Tax Credits Bill

– in the House of Lords at 6:52 pm on 13th June 2002.

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Votes in this debate

On Question, Motion agreed to.

Clause 24 [Payments]:

Photo of Baroness Byford Baroness Byford Conservative

moved Amendment No. 88:

Page 18, line 6, at end insert ", provided that nothing in any such regulations shall exclude credit documents cashable at post offices unless the Board is reasonably satisfied that necessary facilities are in place for every claimant to receive payment by other prescribed means"

Photo of Baroness Byford Baroness Byford Conservative

My Lords, before speaking to Amendment No. 88, I declare an interest as patron of VERSA which has carried out a lot of work with post offices and particularly with small retail services. I receive no money. It is an educational charity that tries to help and to support small rural shops in rural areas.

In tabling this amendment I am trying to ensure that every claimant receives his or her money. My determination was further strengthened by today's Statement on Consignia. In Committee on 23rd May the Minister referred to the payment methods that the Government expect to be put in place over the next couple of years. The most important aspect of the Bill from a tax credit client's point of view is access to one of the said methods and immediate access in time of need.

In Committee the Minister stressed that the Prime Minister and the Paymaster General are agreed that the requirement to receive payment electronically will cut in only when those facilities are in place. That confirmation was welcome. Additionally, I seek assurance that not only will the facilities be in place, but also that anyone requiring to use them will be able to do so. Also in Committee the Minister assured the noble Earl, Lord Russell, that,

"The point is that this will not come into place until the payment methods are available and appropriate".—[Official Report, 23/5/02; col. CWH 178.]

This Bill is concerned with introducing systems; I am concerned with enabling individuals, often at a time of great need, to gain access to their financial entitlement. So I take issue with the words "available" and "appropriate". The individual will need to access available facilities within a reasonable distance of his or her home. That applies particularly to the less well off in areas where public transport is often lacking or expensive. Will the Minister expand on how available the Government envisage those facilities will be? In considering the word "appropriate", I recall my English teacher banning the word from our essays on the ground that it is a catch-all word and effectively meaningless. Can the Minister explain the definition that she has in mind?

The purpose of Amendment No. 88 is to ensure that the board takes responsibility for ascertaining that the facilities necessary for each claimant to receive benefit are in place. It makes the point that every claimant shall be able to receive payment. The board has a duty of care and a responsibility to ensure that each claimant receives his or her money.

I turn to the availability and accessibility of post offices, the main way in which many receive their payments. My concerns grow. I begin to wonder whether anyone truly knows exactly how many post offices there are and where they are. Again on 23rd May the Minister said that,

"85 per cent of people in rural parishes live within two miles of a rural post office; the average distance is 1.23 miles".—[Official Report, 23/5/02; col. CWH 179.]

I do not doubt that, but I shall return to that point later. First, I ask the Minister to define "rural" in the context of the Bill. I understand that only two years ago the recognised figure was 6,000 inhabitants, but that was altered to 10,000 inhabitants. I believe that that is the current figure.

When assessing how far people live from a post office or a sub-post office, is a circle drawn on a map with a compass to indicate a mile, so that the distance is taken as the crow flies and not as one would walk or cycle, which could be quite different? I decided to pursue the matter further and to find out more.

The Countryside Agency in its 2002 report—just published—states that,

"one in every 15 rural households (6.5% of the rural population) are more than two kilometres from their nearest post office".

Some 546 rural post offices closed between 1997 and 2000. That reflected the decline at parish level in the availability of post offices from 57 per cent of parishes with a post office in 1997 to 54 per cent in 2000. A further 5 per cent of rural post offices closed in 2000-01.

