Local Government Finance Bill

HL Deb 23 January 1992 vol 534 cc1017-52

House again in Committee on Clause 5.

Baroness Hamweemoved Amendment No. 52: Page 4, line 27, at end insert: ("(5A) An order made under subsection (4) above shall not be valid unless it is made on or before 31st March in the financial year before the year preceding the year in which the change is to take effect.").

The noble Baroness said: This is a short and, I hope, simple amendment. There are provisions in the Bill for the Secretary of State to substitute different proportions from those set out in Clause 5(1) and to substitute valuation bands other than those set out in Clause 5(2) and (3). That has implications in a number of areas. Administrative matters also arise in reassessing properties and amending databases. Computer software may need to be dealt with and, on a separate matter, the distribution of grant may be affected. It is not unreasonable—this matter was raised with me by CIPFA—to suggest a date after which an order cannot take effect at the beginning of a financial year; in other words, to give those concerned an opportunity to consider the implications and to act on them. The amendment proposes a minimum of one year. I beg to move.

Earl Howe

If the amendment were accepted, notice of at least one full year would need to be given before the ratio establishing the relativity of bills in each valuation band could be changed. I can tell the Committee that the Government do not intend altering this ratio. As my noble friend Lady Blatch explained to the Committee, the 3:1 ratio between the highest and lowest bills achieves the right balance. It is fair to all.

However, if the Government were minded to alter the ratio, we would of course do so in good time. In particular, we fully understand that local authorities would need to be given time to absorb the change. I entirely take the noble Baroness's point about software. I am bound to say, however, that I am confident that authorities would not need as much as a year's notice. One would have to take a view at the time.

The amendment would also require notice of at least one year before different bands were introduced. I have to tell the Committee that a year might not be long enough. The valuation office has been planning for the valuation now in progress since April last year, when our intention to introduce the council tax was announced. It had two years' notice. Few people suggest that the valuation could have been completed in less time.

As the Committee knows, one of the attractions of banding is that frequent revaluations are not needed. Even though property values may have changed, a large number of properties would be in the same band both before and after a revaluation. That is an important point which bears repeating. Banding means that revaluation does not affect all dwellings. Only when there has been a significant, long-term shift in relative house values would a general revaluation be needed. Local taxation should not be subject to short-term fluctuations in the property market. Our proposals ensure that it is not.

There may be a need for a general valuation and that is why the Bill provides for one. If that were the case, it would be announced in good time. I therefore suggest to the noble Baroness that the amendment is unnecessary.

Baroness Hamwee

I thank the Minister for that answer. It was worth raising the matter and having those assurances on the record, not that I would doubt the good faith of the Government or indeed of any government. All governments would want to see a provision implemented in a moderately sensible way when it came down to that kind of detail.

Lord McIntosh of Haringey

Before the noble Baroness withdraws the amendment, I hope that she will think again about that statement. I have great misgivings about the good faith of all kinds of governments. The noble Baroness may have such misgivings as well.

Baroness Hamwee

Yes, I do. I had not intended to be quite so controversial with that comment. However, one would hope that any government would understand the practical matters that arise.

With regard to valuations, the amendment does not suggest that there should be notice of just a year. It suggests at least a year—in the words of the amendment, on or before the preceding 31st March. However, on the basis of the assurances given, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 53 not moved.]

Clause 5 agreed to.

Clause 6 [Persons liable to pay council tax]:

Lord McIntosh of Haringey moved Amendment No. 54: Page 4, line 39, leave out ("a resident") and insert ("an occupier").

The noble Lord said: In moving this amendment I shall speak also to Amendments Nos. 55, 56, 58, 60 and 67. This is intended to be a helpful amendment. There was quite a considerable debate in Committee in another place on this subject. I was not convinced from reading it that the Government have given an adequate reason why they should wish to abandon the definition of occupation, which is well established over 25 years under the General Rate Act 1967, in favour of a definition of residence.

When they abandoned the definition of occupation for the purposes of the poll tax considerable difficulties arose. One of the definitions of residence was whether the person concerned kept his or her possessions in the home. In the leading case of Bradford v. Anderton—Anderton being a merchant seaman who claimed that his residence was his merchant ship—it was found that his residence was his home in Bradford because he kept his possessions in the home. However, in another case which did not reach or need to reach the courts the same kind of test was applied to Terry Waite, who after all kept his possessions in his home in Lewisham at the time that he was a hostage in the Lebanon. Lewisham Council decided—I am sure correctly and not least on humanitarian grounds—that it would not be right to charge him for the poll tax during the time that he had been a hostage in the Lebanon. Therefore the definition of keeping possessions in the home does not really work.

In the absence of a clear definition of a main or sole residence there is not an adequate definition. I fear that the Government are in danger of prolonging the rather confusing legal situation that arises over the definition of a residence, whereas the definition of occupation has been well established for many years, is not subject to legal doubt and could save the Government and therefore the taxpayer a great deal of time and money. I beg to move.

Earl Howe

We have considered this matter carefully and discussed it at length with local authority practitioners. Local authorities saw advantage in the use of the word "occupier" since the term, although nowhere defined in statute, had been the subject of many judicial decisions concerned with rateable occupation. We concluded, however, that its use in the context of the new tax would not produce sensible results in all cases.

Rates were, as the noble Lord, Lord McIntosh, reminded us on the first day, a tax on the beneficial occupation of property. The council tax is a tax in respect of chargeable dwellings which takes account of the number of residents. As the Bill itself depends on residence, it would be strange to attach liability to people on the basis of who would be liable under the law of rateable occupation. To be sure, the two concepts are not wholly dissimilar. Thus the order in which residents are to be liable under Clause 6(2) is similar to the way in which it was the paramount occupier who was liable to rates. However, there are cases where the person who would have been the rateable occupier is not a resident of the dwelling: for example, certain dwellings owned by charities, cases where an employee is provided with accommodation for the better performance of his duties and some dwellings where the residents were licensees.

In such cases where the dwelling is the sole or main residence of a person, it is right that he or she should be liable. Therefore, it would be necessary in any event to modify the doctrine of rateable occupation to bring that about. But rather than change an old-fashioned doctrine to make it fit, it seems sensible to provide a modern basis of liability for a modern tax.

In the majority of cases the authority will send a standard bill to the household. That bill will be paid. The liable person or persons will be the residents of that property. That is the common-sense approach. In the case of a household with one resident adult which is entitled to a discount there can be no doubt who the liable person is. There can be no difficulty in identifying him or her in those cases. In other cases it will be no more difficult to identify the liable person than identifying the person with the paramount interest under the rates. When there is no resident we propose that it will be the owner who is liable. Authorities will have to take steps therefore to identify the owner of the property. But that is no more difficult than was the case under the rates where the owner of unoccupied property was also liable.

Our proposals provide local authorities with the simplest and easiest way of assessing liability. We have set out clearly the order in which liability is to be assessed. It will be the owner-occupier or the tenant where such people live in the property and the owner where there is no resident. Everyone understands the question, "Where do you live?". But I doubt whether people would readily know whether they were in rateable occupation of a dwelling.

I must emphasise once again that the council tax is not the rates. It is, therefore, not necessarily appropriate to use the same criterion on which to base liability. Rateable occupation is a rather old-fashioned concept for an old-fashioned tax. I would emphasise that we have reached the conclusion that residence is a sensible basis for the council tax after very careful consideration and advice from those with detailed knowledge of such matters. Therefore, I hope that the noble Lord will feel able to withdraw the amendment.

Lord McIntosh of Haringey

I am sorry to say that that sounds to me very much as if the Government are putting ideology—that is, their hatred of the rating system—ahead of common sense. Rateable occupation did not cause difficulties. There were no significant problems with definition, and if there were they were resolved a long time ago, whereas the concept of residence, which the Government have taken from the poll tax, has caused enormous difficulties and is continuing to do so because there are tribunals throughout the country giving different judgments on a day-to-day basis.

When the Minister says that using the concept of occupation would not produce sensible results, he is flying in the face of the evidence about the way in which courts and tribunals are interpreting the law. I believe that the proof of that is to be found in the Bill. The noble Earl said that Clause 6(3) gives a series of definitions of what is meant by a "resident"—so indeed it does; and in a subsequent amendment we shall have a discussion on that matter. However, it is a very complex series of definitions. It does not resolve some of the issues to which I have in a very short speech drawn attention. The fact that it is not adequate is recognised by the way that the Bill provides that billing authorities will have the ability to identify an individual to be charged the council tax in cases, for example, of houses in multiple occupation. Again we have amendments to cover that point. But that would not be necessary if the definition of "resident" was clear and unambiguous. It would not cause the difficulties which I have anticipated and which the noble Earl has denied will happen.

I do not think that there is any ideological animus on our side in what we propose, but I very much fear that an ideological animus against the rates is leading the Government astray on a matter of sheer practicality of administration.

8.45 p.m.

Lord Jenkin of Roding

Before the noble Lord sits down perhaps I may make a speech. I make that plea because I do not want to be charged on this occasion with having interrupted a speech before the noble Lord had finished.

Noble Lords

We are in Committee.

Lord Jenkin of Roding

I am most grateful.

It is interesting to note that before it acquired its name the community charge was known in Whitehall as "the residents' charge". It was eventually renamed because it was felt that the difficulty of "residents' charge" was whether it was "residents" or "residence" because manifestly it was not a charge on a residence; it was a charge on a resident. It was felt that that could have given rise to much confusion. However, after I left the Government it was changed to the community charge.

When charging a person it is quite different, as my noble friend Lord Howe said, from a charge on rateable occupation of a property. In cases—and I am rather persuaded by my noble friend's argument—where there would be no liability for the council tax but there would have been a liability on the grounds of rateable occupation, it seems somewhat strange to call in aid a term from the rating legislation—namely, the "occupier"—because then one would presumably need to have a number of exclusions in order to ensure that it would not have the same meaning given to it by the courts in relation to the rating legislation.

