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Lord Kingsland: My Lords, about 97 per cent. of cases heard in our courts are heard in magistrates' courts. A high percentage of those cases are minor summary cases. Nevertheless, they sometimes suffer a number of adjournments. The Bill seeks to reduce those adjournments, and does so successfully. The amendments tabled by the Commons further enhance the effectiveness of the Bill. They are supported by this side of your Lordships' House.

On Question, Motion agreed to.



Clause 1, page 1, line 23, leave out from beginning to first ("the") in line 25 and insert--

(""(7A) Where the court gives a direction under subsection (7)(aa) above the court shall cause an account to be given orally before the court by the clerk of the court of so much of any statement as is not read aloud.
(7B) Whether or not a direction under paragraph (aa) of subsection (7) above is given in relation to any statement served as mentioned in that paragraph").

Lord Hardie: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2 to which I have already spoken with Amendment No. 1.

Moved, That the House do agree with the Commons in their Amendment No. 2.--(Lord Hardie.)

On Question, Motion agreed to.

Tax Credits (Initial Expenditure) Bill

11.42 a.m.

Lord McIntosh of Haringey: My Lords, this Bill represents the first step towards achieving the Government's aim of the introduction of new tax credits--the working families tax credit and the disabled

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person's tax credit. It provides authority for preparatory expenditure by the Inland Revenue and the Department of Social Security for the introduction of the tax credits.

In his recent Budget, the Chancellor of the Exchequer announced the introduction of the WFTC, a central part of the Government's major programme of tax and benefits reform. It will provide a very real incentive to move from welfare into work by significantly boosting the earnings of low income families with children, and providing extra help with childcare costs. It will build on and replace family credit, and similarly, a new disabled person's tax credit will build on and replace disability working allowance. Both these new tax credits will be introduced in October 1999. They will be assessed and administered by the Inland Revenue, and from April 2000 will be paid in the main by employers through the wage packet.

The WFTC proposal is designed to make work pay for families, by guaranteeing them a minimum income, above and beyond the level of the minimum wage. It aims to demonstrate the rewards of work over welfare by providing a clear link with employment. We hope that it will reduce any stigma associated with claiming in-work support by changing it from a welfare benefit into a tax credit. We believe that this will encourage higher take-up and help encourage people to move off welfare and into work.

The WFTC, when it is introduced, will provide around £5 billion of help to about 1.5 million working families, equivalent to £70 per family per week. That represents approaching £1.5 billion more in-work support than family credit.

The WFTC represents an important step towards greater integration of the tax and benefit systems. In particular, it will reduce the current wasteful overlap between the tax and social security systems whereby almost 500,000 families pay income tax to the Inland Revenue while receiving FC from the DSS.

Although the purpose of the Bill is to allow preparatory work in developing the details of the scheme to go ahead, the basic structure of the tax credits is already clear. It may be helpful if I describe the outline scheme as it stands currently.

In general, families on low incomes where the main earner works more than 16 hours a week will be entitled to a tax credit of £48.80 in respect of the adults (or adult) in the household. They will also be entitled to a tax credit in respect of each child, which will range from £14.85 to £25.40 a week, depending on the age of the child. There will be an additional tax credit of £10.80 where the main earner works for more than 30 hours a week, to encourage people to move from part-time to full-time work.

The cost of childcare can be a major obstacle to work, and the WFTC will include a childcare tax credit. This will be an integral part of the WFTC and will be paid in addition to the basic, child and 30-hour credits to make up the whole WFTC package. The childcare tax credit is designed to make support for childcare through the tax system more generous and more transparent than is currently the case with family credit.

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The childcare tax credit will be worth 70 per cent. of eligible childcare costs, subject to an overall limit on those costs of £100 a week for one child and £150 a week for two or more children. As a result of this, the WFTC will provide support for childcare costs up to a maximum of £70 a week for a family with one child, and up to a maximum of £105 a week for a family with two or more children. This will be a significant increase on the maximum support, currently provided by the childcare disregard in family credit and it will, unlike that disregard, be paid to those on very low incomes.

