§ 3.37 p.m.
§ Lord Waddington
My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Local Government Finance Bill, has consented to place her prerogatives and interests, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.
Bill read a third time.
Clause 3 [Meaning of "dwelling"]:
Baroness Blatch moved Amendment No. 1:
Page 3, line 1, leave out ("or substitute another definition for").
§ The noble Baroness said: My Lords, Clause 3(6) allows the definition of a dwelling to be altered or substituted through regulations. Noble Lords have accepted that it is prudent to take a power to amend the definition. But doubts have been expressed about the desirability of allowing the Secretary of State to substitute an entirely new definition for that shown on the face of the Bill.
§ I made it clear that I had considerable sympathy with this view and undertook to consider the matter further. This amendment is being brought forward in the light of that consideration. The amendment retains the power to amend the definition in Clause 3, but removes the power to substitute it. I am sure that noble Lords will welcome this amendment. I beg to move.
§ Lord McIntosh of Haringey
My Lords, we wish to express our gratitude to the Minister for bringing forward this amendment which is, in effect, the same amendment as we brought forward on Report.
I like the touch of elegant variation, as Sir Ernest Gowers would have put it, which allows the Government to bring forward an amendment that quotes the words to be left out, whereas we indicated the words before and after those which were to be left out. However, I understand that the effect is the same.
We were grateful for the support of the noble Lord, Lord Jenkin of Roding, in particular as regards the amendment. It seems common sense that, although there may be amendments to a definition of a "dwelling", a complete substitution would be inappropriate. We are grateful to the Government for that concession.
387 On Question, amendment agreed to.
Clause 4 [Dwellings chargeable to council tax]:
Lord McIntosh of Haringey moved Amendment No. 2:
Page 3, line 19, at end insert:
("(c) the fact that there is no resident in the dwelling.").
§ The noble Lord said: My Lords, in moving this amendment, I shall speak also to Amendment No. 8. With these two amendments we return to the issue of the council tax to be levied on a second home.
§ Noble Lords will recall that as a result of lobbying, which was effective in one part of the Kingdom and not in another, second homes in Wales are subject to a full council tax, but for some inexplicable reason in England they are not. All kinds of spurious arguments have been put forward to defend that difference but they do not amount to very much.
§ Amendment No. 8 makes a straightforward proposal. It provides that there should be a full council tax payable on an unoccupied second home where there is no resident. Amendment No. 2 is intended—and I hope that the wording achieves it—to meet the point made by the noble Earl, Lord Balfour, on Report. He quoted the case of a man who might leave Scotland to look for work in Birmingham and find himself responsible for two council taxes.
§ Amendment No. 2 allows there to be a new class of dwelling; that is, a dwelling where there is no resident which can be treated separately for the purposes of discount. I hope that that meets the point raised by the noble Earl and that both amendments will be accepted as being the logical conclusion to the rather lengthy debates held on the subject. I beg to move.
§ Lord Renfrew of Kaimsthorn
My Lords, I am a little puzzled by the amendment. It seems to class a dwelling where there is no resident, such as a holiday home, within the category of an exempt dwelling; that is, a dwelling on which tax is not payable. That does not seem to fulfil the intentions which the noble Lord expressed; indeed, quite the converse.
It may be that I have misunderstood the position. But even if I have, I shall be interested to know why, in Amendment No. 8, we delete a phrase under Clause 11(2) yet no comparable provision is made in relation to Wales, which seems to be overlooked in the amendment. After all, Wales is dealt with in Clause 12(2). It may be that I have misunderstood the effect of the wording. At first reading it appears to entirely exempt second homes from council tax. If that is the case, I find it rather puzzling.
§ Baroness Blatch
My Lords, Amendments Nos. 2 and 8 both deal with properties which are no one's sole or main residence. The Government propose that such dwellings should normally be subject to a 50 per cent. discount. Amendment No. 8 would instead make them subject to a full bill. Curiously, Amendment No. 2 would go the other way; it is intended to allow the Secretary of State to exempt empty dwellings.
Let me explain the logic of the Government's proposal. In general, if a home has two or more residents, it will not attract a discount. Homes with one resident will get one discount. Homes with no residents will get two discounts. There is obviously a 388 simple idea behind this arrangement. Starting from the two-adult household, for every resident lost, one discount is gained. Let me now look at what would happen under Amendment No. 8. If one person moved out of a two-adult household one discount would be gained. But then if the second adult moved out, that discount would be lost again. That is perfectly bizarre. Amendment No. 8 would mean that an empty dwelling attracted a higher tax bill than a dwelling with just one resident. That cannot be the effect the noble Lord wished to achieve.
As I explained at Report stage, Amendment No. 8 would introduce incentives for couples with two homes to try to manipulate the system to their own advantage. Some such couples might well try to arrange matters so that it appeared that one of them was mainly resident in each dwelling, thus reducing their total tax liability. A system which contains incentives for abuse of this sort is not one which the Government can support.
Amendment No. 2 allows the Secretary of State to exempt dwellings with no residents. The Government accept that it will be appropriate to exempt some empty dwellings from the council tax. These will not be second homes: they will be dwellings in a number of categories which are empty for good reasons. We already have power to do that. Clause 4(4) lists factors to which the Secretary of State may refer in prescribing a class of dwellings as exempt. The list is not exclusive. The Secretary of State may use factors not listed in Clause 4(4) because it makes clear that it is without prejudice to the generality of Clause 4(3). Amendment No. 2 would insert an additional factor; namely, the fact that there is no resident in the dwelling. But Clause 4(4)(b) already allows the Secretary of State to refer to the fact that a dwelling is unoccupied. So the noble Lord's amendment is unnecessary.
It may help your Lordships if I indicate the use we intend to make of this power. A draft of the order we propose to make under Clause 4 is in the Library. Noble Lords will see that we propose to exempt the following classes of unoccupied dwelling: those which are undergoing major works, or where such works have been completed in the preceding six months; those left unoccupied for less than six months by a charity; those left unoccupied by a prisoner, a student, a deceased person, or someone who has moved away to provide or receive care; those left unoccupied because of unfitness, compulsory purchase or repossession; and those left unoccupied awaiting occupation by a clergyman.
While paragraph (b) refers to an unoccupied dwelling, the new paragraph (c) refers to one with no residents. Under Clause 6, that would mean that no one had their sole or main residence in the dwelling. The noble Lord is right to say that there is a distinction. If someone is resident in a dwelling, then clearly it will not be unoccupied. However, a dwelling may still be occupied even if it has no residents; for instance, a holiday cottage or a London flat used during the week by someone whose home—their sole or main residence—is in the country.
389 We have chosen to use the term "unoccupied" in the draft order because we think it would not be appropriate to treat a dwelling as empty if someone lives there from time to time, even though it is not his sole or main residence. But I would not expect there to be many cases where it would have made any difference to refer to dwellings where no one is resident.
As I explained, the noble Lord's amendment is not necessary. The power he suggests is already there in Clause 4(4) (b). I hope that he will therefore not press Amendment No. 2. I have explained to your Lordships the illogical results that would be produced by Amendment No. 8. I hope that that amendment also will not be pressed.
§ 3.45 p.m.
§ Lord McIntosh of Haringey
My Lords, I am grateful to the Minister for her detailed explanation of the cases which will be included in regulations, a draft of which I understood her to say is now available in the Library. That is helpful; it may answer some of the problems we seek to address in Amendment No. 2.
The difficulty that we saw with paragraph (b), which may be overcome by the Minister's explanation, is that the wording is ambiguous. It refers to dwellings that are unoccupied, whereas Ministers have told us at some length that the key test for council tax liability is residency and not being an occupier. The relationship between the two is not simple, and it is not self-evident as to which is the right way to express it.
With regard to Amendment No. 8 I can reassure the Minister that it is our intention, which I believe to be achieved by the amendment, that a full council tax should be payable on a second home and that there should not be the possibility of a single person discount, let alone the two single person discounts provided for at the moment. The amendment will bring England into line with Wales. There does not seem to be any significant difference between a second home in the Lake District, Wiltshire or Devon and one in Wales. I have never been persuaded by the arguments used by Ministers at earlier stages of the Bill.
I recognise that there are still difficulties with the wording of the amendment. I do not refer to the difficulties identified by the noble Lord, Lord Renfrew. They were adequately answered by the Minister. Because there are still difficulties and despite the fact that there are no later stages at which I can return, I think it best that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 6 [Persons liable to pay council tax]:
Baroness Hollis of Heigham moved Amendment No. 3:
Page 5, line 10, at end insert:
("( ) Where two or more people fall to be treated as jointly and severally liable under subsection (3) above and the persons concerned or any other persons managing the premises agrees, the levying or billing authority shall divide the liability for council tax equally between the persons who are jointly and severally liable and send separate bills to each of them.").
§ The noble Baroness said: My Lords, Amendment No. 3 returns to the issue of joint and several liability. The council tax Bill largely invents the problem of joint and several liability. However, we on this side of the House believe it to be unnecessary and consider that the problems associated with it would largely disappear were the Government and your Lordships minded to accept the amendment.
§ Joint and several liability occurs where a group of people are mutually responsible for the total bill and therefore for each other's share of it. It did not exist under the rates system except to some degree for spouses. The bill was the responsibility of the householder and he obtained rebate on it. Alternatively, several people in a flat could have separate bills and separate rebates. If the house was in multi-occupation, normally the landlord paid the rates and recharged it to tenants through rent. That gave one bill, one rebate; separate bills and separate rebates; or a landlord recharge.
§ Under the poll tax, being a head tax, joint and several liability did not arise either except as between spouses. Under the council tax it is extraordinarily complicated. We start with a single bill going to a liable householder and only the liable householder being eligible for rebate. But although there is only one bill and at the moment only one eligibility for rebate, two or three people of equal standing in the hierarchy of liability are jointly and severally liable for it. That applies not just to husband and wife but mother and son, brother and sister, two elderly friends, three young people who are friends or three strangers who are perhaps ex-offenders in a half-way house. They are all jointly and severally liable not just for their own share of the bill but for everyone else's as well, including the bills of strangers.
§ Therefore, the situation presents three problems. The first is the bill and how it should be shared if informal arrangements break down; for example, when a non-student moves into an all-student house, thus bringing with him a dowry of 75 per cent. of the bill. It presents a second problem of joint and several liability when one person departs leaving his debts to be jointly shared by those left behind. Thirdly, it leaves the problem of rebate because, if only the liable person can claim it, how does one cope with differential abilities to pay since the second low income adult discount applies only where there is no joint and several liability?
§ It is all very complicated and in our view quite unnecessarily so. We share with the Minister concern about the need for local authorities to get their bills properly paid. We share with the Minister concern about the need to relate rebates to ability to pay. We share with him concern about the need to keep any changes broadly and financially neutral so that there is no Exchequer subsidy. We share with the Minister concern about the need to keep the system as simple and straightforward as possible. There need be little that divides us.
§ We are suggesting that at the request of the co-owners and co-tenants they can split the bill and split the rebate. They will be responsible for their own portion of the bill. They will be eligible for part-rebate 391 on the part-bill and they will not be responsible for other people's debts. They will not be hostages for the good behaviour of strangers.
§ The Minister may be minded to say that there should be one bill but that he is minded to offer, allow or require—I am not yet sure which—separate rebates. Let us consider a working mother and a physically handicapped son. The Minister may say that as regards the one bill for which they are jointly and severally liable each should get a rebate on half the bill. Therefore, the mother who is in work would not get a rebate but her son would. That is fine. The mother goes off or perhaps unfortunately she dies. Is the son then jointly and severally liable for 100 per cent. of the bill, with only 50 per cent. of it met by his rebate? That is the question. I believe that to be the case. How is the son to pay? He is not only jointly and severally liable for someone else's share but he is offered only half a rebate to cover it.
§ Under the community charge that problem did not arise except between spouses. Practice Note No. 16 from the DoE was quite explicit—that local authorities should not enforce joint and several liability when the person to whom the bill was originally sent could pay and that it would not be enforced where the remaining person could not pay. The local authority was expected to have due regard to the policy of write-offs on grounds of hardship. So there was a sensitive area of flexible discretion and the problem was resolved.
§ But we cannot do that under the Bill. My noble friend Lord McIntosh moved an amendment to allow local authorities to do precisely that. That amendment, based on the ground of hardship, was for small sums to be written off. It was not accepted by the Government. The local authority has no such discretion. The son, with a 100 per cent. bill and a 50 per cent. rebate, has to be pursued by the local authority. It will do so by sending in the bailiffs. He has lost his mother, he faces the bill and now he will lose his goods.
§ The result is that the local authority is boxed in. In these situations I suggest that, first, any member in that household could have the full rebate, but the Minister has already made it clear that he would reject that because it would produce a perverse incentive for financial rearrangements. We cannot do that and he has made that clear. Secondly, there could be a 50 per cent. backdated rebate on the other half of the bill. That might be sensible but the Minister has rejected that because it could encourage one of the parties to disappear leaving bills behind. I can understand the Minister's concern.
§ Thirdly, there could be a 50 per cent. rebate and write off of the remaining sum, where appropriate, on the grounds of hardship. We cannot have that because the Minister has rejected that policy. I am sure that that was unwise and if he cares to reconsider we shall be delighted. So what have we left? I suggest to noble Lords only the acceptance of this amendment which will permit split rebates on split bills. One can only have a split 50 per cent. rebate if one is liable for only 50 per cent. of the bill. One can only have split bills if one has separate liability—in other words, if one 392 abandons the principle of joint and several liability. One can do that only if it is abandoned for other than co-habitees; otherwise it is a worse tangle than before.
§ Unless the Minister can tell us today how someone with only a 50 per cent. rebate is expected to meet a 100 per cent. bill, given that we cannot write off small debts, produce back-payment rebates or acquire a full rebate, then I suggest to noble Lords that the only alternative is to accept this amendment. I beg to move.
§ Lord Boyd-Carpenter: My Lords, the noble Baroness complains that this part of the Bill is complicated. I believe that she will have to accept that, whatever else the effect of her amendment, it would be to make the Bill more complicated and in particular for the local authority. As the Bill stands the local authority will apply for payment to the householder or owner. He or she will be responsible for making the payment.
§ As I understand it, if this amendment were accepted the local authority would have to seek payment separately both from the owner and from the tenant or other resident, with all the additional expense and trouble of pursuing the matter for payment. In the case of the resident other than the owner, probably the question of collecting will be even more difficult because that person may not necessarily have any visible means. Therefore, I hope that the noble Baroness will not persist with a complicating addition —whatever else it will do—to the Bill which I do not believe will help anybody. It will be a distinct handicap to the local authorities concerned.
§ Lord Cockfield
My Lords, the noble Baroness is asking the House to accept this amendment. With all due respect to the merits or demerits of the arguments that she has put forward, the amendment as it stands is complete nonsense. In case that upsets anyone I use the word "nonsense" in its original and objective meaning and not in its modern and pejorative sense. To quote the words of the amendment, if you "divide the liability"—note the word "liability"—between two persons, they clearly cannot then be "jointly and severally liable". In other words, the amendment is not only internally inconsistent, it is also inconsistent with the subsection which precedes it. Therefore, I do not believe that your Lordships would be well advised to adopt an amendment of this kind particularly at Third Reading.
§ Lord Henderson of Brompton
My Lords, I have listened to what the noble Lord has said and it may be that there is an element of nonsense in the amendment. But undoubtedly there is an element of nonsense which it seeks to cure. Here we are at Third Reading trying to cure something which has been fought against very much by those who look after poorer people. By "poorer people" I do not mean only people who do not have much money but those who are disabled or who perhaps have some kind of mental impairment.
It is nonsense, if I may use the word in another sense, to ask someone who perhaps has been discharged from what we used to call an asylum and who comes to share a house, flat or lodgings with 393 somebody else, and whose mental impairment remains the same, to have the kind of joint and several liability that it would be reasonable for two sane people to have. The difficulty about that is that it worked perfectly well with the poll tax, but it does not work when there is a much more complicated system.
I do not find any difficulty over joint and several liability with people who are ordinarily considered to have none of these difficulties and who are sane. However, when it comes to people who have been taken out of long-stay hospitals and put into special lodgings, it does not seem to me to be at all right and proper—if I may use that phrase instead of saying that it is a nonsense—for them to have to take the responsibility for their share of council tax bills. I do not think that any of us would wish to impose that kind of responsibility on people with a mental impairment. That is what the Government are doing and that is what we have been seeking to rectify.
For that reason, I much prefer the amendment of the noble Baroness, Lady Hollis, to the Government's provisions. Of course, if it is defective and it goes into the Bill, it can be put right in another place when they come to consider the Lords amendment.
I should like to ask the Government whether they have consulted about the provision. Have they consulted the National Federation of Housing Associations, for instance? That organisation is very unhappy indeed with the provision. Even if the Government have consulted the federation, why do they go forward with a provision which gives rise to the kind of anomalies and impositions which I have been suggesting that it does?
Also, there is such an inflexibility on the part of the local authorities. Here we return to the Citizen's Charter, which was designed to make life easier for the citizen. This makes it harder. The local authorities are exceedingly inflexible under this Bill. They are obliged to pursue someone with a mental incapacity for his liability for his joint tenant's share if that joint tenant has fled, died or cannot be found. The local authority has to do this inhumane thing of pursuing someone with a mental incapacity, not only for his share but for his fellow lodger's share. How can that be right? Is that not a nonsense?
§ 4 p.m.
§ Baroness Hamwee
My Lords, I should like to support this amendment. I shared the reaction which has been expressed by the noble Lords, Lord Boyd-Carpenter and Lord Cockfield. When I read it I had a natural instinct against a reference in one line to joint and several liability immediately following a reference to dividing liability. However, if we have to choose between elegant and legally happier phraseology and doing the right thing, then I for one should like to do the right thing.
I strongly support what the noble Lord, Lord Henderson, said. I am sure all noble Lords are very well aware that we have to bear in mind not simply the people who live in conventional households and who can look after themselves, but those who find themselves sharing a household and in danger of 394 incurring someone else's liability because the household in which they find themselves is the only type of household in which they can maintain some sort of independence within the community. If this amendment is agreed to, even though the provision in the Bill may not be the most felicitous, that will be because we find ourselves at this late stage still trying to get the underlying provision right. I support the amendment.
§ Lord Henley
My Lords, my noble friend Lord Cockfield said that the amendment was nonsensical and internally inconsistent. I have to admit that I tend to agree with my noble friend. I do not think it is a question, as the noble Baroness, Lady Hamwee, said, of elegance or inelegance in the words we use in the Bill. There is no point in a revising Chamber coming forward at Third Reading with amendments that do not do what they aim to do and which are internally inconsistent. I intend to argue the point about the amendment on its merits, but I thought it worth referring to what my noble friend Lord Cockfield said at the beginning of what I have to say.
I listened very carefully to what the noble Lord, Lord Henderson, had to say. I suspect that on the next group of government amendments, when we shall be dealing with an amendment successfully carried at an earlier stage of the Bill, we might be able to come on to some of the anxieties he expressed. I do not think that they are strictly relevant to the pure question of joint and several liability for everyone else.
I do not accept the premise that the noble Baroness raised that this Bill invents the concept of joint and several liability. It is a concept that has long existed in law. It is a concept that has existed before under rates. The noble Baroness shakes her head, but she did accept that married couples could be jointly liable for their rates. The same was true of joint owners and joint tenants in joint occupation; they too could be jointly and severally liable. We believe that it is fundamental to the council tax. If these amendments, which provide for persons who are jointly and severally liable to have separate liability, and therefore separate bills, were to be accepted, the administrative burdens on local authorities collecting council tax would be formidable.
We have emphasised many times the importance of simple, cost effective administrative arrangements for council tax. By adding further administrative responsibilities to local authorities in the form of optional separate bills, the tax would no longer be simple and cheap to collect. As my noble friend Lord Boyd-Carpenter put it, the noble Baroness had been complaining about the very complexity of this Bill, but her amendments, even if they were not defective, would make matters much, much worse.
The persons normally resident in a property, whether as owners or tenants, should be responsible for payment of the single council tax bill for each property. It will then be entirely up to the household to decide how the bill should be divided between those living in the property and to make the appropriate financial arrangements between themselves. I put it to your Lordships that that is not a matter that most households will find very difficult. It is not a matter 395 that will cause great difficulties to the existing arrangements within any given household when one bears in mind that very often in shared households there are also electricity bills, gas bills and telephone bills which all have to be divided among different people.
