HL Deb 28 January 1991 vol 525 cc454-7

3.9 p.m.

Lord Denham

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Caravans (Standard Community Charge and Rating) Bill, has consented to place her prerogative and interests so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

The Parliamentary Under-Secretary of State, Department of the Environment (Baroness Blatch)

My Lords, I beg to move that this Bill be now read a third time.

Moved, That the Bill be now read a third time.—(Baroness Blatch.)

Baroness Hollis of Heigham

My Lords, this is a curious Bill which should never have been necessary. When the Government introduced the poll tax, three forms of financial liability were available to levy on caravans. Those were the personal community charge, which is rather like the charge paid by the ordinary householder; the standard community charge, which is levied on owners of second homes; and the non-domestic rate, which is the charge levied on commercial businesses.

This is the Government's third attempt to try to get the financial liability on caravans correct. Mr. Chope, the Minister in another place, introduced the first version offered by the Government in February 1988. At that time it was suggested that all caravans that were a person's main or sole residence should be liable to a personal charge. Those who inhabited other caravans that comprised second homes or were touring or commercial letting caravans should pay the standard charge; in other words, the line was drawn between residential use on the one hand and leisure use on the other. It was decided that leisure users should pay a standard charge. However, after complaints were received from the caravan society, the Minister drew up a different boundary line. The boundary was no longer drawn between residential and leisure caravans, but between static and mobile caravans. The answer to the question of when a second home is not a second home is when the caravan or its occupants move. However, that decision generated further problems because those caravan residents who paid a personal charge, those caravan residents who paid a standard charge, and those residents who paid a business rate were all on the same site, and caravan residents did not know which charge they had to pay.

In this Bill the Government have tried to draw the boundaries for a third time. It has been decided that if there is year-round occupancy, the residents should pay a personal charge. However, if there is irregular or intermittent occupancy—this applies when a caravan is used as a second home or is let commercially—a business rate should be levied. We do not object to this third attempt to define what caravan residents should pay. However, I suggest to the Minister that the problem of boundaries and definitions will not go away. We said this on Second Reading and in Committee and we are saying it again today.

If the line is drawn between residential caravans, whose owners are liable for the personal charge, and all other leisure caravans, including second homes and holiday caravans whose residents pay a business rate, what grounds are there for not treating holiday chalets in the same way? Holiday chalets may share the same site as caravans. They are the same size as caravans, and they may have the same or a lesser value. They make use of the same limited facilities as caravans, but residents of chalets will pay a standard charge which in many cases will be three or four times higher than the non-domestic rate.

In 1988 the Government promised to brigade chalets with caravans and treat them similarly. However, they have not done so and they are not doing so in this Bill. They are pulling chalets and caravans further apart. It is not good enough to say that caravans are mobile, because many are no more mobile than chalet homes. Nor is it good enough to say that caravans are chattels, because chalets deteriorate in the same way. I suggest that to get rid of one anomaly by introducing another cannot be a sensible way of proceeding.

The first proposal of the Government on this matter was consistent although unfair. The second proposal was fair but unworkable. The third proposal may be workable but I suggest that it is inconsistent and probably unfair. We on this side of the House do not oppose the Bill, because it removes a significant financial burden from many elderly people and families on a modest income for whom their caravan is their second home and hobby. However, I suggest that the losers will be the local authorities. Local authorities will lose the standard charge they would have collected from second home caravans. That would have been a useful supplement for that element of the poll tax which they find they are unable to collect. Local authorities under this Bill will not only lose income but will also have to refund the income they have so far collected due to a government change of policy.

Local authorities will have to cover the administrative costs and overheads of adjusting their registers. The loss may be as much as a third of a million pounds this year for one small local authority. That will have to be borne out of the poll tax. The Government are entitled to change their mind three times but they should not expect local authorities to pay for that privilege.

The Government have the parliamentary time to amend the poll tax in this Bill and, apparently, in a second Bill which will appear next week, and in a third Bill on enforcement in a few weeks' time. Therefore I suggest that they should be looking not just at the transitional arrangements that have been announced by the Minister but also at the 20 per cent. payment by students, young people and the elderly, which costs more to collect than it brings in. I further suggest that the Government should consider a non-domestic rate which breaks the link between the local business community and the local authority. The Government should look again at the inadequate central grant, which fails to fund essential services such as education and training, community care or police authorities. The situation in police authorities was referred to in a recent Question.

I suggest that all the tinkering in the world and the Bill this week, the Bill next week and the Bill in a few weeks' time will not make the poll tax a viable, fair and just tax. Its time is up and I hope the Minister will recognise that.

Baroness Blatch

My Lords, I shall try to bring the House back to the Bill we are discussing. The noble Baroness has ranged far and wide beyond the boundaries of the Bill under discussion.

The matter of chalets was raised by noble Lords during our earlier discussion of the Bill and was also dealt with in another place. All the points that the noble Baroness has raised have been dealt with in detail.

We are not seeking to change the boundary between rating and the community charge, merely to correct the specific inadequacy in the present legislation. The question of disadvantaging chalet owners does not arise therefore. The definition of "caravan" to which the noble Baroness referred and to which this Bill applies is set out in other legislation which is not at issue.

As your Lordships will recognise, the Bill is a technical measure which puts right the anomaly created when we amended the local government finance legislation in 1988. It has been discovered that our amendment designed to honour an earlier commitment to place holiday caravans in non-domestic rating does not in fact do so. The owners of many holiday caravans—perhaps as many as 100,000 —are liable for the standard community charge.

Our announcement that we would legislate to correct the position and provide that any sums of standard charge already paid would be refunded, was warmly welcomed by the caravan industry and caravan owners in general. The part repayment of any standard charge paid last financial year will also be welcomed in Scotland, together with the powers to extend the derating of caravans, which will continue the process of harmonising rateable values throughout Great Britain. As I have said, all the points that the noble Baroness has raised have been dealt with. I commend the Third Reading to the House.

On Question, Bill read a third time, and passed.