HL Deb 07 June 1988 vol 497 cc1239-59

3.7 p.m.

The Minister of State, Department of the Environment (The Earl of Caithness)

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.—(The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.

[The LORD ABERDARE in the Chair.]

Clause 16 [Joint and several liability: spouses]:

The Earl of Caithness moved Amendment No. 73: Page 11, line 13, leave out from ("year,") to ("is") in line 17 and insert— ("(b) the liability arises under section 12 above (read with section 13 above, where it is appropriate) or section 14 above, and (c) on any day in the chargeable period the chargeable person").

The noble Earl said: Amendment No. 73 gives effect to a commitment made by the Government in another place concerning the scope of joint and several liability for husbands and wives. As Clause 16 stands, joint and several liability applies to personal, standard and collective community charges. We have accepted that it would not be appropriate for joint and several liability to extend to the collective community charge.

This amendment which, as I have said, was promised in another place will therefore limit joint and several liability to personal and standard community charges. I beg to move.

Baroness Ewart-Biggs

As the Minister has said, the amendment implements an assurance made at an earlier stage to take collective community charge contributions out of the remit of joint and several liabilities. It means that a previously married or co-habiting couple would have been jointly liable for their contributions if they were temporarily resident in a short-stay hostel, perhaps for only a few days.

As I understand it, the amendment is merely a tidying up process because the idea that anyone would pursue a spouse of a homeless person to obtain a comparatively small amount—perhaps only a few pounds—is difficult to understand. I believe that the amendment is helpful to the extent that it improves the Bill by making it more practical. However, the Minister will agree that it will affect virtually no one in the real world.

The Earl of Caithness

I am grateful for the welcome that the noble Baroness has given to my amendment.

On Question, amendment agreed to.

Lord Banks moved Amendment No. 74: Page 11, line 26, after ("shall") insert ("subject to subsection (9) below").

The noble Lord said: With the leave of the Committee I shall speak also to Amendment No. 75. The Bill provides that married and cohabiting couples shall have joint and several liability for the payment of their combined community charges. If one spouse defaults and disappears, the other spouse may have to pay the community charge arrears of the defaulting spouse.

I have an example which will indicate how this could bear very hard indeed on the remaining spouse where that spouse has little or no income. More often than not it will be the woman who is in that position as 50 per cent. of married women have no independent income. That applies particularly to women caring for young children or a sick or aged relative. Despite having no or very little independent income, the majority of women living as part of a couple would not qualify for a community charge rebate unless the partner was unemployed or on a very low wage. That is because the benefits system is based on a joint assessment of a couple's income.

My example is this. Mrs. F, a mother of two, works as a dinner lady during the school term earning £20 a week for 10 hours' work. Her husband works full time in a garage earning £180 gross per week. If benefits were individually assessed, Mrs. F would qualify for an 80 per cent. rebate of the community charge. However, the benefit calculation is based on a couple's combined income. In Mr. and Mrs. F's case, their joint earnings are marginally above the qualifying level of family credit and housing benefit. Both are liable to pay the community charge in full. Since her own income is so low, Mrs. F will have to rely on Mr. F to pay both their charges. However, if he has allowed arrears to accumulate and subsequently deserts his wife and children, disappearing without trace, Mrs. F would be liable to pay both their arrears despite the fact that her own income during that period was only £20 per week during the school term.

It would not be inconceivable for Mr. F to fail deliberately to pay the community charge when it became clear that his marriage would end, in the knowledge that his wife would be held liable. I should make it clear that on these Benches we oppose the joint and several liability principle completely, believing in individual assessment for husband and wife in both benefit and tax systems. The principle of joint and several liability is objectionable as between man and wife and is additionally objectionable as between a cohabiting couple where prying into the privacy of the individuals concerned might be necessary to determine whether they are cohabiting.

However, the amendment does not seek to remove the principle but merely to remove the harm which its application does in the case of the poorest. Amendment No. 74 ensures that the application of the principle of joint and several liability shall be modified by reference to a new subsection (9) set out in Amendment No. 75. That new subsection would relieve the spouse of liability to pay the community charge in respect of arrears incurred by both partners during the marriage—and cohabiting counts as marriage for the purposes of this clause—if he or she is no longer married to the spouse in question. The chargeable amount is in respect of the period during which they were married to each other and the remaining spouse was in receipt of community charge benefit during the period, or would have been but for circumstances such as I outlined in the example I gave. In other words, as Mrs. F was no longer married to Mr. F in the terms of subsection (7), as she would have received benefit during the chargeable period but for M r. F's income, modest though it was, she would not have to pay the arrears for herself or her husband.

Amendment No. 75 also covers cases where the former couple were in receipt of benefit, and although they would only have to pay 20 per cent. of the community charge in those circumstances, a deserted wife whose husband disappears or simply refuses to pay could be held liable for both their arrears. Consequently a single parent may be faced with deductions from benefits to cover arrears accumulating at 40 per cent. of the community charge in addition to having to pay the ongoing 20 per cent. which she is due to pay. She may well be repaying a debt to the social fund for some article of household equipment which was necessary and she may also be paying bills to the electricity authority for fuel. The amendment would relieve her of liability to pay the community charge arrears.

These two amendments prevent a heavy burden being placed on remaining spouses—perhaps I should say remaining former spouses—who are deserted, perhaps with little or no income other than income support and with a liability for arrears of community charge incurred by the deserter. I hope that the Government will look sympathetically at this amendment and the effect on the single parents whom these amendments are designed to help. I beg to move.

3.15 p.m.

Baroness Ewart-Biggs

I should like to speak primarily to Amendment No. 74A, which is grouped with Amendments Nos. 74 and 75 but which addresses a slightly different situation. As the noble Lord said, Clause 16 provides for couples to be jointly and severally liable for each other's community charge. One objection is that it makes nonsense of the Government's much-repeated insistence on the value of individual liberty as essential to individual accountability. Another objection is that, in principle, it is utterly wrong to legislate for women to be dependent on men, or for that matter vice versa. Apart from anything else, it goes against the general trend in social policy and taxation towards financial independence between spouses.

