Previous Section Back to Table of Contents Lords Hansard Home Page

Lord Skelmersdale: My Lords, I was not sure which of the "heavenly twins" was going to answer my amendment. Had it been the noble Baroness, I would have sympathised with her on having to work at this hour of night on her birthday, but I would have pointed out too that I made my maiden speech in your Lordships' House on my fifth wedding anniversary. Nobody listened to a word I said. The only comment that was made included congratulations to my wife on getting rid of me!

That said, I am very comforted indeed by the response of the noble Lord the Deputy Chief Whip to my amendment. Indeed it was intended to be helpful. My interest was not on the employer's side; it was on the practicality of employees--perhaps one might call them erratic employees in this case--getting their family tax credit on time. I am interested by the noble Lord's comment that unless three continuous tax credit payment periods are completed, the automatic assumption will be that throughout the 26 weeks this will be paid by the board. I rather think that that is a mistake because the second period of employment might well be for the rest of the tax credit grant award period: in other words, for the rest of the 26 weeks. In that case it would be entirely logical and would fit in with the purpose of the Bill, which has been emphasised over and over again that the employer should pay.

I readily accept that my 10 weeks is the wrong period. I shall have to think it out again. But I was also slightly worried by the noble Lord's formulation of the words "three tax credit payments". Are these weekly or monthly payments, or does it depend on--there is no need for an answer now because we can come back to it--

Lord McIntosh of Haringey: My Lords, either.

Lord Skelmersdale: Either, my Lords, or both? In that case I am even more worried, not from the point of view of being a member of the Opposition on a government Bill but from the point of view of pure practicality. I shall read carefully in Hansard what has

24 May 1999 : Column 745

been said, and if I feel it is necessary come back to the matter at the next stage of the Bill. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Penalties for fraud etc. and failures to comply]:

Lord Higgins moved Amendment No. 27:

Page 6, line 26, at end insert--
("(9) The Treasury shall provide appeal tribunals within the meaning of the Social Security Act 1998 and general and special commissioners with sufficient funds to enable them to determine expeditiously appeals against determinations made under this section.")

The noble Lord said: My Lords, I beg to move Amendment No. 27 which stands in my name and that of the noble Viscount, Lord Astor. The noble Baroness will recall--how can anyone forget?--the debates that we had on this subject last year on the Social Security Bill. Clearly this piece of legislation will impose more burdens on the tribunals concerned. It is important that this should remain within the social security system and perhaps the noble Baroness can confirm whether that is so. Earlier the noble Lord, Lord Goodhart, and I, stressed the difference between the attitude of the Social Security Department and the Inland Revenue. There is certainly a difference in attitude between the appeal tribunals so far as the Revenue departments are concerned. There are rather different arrangements from those with regard to the Social Security Act.

The amendment seeks to ensure that appeals are dealt with expeditiously. My understanding is that the system is under considerable strain at the moment. Average waiting times, I understand, are currently seven months, with some applicants waiting over a year for a decision in their case. The number of appeals continues to rise. Apparently in 1997-98 the number was 25 per cent up on the previous year and 56 per cent up on the year before that. This is a considerable burden. But when one looks at the figures for the ITS, the figure for 1998-99 was 55,000. That seems to me an extraordinarily low figure. For the year 1999-2000 the figure is only 54,386. Am I wrong in thinking that is a cut in real terms on the budget of the ITS? If so, it seems extraordinary, given that this Bill, among others, will add to the burdens on the appeals procedure. I am not clear why the noble Baroness appears to be puzzled. My understanding is that the budget is a cut in real terms, while at the same time the burden on the appeal service is increasing.

Can the noble Baroness tell the House what increase she expects in the number of appeals as a result of the introduction of the working families' tax credit system? At the moment, the number of appeals relating to family credit is low; it is only 2 per cent of the total number of appeals being heard by the service. Obviously, that figure is likely to increase with the working families' tax credit, if only because more claimants are involved. In addition, the appeals service will hear appeals that are related to whether a person has acted negligently or fraudulently and on the appropriate level of penalty. One would regard that as a considerable extra burden.

The essence of the amendment is to point out that the budget appears to be going down and the workload is going up. Can that be right? I look forward to hearing

24 May 1999 : Column 746

from the noble Baroness as to whether what I have described is the true situation. Perhaps she can also give some idea of what is happening as far as concerns the training of tribunal members and whether that is included in the budget.

Baroness Hollis of Heigham: My Lords, I saw the House emptying rapidly on the other side and I took it that there was no longer any enthusiasm for these proceedings.