In the case of properties which are clearly divided into separate flats, each will be separately valued, with the council tax bill payable by the resident tenant or owner. We believe that these arrangements will be appropriate for most households.
If persons who are jointly and severally liable could opt for separate liability, local authorities would have to know the composition of all households and retain that information. Every change in the number of people in the household would have a direct impact on the billing arrangements for the property. That would involve local authorities having to recalculate liability and reissue bills every time someone moved in or out of a property. That would go entirely against the whole principle of a simple and efficient system.
The noble Baroness raised the case of the mother and son where, as she alleged, he had 100 per cent. liability but only 50 per cent. benefit. I suspect that the noble Baroness is not looking at the council tax in the right way. Unlike the community charge, there is no question of being liable for someone else's tax. There will be a single bill for which all the residents will be jointly liable. Subject to that difference, we certainly intend to issue guidance to local authorities about pursuing partners—or in the case which the noble Baroness mentioned, the son—with no resources similar to that which was issued under the community charge arrangements.
Lastly, I turn to the point that was raised concerning inconsistency in our arguments against separate liability for council tax purposes when determination for benefit purposes will apportion liability. I simply do not accept that point. When determining benefit it is, and always has been, the accepted principle that the local authorities, in the case of housing benefit and council tax benefit, must look carefully at individual claimants' status, income and circumstances in order to establish benefit entitlement. It would be wholly unacceptable if the local authorities had to extend those checks to establish council tax liability.
As I have said on more than one occasion, what we have done is to establish a simple taxation system that is easy to administer and collect. As I have already stated, the best way of ensuring this is for each household to receive and pay a single bill having determined among its members the appropriate financial arrangements. I hope therefore, finally, that the noble Baroness will feel able to withdraw the amendment. If she does not feel able to do so, I very much advise the House to reject it.
§ Baroness Hollis of Heigham
My Lords, I thank noble Lords who took part in this discussion. I believe that the noble Lords, Lord Cockfield and Lord Boyd-Carpenter, were in error when they made much of the problems that would be presented to local authorities were there to be separate billing; that is, split bills and split rebates. That is precisely the 396 situation that existed for other than basic nuclear families under the rates. Local authorities have done this for decades and decades. They did not experience a problem then and I do not see why they would experience a problem were they to revert to that practice.
Similarly, although the noble Lord, Lord Henley, did not use this instance, with regard to housing benefit, if one looks at the guidance circular for November 1991, the same assumption of split apportionment of a bill and split rebate applies. There is well established precedent under the rates and under housing benefit for precisely what the amendment proposes. I have talked to numerous city treasurers about this. They would rather have this principle established than produce the alternative scenario with which we are left. The noble Lord made no movement on how we should handle the problem that would otherwise remain.
Secondly, the noble Lord made much of the point that local authorities would have to bill every time someone moved in and out of a property. We on this side of the House have been arguing that that is precisely the consequence of having single-person discounts. Every time that changes or, alternatively, every time the position of someone who is the second low-income adult changes, the local authority would have to do precisely that. This is a minimal additional piece of administration to tackle what in our view could be a major problem of unfairness.
Let us say that three people have split rebates. The local authority still has to determine from whom it is to collect the total sum. It still has to make inquiries in terms of income for eligibility for rebate. There is minimal additional administration to this amendment and maximum clarity. That is why it comes with the support also of the National Federation of Housing Associations.
I come back to the noble Lord. What is the alternative? At no point has he addressed the problem which I presented to your Lordships of a handicapped son, whose parent has left, having a 50 per cent. rebate and joint and several liability for 100 per cent. of the Bill. He will not get backdated rebates and 100 per cent. rebates. The noble Lord, Lord Henley, suggested that local authorities would receive a guidance circular analogous to the poll tax allowing them to write off the amount. It is my understanding that they cannot do that. This Bill excludes what was possible under the rates and what was possible under the poll tax because the Front Bench opposite rejected our amendment at Report stage which would have allowed us to do precisely that. We have had to come back because of the consequences of rejecting that earlier amendment.
The amendment is simple to understand and simple to administer. It is supported by the local authorities and by the National Federation of Housing Associations. It is fair and neutral in its cost implications. Therefore, because the noble Lord has given us no way of tackling the basic unfairness of someone with 50 per cent. of the rebate being faced with 100 per cent. of the Bill, I must test the opinion of the House.
§ 4.14 p.m.
§ On Question, Whether the said amendment(No.3) shall be agreed to?
§ Their Lordships divided: Content, 91; Not-Contents, 140.398
|Division No. 1|
|Acton, L.||Irvine of Lairg, L.|
|Amwell, L.||Jay, L.|
|Ardwick, L.||Jenkins of Hillhead, L.|
|Aylestone, L.||Jenkins of Putney, L.|
|Beaumont of Whitley, L.||John-Mackie, L.|
|Birk, B.||Judd, L.|
|Blackstone, B.||Kissin, L.|
|Boston of Faversham, L.||Lawrence, L.|
|Bottomley, L.||Listowel, E.|
|Carmichael of Kelvingrove, L.||Longford, E.|
|Carter, L. [Teller.]||Lovell-Davis, L.|
|Castle of Blackburn, B.||McIntosh of Haringey, L.|
|Cledwyn of Penrhos, L.||Mallalieu, B.|
|Cocks of Hartcliffe, L.||Mason of Barnsley, L.|
|Darcy (de Knayth), B.||Mayhew, L.|
|David, B.||Milner of Leeds, L.|
|Dean of Beswick, L.||Molloy, L.|
|Desai, L.||Morris of Castle Morris, L.|
|Diamond, L.||Nathan, L.|
|Donaldson of Kingsbridge, L.||Nicol, B.|
|Donoughue, L.||Peston, L.|
|Dormand of Easington, L.||Phillips, B.|
|Falkender, B.||Pitt of Hampstead, L.|
|Falkland, V.||Prys-Davies, L.|
|Fisher of Rednal, B.||Rea, L.|
|Foot, L.||Sainsbury, L.|
|Gallacher, L.||Seear, B.|
|Galpern, L.||Sefton of Garston, L.|
|Graham of Edmonton, L. [Teller.]||Serota, B.|
|Greene of Harrow Weald, L.||Stallard, L.|
|Gregson, L.||Stedman, B.|
|Grey, E.||Stoddart of Swindon, L.|
|Hacking, L.||Strabolgi, L.|
|Hamwee, B.||Taylor of Blackburn, L.|
|Hanworth, V.||Tordoff, L.|
|Hatch of Lusby, L.||Turner of Camden, B.|
|Hayter, L.||Underhill, L.|
|Henderson of Brompton, L.||Varley, L.|
|Hilton of Eggardon, B.||Wallace of Coslany, L.|
|Hollick, L.||Walpole, L.|
|Hollis of Heigham, B.||Whaddon, L.|
|Holme of Cheltenham, L.||Wharton, B.|
|Houghton of Sowerby, L.||White, B.|
|Howie of Troon, L.||Williams of Elvel, L.|
|Hughes, L.||Wilson of Rievaulx, L.|
|Abinger, L.||Campbell of Alloway, L.|
|Ailesbury, M.||Carnarvon, E.|
|Aldington, L.||Carnegy of Lour, B.|
|Allenby of Megiddo, V.||Carnock, L.|
|Ampthill, L.||Cavendish of Furness, L.|
|Annan, L.||Clanwilliam, E.|
|Arran, E.||Cochrane of Cults, L.|
|Astor, V.||Cockfield, L.|
|Astor of Hever, L.||Colnbrook, L.|
|Auckland, L.||Cross, V.|
|Balfour, E.||Cullen of Ashbourne, L.|
|Barber, L.||Cumberlege, B.|
|Bauer, L.||Dacre of Glanton, L.|
|Belstead, L.||De Freyne, L.|
|Bessborough, E.||De L'Isle, V.|
|Blatch, B.||Denton of Wakefield, B.|
|Blyth, L.||Donegall, M.|
|Boardman, L.||Elibank, L.|
|Borthwick, L.||Ellenborough, L.|
|Boyd-Carpenter, L.||Elles, B.|
|Brabazon of Tara, L.||Elliot of Harwood, B.|
|Brougham and Vaux, L.||Elton, L.|
|Butterworth, L.||Ferrers, E.|
|Fraser of Carmyllie, L.||Murton of Lindisfarne, L.|
|Gainford, L.||Nelson, E.|
|Gainsborough, E.||Newall, L.|
|Geddes, L.||Norfolk, D.|
|Goschen, V.||Norrie, L.|
|Gray of Contin, L.||Northbourne, L.|
|Gridley, L.||O'Cathain, B.|
|Grimthorpe, L.||Orkney, E.|
|Haddington, E.||Oxfuird, V.|
|Hailsham of Saint Marylebone,.L||Palmer, L.|
|Park of Monmouth, B.|
|Harding of Petherton, L.||Perry of Southwark, B.|
|Harmsworth, L.||Peyton of Yeovil, L.|
|Henley, L.||Plummer of St. Marylebone, L.|
|Hesketh, L. [Teller.]||Portsmouth, E.|
|Hives, L.||Prentice, L.|
|Holderness, L.||Radnor, E.|
|HolmPatrick, L.||Rankeillour, L.|
|Hood, V.||Reay, L.|
|Hooper, B.||Renfrew of Kaimsthorn, L.|
|Hylton-Foster, B.||Richardson, L.|
|Jenkin of Roding, L.||Rochdale, V.|
|Joseph, L.||Romney, E.|
|Kimball, L.||St. Davids, V.|
|Knollys, V.||Salisbury, M.|
|Lauderdale, E.||Savile, L.|
|Liverpool, E.||Seccombe, B.|
|Lloyd of Hampstead, L.||Selkirk, E.|
|Long, V.||Sharp of Grimsdyke, L.|
|Lucas of Chilworth, L.||Skelmersdale, L.|
|Lyell, L.||Soulsby of Swaffham Prior, L.|
|McColl of Dulwich, L.||Strathcarron, L.|
|Mackay of Clashfern, L.||Strathclyde, L.|
|Macleod of Borve, B.||Strathmore and Kinghorne, E.[Teller.]|
|Mancroft, L.||Swinfen, L.|
|Marlesford, L.||Swinton, E.|
|Marsh, L.||Terrington, L.|
|Massereene and Ferrard, V.||Teviot, L.|
|Merrivale, L.||Tollemache, L.|
|Mersey, V.||Trumpington, B.|
|Middleton, L.||Tryon, L.|
|Montgomery of Alamein, V.||Ullswater, V.|
|Morris, L.||Vaux of Harrowden, L.|
|Mottistone, L.||Waddington, L.|
|Mountevans, L.||Wade of Chorlton, L.|
|Mowbray and Stourton, L.||Westbury, L.|
|Munster, E.||Wolfson, L.|
§ 4.22 p.m.
§ Lord Henley: moved Amendment No. 4:
Page 5, line 11, leave out subsection (4) and insert:
("(4) subsection (3) above shall not apply as respects any day on which one or more of the persons there mentioned fall to be disregarded for the purposes of discount by virtue of paragraph 2 of Schedule 1 to this Act(the severely mentally impaired)and one or more of them do not; and liability to pay the council tax in respect of the dwelling and that day shall be determined as follows—
§ The noble Lord said: My lords, in moving this amendment I shall, with the leave of the House, speak also to Amendments Nos. 5 to 7 and 19 to 21. On Report, the noble Baroness, Lady Hollis, successfully moved amendments—which, I imagine, we might term "the noble Lord, Lord Callaghan's birthday party benefit amendments" —intended to prevent joint and several liability from applying to people who are severely mentally impaired. The Government do not intend to seek to reverse those amendments. However, 399 as I believe I said at the time, they are uncertain in their effects. We are therefore bringing forward the present amendments in order to replace them.
§ Amendment No. 4, and its Scottish equivalent Amendment No. 19, cover cases where residents of a dwelling would normally be jointly and severally liable because they fall into the same category in the hierarchy set out in Clause 6. It provides that the normal rules for joint and several liability will not apply where one or more of the residents are eligible for a discount because of severe mental impairment, and at least one of the residents is not severely mentally impaired. In such cases the liability will attach to the person or persons without the impairment, jointly and severally if there are more than one.
§ Amendment No. 5 makes exactly the same provision for caravans. Amendment No. 6, and its Scottish equivalent Amendment No. 20, cover dwellings where the liability falls on the owner, rather than the residents, under regulations made by the Secretary of State. Amendment No. 7, and its Scottish equivalent Amendment No. 21, cover people who would normally be jointly and severally liable because they are either married to each other, or living together as husband and wife. It provides that a spouse without an interest in the property will not be jointly and severally liable if he or she is eligible for discount because of severe mental impairment. Couples where both partners have an interest in the property are covered by Amendments Nos. 4 and 19.
§ I believe that these amendments achieve the effect for which the noble Baroness was aiming. It will ensure that, in the cases she quoted where brothers and sisters or mother and son would be jointly liable and one of them has a severe mental impairment, that person will have no liability. I hope therefore that the amendments will be accepted by the House. I beg to move.
§ Baroness Hollis of Heigham
My Lords, I shall be very brief. I should like to express our thanks to the noble Lord for coming back with amendments which will adequately reflect in drafting terms the intention of your Lordships' House. We are delighted to support them.
§ Lord Henderson of Brompton
My Lords, perhaps I may add my congratulations to the noble Lord on securing these amendments. I am sure that they are most acceptable to all of us.
§ Lord Henley
My Lords, I am much obliged.
On Question, amendment agreed to.
Clause 7 [Liability in respect of caravans and boats]:
§ Lord Henley moved Amendment No. 5:
Page 5, line 43, at end insert:
("( ) Subsection (4) of section 6 above shall apply for the purposes of subsection (4) above as it applies for the purposes of subsection (3) of that section.").
§ On Question, amendment agreed to.
Clause 8 [Liability in prescribed cases]:
§ Lord Henley: moved Amendment No. 6:
§ Clause 9 [Liability of spouses]:
§ Lord Henley: moved Amendment No. 7:
Page 6, line 41, leave out subsection (2) and insert:
("(2) Subsection (1) above shall not apply as respects any day on which the other person there mentioned falls to be disregarded for the purposes of discount by virtue of paragraph 2 of Schedule 1 to this Act (the severely mentally impaired).").
§ Clause 11 [Discounts]:
§ [Amendment No. 8 not moved.]
Lord McIntosh of Haringey moved Amendment No. 9.
Page 7, line 43, at end insert:
("(6) The Secretary of State shall reimburse each billing authority for the income forgone by the granting of discounts by a special grant paid in accordance with the provisions of section 88B of the 1988 Act, and such grant shall be in addition to any grants payable as revenue support grant.").
§ The noble Lord said: My Lords, with this amendment we return to an issue which had a considerable airing at earlier stages, but which still resulted in a combination of confusion as regards what was meant by government and a very evident injustice in the way in which the council tax is to fall. I believe that it is common ground that the onus for the transitional relief and for the rebate system under the council tax is to be the responsibility of central government. That has been clear from the outset and that is, I think, the fair and proper way to pay for such items.
§ However, we still have the strange situation whereby the discount structure, which in many ways is designed to achieve comparable effects to the rebate structure, is to be the responsibility of local authorities and not the responsibility of central government. The cost of the discount structure is very considerable. Ministers have never given a figure for it. However, if one calculates it on the basis that there are likely to be 7.8 million discounts and that that will cost 25 per cent. of the council tax for standard spending for band D properties—that would be 25 per cent. of £400 or £100—one comes to a figure of £780 million for the cost of the discounts. We have quoted that figure on a number of occasions. I have not heard Ministers object to such a calculation. Therefore I believe that I am entitled to assume that we are not too far off in our calculation. I appreciate that no one knows the exact figure because no one knows exactly how many discounts will in practice be applied for.
§ A second curious feature of the discount structure is that the onus is on the tax payer to apply for the discount. The local authority clearly does not want to encourage tax payers in turn to apply for discounts because of the cost; in other words, those who pay the full council tax will have to pay for their neighbours in single person households. That is curious because it conflicts with the way in which the Department of Social Security behaves. For example, when a family applies for child benefit, the department sends a letter to the claimant which, in effect, advertises the 401 availability of the additional one-parent benefit and suggests that it could be advantageous for those who would qualify for such a benefit to apply for it. Again, that seems reasonable; but it is not a process that is encouraged by the council tax procedure.
§ Of course, there is an additional difficulty for local authorities with the discount structure; namely, that because the onus is on the tax payer to apply for it, it is very difficult for local authorities (individual charging authorities) to estimate the take-up. Yet, in order to make their claim for block grant early in the year they will have to make some sort of estimate. If they make a wrong estimate, they will suffer financially later on.
§ I appreciate that the discount system was introduced for what seemed to be a good reason but it is a cuckoo in the nest as regards the council tax. It was put in because of the myth that Ministers have —and which Conservative Central Office has—of a little old lady living in one house and four strapping young men living in the neighbouring house, with the four strapping young men paying the same as the little old lady.
§ Either that is a real financial and budgeting problem, in which case it can and should be dealt with by the rebate structure rather than by the discount structure, or it is not a problem because the little old lady can perfectly well afford to pay her council tax. As has often been said, the four strapping young men will make their contribution through the national taxation system.
§ Therefore, we still end up with the discount being out of kilter with the other provisions of the council tax. Under these circumstances, the proper thing to do seems to us to bring the provisions as close as possible to the financial regime for rebates and transitional relief and to make it the responsibility of central government. I beg to move.
§ 4.30 p.m.
§ Baroness Blatch
My Lords, it is unfortunate that I did not see the amendment until this morning but, having said that, the Government propose to compensate local authorities through the revenue support grant system. Revenue support grant will be paid to bridge the gap between a local authority's standard spending assessment and its notional revenue, including its receipts from the national non-domestic rate pool and the amount it would raise if it set the council tax according to standard spending. Clearly, an authority's revenue will depend on the number of discounts it awards.
Our revenue support grant calculations of notional revenue will take this into account, using authorities' own estimates of the numbers of discounts. The more discounts an authority estimates that it will award, the smaller will be its notional income. A smaller notional income means a bigger gap between that amount and the standard spending assessment, and therefore a greater entitlement to revenue support grant.
The whole idea of the revenue support grant distribution is that authorities everywhere should be able to set the same standard level of council tax for 402 a band D property with two resident adults for spending at SSA. That will be so, regardless of the number of discounts an authority estimates it will award.
The noble Lord, Lord McIntosh, is suggesting that there should be a special grant to compensate authorities for one factor affecting their revenue raising potential. If the Government adopted that logic, we would need to pay special grants for all such factors.
Discounts are an integral part of the council tax. They are as fundamental in determining the tax bill for a property as the valuation band to which that property is allocated. All these fundamental matters are taken into account in the revenue support grant distribution. Council tax benefits, on the other hand, are quite different. Benefit entitlement is related to the tax bill and to the income and circumstances of the claimant. Benefits are applied only after the basic tax liability has been determined. It is therefore appropriate that they should be the subject of separate subsidy arrangements. A separate system needs separate finance. But discounts, which are inherent in the nature of the council tax, should be compensated for through the general local government finance system.
It will be local authorities collectively which meet the cost of discounts, through the redistribution of the revenue support grant total. It will certainly not be the individual local authority which pays. I repeat that an individual authority will not be penalised if it says it needs to award a particularly large number of discounts.
There is no reason to expect that local authorities' estimates of the numbers of discounts they will award will be particularly inaccurate. Certainly once the tax has been in force for a year, authorities will know very well how many discounts they are likely to award.
I firmly believe that local authorities will also be able to make good estimates of the number of discounts they will award in the first year of the tax. They have plenty of information to go on. Their community charge registers will tell them the number of properties with only one resident, and the number of empty properties. They will be able to assess the number of status discounts for students from the same source. Information as to the number of exempt properties will be available from their standard community charge records, because the classes of properties we propose to exempt follow closely the classes used under the standard charge. Using all of this data, authorities should be able to forecast discounts very effectively.
If problems do arise, we have said that we are willing to consider them with an open mind. If a large number of authorities make significantly inaccurate estimates of the number of discounts they will award, we shall consider whether it would be appropriate to recalculate RSG entitlements to ensure that proper compensation is achieved. We are not convinced that this step would be necessary or desirable, because it would undermine the certainty as to grant entitlement 403 that is one of the great values of the revenue support grant system. But we would be prepared to discuss the matter with the local authority associations.