One faces an inevitable problem here: whenever such terms are first used they are for some time the subject of judicial interpretation. However, that gradually settles down; the courts make the meaning clear, define the parameters and there is no more problem. If you introduce a tax which is based on an entirely different principle it should take a new name. Of course, as the noble Lord, Lord McIntosh, described, there have been many cases where the courts have been asked to decide whether the issue falls within the term "resident". Eventually—and it may not take as long as it did for the word "occupier" as regards the occupation of property—the definition will settle down and we shall be back to a position of clarity.

In the light of some of the difficulties, perhaps my noble friend may be able to say that we can add a definition which will make the position clearer. I am not sure whether the fact that one leaves one's house with one's belongings in it is necessarily a test. As I understand it, different decisions have been or could be taken on the issue. It seems to me that this is entirely appropriate where you are having a tax primarily on people, though it be calculated by reference to one's property. I see that the noble Lord raises his eyebrows, but it is primarily on people. After all, taxes are paid by people, not houses. It is, as was described on the first day of Committee and on Second Reading, a tax with a property and a personal element. However, it is a tax on a person who resides in a house and who is therefore a resident. I think that the word is right.

When my noble friend looks again at the matter between now and Report stage, I hope that he will consider whether he could perhaps circumvent some of the possible court cases which may arise by adding a rather clearer and more limiting definition of what is actually meant by "resident". It is certainly not the occupier because that has a specific meaning given by the courts. If the word "occupier" is put into the legislation it would require a new definition with other exclusions in order to ensure that the tax would not apply in circumstances for which it was not intended.

Lord McIntosh of Haringey

I am grateful for those historical insights, but the noble Lord bases his argument upon the assertion that every new definition takes some time to settle down in judicial interpretations. The Government are choosing to reject a definition which has already settled down—it was introduced 25 years ago and has been adequately judicially interpreted—in favour of a definition which has not settled down, not merely because that part of the poll tax does not work, but because the poll tax itself does not work. The definition is contained in Clause 6(2). There are six parts to the definition in a hierarchy. It is not a simple definition, by any means.

The difficulties that local authorities will have will be to discover where in that hierarchy any individual falls, because, as the noble Lord, Lord Jenkin, rightly says, the tax is a mixture of a property tax and a personal tax. Clearly individual liability is a critical part of the tax. I do not see how, within that hierarchy of liability, local authorities will find out who is liable. In his reply, the noble Earl, Lord Howe, said that everyone knows where they live. All I can say is that the experience of the poll tax is that not everyone knows where they live, and even if they do, they will not say, and local authorities will not be able to find out. The replies are not adequate to the case that has been put which, as I said, is made without any political animus.

Earl Howe

The Government approached this matter with an open mind. We were not biased one way or the other. We were persuaded that the concept of a rateable occupier was so encrusted with outdated case law—for example, certain types of employees were deemed not to be the occupier when, under the ordinary meaning of the term, they were resident—that we felt that it was better to start with the term "resident" as the basis for the legislation.

Lord McIntosh of Haringey

Look at the difficulty the Government had with the farming lobby an hour or so ago! I do not believe that the problem has been resolved. I shall think again about this matter and read carefully what has been said. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 55 and 56 not moved.]

Lord McIntosh of Haringey moved Amendment No. 57: Page 5, line 1, after ("statutory") insert ("assured").

The noble Lord said: I should like to speak also to Amendment No. 68. The amendment, again, relates to the hierarchy of persons who are liable for council tax under Clause 6(2). What appears to be missing from that complicated hierarchy is a form of residence or occupancy—I cannot find a better word than that—which has become common after the Housing Act 1988, and that is an assured tenancy. The Government may say that an assured tenancy is covered by Clause 6(2) (e); in other words, by the fact that a person is a resident. When we are talking about other forms of tenancy I should have thought that it would have been as well to be explicit and to include assured tenancies which were introduced by the Government's legislation in 1988. I beg to move.

The Earl of Balfour

Is this not a case of where we are dealing with the old Rent Acts and the comparatively new Rent Acts? If I remember aright, the old Rent Acts were consolidated in 1968, and there, of course, the words "statutory tenant" are introduced. I am not sure that the word "assured" would fit in here. The matter is reasonably well covered by the words "a secure tenant" in the Bill. There are assured tenancies and short assured tenancies. They are different. An assured tenancy holds good for six months only, if that is what is wanted. It can hold good for 20 years. The categories need to be considered.

Lord McIntosh of Haringey

All I can say is that the noble Earl did not have the misfortune to sit through the Housing Bill 1988 to the same extent that I did. We had many debates on assured tenancies and shorthold assured tenancies, and I can assure him that the assured tenancy—dubious as we are about its security and political merits—is the common form of tenancy now for private landlords and housing associations.

The National Federation of Housing Associations is anxious that there should be explicit recognition of assured tenancies. It is not just a matter of definition or semantics, under the legislation as drafted it appears that in a self-contained dwelling there would be no adequate distinction as to liability between a lodger and an assured tenant. I cannot believe that that is what the Government want.

Earl Howe

I hope that I can clarify the issue to the satisfaction of my noble friend and the noble Lord, Lord McIntosh.

The amendments seek to include assured tenants, as defined under Part I of the Housing Act 1988, as one of the categories of resident on which liability for the council tax will be based.

Assured tenants are already included within the provisions of Clause 6. A tenancy under which a dwelling-house is let as a separate dwelling is an assured tenancy for the purposes of the Housing Act 1988, subject to certain exceptions. It may be either a fixed term tenancy or a periodic tenancy. A person who has such a tenancy has a leasehold interest in the dwelling and, if a resident, will therefore fall within Clause 6(2) (b).

There is separate provision in Clause 6 for statutory tenants under the Rent Acts because they do not have a leasehold interest in a dwelling. In addition, secure tenants under the Housing Act 1985 may have a licence only and not a tenancy. Statutory tenants and certain secure tenants would not therefore fall within Clause 6(2) (b) and are included in a separate category —Clause 6(2) (b).

I hope that the noble Lord will be satisfied with that explanation and will agree that the amendments are unnecessary.

Lord McIntosh of Haringey

I shall read that answer carefully, but no one should be under the illusion that this is a simple matter, or that the use of the term "resident" has resolved the issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 58 not moved.]

[Amendment No. 59 had been withdrawn from the Marshalled List.]

[Amendment No. 60 not moved.]

Lord Renfrew of Kaimsthorn moved Amendment No. 61: Page 5, line 10, at end insert: ("( ) No person who is a student, student nurse, apprentice or youth training trainee or who otherwise falls to be disregarded under paragraph 4 of Schedule 1 shall be liable to pay council tax on the grounds that he is a resident of a dwelling.").

The noble Lord said: The amendment was set down as a probing amendment at a time when this place had no inkling of what was intended for students. I was therefore greatly gratified when my noble friend Lord Strathclyde made the matter clear on the first Committee day. His observations were published in Hansard (cols. 830 to 832). I can well see that in one sense my amendment was inappropriate because the system under the Bill is to make dwellings rather than individuals exempt. Individuals may incur rebates, but not exemptions in that sense.

However there was at least a well-meaning point in the tail of the proposed amendment. One can imagine that a wealthy student might own a number of properties, and whereas it may be appropriate that the property that the student occupies should be subject to discount or that the property may be subject to exemption, that should clearly not apply automatically to other properties that that individual might own. So it was with great relief that we heard that there are to be regulations to exempt dwellings wholly occupied by students, I presume under Clause 4(3). It will of great interest to read the draft regulations. I look forward to seeing them in detail but, as I understand it, the student hostels, halls of residence and houses exclusively occupied by students will be exempt and that will be it. The Bill makes clear that when students live with non-students, the students fall to be disregarded and are, in a sense, invisible to the Bill.

However, as the noble Baroness, Lady Hollis, indicated, the problem arises in that the students may be invisible to the Bill but not to the landlord. That presents a difficulty, but it was made clear by my noble friend Lord Strathclyde that the difficulty was disregarded. He pronounced that whether or not the landlord charges them rent to make up what he pays in council tax depends on the relationship between the two; that is, between the landlord and the student tenants. It was a candid analysis of the situation.

It is worth pondering for a moment longer. We may imagine a landlord who occupies a house with four rooms available for letting. If two of the rooms are let to persons who are not students and two to students, it is likely that the landlord will decide to divide the council tax either by five or by four. It is much more likely to be four, so passing the burden on to his lodgers or tenants. He may well decide to divide the amount equally in four so that it falls equally on the students and non-students. So far as I can see, the present regulations say nothing about that. My noble friend Lord Strathclyde made clear that it was a matter for discussion between the landlord and the tenants.

I am not sure that that is entirely satisfactory. Perhaps I should have begun my remarks by saying that it is enormously satisfactory that students in halls of residence and students who are sole occupiers of dwellings will find themselves in premises which are exempt from the council tax. That meets a great part of the problem. I am addressing myself now to perhaps a relatively detailed point. The solution may well lie along the lines proposed by the noble Lord, Lord McIntosh, and others in Amendment No. 69. Perhaps the matter should be more extensively discussed under that amendment.

I wish to allude to the point because the Government have, to a significant extent, solved the problem for students. One should emphasise how satisfactory that is. The poll tax has not been a happy experience for students and I heard my right honourable friend the Secretary of State observe today in another context that it had not been an entirely happy experience for those trying to collect the tax from the students. So this is a happy circumstance.

One other point to throw into the discussion is what happens when a fair rent has been determined. Will the council tax be added to it or not? That point may also merit further discussion. In conclusion, I believe that the Government have gone a long way to meet the anxieties of those concerned with the burden of taxation on students. I am satisfied, although I feel that specific points still merit clarification.