The justification for these amendments does not lie purely in these arguments of principle. This amendment addresses quite precise and severe practical problems which will face often the most vulnerable people as a consequence of joint and several liability. Amendment No. 75, as the noble Lord explained, deals with a situation faced by an abandoned partner with possible very large arrears of bills for the period immediately before the relationship breaks down.

My Amendment No. 74A is a complementary amendment designed to protect the non-earning partner while a relationship still exists. Both problems have a common cause; namely, that rebates are to be calculated on the joint earnings of the couple. Therefore, a non-earning partner can be liable to pay 100 per cent. of the community charge because of the earnings or the savings of the other partner. Joint and several liability adds insult to injury by making the non-earning partner, who is usually the woman, also liable for her earning spouse's 100 per cent. community charge. Of course, joint and several liability works both ways, so that by the same token the earner is liable for his own and his partner's community charge bills. The problems arise where the earning partner is for some reason less accessible to the local authority than the non-earning partner.

The amendment moved by the noble Lord, Lord Banks, relates to where the local authority cannot get at the earnings partner because he, or possibly in some cases she, has disappeared following the breakdown of the relationship. The noble Lord gave a very clear example of the single parent who remains behind.

Amendment No. 74A requires that local authorities should have regard to the resources available to each spouse when collecting the community charge while the marriage or relationship is continuing. It applies to current bills but, more importantly, also to arrears. I believe that the Government recognise that there is a problem. Indeed, they have promised to issue a code of guidance to local authorities to encourage them to pursue an earning husband rather than a non-earning wife.

However, it must be recognised that local authorities will have a strong interest in collecting the charge as quickly and as cheaply as possible. That consideration is likely to override the weak counter-argument provided by a mere code of guidance. Amendment No. 74A would at least back up and reinforce such a code by putting the requirement—namely, a bias in favour of pursuing the earner—on the face of the Bill.

None of the amendments strikes at the heart of the clause, let alone at the heart of the Bill. They are designed to protect some of the most vulnerable people in our society—those on benefit and single parents. I believe that the Government could easily accept these amendments without damaging the community charge as a whole. We urge them to do so.

Lord Monson

While I believe that the amendments tabled by the noble Lord, Lord Banks, are a great improvement on the existing wording, and I would certainly support him if he were to take us through the Division Lobbies, this might be an opportune moment to discuss the whole principle of Clause 16.

It is an extremely odd clause. In the first place, it gives the lie to the claim made by the supporters of the Bill that the community charge is people-related rather than property-related, because unless the people concerned are living together in a specific property the legal liabilities imposed by Clause 16 will not apply. That is reinforced by the fact that the standard community charge specifically relates to property and not to people, as Clause 36(1) on page 21 makes clear.

Secondly, the clause flies right in the face of the principles laid down by the Chancellor of the Exchequer in his notable 1988 Budget; namely, that husbands and wives should henceforth (at least as soon as administratively feasible) be separately liable for their own tax. Ironically this radical change is scheduled to come into effect at about the same time as the community charge comes into effect. I am glad that both the noble Lord, Lord Banks, and the noble Baroness, Lady Ewart-Biggs, drew attention to that total inconsistency.

Before we decide whether Clause 16 should stand part of the Bill, can the Minister kindly explain why the Government propose to take away with one hand from men and women what they are giving them with the other?

The Earl of Balfour

Before my noble friend replies I should like to ask him one question. I give an example of a home in which live a grandfather who is a widower and his grand-daughter who is widowed, with two very nice young children. From the wording of subsection (7) they are in a way living as man and wife but obviously legally they could never marry. I quote subsection (7): For the purposes of this section people are married to each other if they are a man and a woman"— and in this case they are a man and a woman— who are not married to each other but are living together as husband and wife". Why make the difference between, say, a brother and sister living together and a man and wife living together? I believe that is worth bearing in mind.

Baroness Lockwood

I support this group of amendments. As Members of the Committee have already said, and as I indicated on Second Reading, this clause sits ill in the present Bill, which is intended to impose an individual charge and not a collective family charge. Yet in this clause we have collective and several liability, which places a spouse in a position of responsibility for any debts imposed by the other spouse.

At an earlier sitting of the Committee I moved an amendment to alleviate the position of those women who are seeking temporary accommodation in women's refuges. This clause is again something that such women are concerned about. They feel that when domestic and family relationships have reached the position where the woman needs to seek refuge from her husband away from the matrimonial home, there is always a strong possibility that the husband will not only refuse to accept responsibility for his wife's debts during the period in which they were living together but he might also default on his own debts and in that case the wife would be responsible.

We were seeking relief for the wife herself, which the Minister was unable fully to concede at the time my amendment was debated. In this case we are concerned with a clause that imposes a liability on the wife not only for her own debts but also for the debts of her husband, if they are incurred. I should like the Minister to take that position into consideration in his response to the amendments.

Lord Hylton

As I go through this Bill it becomes ever more clear that the costs of collection will be much higher than is at present the case with rates. Moreover, it also becomes clear that the Bill as drafted will cause a serious degree of hardship in special cases. In my view it will impose new stresses and strains on family relationships. On all those grounds I support the amendments and ask the Government to think again.

Lady Kinloss

The women's committee of a city council has written to me expressing considerable concern about the joint and several liability payment of the tax. As many women are financially dependent on their partners, should a man leave his partner without having paid, would the joint debt remain with the woman? If a woman leaves her partner because of violence, joint liability allows partners to see each other's entry in the register, therefore enabling her partner to trace her whereabouts and putting her in danger of more violence. I ask the Government to reconsider the position.

3.30 p.m.

The Earl of Caithness

In his Amendments Nos. 74 and 75 the noble Lord, Lord Banks, has identified a problem that would exist with Clause 16 if local authorities were to use the joint and several liability powers in the way that he described. I believe that his fears are misplaced and I hope I will be able to explain to the Committee exactly why.

The noble Lord is rightly concerned about individuals who have no incomes of their own and who are financially reliant on their spouses. Most of them will be non-working wives. However, I have to tell the noble Lord that joint and several liability is not intended to be a burden to such people. Indeed, it is specifically designed to relieve them of a burden; to ensure that the liability passes to their spouse. Without joint and several liability a married woman with no income would indeed have cause for concern.

