Local Government Finance Bill

HL Deb 17 February 1992 vol 535 cc1057-106

Consideration of amendments on Report resumed on Clause 6.

[Amendment No. 12 not moved.]

Baroness Hollis of Heigham moved Amendment No. 13: Page 5, line 10, at end insert: ("( ) Subsection (3) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").

The noble Baroness said: My Lords, I shall speak also to Amendment No. 17 which raises the issue of joint and several liability.

Lord Henley

My Lords, I presume that the noble Baroness is speaking also to Amendments Nos. 35 and 37.

Baroness Hollis of Heigham

My Lords, I stand corrected by the Minister. Whichever amendments the noble Lord mentioned, they were the correct ones, but that may be the only time tonight that I endorse entirely what he says. I thank him. The amendment seeks to raise the issue of joint and several liability for those people with severe mental impairment. In the United Kingdom about 750,000 people suffer from dementia—500,000 of them, mostly elderly, have Alzheimer's disease, and one in five of them is over 80. A further 130,000 adults have severe learning disabilities. We all know families with members suffering from Alzheimer's disease. I am sure that we are all aware of the strain, physical and financial, that that places on the family.

Under the council tax, people with severe mental impairment, and therefore their families, are considerably worse off than they were under the poll tax. I am not sure that that is what your Lordships wish or intend. There are two sets of amendments, one of which I am moving and one which will be moved later by the noble Baroness, Lady Seear. If the House were minded to accept the amendments that would at least ensure that such people would not be worse off financially.

Lord Henley

My Lords, perhaps the noble Baroness will give way, She referred to amendments that the noble Baroness, Lady Seear, would be moving. It would help if she would let me know which they are so that I can respond to both sets of amendments.

Baroness Hollis of Heigham

My Lords, I was referring to the amendment relating to carers, which I doubt will be moved tonight. The first issue relates to the proportion of the bill that someone with Alzheimer's disease has to pay, and the second relates to joint and several liability for the proportion of the bill that he or she does not have to pay. On the first point—the proportion of the bill that such a person has to pay—under the poll tax anyone suffering from Alzheimer's disease was exempt from paying. That meant that in a two-person household only 50 per cent. of the bill would be paid. Under the council tax, 75 per cent. of the bill will have to be paid by that family. The family will receive only a 25 per cent. discount. The family starts by being worse off although, as I have said, if the Government were minded to accept the amendments relating to carers tabled by the noble Baroness, Lady Seear, they would produce a second 25 per cent. discount which would restore people suffering from Alzheimer's disease to the position they currently experience under the poll tax.

The second issue relates to joint and several liability which I should like to argue is even more perverse. It did not exist in practice under the rates, nor under the poll tax except between spouses. I have checked and even there I know of no local authority which pursued joint and several liability for debts incurred where the liability started only when the debt was incurred and not at the point when bills were drawn up, following practice note No. 16. Yet under the Bill people with Alzheimer's disease deemed not competent to pay their own bills—which is why they qualify for the discount—are held jointly and severally liable for someone else's tax.

Clearly, if people are able to live alone, there is a presumption that they have sufficient competence to know that they are required to pay the bill and can be pursued for it if they do not. But if they live with a spouse or relative —which is the situation under which the joint and several liability is likely to arise—as their condition deteriorates, they are likely to have no responsibility at all for budgeting and household decisions. Indeed, were they to know that they were liable for someone else's bills, that could only add to their worries, distress and confusion. If mistakes were made on the calculation of the bill or the rebate for which they were eligible, they would probably be unable to check the calculations correctly, unable to argue their case for backdated rebate and unable to know that part of the bill was already paid. They would be unable to protect their own interests.

How can a person with Alzheimer's disease, whose wife or husband has walked away and cannot be traced, cope with the situation of abandonment? They would probably have to move into residential care but at the same time they would be held accountable for the debts of other people.

