Report on the Legislative Consent Motion associated with the Westminster Welfare Reform Bill

Legislative Consent Motion Westminster Welfare Reform Bill

• The Minister for Social Development is to table the following Legislative Consent Motion for debate in the Assembly on 28 June 2011:

“That this Assembly agrees that the provisions in clauses 122 and 123 of the Welfare Reform Bill, as amended at Committee Stage in the House of Commons, dealing with the transfer of tax credit functions and the supply of information by a Northern Ireland Department, or by a person providing services to a Northern Ireland Department, should be considered by the UK Parliament.”

• The Committee agreed to prepare a short Report to be sent to all MLAs in advance of the debate. This Report, agreed by the Committee at its meeting of 16 June 2011, is attached and includes a summary of the Committee’s consideration of the Legislative Consent Motion, correspondence from DSD, correspondence from the Committee for Finance and Personnel and the relevant Hansard minutes of evidence.

Yours sincerely,
Alex Maskey MLA
Chairperson
Committee for Social Development

Report on the Legislative Consent Motion associated with the Westminster Welfare Reform Bill

Contents

Background

Committee Consideration

Details of the Westminster Welfare Reform Bill

Appendices

Minutes of Evidence

Departmental Correspondence

Other Correspondence

Background

1. The Department advised the Committee for Social Development that the Westminster Welfare Reform Bill was introduced at Westminster on 16 February 2011. The Bill contains provisions relating to Northern Ireland which are the subject of a Legislative Consent Motion. These are set out below.

2. The areas of the Bill that apply to Northern Ireland and require a Legislative Consent Motion includes provisions relating to the transfer of tax credits functions and the supply of information by a Northern Ireland Department, or by a person providing services to a Northern Ireland Department.

3. The relevant proposals in the Welfare Reform Bill, as amended in the House of Commons, are clauses 122 and 123. These provide for:

(i) an Order in Council to be made to allow new functions to be given or functions to be removed from HM Treasury, HM Revenue and Customs and a Northern Ireland Department. The power to allocate or remove functions is purely consequential on the transfer of functions on tax credits from HM Revenue and Customs and HM Treasury to the Department for Work and Pensions; and

(ii) the use or supply of information held for purposes connected with tax credits to ensure that there is a clear legal basis for data sharing between the Department for Work and Pensions, HM Revenue and Customs and a Northern Ireland Department

Committee Consideration

4. The Department for Social Development wrote to the Committee on 2 June 2011 indicating that the Executive’s support was to be sought for the Legislative Consent Motion associated with the aspects of the Welfare Reform Bill described above. The Department’s letter and accompanying explanatory information are included in the appendices below.

5. On 9 June 2011, the Committee took evidence from Departmental officials on the proposed Legislative Consent Motion. The officials explained that the Legislative Consent Motion applied solely to the provisions in clauses 122 and 123 which are minor and technical in nature.

6. The Social Development Committee agreed that it would support the Legislative Consent Motion in relation to a ‘ transfer of tax credits functions and the supply of information by a Northern Ireland Department or by a person providing services to a Northern Ireland Department’ .

Details of the Westminster Welfare Reform Bill

7. It is proposed that the Working Tax Credit and Child Tax Credit, which are administered by HM Revenue and Customs (HMRC) will be replaced by Universal Credit which will be administered by the Department for Work and Pensions (DWP). To enable the Department for Work and Pensions to manage the transition process, it may be desirable to transfer tax credits functions from HMRC to DWP. The Westminster Reform Bill contains an Order-making power to make consequential provisions including the power to allow the transfer of functions (Clause 122).

8. Following the transfer of functions, DWP will need to be able to gain access to certain HMRC data and will also need to be able to provide data relating to tax credits to other Departments. There is provision in the Bill to allow for a wider, single, two-way data sharing gateway between DWP, HMRC and relevant Northern Ireland Departments so that information can be shared to facilitate discharge of their respective functions (Clause 123). DSD advised that this is not a completely new provision as current legislation for data sharing already extends to Northern Ireland and it is proposed that the provisions in the Bill should provide for this continue to be the case.

9. The Committee also noted that the Welfare Reform Bill includes other provisions which are set out in the DSD papers below and which are not the subject of the Legislative Consent Motion, notably:

• The Bill will introduce Universal Credit- an integrated working-age benefit to be paid to people both in an out of work from 2013. It will replace working tax credit, child tax credit, housing benefit, income support, income-based jobseeker’s allowance and income related employment and support allowance.

• The Bill provides for the introduction of a claimant commitment. This will be a record of the requirements claimants are expected to meet in order receive benefit and the consequences should they fail to do so.

• The Bill will implement changes to Industrial Injuries Benefit, Housing Benefit and the up-rating of Local Housing Allowance rates. The Bill also provides for the abolition of Social Fund Community Care Grants and Crisis Loans. Budgeting loans and alignment loans are to be replaced by a new nationally administered advance of benefit facility.

• The Bill will make changes to Pension Credit so that a member of a couple who has attained the qualifying age for state pension credit may not receive state pension credit if the other member of the couple has not attained that qualifying age.

• The Bill will replace Disability Living allowance with a new cash benefit to be called Personal Independence Payment.

• The Bill will introduce provisions on a cap of benefit payments and measures to deal with benefit and tax credit fraud.