In the situation described by the noble Lord, in the period during which the couple are living together there would be no reason for the local authority to exercise joint and several liability against the partner with no income. If her husband did not pay the community charge the local authority would pursue him. The local authority would be right to do so because it would know that, in the circumstances the noble Lord described, the husband would have an income out of which to pay.

The noble Lord then asked what happens if the couple separate. Of course in the circumstance he describes not only would the couple have to separate but the husband would have to leave owing community charge for the period during which the couple lived together. I have already explained that when the couple were living together the local authority would not pursue the non-earning wife for her husband's community charge. However, there will be circumstances where a husband leaves his wife with part of his community charge unpaid. The local authority will then need to trace the husband, who will of course in any case be strictly required to notify the registration officer of his new address and ensure that he pays the debt that he incurred. Indeed, to protect the wife it may well also need to ensure that, if he left before paying her community charge, he should be enforced against for that debt too.

The noble Lord has raised a legitimate worry. I understand that in the circumstances he describes a wife might feel that she had an obligation to pay the outstanding community charge not paid by her husband. But there is no reason for her to think that any more than she would expect to pay his community charge if she had no income and the couple were living together.

I further reassure the noble Lord by saying that I believe that local authorities can be trusted to use sensibly the enforcement powers that this Bill gives them. Furthermore, in advising local authorities on the use of their powers, it is the Government's intention to recommend authorities to bear in mind the kinds of circumstances described during this debate and to devote their energies to tracking down the husband rather than pursuing the deserted wife.

I turn now to Amendment No. 74A moved by the noble Baroness. As she explained her amendment I became convinced that it was based upon a misapprehension of the way in which we see the joint and several liability provisions operating. I must emphasise that the personal community charge will be first and foremost an individual liability. Every individual will receive a bill and if they have resources of their own they can be expected to pay that bill. For example, if both partners in a couple are in employment, there is no reason why if one partner fails to pay his or her community charge the other partner needs to be involved at all.

With a married or an unmarried couple, if only one partner has an income, he or she will be providing for the needs of the other partner. That provision will need to extend to the community charge as it will to other bills and expenses. It may be that the partner with the income will simply pay both hills or they may choose to pay over money to enable the non-earning partner to pay their own bill.

The noble Baroness, Lady Ewart-Biggs, raised a point about the operation of the charge while the couple were living together. This clause is not about those arrangements for payments which are reached by each married or unmarried couple. How it is arranged is up to the couple and it is of no concern to the local authority. What the clause is about is what happens if one bill is not paid. As I have said, where the person who has not paid the bill has resources, any enforcement action can be taken against him or her direct. It is only where they are reliant financially on the spouse that joint and several liability will be needed.

Perhaps I may now turn to answer some of the points raised and in particular that of the noble Lord, Lord Monson, when he spoke about income tax treatment. In the Budget of 1988 my right honourable friend the Chancellor of the Exchequer announced that from the tax year 1990–91 all married couples will be separately assessed for the purposes of income tax. However, this makes absolutely no difference to the case for joint and several liability, which is designed to deal with couples where one partner has no income but not those where both have incomes that could be taxed and out of which community charges could be paid.

My noble friend Lord Balfour raised the point of a grandfather and grand-daughter living together or a brother and sister. They will be eligible for rebates and income support separately and in their own right. That is the reason why there is no need for joint and several liability in these instances. I repeat to the Committee that joint and several liability is designed to deal with the case where one partner of a couple has no income. That cannot happen with the example that my noble friend gave.

The noble Baroness, Lady Lockwood, raised the important point that we discussed at an earlier stage. I said to her at that stage that while the wife is perhaps in a hostel for wives who are suffering from violence, she will be there in all probability on a short-term basis and will not need to move her sole or main residence. Though she might not be living at home, she might be assessed at home. However, if her husband has been responsible for the community charge until that period of separation—they might go back together or she might go to live somewhere else with the family or be given a council house—the local authority will pursue her husband.

I was disappointed that the noble Lord, Lord Hylton, was not with us last night when the Committee discussed in some detail the extra cost incurred by the introduction of the community charge. We all agreed then that it was going to be more expensive than rates, but we agreed that the rates were highly discredited and that it was a system which we wished to move away from.

Lord McIntosh of Haringey

The noble Earl must speak for himself. He made that point and it was not discussed by other Members of the Committee. As he correctly said, what we all agreed upon was that the community charge system is going to be enormously more expensive to operate than the rating system.

The Earl of Caithness

I am surprised that the noble Lord did not take me up on the point yesterday. Perhaps he is moving back towards the rating system as a preferred system in view of his recent comments.

I say to the noble Lord, Lord Hylton, that if he prefers local income tax, that would be considerably more costly to collect than the community charge. He says that in his opinion certain groups will be badly affected by the community charge, but I can assure him that there are an awful lot of groups that are very badly affected by the present rating system.

Lord Taylor of Gryfe

Perhaps I may ask the Minister before he sits down about the assertion which he makes repeatedly that local income tax would be much more expensive to collect than the community charge. On what basis has he made these costings? Are the costings made up to date following the computerisation of the Inland Revenue?

The Earl of Caithness

The basis upon which I make that statement is that the local income tax system that the noble Lord wants would be far more intrusive because the registration officer would need considerably more information than he would to collect the community charge. When the incomes of certain people, particularly the self-employed, are not known until some time after the end of the financial year, the maintaining of such a register will add considerable extra cost to the collection.

Lord McIntosh of Haringey

I believe that the Minister is dragging the Committee away from the impact and the purport of these amendments. He is getting himself into difficulty by forcing other people to defend alternative ways of collecting finance for local government. He is trying to put words into my mouth which I do not find acceptable. He is getting himself into an unnecessary dispute with the noble Lord, Lord Taylor of Gryfe. I suggest it would be better if we return to the amendment.

The Earl of Caithness

I was trying to answer the questions that I was asked.

Baroness Fisher of Rednal

I was very interested when the Minister told us about all the happily married husbands and wives. It was a strange thing for him to describe that perhaps at the end of each month the husband will say to the wife, "There you are, darling, here is your community charge. You can go off now and pay it". One can hardly imagine that happening. However, he continued by saying that most likely the husband would pay both of the charges. Therefore, we come to the whole basis of the Bill, which is the question of accountability.