I then turned to Consignia's figures from Post Office Limited, which state that the average distance to a post office in rural areas is 0.7 miles, with 84 per cent of the rural population living within one mile of a post office. I turned again. The Performance and Innovation Unit in 2000 gave yet different figures: 85 per cent of rural populations live within one mile of a post office and 99 per cent of rural populations live within three miles. I turned again. Postcomm 2001 statistics say that 93.7 per cent of households live within two kilometres of a post office in England and that 0.23 per cent live more than four kilometres away.

I am sure that noble Lords will be as confused as I am. It did not give me confidence in the current position. Additionally, the Consignia figures for the closures of post offices in rural areas for 2000 and 2001 combined come to some 929. The Postwatch figure is 809 for the same period, of which 80 per cent were in rural areas. At the very least there appears to be major confusion. One organisation states that there were 929 closures and another says 809. In one year, 120 post offices are either unaccounted for or accounted for in differing ways.

That is truly extraordinary, but in addition I was told the following story this afternoon. The village of Trull, pronounced "Trowel", in Somerset, is three and a half miles from Taunton. The national Post Office management, in encouraging urban postmasters to retire, asked Trull's postmaster to retire on the basis that it was one "urban post office too many". Despite protestations that he did not run an urban post office, it was many weeks before the Post Office manager came to visit him. On arrival at Trull's post office, he realised that it was indeed a rural, not urban, sub-post office.

I know that the Minister has not been involved in all the Statements on the Post Office, although she sat in on today's—I was glad she was here for it. However, she must appreciate that there is strong feeling in both this House and another place that it was iniquitous for the Government to put on the Post Office the cost of withdrawing the Horizon project, referred to by the noble Lord, Lord Dearing—who is not in his place—which meant that expenses of some £571 million were passed to it. The Government, in particular the Department of Social Security—as it was then—should have taken that cost on board.

If I have laboured the point, it is only to make the real point that where people are able to collect their credit from is important to them. The Minister has often implied that the matter is not her department's direct responsibility. I have to disagree with her. It is no use our bringing in new systems if the client cannot reasonably access that to which he is entitled. The Government must take some responsibility for their actions.

We live in an age where there have been many closures of post offices, banks and shops, which is as true of urban areas as it is of rural areas. The Government should understand and accept that many people are having to spend more of their benefits on the cost of travel to collect them. More often than not, those directly affected are the less well-off or the elderly.

I hope that the Minister will reflect on the feeling that I suspect will follow my introduction of Amendment No. 88. It is linked with Amendment No. 90 in the name of the noble Earl, Lord Russell, on which I hope to comment later when I have heard his contribution. Amendment No. 88 asks that,

"the Board is reasonably satisfied that necessary facilities are in place for every claimant to receive payment by other prescribed means".

I beg to move.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, for the convenience of the House I shall say that, should the amendment be accepted, I shall not move Amendment No. 90. Amendment No. 90 goes slightly further than this amendment, but were I able to take one pound of flesh I would not be greedy and ask for two.

The amendment is a matter of belt and braces. Although I cannot use the memorable line of the noble Lord, Lord Briggs, that that is something of which I have some professional knowledge, it is a matter of which I have at least some amateur knowledge. It was painfully clear this afternoon that the decline and collapse of the Post Office is proceeding a great deal faster than some of us expected. In the nature of administrative matters, especially when information technology is involved, it is possible that the growth of the universal bank may correspondingly happen a great deal slower than people expected.

This is not a matter of the Minister's good faith. We totally accept the Minister's good faith, but she is not omnipotent. The world might in some respects be better if she were, and I do not say that often. But she cannot control the working of every information technology contract and the working of the global economy. She can express a firm intention that the universal bank will be in place in time for the Bill, but she cannot be certain that it will happen.

There are some among us who foresaw the comments passed on the Post Office today. The gentleman I used to know as my noble friend Lord Thurso, to whom I must now get used to referring as my honourable friend Mr Thurso, put out a press release on 31st January, which stated that,

"Postcomm's decision to open up the postal market to full competition by 2006 would signal the death knell for the Post Office unless urgent action is taken to safeguard the Universal Service Agreement".

