§ (1) The rating authority may, if they think fit, by resolution direct that an allowance by way of discount of such amount not exceeding two-and-a-half per cent. as may be specified in the resolution shall be granted to any per son entitled to give a notice under section 1(1) of this Act in respect of a hereditament which is a dwelling-house, whether or not he has in fact given such a notice, who pays the net amount due by way of rates on that hereditament either—
- (a) otherwise than by instalments; or
- (b) by instalments required in pursuance of section 15 of the Poor Rate Assessment and Collection Act 1869.
§ (2) If an allowance under this section is made in respect of a hereditament in respect of which a notice under subsection (1) of section 1 of this Act is for the time being in force, that notice shall thereupon cease to be in force and, notwithstanding anything in the said subsection (1), rates on that hereditament shall cease to be payable in accordance with that section, without prejudice, however, to the right to give a fresh notice under the said subsection (1) in accordance with subsection (2)(a), of that section.640
§ (3) The rating authority may at any time revoke or vary a resolution under this section.
§ (4) While any resolution under this section is in force, a statement of the effect thereof shall be included in or sent with every demand note on which rates are levied in respect of any hereditament which is a dwelling-house, being a demand note in respect of a rate period beginning on or after 1st October 1966.
§ (5) Nothing in this section shall prejudice the powers with respect to allowances by way of discount conferred by section 8 of the Rating and Valuation Act 1925 or any provision for like purposes contained in any local Act, but a person who is for the time being entitled to an allowance under this section in respect of any hereditament shall not be entitled to an allowance in respect of that hereditament under the said section 8 or any such provision of a local Act as aforesaid.
§ (6) In section 9(4)(a) of the Rating and Valuation Act 1925 (which enables rules made for the purposes of certain precepts to provide in what manner and to what extent any allowances made under section 8 of that Act are to be treated as deductions in estimating and ascertaining the amount produced by a rate) the reference to such allowances shall be construed as including a reference to allowances made under this section.
§ (7) In the application of this section to Scotland—
- (a) in subsection (1), for the reference to section 1(1) of this Act there shall be substituted a reference to section 2(1) thereof, and the words from "either" to the end of paragraph (b) and the words "or respective dates" shall be omitted;
- (b) in subsection (2), for any reference to section 1 of this Act there shall be substituted a reference to section 2 thereof, and the words from "in accordance" onwards shall be omitted;
- (c) in subsection (4) the words from "being" onwards shall be omitted;
- (d) in subsection (5), for the reference to section 8 of the Rating and Valuation Act 1925 there shall be substituted references to section 12 of the Local Government (Development and Finance) (Scotland) Act 1964; and
- (e) subsection (6) shall be omitted.
§ —[Mr. MacColl.]
§ Brought up, and read the First time.
§ Mr. MacColl
I beg to move, That the Clause be read a Second time.
This Clause also deals with a matter that was discussed in Committee. Two arguments were propounded in relation to it—one that the power to enable discount for prompt payment should be mandatory on local authorities, and the other that it should be discretionary. Before the Bill there was power for a local authority to allow discount, but it had to apply to commercial as well as to domestic ratepayers.
641 The view expressed by hon. Members on both sides of the Committee was that this was unreasonable, and that as we were introducing a power to allow payment by instalments it would be reasonable that the same group of people who had this new right of paying by instalments ought to be given an incentive to pay promptly, that incentive taking the form of a discount comparable to the discount which can be given under previous legislation.
As a result of our debate in Committee we have brought in this new Clause, based on the discretionary principle. We take the view that it would not be right to inflict this as a duty on local authorities. Those authorities which feel that such an incentive would be worth while are given the power to provide it. The new Clause follows closely the old legislation in the form of the 1925 Act. It provides that local authorities may decide whether or not to offer a discount, and may specify the date by which the rates must be paid.
I draw attention to subsection (2), which provides that although a ratepayer can opt to pay by instalments but finally decide to settle in full, he cannot opt to settle in full and then decide to pay by instalments; he will, instead, have to wait until the next financial year, when he can start from scratch and then claim the right to pay by instalments.
§ Mr. James Allason (Hemel Hempstead)
I greet this Clause with modified rapture. The Parliamentary Secretary has pointed out that two points of view were expressed on this matter—one, that there should be a mandatory requirement to grant 2½ per cent. discount to those people covered by Clause 1, and the other, which was expressed in the terms of the Amendment in my name, that there should be discretionary power for local authorities to grant discount in respect of persons to whom they wished to grant it.
In the Clause the Parliamentary Secretary has steered a very narrow course between the two points of view, in that he grants discretionary powers to local authorities, but only in respect of those persons defined in Clause 1(1). The Clause will be of great benefit to local authorities in encouraging people to pay promptly and to receive 2½ per cent. discount. On the other hand, it leaves 642 out various other classes which the local authorities might have wished to include. Their difficulty, of course, has been that, under Section 8 of the Rating and Valuation Act, 1925, the local authorities could give a discount only to all ratepayers.
