Child Benefit Bill – in a Public Bill Committee at 4:00 pm on 18 January 2005.

Alert me about debates like this

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury) 4:00, 18 January 2005

I beg to move amendment No. 7, in clause 6, page 2, line 37, leave out '2006' and insert '2005'.

As I indicated earlier, I shall touch on something the Paymaster General said about announcements that may be forthcoming in the Budget. The associated draft regulations that accompany the Bill do not specify under the heading ''Siting: Commencement and Effect'' the date on which the regulations shall come into force. That is left blank. The regulations state that they shall have effect on and after 10 April 2006.

The amendment would bring the Bill's provisions into effect at the start of the forthcoming financial year—in April 2005, as opposed to April 2006. It is an attempt to probe the Government's thinking on the timing of the Bill and some of the related elements that were mentioned on Second Reading. The Government have been working for some time on a changed suite of financial support for young people. Part of their rationale for doing so is the complexity of the current system, which was almost universally accepted on all sides of the House on Second Reading. That is not a point of contention.

One issue here is the progress made by the Government on the rest of their proposed changes. During the winding-up speeches on Second Reading, I pressed the Economic Secretary on whether we could expect a more definitive announcement in the 2005 Budget. He did not appear able to answer my question and rather glossed over it, so we intimated to the Government that we were likely to press the matter further in Committee. I am grateful to the Paymaster General that the Government have taken some notice of the fact that we wanted to concentrate on this point. She has come up with an announcement that we can expect further news on all those subjects in the Budget for 2005, so we look forward to that in due course.

I appreciate that the Paymaster General will not want to pre-empt the Budget announcements entirely, but it would be helpful if she could give us an intimation of whether we can expect some further incremental announcement in the Budget, or if we are likely then to receive the complete package, as it were. There was some mention on Second Reading of a White Paper, unless I am mistaken. Perhaps the Paymaster General will confirm whether a White Paper on these matters is likely to be issued with the Budget, even if she is not able, for obvious reasons—although it would be lovely if she could—to tell us this afternoon what exactly that White Paper is likely to contain.

In addition, if the Government's intention in the Bill—which, I reiterate, is meant to be an interim measure—is to correct an anomaly, why is it that the changes are not to be introduced as soon as practicable, at the start of this financial year? We appear to be in the curious position of trying to rush a Bill through the House—we are certainly not taking it in slow time—only to wait more than a year for its   provisions to come into force. It would be helpful to have some explanation from the Government of why they are pursuing their course of action at such a pace. There may be some who wonder whether there is an electoral reason for all this. Over the next few months, people will be looking for electoral motivations in all sorts of Government announcements. Will the Paymaster General tell us whether there is some other rationale for what the Government want to do?

Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

I rise, briefly, to express my surprise at the amendment, and particularly at the way in which it was moved by the hon. Member for Rayleigh. Were the Bill being rushed through the House—to use the verb that he used—it seems unlikely that it would receive Royal Assent before the end of February, at the earliest. Were that to be the case, his amendment having been carried, he would be suggesting quite a major change in the way we categorise some young people—in the sense of trying to find out who they are—and paying out about £2 million a week. That would give only six weeks' notice to the Department for Work and Pensions, during which period Easter falls. Does he really think that six weeks would be sufficient? That is a tight timetable, positing hypothetically that the Bill, with the hon. Gentleman's amendment, might receive Royal Assent by the end of February.

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

I shall deal with the three points made by the hon. Member for Rayleigh. I touch first on the consultation and what will be available in the Budget 2005. Let me try this for the third time: the consultation that is outstanding, which is to be reported on in the Budget 2005, is on when a young person becomes independent—what the dependence/independence point is. We need to be informed about that in order to move forward on achieving the objective of financial independence. The hon. Gentleman may be surprised to hear that there is not agreement on that definition. For all the concerns that the Opposition raised in the previous debate about what was and was not meant in certain parts of the document, those who study the detail do not find that there is a lack of clarity.

Earlier this afternoon, the hon. Member for Rayleigh lamented the fact that he had not had enough information from us. The consultation that he mentioned is not to do with this Bill, but deals with the definition that I mentioned. The outcome of those discussions should enable us to settle on what we mean, so that we can use that definition constructively in taking the debate forward about the independence of 16 to 19-year-olds. That is the first point—I am speaking slowly so that it sinks in.

Secondly, the White Papers that were referred to on Second Reading in my recollection were twofold. The first one was referred to in an intervention. I pointed out that we were awaiting the Government's response on the 14 to 19 review—the Tomlinson review—and that when that response was published we would have to factor it into our considerations. The second issue was prompted by another Conservative Member, with regard to advice that would be given to young people   so that they were aware of their choices. I responded to that by saying that the Government's intention was to produce a youth White Paper, which, as I understood from what the Ministers at the DFES had said to me, would deal specifically with many issues concerned with young people and youth service, including advice. That was the second White Paper. Let us separate what is a White Paper, a consultation and what will be done in the Budget 2005.

