Mr George Osborne (Tatton, Conservative)

I beg to move amendment No. 130, in

clause 11, page 6, line 29, at end insert

'provided that a person is shown to have acted fraudulently or negligently'.

The Financial Secretary is being unduly pessimistic about her career chances if she believes that she will still be in the post in 2009. These things are not in her gift, but I predict that she will be shadow Chancellor of the Exchequer.

Clause 11 deals with recouping Inland Revenue contributions, and amendment No. 130 is a probing amendment. The clause gives the Inland Revenue a general power to make regulations to recoup money from child trust funds. The explanatory notes state:

''This clause gives the Treasury power to make regulations requiring persons of a description specified in the regulations to repay to the Inland Revenue sums paid into accounts by the Inland Revenue''.

The clause does not specify under what circumstances that power will be given, and it does not give people much protection from the taxman. My amendment merely states that the Inland Revenue may recoup funds only where a person has acted ''fraudulently or negligently''. Those words are used elsewhere in the Bill.

If the Minister is not minded to agree to my amendment, which, given her record over the last few amendments, may well be the case, perhaps she will say that where the Inland Revenue has made a genuine mistake that is its fault, people will at least be allowed to keep the investment gains that they have made on the money put in by the Inland Revenue. It would be harsh if the Inland Revenue could suddenly claw back the gains that someone had made because, for instance, it had incorrectly credited them. This amendment would keep the Inland Revenue on its toes. However, it is intended to allow for a discussion about the wide-ranging powers that this clause gives to the Inland Revenue.

Ms Ruth Kelly (Financial Secretary, HM Treasury; Bolton West, Labour)

The hon. Gentleman is correct to say that we envisage in the main recovering child trust fund contributions only where fraud or negligence is involved: for example, where a child trust fund has been opened for an ineligible child; a child tax credit claim giving rise to a supplementary contribution is discovered to be excessive; or indeed where more than one CTF account has been opened for an eligible child.

Although we are making every effort to minimise any risk in the design of the IT system—I have debated this matter with the hon. Gentleman before—errors are always possible, and payments could be made in error even though no negligence or fraud was involved. If that were to happen, it would of course be right for the Inland Revenue to try to recover any excessive payments. Not to do so would be unfair to others and an improper use of Government money.

The amendment, by restricting recovery to situations of fraud or negligence, would prevent us from doing that. Clearly the Inland Revenue will have to make a judgment as to whether it recoups the value of the mistaken awards or whether it tries to recover any interest on those amounts. I take it that the Inland Revenue would recover the gains on the amounts as

well as the actual amounts. The main point is that it would be an unfair use of taxpayers' money were it not try to recover excessive payments, and on those grounds I urge the hon. Gentleman to withdraw his amendment.

Mr George Osborne (Tatton, Conservative)

For a second there I thought that the Minister was straying into generosity, but she received a note from a mysterious source and suddenly she was hard-nosed again. She said that people in such cases would not even be able to keep any gains from such an error made by the Inland Revenue. All I was trying to do with the amendment, as a humble legislator, was to restrain the over-mighty Executive. However, the over-mighty Executive have the majority in the Committee, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment proposed: No. 43, in

clause 11, page 6, line 31, after '10', insert

'or [additional contributions by Inland Revenue for children in care]'.—[Mr. Osborne.]

Question put, That the amendment be made.

The Committee proceeded to a Division.

Mr. Laws: On a point of order, Mr. Amess. Will you clarify for the benefit of all members of the Committee that we are now returning to the issue of

children in care, which we debated earlier, and that the question is effectively whether we should support the proposal of the hon. Member for Tatton that child benefit should be paid into the accounts of children in care?

The Chairman: The hon. Gentleman has described the position perfectly.

The Committee having divided: Ayes 4, Noes 10.