9 p.m.

Lord Henley

My noble friend referred to Amendment No. 69 in the name of the noble Lord, Lord McIntosh. My noble friend Lady Blatch will deal with that; I merely refer to the remarks of my noble friend Lord Renfrew on Amendment No. 61. The Committee will know that the Government propose that all the people mentioned in the amendment—students, student nurses, apprentices or youth training trainees—will be entitled to the personal discounts. They will not add to the bill for such a property. However, we propose that in certain cases such people will be liable for the tax.

First, perhaps I may point out that my noble friend's amendment makes no alternative proposal, as he said. It suggests that these people should not be liable, but it does not suggest who should be liable. It is perfectly proper to put down such an amendment to draw out the logic behind the Government's proposals but I hope to show the Committee that the provisions in the Bill are logical and there is no feasible alternative.

If a student, student nurse, apprentice or YT trainee—that is, a discounted person—lives with one or more other adults the bill for the dwelling will be the same as if the discounted person were not resident. It will be one or more of the other adults, rather than the discounted person, who is liable for the tax in many such cases. For example, if a student lives with his or her parents, it will presumably be the parents who own or rent the dwelling, and hence it will be the parents who will be liable for the tax.

However, there will be some dwellings where the liable person is a discounted person. These will often be dwellings where one discounted person is the head of the household, or where the household comprises a number of such people.

I shall consider first a household comprising, say, an apprentice and his brother, where the apprentice is the tenant and hence the person liable for the bill, which will be 75 per cent. of the full amount because he is the discounted person. It may well be that he has a low income; in that case, he will be able to claim benefit of up to 100 per cent. of his bill. But if some amount remains payable after benefit, who should be liable to pay it? Should it be the brother, who may have no income of his own and may not be personally responsible for any other bills? Or should it be the apprentice, who pays the rent and certainly has some income? The Government have concluded that it should certainly be the latter—that is, that the general principles of liability set out in Clause 6 should continue to apply.

Let me now look at a dwelling occupied only by students, student nurses, apprentices or YT trainees. This would give rise to a 50 per cent. bill—that is, the property element of the tax only. The residents would be able to have this bill further reduced or even eliminated by rebates if they were on low incomes. Because most students cannot claim rebates, we have decided that any property where all the residents are students should be entirely exempt from the tax, as my noble friend said. I can assure him that draft regulations on the matter are already in the Library and were put there with the other draft regulations mentioned by my noble friend Lady Blatch yesterday.

In such a dwelling, there is no alternative person upon whom liability could be placed. It must be the discounted person who is held liable. But the Committee should remember that the amount for which they are held liable will reflect their entitlement to personal discount and rebates.

I turn to rents and what the landlord may charge for his various tenants, some of whom might be students and some not. I believe my noble friend Lord Strathclyde has said on a previous occasion that this must be a matter for the landlord as it concerns his contractual relationship with his tenants. We do not think it would be practical for the Government to insist in legislation on any alternative arrangement.

We accept that these are not simple issues, but the Government have considered them long and hard and we are confident we have reached the right solution. We are confident we have identified the only sensible alternative. I hope with that explanation my noble friend will feel able to withdraw the amendment.

Lord Renfrew of Kaimsthorn

That was a most helpful explanation. There are matters which perhaps could be explored further but no doubt that will occur in the context of Amendment No. 69. I am most grateful for my noble friend's helpful observations. I shall hasten to the Library to read the draft regulations. In the meantime I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 62 not moved.]

Baroness Hollis of Heigham moved Amendment No. 63: 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 the council tax equally between the persons who are jointly and severally liable and send separate bills to each of them.").

The noble Baroness said: We are about to discuss a series of amendments on joint and several liability. Under the former rating system the concept of joint and several liability did not really exist although in practice the concept of beneficial occupation led, through a series of court cases, to concurrent responsibility of spouses for a property bill, that is the rates bill. The poll tax has not been a property bill but rather a bill that is levied per capita, whereupon the Government perversely invented the concept of joint and several liability between spouses. That concept has been deeply unpopular and has been considered unfair even within the logic of an unfair tax.

We are now moving towards a property poll tax. We are not at this point challenging the principle of joint and several liability for a property tax between spouses, or that of the property element between spouses. The council tax maintains the principle of joint and several liability not only as regards the property element within the council tax—that is 50 per cent. of the tax—but also as regards the two personal individual elements of 25 per cent. each. What is more, the council tax extends that provision from the spouses to any two people or more who occupy the same position in the hierarchy of liability, for example between brother and sister who are co-owners, or between two unrelated adults who are co-tenants who then each become responsible for the other's personal element of the council tax. We raised this issue on Second Reading and the noble Lord, Lord Strathclyde, kindly confirmed in a subsequent letter that our reading of joint and several liability was correct—perhaps unlike his brief at the time.

Each of the following amendments raises a slightly different issue but they all share the common aim of seeking to end joint and several liability for what is meant to be the personal element in the council tax. After all, even under the poll tax, the DoE practice note No. 16—we shall return to that—makes it clear that even between spouses joint and several liability would not normally be pursued where the defaulting partner had the money to pay but failed to do so.

The purpose of Amendment No. 63 is to seek that local authorities provide individual bills at the request of the residents, or the person who manages the premises, where two or more residents fall to be treated as jointly and severally liable. Under the poll tax individual bills were sent out even where joint and several liability operated between spouses. In so far as this tax contains a personal element—as Ministers opposite have been at pains to indicate—we feel the same principle should apply. That would restrict the right to individual bills to residents only of the same status, for example joint freeholders, three tenants sharing a flat and the like. That is certainly a simpler method. It is easier for both the local authority and the individuals concerned to know where they stand. So far as I can tell—I stand to be corrected by the Minister—it is largely financially neutral.

I wish to give one brief example of why this provision might be useful. Three strangers might respond to a newspaper advertisement in which rooms are offered in a three bedroom flat. They each have separate tenancy agreements with the landlord but they share the living room, kitchen and bathroom. The council tax bill is £300. There is no logical basis for the local authority to decide in such a case who should receive the council tax bill or be pursued for payment. The owner cannot be liable because in terms of liability he or she comes further down the hierarchy than the resident tenants.

It cannot be reasonable in those circumstances to expect one tenant to pay the bill and collect a share from the other two, particularly as they may be relatively unknown to each other. If there is only one bill, even if it is sent to a named individual, how will the council know which other residents are also tenants of the property? I believe the concept of joint and several liability will not work if there is no method for the council to discover who is liable.

This amendment proposes a simpler and more rational method for billing and collecting in such cases. It would simply split the bill equally between those residents who all had the same occupancy status, be that as tenants or as licensees. Each of them would be personally liable for the period when they were resident. Their names would be known to the council and they could be pursued for any arrears in the same way as any other taxpayer. The residents would divide the Bill. They would equally have separate eligibility for rebates because only the liable person can claim a rebate. Yet an amendment such as this would allow us to overcome some of the complexities of swinging from a discount or rebate on the first person to bringing into play the second adult low income discount with all its complexity.

On this side of the Chamber we recognise that the introduction of a second adult low income discount was an honourable move made in response to a problem in which the second adult might have a much lower income than the first person yet the bill applied to both. However, we feel that that response would make the system extremely complex to administer. The amendment would allow for separate bills and separate eligibility for rebates, but each rebate would apply on only a fraction of the bill. So far as we can see, the constituency eligible for the second person discount would be the people who would benefit from the proposal. Therefore, we believe that it would be financially neutral.

We also believe that such a provision would be extremely helpful for those voluntary organisations which offer shared living schemes, for example, under community care programmes. The amendment is strongly supported by the National Federation of Housing Associations.

It is a simple amendment seeking separate bills for people in the same category of liability who are jointly and severally liable together with separate eligibility for rebate. As far as we can tell it is financially neutral. It is infinitely more simple to present and to administer, both for the local authority and for the individuals, than the extraordinarily complicated structure which the Government have so far devised. I beg to move.

Baroness Hamwee

I should like to say for the record that I support the amendment, which seems to be entirely logical and appropriate.

9.15 p.m.

Lord Henley

The noble Baroness made a perfectly valid point. I should not want to reject the amendment totally out of hand but I should like to stress some of the practical problems with what the noble Baroness put forward and say that we think that it is better to stay as we are and retain the joint and several liabilities.

There are certain practical problems which I shall come to. I start by saying that even where the parties agree to separate bills that is contrary to the basis of the council tax under which it is the dwelling which gives rise to the tax. The amount of tax might vary according to the number of residents but it is a single amount in respect of the property. It follows, therefore, that all those liable are liable for the full amount.

It is possible for the people who live in a property and who, as the noble Baroness put it, all have the same occupancy status to agree among themselves the shares each will contribute to the bill. However, no separate part of the amount can attach to any individual who is jointly and severally liable with others. I do not think that that causes any practical problems for joint tenants with similar occupancy status. As the noble Baroness will know there will be other household bills which they will have to share in the same way, such as the telephone bill. They might keep records to show who uses the telephone most. They might share the electricity bill, unless there happen to be separate coin meters for each to pay individually. However, the residents will have to agree among themselves how such bills should be divided. I do not think that it would be practical—and one should consider the practical implications—for local authorities to have to send out separate bills, thereby adding to the cost, even if all the residents agreed.

I am trying to be helpful and I recognise that the noble Baroness has raised a perfectly valid point, but I believe that it would be simpler if all the people in the house remained jointly and severally liable.

Baroness Hollis of Heigham

I thank the Minister for that helpful reply, which I shall study. He is right to say that given a certain amount of good will one can apportion the bills. However, there was a second part of the argument that I tried to advance which he has not addressed. That is why I welcome his offer at least to think about the matter to see whether we can move forward.