We understand that there are approximately 11 million women who are non-earners. In other words, the husband is the mainstay of the family. The wives are non-earners and therefore they will be non-payers. Accountability for those 11 million voters will not be because of any money that they are spending to defend services, because they are not paying out any money. Can the Minister say how accountability is brought into operation for those 11 million non-paying, happily married wives?

Baroness Lockwood

Can the Minister also explain why he feels so confident in saying that this clause is an attempt to help those non-earning spouses? He has indicated that the intention of the clause is to put the responsibility to pay on the earning spouse, but the clause does not say that. A great many women in this country are concerned that they will be responsible not only for their own community charge but for their husband's as well.

The Earl of Caithness

In response to the noble Baroness, Lady Fisher of Rednal, there are many husbands who give their wives a housekeeping allowance to pay some of the bills and might give a further allowance out of their income to meet the wives' community charge. The accountability about which the noble Baroness was concerned comes with the fact that for the first time the wives will be receiving a charge bill on a regular basis.

Baroness Fisher of Rednal

She will be receiving a bill but she will not be paying it.

The Earl of Caithness

Receiving the bill is very much the key to the argument. As the noble Baroness will doubtless be aware, the recent opinion poll for the Audit Commission showed that people who receive rates bills are three times more likely to know whether rates have gone up or down than people such as spouses who do not receive bills. When we transfer that from rates into charges, there will be the accountability which the noble Baroness, I am glad to say, is so keen to support.

I can try to reassure the noble Baroness, Lady Lockwood. The point of Clause 16 is to help the non-earning spouse. That is where the safeguard is and where the position would be far worse if that clause was not in the Bill. Without the guidance that we shall be able to give local authorities on this matter and without the procedure that we can lay down for them, they would perhaps go for the non-earning spouse rather than the earning spouse.

Lord Jay

It seems to some of us at any rate that the more we hear about this tax the more extraordinary it appears. I should like to ask the Minister to elucidate one point further. He has explained that the liability to pay in this case will not fall on the non-earning partner of any couple—that is to say, it will not fall on somebody who has no income. How exactly will the local authority know whether all these individuals, whether or not wives, have an income? With the rating system up to now, all the local authority needed to know was the value of the property. It did not have to inquire into everybody's income. We are now apparently being told that the local authority will have to know the incomes of, at any rate, a very large number of people resident in its area. Is it to get these from the Inland Revenue, or is it to have some rival system of assessing people's incomes which may not be the same as that of the Inland Revenue? I am sure that there is an answer to this and some of us would like to know what it is.

The Earl of Caithness

Perhaps it would be right for me to go into more detail on the point which I believe the noble Lord. Lord Monson, intends to raise about clause stand part. With the Committee's agreement, perhaps I may deal more fully with the whole of Clause 16.

We have demonstrated already in the discussions on the Bill that the Government are concerned to have a system which works. We want registration officers to have access to the information that they will reasonably need to compile their registers. We have devised the collective community charge to cater for circumstances where people stay at one address for too short a period for individual registration to be practical. That was the kind of case which I have just discussed with the noble Baroness, Lady Lockwood. We are, as we shall discuss further on Schedule 2, concerned that billing and paying of the community charge should run smoothly and easily for local authorities and individuals alike.

Clause 16 is a provision without which local authorities simply would not, in certain circumstances, be able to collect the money that will be owed to them. If joint and several liability were not available, then it would become widely known that, where one partner in a couple had no earnings from employment, was not receiving social security benefits direct, and had few personal possessions in his or her own name, he or she would be virtually immune from having to pay the personal community charge and there would be a virtual tax haven so far as the standard charge was concerned. The very fact that joint and several liability is available will make it much less likely that people will try to evade payment in this way. The local authority concerned will be able to point out that such attempts will be fruitless.

It may be worth explaining in some detail how joint and several liability will work in practice, to disprove the claim that joint and several liability somehow undermines the Government's claims to extend accountability as concerns married and unmarried couples, a point raised by the noble Baroness, Lady Fisher of Rednal. Separate community charge bills will be sent to everyone. If there are two adults in a household, they will each receive a bill. There is no question of combining the two liabilities, nor even of sending both hills to one partner. To Members of the Committee who suggest that such a process is inappropriate, I would make two points. The first is the importance of ensuring that each individual sees a bill of his own—especially when the community charge bills will show clearly the level of spending of local councils in the area. The second is the fact that 60 per cent. of married women now have some earnings of their own. That figure has risen steadily in recent years, and continues to increase. Other married women may have investment income of their own; and, as occupational pensions become more widespread, the number of women with pensions in their own right is also growing. So many married women will be able to pay their own bills.

Of course, some married and unmarried couples may want to pay both community charge bills together. There will be nothing to stop them from doing that, just as there is nothing to stop someone paying another person's credit card bill. But, in the first place, each individual will be liable if his community charge bill is not paid. It is to the individual that the reminder will be sent, and the individual who will be invited to discuss with the local authority any problems he has in paying it.

So what are the circumstances in which joint and several liability may come into play? I now come to answer in detail the noble Lord, Lord Jay. They concern couples where only one partner has an income and for some reason is unwilling to let the other partner have money to pay the community charge bill. Some of these may be couples wholly reliant on state benefits, which are normally paid only to one partner. But those benefits will include an amount towards both partners' 20 per cent. community charges; and the benefits can be paid to the woman rather than the man. Other couples with only one income will include households where the person who is earning is very well off indeed. In all these households, joint and several liability is a fallback for those few cases where the person with the income is unwilling, for some reason, either to give the other partner money to pay the community charge—just as money is to be provided for other purposes—and unwilling also to pay both bills direct.

Regulations under Schedule 2 will provide that, where joint and several liability under Clause 16 applies, it will be the local authority which judges that recovery against the individual to whom the bill was originally sent would be unproductive or undesirable. It is only when this stage is reached that the authority will need to establish that joint and several liability exists. It will do this by determining that the individual concerned has insufficient income of his own and is reliant on the partner in the same household. If the local authority reaches this position, it will send a bill to the person it believes to be the spouse of the individual liable. It will be made plain to that person that he or she is regarded jointly and severally liable for the bill. Often, we can safely assume, this will be enough to ensure that the bill is paid, though of course if the person concerned believes he or she is not jointly or severally liable then he or she will tell the local authority.