The WFTC will begin to be withdrawn when the family's net income (before adding the WFTC) exceeds £90 a week. But WFTC will be withdrawn more slowly than family credit. After the £90 threshold, for each additional pound of net earnings 55 pence of WFTC will be withdrawn, as compared with 70 pence per pound under the current family credit rules.

The structure of the disabled person's tax credit will be broadly similar, and it will include an adult credit (for single people and those who are married), child credit, and the childcare tax credit to help with childcare costs.

The structure of the new tax credits reflects the priority the Government attach to getting those who are out of work into work--and keeping them in work and on the ladder of opportunity. It unambiguously improves the return to work, and will improve work incentives for families and those with an illness or disability, by making work pay. For example, by targeting the greatest increase in support on those earning between £100 and £300 a week, the WFTC will provide support for the sort of jobs people moving from unemployment and inactivity are most likely to take. The reforms to national insurance paid by employees and employers will reinforce this effect.

The WFTC alone will also ease the poverty trap--another significant discouragement to work--by reducing marginal rates for over half a million families, currently receiving family credit. The reduction is created by the lower withdrawal taper of 55 per cent. compared with 70 per cent. under family credit; the increase in the withdrawal threshold to £90 per week; the increase in child credits; and changes in the interaction with housing benefit which can currently lead to marginal rates of over 100 per cent.

Further details of the new tax credits will be fully developed in the coming months. Both the credits will be administered by the Inland Revenue on their introduction in October 1999, and from April 2000 will be paid in the main by employers through the wage packet. This will help to reinforce the link with work.

It is particularly important to ensure that the system works effectively from the start in view of the significant benefits it will provide for so many people on low incomes. This, and prudent management, means that there must be meticulous preparation. And if it is to be thorough, the preparatory work needs to begin well in advance of the introduction.

There is much to be done to bring about the smooth introduction and operation of the tax credits. The computer systems and processes need to be designed

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and ready to begin on the date of the introduction of the credits. Other necessary preparatory work includes the training of staff in new procedures and responsibilities, redesign of forms and leaflets, and the provision of information to employers and potential claimants. None of this can be done overnight.

Both the Inland Revenue and the Department of Social Security fully recognise the need to work closely together and to start work straight away to develop the necessary business processes. Indeed, an Inland Revenue project team, working jointly with the Benefits Agency and the Department of Social Security, has been set up to plan the new processes.

However, until the legislation introducing the credits has been sanctioned by Parliament, the costs for these aspects of development work are outside the current accounting remits of both departments. That is why we need the Bill. It will allow the department to expend money in preparing for the introduction of the credits. This authority is essential to enable the development work to begin now, in order to meet the timetable.

In seeking this authority the Government are behaving entirely correctly in bringing the matter to Parliament for approval. This will make sure that there is no doubt about the propriety of spending the necessary money in preparation for the tax credits. This type of legislation is not without precedent. Bills of this kind are more commonly used to facilitate privatisations where, for example, agencies are wound up and, incidentally, need to expend money on winding themselves up. This is normally outside their powers and requires specific legislation for the necessary expenditure to be incurred by them.

It is important also to bear in mind that while this Bill extends the authority to incur expenditure for the Inland Revenue and the Department of Social Security, it does not relax the controls upon them. Both departments will be accountable for this expenditure in the normal way, through their Permanent Secretaries in their role as Chief Accounting Officer. This Bill merely allows the work to go ahead in developing the credits. The substantive legislation will be brought before the House, probably in the next parliamentary session, when this House will have the opportunity to scrutinise the details carefully.

This is an important Bill which will allow necessary work to begin in preparation for the introduction of these credits which are central to the Government's programme of tax and benefit reform, and I therefore commend it to the House. I beg to move.

Moved, That the Bill be now read a second time.--(Lord McIntosh of Haringey.)

11.53 a.m.

