Rates: London Boroughs (Hansard, 22 February 1982)

§ Lord Boyd-Carpenter
My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.

§ The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin)
My Lords, as I told the House in response to a Question from my noble friend Lord Balfour of Inchrye on 9th February, I understand that all London boroughs are taking the advice of the London Boroughs Association to give people who have paid the supplementary rate either a credit against next year's rate or, if they ask for it, a refund. As to the payment of interest, it is for individual boroughs to decide what to do. Some appear to be paying it; others not. However, as I told the House on 9th February, we are considering whether the law needs amending in the light of this case.

§ Lord Boyd-Carpenter
My Lords, is it not wholly wrong in principle for a public body that has obtained money from the citizen by aid of a demand which subsequently has been shown to be invalid in law to retain it? Does my noble friend appreciate that it is precisely the people who need this money back the most—the widow, the pensioner and so on—who do not read the law reports and therefore probably do not ask for it back?

§ Lord Bellwin
My Lords, obviously I have much sympathy with both points my noble friend makes. On the first, that is why I say we are looking to see whether the law needs to be changed in this matter; this case has introduced something new and, as I am sure my noble friend will appreciate, one must be very careful before proceeding, and I confirm that we are looking at it very carefully. On his second point—do all those people who need to know, really know? —it is a fair point to make, but I am not sure how one can go further in publicising the position than has been done. Nevertheless, he makes a very valid point which only highlights the need for some clarification of the matter as regards the future.

§ Lord Sandford
My Lords, may I ask my noble friend two or three further questions arising from this matter? Does not this situation indicate that we must move to a position where each local authority sends the bill to the ratepayers for what the authority itself needs? Is it not the case that in this instance it has been the illegal action of the Greater London Council that has caused the problem and nothing that has been done by the London boroughs?
Has my noble friend seen the article, under the heading Commercial Property, on page 19 of The Times today, in which the very damaging effects of a so-called 744 20 per cent. rise in the Westminster rate are set out? Is my noble friend aware that the so-called 20 per cent. rise is caused by an increase in the GLC demand of 86 per cent., an increase in the ILEA demand of 15 per cent., and an increase in the demand of the Home Office, on behalf of the Metropolitan Police, of 4 per cent., whereas Westminster City Council itself has reduced its rate by 4 per cent.?

§ Lord Bellwin
My Lords, my noble friend raises the whole matter of what we call separate billing, which in the case of the water authorities was taken on within the last couple of years. I know that there is much sympathy for this idea, but the problem lies in the expense of carrying it out, offset against the benefit of the clear accountability that would then be shown if the rates were separately levied. I have very much sympathy with the point that my noble friend is making, but how far in practical terms I should want to go down that road I am not sure.

§ Viscount Hanworth
My Lords, will the noble Lord bear in mind that if one does not pay one's rates, one is soon taken to court?—the period is very brief indeed. Therefore, it is only fair that interest should be paid on what is now becoming quite a long-standing debt.

§ Lord Bellwin
My Lords, I understand that there are a number of boroughs who are paying interest. That is a decision that they have made following the recommendation to them by the London Boroughs Association, which has very much left it for them to deal with individually. The question that my noble friend originally posed was whether or not payment of interest ought to be obligatory, and, as I have said, that is something we are looking at because this is a new situation.

§ Lord Balfour of Inchrye
My Lords, will the Minister agree that those ratepayers who paid promptly are put at a financial disadvantage as compared with those who did not pay? If that be the case, is it much of an inducement to ratepayers in general to pay their rates promptly?

§ Lord Bellwin
Well, my Lords, with regard to the first point, yes, I do agree that those who pay promptly are at a disadvantage; of course I would agree. Again, as with the point put by my noble friend Lord Sandford, there is much merit in the argument about the situation being an inducement not to pay promptly. As I have said, this is a new situation, and I hope that it will not again arise in this particular way.

§ Lord Molloy
My Lords, does not the noble Lord agree that it is not beyond the bounds of peradventure that the advice given by the London Boroughs Association to its constituent members could be as illegal as the advice that the GLC received from its legal advisers? What is really required is a clearing up of the law so that this kind of awful situation in which local government finds itself cannot occur again.

§ Lord Bellwin
My Lords, I should hardly think that the advice given, which is concerned really with how the boroughs should act, rather than with what action 745 they should initiate, is in the same category as the other advice mentioned. However, I take the second part of the noble Lord's supplementary question—yes, I think there is need for clarification.

§ Lord Balfour of Inchrye
My Lords, may I inflict upon the Minister just one further brief question with regard to the matter of interest? Is it really beyond the powers of local bureaucracy to attach a credit note against the next rate demand, stating how much had previously been paid, the period involved, and the interest due on the payment?

§ Lord Bellwin
My Lords, my noble friend makes a very interesting suggestion. Certainly that is not beyond the powers of local authorities, and I am sure that note will be taken of what he has said.

Viscount St. Davids
My Lords, while stating that I refuse to pay the extra rate and have not paid it, may I ask the Minister whether he will listen to the plea of the noble Lord, in regard to those firms and, in particular, as I know, one or two schools which had to pay a supplementary rate of a very large amount—thousands of pounds—which they are now getting back, but without interest?

§ Lord Bellwin
My Lords, I do not think that I can add anything to what I have said on this subject. The noble Viscount simply confirms that there can be hardship caused in this situation, and I accept that.