If neither of those things happens and the bill is still not paid, a reminder will be sent. The next stage is then to seek a summons against the person concerned. Even at this stage it will be open to him or her to persuade the magistrates that a warrant should not be granted because the couple are not jointly and severally liable. I must emphasise that if it is discovered that no one is jointly and severally liable with the individual concerned for his or her bill, then it will undoubtedly mean that he or she is eligible for a rebate and income support in his or her own right—unless they have income of their own in which case they should pay the bill in any event.

I hope that that explanation has clarified the position for the Committee. I believe it confirms the point I was trying to make earlier to the noble Baroness, Lady Lockwood, that this is a situation where Clause 16 is a benefit to the non-earning spouse who is left in difficulties by the earning spouse.

Lord Harmar-Nicholls

Almost by accident we seem to have discovered a procedure which I think will help everyone in trying to arrive at the real purpose behind the Bill. However, it must be said we have arrived there by accident. Can we not have, when there are many intricate details which need explaining as shown by the amendments on the Marshalled List, a detailed explantion of the clause—as my noble friend has just given—which anticipates some of the queries that may arise? It would save a great deal of time. This in no way precludes Members of the Committee pursuing their arguments in greater detail; rather they would be pursuing them as part of a picture which is generally understood. As I said, we have arrived accidentally at this position. Indeed, I had begun to think that there was quite a lot in the arguments put forward by the noble Lord, Lord Banks. When one wants to arrive at the right conclusion, there is bound to be such controversy. However, when I see the explanation inserted into the total picture, as my noble friend has just done, it makes the whole concept much easier to understand. It is a procedure we have dropped on by accident.

We should perhaps thank the noble Lord, Lord Monson, who expressed concern about the purpose behind the clause, as distinct from the parts of it being examined in discussion on the amendment. I hope that we can follow the procedure in the future; the noble Earl can be assured that I shall support him against most of the amendments which have been tabled now that I understand the whole picture.

The Earl of Caithness

As I understand it, the procedure in Committee is to have clause stand part at the end of the debate. Of course, should it be dealt with at the beginning, it might help to clarify matters. However, I am not sure that I am the right person at this stage to comment further upon the matter. I shall nevertheless draw it to the attention of my noble friend the Chief Whip.

Lord Jay

It does not seem to me that the Minister has answered my question. I asked how the local authority would ascertain the income of every person. The whole of his recent speech was dependent upon the assumption that the local authority knew who was in receipt of income and who was not. We have still not been told about the way in which local authorities will gather such information. After all, it is a vast operation to discover everyone's income.

Lord Taylor of Gryfe

I should like to supplement the question posed by the noble Lord, Lord Jay. I speak as someone who has just completed his community charge form, since the system is now in operation in Scotland. There is no question on the form—although it is quite a complicated questionnaire—as to who is the earner in the household. Therefore, what is the follow-up? Having completed the form and submitted it to the local authority, how will that authority—in the words of the noble Lord, Lord Jay—then find out who is the earner, and who has the liability? Does it perhaps require another questionnaire?

Lord Stoddart of Swindon

I must say that I was confused about the Bill, and especially this clause, before we started the debate. However, I am now even more confused. My mind has been completely boggled—if that is the right term to use.

The noble Earl suggested that the rating system was discredited. Well, if it was discredited, it was at least discredited after 387 years. On the other hand, this community charge has been discredited even before it has started. It has been discredited in the main because people do not understand how it will work.

Let us take, for example, the position of husband and wife. Each partner receives a community charge bill. That is perfectly understood. The husband is 50 years of age and the wife is 45 years of age. The wife has had her children and is therefore perfectly capable of going out to work and her husband thinks that she should. However, she refuses to do so. Of course it must be said that the situation could work either way; that is, it could be the male or the female these days.

Nevertheless, let us consider the situation. Perhaps there is a dispute in the family as to whether a person is capable of going out and earning their own wherewithall to pay the community charge. The local authority then receives one of the charges from the husband or the wife—it does not matter which—and says, "There is only one community charge here, we should have two payments." So the authority calls the partner who has not paid and says, "Why have you not paid?" The answer is, "Well, that is the responsibility of my husband/my wife." The local authority then sends for the husband, or the wife, and says, "You are responsible for paying your husband's/your wife's community charge". The person concerned then says, "Absolutely not. He/she is perfectly capable of going out and earning money to pay his/her own community charge."

What will the situation be under those circumstances? Who will resolve that conundrum? Will it be the local authority? Will the local authority say to the husband, or the wife, who is not working, "You are capable of going out to work and your husband/wife will not pay your community charge. You must go out and earn so that we can collect our community charge." That is a reasonable proposition, it is not? I think the Committee is entitled to an answer from the Minister.

The Earl of Caithness

In order to answer the queries raised by the noble Lords, Lord Jay and Lord Taylor of Gryfe, I must say that of course the local authority will not be especially concerned about who earns the income until the husband, or wife, does not pay the community charge and when joint and several liability starts. At that stage I should refer both noble Lords to paragraph 4 of Schedule 4 which sets out how that situation will be dealt with should it ever reach the courts.

In answer to the hypothetical situation so eloquently expressed by the noble Lord, Lord Stoddart of Swindon, I must say that there is little difference between this bill and any other bill with which the husband or wife might be faced. For example if the wife goes out and purchases a dress and subsequently the bill is sent, the situation is well known to the noble Lord should the husband refuse to pay. He has isolated the community charge quite unnecessarily from any other bill that a household could face. Should it come to that situation I should think that the marriage is almost certainly one that is already suffering from other strains. Such a situation will be taken into account by the local authority or the courts when assessing who should be liable for that portion of the community charge which remains unpaid.