Lord Mackay of Ardbrecknish: My Lords, I am grateful to the Minister for explaining the purposes of this short Bill. I was a little concerned on, I think Tuesday, that the Minister would no longer be answering for the Treasury when I discovered that he was taking through the education Bill. I congratulate the noble Lord on his versatility and brilliance. When he

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has to be parachuted in to help, I am not sure whether it is a reflection on the versatility and brilliance or a reflection on Ministers. I believe that my noble friend Lady Blatch, considered it a distinct honour that the noble Baroness, Lady Blackstone, had to be reinforced by the strength and ability of the noble Lord, Lord McIntosh. However, I am just relieved that I am not deprived of his excellent explanation of Bills. I fear that he is about to beat my record for the number of Bills taken through in one parliamentary Session; I suppose I can do nothing to stop that.

This is a small Bill, as the noble Lord said. It deals with preparatory expenditure for the new proposals for tax credits. I was a little surprised to hear the Minister say that the main Bill would be introduced probably next Session. I wonder how that squares with introducing the new tax credits by April 1999. I should have thought that the measure had to be introduced next Session. It seems a little odd that some doubt is creeping into the Government's mind. The only reason why Parliament should pass such preparatory legislation is if Parliament is absolutely sure that the main Bill for which the expenditure is designed will be passed.

The proposal for tax credits builds on the success of the family credit scheme. We are not opposed in principle to a shift from the benefit system to a tax credit system. Many of the points the Minister made are absolutely valid. When we were in government, it seemed odd to us as well that some families paid tax on the one hand and received benefits on the other. However, when we considered moving to a system somewhat like that proposed here we discovered that there were major administrative and other difficulties. When we judge the main Bill, and the prospectus set out by the Minister, we shall ask some questions. Is it simple to operate? Is it transparent? Does it impose unnecessary burdens and expense on business? Does it erode the principle of independent taxation? We considered the possibility of this system ourselves, but the complications are considerable.

Currently family credit has a considerable virtue: it is relatively simple to administer. The person goes to the Benefits Agency with which she is probably dealing anyway. Some checks are made; a payment book is brought forward; and, in general, the mother goes to the post office and picks up the family credit. That will be changed. Other players will be introduced. The Inland Revenue will have to come in. I suppose the Minister will say that it replaces the Benefits Agency so it is a one for one. More importantly, the employer will have to become involved in a way that does not happen now. At present the employer does not necessarily know which of his employees is claiming family credit. He does not need to know. In future he will need to know so there will be a relationship between the employee and the revenue, the revenue and the employer, and the employer and employee--perhaps even between the employee and employer so far as concerns tax credit.

Employers will need to know who is entitled to family credit. They may even need to know what an employee's spouse earns, and how many children he has. Employers will need to know this for the very first time. They will obviously know who is so entitled.

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I fear that too much bureaucracy may be involved on the part of the employer. There is also the impact on the employer's cash flow. If he is paying out money in tax credit, for how long will he be without that money before he receives it back from the Inland Revenue? It is a difficult question. It could become more difficult. An employer interviews two people for a job. If he discovers that one will be eligible for tax credit and the other will not, will he be more sympathetic to the fellow or lady who does not have a tax credit and therefore will not add to his workload or problems with his cash flow? It is a serious problem that we shall undoubtedly have to consider. It will have to be addressed to an extent in the preliminary work. I understand that much of the expense is in developing the computer system. I strongly suspect that it will be more expensive to develop than the Government think if experience with the Benefits Agency is anything to go by. One needs to know what questions the computer has to answer and ask, as it is engineered. Many of those issues will have to be decided before the main Bill comes before the House. Therefore I imagine that the Government have answers to some of these points.

An important aspect arises in respect of the employer's workload and his discovering details about the employee's personal affairs; for instance, his spouse's income, his children and whether he is eligible for tax credit. When the Social Security Select Committee in the other place took evidence on that the Institute of Directors stated:

    "No employer will want to have to collect that information",

that is, information about the earnings of employees' spouses and the number of children they have. It continued:

    "Furthermore, many employees will be reluctant to supply such information to their employers. Claimants currently supply that information to the Benefits Agency only on the clear understanding that it will not go any further".

