RATE REBATES (LIMITS OF INCOME) ORDER 1968 (Hansard, 28 June 1968)

§ LORD KENNET
My Lords, with the leave of the House I shall, in moving approval of this Order, speak to both this Order and the corresponding Scottish Order, which is next on the Order Paper. These Draft Orders, which have been approved in the House of Commons and have been welcomed generally throughout the country, raise the level of income at which the maximum rate rebate payable to a domestic ratepayer, and calculated primarily by reference to the size of his rate bill, has then to be tapered down by reference to the size of his gross income in a recent period.
Hitherto, between 1¼ and 1½ million ratepayers in Great Britain have been eligible for rate rebates because their weekly incomes have been below, or barely above, £8 a week in the case of single householders, or £10 a week in the case of married couples, extended by 30s. a week for each resident child. Around 1 million of these 1½ million eligible householders have been actually claiming rebates, amounting on average to £15 per year or about half their rate bills—which is, of course, quite something for people with incomes at that low level. They are mainly pensioners, but there are also low wage earners with large families, and the beneficiaries of the rate rebates include a large number of owner-occupiers as well as private and municipal tenants.
These Draft Orders raise these income limits governing entitlement to maximum rebate from £8 to £9 a week in the case of a single householder, and from £10 to £11 a week in the case of a couple; and to raise the extension for each resident child from 30s. to 40s. a week. Thus, for example, a single householder with gross income of up to £9 a week, and a couple with four children and a gross income of up to £19 a week will get the maximum rebate. And they will still get some rebate even if their incomes are a little above those levels, especially if their rate bills happen to be rather sizeable.
We estimate that as a result the total number of householders eligible for rate rebate will be kept for the time being around the 1½ million mark instead of 1648 falling rather steeply to well below 1 million, as would have been the case if these Orders had not been introduced. I do not need to remind the House that the overall justification for having rebates at all, and for the subsidies paid by the Ministries to local authorities in reduction of rate increase which would otherwise have taken place, is that rates are a regressive form of taxation which bears relatively most hardly on the lowest paid people in the country. I beg to move.

§ LORD DRUMALBYN
My Lords, I should like to thank the noble Lord for his explanation of these Orders. I have two points to put to him. He said that the effect of these Orders will be to keep the number of ratepayers who enjoy relief at about 1½ million. Is this the principle of the increase which is being made in the limit? Is it the intention of the Government to keep the number of ratepayers at this kind of level? If not, what is the principle on which this addition is being made? I am not in any way opposing the increase in the limit. I merely want to know on what principle the Government are acting in this particular case. Could the noble Lord give the House any estimated figures of the cost of the rebate at present to local authorities in England and Wales, and could he say what the increased cost, both net and gross, will be as a result of this Order?

§ LORD KENNET
The principle behind this Order is not in any way tied to a sacrosanct figure of 1½ million. The increase was introduced partly to give effect to the Government's pledge that the worst off sectors of the community would be cushioned against the adverse effects of all the measures which were taken around the time of devaluation and thereafter, and also because in itself it would have been a social injustice that people who had a certain benefit should be priced out of it by changes in the value of money since that time. This does not mean that automatically we shall try to hold it at 1½ million for ever. The time must be coming within a few years when there must be an overall 1649 review of the system of local government taxation and the rating system. This will be after the Report of the Maud Committee.
The noble Lord asked for some overall figures. A theoretical possible total payment of rebates in Great Britain during the financial year 1968–69 as a whole, assuming a maximum take-up—that would be if everybody claims it—would be about £22½, million. If these Orders were not made, it would be about £18 million. With the Exchequer meeting 75 per cent. of the cost of these rebates, that means a theoretical Exchequer liability for 1968–69 of about £16,750,000 instead of about £13½1 million. In practice one must allow for a certain amount of non-claiming, especially among householders paying inclusive rents in households and dwellings of a kind where the reckonable rates, and therefore the allowable rebate, would be relatively small. The actual Exchequer liability in 1968–69 may be well below the £16,750,000 figure, simply because not everybody who is eligible to the rebate claims it.

§ LORD DRUMALBYN
My Lords, I am much obliged to the noble Lord.

§ LORD ILFORD
My Lords, I wonder whether the noble Lord could answer this question. Is he able to say how many persons who are believed to be entitled to rent rebates if they made application for them have in fact not made application for them?

§ LORD KENNET
My Lords, I believe it may have been somewhere in the neighbourhood of half a million; that is one-third of those entitled.