Rates (Amendment) (Northern Ireland) Order 1986 (Hansard, 16 October 1986)

§ The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell)
My Lords, I beg to move that the Rates (Amendment) (Northern Ireland) Order 1986, the title of which is not as printed on the Order Paper or indeed in the Minutes, be approved. I hasten to add that we are not discussing the matter as printed on the Order Paper and are not debating firms of jewellers, gold, diamonds or anything of that sort. This is the much more humdrum affair of rates. A draft of this order was laid before your Lordships' House on 21st July of this year. I beg to move that the draft order be approved.
The order is relatively short and uncomplicated and its objective is to allow the Department of the Environment for Northern Ireland, which is the rate collecting authority for the Province, to serve a process by ordinary post when seeking to recover rates through a court of summary jurisdiction. The present principal order relating to rates in Northern Ireland, the Rates (Northern Ireland) Order 1977, would be amended by this order to include court processes in the list of documents that could be served by ordinary post. The current documents in this category are rating bills, demands and valuation certificates.
The permissive power sought in Article 3 to allow the processes to be served by ordinary post has become necessary because of the progressive increase in the number of processes issued annually. Last year 43,000 such processes were issued, and at present it is a legal requirement that in normal circumstances each one of these must be served personally by a summons server. Personal service is by its nature slow and the number 969 of processes that can be served by the process server for a court hearing is limited. Because the service is personal, it can be avoided or delayed. With the present number of cases to be taken to court and the time required personally to serve the processes, court action occupies staff resources from August to the following March and delays recovery of the rates due. If your Lordships approve this order, it should be possible in the first full year of operation to bring greater numbers of defaulters to court earlier and have the majority of outstanding cases heard by the courts of summary jurisdiction before Christmas each year.
Over the years experience has shown that 75 per cent. of the cases for which a process has been issued are paid at court stage. The advancement of this stage should speed up the collection of rates and assist in reducing rate arrears. Under the present system a summons server fee of £3 per process is also incurred. Although these are ordinarily recoverable from defendants, inevitably not all of this expense is recouped, and it is expected that the order will effect modest savings of the order of £30,000 per annum.
I hope your Lordships will recognise that the general effect of this order is to streamline rate collection procedures and make them more efficient and cost effective. It will also bring the legislation in Northern Ireland into line with England and Wales, where serving processes for rating debt by post has been the practice since 1960. A similar power also exists in Scotland. The Government's primary objective in presenting this order is to ensure that the public service is run in an efficient manner, and it is on this basis that I commend the order to your Lordships. I beg to move the draft order.
Moved, That the draft order laid before the House on 21st July be approved.—(Lord Lyell.)

§ Lord Graham of Edmonton
My Lords, we on this side of the House approve of the order. The Minister began by pointing out that, despite a misprint, we are not dealing with gold, silver or diamonds. But we are dealing with the Emerald Isle and to that extent it is fortuitous that the mistake was made. I wonder whether the Minister can tell us whether he has comparative statistics in respect of the late payment, the non-payment and the rate-paying records of the people of Northern Ireland as against those of England and Wales, because he said that we now have a more efficient service. By inference, that means that there was a less efficient service in the past. But it was less efficient only in the context of this very narrow point of streamlining and bringing into use the quite reasonable device of using the post. It may not be possible to give me those statistics tonight, but for the completeness of the record we ought to see where the payment of rates, as a social responsibility and a civic duty, stands in Northern Ireland as opposed to Great Britain.
I am well aware that the Minister was quite fair in not mentioning the rates strike from which we are at present suffering owing to the dispute over the acceptance or otherwise of the Anglo-Irish Agreement. I am also reminded of the fact that the genesis of what we are debating tonight was early enough this year to have been in the mind of the Government as an 970 administrative and procedural device outwith any other consideration of the matter.
I wonder whether the Minister would care to say something about the practice of small businesses—not necessarily in Northern Ireland, though it may very well be there—whereby they can avoid payment of rates until after Christmas. Can he say whether that is a factor? By paying after Christmas one-twelfth of the rate revenue is paid to local authorities each month from central funds and the money is often not recovered for several months, necessitating borrowing.
I am a little uneasy about the equity of the application of the law to businesses and domestic ratepayers. I am not familiar with the make-up of the total rate take in Northern Ireland as between the business community and the domestic community. That is not something for now, but, with the assistance which the noble Lord may receive, I should like to hear from him at some other time. From this side of the House we regard that as a sensible and reasonable change and improvement in the procedure, which is in the best interests of ratepayers—which ultimately means taxpayers—is good sense and is in the interest of law and order so far as Northern Ireland is concerned.

