Clause 23 - Payments

Tax Credits Bill – in a Public Bill Committee at on 22 January 2002.

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Amendment proposed [this day]: No. 101, in page 16, line 21, at end insert—

'provided that the regulations shall not directly or indirectly require the recipient to hold a bank account'.—[Mr. Flight.]

Question again proposed, That the amendment be made.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford 4:30, 22 January 2002

I remind the Committee that with this we are taking amendment No. 113, in page 16, line 21, at end insert—

'provided that the regulations shall provide that payment shall be through post offices where the claimant elects for payment by such method'.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

I welcome you to the Chair, Mr. Beard. At our previous sitting, I was first seeking a clear answer from the Minister about whether the Bill will provide for tax credits to be paid via coupons at post offices in the event that the universal bank arrangements are not up and running by April 2003. In other words, will there be a safety proviso to ensure that tax credits are paid? Secondly, as a matter of principle, if claimants, for whatever bona fide reason, wish to be paid directly at post offices via a coupon process when the new arrangements with the universal bank are in place, can they continue to be paid in that way?

Photo of Dawn Primarolo Dawn Primarolo Paymaster General (HM Treasury)

I am happy to clarify those points for the hon. Gentleman. As I have explained, the preferred arrangements in connection with social exclusion, the development of the high street banks and the new types of accounts, and the post office is to transfer the money directly to a point at which the correct person receives it into an account from which he could draw the money. That would take account of a person's choice of using a post office, which was the first major point raised by the hon. Member for Arundel and South Downs (Mr. Flight).

I had misunderstood slightly the hon. Gentleman's second point and I am grateful for his clarification of it today. The Bill provides for regulations that give the Inland Revenue the power to make payment directly to a bank account. That is our preferred option, as it will ensure that we further eliminate fraud when order books are mislaid, lost or used in ways in which they were not intended to be used. However, the regulations are permissive in that, although that is the preferred route, the Inland Revenue will still have the power to pay the person directly by a giro payment. I do not want to leave the Committee in any doubt. However, we shall encourage people to have accounts into which the money can be paid.

The hon. Gentleman wanted to ascertain whether the Bill provides powers to pay directly into bank accounts and removes the power to pay by the alternative giro payment method. I can confirm that both methods can be used. However, we could not send a brown envelope stuffed with cash. The two traditional methods of payment to which I have referred will remain, although as we progress with the universal bank, the work on the high street banks and the social exclusion agenda, we expect that payment will be made into bank accounts, but obviously there will be some exceptions.

Photo of Mr Howard Flight Mr Howard Flight Conservative, Arundel and South Downs

I thank the Minister for that clarification. I shall withdraw my amendment, but strongly advise her to get the plans to pay by coupon up and running because no one working on the universal bank—at least not those with whom I am in contact—expects it to be up and running by April 2003. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Photo of Mr Nigel Beard Mr Nigel Beard Labour, Bexleyheath and Crayford

We now come to the Programming Sub-Committee's further programme motion, which has been circulated.

Ordered,

That the Resolution of the Committee of 15 January be amended as follows—

(1) in paragraph (1), at end insert 'save that on Thursday 24 January the Committee shall meet between half-past Nine o'clock and half-past Ten o'clock and at Two o'clock; and

(2) paragraph (4) is omitted.—[Dawn Primarolo.]

Clause 23 ordered to stand part of the Bill.

Clause 24 ordered to stand part of the Bill.