However, I think it unlikely that any such adjustments will be necessary. Local authorities have great expertise when making assessments in the areas that they know best. Because I expect that authorities will be able to make good estimates of their tax base, I hope that the amendment will not be pressed.
§ Lord McIntosh of Haringey
My Lords, we are on Third Reading and we have spent a long time trying to tease out not only the truth but the implications of this peculiarly complex system of discounts, rebates and transitional relief. To one extent, of course, we are in complete agreement and I have never suggested otherwise. I have said from the outset that I recognise that the resources element of the RSG will be calculated according to the number of discounts that the local authority expects. However, all that means is that other local authorities—or rather, the local authorities as a whole—will be paying the cost of the discounts. Indeed, that was confirmed by the noble Lord, Lord Strathclyde, on Report on more than one occasion.
However, there is still a distinction which the Minister does not seem prepared to recognise between the rebate system which is paid for out of central government funding and which is part of social security, such as housing benefit; the transitional relief, which is a special payment from central government funding and not paid for out of the revenue support grant; and the rebates and discounts, which are paid for out of the revenue support grant and which therefore affect all local authorities. In her reply, the Minister suggested that if we made an exception and a specific grant for discounts, we should have to make it also for all kinds of other forms of financial provision. I do not think that that is the case. We are already making a special grant for transitional relief. There is really no difference.
Nor is it satisfactory for the Minister at this stage to repeat what has been said by Ministers for several months now about the ability of local authorities accurately to calculate what discounts will be claimed. They simply do not know. That is the great difference between universal discounts and things such as rebates which are given on evidence of need. It is well known that discounts of this kind have a much lower take-up than need-related rebates and the uncertainty about them is therefore very much greater. The ability of local authorities to make accurate estimates of the level of discounts that will arise in practice is limited. It is simply a joke to suggest that that should be done by using the poll tax register. I thought that that was what we were trying to get away from. My understanding is that local authorities are not being encouraged to update their poll tax registers.
This is still a thoroughly anomalous element of the council tax. As we have said all along, it is a very unfair tax, but this is perhaps the most peculiar and the least desirable element of it. We are clearly making no progress in explaining to the Government the nature of our concerns and those that we believe that the people of this country will have when they have to 404 face the council tax in all its complexity and glory. I am sorry about that. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Reduced amounts]:
Baroness Hollis of Heigham moved Amendment No. 10:
Page 9, line 21, at end insert:
("( ) Notwithstanding subsection (7) above, where the factors taken into account by the Secretary of State include those mentioned in subsection (6) above, the rules mentioned in subsection (2) above shall prescribe that the amount payable by the person concerned shall be reduced by a factor of 14 per cent.").
§ The noble Baroness said: My Lords, with this amendment we return to the issue of relief for the disabled. The amendment relates solely to disability tax relief under Clause 13, which provides for the council tax bill to be reduced by one band because the facilities in that property are needed by a disabled person. The amendment would mean that instead of reducing the valuation by one band, the bill would be reduced by 14 per cent. if the property qualified for a reduction, regardless of the band in which it was placed.
§ I appreciate that if the amendment were accepted the Government might need to make consequential amendments in another place. Why move the amendment in this form? First, there is a practical reason. I cannot return to a percentage reduction on band A because your Lordships saw fit to negative a previous amendment. I am seeking to approach the same issue in a different way.
§ As your Lordships will know, in another place, Mr. Portillo agreed to drop by one band properties occupied by the disabled which had been altered materially, unless those properties were already in band A—the lowest and poorest properties occupied often by the poorest disabled—where no further drop would be possible. Mr. Portillo's proposal was welcome but, in practice, it meant little advance on the original Bill because everyone—not just the disabled —whose property was altered materially would benefit from a similar reduction. Everyone, disabled or not, whose property was extended would enjoy a similar reduction. So Mr. Portillo's proposals, although helpful as affording clarification, did not add much to what was already in place for everyone, including every Member of your Lordships' House.
§ In Committee, the Minister helpfully went further. He agreed that where a disabled person stayed put and did not alter his property one iota—by one brick, window or doorway—neither increasing nor decreasing its value, but merely occupied it by virtue of his disability and therefore made different use of the space (for example, brought into play a second bedroom or needed, more than previously, an extra large sitting room) then that property also would drop a band. That was a crucial and helpful clarification from the Minister which we welcomed. It meant that where Mr. Portillo granted a reduction in band because of what was done physically to the property, the Minister in this House accepted that even where the property was 405 not altered, the band would drop merely because the person was disabled. In other words, the reduction attached not to the property but to the disability.
§ A disabled person would obtain a one-band discount because he was disabled and had lived in the property, and not because of what he had done to it. Usually he will have done something to it, but he need not have done so and will still enjoy that band reduction. We all thought that that was fair and proper and welcomed it, except when it comes to band A properties—the poorest and oldest properties occupied too often by the poorest and oldest among the disabled. I accept for these purposes that if the reduction were due to the property itself then one cannot drop below band A unless another band is invented. In all decency and fairness one cannot drop a band for the better-off disabled and not apply a similar provision to the poorer disabled; hence the amendment.
§ The amendment moves away from reducing property by valuation band to give a straightforward 14 per cent. reduction for everyone. It thus avoids the problem of the reduction being attached to a property in a band and instead attaches the reduction to the person irrespective of the band into which the property might fall. Clearly, for those in bands above band A it means virtually the same; that by being attached to the person and not to the property—if I may refer to what the noble Lord, Lord Skelmersdale, said on Report—we overcome a problem.
§ The amendment has a second virtue. Dropping a hand has different percentage implications according to which hand the property is in. Drop from band B to band A and one receives a 14.29 per cent. reduction; band C to band B, a 12.5 per cent. reduction; band D to band C, 11.11 per cent.; band E to band D, 18.18 per cent.; band F to band E, 15.38 per cent.; band G to band F, 13.33 per cent.; band H to band G, 16.67 per cent.; or an average of 14.49 per cent. A straight 14 per cent. off the bill would treat all disabled people in the same way, instead of receiving discounts ranging from 11 per cent. to 18 per cent., unless of course they happen to be the poorest and oldest disabled in the poorest and oldest properties, in which case they receive nothing.
§ I urge your Lordships to support the amendment. First, it in no way challenges the principle of the Bill. It does not invent a new band. I understand from the logic of the Bill that it would be unacceptable to target the discount only at the poorest disabled. Secondly, the Minister has already established for us that discounts relate to disability and not just to a material alteration of the physical fabric; so no new principle is involved. It merely applies the reduction to all those disabled who might qualify and not just to the better off.
§ Thirdly, we are not breaching the principle of having discounts for people in band A, as such. After all, if one is single and in band A one receives a 25 per cent. discount, twice that proposed for the disabled in the amendment. Those of your Lordships who were present on Report might recall the case of a millionaire with an unemployed son living with him, 406 who might be studying art. If your Lordships agree with me—improbable though it might be—that he might be living in a band A property, the two of them would receive a discount of 25 per cent. with no grounds of hardship. Are we going to say that the disabled cannot have a discount while a millionaire with an unemployed son can have a 25 per cent. discount if they live in the same house?
We are breaching no principle here. Not just the millionaire and his son, but the student, the nurse and all those in band A properties receive a discount. There is no problem. We have established the principle of targeted discounts by virtue of occupancy and status. I ask your Lordships to include the disabled among them.
Finally, the amendment will cost central government nothing. As we have just heard under Amendment No. 9, discounts will be met by aggregate external finance; in other words, a predetermined sum of revenue support grant. It will be allocated to local authorities according to the SSA, with some tweaking at the edges for the number of discounts that they have over and beyond the mean. No extra money will flow from central government were your Lordships minded to accept the amendment. It would cost central government not a halfpenny. Will it cost local authorities much? No. Under the rates, about 160,000 households, irrespective of the value of the property, enjoyed rate relief by virtue of the occupants being disabled. The Government have excluded band A, but still think that the figure will be about 160,000. With band A it is my guess—I may be wrong—that the figure would be about 40,000 properties; in other words, an additional 100 families in every local authority. Half of them may already be on income support; the other half may be eligible.
We are talking about a bill to a local authority of £2,000 to £3,000 a year—that is all. But it would be a useful rebate of £40 to £50 a year for the poorest and oldest disabled living in the poorest and oldest properties. That is a form of mutual aid that local council tax payers would be happy to offer.
We face a general election and Members opposite must be confident that the Bill will be law and stay on the statute book. In that case, there is a moral imperative on us all to make the Bill as fair as possible. On Report many Members of your Lordships' House felt a sense of unease over the anomalies and the unfairness to those disabled people in band A properties who receive no reduction while everyone else might. The amendment has no cost implications. It does not challenge the principle of the Bill at any point. With the amendment we have a last chance of making the Bill fair to the disabled at nil cost to government, and at a tiny cost to local authorities. It merely requires your Lordships' vote or at least a decent absence. I beg to move.
§ Lord Boyd-Carpenter
My Lords, the noble Baroness accepted at the beginning of her speech that the amendment was not 100 per cent. technically correct. She went out of her way to say that that could be dealt with by amendments in another place when the Bill went back there. That seems to indicate the disadvantage of taking such amendments on Third 407 Reading in this House, because it reflects not very well on the work of the House as a revising Chamber if we send hack Bills to another place in a shape and form such that they have to be amended merely to make them work. That does not suggest that the House is doing its job properly, and so I approach the amendment with a great deal of antipathy. If the point were a good one, as the noble Baroness argues, then no doubt the House would have been persuaded of it at an earlier stage and these difficulties would not have arisen. However, taking it now on Third Reading is disadvantageous.
I am not at all sure how it will work. Fourteen per cent., as I understand it, is a purely arbitrary figure. Think of a number! It is not to be assumed that it will give suitable and appropriate relief in the right cases. I am doubtful whether there is any necessity for it.
After all, the point arises only where the property concerned is in band A when, ex hypothesi, the demand for council tax will be the lowest anyhow. People whose houses are put in band A, compared with those in other bands, receive some advantage. Apparently, no allowance at all has been made for that. It seems therefore that this is not a well thought out amendment. Although its intentions—like all the intentions of the noble Baroness—are highly honourable and respectable, I do not believe that it is a practical proposal and I hope that your Lordships will not accept it.
§ Lord McIntosh of Haringey
My Lords, perhaps I may intervene merely on a procedural point, I do not wish to intervene on the subject of the amendment. The noble Lord, Lord Boyd-Carpenter, seemed to suggest that it was wrong for us to bring forward such an amendment on Third Reading. I remind him that we brought forward an amendment on a similar subject—not the same amendment—at Committee stage. We were prepared to withdraw it, but it was decided by two or three noble Lords on the Government Front Bench that we should not be allowed to withdraw it. Under those circumstances, it would have been cowardly for us to refrain from returning to the matter on Third Reading.
§ Lord Boyd-Carpenter
My Lords, the criticism is of producing on Third Reading an amendment which the noble Lord himself admits is defective in form and which would require amendment in another place. That is the point which the noble Lord did not address.
§ Lord Jenkin of Roding
My Lords, I have another reason for objecting to the noble Baroness's amendment and to the case she made in moving it. With the greatest respect to her, she did not address the principal, central argument as to why the Government amended the Bill in the way they did. That principal, central argument was that disabled people should not have to pay more council tax because they have to live in a larger house or a house with specific improvements, simply because of their disability. That should be ignored.
Therefore, the step that was taken by the Government was to say, "If your house is rated in a 408 band higher than would be likely, having regard to your circumstances, simply because you are disabled and therefore have to have bigger rooms, more rooms or the lift on the staircase"—whatever it may be that would put the house into a higher band—"it is to be disregarded. No one shall pay more council tax because they live in a larger house due to their disability."
However, if people are already paying in the lowest band, by definition that cannot apply to them. They will not have to pay more tax because they live in a larger house than they would otherwise need. It seems to me that the noble Baroness did not address that case. She seeks an allowance simply for disability. That is a different matter.
There already exists a complicated system under the provisions on the face of the Bill contained in amendments to the social security legislation. The system is complicated: it must inevitably be so if it is to take account of people's means. There is this complicated system of rebate to help people who cannot afford the full council tax, quite apart from the discounts which are not relevant in this case.
The legislation does not provide—nor do I see why it should—an extra special relief for people simply because they are disabled. I entirely agree with the proposition that no one should pay more tax if they have to live in a larger or more expensive house because they are disabled. But if they already pay at the lowest level, by definition that cannot apply to them.
It seems to me that that is the hole in the noble Baroness's case. She made a powerful and eloquent plea for more help for disabled people, but with the greatest respect to her, that is not what is required when we are dealing with this clause.
§ Lord Renton
My Lords, it is accepted by the Government and written into the Bill that in one way or another disabled people must be helped if they need assistance in paying the council tax, whatever band they are in. What worries me about the amendment is that by choosing the 14 per cent., as the noble Baroness did, she may not do as well for disabled people as the Secretary of State, using his discretion when making regulations, may find desirable, possible and necessary.
Having taken no previous part in the proceedings on the Bill, perhaps I may use the discussion on the amendment to obtain an assurance from my noble friends on the Front Bench that the word "disabled" includes what are generally understood to be the largest of all groups of the disabled; namely, those who are mentally handicapped.
§ Lord Skelmersdale
My Lords, I am grateful to my noble friend Lord Jenkin for putting the points on bands B to the highest band in a way that was far more effective than I could have done. The problem is the perceived unfairness of band A. My noble friend made the point that the Government have made throughout discussions on this subject. Disabled people should not be made worse off by virtue of their disability and having to live in a larger house. That does not apply to band A. What can apply to it is that people in the 409 least valued houses must make improvements to them because of their disablement. That may well leave them in band A.
I suspect that the noble Baroness's amendment is supposed to cover that difficulty. But I suggest that, for the reasons produced by my noble friends Lord Jenkin and Lord Henley on the Front Bench at earlier stages, the right way to achieve that cover is through the social services and the social security benefit regimes, not through this Bill.
§ Lord Desai
My Lords, two arguments have been made by noble Lords opposite, who somehow think that 14 per cent. is an arbitrary figure dreamed up by my noble friend Lady Hollis. The noble Lord, Lord Jenkin, said that people in band A already pay the lowest possible rate. Therefore, how could they go any lower?
There are two problems. Even if we concede the principle of the council tax—which I shall concede for the time being —the bands are somewhat arbitrary, especially because the lowest band increases to £40,000. The proportions of "6: 7: 8: 9:" and so on in which the council tax is calculated under Clause 5(1), move about rather arbitrarily if we calculate the jumps between the different steps. If we accept dropping down a band from G to F and so on, there is an uneven concession in some bands and a concession of about 13 to 14 per cent. in other bands. So while 13 to 14 per cent. is the concession obtained if one goes from band C to band B, or from band D to band C, it is a little more at the upper end, but that can be smoothed out by having a 14 per cent. concession. That is the first point.
My second point concerns band A. Band A may be the lowest band by definition. However, someone may live in a poor property worth, say, £20,000 rather than £35,000 and if we had more bands, we could have a band lower than band A and that person could benefit from that position. It is the determination of band A that is arbitrary here, not the matter of the 14 per cent. that my noble friend is proposing. In order to remove the arbitrary aspect, it is necessary to take the factor of 14 per cent. across all the bands so that a person in band A would not pay the minimum council tax rate but rather 14 per cent. less than that. I believe that what my noble friend has proposed is a more equitable system than the one in the Bill. It would remove the arbitrary aspect of the bands in Clause 5. I commend my noble friend's amendment to the House.
§ 5 p.m.
§ Baroness Gardner of Parkes
My Lords, my noble friend Lord Jenkin made his point well when he spoke. We have got this matter back to front. As I understand the situation it is a question not of reducing bands, but rather of preventing them going up. That is a different matter entirely and it is the basis on which I oppose this amendment. The noble Baroness opposite makes a most appealing case which touches all our hearts when she talks about the oldest and poorest people and the poorest properties. However, she overlooks the fact that if one is a really 410 poor person in a poor property one can obtain a 100 per cent. rebate. That is how I understand the position. Surely we cannot ask for less than that.
§ Lord Henderson of Brompton
My Lords, what we are talking about is disability tax relief. That has nothing to do with property: it has to do with disability. I am extremely grateful to the noble Baroness, Lady Hollis, for tabling this amendment. Clearly we had reached the end of the road on the previous approach that was taken. I am—as I am sure are all people who are concerned with disability—extremely grateful to Mr. Portillo for making attempts in the House of Commons to meet the case of undoubted hardship. There was no provision and Mr. Portillo made provision and for that we are duly grateful.
We are also grateful to the noble Lord, Lord Henley, for putting a welcome gloss on this matter on Report. This House has seized the fact that there is a lack of equity in the proposals put forward by Mr. Portillo and incorporated in the Bill. We have found it logically difficult to pursue this matter in the way in which we have pursued it up to Report. The noble Baroness is to be congratulated on not pursuing that approach any further as there was no mileage in it and she recognised that the Government's opposition to that approach was based on logic. She has therefore turned from that proposal to another. Her present approach may not yet be perfect, but the justification of Third Reading is to be able to put right an acknowledged wrong. That may occur in pursuance of an objective that has been argued throughout various stages of a Bill. The amendment may be technically imperfect but, if it is incorporated in the Bill, it can be put right in another place. There is no reason to disparage the amendment on that account.
The Bill is rigid and the bands are rigid, as are the differences between the bands. As the noble Lord, Lord Jenkin, quite rightly said, this is a complicated system. If one tries to put right one wrong, one finds, unfortunately, that one has imported a wrong. That is what has happened in the case of Mr. Portillo's scheme that was intended to help disabled people: it has imported an inequity. It is undeniable that the people concerned feel that the position is inequitable. I ask noble Lords to place themselves in the shoes of disabled people and to try to sympathise with them. This amendment is an ingenious way of righting the inequity. It would not be in accordance with the best spirit of this House if, having realised there was an inequity—I believe most noble Lords feel that there is an inequity here—we did not use the last stage of the Bill to put that inequity right. The noble Baroness is gallantly attempting to do so through her amendment. I shall say no more than that we have tried to respect the principles of the Bill and we have respected the logic of the banding scheme. I have added my name to this amendment. I ask the House at least to sympathise with the amendment moved by the noble Baroness, Lady Hollis, who is attempting to overcome the inequity that was inadvertently imported into this scheme in another place by Mr. Portillo. It is perfectly justifiable to move this amendment and for the House to support it.
§ Baroness Hamwee
My Lords, like other noble Lords, I accept and acknowledge the steps which have been taken towards addressing the problem that was brought to the attention of the Government in the first instance by groups representing the disabled. That is how I understand the position. It is a great pity that after that exercise when the disability groups believed a victory had been won, they discovered that it had been won only to a factor of 95 per cent. It is a pity that a sour taste has been left in their mouths. They are concerned that an element of discrimination remains. The Minister frowns, but I believe that that is the impression that will be left with those groups as a result of what has happened. Today we have an opportunity to put that right and to eliminate the unease and disquiet which remain.
The figure in the amendment may be arbitrary, although I did not read it as arbitrary because it is situated in the middle of the divisions between the bands as one progresses up the hierarchy. We are dealing with banding which in itself has an element of arbitrariness, given that the valuation of houses in different parts of the country is so different. A house in London and the South East may be physically similar to one in the North East, but the house in the South East will have a much higher value. The Bill contains a great deal that is arbitrary. However, this is an arbitrary extra provision that I for one will be happy to support.
§ Lord Henley
My Lords, I totally and utterly reject the allegations which the noble Baroness made when she suggested that we had misled the groups of and for disabled people. I totally and utterly reject the suggestions made by the noble Lord, Lord Henderson, that there is an inequity in this particular provision for the disabled. I shall go on to discuss that in some detail. Nor do I agree with the noble Lord, Lord Henderson, that there are no objections to the basis of the amendment and that it is quite right and proper to come forward with an amendment, the movers of which admit is defective, at Third Reading.
§ Baroness Hollis of Heigham
My Lords, what I said was that if this amendment were adopted I believe that there would have to be consequential adjustments. That is not the same as saying that it is defective.
§ Lord Henley
My Lords, in my reading that means that the amendment is defective. It does not do what the noble Baroness is trying to do. It is wrong and it makes a fool of this House, which is a revising Chamber, to move amendments that are defective and do not achieve their purposes, and to seek that another place should make revisions.