Indeed, security of information is an important aspect of the work of the Benefits Agency.

I wish to repeat a point that I made previously about transparency of the expenditure. Help given to working families will no longer be shown in the Red Book as an expenditure of the Department of Social Security, but will appear in the figures of the Inland Revenue. It will be tax forgone. That is a difficult issue. A huge error was made in the Government's Red Book because of such difficulties. Four of its tables were wrong; they were tables B5, B8, B9 and B24. Indeed, a parliamentary Answer was needed to a "planted question", as they call it, on 27th March to enable the Financial Secretary to correct the errors in the Red Book.

The errors were significant. The original tables assumed that the value of the income tax credits would be 0.3 per cent. of GDP. The correction was that they would be 0.8 per cent. of GDP. Your Lordships may be forgiven for believing that 0.5 per cent. of GDP does not add up to much. But it adds up to an awful lot; to £15 billion between the start of the scheme and the year 2002-2003. Therefore, it was a significant error.

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The shift to being scored as negative taxation and not social security spending is an odd sleight of hand. When I previously challenged the Government the Minister answering pointed to MIRAS as being something similar which they could pray in aid. Whereas MIRAS has never been counted as social security expenditure, family credit has. Therefore, this large item of expenditure will be Tipp-Exed out of the Government's income and expenditure accounts. One will need to burrow deeply into the income figures in order to discover exactly how much tax has been forgone by the family credit.

My final question is equally important in the context of how the computer system is set up. Who collects the money? The Minister said he trusted that by April 2000 in the main the money would be paid via tax credits. Currently, family credit is largely collected by the mother, a little like child benefit. That is the great strength in both family credit and child benefit. If the mother is the only earner in a household of two adults or is a single parent, nothing will change; she will collect the tax credit as she collects the family credit from the post office. Nothing will change. Even if the father is the earner, by and large the mother usually collects the money. However, under the new system the father can collect the money via the tax credit. What puzzles me is: who decides? What is the fallback position? Does the mother decide that she wishes to continue to collect the money as a family credit? Does the father decide that he wishes to collect it as a tax credit? Alternatively, must they have a family meeting to make the decision?

I wish to know who has the veto on the matter because it is important. If there is inertia and no one makes a decision what will the Government do? My wager is that the Government will pay the money as a tax credit. They do not want to pay it as a family credit because they do not want it to appear in the accounts as an expenditure. Therefore, I suspect that in the circumstances I have outlined the father will be given the tax credit.

I and many people are concerned about the pressures which will be brought on the mother to ensure that she gives up her right to collect the money at the post office. Will she and the children see the money if it is paid to the father? When child benefit was introduced, one of the great debates was that it would go to the mother. One of the worrying aspects which stopped us proceeding with this proposal, apart from the bureaucracy, was the question of who is paid. These are difficult social issues, and I wish to warn to Government that in Committee and at later stages we shall wish to explore them. However, it may be too late because the engineering of the computer system will have been designed to deliver the benefit either to the father or to the mother.

I hope that the Minister can give me some reassurance on these issues, in particular the last issue. In many of the families which need such help, the financial relationships between the father and the mother are not--let me put it this way--on a good footing. I can see that money which is currently paid to the mother through the post office will turn up in the husband's

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wallet and will not see its way to her purse. I do not believe that a transfer from the purse to the wallet will help achieve our purpose of assisting all members of families in work.

12.7 p.m.

Lord Newby: My Lords, we on these Benches support the principle behind the substance of the working families tax credit. We have a number of concerns about the Government's approach and I hope that the Minister will deal with some of them today. First, we are surprised that we have an open-ended money Bill to deal with the issue. The Bill makes no suggestion of the cost and we and our colleagues in another place are being asked to give the Government an open cheque. That is not a good general principle.