That second point is that the proposal would also overcome an aspect which I am convinced will be extremely difficult for local authorities to administer, namely, the problem of the second adult resident in the household who has a low income. I identified the problem of a bill falling on two people for which the person eligible for a rebate is the person liable for the tax who has a higher income than the second person, who has a low income. That is why the Minister in the other place helpfully produced proposals for 25 per cent., 12½ per cent. or 7 per cent. discounts and the like in respect of that second adult with a low income. The matter is extraordinarily complicated because that then interlocks with the issues of rebate. The individuals in that household have to do elaborate calculations to determine whether they seek rebate on the first person or the discount for the second person, and their situation may change. My proposal would overcome that complexity and make the position much more transparent to the residents in that household and much simpler for the local authority to administer.

I welcome the Minister's comment that he will consider the matter. If, on reflection and after discussion, he feels that there is some substance to the argument—and I hope that he will explore the matter with the local authority associations which will implement the scheme—then I am content. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham: moved Amendment No. 64: Page 5, line 10, at end insert: ("( ) Subsection (3) above shall not apply to any person in respect of any day when he had an income which would not have exceeded his applicable amount as a single person or where applicable as a single parent for the purposes of entitlement to income support calculated according to Part 1 of the Social Security Act 1986 if he had made a claim for that benefit on any day during the period when the liability arose.").

The noble Baroness said: In moving this amendment, I shall speak also to Amendment No. 71. Joint and several liability for poll tax only arises when a spouse has failed to pay the bill. Ministers have said that it will apply to council tax from the beginning and that the council could choose to collect the tax from any of the people jointly and severally liable. However, I accept that in practice that is only likely to arise as an issue when there is default on the bill.

These amendments seek to protect the position of a joint occupier or a spouse who becomes liable for arrears of council tax because the person named on the bill has failed to pay it. They provide some limited protection by ensuring that anyone who qualified for income support in their own right during the period when the debt accrued cannot now be pursued for that debt. I tried to give an example at Second Reading of a husband and non-working wife with children when the husband leaves her and his debts for the council tax behind him. She is jointly and severally liable for his debts during the period when she had no income of her own and would have to repay those debts out of income support when she is on the poverty line; that would push her well below it.

Under the poll tax the DoE Practice Note 16 is fairly generous in its interpretation. Para. 2.2 states that: In theory joint and several liability would also apply if either the husband or the wife were exempt. It seems in practice unlikely that charging authorities would wish to use the powers in those circumstances". The note goes on to suggest that in particular where the defaulting husband—presumably it would normally be a defaulting husband—had resources but failed to pay, the wife would not normally be expected to cover that debt.

Ministerial responses in Standing Committee in another place suggest that there need be no problem because the local authority could offer a backdated rebate in respect of the liability to the jointly and severally liable person in their own right. Unfortunately, the legislation on rebates gives considerable discretion to the local authority. It cannot be guaranteed that people will so qualify because, whereas a rebate claimed at the time that it is incurred attracts 95 per cent., subsidy from the DoE, a backdated rebate claims back only 20 per cent. subsidy back from the DoE. There can therefore be no necessary confidence that the local authorities will be as generous in their backdating of rebate as should otherwise be the case.

The amendments do not preclude claims for rebate but offer protection to those individuals who may be refused it or who cannot get a rebate to cover the whole period. This point interlocks with certain of the social security issues and I hope that we can receive a supportive response from the Minister opposite. I beg to move.

Lord Henley

I have already stressed that we see the joint and several liability as being the central principle of the council tax. I went on to say that the way in which household residents divide that bill between them is not something in which the Government or legislation ought to interfere. However, if the council tax bill is not paid, the local authority must have power to act and be able to recover the amounts due without becoming involved in the internal arrangements of the household. It should therefore be able to send the bill or summons to anyone who is liable to pay the bill. It should not be required to consider the circumstances of each individual. One resident's personal income might be below the income support level but if he is supported by other residents, there may be more than adequate resources to meet the bill.

The noble Baroness mentioned a case of a wife deserted by her husband who has also left certain arrears on the bill. From the moment that he leaves, all is well. She is able to obtain benefit that will cover her bill. With his departure —presuming that the family is a husband, wife and children who are not yet adult—there will be a reduction and benefit will cover that. He will remain jointly and severally liable for the council tax for the period up to the day on which he left. Daily liability ties down precisely the period for which he remains liable. We discussed daily liability earlier this week. The person who remains will also be jointly and severally liable for the period up to that time and for the period after that that she remains in the property. We agree that there is no problem for her after that day.

It is up to the local authority to decide from whom to recover the unpaid debts—from which partner. Clearly, it would be more sensible for them to recover the sum from the person with the greatest resources or the one who is in fulltime employment—for example, the ex-husband if he has a job or has significant financial resources. As I said, if the remaining partner is left with low income and few resources she will be able to claim council tax benefit; but benefits will not help her discharge debts for the period before the separation occurred. That position must remain. It must be for the local authority to decide who to pursue in this case. One would have thought that if the wife obviously had no resources it would pursue the absconding husband.

Baroness Hollis of Heigham

I am grateful to the Minister for giving way. On the assumption that the absconding husband has moved to a different part of the country, and that the local authority is unable to recover that money, what is the Minister's advice?

Lord Henley

That must be a matter for the local authority. It cannot be for the benefits system to pay back the debts that have already been built up before the separation. That would create far worse anomalies with the encouragement to build up debts and then to abscond, leaving the benefits system to pick up the debts. At the time that those debts were built up they would not have been eligible to be covered by the benefits system. Before said husband's departure there was no entitlement to benefit because the husband had a considerable income. He has now gone. It must be for the local authority to pursue the debts from him. He would be the obvious person if he still has adequate resources to pay them. It cannot be for the benefits system to pick up the tab for those debts incurred before his departure. That would create a perverse incentive to build up debts and then to pass them on to the benefits system.

I hope that the noble Baroness accepts my argument. Obviously people who choose to share a dwelling share many responsibilities, and it is reasonable that they should share that responsibility. I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness Hollis of Heigham

I thank the Minister for his reply. We clearly understand the nature of the problem. Like the noble Lord, I would not wish to give a perverse incentive to people to abscond and to slough off debts knowing that no one would pay them. I entirely accept that point. However, the problem remains. Which situation is the lesser of two evils? It is obviously desirable that the local authority should recover the debt from an absconding husband with a higher income. However, on the assumption that it cannot, the wife is then liable for the repayment of those debts out of her income support levels. With possible top slicing, such repayment may push her well below the poverty line and could involve her income support levels being reduced to half of what is regarded as the minimum subsistence level. What advice does the Minister give when the local authority in good faith has tried but failed to recover the debt from the absconding husband?

I press the matter because under the poll tax the DoE guidance in Circular 16 made clear that in those circumstances the local authority would be encouraged not to press the wife for recovery. But in that case the local authority must expect some proportional compensation from the DoE through a backdated rebate scheme of recovery of sums paid out.

Lord Henley

Perhaps I may consider the matter. Obviously it would be available for deductions to be made from income support as with other bills. I do not at present know where those deductions will come in the hierarchy of bills. However, I do not accept that payment would push the individual claimant below what the noble Baroness calls the poverty line; I do not accept that there is such a thing. There are safeguards in the income support system which prevent deduction of more than a certain level from income support. The noble Baroness knows that perfectly well. There is only a set limit that can be deducted from income support.

I shall consider the matter further and write to the noble Baroness about our intentions as to where those issues should come within the hierarchy of deductions from income support or from benefit. However, the wife would remain jointly and severally liable for that bill as would the husband, wherever he had absconded to.

9.30 p.m.

Lord Jenkin of Roding

Having listened to the debate I believe that the noble Baroness has made a case. The question that occurs to me is this: is it not open to the department to issue guidance of the type that existed for the purposes of the community charge? While totally accepting the view that in the circumstances described there should not be an inducement to people to pass on the bill to the Social Security, some people will be left with only the minimum income and a substantial debt which is owed by somebody else. There must be some guidance to indicate the circumstances in which it would not be sensible to recover that debt.

Lord McIntosh of Haringey

The noble Lord's suggestion is sensible provided that the guidance is that to which the local authority shall have regard rather than guidance which they would have to observe or contravene.

Lord Henley

I take the point made by my noble friend and shall consider whether guidance might be given on how these matters should be proceeded with. I am grateful that my noble friend and I believe the noble Baroness recognise that there is a considerable danger of creating what I referred to as a perverse incentive.

Baroness Hollis of Heigham

The discussion has been most helpful and I was grateful for the intervention of the noble Lord, Lord Jenkin. My fear is that if local authorities cannot track down the errant husband they will simply send in the bailiffs and the wife will lose her property. I am happy to respond to the Minister's offer to look at the matter again and I take pleasure in withdrawing the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 65: Page 5, line 10, at end insert: ("( ) Subsection (3) above shall not apply to any person who on any day is a person to be disregarded under paragraphs 1, 2, 3 or 4 of Schedule 1; or").

The noble Baroness said: In moving the amendment I shall speak also to Amendment No. 70. No doubt to the relief of Members opposite this may be the last discussion for the time being on joint and several liability. The effect of the amendments is to exempt in a straightforward way from joint and several liability four categories of people. First, prisoners and others in custody who are covered by paragraph 1 of Schedule 1. Secondly, people who are severely mentally impaired as covered by paragraph 2. By normal reference one tends to refer to Alzheimer's cases. Thirdly, people over the age of 18 but still at school who are covered by paragraph 3, because child benefit is still being paid. Fourthly, full-time students covered by paragraph 4.

Perhaps I may indicate briefly why all those cases raise real problems within the structure of the council tax. First, the prisoner is in jail and obviously not at home. He is not liable for his personal element and therefore the wife in the marital home—I make that assumption for this purpose—is paying 75 per cent. of the council tax. Let us suppose that he does a flit leaving accrued debts behind. He is in jail, in destitution and in ignorance and finds himself liable for her bills while he is exempt from his own. That cannot be sensible and I should welcome the Minister's comments.