On 24th May, he pointed out that 2,000 Scottish households were ceasing to receive regular delivery. What is Scotland's case today may be England's tomorrow. The situation may become urgent at any moment.

However much the Minister says that it will be all right on the night—the motto of the noble Lord, Lord Peston—she cannot be certain that it is true. It is no good her saying that it will not be done until it is appropriate. When Mr Lennox-Boyd was Secretary of State for the Colonies, he once said that Cyprus would not be given independence until the appropriate moment. Aneurin Bevan pressed him hard as to what was the appropriate moment, and received the answer: "The appropriate moment is the appropriate moment".

Try as she would, I do not believe the Minister could say any more than that. This is a matter of people's lifelines. Plenty of people are already spending 10 per cent of their benefit on fares simply to collect it. There may soon be people with no opportunity at all to collect their benefit. I am not entering now into the argument about whether people should be disentitled to benefit, but they should not lose their benefit by accident. Do not die of ignorance; do not lose your benefit by accident. If the amendment is not carried, some people will.

Photo of The Earl of Northesk The Earl of Northesk Conservative

My Lords, once again I pay tribute to my noble friend Lady Byford for her dogged persistence and sincerity in pursuing this issue. As she and the noble Earl, Lord Russell, have told us, today's Statement on Consignia has added to rather than dissipated nervousness. Of course the Minister will give her customary reassurances on that matter. That is all good and well. But it begs the question posed by the noble Earl, Lord Russell, in Grand Committee, as to why those reassurances cannot be written in the Bill. Their currency and quality are such that surely there is nothing to be lost and potentially much to be gained in doing so. In terms, that is what our amendment seeks to do.

A theme of our debates has been the desire for all sides of the House to persuade the Government to acknowledge that the Inland Revenue, in taking over a benefit function has, as my noble friend Lady Byford said, a duty of care to those entitled to claim tax credits. Part and parcel of that duty of care is to deliver payment of tax credit claims via mechanisms appropriate—I hesitate to use the word for fear of incurring the wrath of my noble friend's erstwhile English teacher—to the needs and circumstances of individual claimants. Contrary to the Minister's suggestion in Grand Committee, this is not about dictating where post offices should be located, but about ensuring that the system offers the right levels of choice to its customers.

Without wishing to labour the point, I repeat that this is wholly consistent with the Performance and Innovation Unit's report, Reforming our public services: Principles into practice. That document, wholeheartedly endorsed by the Prime Minister, states on page 8:

"Public services . . . have to be refocused round the needs of the patients, the pupils, the passengers and the general public rather than the problems of those who provide the services".

And on page 11 it states:

"The starting point must be that the public has a right to good quality education, to healthcare, to law and order, to local authority services,"— and, the key point—

"to income support, and that it is the duty of the Government to secure these rights on their behalf".

The logical inference is that, as a necessary requirement of their duty of care to their tax credit customers, the Inland Revenue has a duty to secure the rights of individual claimants in ways that ensure that the level of service is focused on their needs. In other words, the amendment is wholly consistent with the policy initiative outlined by the Performance and Innovation Unit and endorsed so fulsomely by the Prime Minister. In such circumstances, I cannot resist suggesting that it would be somewhat strange were the Government to resist the amendment. For our part, we on these Benches support it wholeheartedly.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I agree with the noble Earl, Lord Northesk, that this is not a debate about the location of post offices. The noble Baroness spent part of her speech on that issue but we are not dealing with it today.

The amendment seeks to ensure that payment facilities at post offices, wherever they may be located, are adequate and appropriate for clients. Ultimately, post offices survive because they are used. A statistic I have given the noble Baroness previously indicates that half the Post Offices which were closed last year were used, on average, by fewer than 70 people per week. One cannot expect any government department artificially to keep alive a post office for which there appears to be no local demand.

