face of the Bill. It is no good the Government saying that the Inland Revenue will pay attention to the danger and so forth. Citizens' advice bureaux and lawyers need to know that the provision is in the legislation. People need to know where they stand. I hope that the Government will accept the amendment because it is very important.

Baroness Hollis of Heigham

My Lords, first, I apologise to the noble Lord, Lord Astor, because he should have received a reply to his question by now. On behalf of the Government, I express my regret, and I will follow the matter up. I understood that he was receiving a written reply about the Government's initiatives on domestic violence. His request slipped through the net and I apologise; it should not have happened.

I am rather moved and pleased that the House shares the concerns of the Government—or the Government share the concerns of the House—on the issue of domestic violence. There is no dispute or difference between us on that. I sit on the inter-ministerial committee, chaired by my noble friend Lady Jay, as a representative of the Department of Social Security. I have also undertaken work for the Government on issues of domestic violence. Therefore, I, too, am committed to ensuring that we do our best to help couples to overcome the situations in which domestic violence occurs, unfortunately now drink and drugs-related. We are also committed to ensuring that where the problem is not able to be addressed through anger management courses or the like, the women partners and the children are protected in all such cases. Wearing another hat, in connection with changes to the child support system, the Government's views have shifted in response to representations that women who are at risk, or believe themselves to be at risk, are properly protected. I give assurances to that effect; there is no dispute between us about the need to protect women in that situation.

Perhaps some of the more difficult situations described by the noble Earl, Lord Russell, and the noble Baroness, Lady Carnegy, arise when the couple are not living together as a household but where the woman has already felt the need to leave the marital home in order to secure a place of safety. In that situation, she tends to be a lone parent family.

Earl Russell

My Lords, it was my understanding that the amendment was intended to bite in precisely the situation which arises during the few weeks after the woman leaves home.

Baroness Hollis of Heigham

My Lords, perhaps I may seek advice on that. Amendments Nos. 5 and 6 were grouped with this amendment. However, the noble Lord, Lord Higgins, as was entirely his right, decided to separate them. They deal with the related issue of who should receive the working families' tax credit and how we should design a system to enable those who need the help that it offers to claim it.

The two amendments deal with a more particular issue of ensuring that people know about procedures which have already been described here and in another place. Amendment No. 9 seeks to require the Inland Revenue to take reasonable steps to ensure that potential claimants who fear domestic violence are aware that they can submit a claim without their partner's signature.

The Inland Revenue's dispute procedures, which have already been described to the House, will have a much wider scope. If I have any criticism of the amendment it is that it is too narrowly drawn. The experience of the Inland Revenue is somewhat limited because there is seldom a dispute over family credit. Domestic violence is not at the core of the issue because the argument tends to be about family management of resources and the like. In such a case, the money goes to the woman, which will be our procedure, too. Our disputes procedure is not just for those couples where there is fear of domestic violence, but for any couple who cannot agree which one of them should receive the money.

It is important to emphasise that we were never seeking to narrow the gateway only to domestic violence. We are going much wider than that. We are saying that, when both agree, the money will be paid to the partner in work. Where they disagree, inquiries will be followed up and the money will be paid to the carer of the children, normally the mother. If there is a dispute, the money will certainly be paid to her. Within that category of dispute are all such situations of domestic violence.

Therefore, we have made it clear that by default, or in dispute, the money goes to her. It goes to him, even though he is the main earner, where both are in agreement. We want it to go to him because we believe that the credit should be an incentive to work, even at modest wages, and to see a clear benefit from being in work. We have balanced that against the need in disputes or by default to protect the position of women whose children remain in their primary care. We believe that we have already done that.

The thrust of the amendment is to ensure that the Inland Revenue is open about the disputes procedure so that it is available to the women who most need to take advantage of it. I agree that the procedure is there to be used. It is there to address the problems and to ensure that, where disputes occur, the partner caring for the children receives the tax credit. We expect the need for that to be exceptional and we expect most women to agree with what we propose. However, we must capture the exceptions and, where appropriate, the disputes procedure can be used.

