HC Deb 26 June 2002 vol 387 cc928-9

Lords amendment: No. 32.

Motion made, and Question proposed, That this House agrees with the Lords in the said amendment.—[Dawn Primarolo.]

Mr. Deputy Speaker

With this it will be convenient to deal with Lords amendments Nos. 35, 36, 41, 43, 44, 46, 48, 65, 67 to 71, 74, 79, 82, 83, 87, 89, 90, 92 and 94.

Mr. Webb

I apologise if, by my earlier remark, I indicated that I would not speak on this group of amendments. Something that arose in debate prompted me to make a brief comment. Lords amendment No. 36 would insert a new clause, subsection (5) of which refers to the revision of decisions. It arises from our earlier discussion about the revision of decisions where a person is being made an award on the basis of an out-of-date P60 and then, within a year, they get a revised decision. I have one question for the Minister, which I hope to put briefly and simply.

The new system is starting in eight or nine months' time and everyone will be starting afresh on it. Let us assume that, very roughly speaking, the income of three quarters of the population goes up from one year to the next, as a result of inflation and so on, and the income of the remaining quarter goes down—in reality, most people's income goes up. In terms of revising decisions, is it correct that the three quarters of people who, for the sake of argument, will be assessed in March 2003 on the basis of their 2001–02 P60, will be overpaid and then, a few months into the financial year, will have to have that award revised downwards in light of their 2002–03 P60?

Will it be the case that, three months into the system, three quarters of all tax credit claimants will have their awards revised downwards? What effect will that have on public perceptions of the system? Will everyone face revisions, will most of them be downwards and will that undermine the system?

Dawn Primarolo

The hon. Gentleman is asking a question on quite a technical point. My understanding is that the answers to his questions are basically no, no and no, but I shall read what he said in the Official Report. This comes back to the way that calculations of what has already been received are taken into account when deciding future entitlement. The ability to revise is exactly that—for instance, where an application may be moving from previous year to in-year—so it does not imply what the hon. Gentleman said; quite the contrary.

Lords amendment agreed to.

Lords amendments Nos. 33 to 137 agreed to [some with Special Entry].