HC Deb 24 February 1966 vol 725 cc635-9

(1) This section applies to any hereditament such as is mentioned in section 1(1) or section 2(1) of this Act in the case of which—

  1. (a) the persons who reside or are usually resident therein consist wholly or mainly of persons who are beneficiaries of a charity; and
  2. (b) the rates thereon are paid by that charity either as occupier of the hereditament or in pursuance of arrangements made between the charity and the persons who reside or are usually resident in the hereditament;

and in this section the expression "charity" means any body of persons or trust which appears to the Minister or, as the case may be, to the Secretary of State to be established wholly or mainly for charitable purposes.

(2) The Minister or, as the case may be, the Secretary of State may direct that any hereditament to which this section applies which is specified in the direction shall be treated for the purposes of section 1 or, as the case may be, section 2 of this Act as if the charity were both the occupier of, and residing in, that hereditament.—[Mr. MacColl.]

Brought up, and read the First time.

3.42 p.m.

The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl)

I beg to move, That the Clause be read a Second time.

This Clause arises out of a discussion in Committee about the right of charities to pay their rates by instalments. We had quite a hot debate about it. We took the line that we had no evidence that any hardship was caused by charities having no right to pay by instalments. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), and the hon. Lady the Member for Finchley (Mrs. Thatcher) rather strongly took the opposite view, that hardship might be caused in particular cases, such as old people's homes, homes for the disabled, and so on.

I promised that my right hon. Friend would look at this carefully. We have no evidence of any cases where trouble has been caused by this; indeed, in the cases which we have found where hardship might arise we have found no evidence that the managers of these institutions have ever asked to pay by instalments.

The nearest thing to evidence on the matter came up in the Solicitors' Journal this week—and I expect the hon. Lady read it—in a case about the derating of a S.S.A.F.A. home. This was a case which went to the Chancery Court, where the charity was held to be the occupier of a home of this kind, and Mr. Justice Buckley said: The question whether the flats ought to be regarded as occupied by the plaintiffs"— that is, the charity— was a question of fact which should be answered, keeping all the circumstances in view. Mr. Justice Buckley held that the plaintiffs were a charity providing residence for needy ladies, but were controlling their activities so carefully and stringently that it amounted to the charity being the occupier, and not the people who were living in the flatlets. That is the evidence of a case where hardship might arise, though I have no evidence that in any case, either in the case to which the right hon. Gentleman referred or the case to which the hon. Lady referred, any application was made.

I say that because I think it would be a bit hard on local authorities and their financial advisers to imply that they have been churlish about this and that that is why we have put down this Clause. However, we have suggested this Clause so that there may be no doubt. It is clear in the Bill that charities of this kind can be given the right to pay by instalments.

What we are proposing is that if a charity applies for the right to pay by instalments, and it is refused the right, it will have power to complain to the Minister who, if he thinks fit, will be able to issue a direction requiring the instalment provision to be applied. I think that this is a better way of doing it than trying to produce an extremely clear definition which would cover particular cases where hardship might arise.

Mr. C. M. Woodhouse (Oxford)

I gather that the Amendment which I have tabled to the new Clause is not selected, so I shall confine what I have to say to a question.

In this Clause the Minister is taking power to decide for himself what is, or is not, to be deemed to be a charity for the purposes of the Bill. In deciding what is or is not to be deemed a charity, will he be guided by previous legislation defining charities? I am sure that the Minister will see the point of my question if I refer him to the First Schedule of the 1961 Rating and Valuation Act which describes certain institutions as charities, namely, universities, and university institutions in this country, with the exception of the Oxford and Cambridge Colleges. I assure the Minister that I am not about to parade King Charles's head this afternoon. I am aware that this is not the proper occasion to seek to rectify that anomaly.

The institutions listed in the First Schedule of the 1961 Act all enjoy the benefit of having either the whole or part of their rate liability met by the Exchequer. I have not been able to establish—though I have tried to do so by a number of Questions, including one this afternoon—whether the Exchequer meets the entirety of the rate liability of these institutions, or only their increased rate liability arising from the 1961 Act, but it is in any case a fact, as was revealed in figures given this afternoon by the Minister of State, Department of Education and Science, that at least some of their rate liability is met by the Exchequer.

It is common ground that the effect of providing for the payment of rates by instalments is to give some relief to the ratepayers who take advantage of it. It also adds a marginal burden to the local authority and the rest of the ratepayers. In that case it seems inequitable that the Exchequer should be relieved at the expense of the ratepayers. The amounts involved may be small, but the principle seems to be entirely wrong. I should, therefore, like to know whether, in interpreting the definition of a charity as referred to in the new Clause, the Minister intends to be guided by previous legislation, and to count as charities for this purpose the institutions listed in the First Schedule to the 1961 Act.

Mrs. Margaret Thatcher (Finchley)

I thank the right hon. Gentleman and the Parliamentary Secretary for tabling the new Clause, which meets some of the points that we made in Committee. Many of us feel that charities should not have to prove hardship in order to gain the benefit of Clause 1 any more than the domestic ratepayer has to prove hardship in order to do so. We feel that it will be greatly for the convenience of many charities if, instead of their having to find lump sums twice a year to meet a specific rate commitment, they are able to pay by way of a number of smaller instalments, which they can find at regular intervals.

A large commitment is often quite an embarrassment to a charity and may preclude it from being able to spend money on a contingent liability which may arise. I remember that on one occasion, when the weather was rather cold, a charity in my constituency experienced great difficulty in finding money to meet the cost of repairing a boiler which had broken down. The rate bill came in at the same time, and added to the charity's difficulties. If such a charity can now pay its rates by instalments—subject to the Minister's consent, if necessary—it may well be that money which it had formerly earmarked for rates can be used for some other purpose, while it continues to raise money for the next instalment of rates.

I am grateful for the new Clause, which we shall support. I hope that the Minister will also consider the points raised by my hon. Friend the Member for Oxford (Mr. Woodhouse).

Mr. MacColl

If I may speak again, with the leave of the House, I should like to deal with the points raised by the hon. Member for Oxford (Mr. Wood-house). On the merits of the case, my right hon. Friend would not want to give power to an Oxford college to pay its rates by instalments. As for the legal position, I am advised—and this may surprise the hon. Gentleman—that a college is an educational charity and the beneficiaries of an educational charity are the public and not the individual students, and certainly not the dons. I think that that meets the hon. Member's point.

Mr. Woodhouse

I was referring to the institutions which are listed in the First Schedule to the 1961 Act. They do not include the colleges of Oxford or Cambridge, although they include all the other university institutions. It was about those that I was talking.

Mr. MacColl

They are educational charities, and the same point arises.

I thank the hon. Member for Finchley (Mrs. Thatcher) for what she said. She also expressed the view that it would be a comfort to these bodies to know that they can now pay by instalments. I have tried to underline the fact that they have always been able to pay by instalments, with the good will of their local authorities. I have no evidence that local authorities have not acted sympathetically in this matter. Therefore, my advice—which I hope will be passed on—is not to wait until the Minister has made an order, but to ring up the borough treasurer and get his sympathy and advice as to how best to deal with the problem. I suspect that, if not in all cases certainly in the great majority, local authorities will be happy to help charities. The Clause provides a reserve power in the event of a breakdown.

Question put and agreed to.

Clause read a Second time, and added to the Bill.