I should like to give two examples. First, let us take a mother and son. Under the Bill, it would appear that if a widowed mother living with a 30 year-old son, who has a learning disability, defaulted on paying the council tax, she could find her son being pursued by the local authority for payment. That is despite her son being altogether exempt under the community charge. Another example, which is not hypothetical but a real case, is that of a husband and wife. I have a letter which was written from a carer to the Alzheimer's Disease Society. It states: My husband started to take ridiculous sums out of his accounts. I went to the bank and explained the problem. They said they were unable to help me at all and said they could only do something if I invoked the powers of attorney. I then asked them if they could have stopped all their advertising mail which jogged his memory and caused him to go rushing along to their branch and drawing money out. No they said we cannot stop the mail … The money he took out of the accounts he either gave away or lost. It was never recorded. At the time there was so much going on that I never realised how close we were to financial ruin". The Alzheimer's Disease Society says in a letter that: the Bill as it stands imposes liability for a spouse's or other carer's bill on a person with severe mental impairment despite the fact that their own personal element has been discounted. It also imposes on a carer who has joint liability the burden of meeting the cost of the tax for the person with dementia who may be quite incapable of managing their own …affairs. The council tax as currently constructed will add to the burden of caring for a person with dementia both by increasing the potential tax liability of the carer and by adding possible liability for the debts of the person", who is mentally incompetent but who is still incurring the debts of the person for whom they care.

Why was exemption from the poll tax awarded? I quote from a letter dated 15th August 1989 from the Minister responsible at the time, the Parliamentary Under-Secretary at the Department of Environment, Mr. Christopher Chope, to the secretary of MENCAP: As you know the Local Government Finance Act 1988 provides that people who are severely mentally impaired will be exempt from the personal community charge. We recognise that these people may have little understanding of the concept of local government accountability and are unlikely to play a full role in the local democratic process. Therefore, it would not be fair to expect them to contribute towards the cost of local services". These are the words of Mr. Christopher Chope, not of the Alzheimer's Disease Society nor us, but the Minister responsible at the time. He stated that it would not be fair to expect them to contribute towards the cost of local government services. If people could not take part in the democratic process, they should not be held liable for decisions they were incapable of making. To say that someone who is mentally impaired should receive a discount because he is not competent to handle his own affairs but should be jointly and severally liable for the debts of someone else—which is a much more complex situation—seems to me to be perverse and cruel.

Only a small number of people would be helped by the amendment: those in a situation where there is an unpaid bill, a person who is liable but who is unobtainable, either dead or missing, and where the remaining person is severely mentally impaired. It would cost very little but make a huge difference to the families of carers as well as the person with Alzheimer's disease, if the House were minded to accept the amendment. I beg to move.

8.15 p.m.

The Earl of Balfour

My Lords, I wish to ask one or two questions. Under Schedule 1, paragraph 9(1) on page 84, A person shall be disregarded for the purposes of discount…if— (a) on the day he is engaged in providing care or support …to another person". A person who is disabled would have a discount of 25 per cent. and the person helping with care would receive a further 25 per cent. discount.

Referring to page 85, paragraph 11 of Schedule 1, I was under the impression that this provision would enable the person receiving social security benefit to pay the council tax where a person was severely disabled and that the whole council tax could then be provided for under these conditions. That is the impression I received in Committee and I should be interested to hear what my noble friend says. If I am correct, then the amendment proposed by the noble Baroness, Lady Hollis, would not be necessary.

Lord Henley

My Lords, as the noble Baroness said, we shall reach the question of carers when we consider the amendment proposed by the noble Baroness, Lady Seear, tomorrow afternoon. I should not like to say at this stage exactly how we shall respond to it but I am probably not giving anything away if I say at this stage that I hope that to a great extent we shall be able to meet the demands of the noble Baroness, Lady Seear. Having said that, I am not prepared to say how far we will go; I can only say that I do not believe that we can go as far as her amendment does at the moment. However, we shall go a considerable way to satisfying the demands of the noble Baronesses, Lady Hollis and Lady Seear. On that occasion I hope that we shall be able to deal with the point made by my noble friend Lord Balfour about carers in relation to Schedule 1(9) (a).

Turning to Amendment No. 13 which, as the noble Baroness knows, we discussed in some detail during the Committee stage and which the noble Baroness and I have discussed further in the privacy of my office—

Baroness Hollis of Heigham

My Lords, with others present.

Lord Henley

My Lords, as the noble Baroness said there were others present, but I am sure that she did not need to be chaperoned on that occasion, she is a grown up girl‡

Those were useful discussions, as the noble Baroness said, and to some extent we understand what we are both talking about. I also believe that she accepts that the award of a status discount which is what the discount for a person with Alzheimer's disease amounts to, does not mean that a person cannot be liable for the tax. That is clear if we look at the case of a discounted person who lives on his or her own. In that case, the tax will be reduced by 50 per cent. But the individual will still be liable for it, subject to any benefit entitlement. Again that point was made by my noble friend Lord Balfour as part of his question. There is no doubt that that individual would still be subject to 50 per cent. of the tax. The noble Baroness prays in aid the remarks of my honourable friend Mr. Chope in relation to the community charge. I must stress that that was a very different tax levied on very different principles. Here we are talking about a tax based on property.