§ Baroness Hollis of Heigham
My Lords, I thank the Minister for giving way a second time. I have taken professional advice of the Officers of this House and I was assured that this amendment was appropriate under the circumstances. I could do no other.
§ Lord Henley
My Lords, I have not said that it is inappropriate. I have just said that I did not think it was quite right for us to be wasting our time debating it when we debated this matter a great deal on earlier 412 occasions. I hope I may say, finally, as regards bringing forward amendments of quite such detail at this stage—I only saw the amendment for the first time this morning—that it might have been a little better if the noble Baroness had possibly apologised to the House for bringing forward amendments at Third Reading, at such a late stage.
I start by saying that we have taken considerable care to ensure that the council tax is fair to disabled people. We have had considerable discussions with all those groups representing organisations of and for disabled people. I am glad that the noble Lord, Lord Henderson, recognised that my honourable friend Mr. Portillo had taken considerable trouble on these matters. There will be discounts for severely disabled people who need carers to live with them, and discounts for people who are mentally impaired. The valuation regulations will be framed so as not to penalise people who need special fixtures or adaptations to their homes; and we propose a special scheme of reductions by regulations under this clause so that disabled people do not have to pay more council tax because their disability means that they need extra space in their homes.
The scheme that we propose will ensure that, where that person needs an extra bathroom, kitchen or other room because of a disability, or extra space to allow for wheelchair circulation, he will be eligible for a reduction equivalent to allocating his dwelling to a band one lower than the actual band.
The noble Baroness claimed that I had argued that they were reductions purely on account of disability in that a reduction in band could come about when someone stayed in exactly the same property. The noble Baroness, as always, was misinterpreting my position. The point I was trying to make was that it was the features taking on a new significance that could lead to a reduction in the band. That does not mean that it is purely on the grounds of disability. It is a question of the features themselves taking on a new significance. A disabled person who might he living in a band E property because of his need for a room to serve as a treatment room would therefore be eligible for a reduction under the scheme. In this case the bill would be calculated as if the dwelling were in band D, so that he would not have to pay more tax on account of his need for that extra room.
The amendment before us would mean that a reduction under the scheme would be limited to 14 per cent. of the bill. I am grateful to the noble Baroness for explaining the odd reasoning by which she reached that 14 per cent. but, as she accepted, in many cases it delivers a smaller reduction than the scheme which we propose. The real aim of the amendment is to deliver a reduction to disabled people living in band A dwellings. In this, it completely misses the point of the reduction scheme which we propose, just as the noble Baroness has missed the point in all our discussions in earlier stages of the Bill.
The case was put to us by RADAR and other bodies that it would be unfair if a disabled person had to pay more tax simply because of his disability, as my noble friend Lord Jenkin of Roding put it. Those bodies put it to us that someone who needed an extra 413 room to store wheelchairs, or for kidney dialysis equipment, might have to buy a two-bedroomed flat, or a house with two reception rooms, whereas, but for their disability, a smaller property with a lower capital value would have sufficed. They were concerned that such people might be paying more tax because they needed to live in larger and thus more expensive dwellings.
The aim of the scheme is therefore not to ensure that disabled people get a reduction solely because of their disability. The aim is to deliver a reduction where there is a likelihood that a disabled person would otherwise be paying more because of his disability. Those are two quite different things. The scheme we have proposed ensures equal treatment where a disability could otherwise mean a higher bill.
In the case of a band A property, as many noble Lords have said, it is simply not possible for someone to be paying more on account of a disability. A disabled person living in a band A house or flat cannot say that he is paying more tax because extra space or an additional room has placed his home in a higher band than would otherwise be the case. The dwelling is already in the lowest band, and the tax payer will be paying the smallest amount of tax possible for his area. The case that was put to us that disabled people could be paying more because of their disability does not arise in the case of band A property.
It has also been argued that there should be a reduction for those in band A on the ground of hardship. I recognise, as we always have done, that many disabled people will be on low incomes. As my noble friend Lord Skelmersdale said, this is where we look to the benefit system to provide rebates of up to 100 per cent. The higher personal allowances and disregards of income in the income support system that benefit disabled people allow them rebates at much higher levels of income than other claimants in similar circumstances.
Lastly, my noble friend Lord Renton asked about the disabled and whether that term included those with mental handicaps. I hope that we came forward with appropriate concessions on an earlier amendment, Amendment No. 4, which was welcomed by the House. The consequential amendment will go much of the way to meet the problems which my noble friend raised, but I can give him the assurance that the word "disabled" includes people with mental disabilities.
The measures we have taken have been in direct response to the representations made to us that disabled people should not be disadvantaged in comparison with others because property values form the basis of the tax. I hope the House will accept that we have met those concerns, and I would urge the House to reject the amendment.
§ 5.15 p.m.
§ Baroness Hollis of Heigham
My Lords, the noble Lord made one comment that I welcomed, which was his response to the noble Lord, Lord Renton, that the concept of disability includes those with severe mental impairment. As this is the subject of a subsequent 414 amendment, I am delighted to have that clarification from the Minister because it may make the meeting of minds somewhat easier later.
Five main points have been raised in a variety of very interesting and helpful contributions by your Lordships. I shall do my best to respond to them. First, the noble Lord, Lord Boyd-Carpenter, asked why it was suggested that this amendment was defective. What I tried to say was not that it was defective but that it might need consequential amendments. I was assured by senior officers of the House that that was an entirely proper way forward. It was necessary in that form—and I did not make a meal of this when I opened with this amendment—because of procedural moves (I will not call them games) played by Members on the Front Bench over an amendment which sought to help the most vulnerable people in our society. I was not going to say this until the noble Lord, Lord Boyd-Carpenter, raised the matter, but I thought those moves tasteless at best and perhaps cheap because they failed to permit us to bring back, on reflection, a different kind of amendment. That is why we have moved to this amendment, not because we would not have wished to pursue the first amendment. We were prevented from doing so by the manoeuvres on the Front Bench. That amendment was negatived. That is not a usual procedure.
On the second point about the arbitrariness of the 14 per cent. figure which was emphasised by some noble Lords, I had hoped that in my introductory remarks I had explained why the figure of 14 per cent. was chosen. It is the average of the percentage reduction of all the other bands. In fact, it is 14.4 per cent. That is why 14 per cent. was chosen. To use the words of my noble friend Lord Desai, it smoothes out the fact that some people enjoy an 18 per cent. reduction and some an 11 per cent. reduction only, according to which band they start from. This does not seem to be an unreasonable position. As it stands, the percentage drops are quirky; under this amendment they would be the same for all, and smoothed out.
I come now to the substance of two or three points raised by your Lordships. The first was raised by the noble Lord, Lord Jenkin, and supported by the noble Lord, Lord Henley. It was that the purpose of the original concessions from Mr. Portillo—which, as the noble Lord, Lord Henderson, said, were widely and genuinely welcomed by all parties—was that a disabled person who had to adjust his property so that it would come into a more expensive band would not have to pay for it to go into a more expensive band. That is correct, but that is also true for me. Let us suppose that I adjust my property tomorrow and build on an extra bathroom, kitchen or conservatory. If I start with a property of £40,000 and add £50,000 worth of value, I would not go up a band. What concession is that for the disabled if it is one that every noble Lord in this House currently enjoys? Why make a meal of that? It is part of the Bill as it stands.
The useful point made in Committee by the noble Lord, Lord Henley, was that where somebody stayed in his existing house and, as he rightly said, where its 415 features took on new significance by virtue of the person's disability—not because anything was done to the property: no new windows, bricks, doors or anything else—and so a different use was made of the property, that property would enjoy a reduction. The noble Lord, Lord Henley, said:For example, where some rooms are very large, and a person became disabled, the size of the rooms would be Important because the disabled person would not be able to live in smaller rooms".—[Official Report, 27/1/92; col. 1123.]I pressed him when winding up to say that if someone became disabled in an existing property and therefore its features took on a new significance, that person could apply for a downward valuation of the property. I asked: That is a correct reading, is it not? Yes, replied the noble Lord, unless he were to write to say otherwise. But of course he did not write. In other words, the person enjoyed a reduction by virtue of his disability. We should all be in the same position by virtue of the physical alteration of the property. If any of us reduce the value, we get a reduction; we can improve the property and it does not go up. The only thing that is distinctive for the disabled is that they use the space differently. That was the basis for the additional concession that we were glad to hear from the noble Lord. That is the point of our argument —except that it does not apply to band A. Having conceded that, there is no logical reason why it should not apply to band A.
My fourth substantial point concerned poverty. The noble Lord, Lord Skelmersdale, said that the disabled should be helped through the benefit system. He is entirely right. I remind your Lordships of the point at issue. Someone who is disabled would enjoy, for example, an additional premium of £16.65 (for a single person); for a couple it would be £23.90. That is welcome. But the Disability Income Group has suggested that the additional cost to that household is likely to be £60 a week.
As for the rebate scheme, if one member of a couple is disabled, they would cease to qualify for rebate in band A on the average council tax when their income exceeded £115.50 per week. They would run out of rebate at £115 a week in a band A property. Given that the cost of disability is perhaps an additional £60 a week, that is not a very high sum. I give way to the noble Lord.
§ Lord Henley
My Lords, the noble Baroness has been grossly over-selective. She merely mentions the disability premium on income support for a single person at £16.65. She fails to mention that there is a premium for couples and one for severe disability. The disability premium can be received at the same time as the severe disability premium. There is a premium for a disabled child and premiums for carers. All those can be taken into account. The noble Baroness merely takes one figure and says that on average according to some group the costs are £60 higher. There is a whole host of premiums which can assist the disabled person.
§ Baroness Hollis of Heigham
My Lords, I accept that, but I wish that the Minster had been courteous enough to listen to what I said. I gave figures for both a single person and a couple. I also quoted the figure for rebates, which he has not challenged: a couple, one 416 person of which is disabled, runs out of rebate at £115 a week. That is why the social security system cannot and will not meet their needs.
Finally, we come to the principle that if someone is in band A he cannot have a reduction because there is nowhere further down for him to go. I repeat, if one is single, one gets a reduction; if one is a millionaire with a dependent, unemployed son, one gets a reduction in band A. If one is disabled, apparently one does not. The amendment targets discounts for the disabled in all bands—not just those in the higher bands but those in band A as well.
The amendment would create fairness within the community of the disabled and fairness among those in band A who receive discounts. Do noble Lords want this Bill to leave this House knowing that the wealthy, the single, the nurse and the student can all get discounts in band A, unless they are disabled? In that case one can get discounts in bands B, C, D, E, F, G and H, but not in band A.
Noble Lords can do something about that situation tonight, at no cost to the Exchequer and minimal cost to local authorities. As a result the Bill will hit the statute book and perhaps the law will he the fairer because of your decision tonight. I seek the opinion of the House.
§ 5.24 p.m.
§ On Question, Whether the said amendment (No. 10) shall be agreed to?
§ Their Lordships divided: Contents, 71; Not-Contents, 151.418
§ Resolved in the negative, and amendment disagreed to accordingly.
§ 5.31 p.m.
§ Clause 14 [Administration, penalties and enforce-men's]:
Lord McIntosh of Haringey moved Amendment No. 11:
Page 10, line 7, after ("penalties") insert ("including provision as to the admissibility of evidence").
§ The noble Lord said: My Lords, I speak also to Amendments Nos. 23, 24 and 25, all of which relate to the issue of computerised records. Should anyone become touchy about such amendments being introduced at Third Reading, I remind the House that the amendments to deal with the problem of the inapplicability of computerised records as evidence in magistrates' courts were introduced by the Government only at Report stage in this House after the Bill had already gone through another place. I make no apology for taking a few days after seeing the government amendments to bring forward substantive amendments to the Government's own proposals.
§ I am well aware that Amendments Nos. 23, 24 and 25 are alternatives. One could hardly pass both Amendments Nos. 23 and 24, which propose different starting dates for the implementation of the Government's own proposals. I have to deal with the matter in this way because today is the last stage of the Bill in this House. I have to deal with this fugue in stretto. I believe that that is the technical term. In other words I have to take the amendments together and make a decision on the spot as to which is the best of the alternative Amendments Nos. 23 to 25 to recommend to your Lordships. I undertake to do so.
§ It is a sorry story of delay and indecision by the Government on a problem that had become clear in the summer and autumn of last year. Already in the summer a number of cases arose when pursuit of poll tax defaulters was held up by claims that computerised records were not acceptable as evidence in magistrates' courts. The chairman of the Association of Metropolitan Authorities wrote to Ministers about the matter in September. It took some time to receive a reply. Meanwhile the build up of court cases continued. However, it was not until 27th January that the Government first suggested that they would make proposals to legitimate the use of computerised evidence in poll tax cases in magistrates' courts.
§ It was not until last week that the matter came to your Lordships' House as a series of amendments to this Bill, with Third Reading today and presumably for Royal Assent some time in the second half of next week, although we cannot be sure about the progress of business in another place. I understand that the Commons consideration of Lords amendments is set down for Wednesday afternoon. Perhaps the Minister will indicate when he replies whether that means that Royal Assent will be sought on the same day. It makes a difference to the implications of these amendments.
§ As the matter has continued and as there has been disagreement between the Home Office and the Department of the Environment about what should be done regarding a problem which was well 419 recognised and documented, so the awareness of the general public of a loophole in the legislation has become wider. The number of cases which have not been resolved as a result of that loophole has increased enormously. A conference was held yesterday of the Association of Metropolitan Authorities and the Association of District Councils to consider the extent of the problem and what should be done about it. They had before them a letter from the Department of the Environment dated 24th February which concerned the advice to be given on community charge liability orders.
§ I shall not read out all the evidence from yesterday's conference, but it is appalling. Perhaps I may cite a few of the 39 examples that I could give. For example, in Rochdale, although at the beginning of the recent difficulties only those cases attending court were adjourned, the final court session for 1991–92 poll tax has been cancelled and 15,000 liability orders have been lost. In Coventry, from January 1992 magistrates were refusing to accept summons applications and had stopped hearing committals. Now everything is at a standstill. Lewisham had hoped to clear 60,000 cases by the end of the year involving 15 million of unpaid poll tax. On 28th January 4,000 cases were adjourned sine die and there have been no cases since then. In Havering on 18th February 3,000 cases were adjourned until 24th March. In Solihull cases are due on 5th March but it is uncertain whether 3,800 liability orders will be granted.
§ I could continue, but I shall not cite 39 different examples of cases where not tens, hundreds or thousands, but tens of thousands of court cases are being adjourned, sometimes until April or even later, because of the inadequacy of the present law and the inadequacy of magistrates' understanding of the law.
§ When the matter was raised at Report, I said that it was important. The noble and learned Lord, Lord Hailsham, corrected me. He said that it was not important but it was indeed urgent. It is the urgency that I now wish to stress. That is the thrust of the amendments.
§ In these amendments we do not seek to change the provision which is made. However, it would be much better if a broader power were given to allow the use of computerised evidence in magistrates' courts. As the noble and learned Lord, Lord Hailsham, rightly said, that should have happened many years ago or the law should never have been interpreted in any other way. But, it has happened and it would be better if the law were put right in a more structured way. In tabling these amendments we are fighting one part of the fire. I suppose that we must be grateful for that and hope that the fire does not spread to other areas as a result of the fire fighting at this stage.
§ The situation is so serious that in our view we should in such cases resort to retrospective legislation. In Amendment No. 23 we propose to make the provision retrospective from the date on which the Government announced that they would amend the Bill. Amendment No. 24 would be a fallback and would make the provision retrospective from the Third Reading of this Bill; that is from midnight 420 today. That is a course which governments have taken on many occasions. Indeed, on many occasions they have done what is provided in Amendment No. 23 and have said, "From the date on which we announce that something will be done, the legislation which follows shall act retrospectively from that date". Amendment No. 25, which is of a different kind, introduces provision for the payment of grants to reimburse authorities for the losses incurred by them as a result in the delay in the Government's response to the problems of computer evidence.
§ The first date in that amendment is the date of the January meeting of the council tax technical sub-group. Local authority associations then expressed anxiety at the consequences of the decision of St. Edmundsbury magistrates. At that meeting on 7th January civil servants said that urgent action would be taken to remedy the situation. The second date is 27th January, the date on which the Government announced their intention to amend the Bill rather than to use emergency primary legislation. I remind the House that when it became clear that legislation would be required the Opposition in another place undertook to give all co-operation in getting a Bill quickly through another place and, I am sure, through this House in order to achieve a speedier resolution.
§ We have a situation which is becoming worse day by day and week by week. Money is being lost because the shortfall in poll tax, which is difficult to calculate, is in the order of £15 billion. It means that local authorities are losing approximately £3 million in interest payments in every week of delay. I shall not comment further about the timing or about the adequacy of the provisions in the long term. However, in the short term and for this particular purpose the Government have done the right thing. In tabling these amendments we ask merely that they do so more quickly than has been proposed.
§ If the Government are at all sympathetic to any of the amendments we shall not move those in respect of which they are not sympathetic. If they do not feel able to be sympathetic, we shall have to decide which of the substantive amendments should be linked to the paving amendment. I beg to move.
§ 5.45 p.m.
§ Lord Renfrew of Kaimsthorn
My Lords, clearly the Opposition's intention in moving the amendments is constructive and one welcomes that. However, I hope that it is not inappropriate to point out that Amendment No. 11 must be one of the most superfluous ever moved. I apologise to the House for taking up time in commenting upon it. But since it appears on the Marshalled List, which is regrettable, one might as well point out that the appropriate clause which it amends reads:Schedule 4 to this Act (which contains provisions about the recovery of sums due, including sums due as penalties) shall have effect".It is proposed to add the words:including provision as to the admissibility of evidence".That is certainly true; the clause now includes such provision as amended. But to include that provision is 421 overwhelmingly superfluous, in particular since Schedule 4 deals with a number of other matters which are not itemised in this part of the Bill.
I apologise for taking up the time of the House in referring to the matter. However, this amendment appears to me to be one of the most supremely footling that we have had and, whatever else may happen, I cannot imagine that the noble Lord will divide the House on Amendment No. 11.
The other amendments have a great deal more substance. But I wish to express a note of caution about the element of retrospective legislation to which the noble Lord has referred. The necessity to bring about retrospective legislation is always a cause of unease. Whether the date is 27th January, 27th February or early in March, which the noble Lord predicted, when the Bill receives Royal Assent does not appear to make a great deal of difference. I agree with him that it is unfortunate that the loophole in respect of computer records, which is now closed as a result of an amendment moved at an earlier stage of the Bill, has cost a great deal of money. However, we must simply accept that that is the case. I do not believe that a great deal is achieved by bolting the stable door on 27th January or 27th February rather than 5th March or whenever the Bill receives Royal Assent. Surely the principle that wherever possible one avoids retrospective legislation is sound.
§ Baroness Hamwee
My Lords, I support the amendments. I hope that the Government will indicate that one of the solutions proposed by the noble Lord, Lord McIntosh, finds favour. I share the concern expressed by the noble Lord, Lord Renfrew, about retrospective legislation. However, one's anxiety about retrospection is that it is not generally in the public interest to make an act a wrong, whether criminal or civil, after the event. The point is so technical that I cannot believe that most of the people who were on their way to the courts believed that they would get off on a technicality.
I agree that this is an unusual case, but I believe that in the balance of public interest retrospection will not only assist the public purse to the tune of about £3 million per day—a figure which I too have seen—but will strike the right balance in the eyes of the public. We must all know that the public considers that one of the most distasteful aspects of the poll tax is the amount that those who are paying must pay as a result of those who are not.
I too have seen the letter to the chief executives dated 24th February. It gives them some comfort in stating that they should not assume that courts will necessarily reach the same decision as a particular court has reached. I take the point but do not expect that the chief executives will feel an enormous degree of comfort because so far the score is against them. I hope we shall hear that there is to be some movement on that.
§ Baroness Blatch
My Lords, I too can deal briefly with Amendment No. 11, as did my noble friend Lord Renfrew. The effect of the amendment is to make explicit that Schedule 4 includes provisions on 422 computer evidence. That simply is unnecessary. There is no need to specify in detail what is covered by the schedule.
Amendments Nos. 23 and 24 aim to make the provisions on computer evidence for purposes relating to the community charge and non-domestic rates partially retrospective either to 27th January or to today, 27th February. While I understand the noble Lord's intention I do not believe that the proposal is workable and I urge him to withdraw the amendment. Magistrates' courts have to act on the basis of the law as it stands. They cannot take account of what the law may be—and we are confident will be—in a week or so. On that point, the noble Lord was right in saying that the Commons will consider Lords amendments this coming Wednesday, but I cannot predict the date of Royal Assent. Therefore, they must decide cases now without the benefit of the computer evidence provisions before us.