1 find Alzheimer's disease especially cruel. I wrote to the Minister about the matter and I have his reply which I may need to refer to later. Joint and several liability applied only between spouses under the poll tax and not under guidance where one party could but did not pay. We now find that joint and several liability applies to less intimate relationships than that of spouses; for instance, brothers and sisters. Unlike the poll tax, the council tax gives the Alzheimer victim joint and several liability for the personal element of the other person even though he may not be and is not liable for his own. Would the Minister tell me why someone with Alzheimer's disease is given a personal exemption of 25 per cent. from the poll tax on the ground of being mentally incompetent but is then held jointly and severally liable for the other 75 per cent. of the bill? Someone who is incompetent to pay his own debt is held to be jointly and severally liable for someone else's debt.

That cannot be sensible. It was not the case under the poll tax but it will be the case under the council tax. A person judged not competent to pay his own debt is held to be competent to pay someone else's. I hope that the disability groups recognise that the provisions for joint and several liability under the council tax are far more harsh and severe than they were under the poll tax. Concessions wrung from the Government in relation to the poll tax, which we were pleased to acknowledge, are being partly dismantled under the council tax.

My third example is the 18 year-old. A relative, a kindly uncle, leaves a home jointly to a mother and daughter and the 18 year-old daughter is still at school, mother receiving child benefit for her. If the mother defaults on the council tax bill, the child, who is still at school and with no income at all of her own, is jointly and severally liable for it. How can this be sensible? Again it is perverse.

Finally, I come to the full-time student. Similarly we can consider a student sharing a house with a friend who is not a student. They are not cohabitees; they are just friends. They are joint tenants, and because both are in the house the house itself is not exempt. It is instead treated as a single-person household. The student is properly exempt from liability for his own 25 per cent. of the bill and is invisible, to repeat the words of the noble Lord, Lord Renfrew. But that student, though invisible for his own bill, remains jointly and severally liable for 75 per cent. of the bill not only for the property element, which if he lived with another student would not exist, but for the personal element—and this is the case with all of these —of the non-student. Even though the student may be on a grant which is below income support level, and by far, and the defaulter on a substantially higher income, the student remains liable.

While there may be a case for somebody who is exempt from the personal element of 25 per cent. having some liability for the property element, the council tax goes further than that. They are jointly and severally liable for the other person's personal element, albeit exempted from their own. This has to change. It is not only unfair; it is deeply illogical within the conceptual structure of this tax itself. It is offensive, and I have to say so far as the Alzheimer's case is concerned it is downright cruel. I beg to move.

Baroness Hamwee

I briefly support the amendment. The noble Baroness has explained the position clearly. I share her concerns and hope that they can be resolved.

Lord Henley

The noble Baroness gave a number of different examples. As she said, this was something on which my noble friend Lord Strathclyde has written to the noble Baroness. I hope that she found that letter of some use in setting out the problems in this area. Let me start with one of her examples, and that is the case of the person who is severely mentally impaired or has, as she put it, Alzheimer's. Disapplying joint and several liability in such cases could give rise to some serious difficulties, and not least for the people who would be affected.

Let us take the example given by the noble Baroness of, for example, a married couple where the husband has developed Alzheimer's but all the assets, including the house, were in the husband's name, and he, before developing Alzheimer's, will have been meeting all of the household bills. But despite his illness and his impairment he is still the partner who has the resources to continue to meet the bills. It would be hardly fair to transfer the sole liability to his wife. In practice of course the wife may have responsibility for administering his financial affairs. In that case she will be able to make the council tax payment from his financial resources.

Baroness Hollis of Heigham

Could the Minister then tell me, given that reasoning, why the person with Alzheimer's should have any discount or invisibility at all if he has resources?

Lord Henley

Because he is disabled. We have therefore offered that concession. Is the noble Baroness arguing that she would not like to have that discount?

Baroness Hollis of Heigham

On the contrary, I am probing to see what the logic is to exempt somebody who is ill but to continue to make them responsible for someone else's debts?

Lord Henley

It is a mere discount. It is not an exemption. May I continue with the example of the husband suffering from Alzheimer's? In that case, if the wife has responsibility for managing his affairs, she can and will be able to make the council payment. But it may well be that someone else has this responsibility. It depends on how they have managed their affairs since his illness. For example, it might be one of his relatives other than his wife. In that case, making the wife solely liable for the tax would be perverse and possibly harsh in its effect. As I stressed on previous amendments, benefits will continue to be available for up to 100 per cent. for those on low incomes, including couples on low incomes.

As I have been trying to point out throughout the debates on all the amendments moved by the noble Baroness, joint and several liability is a difficult area and creates problems. It has given rise to careful consideration within the Government. Having considered the arguments carefully and sympathetically we believe that the position at which we have arrived is both logical and sensitive to the people's circumstances.

In the light of the example I gave I hope that the noble Baroness will feel able to withdraw her amendment. However, if she would prefer to have further explanation following the letter from my noble friend Lord Strathclyde, I shall be more than delighted to write or my noble friend Lord Strathclyde, I am sure, will be delighted to write yet again.

Baroness Hollis of Heigham

I understand what the Minister is saying; what I cannot do is accept it. The Minister mentioned the Alzheimer's case and quoted at some length the letter kindly written to me by the noble Lord, Lord Strathclyde, saying that the position was sensitive and logical. He referred primarily to the Alzheimer's case because there is a Civil Service draft in existence in that regard.

The situation is not logical and it is not sensitive. It is not logical to give a person a personal discount of 25 per cent. on the grounds that they are so severely mentally impaired that they are not competent, and yet continue to make them jointly and severally liable for another person's debts. That cannot be right. It is certainly not logical and it is certainly not sensitive.

Lord Henley

Perhaps the noble Baroness will give way. I believe that she is misunderstanding the nature of the personal element. One should not look at the personal element in the council tax as being what the noble Baroness would like to call the poll tax. The standard bill assumes that there are two adult residents. That standard bill will not be increased if there are more than two adult residents. However, as the noble Baroness says, it will be reduced if there are fewer than two or if one of those residents is discounted. It is not increased if there are more than two.

The Bill is designed to help single-person households and those containing certain groups; for instance, the person suffering from Alzheimer's disease and hence the discount. It does not represent a part of the tax which attaches to any specific individual. There may be three people in the house. That does not increase the council tax chargeable on that house.

Baroness Hollis of Heigham

That is true. Nonetheless, Mr. Portillo in another place, throughout the Committee stage, was at pains to establish —it was reconfirmed in the debates that have already taken place in this Chamber—that it is a property poll tax Bill, or a property personal Bill, if the Minister wishes me to use the vocabulary employed by the noble Lords opposite.

Lord Henley

It is only the noble Baroness who calls it a property poll tax Bill. We call it a council tax Bill.

Baroness Hollis of Heigham

Your Lordships, including the noble Baroness, Lady Blatch, in moving the Bill at Second Reading referred to it as a tax with two elements—a property and a personal. The personal element was based on a two-person household and the rest of the structure of the Bill—including, for example, the discount on second homes, including the comments made by Mr. Portillo in another place, including the 25 per cent. discount for one person-all show that the property element is regarded as amounting to around 50 per cent. of the bill and the personal element is two times 25 per cent. of the bill.

That is why, if somebody is invisible and therefore a two-person household becomes a single-person household—for example, if one resident is a student —the bill goes down by 25 per cent. There can surely be no disagreement between us on that. In which case, somebody suffering from Alzheimer's disease, somebody who is in prison or where there is an 18 year-old still at school and the like, the household bill will accordingly be reduced by 25 per cent. For their own invisibility they have a personal discount. Nonetheless, while recognising that they are invisible for the purposes of the Bill, they continue to be jointly and severally liable not just for the property element which they share, but for the other person's personal element. That is the structural problem of the tax. I see Ministers opposite shaking their heads.

Lord Renfrew of Kaimsthorn

I can only follow the noble Baroness so far. There may be some point in what she is saying, but the element of discount clearly does not prevent somebody from being in a position financially to pay if they are of great wealth. That is what I found so effective in the points that the Minister was making. If we imagine that there are cases where persons with disabilities, whether Alzheimer's disease or something else, are persons of great wealth, then it is naturally appropriate that from those resources they should meet the bill. The fact that they are liable to discount through disability is not relevant. Quite clearly, it makes sense to have a blanket discount eligibility through grounds of ill health. It would be absurd to inquire whether a person is wealthy before offering a discount. It is much simpler to ask whether the person is in a category which falls to be disregarded. If that is so, then that person is eligible for discount. It is an interesting but completely separate issue.

I believe that the noble Baroness may have a point of interest; but if the person involved is not wealthy, that would be another matter. The discount is one thing and the personal resource is another. Surely that is an element that the noble Baroness should bear in mind. She is flogging the one horse, whereas it may be that the other horse will go further.

9.45 p.m.

Lord Henley

My noble friend could hardly have put it better. It is not an invisibility which affects the mature student or a person with Alzheimer's disease; it is the question of the discount. The only occasion when one has invisibility is when one has a household of students. There is no invisibility in the case of the person I have mentioned—that is to say, someone with Alzheimer's disease, but there is a discount on that household's liability.

Lord Monkswell

Can the Government help me in understanding this matter? There seems to be a conflict in logic. We are advised by the Government that if a person such as a child, a student, someone in prison, or a person suffering mental incapacity is affected, then there is a discount of 25 per cent. if there are two persons in the household. That is entirely logical in the sense that all four categories of people will either have no income or they will be poor. Rather than go through the benefit system to assess their income and become involved with the red tape of bureaucracy, it makes laudable and logical sense to say, "Yes, we shall knock 25 per cent. off".

