HL Deb 09 February 1982 vol 427 cc94-6

2.51 p.m.

Lord Balfour of Inchrye

My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

The Question was as follows:

To ask Her Majesty's Government whether they will take steps to impress on local authorities the urgent need to refund to ratepayers who have already paid the GLC supplementary rate precept such part as covers the now illegal demand in respect of London Transport and thus avoid those who have already paid being put at a financial disadvantage compared to those who have not.

The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)

My Lords, the London Boroughs Association has issued advice to their member authorities which provides that ratepayers who have already paid the supplementary rate in question should receive a credit against next year's rate, or, if they request it, a refund. My right honourable friend the Secretary of State welcomed this advice in a speech on 18th January in another place, and I understand that all London boroughs are now acting upon it.

Lord Balfour of Inchrye

My Lords, I thank the Minister for that reply. May I ask him this: In respect of ratepayers who promptly paid the rate demand, as compared to ratepayers who did not comply with that demand, are not the former put at a financial disadvantage? Should the local authorities not be willing to give credit in respect of the moneys which they have been holding for long periods of time, and would not the easiest way of giving this credit be not to return the money to the ratepayer but to give a credit note for interest due when the next rate demand comes in April?

Lord Bellwin

My Lords, one obviously has sympathy with those who did pay in reply to the original request, but the law on the matter of interest is far from clear and makes no explicit reference to the payment of interest, either in discretionary or mandatory terms. Some boroughs have apparently concluded that in these circumstances it would be right for them to pay interest, while others have doubts and are not doing so. Of course, this must be a matter for individual boroughs.

Baroness Seear

My Lords, would the noble Lord not agree that it would be appropriate for those of us who were foolish enough to pay on demand to withhold payment of the next bill that comes in until we have earned, so to speak, the interest due to us by delaying payment for that amount of time?

Lord Bellwin

My Lords, as one who did not pay originally, I understand exactly what the noble Baroness is saying, but I am sure she would hardly expect me to endorse her proposal.

Lord Boyd-Carpenter

My Lords, is it not difficult to justify retention by local authorities of money paid in response to a demand which has unlawful? If an authority so acts, is it not putting itself in legal peril?

Lord Bellwin

My Lords, I thought I had made it clear that in fact the London Boroughs Association have suggested that if anyone requests a refund they will make it. It is my information that they are in fact doing that. But, of course, we are now in February; the year ends at the end of March and therefore the new demand will be due on 1st April. Therefore, one can see why those who take that line perhaps prefer not to make the repayment unless it is specifically requested. If it is, then, as my noble friend so rightly says, they are entitled to refund it, and my information is that they are willing to do so.

Lord Cledwyn of Penrhos

My Lords, if there is doubt on this question of interest and if there is lack of uniformity as between various councils, is it not the duty of the Government to clarify the situation? Will the noble Lord ask his right honourable friend to make a Statement in clarification.

Lord Bellwin

My Lords, the point the noble Lord raises is a fair point. We are very aware of the difficulties which have been thrown up by this case. We are at the moment actively considering whether the current law needs to be amended, but at this moment in time it is too early for me to say what, if any, action will be taken. But the point is very much on the table.

Lord Segal

My Lords, since certain ratepayers have been foolish enough to grant local authorities the right to deduct taxes automatically as they increase, should not the local authorities have the graciousness to make a refund to these ratepayers without having to be specially asked to do so?

Lord Bellwin

My Lords, I think it would be reasonable, in fairness to the authorities, to say this is a situation without precedent, certainly to my knowledge. It is a new situation which arises, and it is for that reason that, when they offer either to credit or to make refund, I think that is a fair proposal. But, in any case, I have gone on to say that the law is not clear; the Government are aware that this is difficult and we are looking to see whether or not we should do something about it.

Lord Mishcon

My Lords, is it not a fact that if one estimates the cost of administering the refund and the cost of computing the interest and dealing with correspondence with ratepayers, the cost will be such that another supplementary rate demand may well be made?

Lord Bellwin

My Lords, I am grateful to the noble Lord for the first part of what he said, because I do know that a number of local authorities have worked out that it would be very costly and that is why they have been hesitant. I think the noble Lord's question highlights once more that this is an area that requires further clarification.

Lord Balfour of Inchrye

My Lords, could the noble Lord say when it is likely that clarification will take place, and, if and when it does take place, will it be retrospective in respect of the interest which would now be due?

Lord Bellwin

My Lords, I fear I am not able to help my noble friend on that. I suspect that he did not really think that I could.

Lord Underhill

My Lords, will the clarification, which the Minister says is likely, include determination of the criteria for determining the amount which is legal and the amount which is not legal? The noble Lord will recall that in a Statement which was made in this House three weeks ago he was unable to give me an answer to that question.

Lord Bellwin

My Lords, we start to move into a whole new area when we start to discuss the reasonableness, and all that goes with it. With respect, I would suggest that this is getting away from the Question.

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