In another place, we expressed concern about the fact that a supplementary estimate had not been adopted. That seemed to us a more normal way of proceeding. Today the Minister gave us some precedents for money Bills, but I am not sure that the privatisation precedent is relevant to a tax and benefits change. The Minister in another place said that she believed that this was the correct legislative route for the somewhat unusual circumstance whereby two departments were required to work together. We were sorry to hear that the situation is so unusual that we need a special Bill to help them to do so. We wondered mischievously whether there was a certain amount of passing the parcel between the departments in respect of which was to bear the cost. Perhaps a money Bill is seen as a way of dealing with a potential conflict as to which will foot the bill.

We have a further concern relating to the components of the expenditure. The Minister explained what they might be. We hear about computers, training and information. We also hear about staffing costs, but I do not believe that we need a money Bill to set up a working group of Inland Revenue officials to look at a tax change. Tax changes take place all the time and in the Finance Bill following the Budget we see a huge amount of putative work that has had to be done on tax changes.

The one matter which is really likely to cost money is in relation to computers. It is impossible for the Inland Revenue to be spending money at this stage on information because there is nothing about which to inform people. There are no proposals. It is very difficult to see how it can be spending very much on training because there is nothing to train people on. Indeed, even as regards computers, as the noble Lord, Lord Mackay of Ardbrecknish, has just said, you can only do a significant amount of work when you know what is to be the structure of the new benefit.

That brings me to our main concern, which relates to timing and consultation. Both here and in another place much has been made of the need to consult widely on this Bill because it is extremely complicated and affects millions of people. And yet we have heard nothing about the timetable for pre-legislative consultation.

I believe that the Minister said that he expected the Bill to be in the next Session. I assume that the only other alternative is that we shall have the Bill in a

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fortnight, in a month or before the Summer Recess; but I suspect not. If that is the case and we are talking about a Bill in the next Session, it would be helpful to know what procedure the Inland Revenue now intends to follow in terms of consultation on the structure of the new benefit. When can we expect a consultative document; what form will it take; and will it be issued in plenty of time for all those who have a legitimate interest in the issue to make substantive comments on it before legislation is in such a form that those comments cannot be taken on board? In particular, we express the hope that the document does not emerge in the middle of the summer period with a very short timetable for comments to come in.

While in one sense we are pleased that the Government are getting on with the introduction of this benefit, we are sensible of its extremely complex nature. The noble Lord, Lord Mackay of Ardbrecknish, has spoken at length about a number of the complications. It seems to us that this measure will affect the lives of millions of people in a fundamental way, where even a week's problem in terms of the flow of income to low income earners may have a devastating effect on their family income and their capacity to manage their affairs in a sensible way. Therefore, it is crucially important that from the day this credit is introduced it is fully formed and operating efficiently. We must not find ourselves dealing with a large number of errors. Therefore, the whole question of consultation and timetable becomes crucially important.

On balance, we believe that setting a tight deadline--and October next year is an extremely tight deadline for a change of this magnitude--is good because if a longer deadline is set it may take longer to achieve it. However, I should welcome any assurance which the Minister can give about an orderly timetable for consultation, legislation and implementation between now and next October. We should welcome also the assurance that the Minister is confident that the Inland Revenue has the measure of that change and will be able to introduce it in an orderly way which will be crucially important if this much-needed change is to take place successfully.

12.14 p.m.

Lord Simon of Glaisdale: My Lords, perhaps I may make two points. It is clear from the speeches to which your Lordships have listened that the main Bill next Session is likely to be extremely complicated. Both for that reason and from past experience, it is extremely unlikely to be easily comprehended. The noble Lord, Lord Mackay, used the current fashionable phrase "transparency". It is not likely to be very transparent.

There is an unofficial body which has been generally acclaimed and has had official support both from the previous government and from the present Government concerned with the rewriting and clarification of the fiscal law generally. Arising out of what has been said, and particularly after the last speech that was addressed to your Lordships, I suggest that before we have the main Bill, it should be processed through the Fiscal Law Reform Committee.