There is now, under the Bill, a power for certain ratepayers to pay by instalments, so, clearly, there ought also to be some power for local authorities to be able to grant to certain classes of ratepayers the 2½ per cent. discount. But I would suggest that it is a pity to confine this to precisely those defined in subsection (1) of Clause 1. For example, under this new Clause, charities will be able to receive payment by instalments, but not, of course, the 2½ per cent. discount in lieu. That will mean, therefore, that every charity will find it a financial advantage to pay by instalments. Even though they could afford to pay on the dot, they will take the more complicated course. This means more work and more expense for local authorities and it is a pity that charities are not included.
Secondly, landlords who, voluntarily—not under any arrangement under the 1925 Act—pay the rates on behalf of their tenants in bulk will in turn be penalised. If they pass it on to their tenants and make them pay the rates, the tenants will, of course, be entitled to pay by instalments. But the landlord will not be entitled either to pay by instalments or to receive the discount, so his best financial arrangement will be to pass the liability to pay rates on to his tenants.
The Parliamentary Secretary said in Standing Committee that this was a great advantage. He thought that it was a good thing that tenants should pay their own rates. I do not believe that this is so in the case of local authorities. It seems a disadvantage that a greater number of ratepayers should be entitled to this than there is at the moment.
Finally, there are the other classes of ratepayer whom a local authority might wish to try to help. An example is the small shopkeeper in a small way of business. The local authority might consider that, because substantial and wealthy householders are entitled to receive the 2½ per cent. discount, it is unfair that the small shopkeeper should not receive it as well. The authority might 643 wish to be able to give this discount, but under the Clause it will not be allowed to do so.
I am sorry that the Parliamentary Secretary did not accept my Amendment, which was simple and brief, and that, instead, no less than 35 lines must be added to the Bill for England alone, plus further lines for Scotland. However, this is a very prolix Bill and I am not surprised to find this great extension to it. I welcome the Clause, but with modified rapture.
§ Mrs. Thatcher
I believe that my hon. Friend the Member for Hemel Hempstead (Mr. Allason) has already made the main points, so I will not detain the House for long. I wish only to make three points.
First, I think that it is probably right to give this relief by way of discretion to local authorities rather than by way of a mandate. Clearly, the effect of giving the discount for prompt payment would vary very much between local authorities, so it is right that they should have this discretion. We are a little disappointed, however, that the area of discretion is so narrow.
Secondly, I hope that this discretion will be used in future rather more widely than it has been in the past. Local authorities have been very loath to give a discount for prompt payment of rates, but I understand from many municipal treasurers that, until now, this was because they would have had to give it to all classes of ratepayers. If they could give it to domestic ratepayers only, they would be encouraged to use it a good deal more widely.
Thirdly, as my hon. Friend said, we are somewhat disappointed that charities still have something of a poor deal under the new Clause. I would ask the Parliamentary Secretary perhaps to reconsider this point so that it might be rectified in another place. I understand that the time is short, but, naturally, if he wants the Bill to go through in another place, he will have to make arrangements fairly quickly. I ask him to consider extending the discretion which local authorities can give so that they could give it in favour of the charities with which we were dealing in the last new Clause.
§ Mr. MacColl
Some day, I will get this right. I have been wrong every time so far, Mr. Speaker.
The hon. Member for Hemel Hempstead (Mr. Allason) says that this provision is confined to all domestic ratepayers. We felt that selective discounts represented treacherous ground for local authorities. It would be difficult for them to have a standard of selection in what they would allow, particularly in the commercial ranges which the hon. Member mentioned, where the problem of competition might arise. There might be difficulties about saying that one person was entitled to a discount although another was not. If—
§ Mrs. Thatcher
With respect, I do not think that this is what my hon. Friend meant. He was concerned with discretion to classes of ratepayers rather than to individual ratepayers.
§ Mr. MacColl
That probably makes the position more complicated, as to how one defines the classes. It would be difficult to pick a particular definition and ascertain that it covered all the people whom one wanted to cover and was not just a straightforward test of whether each person was a domestic ratepayer—which, clearly, would be simple to establish. I can understand what the hon. Member feels about the small shopkeeper. It is a difficult position for them, but it would be difficult to find a definition of small shopkeepers which did not also include other people who might not need this advantage.
I thought that it was a little hard of the hon. Gentleman to refer to the length of the Clause. Neither Parliamentary counsel nor Parliamentary Secretaries are paid by the line and we have no incentive to make a Clause too long. When we resisted some Amendments in this vein in the Standing Committee, on the ground that they would complicate the Bill, we were scolded for not facing up to our responsibilities. Some of these matters are complicated and I think that parliamentary counsel has worked extremely hard and with great skill and imagination to launch these provisions into the Bill.
645 Therefore, I hope that the Clause will present itself favourably to the House.
§ Question put and agreed to.
§ Clause read a Second time, and added to the Bill.