There is an additional difficulty. The provisions that will be made under the new enabling powers in Clause 102 will require authorities to provide certificates when presenting computer evidence. They have not done so, indeed have not been able to do so, and will not be able to do so properly until the Act and the accompanying regulations are in force. The requirements of the new provisions cannot therefore be met.
As the noble Lord has explained, the amendment is designed to deal in particular with issues raised by two recent court judgments in the Blatchford and Bullard cases. The noble Lord has pressed us to say in the light of those judgments what action local authorities should be taking to enforce existing liability orders and seek new ones.
The Department of the Environment has written to local authorities on both questions. The position remains that, where an authority is seeking new liability orders, it should discuss the handling of those orders with the magistrates' court clerk concerned. There is no obstacle to authorities continuing to apply for liability orders where they consider that their procedures for the presentation of cases meet the requirements of existing law.
Turning to liability orders already made, a number of key points emerged from the Blatchford and Bullard cases. The bulk of liability orders granted by magistrates' courts cannot now be challenged because it is too late for the charge payers to bring proceedings. Liability orders remain valid and can be enforced until they are quashed by the High Court.
Authorities should consider being represented in future High Court cases and should consider inviting the court to use its discretion not to quash the liability order on the ground that the sum had been outstanding and no injustice can have been caused. I understand in the Bullard case that Coventry was not represented. That is most unfortunate.
When an order is quashed and remitted to the magistrates' courts for redetermination, authorities should consider asking them to hear other evidence of non-payment and, once this Bill becomes law, to take the regulations into account when considering 423 computer evidence. I am sure authorities will wish to consider these points carefully when deciding how to proceed.
Amendment No. 25 seeks to bring in a grant regime to enable the Secretary of State to reimburse authorities for any costs incurred as a result of the inadmissibility of computer evidence.
I recognise of course that problems with the admissibility of computer evidence have hindered the enforcement process. That is why we amended this Bill at Report stage to put matters right. We do not, however, accept that authorities need to be compensated for losses in cash flow that may have occurred. I certainly do not accept that authorities are losing £3 million a week as suggested by some noble Lords. Indeed, the noble Lord, Lord McIntosh, mentioned that figure. I should be interested to hear the data and a justification for those figures and the assumptions which underlie them.
It is far from clear that all authorities will have suffered losses or significant losses. While problems for authorities will have increased since last week's court judgment in the Bullard case, not all authorities will have had courts booked in the period. In sum, it would be very difficult indeed, if not impossible, to calculate the amount of loss which any particular authority might have incurred given the wide variety of circumstances. Indeed, quite a number of local authorities are managing without too much difficulty.
I should add that there is no need for this amendment anyway to pay a special grant. Section 146 of the Local Government and Housing Act enables the Secretary of State to pay grants for special purposes.
The noble Lord mentioned that there have been a number of adjournments. However, I believe that he will acknowledge that the position has been patchy. Despite what he said, throughout the country some authorities have obtained liability orders this month.
The House may like me to bring it up to date on progress with the draft regulations to implement the computer evidence provisions. As I explained to the House on Report, officials had discussed the regulations with the local authority associations. Those discussions have proved very helpful and we are grateful to the associations for their contribution. As a result of considering the points made, we have decided to make a number of amendments to the draft regulations. I shall outline those shortly. We concluded that it was not necessary or right to amend the provisions now in the Bill.
As regards the draft regulations, we have taken up a number of points made by the associations. We have extended the coverage of the regulations to all hearings that may take place in a magistrates' court in relation to enforcement of the community charge and non-domestic rate. Those procedures are the obtaining of a liability order, the hearing of a complaint against the levying of distress and the committal hearing. Computer evidence, subject to the certification procedure, will be admissible in any such hearing. Similar regulations will of course be made to cover the council tax.
424 The associations were also concerned about what the certificate to accompany computer generated evidence should contain. We have made a number of changes to make the certificate more straightforward. In particular, authorities will now be required to identify only the document concerned and the computer which produced it rather than, as previously proposed, describing the manner in which the document was produced and giving particulars of any device involved in its production. We have placed a revised draft of the regulations in the Library.
I hope that what I have said demonstrates that we have considered the views of the associations very carefully and that we are seeking to produce a workable system that will enable authorities to present the evidence they need. Once this Bill receives Royal Assent and the necessary regulations are made, the Department of the Environment will immediately write to all authorities with the regulations and some guidance on their application. Officials will be discussing that guidance with the local authority associations. Meanwhile, the latest draft of the regulations will be sent to authorities tomorrow to give them warning of the new arrangements.
In the light of what I have said, I hope that these amendments will not be pressed.
§ Lord McIntosh of Haringey
My Lords, I am grateful to the Minister for that lengthy and often helpful explanation of the Government's viewpoint.
First, I should correct something that I said earlier. I talked about £15 billion of poll tax arrears. Of course I meant £1.5 billion. I apologise for the mistake.
I should say to the noble Lord, Lord Renfrew, that when he is in Opposition later in the year, for the price of a lunch I shall be happy to explain to him the way in which the Opposition frame paving amendments so that matters are discussed for their convenience and for the convenience of the House. We recognise that paving amendments are not very significant in themselves but they help to put together groups of amendments which it makes sense for the House to debate.
§ Lord Renfrew of Kaimsthorn
My Lords, I am overwhelmingly relieved to understand that Amendment No. 11 had some purpose.
§ Lord McIntosh of Haringey
My Lords, as is obvious, not least from the fact that I found it necessary to speak for 10 minutes, the issue is extremely complicated. It is complicated not merely because the law is unclear but because different magistrates' courts and their advisers throughout the country have taken different views.
The Minister is right to say that in some parts of the country this does not appear to be a major problem. However, in other parts of the country magistrates' courts are cancelling poll tax hearings. That makes it impossible for any local authority to make progress in pursuit of arrears. Some courts are hearing appeals, some courts are hearing committals and some are hearing liability orders and any stage in between. Therefore, the fundamental point still applies; namely, 425 that it is the uncertainty of the law which is causing uncertainty in its application in different parts of the country.
It is still not certain what the law is. Despite the fact that the regulations are helpful and that contact with local authority associations has been helpful, it is not certain that all points have yet been cleared up. For example, what is the position of summonses that have already been issued which could be challenged between now and Royal Assent? Will the regulations cover those summonses? What is the position where liability orders have already been made? Will the Minister tell the House whether enforcement of those liability orders is safe or whether it is possible for them to be challenged? Clearly, many people have a strong interest in challenging those liability orders.
It may be that the most moderate of the three amendments is Amendment No. 25 which refers to the possibility of special grant. The Minister said that she recognises that the process of pursuing poll tax defaulters had been hindered by the inadequacy of the law. In all seriousness I must ask the Government whose fault they think that is. It is not the fault of the local authorities and it is not the fault of the Opposition. It is the fault of government that it has taken so long between the first flagging of the problem last year and the final implementation of even this partial solution. As has been made clear, the amounts of money are immense. The longer the delay, the larger the losses are likely to be and the more difficult it will be to obtain payment in the future.
It is not only with what happened in the past that we must be concerned; we must be concerned that for many months there has been uncertainty about the enforceability of the poll tax. That will affect not only the 1990–91 and the 1991–92 poll tax, but also the poll tax levied for 1992–93. Any unnecessary uncertainties or difficulties placed in the paths of local authorities—which are trying hard, as the Minister will agree, at enormous expense to reduce the backlog of arrears—should be avoided.
I return to the issue of retrospective legislation. I agree with all those who have said that it is undesirable. But we are making only a modest move towards retrospection. If we really wanted retrospective legislation we would have gone back to 1st April 1990, when the poll tax was first introduced. It was clearly the intention of the Government that the poll tax, having been introduced on 1st April 1990, could be enforced and collected; that magistrates' courts could issue liability orders where necessary. It was not anticipated by the Government or anybody else that this problem could arise. The problem should have been corrected much earlier. The least we can do is recognise that even a saving of a few days or a month or two in uncertainty is good for now and good for the future.
We are within possibly a week of Royal Assent. For that reason and on reflection it would be unwise for me to seek the opinion of the House on this matter although I fully intended to do so. That is not a matter for which I should apologise. It is the inadequacy and 426 tardiness of the Government's response to this well recognised problem that placed us in this unfortunate position. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ 6 p.m.
§ Clause 23 [.Contents of lists]:
Lord McIntosh of Haringey moved Amendment No. 12:
Page 14, line 43, at end insert ("and whether the assignment of the dwelling to the applicable band was carried out by a person appointed under section 21(3) above.").
§ The noble Lord said: My Lords, in moving Amendment No. 12, I shall speak also to Amendment No. 13. What a strange state of affairs we find concerning estate agents. Despite the opposition by a number of noble Lords opposite, we pointed out that the proposals for the valuation into bands of all the domestic properties in the United Kingdom were severely defective. We did that not merely because the bands are crude and the differences between them inadequate, but because the process of privatising a large part of the valuation procedure, which has never been privatised in the past, was fraught with risk.
§ As long ago as December, when the first contracts were let to private estate agents, it was clear that a number of estate agents had a good deal of doubt about whether it was possible for them to do a decent job. A number of them expressed anxiety in regard to the unfairness of a procedure where they are not allowed access to the property; whether or not they can see a back extension to a house, for example, depends entirely upon the height of the garden wall or whether there is a public footpath behind the house. Some noble Lords may recall publicity in the press for the anxieties felt by estate agents and others in regard to the valuation procedure.
§ We said that it was being done on the cheap and that if we were offered something for £20 million when we had estimated that it would cost £120 million, we should ask ourselves whether it would be done properly. Ministers brushed that aside and said that it would be all right. Unfortunately evidence is starting to emerge which already makes clear that we were entirely right.
§ The valuation office of the Inland Revenue produced a document which has become available to us—V07421NS. That shows that the differences between valuations carried out by the valuation officers and private contractors are huge. Of the first 4,704 batches checked by the valuation office and carried out by private contractors, almost 10 per cent. —437—failed the test. Even when they were resubmitted nearly 10 per cent. were still failing the test—that is, 30 out of 368.
§ In comparison, the valuations carried out by the valuation officers in a first issue of 2,379 resulted in only 96 failures and on resubmission in no failures at all. Those are large differences and clearly show that there is a high number of failed batches from private contractors. I gave the total figures for the whole country. We have the figures for each of the regions and those from a number of valuation officers. In Cambridge, of the batches checked, 68 per cent. of 427 those carried out by private contractors failed the test; in Worthing the figure was 54 per cent.; in York 40 per cent.; in Darlington 37 per cent., and so on. The rest are of course lower because the average, as I said, is 10 per cent.
§ That indicates that something is seriously wrong when the quality of work carried out by private contractors is so conspicuously worse than the quality of work carried out by valuation officers. One is bound to ask whether even the £19 million that the process will cost is money well spent if it results in something which appears to be as largely arbitrary as the valuations being carried out.
§ The cost is not merely the cost of reassessment by the valuation office or the resubmission of batches; the cost is that there will be no public confidence, justifiably, in the valuation process. That in turn will lead to a large number of appeals against the banding, again as we predicted and as Ministers denied. Those appeals will be fuelled by the knowledge that the work of private contractors is unsatisfactory. The Ministers will no doubt say in reply that it is all right because those failures were revealed by the quality control procedures of the valuation office. That is all very well, but even Ministers will not claim that the quality control procedures cover all batches. They can only be a sampling process. I do not think that anybody would claim that they would be valuations of all the properties within any individual batch. Again, it must be a sampling process. It is public confidence that is at stake. Public confidence cannot be assured by the way in which the valuation process has been proceeding and by the results so far produced by the valuation office.
§ The amendments seek to provide the minimum of freedom of information. People should know whether their dwelling has been valued by private contractors or by valuation officers. Amendment No. 13 provides that anyone wishing to appeal against a valuation will have an indication of the standards of work of the estate agent who carried out the valuation of the dwelling. If the Government accept the amendment, they will avoid enormous difficulty with appeals later on. Those who have had their valuations properly conducted, either by valuation officers or according to proper procedures, will be discouraged from appealing. I beg to move.
§ Lord Skelmersdale
My Lords, that is a very curious way of looking at the matter. Although we all read in the Sunday papers of the valuation office's recent report and the sample figures from it—I understand that the noble Lord has quoted from the report itself—nowhere was the suggestion made, as far as I can see, that all private sector valuations were in error. The noble Lord has not made that point himself. Therefore, that leads me to suppose that there will be many cases where private sector valuation is perfectly satisfactory and above board. By highlighting, as the noble Lord's amendment suggests we do, the private sector valuations in the valuation list, we are causing more uncertainty rather than less. I suspect that this is a direct attack on private sector valuations and I do not think that that is right.
§ Lord Renfrew of Kaimsthorn
My Lords, I too have very strong reservations about the amendment. The noble Lord opposite spoke of public confidence. I cannot see a more effective way of undermining public confidence than by having asterisks and footnotes which would tend to raise doubts. He certainly pointed out that there have been inconsistencies in some valuations. I am satisfied that the valuation office has clearly been doing a good job in various areas in picking up the discrepancies.
If the noble Lord had been arguing that there was a case for more internal scrutiny of the same kind I believe that he could have persuaded me that he had a significant point. When it comes to the details of the amendments I am not at all clear, as is often the case, that they will achieve even what he intends. He wants an addition made to the valuation list under Amendment No. 12, but he has not included a provision that when the notice goes out to householders or residents that the same point will be made. The notice has to include the valuation—that is to say, the banding within which the property falls. But the noble Lord has not made that provision.
As regards Amendment No. 13 we find a curious point. We have a long supplementary statement which the noble Lord wishes to have made and which he wants the listing officer to state. But nowhere does the noble Lord tell us to whom or where the listing officer shall make the statement. I am not being unduly pedantic here. It is not at all clear in exactly what way the listing officer will make the statement. He could append this very copious supplement to the valuation list referring to each property, but that would not necessarily do a great deal. If the amendment required it, he could include a long supplement in each notice sent to each householder. That would be bureaucracy run wild. That appears to be the trouble with this amendment. It would result in bureaucracy run wild. If anything, it would undermine public confidence in the procedures. I agree very much with the noble Lord's point that it is important that there should be public confidence in the procedures. I am sure that that would only be enhanced if there were more internal scrutiny of the kind which has already brought to light the discrepancies to which the noble Lord rightly draws attention.
§ Lord Boyd-Carpenter
My Lords, the purpose of the amendment is to discourage the use of private professional firms. If the amendment were put into law and a notice was put on every assessment which was carried out by professional firms that it was done by them, that would plainly be read as the noble Lord intended that it should be read; namely, as an indication that the assessment was done in an inferior and perhaps inadequate way. That is clearly the purpose of the amendment. I do not believe that your Lordships need waste very much time on what is simply an example of the prejudice of noble Lords opposite against the private sector and private enterprise.
§ 6.15 p.m.
§ Baroness Blatch
My Lords, I think that the noble Lord doth exaggerate his case. This is no more than a vendetta against the private sector.
Amendment No. 12 proposes that those dwellings which were valued by private sector valuers should be identified on the valuation list. Amendment No. 13 proposes that, where there is a disagreement between a listing officer and the person making a proposal to alter a valuation list, the listing officer should be required to say whether the valuation was carried out by a private sector contractor and what quality controls were applied by the valuation office. I would suggest that the real objective of noble Lords opposite is to make mischief with the thinnest, and indeed the most immaterial, of evidence.
The valuation office understood from the start that there would be some variation in standards at the beginning of a large exercise like this, whether it was being conducted by private sector valuers or by their own staff. That is why it put in place such stringent quality control procedures. I take the point made by my noble friend Lord Renfrew on that.
Noble Lords opposite have tried to argue that the valuation exercise is running aground; that unqualified and unscrupulous estate agents are producing poor quality work jeopardising the integrity of the valuation lists now being prepared. If I may say so, I believe that they have proved quite the opposite. They have demonstrated that the Valuation Office Agency is very much in charge of the valuation exercise, that the quality control procedures that it has adopted are working effectively and that the overwhelming majority of private sector valuers are satisfying all the required standards—again a point picked up by my noble friend Lord Skelmersdale.
We made it clear from the very first that the Commissioners of Inland Revenue are responsible for all council tax valuations. There was never any possibility that the valuation office would unquestioningly accept whatever valuations the private sector produced. What noble Lords opposite have produced is in fact evidence that the valuation office is very much in control and very much on top of the job.
Each batch of valuations provided by private sector valuers is carefully checked by the valuation office. If the private sector fails to come up to the mark, it can be asked to value the batch again. If the work is still not up to the required standards the contractors can be dismissed. To date over 90 per cent. of the batches completed by private sector valuers have met the required standard. Only about 9 per cent. of batches were not accepted. In all such cases the valuation office and its contractors discussed any disagreements and the work was repeated by the contractor. Following such further consideration, over 99 per cent. of private sector valuations were in line with valuation office requirements.
The net result of applying this stringent and thorough quality control procedure is that the valuation office has had insurmountable problems with only four out of the 512 contracts. Those four contracts have been terminated. I think that noble Lords will agree that that is a pretty good record.
430 Progress on the valuation exercise as a whole has been excellent. I can assure noble Lords that all properties will have been valued in good time for the introduction of the council tax in 1993. The systems that we have put in place ensure consistent and reliable valuations while providing excellent value for money. I hope that the noble Lord recognises that the work is being carried out to a high order and that it is acceptable. I hope that he will not press the amendment.
§ Lord McIntosh of Haringey
My Lords, the noble Lord, Lord Renfrew, said that he may have been pedantic. For an archaeologist being pedantic is a virtue, is it not? I am sure that he brings his academic virtues to the deliberations of this House. We do not criticise him in that way. He is wrong though. He is wrong in saying that the amendment requires that the notice of valuation going out should include all the additional material. He is wrong because there is no notice of valuation going out. The first that householders will know of what band they are in is when they get the bill. That is another of the problems that has been pointed out from these Benches over and over again.
The noble Lord, Lord Skelmersdale, accused us of highlighting the problem. What we are doing here is pointing out, as the Minister rightly said, that the problems are in a small minority of cases. The problem is that unless people know whether they are part of that small minority of cases which have been badly valued they will lose confidence in the whole process. The effect of what we are saying is that the quality control procedures which are quite rightly being applied by the Commissioners of Inland Revenue shall be made public and on an individual basis.
§ Lord Skelmersdale
My Lords, what I actually said, and what I believe, is that marking all such properties on the list as these amendments propose would result in the valuation exercise being devalued per se. That is what I said.
§ Lord McIntosh of Haringey
My Lords, that is not what the amendments say. Amendment No. 12 seeks to provide that a valuation list must show whether the valuation has been carried out by a private sector estate agent or not. Someone wishing to appeal against the valuation will then have an indication of the standard of work carried out. The hope is that, if that happens, a high proportion of those appealing will know that the work has been carried out to a high standard.
I am not sure that at Third Reading I ought to give way to a noble Lord who has not taken part in the debate. I will do so on this occasion, but it is dangerous.
§ Lord Swinfen
My Lords, I thank the noble Lord for his courtesy. Speaking as a surveyor who has been involved in valuations, the private sector has far more experience of the values at which properties change hands than does the public sector and is therefore far more likely to be accurate in its valuations.
§ Lord McIntosh of Haringey
My Lords, unfortunately the evidence gives the lie to that. I cannot keep giving way.
§ Baroness Blatch
My Lords, the evidence does not give the lie to that. The evidence bears out what my noble friend has just said.
§ Lord McIntosh of Haringey
My Lords, on the contrary. The evidence which I read out, and which is on the record, is that the internal valuations of valuation officers were to a much higher standard than the valuations of private contractors. I do not wish to repeat the figures, but the Minister has confirmed that 9 per cent. of the private contractors' valuations failed the quality control test, whereas—though I have not calculated the percentage—of the valuation officers' bandings only 96 out of 2,379 failed the test. The valuation officers did a better job than the private contractors. That is a matter of record.
Fundamentally it is an issue of public confidence, is it not? If we are to have a system which is accepted, understood and believed in, then there has to be public confidence. It is simply no good to say that public confidence will be maintained by concealing the facts. That is what is being suggested; it is the bearer of bad news who should be shot rather than that the bad news should be accepted. What I have revealed today in this House is an unacceptable level of valuation by private contractors. By anybody's standards to have 9 per cent. of batches failing the tests of the valuation officers is unsatisfactory.
