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Lord Higgins: In the light of what the Minister said and since we shall be able to pursue matters further on Schedule 1, I withdraw my objection to Clause 1.

Clause 1 agreed to.

Schedule 1 [Transfer of Contributions Agency functions and associated functions]:

Baroness Hollis of Heigham moved Amendment No. 1:

Page 16, line 29, at end insert--
("2A. In section 638 of the Income and Corporation Taxes Act 1988 (other restrictions on approval of personal pension schemes), in subsection (6)(c) for "Secretary of State" there is substituted "Board".").

The noble Baroness said: We start with a very sexy and exciting amendment or, as my brief says, a technical, consequential amendment. Section 638(6)(c) of the Income and Corporation Taxes Act 1988 refers to minimum contributions paid by the Secretary of State under Section 43 of the Pension Schemes Act 1993. Once Clause 1 of the Bill is in force, those minimum contributions will be paid by the Inland Revenue. I beg to move.

On Question, amendment agreed to.

Baroness Hollis of Heigham moved Amendment No. 2:

Page 17, line 22, after ("substituted") insert (""Commissioners of").

The noble Baroness said: This too is a technical drafting amendment. The term "Inland Revenue" is amplified to "Commissioners of the Inland Revenue", to be consistent with existing references in Part XI of the Contributions and Benefits Act. I beg to move.

On Question, amendment agreed to.

On Question, Whether Schedule 1, as amended, shall stand part of the Bill?

Lord Higgins: As I have indicated, a number of points arise on the schedule which is introduced by Clause 1 which we have already agreed. Therefore, this will be a reasonably orderly debate, if we continue the debate on Clause 1.

Earlier in her remarks on Clause 1, the noble Baroness pointed out that there may be a number of technical points on which she would wish to write to people rather than to respond on the Floor of the House. We can well understand, given the nature of the Bill, why that might be so.

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However, having said that, there is a point which should be made. The noble Baroness referred to the way in which tax lawyers tend to "crawl over"--if that is the right expression--the nitty-gritty of this kind of legislation. If I understand the position correctly, it is not the case that the interpretation of the Act would necessarily turn on the travaux preparatoires. If there has not been a debate on the Floor of the House on the point, the correspondence may never come into public light. Those are matters about which the noble Lord, Lord Goodhart will know infinitely more than I. If that is the case, if some technical point has to be made in correspondence, perhaps we should consider whether it could be read straight into the record, quickly, at some later stage of the Bill.

The reality is that the Bill must be introduced because of the curious fact that it could not be done by regulation because of the status of the Inland Revenue department in our existing law. Therefore, it deals a great deal by reference to existing legislation. I am becoming worried at the extent to which the drafting carries over from one Act to another and then on to yet a third. That point will emerge on later amendments. The noble and learned Lord, Lord Howe of Aberavon, is sitting on a committee which hopes to improve tax legislation generally from the present complex situation. It may be that the area with which we are dealing in the Bill is one at which he could appropriately look.

I now turn to more substantive points, although again they are related to lawyers. In Section 20(3) of Schedule 1, it is suggested that there should be inserted in the Social Security Administration Act 1992 the words:

    "any person authorised by the Inland Revenue may conduct any proceedings under section 114 of this Act before a magistrates' court although not a barrister or solicitor."
I am not clear whether that is simply an effort to reduce restrictive practice in this field or whether it is an innovation.

The next point which arises in this context is in relation to the timing of the operational arrangements of the Department of Social Security being transferred to the Inland Revenue. My noble friend Lady Anelay of St. Johns raised at Second Reading the issue of computerisation of the Department and referred to some of the problems that have arisen in that field. We also discussed at that stage whether the Millennium bug would be a problem. We are not experts in this field but in the last few days a particular case has come to my attention, which I have not had time to raise with the Minister's office until this morning.

It raises the question of whether as the Chancellor of the Exchequer suggested in his Budget speech, it is an appropriate moment to transfer the responsibility for these matters from the Department of Social Security to the Chancellor's department. This particular case raises broader issues. It concerns an individual who had deferred drawing his national insurance pension last September and decided to draw it from October. He would have received a larger amount than he would otherwise have received because of the deferment of the pension. By January he had heard nothing at all from the department and, therefore, being concerned about

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the delay, he rang the department and was told that the department's computer had been "down" since last June. It was indicated that the computer was not likely to be working fully until April. No doubt the noble Baroness can say whether or not that was indeed the case.

A number of different issues arise, leaving aside the fact that the individual had been unable to draw his pension on the date requested. He also asked what would happen about the increment, and it was indicated that even by April it might not be possible to decide whether or not it would be paid. That left the individual in a position of not knowing how much to declare on his income tax form under the new system of self assessment. This may be some justification for the Bill.

I thought that it would be helpful at this stage to ask whether or not this is an appropriate moment to transfer the operation from the Department of Social Security to the Inland Revenue. At Second Reading the Minister indicated that this was not a great problem and that it would be switched from one department to the other. However, would that be a sensible move when the computer, which I gather is a massive computer, is not operating effectively? It may well be that the department which has been operating it so far is in a better position to sort out the problem and then to transfer at a later date.

I presume that there is no substantive reason, other than the fact that the Chancellor mentioned it in his Budget speech, why the matter cannot be delayed so that the transfer can take place more efficiently.

I turn now to one matter which puzzles me. The whole thrust of the Bill and in particular this schedule, is to transfer the operation from the Secretary of State to the Inland Revenue. The noble Baroness agrees with me that that is clearly the case. However, I am not clear why it should be transferred from the Secretary of State to the officials of the Commissioners of the Inland Revenue. One would have thought that it was more appropriate to transfer it to the Chancellor of the Exchequer since the Inland Revenue is one of the Chancellor of the Exchequer's departments.

There may be some technical implications which arise in relation to later clauses, but it raises a question about the accountability of Parliament. We are moving the Next Steps Agency operation to the Inland Revenue, which has a very different history and is more independent and has different powers. Can the Minister clarify why it is being done in that way rather than transferring it from one Minister to another?

Baroness Hollis of Heigham: I take the noble Lord's point that technical, but nonetheless significant, issues arise. I recognise that people need access to the Government's view. I am trying to steer a course between providing something solid on which people can rely and providing wider access. If noble Lords wish to raise the matter in the form of a probing amendment on Report, or if they would like to notify me privately that they would like to do so, I will ensure that this matter comes back on Report. To some extent, the "constituency" from which some of those questions may come will depend on access to information and the degree to which it needs to be on the public record.

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The noble Lord raised a question about the general drafting of the Bill. It is complicated because there are many issues associated with contributions into the National Insurance Fund as well as payments out, which are handled by the DSS. The Bill fillets those responsibilities not two ways, but three ways. Some responsibilities will remain with the DSS, particularly those for statutory sick pay and maternity pay; some responsibilities will go to the Inland Revenue and some will go to the Treasury. Therefore there is a three-way split into other departments which use different terminologies and have different understandings. We are trying in this Bill not only to fillet the responsibilities but to standardise terminology throughout the system. That is the reason for what may appear to many Members of the Committee to be an endless array of technical drafting amendments.

The noble Lord referred to paragraph 20(3) on page 19 and asked whether this was a possible "dig" at restrictive practices. Currently, DSS officials have this power and we are transferring the same powers to the Inland Revenue; in other words, it mirrors the existing provisions of Section 116 of the Social Security Administration Act which gives authorised people that right. There is nothing new in this; it simply transfers existing powers.

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