However, I am confused because the argument put forward by my noble friend means that the issue is being turned on its head. The Government argue that these people will be rich and therefore they can afford the cost. Can the Government explain this apparently logical inconsistency?

Lord Jenkin of Roding

I have listened to the argument with a growing sense of puzzlement. I say with no sense of criticism whatever of either the noble Baroness or my noble friend, but there seems to be some difficulty in making the arguments meet head-on. I get the impression that people on either side of the Committee are seeing somewhat different aspects of the argument. I wonder whether we shall be able to resolve this matter tonight.

I have been sufficiently persuaded by the speech of the noble Baroness and by that of my noble friend Lord Renfrew, to accept that there is a point here. I have yet to be convinced that my noble friend has wholly answered it. I wonder whether the right answer at this hour of the night is for my noble friend to take the matter away. We can all read Hansard and make sure that we have understood the arguments. Somewhere along the line there is a matter here which has not yet been thoroughly thought through. It is better that it should be resolved after careful thought given at leisure rather than to seek to argue it out and reach a Division tonight so that the matter cannot be returned to at Report stage.

Lord Henley

It is entirely for the noble Baroness to say what she wishes to do about her amendment. I cannot offer, as my noble friend has suggested, to take the matter away and have further thoughts about it. I can certainly write again to the noble Baroness. However, I suspect that the noble Baroness and her noble friend Lord Monkswell have misunderstood the point that I have been trying to make. In addition to that, I also suspect that there might be a fundamental disagreement between us. If that is so, then we must continue to differ. If the noble Baroness wishes to bring back the amendment at Report stage, I can do nothing to prevent her. I hope that by now she understands the point that we are trying to make.

Baroness Hollis of Heigham

I do actually understand what the Minister said; that is the problem. But given the comments also being made from his side of the Chamber, in a constructive spirit I would hope that perhaps we could meet to discuss this rather than continue to exchange letters—which then get read into Hansard—to see whether we can find a way forward. In the light of that, and in the hope that we can arrange a meeting to discuss the matter, I take pleasure in withdrawing the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 66: Page 5, line 10, at end insert: ("( ) A person who would otherwise be held jointly and severally liable under either subsection (3) above or under section 9 (liability of spouses) and who is a person who falls to be disregarded for the purpose of discounts under Schedule 1 shall only be liable for a maximum of 50 per cent of the daily liability for any period to which subsection (3) above or section 9 applies.").

The noble Baroness said: This is a much more modest and a much briefer amendment. It is weaker than the other two, which would exempt certain people from joint and several liability. This amendment seeks to confine joint and several liability to 50 per cent. of the tax, which Ministers say is the property element for the most part—as reflected, for example, in the debate on second homes. As a result, where the wife has Alzheimer's disease and the bill is reduced by 25 per cent. because the husband is treated as a single person, she is not then liable for his personal element though they may continue to share the problem of joint and several liability for the property element. I beg to move.

Lord Henley

I am glad the noble Baroness herself has said that her arguments are somewhat weaker—

Baroness Hollis of Heigham

No, I did not. Absolutely not. The noble Baroness, Lady Blatch, sometimes complains that I put words into her mouth, but I think that none has been such a transgression of propriety as that which we have just heard from the Minister. What I said was that the amendment was weaker. However, I am sure the noble Lord will listen more carefully in future.

Lord Henley

I certainly accept the correction from the noble Baroness. I also accept that the amendment is somewhat weaker. I was about to say that the proposal to limit liability in these circumstances has very little indeed to commend it. The council tax is a single amount chargeable in respect of a dwelling. The amount may well be determined by the number and status of the people living in the dwelling, as we have already discussed, but it is a single integral amount. It is the amount in the tax which the local authority expect the dwelling to contribute. As I said earlier, how the residents themselves decide to choose to divide that contribution among themselves is a matter for them. Where all, or some, of the residents need help they may be entitled to benefit according to their circumstances. But at the end of the day all the residents, as we have said before, are equally responsible for ensuring that the due amount is paid.

The amendment could also give rise to certain anomalies. Where the person giving rise to the discount has all the resources this amendment would limit his or her liability to 50 per cent. That would mean that the liability for the other half of the council tax would fall on the other partner, who may well have no means to meet it. It is far better for households to make their own financial arrangements, as I said earlier, and to make their own arrangements without the authorities having to concern themselves with the status and resources of the residents. I hope therefore that the noble Baroness will feel able to withdraw her amendment.

Baroness Hollis of Heigham

The gap of misunderstanding is still there, is it not? In response the Minister said—if I quote his phrases accurately —that it is for the individuals concerned to make their own financial arrangements and to decide for themselves. I think I have paraphrased him accurately. The point remains: how can those with Alzheimer's disease rationally make their own financial arrangements and decide for themselves? How can those who are imprisoned and therefore absent from the home make financial arrangements and decide for themselves? They are not, in that sense, consenting partners to the financial arrangements that need to be made. That is at the core of this argument. That is why they were given a personal discount in the first place and that is why, with the same logic, they cannot be held responsible for someone else's debts.

We have probably pushed this point far enough tonight. As I said, we shall obviously need to discuss the matter further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe moved Amendment No. 66A: Page 5, line 12, leave out from ("person") to end of line 13 and insert ("as regards whom the following conditions are fulfilled—

1. (a) he has a material interest in the whole or any part of the dwelling; and
2. (b) at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest;").

The noble Earl said: Amendments Nos. 66A and 67A redefine "owner" for the purposes of the council tax.

Clause 6 provides for the owner of a dwelling to be liable to pay the council tax where there are no residents. The existing definition of owner in Clause 6(4) states that the owner would be the person entitled to possession of the dwelling or any part of it. This is the same definition as that used for non-domestic rating purposes, for which it works well. However, we believe that in certain circumstances the existing definition may not produce a satisfactory result for council tax purposes. This is because the person entitled to possession may not always be the owner as usually understood. Take, for example, the position of a person for whom temporary accommodation has been provided under a licence, as part of his or her job. Where the accommodation has not become that person's sole or main residence we believe that liability for the council tax should fall on someone who has a substantial proprietary interest in the dwelling. However, the individual for whom the accommodation is provided may be held to be entitled to possession of the dwelling; he or she would then be the liable person under the present clause. This situation may also occur with holiday lettings where liability might attach to the person who had taken the letting, rather than the person letting the property.

The amendments therefore revise the definition of owner. The new definition relates to a person's interest in the dwelling and covers both freeholders and long leaseholders. This is similar to the definition currently used for the standard community charge. It means that the person who has the freehold, or if there is a lease of any part of the dwelling, any person who has an immediate interest in the dwelling under a lease of six months or more, will be liable. Leases of under six months will not be taken into account.

Clause 8 contains a power to place liability on the owner of prescribed dwellings instead of the residents. There is also a power to prescribe who should be regarded as the owner in certain cases. The new definition of owner proposed by Amendments Nos. 66A and 67A may not, however, cover the person on whom it would be appropriate to place liability in all situations. Amendment No. 68B seeks to clarify the position with regard to the definition of owner. It extends the order-making power to provide for liability to be place on a prescribed person, in particular cases.

Dwellings occupied by ministers of religion are one such example. It is our intention that ministers of religion should not be liable to pay council tax on dwellings in which they reside in order to perform their duties. Liability instead will be placed on the Church, but the definition of owner will not, in all cases, cover the appropriate body. The provision also allows for flexibility should difficult cases arise in the future.

Amendments Nos. 76ZA and 80A to the Scottish Clauses 75 and 76 achieve similar effects in Scotland. We have, of course, already amended Clause 75 in another place in a manner which aligned Scottish policy more closely with that for England and Wales. The further change is required to maintain a consistent approach. The differences between the two sets of amendments reflect differences in existing law relating to land tenure in Scotland and England and Wales which require, in the context of the present Bill, different approaches to achieve a similar effect.

These amendments are necessary to ensure fairness and will assist in the administration of the council tax. I therefore commend them to the Committee.

Lord McIntosh of Haringey

I am glad that the noble Lord, Lord Renfrew, is still in his place because he is the one who commends the Bill as having the virtue of simplicity. If he still thinks, after that explanation, that the Bill is simple, all I can say is that he has a greater gift of reduction to simple elements than I would lay claim to.

Clause 6(2) provides what is intended to be an exhaustive list of persons who are liable to pay the council tax. The list is in a hierarchical order. What the Government are in effect doing in these amendments is taking the bottom category—category F of the list in hierarchical order—and saying, "We shall define it to mean what we like to make sure that no one is left out". That is a laudable intention in some ways but it certainly does not conform with the view of the Bill held by the noble Lord, Lord Renfrew. I suppose we must recognise that the amendments are inevitable given the way the Government have structured the Bill.

On Question, amendment agreed to.

[Amendment No. 67 not moved.]

10 p.m.

Earl Howe moved Amendment No. 67A: Page 5, line 17, at end insert: (""material interest" means a freehold interest or a leasehold interest which was granted for a term of six months or more."). On Question, amendment agreed to.

[Amendment No. 68 and 68A not moved.]

Clause 6, as amended, agreed to.

Clause 7 agreed to.

Clause 8 [Liability in prescribed cases]:

Earl Howe moved Amendment No. 68B: Page 6, line 17, leave out from ("may") to end of line 19 and insert ("provide that, in relation to any dwelling of that class, subsection (3) above shall have effect as if for the reference to the owner of the dwelling there were substituted a reference to the person falling within such description as may be prescribed").

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 69: Page 6, line 22, at end insert: ("(7) A person who is liable in respect of any chargeable dwelling under subsection (3) above shall have a duty separately to notify each resident of—

1. (a) the amount that resident shall pay to that or any other person in respect of council tax for that dwelling; and
2. (c) the amount that that resident shall pay to that or any other person in rent.