I was pressed on this subject at earlier stages, including by my noble friend Lady Turner. I was happy to give an assurance that the forms to be used after the interim period will be amended to cover the point raised by this amendment. However, in practice, there is more to this. The key is that any carer who is afraid, or simply does not agree that the other partner should receive WFTC, need not sign a form completed by the partner in work and they may submit their own, signed only by them. I believe that the point is fully met.

The second related issue is that people need to know that that is the case. I gave an assurance on the revised forms for next year, which will come into use from October 2000. The revised notes of guidance, which came about partly as a result of discussions and pressures within your Lordships' House, will give specific reference to the disputes procedure, making the position of women clear. We shall consider whether we need to specify domestic violence as such. At the moment, women suffering domestic violence constitute a smaller group within a wider disputes and default procedure, which goes much further than these amendments.

We shall revise the forms to make matters clear. The internal guidance will be open to the public; we shall give guidance to the CAB; we shall make specific reference to the disputes procedure in the regulations to alert such organisations; and, of course, we have the debates in the House. Given that the forms will be amended in response to discussions in your Lordships' House, that staff will be ready to pick up potential cases and advise people on procedure, that changes will be made to the regulations, that there will be public access to internal guidance and to considering the profile that that procedure will undoubtedly achieve, I am pretty confident that people at the point of need will be aware of their rights.

Baroness Carnegy of Lour

My Lords, with the leave of the House, I thank the Minister for giving way. The noble Baroness has said that the Government have taken the matter of domestic violence into account. Does she, with all her experience—the Minister for Women, who also has great experience in this area, is now sitting beside her—appreciate that, where there is domestic violence, the wife will sign the form, and there will be agreement. Unless it is against the law and somebody can do something about it, it will happen. Where there is domestic violence the wife will not refuse to sign; she will agree.

Baroness Hollis of Heigham

My Lords, I believe it will be very difficult to lever open a situation where the woman is so physically or emotionally battered that she colludes with her husband's violence, in the sense of signing forms that she would rather not sign. At present the woman has positively to sign the form for her partner to get the money. If she fails to sign the form or puts in her own form, she will receive WFTC.

I find it difficult to conceive how you can do more to protect a woman in that situation, on the grounds that all she has to do is to take no action and there is a presumption of enquiry and a presumption, ultimately, that the money will go to her. I honestly do not see how we can help if she signs the form, without someone knocking on the door and asking, "Did you really mean to sign it?" If the noble Baroness has any suggestions for meeting that situation, I will be very happy to hear them.

If the woman signs the form, there is no way for any agency to make a distinction between that couple and a couple living harmoniously, unless they go by gossip on the grapevine, newspaper cuttings, black eyes or police reports. I do not think that is a road we can usefully go down. If the woman does nothing, the money will ultimately go to her. In terms of protection, it seems to me that is as far as any more bureaucratic system can devise. If she is so battered in that sense, one would hope that family members would advise her, if necessary, to leave home altogether.

Baroness Carnegy of Lour

My Lords, if it were against the law for the husband to insist that his wife signs the form, in certain circumstances, the woman, having signed the form, because she is too frightened not to, could go to the citizens' advice bureau, which could look into the matter legally. If this matter is not on the face of the Bill, that could not happen. I may be wrong, but that seems to me to be the simple solution.

Baroness Hollis of Heigham

My Lords, we shall check on whether she can subsequently nullify a form which she has already signed on the grounds that she has had a change of mind. My belief is that under WFTC that is possible now, but I shall check. If I cannot give the noble Baroness an answer now, I shall write to her. I am hoping that your Lordships will agree that we all want this protection that we have put in place not just for the somewhat rarer cases of domestic violence, but for the wider issues of dispute and default, given that the guidance will be amended as from next year, in response to pressure from noble Lords. I hope that the noble Lord, Lord Astor, will feel able, in the light of that, to withdraw his amendment.