This amendment would have the effect that the cost of the tribunals adjudicating appeals against penalties determined under Clause 9 would be separately considered in setting the funding of these tribunals. Perhaps I may quickly recap how and by whom appeals under the tax credits legislation will be heard. Appeals by applicants (employees) relating to their applications and awards will be heard by the new unified appeals tribunal (UAT) which is being set up as a consequence of the Social Security Act 1998, which happily occupied the noble Lord and myself for many hours last year. The UAT replaces a number of specialised tribunals as well as the current Social Security Appeal Tribunal. This change as well as others brought in by the 1998 Act is designed to improve the efficiency of the handling of appeals from benefit claimants.

The UAT members who will hear tax credit appeals will, we believe, have the best mix of skills and experience to deal with the kinds of issues that involve tax credit applicants. But appeals from employers as a consequence of their role in administering tax credit payments through the wage packet will involve issues that are much more akin to those that arise on the administration of PAYE. Therefore, those employer appeals will go to the Tax Appeal Commissioners, as we believe that they have the appropriate expertise to deal with such issues; in other words, there will be two streams of appeal according to the appropriate expertise. Those relating to employees will go to the new unified appeals tribunal and those relating to employers will go to the Tax Appeal Commissioners.

This ensures that appellants, whether applicant employees or employers, have their problems put before the most appropriate tribunal from the outset, although my honourable friend the Paymaster General announced in the other place that in due course--it may be a very long way down the path--jurisdiction for applicants' appeals will also pass to the Tax Appeal Commissioners and they will hear all tax credit appeals. But that is for the future.

The noble Lord, Lord Higgins, raised concerns about delay in hearing appeals. There is a backlog of work with the current social security appeal tribunals. The approximate delay is seven months at the moment. That was precisely why we passed the Social Security Act last year. During the second half of 1999 the decision-making and appeals programme (DMA) will deliver changes to current arrangements for making decisions and handling appeals in benefits and child support. The changes aim to deliver a modern, clearer, simpler, more streamlined and more accessible welfare system. The emphasis is on making real improvements for claimants.

24 May 1999 : Column 747

The current system has several problems. For example, decisions on claims are fragmented and notifications are confusing. Getting mistakes put right is complicated and claimants often have to appeal. Then appeals take far too long to decide--seven months on average with some appellants waiting over a year for a decision. The appeals system is complicated. There are five different sorts of tribunal, each with different rules. A three-member tribunal hears all cases, however complicated or straightforward; and appeals which have no prospect of success (because they are counter to the law) still have to be handled in the usual way, without explanation, so appellants wait months only to find that their appeal could not have succeeded by definition. For example, they may claim DLA for a child under five and the law makes it clear that no child under five can be paid DLA.

Under DMA, some essentials will not change. As now, claimants and clients will get decisions based on the facts and law with the right of appeal to an independent tribunal. But under the new system, the focus will be on getting the decision right first time. Claimants unhappy with a decision will be invited to contact the decision-maker within one month of the date of notification decision. This will give them the opportunity to examine with the decision-maker the reasons behind the decision and to correct any errors. If the decision is found to be wrong, it can be put right without the need for the individual to go to appeal. Appeal tribunals will be able to focus on the issues raised in the appeal. As we discussed at great length in Committee, and on the previous Bill, the tribunals will comprise one, two or three members with the appropriate expertise for the issues raised. Appeals which have no prospect of success will be handled more quickly. Demanding targets for the administration of appeals will be published and the results reported on.

The settlement of disputes by agreement, without the need for a formal appeal hearing, has been the cornerstone of tax appeals since the very beginning. Only those cases where the Revenue cannot come to an agreement with the appellant go before the tax appeal commissioners.

Putting all that together, we believe that we shall be streamlining the appeals system, with a unified appeal tribunal system for employees. The appeal will go before a one, two or three member tribunal as need be. That will allow for greater and more adequate deployment of skilled staff and will lead to more expeditious hearings. It will break into the backlog and lead to a more efficient procedure.

That may meet the point raised by the noble Lord about the workload increasing and the budget reducing. The workload will be handled in such a different way that it will be on a new basis of costing. I shall be happy to write to the noble Lord with a further explanation of the costs of the new system.

10.15 p.m.

Lord Higgins: My Lords, will the Minister confirm the figures that I quoted? Was there a cut in real terms

24 May 1999 : Column 748

as regards the budget of the ITS between 1998-99 and 1999-2000? I may have missed her reply as regards the number of appeals expected under the new system compared with the old.

Next Section Back to Table of Contents Lords Hansard Home Page