The noble Baroness is concerned with a much narrower case and that is where two people are jointly liable for a council tax bill. This will happen where the pair are joint owners or tenants. It may cover the case the noble Baroness gave of a mother and son, or a brother and sister, or even for that matter a married couple. The noble Baroness argues that in these circumstances although it is right that the individual who is severely mentally impaired should retain some liability for the council tax, it is wrong for him to be liable for all of it. She argues that 25 per cent. of the bill represents the personal element of the other person, and that the person with the discount should not be liable for it. Certainly that is how the amendments read.

That argument is based on a misunderstanding of the way we propose that the council tax should work. It is a single indivisible tax and a single indivisible amount which is levied in respect of chargeable dwellings. It may be reduced according to the number of adults in a household or their status. As this discount is person based, it is reasonable to refer to it on occasions as the personal element of the tax. But it is not attributable to any particular individual. We can see that straightaway if we consider a house with three adults in it, all of whom are liable. To which of these three would the noble Baroness assign the two personal elements which she maintains are included in the bill? Nor does discount imply that the person giving rise to it is not competent to pay his own tax as I believe the noble Baroness was arguing. The point of the discounts is that those who are eligible for them should not add to the household bill. They say nothing about the competence or otherwise of the person who has to pay.

I can assure the noble Baroness that we have thought this through very carefully indeed. The amendment would not in fact prevent people who are severely mentally impaired from being liable. In the circumstances described by the noble Baroness where both fall to be liable under Clause 6, that liability would remain. It would not remove the liability for what the noble Baroness would refer to as the other person's liability. The amendment would simply not achieve the result that the noble Baroness seeks to achieve.

I do not make this point as a mere drafting quibble. The noble Baroness quoted an example of a difficult case of someone with Alzheimer's disease, or rather she referred to a mother who had a son with severe learning difficulties where the mother simply refused to pay the bill or abandoned her son. However, we do not feel it is possible to guard against every single possibility. People have responsibilities in many areas and it is always possible that some of them will turn their back on them. The law, however, should not be drafted on the basis that people will normally act in that way. The law should provide sensible arrangements for dealing with particular situations.

If we were to try to dictate the financial affairs of every household, we would be entering on very dangerous territory indeed. The arrangements allow those who find themselves in the position described by the noble Baroness to devise their own arrangements for paying the bill. Those arrangements can reflect the exact financial position of the household. In short, once it is accepted—I think the noble Baroness accepts this—that a person entitled to a discount may nonetheless be liable for a council tax bill, there is no case for lessening that liability in cases where someone else is jointly liable. There is no separate personal element in the council tax and if there were, these amendments would not relieve anyone of the liability to pay for it.

Joint and several liability under the council tax is entirely different, as I have said, from that under the community charge. There is no question of being liable for someone else's tax. Under the rates there were no special arrangements for people who were severely mentally impaired. Under the community charge which is a personal tax we provided that exemption. But, as I have said, the community charge was a very different animal from the council tax. We have carried this forward into a discount under the council tax. We believe we have arrived at arrangements which are in the main sensitive to people's circumstances. In the majority of cases, and perhaps even all of them, the arrangements will work well without any difficulties. I hope, with that explanation, that the noble Baroness will feel able to withdraw her amendment.

Baroness Hollis of Heigham

My Lords, I must say I am entirely unpersuaded by the Minister's response. We are not dealing with discounts here. We are discussing whether someone who is severely mentally impaired, and as a result is not liable for a bill, is nonetheless responsible for somebody else's bill. In all common sense as well as compassion that cannot make sense. I seek leave to test the opinion of the House.

8.25 p.m.

On Question, Whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided Contents, 95; Not-Contents, 83.