(8) At no time shall the total of the amounts, in respect of any chargeable dwelling, referred to in subsection (7) (a) above exceed the council tax due for that dwelling for that day or any other period. (9) The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident.").

The noble Lord said: The amendment now before the Committee has already been referred to in debate. I trust that its importance has not been overestimated. It is a modest and relatively non-controversial amendment, as I hope Members of the Committee will agree. The Bill provides that where there are houses with multiple occupation—although it does not actually use those words—and where it is appropriate, the local authority may determine that the owner is liable; in other words, it will push the owner up the hierarchy of Clause 6(2) so as to ensure that the tax is actually collected. If there is, for example, a floating population in bedsitting rooms, a residential hostel which falls within the scope of the council tax or if part of a dwelling is being used to house another member of the family, such as a granny flat, it is much easier for the local authority to collect from one person (the owner) rather than from all of the people who might otherwise be liable. The Bill quite properly covers that point.

However, safeguards are needed and it is to those that we want to draw attention. Noble Lords will recall that, when both the Scottish and the English poll tax Bills were being introduced, we on this side of the Chamber gave the warning that the fact that the poll tax was to be collected from an individual meant that where in the past there had been rents inclusive of the rates, landlords would not deduct the rating element from the rent and would therefore make windfall profits.

Estimates have been made of those windfall profits which arose from the fact that the Government refused to take heed of our warnings. I have with me some estimates. However, I do not know how the information was collected and therefore I would not put my professional judgment on them. Nevertheless, estimates which appear to have been widely accepted reveal that something like £40 million in windfall profits was made in Scotland and perhaps as much as £90 million in London.

It may be thought that that is a matter between landlord and tenant and not the concern of government. But of course many of those rents are being subsidised by housing benefit. If the rents are excessive because the rating element has not been taken off, then it is the public purse through the housing benefit scheme which is losing out because of such profiteering.

The amendment seeks to provide that the landlord, in this case, who is liable in respect of a chargeable dwelling, shall notify each resident of the amount that the resident shall pay in respect of council tax, and, under subsection (8), shall never charge more than the amount due for the council tax. In other words, there should not be, as there has been in the past with electricity meters, for example, a bumping up of the amount to be paid because of an excessive amount claimed to be due in council tax. So we say in subsection (9): The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident".

The amendment is not a theoretical one. It is based on the experience of the bad drafting of the poll tax legislation. The amendment does not just affect other people, it affects the public purse. It is obviously a matter of simple justice that tenants should be protected in this way. I beg to move.

Baroness Hamwee

I support the amendment. I did not move Amendment No. 62 because I thought that it would be more useful to debate the proposed measure rather than the more general provisions of the earlier amendment.

The noble Lord, Lord McIntosh, said that the responsibility lay with government, for financial reasons. It is also the responsibility of government, for the reason he mentioned at the end, where it is known that there was a form of exploitation—I do not believe that it is too strong a term—as there was with regard to the poll tax, to ensure that that is not replicated in the new tax.

Baroness Blatch

I am not surprised that the noble Baroness did not move Amendment No. 62, because it would have required an incredible amount of bureaucracy. Details of tenants' incomes would have been required in order to make a report to Parliament.

The amendment would provide an unwarranted interference in people's private affairs. It is up to individual owners or landlords to decide how they will reflect council tax in rent payments. Landlords do not have to account separately for other overheads such as gas, electricity, water or maintenance costs when determining rents. It is not therefore appropriate, nor would it be possible, to single out one element, because a landlord can say almost anything. He can say there is no element in the rent for tax, or there is, or it is small, or it is medium. It is not possible, without knowing all the elements involved in making up the rent. It may be the policy of Members opposite to have a system in place so that every landlord has to submit evidence with respect to each element of the rent to ascertain which part of it relates to the council tax.

There is no reason to believe that a landlord would be more or less fair and equitable when levying, as part of his overheads, the council tax as an overhead than a landlord would be when levying any other overhead: heating, lighting, gardening, possibly cooking, cleaning or whatever element is built in to make up the rent. How is it possible separately to identify the council tax? It is not possible.

Under the council tax, liability will normally fall on the residents of a dwelling, and the power to make the owner of a dwelling, or other prescribed person, liable for the council tax will be used mainly in the fairly rare cases where it would be difficult to bill the residents. Houses in multiple occupation, where the residents are likely to be occupying the dwelling under licence, and hostels are two such cases.

In contrast, rates were paid by the landlord in a greater number of cases, and, accordingly, a contribution for the rates was often included in the rent payable by tenants. The issue has therefore attracted a substantial amount of attention, but inclusive rents will not be so common under the council tax. They will be the exception rather than the rule. I ask that the amendment be rejected.

Lord Monkswell

I should like to question the noble Baroness about one point she made. If I heard her correctly, she said that a landlord could, in the rent that he charged for the property, include an element of the council tax or an amount in proportion to the council tax. I am concerned about this because surely the council tax is a tax on people for the benefit of the use of the property. It is a combination of a property tax and a personal tax, as has been mentioned.

Is the noble Baroness saying that it is legitimate for an intermediary party between the taxpayer and the Government to decide who shall and who shall not pay the tax? In practice it would mean that the landlord would have to levy an extra charge on some people and tax them more heavily, but allow other people not to pay the tax. That cannot be fair.

Baroness Blatch

The noble Lord has totally misunderstood the point. There is a liable person who is responsible for paying the tax. Unless otherwise decided, it is deemed that there should be a property element, which is 50 per cent., and a personal element which is also 50 per cent. That is the liability for the liable person in the household. For the purpose of this amendment, we assume that that is the landlord. He will have a number of overheads which will include the council tax, heating, lighting and many other items. There will be a negotiated rent between the landlord and the tenant or tenants. The way in which the landlord negotiates a rent, containing all these different elements, is a matter between the landlord and the tenant or tenants. That is all there is to this.

It is not possible separately to identify items, or it would be easy for a landlord to evade the duty, if he had to submit evidence that he had levied a fair element, a fair proportion of the council tax. The choice of the landlord would be to pay the bill as it comes to him, without levying it at all, or to levy it among the tenant or tenants. That is all there is to it. It would be quite impossible and bureaucratic to insist that there had to be evidence that there was fair and equitable levying of that one overhead. It could only be deemed to be fair if there was evidence of all the other elements within the rent. That is not something we could support. However, no doubt Members of the Committee opposite would like to impose that on landlords.

Lord McIntosh of Haringey

This is a most astonishing series of arguments. We are accused of wanting to know the details of all the elements in a rent. There is no need for that and it is not what the amendment says.

Baroness Blatch

How would the noble Lord identify specifically within a rent the element that is related to the council tax?

Lord McIntosh of Haringey

The residence, the property or whatever we care to call it will be subject to a council tax. The landlord will know how much he pays and how many tenants he has. It does not matter what rent he charges for other items—space, lighting, heating or anything else—he will be required to say, "Because in the past you have been paying your poll tax yourself, I am now going to put up your rent because I am going to pay your council tax for you". But if the council tax is, for example, £200 and there are four people, he will not be able to charge more than £50 a head, provided each has an equal share of the dwelling, the property. That seems to me entirely reasonable. It does not require anyone else to know anything about what other elements of rent there are. The landlord simply says, "I can't receive a council tax bill of £200, go along to my tenants and put their rents up by £400 in total and make a windfall of £200 profit". That is what happened when inclusive rents were replaced by poll tax liability when the poll tax was introduced. It happened in Scotland, England and Wales.

Lord Jenkin of Roding

The noble Lord, Lord McIntosh, has got it quite wrong. That is not what happened at all; it was exactly the opposite. I would not attempt to deny that there were cases where a landlord failed to make a reduction because he was no longer paying rates when the tenant was paying the community charge. However, that is a totally different matter. In many cases tenants were able to make the necessary representations to their landlords as they recognised their landlords were no longer paying rates. Some landlords might have said they had not increased the rent for some time and therefore they wished to do so by the amount of the community charge. Often an agreement was reached between tenant and landlord and tenants stayed in their rented accommodation. In cases where rents are regulated or controlled, there is machinery to deal with these matters.

The noble Lord, Lord McIntosh, seems to be obsessed with a person who is letting out property for the first time and who says to his tenants, "This is the rent and in addition I am charging you additional amounts for services I provide". The noble Lord believes it is possible to isolate that element in the rent that accounts for the council tax. It just does not work like that.

In the vast majority of cases where a tenant rents accommodation he will pay his council tax because that is what this Bill provides. However, we are discussing those cases where the landlord pays the tax. The landlord tells his tenant what the rent is. The tenant may ask about other expenses. The landlord tells him that X and Y are included but the tenant will have to pay for A, B and C himself. The landlord may say that X and Y that are included in the rent include the council tax. However, it is a matter for the landlord to decide how much of the total charged represents the council tax and how much of it is the rent. It is not a case of a landlord charging his tenant an additional amount simply to make more money. What he is doing in fact is charging a higher rent. I do not see how one can isolate the different elements of the rent. I believe the noble Lord, Lord McIntosh, is barking up the wrong tree. I totally accept the arguments made by my noble friend. I hope this amendment will be rejected.

Lord McIntosh of Haringey

If I wished to be even more moderate than I usually am, I would say that that speech represents the triumph of hope over experience. Where inclusive rents should have been altered when the individually collected poll tax was introduced, some landlords profited from the situation. Anyone who has any experience of offering advice to tenants knows that that was the case. Landlords did not reduce their rents by the amount of the poll tax.

In the case of tenants who received housing benefit, the public purse stood the cost of that profiteering. The rents should have been reduced but were not and that offered an opportunity for profiteering to landlords. There is now a second opportunity for profiteering when it is recognised that rents will have to be increased to cover the new tax and the Government are refusing to make provision to protect tenants from an excessive increase in rent over and above that which is required in order to pay the council tax. Again, if those tenants are in receipt of housing benefit, the public purse will bear the loss.