§ Lord Hampton
My Lords, I, too, should like to thank the noble Lord, Lord Lyell, for introducing this order. One point that I should like to put to him is that he said its purpose is to bring Northern Ireland into line with the procedure in England and Wales, and he just touched on Scotland. Without too much complication, can he clarify the difference in the position in Scotland and say why the system in England and Wales is preferable?

§ Lord Lyell
My Lords, naturally I am immensely grateful for the attention that has been paid to this order by the two noble Lords and by others who have spoken. I am sure that your Lordships will forgive me if I take five seconds of your time to welcome back the noble Lord, Lord Fitt. Our deliberations are always enlightened by his presence either in silence or in speech. We are particularly delighted to see that he is back fit—and I mean no pun this early in the evening—and well. When we see the noble Lord our hearts leap in expectation. We are delighted to see him back this evening.
I was grateful for the thoughts of the noble Lord, Lord Graham, on the order and was impressed that he had made a very careful study of it. I hope that I can give him answers to most, if not all, of his questions. He asked about the comparative figures for Northern Ireland and Great Britain. I am advised that the latest available figures for comparison (which might help the noble Lord) are for 1984–85, when the arrears for Northern Ireland, shown as a percentage of the gross collectable rate, was 4.3 per cent.
The average figures for England and Wales were in the following order. In the Greater London boroughs, taking like with like so far as we can, the figure was 4.2 per cent.; in the metropolitan districts it was 3.4 per cent.; in the non-metropolitan districts in England the figure was 1.6 per cent. and in Wales, 2.9 per cent. I am advised that the average for England and Wales was 2.7 per cent. 971 I understand that the latest figure for 1985–86, although we should not place total reliance on it, is in the region of 3.8 per cent. That is the arrears figure as a percentage of the gross collectable rate. That may indicate a trend, but I would not say much more than that. As the noble Lord will see, this order should help to reduce the Northern Ireland average.
The noble Lord had another query about small businesses. I understand that approximately 12 per cent. of commercial ratepayers and owner-occupiers receive court processes. About 358,000 of these rate demands are issued both to commercial ratepayers and to owner-occupiers. Approximately 43,000 rate demands are issued to commercial ratepayers, which may be large as well as small businesses, as he indicated. The balance of the 358,000 rate notices—which is in the region of 315,000—is issued to domestic ratepayers who, by the nature of the term, are owner-occupiers. I am advised that the total debt of commercial ratepayers is in the region of £129 million and of domestic ratepayers, £82 million. We hope that this order will simplify the recovery of this sum.
The noble Lord referred to the rates strike in Northern Ireland, if one can use such an esoteric term. I understand that there has been a significant change in the position so far as domestic rate payments are concerned. With the impact of final notices and, above all, the issue of processes for court action, there was a considerable increase in the collection for the month of September compared with the same month in 1985. I understand that the political leaders of the Unionist community have indicated that it is in order with their campaign to pay rates at the process stage. If this advice is acted upon, it could be that the figures will reach a more normal level.
Final notices have now been issued to all those whose bills are in excess of £50, and I understand that this month sees the continuation of court hearings, with a large number of courts at present arranging to deal with a fair number of cases. If I can get the precise number, or perhaps an approximation, I shall let the noble Lord have that. I hope that that covers his queries.
I am grateful for the attention of the noble Lord, Lord Hampton. He picked me up on the rates procedure in Scotland. I am advised that rate demands in Scotland are all served by post. I understand that the process is exactly the same as in England and Wales up to the final notice stage. When we come to that stage in Scotland it is between seven and 10 days after the service of the final notice that the council will seek a summary warrant from the sheriff. That may sound somewhat drastic, but it is the normal legal process in Scotland. I understand that usually the council will contact the sheriff by telephone. If they are in fairly close proximity it might be in writing, but I understand that normally it can be done by telephone.
The sheriff's office sends a letter by post which invites the debtor to call, perhaps with the council officer or sheriff's officer, to discuss the debt; but if there is no response to this note of intention a further letter is sent which indicates that the sheriff will seize goods to clear the debt. Again, that may sound drastic 972 but it is a very rare occurrence. The legislation which governs this particular area is the Local Government (Scotland) Act 1947. The noble Lord will find that Section 247(2) deals with the point.
I hope I have covered the queries raised by the noble Lords who spoke.
On Question, Motion agreed to.