I am second to none in my respect for the noble Baroness in continuing to draw the matter to our attention. However, as the noble Earl, Lord Northesk, said, we are not debating that matter. We are debating the facilities at those post offices.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, will the Minister tell us why 70 people starving because they cannot obtain benefits is less serious than 70 people dying in a train crash?

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, no one has said anything about 70 people starving because they cannot obtain benefits. I said that in half of the post offices which were closed last year on average fewer than 70 people used them each week. Perhaps those people could have gone elsewhere and chose not to.

Given the cost of subsidy of rural post offices, the noble Earl will know that it would cost almost as much to send a car to take each individual user of the post office to the nearest town. Ultimately, post offices survive because they meet a demand and a need. If they are not being used and supported by local communities, it is hard to expect government subsidies to keep them afloat at considerable cost.

I had hoped that today we could stay with the substance of the amendment—that is, the payment methods—and we seek to reassure your Lordships that with ACT we are widening the methods of payment. I hope that I shall be able further to reassure your Lordships that as a result of our policies and the commitments already given by the Prime Minister and the Government, claimants will be able to receive direct payments in cash by some means other than ACT if there is a delay before the proposed Post Office card account becomes available to clients who are unable to obtain a normal or new basic bank account with a high street bank.

Amendment No. 88 suggests that until suitable alternative payment mechanisms are available to all claimants the regulations should not prevent payment by some method of credit document cashable at the post office. I do not disagree with that. My question to the noble Baroness, Lady Byford, is: why do we need to place such a provision on the face of the Bill? It does nothing more than prevent us from ruling out forms of payment cashable at the post office until such time as other payment facilities are available to claimants. I agree with that, so the issue between us is how to give that assurance.

I ask the noble Baroness why she believes that the published draft regulations which she will have and which cover the matter precisely do not meet her concerns. I give way to the noble Baroness. Will she please tell me why the draft regulations do not meet her concerns? As I read them, they do precisely that and the only difference between us is whether the provisions should be contained in regulations or appear on the face of the Bill.

Photo of Baroness Byford Baroness Byford Conservative

My Lords, I am grateful to the Minister for giving way. I have tried not to make today's debate a post offices issue but to highlight the difficult issue of where those people will go. The Minister said that half the people—

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, this is not Committee stage. I asked the noble Baroness a specific question; I did not invite her to repeat her speech about the location of post offices. Why does she believe that the published draft regulations do not meet the proposal made in the amendment and that until adequate alternative facilities are in place people will not be able to obtain money by credit documents? Why does she believe that the regulations do not meet her concerns?

Photo of Baroness Byford Baroness Byford Conservative

My Lords, I am grateful to the Minister. I tabled the amendment because I would rather see the provisions on the face of the Bill. I know that they are contained in regulations and I do not see why the Government are not willing to accept this sensible amendment and put them on the face of the Bill.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, am I therefore right to assume that the noble Baroness agrees that the issue is fully covered by the regulations and that we are merely arguing about its location?

Photo of Baroness Byford Baroness Byford Conservative

My Lords, no, I do not believe that I am. Perhaps I may return to my original point, and I realise that we are not in Committee. I give way to the noble Earl.

Photo of Earl Russell Earl Russell Liberal Democrat

My Lords, does the noble Baroness agree that regulations, when they prove inconvenient to a government, can be revoked instantly but that repealing an Act takes some time?

Photo of Baroness Byford Baroness Byford Conservative

My Lords, I am grateful to the noble Earl for that intervention. I have taken one or two Bills through the House and I reckon that a provision in regulations does not have the same implication as on the face of a Bill. The noble Earl has made my point.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, I suggest that this is not an issue for the face of the Bill. Regulation 12(iv) relates to methods of payment and when they are to commence. It states:

"This regulation does not have effect in relation to claims for a tax credit made before . . . 2003".