Lord Stoddart of Swindon

The noble Earl must understand that many marriages are in exactly that position. They are not exactly on the rocks, but they are getting there. The ship is still afloat but it may sink at any moment. Many marriages are in that unfortunate situation. Similarly, there are couples who are divorced, or who live apart, but who are forced to remain in the same house because of the housing shortage. That, again, is a difficult conundrum to solve. In the last analysis someone has to decide in such circumstances who will appear in court so that a community charge order can be enforced. The Government must pay some attention to the matter because they will find themselves in many such difficulties.

Lord Sefton of Garston

Can the noble Earl tell the Committee what is meant by the word "income"? Does it include a capital sum?

The Earl of Caithness

The word "income" includes earnings.

Lord Monson

The noble Earl has dealt most fully and helpfully, if I may say so, with the cases where one partner has no income, whether or not they are capable of earning income. However, it seems to me that there remains a very grey area indeed—for example, where one partner has a full-time job bringing in £250 a week gross whereas the other partner, employed in a part-time job, brings in only £50. Under the clause as it stands, is it not the case that the partner earning only £50 could find his, or herself, taken to court for the liabilities of the partner who earns £250?

4 p.m.

The Earl of Caithness

The local authority and the court will look for who has been responsible for the community charges until they cease to be paid. Of course, if the husband or wife has walked out, the respective spouse will be entitled to rebate if his or her income is below a sufficient level, and to income support if there is no income, and will not be meeting the full community charge. The point made by the noble Lord is covered.

Lord Sefton of Garston

Perhaps I may put to the Minister a scenario that I know exists. I asked whether income means earnings, so that I could base my scenario which I assume will be supported by the Bill. If a subsequent court case takes place I assume the assurance will stand. A man has capital, regardless of how he got it—he may have won the pools, bet on the horses or used some illegal operation—and his wife has nothing. His wife does not pay the community charge. On the basis of what the noble Earl has told us, the court will go for the husband on earnings. He says, "I have no earnings. I have no income." The court will say, "Why are you not claiming rebate?" He will say, "I do not need to claim rebate; I do not want to claim rebate." I know plenty of people who have done that. I suggest that Members on the other side of the Chamber know plenty of people who are living on capital. Not too many questions are asked about how they obtained the capital—like Ken Dodd and the jockey in gaol. We can go through the higher echelons of our society and find such cases. That is a diversion.

The noble Lord, Lord Jay, asked how we could find out about income. I do not believe that we have yet had an answer. How does the community charge officer set about determining income? What happens if he determines that there is no income because there are no earnings and someone is living on capital? I consider that that is a way someone can get out of paying the community charge. Unless we get that point clear, we will not know where we are in the future.

The Earl of Caithness

I am extremely grateful to the noble Lord for raising that point. I draw his attention once again to paragraph 4 of Schedule 4 which will be used by the local authority to establish means of income and the source of income if there is non-payment of the charge. I understand the noble Lord's concern that that provision may not be adequate, and I therefore look forward to his support for Amendment No. 86E which I intend to move.

Lord Underhill

The Minister has referred time and time again to paragraph 4 of Schedule 4. Under that paragraph, information can only be obtained where a magistrate has made a liability order. Are we not just piling bureaucratic machinery upon bureaucratic machinery? That is the only way the information can be obtained.

The Earl of Caithness

That is correct. I have explained—I went into some detail on Clause 16 as the Committee gave me permission to do so—the various stages at which a local authority would be involved and the representations that could be made by either spouse in any discussion as to whether liability for payment was due. I said that should that fail, the matter is then taken to the magistrates' court. At that stage, the information that is required, set out in paragraph 4 which is to be extended by Amendment No. 86E to be moved later, will cover the point made by the noble Lord.

Lord Harmar-Nicholls

Paragraph 4 of Schedule 4 seems to explain the position. I return to what the noble Lord, Lord Monson, said. If the matter gets to the magistrates' court and the magistrate finds out that one spouse has an income of £250 a week and the other has a part-time income of £30 or £40 a week, is the magistrate in a position to allocate, according to income, each spouse's responsibility as a proportion of the payment of the debt?

The Earl of Caithness

At that stage the magistrate will determine the liability for the community charge that has not been paid. The magistrate will rightly he allowed to look at the income of both spouses.

Lord Henderson of Brompton

There is one other matter which has not yet been raised and which should be mentioned. The clause is grossly discriminatory against those of us who happen to be heterosexual and could be construed as promoting homosexuality. Clause 28 of an earlier Bill was designed to prevent local authorities promoting homosexuality. We know as a matter of fact that there are homosexual couples who will not be caught by Clause 16's "joint and several liability". I am one of those who is happily married heterosexually. I must say I do not care that the Government should now promote homosexuality in this way.

The Earl of Caithness

The noble Lord's ingenuity seldom ceases to amaze me, and today he has not let me down. The extensive provisions that we have made at the lower end of the income scale to benefit those on low wages who may be faced by the community charge are, as the noble Lord will be aware, based on the social security regulations. They deal with married couples. They do not deal with the case of homosexuals which the noble Lord just mentioned.

Lord Diamond

We cannot let this matter go in the vague fashion in which it is being discussed at the moment. I charge the Minister with making statements from the Front Bench for which he has no authority. It is all very well for him to say what the local authority will do. Neither the local authority not the courts will have the benefit of reading and following the Minister's speech. They will have to be guided by the Act in its final form. The most recent example is the Minister telling us that when the magistrate considers making the order, which he is invited to make by the local authority, he shall assess how much should be paid by each partner to a marriage and shall have the information available to him. He will not.

The clause makes it clear that the information which is regarded as relevant—I shall come back to that point in a minute—is supplied to the charging authority concerned. That is after, not at the time, the magistrate makes his order as to liability. That is what the magistrate is concerned with and that alone. As has been pointed out by several noble Lords, these are not questions of black and white. It is a not a question of one partner having the whole of the income of the marriage and the other partner having none. The normality will be that each partner will have some kind of income. The noble Lord has said that income is taken into account, but it is not taken into account according to the schedule to which the noble Earl is continually referring us. What is taken into account is some of the income—the income which arises from earnings.

Paragraph 4(2) of Schedule 4 says provided: it falls within a prescribed description of information and relates to the debtor's employment and earnings". Not a word about income on capital.