Lord Astor of Hever

My Lords, I thank the Minister for her response. Of course, I am happy to accept her apology on behalf of her noble friend the Lord Privy Seal. Unfortunately, I feel that the response of the Minister fails, by a wide margin, to address the real concerns of women and the professional organisations advising us with regard to domestic violence in the context of this Bill. However, the Opposition, and clearly the Liberal Democrats, take this matter extremely seriously. We are not prepared to leave the matter to chance.

Earl Russell

My Lords, the noble Lord, Lord Astor, has used the name of our party. We have listened carefully to the Government's reply. What does the noble Lord think is wrong with it?

Lord Astor of Hever

My Lords, I shall come to that. Maybe I misunderstood the noble Lord's support for us earlier.

We on these Benches and the organisations who work at the coal-face of domestic violence feel very strongly that this matter must be on the face of the Bill. Accordingly, I wish to test the opinion of the House on this amendment.

4.17 p.m.

On Question, Whether the said amendment (No. 2) shall be agreed to?

Their Lordships divided: Contents, 113; Not-Contents, 153.

Division No. 1
CONTENTS
Addison, V.	Carnock, L.
Ailsa, M.	Carr of Hadley, L.
Alton of Liverpool, L.	Charteris of Amisfield, L.
Archer of Weston-Super-Mare, L.	Chesham, L.
Ashbourne, L.	Clanwilliam, E.
Astor of Hever, L.	Clark of Kempston, L.
Attlee, E.	Cope of Berkeley, L.
Belhaven and Stenton, L.	Cowdrey of Tonbridge, L.
Berners, B.	Cox, B.
Birdwood, L.	Darcy de Knayth, B.
Blatch, B.	Davidson, V.
Boardman, L.	Dean of Harptree, L.
Brentford, V.	Dixon-Smith, L.
Bruntisfield, L.	Dundee, E.
Burnham, L. [Teller.]	Ellenborough, L.
Butterworth, L.	Elles, B.
Cadrnan, L.	Elton, L.
Campbell of Alloway, L.	Ferrers, E.
Carnegy of Lour, B.	Freeman, L.

Garel-Jones, L.	Moyne, L.
Geddes, L.	Murton of Lindisfarne, L.
Gisborough, L.	Norrie, L.
Gray, L.	Northesk, E.
Hanningfield, L.	O'Cathain, B.
Harding of Petherton, L.	Oppenheim-Barnes, B.
Harlech, L.	Oxfuird, V.
Harmar-Nicholls, L.	Park of Monmouth, B.
Harmsworth, L.	Pearson of Rannoch, L.
Harrowby, E.	Pender, L.
Henley, L, [Teller.]	Peyton of Yeovil, L.
Higgins, L.	Rawlings, B.
HolmPatrick, L.	Reay, L.
Howe, E.	Rees, L.
Jenkin of Roding, L.	Renfrew of Kaimsthorn, L.
Jopling, L.	Renwick, L.
Kinnoull, E.	Roberts of Conwy, L.
Knight of Collingtree, B.	Rotherwick, L.
Knollys, V.	St. Davids, V.
Lauderdale, E.	Sanderson of Bowden, L.
Long, V.	Sandford, L.
Lucas, L.	Sandys, L.
Lyell, L.	Seccombe, B.
Lytton, E.	sharples, B.
McColl of Dulwich, L.	Shaw of Northstead, L.
MeConnell, L.	Skelmersdale, L.
Mackay of Clashfern, L.	Strathcarron, I,.
Manton, L.	Strathclyde, L.
Marlesford, L.	Sudeley, L.
Mayhew of Twysden, L.	Swinfen, L.
Miller of Hendon, B.	Thomas of Gwydir, L.
Molyneaux of Killead, L.	Trumpington, B.
	Vivian, L.
Monckton of Brenchley, V.	Waddington, L.
Monro of Langholm, L.	Wakeham, L.
Montgomery of Alamein, V.	Westbury, L.
Mountevans, L.	Wharton, B.
Mowbray and Stourton, L.	Young, B.

