Clause 23 - Payments
Tax Credits Bill
4:30 pm
Ms Dawn Primarolo (Paymaster General, HM Treasury; Bristol South, Labour)
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.