The point for the future is that nobody knows whether they are in the 9 per cent. or not. The point about quality control is that, unless valuation officers will value all the properties in all the batches, nobody will know whether the quality control applies to their own dwelling. That is the fundamental problem that Ministers will face, as will the new government, as the time for appeals against valuation and banding comes into effect.
I have been accused of a vendetta against the private sector. I do not think that was true, even when we started to criticise the use of private contractors, but now that we have been proved right by the figures it can hardly be called a vendetta. I would not dignify it with the name of "crusade" but I would say that the Government are creating enormous difficulties for themselves in the future. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 24 [Alteration of lists]:
§ [Amendment No. 13 not moved.]
Baroness Hollis of Heigham moved Amendment No. 14:
Page 17, line 2, leave out ("physically").
§ The noble Baroness said: My Lords, in moving Amendment No. 14, I shall speak also to Amendment No. 15. In the light of the comment made by the noble Lord, Lord Henley, to the noble Lord, Lord Renton, on a previous amendment that the disabled included the severely mentally impaired, I am hoping that he will spring up and say that this amendment is not 432 necessary; in which case I shall gladly sit down and withdraw it. As so far he has not done that, I shall proceed briefly.
§ At Committee stage there was widespread support for the principle of this amendment that the disabled who are eligible for a valuation discount should not be just those with physical disability. The wording which we put forward then was thought to be too narrow. As a result of the comments of the noble Lord, Lord Boyd-Carpenter, and my noble friend Lord Stoddart among others, that amendment was withdrawn. This amendment has been brought forward in a way which I hope will faithfully meet the points they sought to raise then.
At Committee stage on 20th February the noble Lord, Lord Henley, said:
It is not our intention to exclude any group of people who might benefit from these regulations".—[Official Report, 20/2/92; col. 1347.]
§ This amendment would seek to turn that helpful and conciliatory tone into an effective undertaking by placing it on the face of the Bill, because, as the Bill stands, those suffering severe mental impairment will be excluded from its benefits.
§ It is often assumed that the homes of those with severe mental impairment need little or no adaptation. There are many people in your Lordships' House who have had much more experience than I have and they will know, as even I do, that often extra soundproofing is needed, as may be extra heating for those who tear their clothes. Reinforced doors and windows may also be needed, as well as additional safety precautions and special fittings in kitchens and bathrooms to prevent scalds, burns, electric shocks, gas leaks and fires.
§ MENCAP gives further examples of walls needing to be replastered with plaster that cannot be ripped off the wall and eaten and of woodblock floors which, because they formed a pattern which was unacceptable to someone with a certain severe mental impairment, were continuously pulled up and had to be replaced by concrete. MENCAP also makes the point that mentally disabled and severely handicapped people may simply need extra space not shared, for example, with other children. Therefore an additional bedroom or bathroom may be required.
§ Amendment No. 15 refers to the concept of serious illness and is designed to help those suffering from a sustained and severe condition—for example, rheumatoid arthritis, which may leave the patient wheelchair bound. It might also apply to some terminal illnesses where the term "disabled" is not always appropriate but where the sufferers may need material adaptations and who under the old rating system would have qualified for rating relief. The rates referred to a person handicapped by disability or illness. This amendment, while more acceptable to the disability organisations, would reach the same groups of people. I hope very much that the Minister will be able to accept the substance of this amendment. I beg to move.
§ Lord Henley
My Lords, I hope that I can be somewhat more conciliatory than I have been in the past. I was tempted to intervene, as the noble Baroness 433 invited me at the beginning, to say that the amendment was not necessary. However, I should not like to go quite as far as that. It is certainly important that I get certain things on the record which I hope will go most of the way that the noble Baroness wishes me to go.
Clause 24 deals with circumstances in which valuation lists may be altered after the initial valuation of a dwelling. It enables regulations to be made providing for the lists to be altered in cases where there has been a material reduction in the value of a dwelling. Material reduction is defined as including a reduction caused by an adaptation which makes a dwelling suitable for use by a physically disabled person.
These amendments would enable lists to be altered where a dwelling is adapted to make it suitable for use by a disabled person or a person suffering from serious illness. As the noble Baroness said, we discussed similar amendments at Report stage. I explained then that the amendments, worthy though they were, were simply not necessary. I said then—and the noble Baroness quoted me—that we do not intend to exclude any group of people who might be expected to benefit from these regulations. The question of the material reduction only arises if the alterations made are so substantial that they reduce the value of a dwelling to the extent that it is appropriate to assign it to a lower band. I gave the example of a lift for a wheelchair user which takes up a large proportion of the living space in a dwelling and is unsightly. Such a facility may well reduce the capital value of a dwelling to such an extent that it would be appropriate to allocate it to a lower band. I should make it clear that the facility does not necessarily have to be used by a person with a physical disability. The regulations will be about the changes that have been made to the dwelling and will not depend on the residence of a physically disabled person.
Any dwelling adapted in the way that I have described would be covered by regulations under Clause 24 whether the facility was actually used by a physically disabled person, a mentally impaired person or someone suffering from a serious illness. Since our previous discussion MENCAP has put to me in a letter examples of the type of adaptations that have to be made to the homes of people with learning disabilities. The noble Baroness gave some of the examples which MENCAP put to me. People with severely disturbed behaviour may require special wall and floor coverings of a type that cannot be stripped off. They may need polyurethane windows in place of glass and reinforced doors may be necessary.
However, having considered those examples, I still take the view that such adaptations would not be significant in terms of the downward rebanding of a dwelling. I am also hard put to think of any significant adaptations for a seriously ill person that would not be suitable for use by a physically disabled person and thus be already covered by the clause. I therefore see no reason to amend it.
I do, however, accept MENCAP's case that there are a small number of people with severely disturbed 434 behaviour who may require extra space in the form of a room which is specially equipped; for example, to prevent injury or to provide sound insulation. While this would be unlikely to reduce the value of a dwelling significantly, it could well mean that such people and their families had to live in a larger dwelling than would otherwise be the case. So while this would not be relevant to Clause 24, it would be appropriate in these cases for a one-band reduction to be given under the special reduction scheme which we propose to introduce by regulations under Clause 13 of the Bill. That would allow a reduction where a person with a learning disability requires a room to meet his needs because of his disability. We are currently consulting on the precise terms of the regulations setting out the scheme and we shall certainly ensure that the scheme extends to such people.
We feel that this is the appropriate way of meeting the case of the person with a learning disability who may require extra space in the form of a special room. I hope that the noble Baroness will accept that we have gone a considerable way towards meeting what she seeks and I trust that she will welcome these measures and will therefore not need to press her amendments.
§ 6.30 p.m.
§ Baroness Hollis of Heigham
My Lords, before the noble Lord sits down, if we are as close as he says we are on these amendments, can he say why he cannot accept them?
§ Lord Henley
My Lords, we feel that our wording does these things better and that it is not necessary therefore for the noble Baroness to press her amendment. We go a considerable way towards meeting what she seeks. As I made clear, I do not accept all the arguments put forward in the letter from MENCAP but I have accepted that some people ought to be provided for, as I explained towards the end of my speech.
§ Lord Henderson of Brompton
My Lords, before the noble Lord sits down, could he not accept the first of the two amendments? That would seem logical in view of what he said to the noble Lord, Lord Renton. But I may or may not be right.
§ Lord Henley
No, I do not think I can accept the first of the amendments. I have tried to meet the spirit —the noble Lord nods his head—and obviously I have in large part met the spirit of the amendments. I would not wish therefore to accept the amendment itself.
§ Baroness Hollis of Heigham
My Lords, that genuinely places us in some difficulty. I entirely take the point that the noble Lord has met the spirit of the amendments. He is saying that where the provision says "physically disabled" one should read "disabled". That is fine in so far as anyone who is disabled requires sufficient material adaptations to bring that property down a band. The trouble is that we are dealing with words on the face of the Bill. Anyone reading the words,to make it suitable for use by a physically disabled person",435 will not, unless he carries around with him a portmanteau of Hansard, know that what the Minister actually meant was to disregard the word "physically" and concentrate on the word "disabled". It was genuinely in a spirit of trying to meet the issue that was raised in Committee and on Report that the first of those amendments to leave out the word "physically" was intended.
Following the point made by the noble Lord, Lord Henderson of Brompton, I do not understand why the noble Lord is resisting the amendment. He said that where the provision says "physically disabled" the spirit of it means "physically and mentally disabled" in so far as that produces a reduction in value by virtue of material reductions. Either one says "physically and mentally disabled" or one crosses out "physically" and says "disabled". What one surely does not do is keep on the face of the Bill "physically disabled" to be understood within a framework tucked away in the columns of Hansard that it includes severely mentally impaired people as well.
I ask the noble Lord for help here. Can we perhaps follow the position of the noble Lord, Lord Henderson? We are seeking now to turn the words of the Bill into the spirit of what the Minister said. I welcome the Minister's conciliatory tone; it was very helpful. But the words in the Bill do not reflect what the Minister has now said. The only way to do that is by means of a tiny amendment to cross out the word "physically". That would bridge the gap between us. I invite the noble Lord to make that change.
§ Lord Henley
My Lords, I can go no further. I have explained that that part was unnecessary. Though the words "physically disabled person" are used, the provision does not mean that it has to be a physically disabled person living there; it is suitable for use by a physically disabled person. As I explained, that can very easily cover the other categories that the noble Baroness mentioned: those who are mentally impaired or those suffering from long illness.
§ Baroness Hollis of Heigham
My Lords, if it were not Third Reading I would seek to press the amendment. I am sorry that the Minister could not accept a modest tidying up which would have embodied the spirit of what he was saying. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ [Amendment No. 15 not moved.]
§ Clause 26 [Powers of entry]:
Lord Skelmersdale moved Amendment No. 16:
Page 17, line 31, after ("given") insert ("to the occupier").
§ The noble Lord said: My Lords, when on Report my noble friend Lord Balfour moved a similar amendment to insert "owner or occupier", he received approval from all round the House, if, that is, with the Liberal Democrats, silence means consent. They were the only sector of the House not to utter on that occasion.
§ My noble friend argued that Clause 26 of the Bill did not say to whom a notice specifying the powers of entry to a particular property, where needed—on the fairly rare occasions that they will be needed at all 436 —should be sent. In the course of our short debate on that occasion the Government responded that it was not necessary for the notice to be sent to the owner because it is the occupier who is most incommoded when the powers of entry are required. I accept that point of view, especially as, if the notice does not provide results and the valuation officer cannot gain entry, he may under Clause 27 serve a notice requiring information on either the owner or the occupier of the property. So far, so good. However, I for one was unconvinced by the answer that there is no need to refer to the occupier in Clause 26. But it was not my amendment and my noble friend duly withdrew it.
I decided to do a little research on the matter and discovered that the words of the Bill are rather better in one respect than those of its progenitors—Section 60 of the Local Government Act 1948 which was repealed in favour of Section 86 of the General Rate Act 1967, neither of which mentioned that notices must be sent to the occupier. The respect in which they are better is that in this Bill three days' notice is given to the occupier but in the previous Acts the time was,
not less than 24 hours".
§ So that is a clear improvement. The reason that I put down the amendment is to ask my noble friend whether there have been problems in notices getting to where they are needed; namely, the occupier. I beg to move.
The Earl of Balfour
My Lords, this to me is one of those fascinating examples of where there is a distinct difference between English and Scottish legislation. Like my noble friend Lord Skelmersdale, I went back through quite a number of the Acts to see what the wording was. I must in all fairness say that the drafting of Clause 26 is very much better than any previous legislation I found. I went as far back as 1948.
The real problem is that I failed to find the word "occupier" in any of the previous legislation. The reason behind that is that in English law an occupier is a rather different person from what he would be under Scots law. For what it is worth, if noble Lords compare Clause 6(2) with its mirror clause, Clause 75(2), they will find that the people there listed are almost exactly reversed.
I have come to the conclusion that to insert the word "occupier" into English legislation could perhaps create a minefield. I am very grateful to my noble friend for tabling the amendment. It was certainly worth airing the issue and the differences involved. I merely wished to point out the result of my research. I shall be most interested to hear what my noble friend on the Front Bench has to say.
My Lords, on Report my noble friend Lord Strathclyde explained why the wording of Clause 26 is as it is, and why the equivalent provisions for Scotland are different. There is no need for me to traverse that ground again. However, it may be helpful to the House if I were just to summarise why the Government are completely comfortable with the wording of the Bill.
The occasions when a right of entry is needed will be few and far between. When that right is needed, it 437 is essential that the powers provided by the legislation give the desired result. Clause 26 is based on precedents from rating, both domestic and non-domestic. The wording in the Bill as to notice has operated successfully in England and Wales since 1948. Similarly, the wording used for the Scottish provisions has operated successfully in Scotland since 1928.
The effect of the provisions is precisely what my noble friends say that they are seeking. In practice, notice would be given to the occupier in most cases, although where no one is living in the dwelling, notice to the owner may be more appropriate. Notice to, for example, the next door neighbour—a hypothesis put forward by my noble friend Lord Balfour on Report —would not be adequate.
It is fair to say that my noble friend Lord Skelmersdale has looked at the clause and has detected an apparent lacuna. I ask him to take it from me that there is no such lacuna. If he can take that from me, I would ask him to go further and accept the argument that, "If it ain't broke, don't fix it". Adding the words suggested by the amendment is unlikely to make any difference in the majority of cases. But I am advised that it could in the minority of cases, especially where the occupier and resident are not one and the same person.
My noble friend asked a specific factual question regarding whether there had been problems in getting notices to occupiers. I can tell him that there have not been. Indeed, the increase to "three clear days' notice" in the Bill was to allow people more time to make arrangements to be at home; for example, by getting time off work. I hope that what I have said has reassured both my noble friends. I also hope that the amendment will be withdrawn.
§ Lord Skelmersdale
My Lords, I am grateful to my noble friend Lord Balfour for his support. I must say that I would not have the temerity to involve myself in Scots law, especially from the Back Benches. My noble friend on the Front Bench said:If it ain't broke, don't fix it".He gave me good reason to suppose that it was not broke. But if it becomes broke in the future, I have no doubt that the House will come down on the Government of the day like a ton of bricks. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ 6.45 p.m.
§ Clause 39 [Precepting and precepted authorities]:
Lord Underhill moved Amendment No. 17:
Page 28, line 4, leave out ("and").
§ The noble Lord said: My Lords, in moving this amendment I shall speak also to Amendment No. 18. I do so because Amendment No. 17 is merely a paving amendment. It is not my intention to repeat the speeches that I made on the matter both in Committee and on Report. However, there are one or two points which I ought to make.
§ The House will recall that the Local Government Finance Act 1988 changed passenger transport authorities from being precepted authorities to a 438 levying system. Noble Lords will also recall the very powerful speech made by the noble Lord, Lord Jenkin of Roding, who argued the case for PTAs being precepting authorities.
In Committee, I proposed an amendment to add metropolitan passenger transport authorities to the list of precepting authorities set out in Clause 39. I commented that the local government Minister had said that representations for the change had been made vigorously to the Minister for Public Transport. The noble Earl, Lord Howe, who replied on behalf of the Government in Committee, said:
The Government do not have a closed mind on the return to the precepting status. We are alive to the views expressed". [Official Report, 28/1/92; col. 1275.]
§ As it was clear that the Government were to give serious consideration to the representations so vigorously made, I withdrew the amendment at that stage.
§ On Report, the noble Lord, Lord Teviot—who I am pleased to say has added his name to the present amendment—proposed an amendment not to insert a statutory provision but instead to give the Secretary of State order-making powers should the Government decide on the principle of PTAs becoming precepting authorities. That was all that the noble Lord's amendment, which I supported, sought to achieve. In other words, if the Government decided that PTAs should become precepting authorities, then the Secretary of State would have powers to issue an order.
§ I recognise the fact that the noble Earl has always been very courteous and careful in studying the briefs which he has to use. However, I think that it will be agreed that, on Report, he did not deal with the representations which his own Minister said had been made so vigorously. He stated that the Government rejected any change. I am certain that other noble Lords shared my concern that we had been rather let down on the matter. We believed that the Government were giving serious consideration to the representations which, as I said, the Minister said had been made most vigorously. Yet, frankly, we did not hear the arguments as to why the Government had decided not to accept the mild amendment put forward by the noble Lord, Lord Teviot—and I think he will agree that it was a mild amendment—which merely sought to give the Secretary of State order-making powers.
§ For that reason I am tonight reverting to the original amendment which I proposed in Committee. I am certain that no one will criticise me for bringing it forward on Third Reading. I say that because I withdrew it in Committee and was prepared seriously to consider what the Government had to say on Report; but the reply was unsatisfactory.
§ It will be recalled that the noble Lord, Lord Boyd-Carpenter, said that he had little enthusiasm for the general practice of preception. It will also be recalled that I drew attention to the fact that Clause 39 includes county councils in its list of precepting authorities. No one would believe, or take the view, that a county council could be anything else than a precepting authority so long as county councils still exist.439
§ Further, as the noble Lord, Lord Jenkin, explained, with the abolition of metropolitan counties the Government provided that the police, fire and transport services should be set up under joint boards. In the main, those bodies have worked satisfactorily. I should like the Minister who is to reply to say why police authorities should be left as precepting authorities but not PTAs. Why should the fire service and civil defence authority be listed under Clause 39 as precepting authorities when the Government will not move on PTAs being precepting authorities? Why should the Northumberland PTA be included but no other PTAs? The Government must give sound reasons as to why they have not been included and why they have not been prepared to include PTAs as precepting authorities under Clause 39. What serious consideration have the Government given to the representations which the Minister said had been so vigorously made on this matter?
§ Lord Teviot
My Lords, I am happy to have put my name to this amendment, together with the noble Lord, Lord Underhill. I must first apologise to my noble friend Lord Howe because what I took to be an "incompetent" disadvantage on Report was in fact a "concomitant" disadvantage. I am afraid that I had never heard of the word and had to find a dictionary. For the sake of those less well educated, could not the phrase "further disadvantage" have been used rather than "concomitant disadvantage"? I should have understood that. My noble friend now knows that it is because the word "incompetent" is rather stronger than the word "concomitant" that I reacted so loudly.
The noble Lord, Lord Underhill, mentioned my "mild" amendment. I withdrew it because my noble friend Lord Boyd-Carpenter, whom I am happy to see in his place, said strongly that that procedure was unconstitutional. However, there may be a flaw which is the whole reason why the noble Lord, Lord Underhill, has returned to the amendment today.
As I have said previously, the issue of the precept and the levy is thorny. I now have a totally unscripted speech—on Report I had all the frills and everything with me—but I am now on my own and am probably making an absolute disaster of this as a consequence. The money has simply not got through to the projects as it should have. I mentioned previously all the metropolitan areas, apart from Strathclyde, which the Bill does not affect, and London. All the others have suffered in some way.
I should like to pick up the point of the noble Lord, Lord Underhill, that the police and fire authorities still have the precept, so why has transport been so very unlucky? Finally, although I do not dispute that my noble friend Lord Jenkin made his case very clear, are we not dripping at the stone despite the fact that one should not have to drip at the stone on a question such as this? The precepting situation has been unsatisfactory since 1958, since we went ahead with levying powers. I hope that if the Government will not reconsider this matter tonight, they will do so in the very near future.
§ Lord Boyd-Carpenter
My Lords, the noble Lord, Lord Underhill, was good enough to refer to an earlier 440 speech of mine in which I expressed a certain lack of enthusiasm for the procedure of precepting. He went on to say that county councils would always have to have the power to precept. I do not want to widen the debate too far, but the Local Government Commission is currently investigating the structure of local government on behalf of the Government. If, as may well be the outcome, only small county councils remain, there may well be no particular reason why they should be precepting authorities and why they should not, on the contrary, have to take the responsibility vis-à-vis the electors and voters of proposing a rate that they are prepared to justify. Your Lordships will recall that the difficulty about precepting is that it is perfectly easy to issue a precept to some other body which must then carry the can for raising the money and obtaining it from the voters. On the whole, that is not a sound procedure.
As to the exclusion of the passenger transport authorities, which is the immediate subject of the amendment, I am prepared to listen to the Minister. There is a remarkable list of those who are given precepting powers, including, I am delighted to see, the sub-treasurer of my own Inn of Court. That is a remarkable tribute to him. I shall be interested to hear the Minister's point about the transport authorities.
