HC Deb 24 March 1977 vol 928 cc1530-4

Lords amendment: No. 16, in page 22, line 25, after "7" insert 12(1) to (2A), (6A) and (7A), (Retrospective amendment of Supplementary Benefit Act 1966), 13".

Mr. Deakins

I beg to move, That this House doth agree with the Lords in the said amendment.

The effect of the amendment is to add subsections (1), (2), (2A), (6A) and (7A) of Clause 12, and also Clauses 12A and 13 to those provisions which come into force on the passing of the Act.

In moving the amendments to Clause 12 and the new clause which follows it, I explained why the provisions relating to students and to the Supplementary Benefits Commission's discretionary powers are wanted on Royal Assent. The House will not, I am sure, wish me to go over that ground again.

This amendment also, as I have said, brings Clause 13 into force on Royal Assent. That clause provides part of the powers under which regulations for the recoupment of benefit from industrial tribunal awards are to be made by the Secretary of State for Employment. Since it is intended that the regulations should operate from May 1977, it is desirable that Clause 13 should be brought into force on the passing of the Act so that there shall be adequate time for their making, laying and bringing into operation.

Mr. Patrick Jenkin

The House should recognise that this again is a retrospective clause in the sense that it makes an Act apply right back to 1966 and to the subsequently renamed Supplementary Benefit Act 1966. I shall not go over the ground that I covered earlier, but I must say that it is not satisfactory that we should be confronted with this kind of retrospective legislation, necessary though it may be.

I have spent much of my time in the House dealing with fiscal legislation such as Inland Revenue and Income Tax Acts and annual Finance Acts. In the last 15 months I have been dealing with social security legislation, and over the last four months I have been dealing with this Bill in particular. I am very struck by the similarities and by the contrasts. I hope that Labour Members will not take it amiss if I say that I think there are a great many fewer slips 'twixt cup and lip in the Inland Revenue than we have found even in the limited sphere of this legislation. The Inland Revenue has for years been dealing with a substantial professional body outside which has made it its business to examine with a fine-tooth comb, Finance Bills and Finance Acts, and the regulations and orders which come under them, in order to make sure that in advising clients it takes full account of all the provisions that it is able to use for the clients' benefit.

As a result, what one might describe as a creative tension has existed for many years between the experts in the Inland Revenue and the experts in the professions outside. They have made sure that the causes for major mistakes are kept to very few indeed.

Mr. Orme

There is an annual Finance Act.

Mr. Jenkin

That is true, but the point I was making is that there is no such comparable tension between those who are concerned with the receipt of social security benefits and those who are concerned with the legislation within the Department. It seems to me that this is of some importance, because the result has been, first, that we have had, if anything, more complexity and more obscurity in this legislation than exists in the Income Tax Acts. It also means that there is no other person outside looking at the legislation, or even at the draft legislation, who is able to pinpoint the difficulties and bring them to our attention.

Of course, if there were such a person it might well be that one would have to have an annual Bill. But is that not perhaps better than finding ourselves passing legislation retrospectively, going back for more than 10 years, in order to cover up mistakes that have been unearthed and to close loopholes that have been discovered?

I am in no way criticising those who are dealing with an immensely complex branch of the law. I have had that complexity impressed on me in no uncertain way over the last four months, as, I suspect, has the Minister. We have had to grapple with this legislation, and I have been both impressed and depressed by its complexity. I wonder whether there is not a rôle for some of the bodies outside similar to the rôle in which the accountancy profession sees itself with regard to the Inland Revenue. If so, we might have ended up with better legislation, because loopholes of this kind would not have been allowed to occur.

There is now a very happy relationship between the accountancy profession and the Inland Revenue. Discussions take place regularly, and there are many occasions when the profession has saved the Revenue from mistakes which it would otherwise make. I say no more than that there is something here which needs to be examined. We want to try to make sure that we can secure some of the creative tension existing between those outside the Government and those in the Department so that we can avoid some of the difficulties in which we have found ourselves.

This is the last amendment with which we have to deal. It covers the clauses that have been inserted to reverse the judgment in the Atkinson case. I read in The Times today that judgment has been reserved in the Metzger case. I also read: The Budget is not now expected to contain an announcement about the next increase in pensions, although the Chancellor of the Exchequer is likely to refer to the Government's legal obligation to raise them in November. The Metzger case concerns the question of whether the Government broke the law last year when they failed to uprate pensions by the full amount of the rise in prices between April 1975 and April 1976. That is to be tested in the courts, and we are told that judgment has been reserved until Budget Day.

In those circumstances, I can well understand that the Government are a little hesitant about making a new announcement on Budget Day when a High Court judge may be giving judgment that what the Chancellor announced last year was illegal. I suspect that this year the announcement will be based on prices over the 12 months from November to November, but Pat Healy said in The Times today: Although the Chancellor is not expected to announce the new rates on Tuesday it is understood that the Government has decided to forecast ahead again this year unless judgment is given against it. That would mean measuring the way earnings and prices have risen since last November, and forecasting how much they would move by November this year. Because the Government hopes to use the forecasting method again, it has decided to leave work on the review of the level of benefits until the last possible moment so that the latest figures can be included. I do not object to that. It would seem to me to be sensible. If the Government have managed to speed up the process between the announcement of the increases and the date when they can become payable, that is a good thing, which we welcome. If they are to forecast ahead, the shorter the period ahead the better, because the greater will be the certainty that can be achieved and the greater the accuracy that can be applied to the increases.

I merely mention that as yet another example of how we may find in an annual Finance Bill that the Government have to say "Once again we have boobed. We have been overruled by the court, and there must be retrospective legislation"—such as the new clause. I must not comment, because judgment has been reserved, but as a matter of politics I hope that that will not be so. The mistake was not in the increase but in giving a pledge and then allowing inflation to run away so that it became totally impracticable to honour that pledge. However, that is a matter that we shall be able to examine on another day.

I should like to take this opportunity to thank Ministers for their very courteous replies on all the amendments. We accept this amendment, with its retrospectivity, although reluctantly, for the reasons I have given.

Question put and agreed to.

Lords Amendment No. 17 agreed to.