Various Members of the Committee have referred to people having capital. The Bill is creating an impossibly imprecise situation and apparently leaving it to the local authority to exercise its discretion in some way or another. The noble Earl is telling us which way the local authority will exercise its discretion. He is not entitled to do that. We are talking about what is in the Bill; in the Bill there is total confusion.

The Earl of Caithness

I beg to differ from the noble Lord, Lord Diamond. I refer him to the amendment to be moved in my name, Amendment No. 86E, which I think covers quite a lot of the noble Lord's concerns about the definition of paragraph 4(2)(c). It goes on to define the earnings: (if any) or income (whether or not from employment)". So I think that the anxiety about income from capital with which the noble Lord was concerned a moment ago is met by the amendment which I hope to move shortly.

The authority gets a liability order against the person who has not paid and then the authority will pursue that person. If he or she has an income, he or she should pay. If not, that will become obvious as a result of the inquiries which will be made and the authority will pursue the spouse through the joint and several liability.

I think we should pause for a moment and consider what would happen—what benefit there could be for the local authority to pursue the non-earning spouse. We must all agree that there would be very little point in doing that. That is the protection which Clause 16 offers. That is why the regulations will be designed so that the local authority, via the courts, will determine who has the income and will then be able to pursue that person.

Lord Sefton of Garston

I apologise for my confusion, in which I am not alone. I am not sure whether the noble Earl is telling us that capital is included in his amendment. I have looked at the amendment, as have my colleagues. We cannot find any reference to a person owning a capital sum. We cannot find that anywhere in the noble Earl's amendment. If that is so, if it does not refer to a capital sum, then again I ask: how will the charging authority which starts proceedings to get some money, find out the information about that person? If the noble Earl's amendment, which he may amend again before we see it, refers to capital, do I take it that the charging officer will be entitled to look into the capital sum of anybody who is disputing the payment of a community charge? If that is so, it hinges on our debate yesterday about the invasion of privacy and just how far the community charge officer can go. It would only require somebody who had won the pools to say "I have no earnings; I have no income; I am living on a capital sum and, according to this Act of Parliament, I am not entitled to pay for my wife. You cannot ask me to pay for my wife".

It is suggested that we should then go to the magistrate and, as has already been pointed out, the duty of the magistrate appears in Schedule 4, paragraph 4 which I have read. It does not mention anything about capital; it specifically says that the magistrate shall concern himself with employment and earnings. I do not hold a brief for anybody who lives on capital sums because they are usually ill-acquired, if only by gambling. But if we are to have an Act of Parliament, we want to know where and what the regulation is before this House gives its final approval. I do not think we should leave this clause without getting a solid answer to the questions which the noble Earl has been asked.

Lady Saltoun of Abernethy

It is surely very unusual to be in possession of a capital sum and not receive any income from it. I know that there are a few people who keep used fivers under the bed, but it is not a very usual situation.

4.15 p.m.

The Earl of Caithness

In order to answer the noble Lord, Lord Sefton of Garston, I shall try again to draw his attention to Amendment No. 86E which refers to the income from the capital. At this stage we are determining the question of joint and several liability—who should be liable for an unpaid portion of the community charge. Capital is taken into account in the assessment of whether the person is entitled to a rebate under social security at the lower income. That is the important place where capital is taken into account.

However, when we come to Schedule 4, paragraph 4, we are looking at the liability for a period where the community charge was not paid by or on behalf of one spouse for another. It is the income on capital which will be taken into account then.

Lord Sefton of Garston

I asked what "income" meant. The noble Earl expressly excluded capital.

Baroness Fisher of Rednal

Yes, the noble Earl said "earnings".

Lord Jay

In fairness to the Minister, I think we have made some progress. As I understand it, we have established that the local authority has no information about income of any of these people until it has taken them to court. Therefore, it has to issue a demand for payment to all the individuals in the area and, when it does not receive payment, to take all these individuals to court. Presumably that will be a long, complicated and expensive business. When it has done so and reached the end of the process, all the information that it has is about the earnings of the individuals concerned, and there is none about their capital or any other resources whatever. If that is the case—and that is how it appears to me—it is an extraordinary basis for proposing an impost of this kind.

The Earl of Caithness

I am grateful to the noble Lord. I too think we have made considerable progress and have clarified the point with which the noble Lord was concerned. Of course, he will be fully aware that under the present rating system if a person is sent a rate demand and does not pay it, then he is also liable to end up in court.

Lord Banks

I am grateful to all those who have taken part in the lengthy debate on this section of the Bill. When I look back to the example which I gave at the outset, it not only seems a long time ago but it also seems to me that we have had no satisfaction that the Mrs F in the example which I gave would not suffer in the way which I described. This amendment would prevent such suffering. Why need there be such an elaborate defence against the introduction of this simple amendment which would serve to put the matter right, to put people's minds at rest and to make it less necessary for the Committee to spend a great deal of its time examining the detailed procedure which will be used if the Bill eventually becomes law? It seems to me that this lady, Mrs F, will suffer in the way I have described; I am not satisfied that that is not so. I believe that my amendment would put her into a satisfactory position. Therefore I wish to test the opinion of the Committee on this proposal.

4.20 p.m.

On Question, Whether the said amendment (No. 74) shall be agreed to?

Their Lordships divided: Contents, 116; Not-Contents, 169.