My Lords, during the passage of the Bill we in this House have debated the issue on two previous occasions. In those debates my noble friends Lord Teviot and Lord Jenkin and the noble Lord, Lord Underhill, have set out clearly the arguments for making PTAs precepting authorities. As I have made plain in the earlier debates, we have considered very carefully the clear presentation which noble Lords have made in support of precepting status. I have again this afternoon listened carefully to the arguments.
As my noble friend Lord Jenkin recognised at Report stage, there is a balance of argument as to whether PTAs are given precepting or levying status. Having looked carefully at all the arguments, our firm conclusion still is that the balance of argument lies fairly and squarely on the side of levying status. It is clear from the debates both in this House and in another place that this is no off-the-cuff or rapid conclusion. We have reached this view after well-measured and lengthy consideration and I have not heard anything this afternoon to sway me to the opposite view.
Before we made PTAs levying bodies, which took place for 1990–91, we believed that as precepting authorities they were insufficiently accountable for their spending decisions. As my noble friend Lord Jenkin explained on Report, by making PTAs levying bodies their spending is effectively lumped together with other district expenditure. We believe that this means that district councillors, both in their roles as councillors and as members of their PTA, will more easily be able to weigh relative spending priorities for the whole range of local services, including transport services. Proper consideration of spending priorities lies at the heart of effective local accountability.
The noble Lord, Lord Underhill, suggested that if these arguments are right for PTAs, then they apply 441 with equal force to the single service police and fire authorities which are precepting bodies. There is a crucial distinction between police and fire services and transport services. This is that, in the former case, the services depend in large measure on national standards—there are national minimum standards of fire cover, and the establishments of police authorities are a matter for my right honourable friend the Home Secretary. In short, for police and fire authorities the scope for local discretion on spending priorities is limited. Hence we believe that for these authorities, unlike PTAs, the balance of argument lies in favour of precepting.
Perhaps I may summarise the three principal arguments that have been deployed in favour of precepting status for PTAs. The first is the fact that, with levying, there is no identifiable grant for PTAs. Secondly, with levying status PTAs make progress at the speed of the slowest district. Thirdly, with levying status there have been a number of perceived problems in practice.
As the noble Lord, Lord Underhill, said that I had not done justice to these points in earlier debates, I shall take each in turn briefly. As to having no identifiable grant for the PTA, we see that as a natural consequence of seeking to treat transport spending as simply one element of local spending. I have explained the very great advantages that we see in this. There is no more reason why there should be identifiable grant for transport services than there should be such grant for, say, social services, education or recreation services. I have rarely—I do not think that I have ever —heard arguments that revenue support grant should be hypothecated to particular services.
As to PTAs being restricted to develop at the speed at which the district least committed to transport spending wishes to see, I do not believe that to be the case. No district has a veto over PTA decisions. The number of councillors from each district who are members of a PTA is pro rata to the districts' population. Once on the PTA each member has one vote. I accept that if a majority of members on the PTA, perhaps from only several of the districts concerned, wish to restrict PTA spending, they can do so. But this is no more than the democratic decision of a majority of representatives of the area concerned.
Finally, as to the perceived practical problems, I do not dispute that PTA spending may have increased at a lower rate than other spending on local services. Nor do I dispute the fact that there have been perceived difficulties with certain major projects such as the Supertram in South Yorkshire. On analysis, those practical issues are often no more than a reflection of local spending priorities. In the case of authorities' perceived difficulties in relation to some major capital projects, we have made it clear that we remain as willing as ever to approach those difficulties constructively.
My noble friend and the noble Lord, Lord Underhill, are interested, understandably, to see effective and adequate spending on transport. They are in essence seeking that transport spending should be partially isolated from the normal local democratic 442 processes of deciding spending priorities. Many of their arguments about the perceived problems of levying status simply amount to that.
If local communities have chosen to give priority to spending on services other than transport, that is a matter for them for which they are answerable to their local communities. For understandable reasons noble Lords see that as detrimental. It is not for us here to pre-empt the workings of local democracy. It is not appropriate to debate here the merits of those local choices.
Our case is simple: it is right that those local choices should be made. That is the basis of local accountability. It is our belief that levying status facilitates the making of those choices and hence enhances local accountability. In the light of what I have said, I hope that the noble Lord will feel able to withdraw the amendment.
§ 7 p.m.
§ Lord Underhill
My Lords, I am grateful to the Minister for offering a far better justification—I do not say that I accept it—for the Government's decision to reject PTAs as precepting bodies than I have hitherto heard. I wish to make one correction. I believe that I referred to the Northumberland PTA as being included in the list under Clause 39. I should have said the Northumberland Police Authority.
The noble Lord, Lord Boyd-Carpenter, suggested that I had said that there would always be county councils with precepting powers. When the Official Report is read your Lordships will see that I did not say that. I am sure I said that no one could imagine county councils not being precepting authorities so long as county councils exist. If I did not use precisely those words, that is what I intended to say.
The Minister said a balance had to be drawn. He gave three reasons why the balance was on the Government's side. If we had had a full debate on the representations made to the Minister, I wonder whether we would have seen that the balance of the argument had come down rightly in the Government's favour. A number of passenger transport executives made powerful representations as to why the present levying procedure was hindering decisions on transport that they wanted to make on a countywide basis. That is one of the main reasons why I support preception.
Transport is vital to region after region in this country. Decisions can be made only on a countywide basis. I am certain that if the noble Lord, Lord Brabazon, who deals with transport matters, were here, he would nod his head and say that he agreed with that.
On local accountability, I am sure that my noble friends listened carefully to what the Minister said in the light of the discussions we have had on the Bill. Metropolitan district councils have the power to secede from their PTAs. It is strange but not one metropolitan district council has sought to use that power; in other words, district councils are not worried about how PTAs work. There is not much point in me pressing the case to a Division. I still believe that we are right to ask that PTAs should 443 become precepting authorities. I hope that the Government will reconsider whether there should be changes and at some stage use the order-making power that the noble Lord, Lord Teviot, wished to have included through the amendment that he moved on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
§ [Amendment No. 18 not moved.]
§ Clause 75 [Persons liable to pay council tax]:
Lord Henley moved Amendment No. 19:
Page 51, line 16, leave out subsection (4) and insert:
("(4) Subsection (3) above shall not apply as respects any day on which one or more of the persons there mentioned fall to be disregarded for the purposes of discount by virtue of paragraph 2 of Schedule 1 to this Act (the severely mentally impaired) and one or more of them do not; and liability to pay the council tax in respect of the dwelling and that day shall be determined as follows—
§ On Question, amendment agreed to.
§ Clause 76 [Liability in prescribed cases]:
Lord Henley moved Amendment No. 20:
Page 51, line 39, at end insert:
("( ) Subsection (4) of section 75 above shall apply for the purposes of subsection (4) above as it applies for the purposes of subsection (3) of that section.").
§ On Question amendment agreed to.
§ Clause 77 [Liability of spouses]:
Lord Henley moved Amendment No. 21:
Page 52, line 9, leave out subsection (2) and insert:
("(2) Subsection (1) above shall not apply as respects any day on which the other person there mentioned falls to be disregarded for the purposes of discount by virtue of paragraph 2 of Schedule 1 to this Act (the severely mentally impaired).").
§ On Question, amendment agreed to.
§ Clause 94 [Substituted and reduced settings]:
Earl Howe moved Amendment No. 22:
Page 65, line 26, leave out ("that Schedule") and insert ("Schedule 7 to this Act").
§ The noble Earl said: My Lords, the amendment corrects a minor drafting error. I beg to move.
§ On Question, amendment agreed to.
§ Clause 102 [Transitory enforcement provisions for England and Wales]:
§ [Amendments Nos. 23 and 24 not moved.]
§ [Amendment No. 25 not moved.]
Lord McIntosh of Haringey moved Amendment No. 26:
After Clause 104, insert the following new clause:
§ ("Rate appeal refunds
—(1) In this section—
(a)"relevant rates" means the aggregate of
(b) "a relevant alteration" means any alteration made in a valuation list by virtue of sections 71 to 78 of that Act after 1st April 1990.
(2) In the chargeable financial year commencing 1st April 1992 a charging authority shall be entitled to deduct and retain from the amount (the provisional amount) which it is liable to pay to the Secretary of State for that year under paragraph 5(4) of Schedule 8 to the 1988 Act an amount equal to relevant rates repaid by it prior to 1st April 1993 in consequence of any relevant alteration.
(3) In any subsequent chargeable financial year a charging authority shall be entitled to deduct and retain from the amount (the provisional amount) which it is liable to pay to the Secretary of State for that year under paragraph 5(4) of Schedule 8 to the 1988 Act an amount equal to the relevant rates repaid by it during that financial year in consequence of any relevant alteration.
(4) For each chargeable financial year from 1st April 1992, the Secretary of State shall credit to the account kept by him under Part I of Schedule 8 to the 1988 Act a sum received from the Treasury equal to the aggregate of the amounts deducted and retained by charging authorities during such year pursuant to subsections (2) and (3) of this section.").
§ The noble Lord said: My Lords, the amendment relates to the difficult problem of refunds on rate appeals for non-domestic properties running back to before the introduction of the poll tax. The matter was debated on Report when the noble Lord, Lord Strathclyde, told us that the Secretary of State proposed to make an allowance of supplementary credit approvals to deal with the problem that a number of local authorities face of sometimes owing millions of pounds in respect of rating appeals which took place a long time ago. I shall not again raise the issue of principle as to what should be done about the problem. We have debated it at some length. I made it clear on Report that the issue of supplementary credit approvals—making local authorities pay for those appeals but allowing them to pay for them over a number of years rather than immediately —was a second, third or fourth-best solution and that we would rather that the Government had taken responsibility for what, after all, is a considerable national problem. However, it has been done.
§ Events have moved fast since Report stage. Local authorities had to get their bids for supplementary credit approvals in by Tuesday. I was glad to learn from the Minister that Mr. Portillo has decided to issue £9.5 million of supplementary credit approvals for 1991–92.
§ The purpose of moving the amendment is not to re-open the major issue but to try to find out what that approval means. The Minister said at the beginning that the Government would issue supplementary credit approvals above a given threshold for a percentage of local authorities' obligations. From the figures that I have it is difficult to calculate the threshold or the percentage. Newham is being allowed a supplementary credit approval of £3.225 million out of a cost of something like £6 million; Newcastle, £1.955 million out of a cost of £8 million; Camden, £1.391 million out of a cost of £3 million; and Gateshead only £941,000 out of a cost of £5 million. The figures appear to be erratic. That is presumably 445 because the threshold is a percentage of the council's total budget. Can the Minister tell us the threshold and the percentage?
§ Beyond that, there are two issues of policy on which we should like ministerial answers. First, what percentage of the applications have been granted? In other words, how much was asked for by the deadline on Tuesday? How much is being granted and on what basis has the percentage been worked out?
§ I come to the second issue. Presumably the amount comes from supplementary credit approvals unused in 1991–92. How much more in supplementary credit approvals is available which is still unused after this award? The more fundamental point is not really a question because I know that Ministers will not be able to answer it. What the public will wish to know is a point of political importance: what effect will residual costs, not covered by supplementary credit approvals, have on poll tax levels in 1992–93? If the Minister can give an answer to the third question, we shall really be getting somewhere. I beg to move.
§ Baroness Blatch
My Lords, this amendment, which the House has discussed both in Committee and on Report, seeks to make quite inappropriate and unacceptable arrangements for dealing with the cost to local authorities of what are termed late rating adjustments. These adjustments take the form, in the main, of refunds to former ratepayers. They result from rating appeals for 1989–90 and earlier years which have been decided after the introduction of the current system.
The costs of these adjustments are shared between tiers of authorities, reflecting the fact that all authorities shared the rate income in the first place. As the noble Lord has said, in inner London this means that some costs are passed on to the London Residuary Body as successor to the Inner London Education Authority, since the ILEA was one of the principal beneficiaries of the original rate income.
I should tell the House that in essence the effect of the amendment is to relieve the authorities of any responsibility for meeting such costs. It would mean that they were met, instead, by the national taxpayer. We do not believe that such a course of action can possibly be justified. As I have made clear, local authorities originally received the rate income which has, in effect, been found to have been overstated. In part at least, the costs which they now face are directly related to their own past rating decisions. It would not be right to allow them to take the benefit, but ask the national taxpayer to foot the bill.
I am in some difficulty because the noble Lord appeared not to be talking specifically to the amendment but asking a series of questions for information. The answer to the point on the threshold is that it is 1 per cent. of an authority's budget. Credit approval covers 100 per cent. above that figure.
The noble Lord also asked what percentage of applications had been granted and whether there were any other unused credit approvals. These are matters for information and I shall give him a full reply in 446 writing if he will accept it. They do not seem to relate specifically to the amendment on the Marshalled List, which I hope will not be pressed.
§ Lord McIntosh of Haringey
My Lords, the Minister is quite right. I was using the amendment as a convenient way of aiming at a rapidly moving target, if I may put it that way. Things have changed considerably since last week. I am glad to have had the figures which the Minister gave me and I am grateful for her assurance that she will write to me about the other matters. Perhaps she would also write to me about my final question on the effect of the residual costs not covered by SCAs on poll tax levels in 1992–93. I quite appreciate that she could not answer now, but if she would include the information in her letter, then I would be grateful. On receiving an indication that she will attempt to do so—
§ Baroness Blatch
My Lords, I should put it on record now that I shall be pleased to write to the noble Lord on all these matters.
§ Lord McIntosh of Haringey
My Lords, I am grateful and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 3 [Penalties]:
§ [Amendments Nos. 27 to 29 not moved.]
§ Schedule 4 [Enforcement: England and Wales]:
§ 7.15 p.m.
Baroness Hollis of Heigham had given notice of her intention to move Amendments Nos. 30 to 32:
Page 103, line 6, leave out ("has made") and insert ("makes").
Page 103, line 7, after ("may") insert ("at the same hearing or subsequently apply to").
Page 103, line 9, leave out sub-paragraph (2) and insert:
("(2) Regulations under this paragraph shall provide that before granting a warrant for distress under sub-paragraph (1) above the court shall be satisfied that the authority has given the opportunity for the debtor to pay by weekly or fortnightly intervals (at no additional cost to the payer) on account of not less than an amount to be determined by the Secretary of State in regulation.").
The noble Baroness said: My Lords, I should like to move Amendments Nos. 30, 31 and 32. I gave notification to the noble Earl, Lord Howe, that I wished to correct the third amendment. Amendment No. 32 states:
Page 103, line 9, leave out sub-paragraph (2) and insert—
This was a mistake for which I apologise. The first line of the amendment should read:
Page 103, line 15, at end insert—".
§ With the amendments, we turn to two issues. Local authorities should not adopt the use of bailiffs until the debtor has been given a chance to meet the debt by paying reasonable weekly or fortnightly instalments with a de minimis to be determined by the Secretary of State. We recall the debates in your Lordships' House which touched on the issues of bailiffs on the one hand and of the weekly or fortnightly de minimis payments on the other. The amendment has been given added—
§ Lord Elton
My Lords, is the noble Baroness intending to take the opinion of the House? If so, there 447 ought to be a manuscript amendment because I for one have no idea what the amendment we are discussing states or where it comes in the Bill.
§ Baroness Blatch
My Lords, I understand that a manuscript amendment or any textual amendment is unacceptable at Third Reading; it would not be appropriate and therefore the amendment on the Marshalled List is defective.
§ Baroness Hollis of Heigham
My Lords, I am in some difficulty. I shall obviously accept the spirit of the House. The paragraph remains the same. If your Lordships are not agreeable, then so be it. I understand that a manuscript amendment is not acceptable. I notified the noble Earl, Lord Howe, and the noble Lord, Lord Henderson, before lunch and I understood that it would be acceptable to pursue the matter. However, as an inexperienced Member of your Lordships' House, I obviously defer to the spirit of the House.
§ Lord Elton
My Lords, the difficulty is that most of us are not the noble Earl, Lord Howe, or whoever else was told. These are technical amendments and one needs to be able to insert them into the Bill where appropriate. I suspect that the Companion to the Standing Orders makes it unacceptable for the House to discuss something other than what is printed on the Marshalled List at this stage.
§ Lord Henderson of Brompton
My Lords, I apologise for not being here at the outset. It seems to me that if the noble Baroness wishes to move these three amendments, ordinarily the House would allow her to do so, even though one may not be in its proper form. What would not be acceptable is if the noble Baroness sought to insert them into the Bill by pressing the matter to a Division. However, I see no reason why she should not speak to them. I know of no standing order or any other provision that would prevent her from doing so.
§ Lord Hailsham of Saint Marylebone
My Lords, surely we are on the Third Reading of a Bill and nothing may be spoken to which is not on the Marshalled List. That is plain and obvious.
§ Baroness Blatch
My Lords, if it would be helpful, I can quote from the Companion in regard to Third Readings:Except for privilege amendments, which are moved without notice, notice of amendments must be given in sufficient time to enable them to be printed and circulated in the form in which it is proposed to move them. Manuscript amendments are not permitted".
§ Lord Henderson of Brompton
My Lords, that is absolutely right. Manuscript amendments are not permitted. The House is usually generous in allowing someone to say what they wish, but obviously in the highly charged political atmosphere which is only too explicit on the face of the noble Lord, I believe it would be much better if the noble Baroness did not move her amendments on this occasion. Otherwise heat might be engendered.
§ Baroness Blatch
My Lords, if I may say so, I believe that that remark was rather unkind. This is 448 Third Reading. We are now in the final stages of the Bill and I do not believe that there is anything political or difficult about the matter. Looks on people's faces have more to do with the fact that, if we discuss the subject simply for the sake of discussing it, at this stage of the Bill it could be described as time-wasting.
§ Lord Mottistone
My Lords, the problem is that Amendment No. 32 mentions a warrant for distress. That is not a fact of life. A court does not grant a warrant for distress; it makes a liability order which authorises the local authority to distrain. In paragraph (7) of Schedule 4, noble Lords will find a reference to that. Thus, we should not debate the matter any further.
§ Baroness Hollis of Heigham
My Lords, if I am not permitted to move the amendments then I shall not do so. It is a pity that that is the case as I understood from conversations with the noble Earl, Lord Howe, that there might not have been much between us on this matter. If I had been allowed to move the amendment, it would have given me an opportunity to place on record government policy on the matter of bailiffs where the Government have quite generously worked within the spirit of the House and have moved forward. The matter of weekly or fortnightly payments is of continuing concern to the House. It seemed to me I had an opportunity to restate the case. Perhaps the noble Earl could have indicated the Government's thinking. However, I can only be ruled by the conventions of the House. If the House requires it, I shall not move the amendments.
§ [Amendments Nos. 30 to 32 not moved.]
§ Schedule 9 [Social Security: Council Tax Benefit.]
Baroness Hollis of Heigham moved Amendment No. 33:
Page 115, line 41, at end insert:
("(2A) In relation to any council tax benefit, the applicable amount in the case of a person aged between 18 and 24 years inclusive shall not be a lower amount than would apply to a person aged between 25 and 59 years inclusive, solely on account of the age of the former person.").
§ The noble Baroness said: My Lords, this is the final amendment on the Marshalled List. It concerns the single person. We are again faced with the issue of DSS benefits which relate to income being projected onto DoE considerations of what counts as a household. There is an interface here between DSS considerations of income support and DoE considerations of a household and therefore liability to the council tax. I seek to probe that area with this amendment.
§ As we have revealed, uncovered, been told or learnt in both Committee and on Report, the social security system allocates lower rates of income support for the under 25s on the grounds that they tend to have lower earnings and government policy seeks to avoid an unduly favourable rate of benefit which might act as a work disincentive. On other occasions I might wish to take issue with that concept as income support levels assume a per hour payment of barely £ 1. Whether they are under or over 25 years of age must have little relevance to whether young people do or do not enter 449 work. However I accept that that situation exists and that to remedy it would cost some £250 million or thereabouts. That is probably too wide and too expensive an adjustment to make to the Bill at this point in time.