NOT-CONTENTS
Addington, L.	Dholakia, L.
Ahmed, L.	Dixon, L.
Allenby of Megiddo, V.	Donoughue, L.
Alli, L.	Dormand of Easington, L.
Amos, B.	Dunleath, L.
Ampthill. L.	Evans of Parkside, L.
Archer of Sandwell, L.	Evans of Watford, L.
Ashley of Stoke, L.	Ewing of Kirkford, L.
Barnett, L.	Ezra, L.
Bassam of Brighton. L.	Falconer of Thoroton, L.
Berkeley, L.	Falkland, V.
Blackstone, B.	Farrington of Ribbleton, B.
Blease, L.	Geraint, L.
Borrie, L.	Gilbert, L.
Bragg, L.	Gladwin of Clee, L.
Brooke of Alverthorpe, L.	Glanusk, L.
Brookman, L.	Glenamara, L.
Bruce of Donington, L.	Gordon of Strathblane, L.
Callaghan of Cardiff, L.	Goudie, B.
Calverley, L.	Gould of Potternewton, B.
Carlisle, E.	Graham of Edmonton, L.
Carter, L. [Teller.]	Grenfell, L.
Christopher, L.	Grey, E.
Clarke of Hampstead, L.	Hacking, L.
Clement-Jones, L.	Hanworth, V.
Clinton-Davis, L.	Hardy of Wath, L.
Cocks of Hartcliffe, L.	Harris of Greenwich, L
Colville of Culross, V.	Harris of Haringey, L.
Crawley, B.	Hayman, B.
Currie of Marylebone, L.	Hilton of Eggardon, B.
David, B.	Hogg of Cumbemauld, L.
Davies of Coity, L.	Hollis of Heigham, B.
Davies of Oldham, L.	Hoyle, L.
Dean of Thornton-le-Fylde, B.	Hughes, L.
Desai, L.	Hughes of Woodside, L.

Hunt of Kings Heath, L.	Prys-Davies, L.
Hylton-Foster, B.	Puttnam, L.
Irvine of Lairg, L. [Lord Chancellor.]	Ramsay of Cartvale, B.
	Rea, L.
Jay of Paddington, B. [Lord Privy Seal.]	Redesdale, L.
	Rendell of Babergh, B.
Jeger, B.	Richard, L.
Jenkins of Hillhead, L.	Rodgers of Quarry Bank, L.
Judd, L.	Russell, E.
Kennet, L.	Sandberg, L.
Kinloss, Ly.	Sawyer, L.
Kirkhill, L.	Scotland of Asthal, B.
Lockwood, B.	Sewel, L.
Lofthouse of Pontefract, L.	Sharp of Guildford, B.
Longford, E.	Shepherd, L.
Lovell-Davis, L.	Shore of Stepney, L.
McCarthy, L.	Simon, V.
Macdonald of Tradeston, L.	Simon of Highbury, L.
McIntosh of Haringey, L. [Teller.]	Smith of Gilmorehill, B.
	Stoddart of Swindon, L.
Mackie of Benshie, L.	Strabolgi, L.
McNair, L.	Strafford, E.
McNally, L.	Symons of Vernham Dean, B.
Maddock, B.	Taverne, L.
Mallalieu. B.	Taylor of Blackburn, L.
Marsh, L.	Taylor of Gryfe, L.
Mason of Barnsley, L.	Tenby, V.
Milner of Leeds, L.	Thomas of Macclesfield, L.
Mishcon, L.	Thomas of Walliswood, B.
Molloy, L.	Thomson of Monifieth, L.
Monkswell, L.	Thornton, B.
Montague of Oxford, L.	Thurlow, L.
Morris of Castle Morris, L.	Tomlinson, L.
Morris of Manchester, L.	Tordoff, L.
Murray of Epping Forest, L.	Turner of Camden, B.
Napier and Ettrick, L.	Varley, L.
Nathan, L.	Walker of Doncaster, L.
Newby, L.	Wallace of Saltaire, L.
Orme, L.	Weatherill, L.
Paul, L.	Whitty, L.
Peston, L.	Williams of Crosby, B.
Pitkeathley, B.	Williams of Elvel, L.
Ponsonby of Shulbrede, L.	Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.