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That was a committee under the sponsorship of the noble and learned Lord, Lord Howe of Aberavon, and it will be easily identified. It would certainly be helpful if the Bill could be vetted and drafted under the aegis of that committee rather than having an extremely complicated and untransparent Act which subsequently had to go to the committee.

The other point is very short arising from Clause 1(4)(b) which states:

    "for the reference to money provided by Parliament there shall be substituted a reference to money appropriated by Measure of the Northern Ireland Assembly".

That relates to the Northern Irish impact of the Bill. Is that a reference, as the Bill stands, to the present set-up or does it refer to what we hope will be the outcome of the referendum tomorrow?

12.16 p.m.

Lord McIntosh of Haringey: My Lords, I am grateful to all noble Lords who have taken part in this short Second Reading debate. I am particularly grateful to the noble Lord, Lord Mackay, and the noble Lord, Lord Newby, for their support in principle both for the proposals and for the Bill. My gratitude is even greater to the noble Lord, Lord Mackay of Ardbrecknish, because he carried the twin burdens of representing both the Treasury and the Department of Social Security in this House for a very long time. Therefore, he understands the issues concerned with this legislation and the forthcoming legislation more clearly, I suspect, than anybody else in the House.

However, he should know by now that we do not stand up in this House or anywhere else and give commitments as to what will appear in the Queen's Speech. He knows perfectly well that the words "probably next Session" is the standard precaution which we take in those circumstances.

The noble Lord referred to the burdens on business which may flow from this change to tax credits. Of course, such burdens are very much in the mind of Government. I reassure him about the amount of work that employers will have to do. Instructions to employers will come from the Inland Revenue only in the form of an amount which must be paid to a given employee in the given payment period, whether it is a weekly or monthly payment. There will be no calculation for the employer to make and, more important, there will be no way in which the employer can find out how the calculation was arrived at.

In other words, the employer will not know whether there is a spouse or a partner because those credits apply to unmarried as well as married couples. There is no need for the employer to know anything about the employee's personal affairs; for example, the number of children or any of the other elements in the calculation. The employer will merely be told that he must pay so much per week to that employee.

I hope that that in turn addresses some of the problems which the noble Lord anticipates as regards intrusion into the employee's affairs by the employer. For example, there is no reason at all why an employer interviewing two people should know, before deciding

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which person to employ, whether or not a person is receiving the working family's tax credit. Of course, the instruction to pay is exactly comparable to the instruction to pay in the case of MIRAS, although I hesitate to say that because it would, perhaps, raise more complications than those raised by the noble Lord and, indeed, more than we need to raise. But, certainly, PAYE and national insurance contributions are instructions to employers to pay and it is no different in that respect.

The noble Lord asked me about the reimbursement of employers. Where the amount paid out in working families tax credit or disabled persons tax credit is less than the amount which the employer receives as a result of withholding tax under the PAYE system, the two will be netted off against each other. I acknowledge that that will make a difference in the employer's cashflow. But, historically, since the introduction of PAYE, the employer has always had a timing benefit from withholding tax before he has to pay that tax withheld on a monthly basis. I do not know whether the noble Lord has ever been an employer, but I was one for 30 years. I found that the withholding of PAYE and national insurance contributions enormously easier to organise than I did my VAT returns, with which I always had huge difficulties.

The noble Lord rightly said that a very significant part of the expenditure under this Bill will be in computer systems. But the computer systems will not be starting from scratch. The reason for our needing this power for the Inland Revenue and the Department of Social Security is that we are building on the department's computer system and it is best that it should be involved in that process rather than trying to start entirely from scratch.

The noble Lord made a point about the transparency of expenditure and the fact that tax forgone can be presented--as, indeed, I believe it is in the United States--as not being part of public expenditure on social security. I believe that the Americans also count it as being a tax cut, which we are certainly not attempting to do. Whatever government do for internal purposes is a matter of presentation and is relatively neutral. However, I can assure the noble Lord that, so far as concerns the national accounts, the Office for National Statistics would not stand for any nonsense even if the Government were to propose it, and will be presenting these tax credits as they are, correctly in the national accounts.

