Clause 6 - Notifications of changes of circumstances

Part of Tax Credits Bill – in a Public Bill Committee at 6:15 pm on 15 January 2002.

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Photo of Steve Webb Steve Webb Shadow Secretary of State for Work and Pensions 6:15, 15 January 2002

I speak in support of amendment No. 83. The time scale for notification of a change of circumstance will be set out in regulations, but if the amendment were accepted, regulations would have to specify a notice period of

''not less than three months''.

It is perhaps worth pointing out my concern—shared, I suspect, by both Opposition parties—that the debate is being conducted in the absence of any draft regulations. I tabled a question, asking that we see such regulations before or during our deliberations; indeed, to see them at any point would be nice. It is tempting to say that regulations are about detail and the Bill is about principle, so we do not need to see them, but the line between detail and principle is slightly fuzzy. If the implications of certain regulations prove particularly extreme, the entire principle that we are debating will be undermined. I register my concern, therefore, about the lack of even draft regulations. Failure to provide draft regulations is not universal. In fact, draft regulations were available to the Committee that debated the previous Tax Credits Bill. I therefore hope that the Minister can offer a time scale in that regard.

Amendment No. 83 would, to a limited extent, circumscribe what the regulations may say, given that we have yet to see them. We are trying not to write the regulations into the Bill, but simply to establish the parameters in which they operate.

One example of a change in circumstance—the ending or starting of a relationship—would be reportable in all cases. The issue has been drawn to our attention by the Low Income Tax Reform Group, which, like the National Association of Citizens Advice Bureaux, has first-hand experience of the client group in question. The group states that, where two people's

''relationship ends in tragic circumstances . . . their first reaction is unlikely to be—Ah! We must inform the Inland Revenue straight away because section 5(3) of the Tax Credits Act''

requires that we do so. It is clear that they must inform the Inland Revenue at some point, but we should bear it in mind that, just because one partner has walked out, it is not certain that the relationship is definitely over. It may not become apparent for some weeks or months that that is final. That is just one example of how the establishment in regulations of a short notice period would be rather unfair on that client group.

Obviously, there is a balance to be struck, and we must also consider administrative convenience and the interests of the taxpayer. A period of three months does indeed strike the right balance—a view that is shared by the Low Income Tax Reform Group. As it modestly says, its representatives are

''those who habitually advise potential tax credit claimants'',

and who are very familiar with the circumstances that we are discussing.

As I have said, we are not trying to write the regulations into the Bill. Instead, the purpose of our

amendment, given that we have yet to see the regulations, is to establish some parameters.