It is scarcely credible that having got this matter wrong once, and having seen the effects of getting it wrong once, the Government should insist on getting it wrong again in exactly the same way. However, that is what they are doing. It is only the time of night that prevents me from seeking the opinion of the Committee on this matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 8, as amended, agreed to.

Clause 9 [Liability of spouses]:

[Amendments Nos. 70 and 71 not moved.]

Clause 9 agreed to.

Clause 10 agreed to.

Clause 74 [Different amounts for dwellings in different valuation bands]:

10.15 p.m.

Baroness Hamwee moved Amendment No. 72: Page 49, leave out line 13 and insert: ("Values not exceeding £20,000 AA Values exceeding £20,000 but not exceeding £27,000") A

The noble Baroness said: It is neat that as we approach the end of the day we return to the question of banding. It is a shame that the Scots have had to return to the Highlands and Islands.

Lord Strathclyde

On your side!

Baroness Hamwee

Nevertheless, the phantoms behind me support this amendment. It may be difficult for those of us sitting in central London to accept that a band up to £27,000 is unrealistically high for areas in the Highlands and Islands which are sparsely populated and where property has a low value as a result. That sum is too high as a starter band. It is another example of too many properties falling within the same band. In Caithness 39 per cent. of houses are in the first band; in Ross and Cromarty the figure is 32 per cent.; and it is 33 per cent. in Sutherland. In those districts only 3 per cent. of houses fall within the top three bands.

What we have here is not a true reflection of the cost of housing in remote rural areas. We run the danger once again of requiring Highland residents to pay more than the value of their houses suggests that they should. Many of them live in property which has a low value. They are particularly badly hit. That is particularly so in communities where property values are inflated because people pay high prices for holiday homes, causing the difficulties which we all know about for local communities.

I suggest that we should look again at the low banding for Scotland and insert the two new bands which are proposed in the amendment. I beg to move.

Lord Jenkin of Roding

The amendment which the noble Baroness moved on behalf of her Scottish colleagues—and I thought that she led with her chin—allows me to raise a point which Members of the Committee will recall was raised during the passage of the Local Government Finance Bill which introduced the community charge. What is the liability in respect of occasionally occupied mountain huts and similar properties, many of which would be affected by the amendment which the noble Baroness moved? Such buildings, if they were to change hands, would come well at the bottom end even of her lower band.

In the case of the community charge the argument was put forward that if the building was not occupied for more than a few weeks in the year there was no question of liability for the community charge. I am not clear whether such properties which would fall within the lower band proposed by the noble Baroness would be liable for the council tax. Perhaps I should declare an interest as having an occasional occupation right of such a property, although I hasten to add that I am not the owner. I recall that there was no question of liability to community charge. Will there be liability to council tax?

The point is relevant. The noble Baroness indicated that in certain Highland areas a substantial proportion of properties would fall within the lower band if it were not amended and that therefore there should be an additional band. One wonders what proportion of those properties are the kind of temporarily occupied hostels and huts which do not come within the council tax because they are not occupied for more than a few weeks of the year.

Lord Strathclyde

It is amazing that at this time of the night we should be having yet another debate on banding. Is there anything left to say which will satisfy the noble Baroness, except that this time she has decided to hit Scotland rather than England and Wales?

The noble Baroness came up with a figure of £20,000. There is no evidence to suggest that £20,000 would be better than any other figure. Why not £17,000 or £25,000?

In addition, the noble Baroness has not considered the fact that if there were to be an additional lower band that would benefit the people who currently live in band A properties. Is that what the noble Baroness wants?

Turning to the question of my noble friend Lord Jenkin, if the mountain hut is somebody's sole or main residence it would come under the council tax. If it is unoccupied but belongs to somebody it would receive a 50 per cent. discount. If it is occupied only for very short periods I dare say that it would probably escape council tax altogether. I hope that that explains the matter and that the noble Baroness will decide to withdraw the amendment.

Lord McIntosh of Haringey

The council tax is liable on a daily basis and not an annual basis. Is the Minister encouraging law-breaking?

Lord Strathclyde

The noble Lord on the other side of the Chamber would know far more about that than I do.

Baroness Hamwee

I thought that the words "hit Scotland" were a bit much. Yes, it does hit Scotland. But it is not my amendment that hits Scotland; it is the Bill and the unfair banding. I noticed that the noble Lord, Lord Strathclyde, did not say that he hoped that the explanation would satisfy me. It does not do so. At this hour I shall not press the matter further. However, I am not satisfied and I do not believe that the people in the areas affected will be satisfied.

Lord McIntosh of Haringey

Before the noble Baroness withdraws the amendment, I wonder whether the Minister would care to think again about the words he just used to me.

Lord Strathclyde

If I have an apology to make, it is for making the words personal. I shall broaden my comment to the Labour Party. Clearly in the past the Labour Party has supported law-breakers. In its ranks are Members of Parliament who have refused to pay the poll tax. If the noble Lord would care to deny that, I shall be most pleased to hear it.

Lord McIntosh of Haringey

This exchange is becoming repetitious, but I have to deny it. There have been no such occasions. I assume that the noble Lord refers to the poll tax. The Labour Party has never encouraged any disobedience to the law. The Labour Party has never encouraged that. Individuals of all parties and none have encouraged disobedience but not the Labour Party.

Lord Strathclyde

Not the Conservative Party. It is quite clear that many Members of the Labour Party nationally have refused to pay the poll tax.

Lord McIntosh of Haringey

I accept the noble Lord's apology to me personally.

Baroness Hamwee

It is perhaps inevitable that as we start and end the day with the issue of banding so we have yet again the symmetry of that repeated allegation. I was asked whether I would not leave alone the question of banding. It is relevant to the Bill. Time after time we hear the same allegation. I hope that after hearing clearly quite heartfelt denial after denial, it might be accepted that there should now be an end of the matter. I do not take a party political point but the comments are quite extraordinary.

Baroness Blatch

Neither do I make a party point. However, there was a sensible grouping of all the amendments which covered topics. We have had several discussions about banding. There is almost nothing left to say about it. It is very unfortunate that we have been brought back only to repeat the arguments. The noble Baroness has heard absolutely all that we can have to say on banding. We are not going to concede the point.

The amendment could so well have been, as originally it was, grouped with the other amendments on banding. We have had a long day and are quite unnecessarily now discussing arguments that we had in the middle of the afternoon.

Lord Monkswell

I am sorry to intervene but my reading of the amendment makes it different from the other amendments on banding. One of the effects of the amendment is to take properties that are at the low end of the valuation list—small properties that are used only a few days a year—and remove them from the council tax regime altogether because there is no multiplier. I may have misunderstood the amendment but it seems to me to be significantly different from the other banding amendments. If I have misread the situation, I apologise to the Committee.

Baroness Hamwee

I certainly have no wish to keep people unnecessarily. It is late, but not very late. The interests of Scotland on this point are not the same as the interests of England which we debated earlier. I am sad to hear it suggested that because we know that the Government have set their face against banding we should accept that and not have even a short debate on the topic. However, having said that, I beg leave to withdraw the amendment.

Baroness Blatch

Perhaps I may say to the noble Baroness that we have taken Scotland so seriously that we have chosen to put a Scottish Minister on the Front Bench for the whole of the Bill. We have not seen that happening on the Labour or Liberal Benches.

Amendment, by leave, withdrawn.

Baroness Hamweehad given notice of her intention to move Amendment No. 73:

Page 49, leave out lines 23 and 24 and insert:

('£180,000
Values exceeding £180,000 but not exceeding £250,000	H
Values exceeding £250,000 but not exceeding £400,000	I
Values exceeding £400,000 but not exceeding £500,000	J
Values exceeding £500,000	K")

The noble Baroness said: I am tempted to move the amendment although I wrote a note to myself about half an hour ago to the effect that I would not. Therefore, I shall not do so at this stage.

[Amendments Nos. 73 to 75 not moved.]

[Amendment No. 76 had been withdrawn from the Marshalled List.]

Clause 74 agreed to.

Clause 75 [Persons liable to pay council tax]:

Earl Howe moved Amendment No. 76ZA: Page 50, line 16, leave out paragraph (f) and insert: ("(f) he is any of the following—

1. (i) the sub-tenant of the whole or any part of the dwelling under a sub-lease granted for a term of 6 months or more;
2. (ii) the tenant, under a lease granted for a term of 6 months or more, of any part of the dwelling which is not subject to a sub-lease granted for a term of 6 months or more;
3. (iii) the owner of any part of the dwelling which is not subject to a lease granted for a term of 6 months or more.").

The noble Lord said: The amendment has already been spoken to. I beg to move.

On Question, amendment agreed to.

[Amendment No. 76A not moved.]

Clause 75, as amended, agreed to.

Clause 76 [Liability in prescribed cases]:

[Amendment No. 77 not moved.]

[Amendment No. 78 had been withdrawn from the Marshalled List.]

[Amendment No. 79 not moved.]

[Amendment No. 80 had been withdrawn from the Marshalled List.]

Earl Howe moved Amendment No. 80A: Page 50, line 44, leave out from ("may") to end of line 46 and insert ("provide that, in relation to any dwelling of that class, subsection (3) above shall have effect as if for the reference to the owner of the dwelling there were substituted a reference to the person falling within such description as may be prescribed.").

On Question, amendment agreed to.

Clause 76, as amended, agreed to.

Clauses 77 and 78 agreed to.

Earl Howe

I beg to move that the House do now resume.

Moved accordingly, and on Question, Motion agreed to.

House resumed.

House adjourned at twenty-seven minutes before eleven o'clock.