§ But if there is a logic for lower rates of personal income support—as I say, we may be divided on that matter but I shall not pursue it now—I would argue that that cannot apply to council tax and to housing benefit which are not so much personal income support as income support one receives by virtue of being a householder. Only a small number of under 25s are householders. That is not because they mostly live with parents—barely half do—but because they live with other young people in multi-person households. We wish to emphasise that those young people who are under 25 and who are householders—they may be 23 or 24 years of age—face exactly the same bills as those faced by people over 25 years of age. Nevertheless the income support levels for those under 25 are lower. They are faced with the same outgoings and have lower incomes and they also face a more severe rebate scheme.
§ A 24 year-old pays the same rent as a 26 year-old who lives in an identical flat next door. The 24 year-old faces identical water rates and virtually identical electricity and gas bills. The 24 year-old will pay much the same as the 26 year-old to furnish his flat and he will pay much the same to clean it and to insure it. As a householder the 24 year-old faces identical costs to a 26 year-old, but he is penalised twice over for not yet being 25 years of age. He receives a lower income support level and he faces a harsher rebate system with which to meet his council tax and his rent. Logic suggests that if he receives a lower level of income support, he needs a more and not less generous rebate scheme to meet the same outgoings as the 26 year-old householder.
§ This amendment quite clearly ring-fences the householder element. It reflects, as it were, the property base of the tax. Property bills remain the same whatever the age of the tenant. The amendment also ring-fences the householder for another reason. Whereas income support is normally issued through local benefit offices and benefit agencies, benefits to meet the council tax and housing costs—the local authority benefits—are paid through local authorities. Therefore they can be easily identified and easily ring-fenced. As I have said, were this amendment to apply to income support, the cost of implementing it would be £250 million. However, we are not asking for that.
§ As regards the council tax, it would not cost £250 million to eliminate the deduction that applies to those householders who are under 25. It would not even cost £100 million. It would cost just £5 million. To get rid of the age deduction for housing benefit—I understand that that can be altered by regulation, so it is appropriate to brigade it here—would cost just £25 million. If we ring-fence those two benefits on the grounds of equity—the benefits concern households —and also because they are the only two benefits that are handled by local authorities, the total cost of such 450 a measure would be £30 million. To implement the measure solely as regards council tax would cost just £5 million. I suggest to your Lordships that local authorities would virtually save that money in saving the administrative charges that arise in differentiating between those who are under 25 and those who are over 25. I hope noble Lords will support this amendment. I beg to move.
§ Lord Henley
My Lords, the noble Baroness made a quite extraordinary speech. She accepted that the amendment relates purely to council tax benefit, but she said it must also extend to housing benefit. That is not my reading of the amendment. I understand that it relates purely to council tax benefit. We resist it on the grounds that, in all equity, if an amendment such as this—which I strongly resist—was accepted, its provisions would have to extend to housing benefit and then on to all other income related benefits. The noble Baroness has always rejected that idea. Now she says, despite the fact the amendment is couched purely in terms of council tax benefit, that it should somehow relate to another benefit even though that is not stated in the amendment. I do not criticise the amendment for being defective, but it is defective in terms of what the noble Baroness is trying to achieve. Now the noble Baroness is saying the amendment will also extend to housing benefit.
I do not think that I can take the noble Baroness much further. I have explained on many previous occasions, not just on this Bill, that the benefit system recognises the independent status of couples and lone parents for whom there is no age divide above 18. Neither of these groups will therefore be affected by the lower rate of benefit for young single people. They are also entitled to all the other premiums appropriate, for example, for families or for disabled people. The effect of these rules is that all young people claiming community charge benefit, and from 1993, council tax benefit will be left with at least their income support applicable amount to live on after paying their contribution towards local services.
The amendment of the noble Baroness would not help 18 to 24 year-olds on income support. They will not have to pay anything by way of council tax unless their claim is affected by a non-dependant who lives with them. Indeed the effect of the amendment would be to help only those single under 25 year-old householders without children whose incomes are above income support levels. In order to help single 18 to 24 year-olds on income support, the over 25 adult rate would have to be extended to them as well implying higher expenditure on income support of around £300 million.
If we confined the amendment purely to its wording on the Marshalled List, it would incur extra expenditure of some £5 million. If we followed the spirit of the amendment of the noble Baroness—that is as regards council tax benefit and housing benefit —we would incur expenditure of about £30 million.
There are inevitably many conflicting demands on the social security programme, including families with children, that many noble Lords might consider have a higher priority than under 24 year-olds who do not yet have family responsibilities. I know the noble 451 Baroness will say it is only a matter of £30 million to apply to under 24 year-olds the adult rate of benefit in housing benefit and in the proposed council tax benefit scheme. However, your Lordships ought to be aware that resources for the social security system are provided by taxpayers and that we in government have a responsibility to spend their money wisely. Inevitably choices have to be made. I must tell the House that the Government do not consider that single householders aged under 25 without children whose incomes are above income support levels should have priority compared to, for example, lone parents of the same age. For those reasons I hope the noble Baroness will withdraw her amendment. Should she fail to withdraw her amendment, I certainly advise the House to reject it.
§ Baroness Hollis of Heigham
My Lords, I was sorry to hear the Minster's response. Throughout his response he drew an analogy between lone parents and single young householders under 25 without children who are above the income support level. I did not make that comparison at any point. I made the comparison between a 24 year-old single householder without children above income support level and the 26 year-old single person without children above income support level.
That was the analogy, and at no point has the noble Lord sought to defend that discrimination between the 24 year-old and the 26 year-old who have identical household bills.
§ 7.30 p.m.
§ Lord Henley
My Lords, if the noble Baroness will give way, I said that the Government have to make very difficult decisions in terms of the allocation of social security resources. Fortunately, the noble Baroness will never have to make such decisions but, on the premise that difficult decisions have occasionally to be made, we do not consider the single adult householder under 25 without children to be a high priority.
§ Baroness Hollis of Heigham
My Lords, I was not asking for a high priority. I was asking for fairness between under 25 year-olds—23 and 24 year-olds—and 25 and 26 year-olds in identical situations with identical needs and outgoings. Although the noble Lord may, even at this late stage, be cracking unacceptable political remarks, some of the decisions, problems and issues will be very much welcomed by our side as an attempt to restore greater fairness to the social security system, which, during the past 13 years, has severely eroded the position of the poorest and the disabled.
As for the cost, we were talking about £5 million for council tax and £25 million for housing benefit. I was entirely frank about the fact that going for council benefit has consequential implications for housing benefit, and it stops there not because of any thin-end-of-the-wedge argument but because those two, benefits unlike the others, are householder and, secondly, they are administered by the local authority.
The Minister asked where that money might be found. It was not so very long ago in this House that 452 Members opposite were defending a situation in which some 30 district councils were going to receive £45 million more in Exchequer finance per year, this year and next year, than they were going to spend. They actually had £45 million left over per year from Government grant to district councils. Not only were the Government so flush with funds that they did not need to withdraw them back to the Exchequer but they were going to give them to the county councils to reduce their precept. It ill behoves the Minister to talk about high priorities and not being able to afford this, that and the other when the Government throw at a problem that does not exist money which they could have clawed back to the Exchequer. That sum alone would have funded this provision, before we come to any other issues such as discounts. But it is late, and, with the leave of the House, I shall withdraw the amendment.
Amendment, by leave, withdrawn.
§ Baroness Blatch
My Lords, I beg to move that the Bill do now pass. We are now at the end of the proceedings on this Bill, which has received thorough scrutiny. We have had six days in Committee and three days on report, and 62 noble Lords have contributed to the debate. A number of improvements have been made to the Bill, and once again the House has proved its value as a forum for detailed scrutiny and revision of legislation.
Throughout the discussion on this Bill noble Lords opposite have argued that the council tax system is unfair and complex, and that it will be unworkable. Not only do we believe that view to be misplaced but we also believe that the council tax will prove to be infinitely preferable to the alternative schemes which have been the subject of amendments throughout the passage of this Bill—for example, the system of local income tax with its burdensome bureaucracy advocated by the Social and Liberal Democrats, or the Labour Party's plan for an immediate return to the old 19 years out-of-date rating system with its iniquities and inequities. They would follow that with further legislation for another rating system involving annual valuations of properties based on capital values, rental values, rebuilding and repair costs, and linked with household incomes. That would indeed be unfair, complex and extremely bureaucratic.
All this would be accompanied by the plan to return non-domestic rates to local authorities without the protection of rate poundages not being increased above the rate of inflation. And furthermore a Labour Government would not be concerned about, nor would they exercise any control over, the total of local government expenditure. Those matters will be choices at the forthcoming election.
The council tax will, subject to parliamentary approval, be on the statute book in a few days' time. Therefore there can be no doubt about the importance of this Bill. It sets out a basis for local government finance which is fair, straightforward and stable. It is fair because it recognises that no household should be called on to pay an excessive amount towards the provision of local services. It is fair to single adult households. Most adults living on their own are over 60. It is right that they should pay less than 453 households with two or more adults. It is fair because it ensures that people on low incomes and vulnerable groups are helped through generous rebates of up to 100 per cent. of liability. It is fair because it ensures that regional differences in house prices do not result in excessive bills in high priced areas.
The council tax is also straightforward. It will be easier to administer than the community charge. There will be only half the number of bills. Many of those now liable for the community charge will have no liability at all under the new system. With council tax bills based on properties, collection difficulties should therefore be minimised.
There will be no need for a register. Most households will receive, and pay, a standard bill. There is no need for the local authority to concern itself with the number and status of adults in those households. Authorities will need to know only the name of the liable person. Amendments made to the Bill in your Lordships' House will ensure that they have the powers they need to establish that person's identity. But they will have no power to set up a general register of all adults, which is not necessary.
The discount system is straightforward. Authorities will have a duty to try to establish the discount entitlement of households. But where they have no information about a household they will be able to assume that it is subject to a standard bill. It is for households wishing to claim a discount to supply the information necessary to verify the claim.
The council tax will provide stability for local authorities. The tax base will remain fairly constant from year to year. The number of dwellings in an area is not subject to significant change. Movement of people will have much less effect than under the community charge, since in most cases it will not change the amount of tax to be collected from each household.
The timetable for implementation is challenging; but much has already been done to ensure that local authorities are well placed to have the new system working in April 1993. The Government issued detailed guidelines on implementation to all local authorities last October.
We have established regular discussions with local authority practitioners about the technicalities of the new system. We have issued a user requirements specification for council tax computer systems to help local authorities in their discussions with suppliers. We have already drafted and consulted on the major council tax regulations, and they will be made as soon as possible after Royal Assent. Detailed practice notes are being prepared, and will be issued to local authorities very soon. Throughout the next 13 months, my department, and the Scottish and Welsh Offices, will continue to do everything possible to assist local authorities in preparing for the introduction of the new tax.
I should like to conclude by thanking the House for its forbearance throughout our deliberations. I mentioned that 62 noble Lords had contributed to this debate. I hope I can be forgiven for naming but a few. In particular I should like to thank the noble 454 Baroness, Lady Hamwee, for her courtesy and for presenting, as she always does, an intellectual challenge which has served to keep me and my noble friends on their toes. I also thank her colleagues, the noble Baronesses, Lady Robson and Lady Seear, the noble Lord, Lord Ross of Newport, and the noble Earl, Lord Russell. I am grateful, too, for the customary informed, lively and robust but always courteous contributions from the noble Lord, Lord McIntosh and the noble Baroness, Lady Hollis. Their colleagues, the noble Baroness, Lady Phillips, and the noble Lords, Lord Stoddart of Swindon, Lord Carmichael of Kelvingrove, Lord Dean of Beswick, Lord Underhill and Lord Desai, have ensured that the Government's case for the council tax has been properly challenged. We must thank the noble Lord, Lord Desai, and my noble friend Lord Renfrew for throwing in the odd economics lesson—without a fee, I may add. We have all benefited from their expertise in these matters.
Our debates have also been enriched by the contributions of Cross-Benchers: the noble Lords, Lord Henderson of Brompton and Lord Monson, the noble Baronesses, Lady McFarlane, Lady O'Caithain and Lady Masham, and the noble Lady, Lady Saltoun of Abernethy.
The support and involvement of my noble friends on these Benches have proved invaluable. They have proffered much constructive criticism and helpful advice. I therefore wish to record my thanks to my noble friends Lord Boyd-Carpenter, Lord Jenkin of Roding, Lord Balfour, Lord Renfrew, Lord Skelmersdale, Lord Cockfield, Lord Wise and Lord Mottistone and my noble and learned friend Lord Hailsham of Saint Marylebone; as well as to my noble friends Lord Elton, Lord Swinton, Lord Mountgarret, Lord Stanley of Alderley, Lord Teviot, Lord Mackay of Ardbrecknish, Lord Mancroft, Lady Gardner, Lady Carnegy and Lady Faithfull. All have contributed valuably to the various stages of the Bill.
The officials in my department, in the Scottish Office, the Welsh Office and the Department of Social Security, have served my Front Bench team with great professionalism and much patience, and I wish to thank them for that.
Finally, I have been most fortunate to have had the support of my Front Bench colleagues. My noble friend Lord Henley has dealt with matters such as benefit, disabled persons and other sensitive issues. He has fielded the most difficult amendments with immense skill. I have to say that he only allowed the noble Lords opposite to defeat him on one amendment out of nostalgia for the more exciting times on social security Bills.
My noble friend Lord Strathclyde proved extremely dextrous in bringing to bear his knowledge of matters Scottish combined with readiness to field both English and Welsh amendments. My noble friend Lord Howe has more than proved his competence in dealing with the intricacies of this Bill which was unfamiliar territory for him. I am most appreciative of his support both within and outside this House.
455 This Bill and its sister, the Local Government Bill, which your Lordships considered earlier in the session, are the result of a thorough review of local government. Taken together they will provide a stable basis for the provision of local services for the future. I commend the Bill to the House.
Moved, That the Bill do now pass.—(Baroness Blatch.)
§ Lord McIntosh of Haringey
My Lords, it is all too easy for those of us who have taken an active part in the Bill in all its stages and therefore have sometimes been obsessed by the details, to forget what an extraordinary parliamentary occasion this has been. When else has there been in a single Parliament a major piece of legislation—the flagship of the Government's election manifesto in 1987—passed by Parliament (as this was in 1988) only to be defeated and overturned within the same Parliament? It is an extraordinary state of affairs. It would be a politeness to say that it is an example of the Grand Old Duke of York marching his troops up the hill and down again.
Rather, what seems to have happened is that the Government dug themselves into an enormous hole and have been scrambling around trying to find a way out of it while incurring as little political, social and economic damage as possible. Such damage however was not only possible, it was inevitable; and that is what happened. I do not care about the political damage: that is a problem with which the Conservative Party will have to deal over the forthcoming weeks. But it would be wrong to forget the huge social and economic damage as well as damage to the relationship between central and local government and, above all, damage to respect for the law, which has been caused by the extraordinary enterprise of introducing and abandoning the poll tax within the course of one Parliament.
In the course of that extraordinary activity far more members of the public than ever before found themselves in the position of being law breakers. They did not want to be law breakers but they were faced with a tax which was profoundly unjust. They were confronted with a tax which in the name of accountability—now abandoned—insisted on charging the same amount to every person however poor. I cannot underestimate the extent to which the country has been sorely tried by that escapade. I still feel a sense of astonishment that at no stage have Ministers, Members of the Government or members of the Conservative Party felt it appropriate to apologise to the people of this country for what they put them through.
It will readily be admitted that the council tax, which replaces the poll tax, is a more complex tax than the poll tax was originally intended to be. No doubt it is a better tax—anything is better than the poll tax. But the principle behind it has been to climb out of the hole of the poll tax with as little damage as possible to the pockets of Conservative voters. Indeed, that is why we have a half return to the rating system and a half return to the property tax—literally half: 50 per cent. return to the property tax—but on a base which is as 456 flat and regressive as it has been possible to force through Parliament without retaining the poll tax itself.
This is a thoroughly bad tax and a thoroughly bad addition to the long history of financing local government in this country. It is a tax which will have to be modified quickly and as soon as possible changed radically under a new government. I take no pleasure in having taken part in these two Bills. I do not feel that we have contributed—in the words of the noble Lord, Lord Jenkins of Hillhead—"any net legislative utility" in the actions we have taken in Parliament in response to those Bills. On the contrary, I believe that the Government have done enormous damage and will come to regret that damage if they have not already done so.
I return to what are usually called the niceties of the Motion, That the Bill do now pass. First, I want to express my heartfelt thanks in particular to my noble friend Lady Hollis who has borne at least 50 per cent. of the burden of this Bill. She undertook to cover a large part of the Bill —the benefits part, in which she is extremely expert—and handled it with aplomb and enormous skill. I should like to express my appreciation of the work of the noble Baroness, Lady Hamwee, and her noble friends, which has been in considerable contrast to the differences which emerged between the Liberal Democrats and the Labour Party in another place. I hope that she will feel with me that the fact that we have been able to work so well together is a good omen. I am grateful to all my other noble friends who have already been named by the Minister for the work that they have done on the Bill. Finally, I thank my noble friend Lord Underhill, who is still with us at this last stage. With sincerity I express my appreciation of the work of the very large Government team. We must be very honoured to have facing us on this Bill three Ministers and a Whip. In many respects and on many occasions they have upheld the best traditions of this House.
I must say both to Ministers and other noble Lords opposite that on this Bill there has been a very unpleasant outbreak of election fever, which has been entirely inappropriate to the work that I believe we do in this House. Time after time, instead of responding to the criticisms of the Bill and defending it, Ministers have chosen to attack their version of what they conceive to be Labour Party policy. A number of noble Lords opposite, including Ministers but also noble Lords who came into the debates and participated briefly before leaving, have continued to repeat the straightforward lie that the Labour Party is in favour of law-breaking.
It happened so often that I cannot let the occasion pass without expressing my distaste for that procedure and the way in which it has taken place. My view, which I have stuck to all the way through the proceedings, is that the purpose of this House is to act as a revising Chamber. Therefore, the proper subject of our debates has been this Bill and not a second or third-hand version, filtered through Conservative Central Office, of what the Government think is Labour Party policy. I can also see it happening on the Education (Schools) Bill. I can only say that if it 457 continues between now and the general election, the damage done to this House, from something which in another place Mr. Speaker firmly ruled out of order, will be immense. The situation is very serious when we are reduced to that level of debate.
This is a bad Bill. It has been defended with great skill by Ministers opposite and opposed with skill and determination by my noble friends and others, in particular noble Lords on the Cross Benches. I am grateful to all who have taken part.
§ Baroness Hamwee
My Lords, I too must welcome the end of the poll tax which was driven through Parliament with such determination and against wise counsel, which very quickly was seen to be right. I am sad that we have not taken advantage of the occasion of this Bill to end for the last year of the poll tax the 20 per cent. provision which is a matter with which we could have dealt and for which we would have been thanked very much.
I find the council tax an uneasy conjunction of a personal tax and a property tax. I found it more complex, the more I heard the House consider it. My worries about the cost of administering it and how far it would be understood by taxpayers have increased at each stage of the Bill. However, in saying that, I hope that I shall not be thought to be suggesting that anyone in local government—I find it hard sometimes not to wear two hats at the same time—will not do his best to explain it and ease its passage.
As I have said, no doubt at boring and inordinate length, I believe that the banding system will cause problems for the future as anxieties rise to the surface from among those who find themselves under what they consider to be the wrong regime. I am sad that we do not have a tax that better reflects people's ability to pay, as I believe a local income tax would do. Such a tax could be added on to existing administrative arrangements in a much simpler and more straightforward way than the Bill provides.
It is right to acknowledge that there have been important amendments to the Bill. I am impressed by the fact that the Minister listens carefully to all that is said. She may not necessarily agree with it, but she takes on board the comments that are made. Where she has sensed anxieties I am sure that she will continue to consider them in the context of regulations. I thank the Minister for that reassurance. Perhaps I should not speak for others, but I am reassured, as are other noble Lords on the Front Bench, to know that what is said is listened to carefully.
I am not sure how to respond to the public wooing that we have witnessed recently. My right honourable friend the Leader of the Party has a phrase about picking up the phone and knowing what you will say before you do so. Perhaps that may be my response.
I thank the noble Lord, Lord Henderson, for the experience of working with him on many amendments. Some have been directed towards small but very deserving sectors of our society. I shall not list them, but I thank my noble friends who have assisted me on these Benches in moving amendments on matters about which they have been concerned. Like 458 the noble Lord, Lord McIntosh, I suspect that it is a case of sitting back and seeing how the Bill goes. I am sorry that I do not predict a better future for the tax.
On Question, Bill passed, and returned to the Commons with amendments.