The noble Lord made perfectly responsible and worthwhile points about the purse-to-wallet transfer and the danger of the husband taking the money for childcare and child benefit for that part of working families tax credit where the expenditure really ought to go, as it has in the past, to the mother. Where there is a husband working and a wife who is not working, there is no presumption, despite the noble Lord's wager, that the money will go as a tax credit to the working partner rather than as a direct benefit to the non-working partner. That matter will be resolved by agreement between the two partners. If there is disagreement between them, the presumption will not be that it goes

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to the working partner, whether male or female, but that it will go to the partner who has the most responsibility for looking after the child.

I hope that that will alleviate some of the concerns expressed by the noble Lord and those which were correctly expressed by those interested in family welfare when the proposals of the previous government were put forward. We are not trying to pull a fast one, if I may put it that way, and there is no sleight of hand here either in the national accounts or in the actual mode of payment where there is one working partner and one non-working partner.

The noble Lord's final point was that it will be too late to do anything about it when we actually come to the main Bill. I do not believe that that is the case. We need this paving Bill--and this takes in the point made by the noble Lord, Lord Newby--because the work being done is outside the current accounting remit of both the Inland Revenue and the Department of Social Security. That is why it cannot be done as a statutory instrument. Similarly, because it is being done outside that accounting remit, the existing procedures for paying family credit and disability working allowance will continue, as they have to continue until any changeover takes place. If by any chance the main legislation were not possible, then nothing would have been lost other than the expenditure provided for under this Bill.

I turn now to the remarks made by the noble Lord, Lord Newby. This is not open-ended expenditure; this is expenditure for which both the Inland Revenue and the Department of Social Security will be responsible. Their accounting officer and their Permanent Secretaries will be responsible to Parliament in exactly the same way as for other expenditure. The fact that we cannot say at present what the exact quantum is does not mean that there is no responsibility in that respect.

As my honourable friend the Economic Secretary said in another place, we should have the power to enable departments to work together. It is not that it is unusual; indeed, that is not the reason for having a paving Bill. The reason is the accounting remit. The noble Lord is quite right to say that, in designing the computer systems, we need to have an understanding of the structure which those computer systems are designed to implement. That is why I took care in my opening remarks to set out the fact that we do know the structure and we know a lot of the amounts which we are going to propose in legislation as a result of the Budget. Therefore, the noble Lord can be reassured that the instructions to those who are preparing the computer systems will be clear and that they will be prepared in time.

The noble Lord also referred to the timing of consultation because, as he rightly said, there is a tight time-scale involved. We have already begun consultation. We have consulted representatives of employer groups, payroll organisations, practitioners and business. Indeed, we announced all of this in the pre-budget report in November of last year, which is further evidence of the transparency of our legislation and of our implementation of changes to our tax and welfare system. I hope that that, in turn, reassures the

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noble Lord, Lord Newby, about the nature of the preparations that we are making for what he rightly described as this much-needed change.

The noble and learned Lord, Lord Simon of Glaisdale, anticipated that this would be a very complicated Bill. I shall not say that he is wrong. The noble and learned Lord made suggestions about the way in which this Bill might be scrutinised in terms of the committee chaired by the noble and learned Lord, Lord Howe of Aberavon. We are grateful to him for his comments and we shall certainly consider the suggestions that he made.

The Bill provides for a Northern Ireland assembly, although that provision will not be necessary during a period of direct rule. When this legislation is actually brought into force and implemented, we hope that we will have a Northern Ireland assembly and that we will, therefore, need the provisions in the Bill which have been made in anticipation.

I hope that I have responded to all of the questions that have been raised by noble Lords.

On Question, Bill read a second time; Committee negatived.

Then, Standing Order No. 44 having been dispensed with (pursuant to Resolution of 18th May), Bill read a third time, and passed.

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