DIVISION NO. 1
CONTENTS
Addinglon, L. Darcy (de Knayth), B.
Airedale, L. David, B.
Allen of Abbeydale, L. Davies of Penrhys, L.
Amherst, E. Dean of Beswick, L.
Ardwick, L. Diamond, L.
Attlee, E. Donalds on of Kingsbridge, L
Aylestone, L. Dormand of Easington, L.
Banks, L. Elwyn-Jones, L.
Basnett, L. Ewart-Biggs, B.
Blackstone, B. Ezra, L.
Blease, L. Falkland, V.
Bonham-Carter, L. Fisher of Rednal, B.
Boston of Faversham, L. Flowers, L.
Briginshaw, L. Foot, L.
Campbell of Eskan, L. Gallacher, L.
Caradon, L. Galpern, L.
Carmichael of Kelvingrove, L. Glenamara, L.
Carter, L. Graham of Edmonton, L. [Teller.]
Cledwyn of Penrhos, L.
Cocks of Hartcliffe, L. Grey, E.
Grimond, L. Murray of Epping Forest, L.
Hanworth, V. Nicol, B.
Harris of Greenwich, L. Northfield, L.
Hatch of Lusby, L. Oram, L.
Hayter, L. Parry, L.
Henderson of Brompton, L. Peston, L.
Hughes, L. Ponsonby of Shulbrede, L.
Hunt, L. Porritt, L.
Hunter of Newington, L. Prys-Davies, L.
Hylton, L. Rathcreedan, L.
Irvine of Lairg, L. Ritchie of Dundee, L.
Irving of Dartford, L. Robson of Kiddington, B.
Jay, L. Ross of Newport, L.
Jeger, B. Sainsbury, L.
Jenkins of Hillhead, L. Scanlon, L.
Jenkins of Putney, L. Seear, B.
John-Mackie, L. Sefton of Garston, L.
Kearton, L. Serota, B.
Kilmarnock, L. Shepherd, L.
Kinloss, Ly. Stallard, L.
Leatherland, L. Stewart of Fulham, L.
Llewelyn-Davies of Hastoe, B. Stoddart of Swindon, L.
Lloyd of Hampstead, L. Strabolgi, L.
Lockwood, B. Taylor of Blackburn, L.
Lovell-Davis, L, Taylor of Gryfe, L.
McCarthy, L. Taylor of Mansfield, L.
McGregor of Durris, L. Thurlow, L.
McIntosh of Haringey, L. Tonypandy, V.
McNair, L. Tordoff, L. [Teller.]
Mais, L. Turner of Camden, B.
Manchester, Bp. Underhill, L.
Masham of Ilton, B. Wallace of Coslany, L.
Mason of Barnsley, L. Walston, L.
Milverton, L. Wedderburn of Charlton, L.
Molloy, L. Whaddon, L.
Monson, L. White, B.
Morton of Shuna, L. Williams of Elvel, L.
Mountevans, L. Young of Dartington, L.
Mulley, L.
NOT-CONTENTS
Airey of Abingdon, B. Cross, V.
Alexander of Tunis, E. Cullen of Ashbourne, L.
Allenby of Megiddo, V. Dacre of Glanton, L.
Allerton, L. Davidson, V. [Teller.]
Ampthill. L. Denham, L. [Teller.]
Arran, E. Dilhorne, V.
Auckland, L. Dormer, L.
Balfour, E. Dundee, E.
Bauer, L. Eden of Winton, L.
Beaverbrook, L. Elibank, L.
Belhaven and Stenton, L. Erroll, E.
Bellwin, L. Erroll of Hale, L.
Beloff, L. Fanshawe of Richmond, L.
Belstead, L. Ferrers, E.
Bessborough, E. Foley, L.
Biddulph, L. Fortescue, E.
Blyth, L. Fraser of Kilmorack, L.
Borthwick, L. Gainford, L.
Boyd-Carpenter, L. Gibson-Watt, L.
Brabazon of Tara, L. Gisborough, L.
Bramall. L. Glenarthur, L.
Braye, B. Grantchester, L.
Brougham and Vaux, L. Gray of Contin, L.
Bruce-Gardyne, L. Greenhill of Harrow, L.
Butterworth, L. Greenway, L.
Caithness, E. Gridley, L.
Camden, M. Hailsham of Saint Marylebone, L.
Cameron of Lochbroom, L.
Campbell of Alloway, L. Halsbury, E.
Carlisle of Bucklow, L. Hardinge of Penshurst, L.
Carnarvon, E. Harmar-Nicholls, L.
Carnegy of Lour, B. Harvington, L.
Carnock, L. Havers, L.
Carr of Hadley, L. Henley, L.
Cathcart, E. Hesketh, L.
Cholmondeley, M. Hives, L.
Colnbrook, L. Hood, V.
Constantine of Stanmore, L. Hooper, B.
Cornwallis, L. Hylton-Foster, B.
Cottesloe, L. Ingrow, L.
Cox, B. Jenkin of Roding, L.
Cranbrook, E. Johnston of Rockport, L.
Kaberry of Adel, L. Renton, L.
Killearn, L. Renwick, L.
Kinnaird, L. Rippon of Hexham, L.
Lauderdale, E. Rochdale, V.
Layton, L. Romney, E.
Long, V. St. Aldwyn, E.
McAlpine of West Green, L. St. Davids, V.
McFadzean, L. Saint Oswald, L.
Mackay of Clashfern, L. Saltoun of Abernethy, Ly.
Macleod of Borve, B. Sandford, L.
Malmesbury, E. Seebohm, L.
Manton, L. Sempill, Ly.
Margadale, L. Shannon, E.
Marley, L. Sharples, B.
Massereene and Ferrard, V. Skelmersdale, L.
Merrivale, L. Somers, L.
Middleton, L. Southborough, L.
Monk Bretton, L. Stanley of Alderley, L.
Montgomery of Alamein, V. Stockton, E.
Morris, L. Strathcarron, L.
Mottistone, L. Swinfen, L.
Moyne, L. Swinton, E.
Munster, E. Terrington, L.
Murton of Lindisfarne, L. Teviot, L.
Nelson, L. Teynham, L.
Norfolk, D. Thomas of Gwydir, L.
Norrie, L. Thomas of Swynnerton, L.
Northesk, E. Thorneycroft, L.
Nugent of Guildford, L. Torphichen, L.
O'Brien of Lothbury, L. Trafford, L.
Onslow, E. Tranmire, L.
Orr-Ewing, L. Trefgarne, L.
Oxfuird, V. Trumpington, B.
Peel, E. Ullswater, V.
Pender, L. Vaux of Harrowden, L.
Penrhyn, L. Waldegrave, E.
Peyton of Yeovil, L. Whitelaw, V.
Platt of Writtle, B. Windlesham, L.
Portsmouth, E. Wise, L.
Radnor, E. Wolfson, L.
Rankeillour, L. Wynford, L.
Reay, L. Young, B.
Reigate, L. Young of Graffham, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.28 p.m.

Lord Hesketh

Perhaps I may suggest that this would be a suitable moment for us to take the Statement. I beg to move that the House do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.

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