That is to be filled in when the regulations come before your Lordships' House and the other place in due course, as and when we are confident about the delivery outlets at local post offices. I believe that meets precisely the point which the noble Baroness is pursuing.

I do not want to argue the virtues of ACT over cash books, giros or order books. I suggest that the concerns of the noble Baroness are met in the regulations and the assurances given by the Paymaster General on 7th February 2002 in which he said that if accounts were not in place other methods would have to be found to ensure that the money reached the claimants. We have the power to deal with that.

I believe that the points raised in the amendment are fully addressed by the regulations and the assurance, and that the provisions should appropriately appear in regulations. It is not sensible to put such a level of detail on the face of the Bill. Provisions such as this have never appeared in any of the social security Bills I have handled and I do not believe this is the right time to start to try it.

We have been able to give assurances and there is no difference between us on policy. The only difference is where those assurances should be located—in regulations or on the face of the Bill. I hope that as a result of that the noble Baroness will feel able to withdraw her amendment.

Photo of Baroness Byford Baroness Byford Conservative

My Lords, I have listened carefully to what the Minister has said and I understand where she is coming from. However, as she would not earlier allow me to expand the reason for my concern perhaps this is the moment for me to do so. The payment must be made somewhere. The crux of the matter is whether it is to be made at a post office or whether other arrangements are to be made. The Minister may well scratch her head and be very cross and irritated by me, but I believe that those 70 people need to know that they will be able to obtain their money from somewhere. I do not mind where it is, but nowhere in the Bill is such an assurance given.

Today's Statement on Consignia only goes to show how fragile the position is. We all wish Consignia well and hope that it recovers and strengthens. We hope that more people will use the post offices, but, as the Minister said, half of those which closed had fewer than 70 customers a week. Where are those people expected to go in order to make their claims and obtain their money? I have not received a satisfactory answer. I am happy to give way to the Minister again if she can define the position more clearly. No, I presume that she does not wish to do so.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions)

My Lords, the reason I am not responding is that this is not a general debate on the future, location and services of post offices. I am trying to deal with an amendment at Report stage which relates to methods of payment at existing post offices. I have addressed my remarks to that and to the assurances on which the noble Baroness and the noble Earl have pressed me that we shall not go over to ACT across the board until we are confident that it is available to all who need to use it. What is more, the regulations go further. We say that in exceptional circumstances, even with ACT throughout the system, people will still be able to use other forms of access such as credit documents. That is what I am dealing with, the amendment on the Marshalled List—not with a Second Reading debate about post offices and their location. That is why I have not responded to the noble Baroness's point about distance, location, as the crow flies, rural density, size of catchment area and so on. Those are entirely proper issues for another debate.

Photo of Baroness Byford Baroness Byford Conservative

My Lords, I thank the Minister. Sadly, she and I are obviously not going to have a meeting of minds. The issue is important and I care strongly about it. I do not mind if payment is not made at post offices, but I mind that we do not know how people are going to access their entitlement. I am very disappointed with the noble Baroness who is normally so conscientious. I seek to test the opinion of the House.

On Question, Whether the said amendment (No.88) shall be agreed to?

Their Lordships divided: Contents, 70; Not-Contents, 92.

Division number 1 Private Parking: Ports and Trading Estates — Tax Credits Bill

Aye: 68 Members of the House of Lords

No: 90 Members of the House of Lords

Ayes: A-Z by last name

Tellers

Nos: A-Z by last name

Tellers

Resolved in the negative, and amendment disagreed to accordingly.

Photo of Baroness Hollis of Heigham Baroness Hollis of Heigham Parliamentary Under-Secretary, Department for Work and Pensions, Parliamentary Under-Secretary (Department for Work and Pensions) 7:31 pm, 13th June 2002

My Lords, I beg to move that further consideration on Report be now adjourned. In moving this Motion, may I suggest that the Report stage begins again not before 8.30 p.m.

Moved accordingly, and, on Question, Motion agreed to.