Finally, there was the question of moving the commencement date forward. This proposal fascinates me, coming as it does from a party that normally tries to kick the Government from pillar to post about not making IT changes at speed in case they do not work, and about the procedures of the House. My hon. Friend the Member for Wolverhampton, South-West is correct to say that in order to be able to start making the IT operational changes for child benefit, child tax credit, income support and education maintenance allowances by April 2005, the Bill would have to have Royal Assent by 10 February. Much as I support it, I doubt that that will be possible. If we attempted to act in advance of Royal Assent, we would be in breach of the rule that Acts should not come into force earlier than two months after Royal Assent; it would require agreement through several procedures.

The interaction between finding a slot for measures requiring primary legislation, IT changes, programming computers and parliamentary rules regrettably means that the start date will be in 2006. Although I share my hon. Friend's enthusiasm for bringing in the proposals as soon as possible, we must comply with the parliamentary procedures, and take account of the fact that there will be big changes in the IT systems. I hope that I have responded adequately to what I take to be a probing amendment, and explained why it is not possible for the proposals to be brought in as early as we would wish. I hope that I have answered the questions asked by the hon. Member for Rayleigh.

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury) 4:15, 18 January 2005

I take the Paymaster General's point about IT, on which we have crossed swords before. As she knows, I take an interest in the matter and she will therefore not be surprised if I press her further. The Bill will come into force in about 14 or 15 months. Is she telling the Committee that that is exactly how long it will take to re-programme the computers? What is the Government's estimate of how long that will take?

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

With respect, the hon. Gentleman is being silly. We have to take into account matters such as when assessments are made, how payments are made directly to recipients, the start of the tax year, and the fact that the child benefit changes are aligned with the child tax credits, which require them to start at a particular point—the beginning of the financial year. By starting all the systems at the same time, and specifying only a small number of requirements for those seeking access to the payments, we have tried to make things as simple as we possibly can, as even a   brief consideration of the proposal will show. Given that we work to financial years, it is never sensible to change rules mid-year if that can be avoided.

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury)

I have listened carefully to the Paymaster General. She is quite right; the amendment was tabled as a probing amendment to test the Government's thinking about timing. I am therefore grateful that they have provided the Committee with further information about their intentions.

I also thank the right hon. Lady for telling us which White Papers are likely to appear in the spring. There is no dichotomy; it is logical that a White Paper from the Department for Education and Skills on youth and youth services may have financial implications. Therefore it would not be surprising if there were an announcement in the Budget to give it some financial meat. I am grateful to her for confirming the likelihood of there being a White Paper; she also confirmed the likelihood of related statements in the Budget in spring 2005. That clarification adds to the information that was available on Second Reading and I thank her for putting it in the public domain.

To return to the matter of commencement, I take the right hon. Lady's points about parliamentary rules, IT, and starting at the beginning of the financial year, which has the asset of neatness as much as anything else. However, she also said that the change was intended to come in alongside related alterations to child tax credit. She may be surprised to hear me point out that there has been tremendous difficulty with tax credits in the round, but I will not rehearse that because we gave it a very good go on the Second Reading of the Commissioners for Revenue and Customs Bill. Suffice it to say that we have had a number of exchanges across the Floor of the House about problems with the tax credit system.

The Paymaster General has acknowledged that there are still difficulties with the system that have still not yet been fully sorted out. Because the changes in the Bill have to take place in parallel with changes to the tax credit system, associated technical problems have implications for timing. If child benefit were not linked entirely to child tax credit, or if the tax credit system was operating more effectively, it might be possible to progress quicker. I shall leave it there, but I think that she understands my point.

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury)

Well, that is down to the right hon. Lady. There are still problems with the tax credit system, and they interrelate with child benefit, not least because in the supplementary partial regulatory impact assessment, one of the figures given for the costs of the measures merges the costs of child tax credit and child benefit—the Government were unable to break that figure into two separate columns, even when pressed on Second Reading. That being the case, perhaps she understands my point now.  

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

Tax credit is not holding up the process; it merely requires regulations changing the nature of the entitlement. Despite the hon. Gentlemen's low opinion of the tax credit computer system and the difficulties that we experienced in the early days, the system is perfectly capable of working. The problem is the requirement for primary legislation and cross-referencing with all other legislation to ensure that all laws are in line. I am sure that he will agree with that.

For completeness, since the hon. Gentleman is making a list of publications from the DFES, there will be two White Papers—one on skills, and the other on 14 to 19 curriculum reform—and a youth Green Paper, which was referred to on Second Reading. I am sure that he will wait for those and express his views accordingly.

Photo of Mark Francois Mark Francois Shadow Economic Secretary (Treasury)

We have a point of definite consensus, because I can confirm to the Paymaster General beyond peradventure that I look forward to the receipt of those documents with interest, as I am sure will hon. Members on both sides of the House.

We have had an explanation from the Government of why the timings of the Bill are as they are. We thank them for that. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 6 ordered to stand part of the Bill.

Photo of Anne Begg Anne Begg Labour, Aberdeen South

Order. Before we go on, the Paymaster General's microphone is apparently humming so the Hansard Reporter has requested that she use another one.