Division No. 4
CONTENTS
Addington, L.	Irvine of Lairg, L.
Airedale, L.	Jay, L.
Ardwick, L.	Jeger, B.
Aylestone, L.	Jenkins of Hillhead, L.
Barnett, L.	Jenkins of Putney, L.
Beaumont of Whitley, L.	Judd, L.
Birk, B.	Llewelyn-Davies of Hastoe, B
Blackstone, B.	Lock wood, B.
Blease, L.	Lovell-Davis, L.
Bonham-Carter, L.	Macaulay of Bragar, L.
Boston of Faversham, L.	McCarthy, L.
Bottomley, L.	McIntosh of Haringey, L.
Briginshaw, L.	Mackie of Benshie, L.
Callaghan of Cardiff, L.	Mallalieu, B.
Carmichael of Kelvingrove, L.	Mason of Barnsley, L.
Carter, L.[Teller]	Mayhew, L.
Castle of Blackburn, B.	Milner of Leeds, L.
Cledwyn of Penrhos, L.	Monkswell, L.
Cobbold, L.	Morris of Castle Morris, L.
Cocks of Hartcliffe, L.	Nicol, B.
Craigavon, V.	Ogmore, L.
David, B.	Parry, L.
Dean of Beswick, L.	Phillips, B.
Desai, L.	Pitt of Hampstead, L.
Dormand of Easington, L.	Ponsonby of Shulbrede, L.
Ennals, L.	Prys-Davies, L.
Ewart-Biggs, B.	Rea, L.
Falkender, B.	Redesdale, L.
Falkland, V.	Richard, L.
Gallacher, L.	Robson of Kiddington, B.
Galpern, L.	Rochester, L.
Graham of Edmonton, L.	Ross of Newport, L.
Grey, E.	Russell, E.
Hampton, L.	Seear, B.
Hamwee, B. [Teller]	Sefton of Garston, L.
Harris of Greenwich, L.	Shackleton, L.
Hatch of Lusby, L.	Shepherd, L.
Hollick, L.	Stoddart of Swindon, L.
Hollis of Heigham, B.	Strabolgi, L.
Holme of Cheltenham, L.	Taylor of Blackburn, L.
Hooson, L.	Thomson of Monifieth, L
Houghton of Sowerby, L.	Tordoff, L.
Hughes, L.	Turner of Camden, B.
Hunt, L.	Underhill, L.

Wedderburn of Charlton, L.	Wilson of Rievaulx, L.
Whaddon, L.	Winstanley, L.
White, B.	Young of Dartington, L.
Williams of Elvel, L.
NOT-CONTENTS
Aldington, L.	Hanson, L.
Arran, E.	Harmar-Nicholls, L.
Astor, V.	Henley, L.
Balfour, E.	Hesketh, L. [Teller.]
Barber, L.	HolmPatrick, L.
Beaverbrook, L.	Hooper, B.
Belstead, L.	Howe, E.
Bethell, L.	Jenkin of Roding, L.
Blatch, B.	Kinnoull, E.
Blyth, L.	Knutsford, V
Boardman, L.	Lane of Horsell, L.
Borthwick, L.	Long, V.
Brabazon of Tara, L.	Lucas of Chilworth, L.
Bridgeman, V.	Lyell, L.
Brigstocke, B.	Mackay of Clashfern, L.
Brougham and Vaux, L.	Malmesbury, E.
Caithness, E.	Mancroft, L.
Carlisle of Bucklow, L.	Mersey, V.
Carnegy of Lour, B.	Mountevans, L.
Carnock, L.	Mowbray and Stourton, L.
Cavendish of Furness, L.	Norrie, L.
Cochrane of Cults, L.	Northbrook, L.
Colnbrook, L.	Pearson of Rannoch, L.
Craigmyle, L.	Platt of Writtle, B.
Crathorne, L.	Prentice, L.
Crawford and Balcarres, E.	Rankeillour, L.
De La Warr, E.	Reay, L.
De L'Isle, V.	Renton, L.
Denton of Wakefield, B.	St. Davids, V.
Dilhorne, V.	Seccombe, B.
Elliott of Morpeth, L.	Skelmersdale, L.
Elton, L.	Stanley of Alderley, L.
Ferrers, E.	Strange, B.
Flather, B.	Strathclyde, L.
Forester, L.	Strathmore and Kinghorne, E.[Teller.]
Fraser of Carmyllie, L.
Gardner of Parkes, B.	Thomas of Gwydir, L.
Gray of Contin, L.	Trumpington, B.
Gridley, L.	Ullswater, V.
Haddington, E.	Waddington, L.
Haig, E.	Wolfson, L.
Hailsham of Saint Marylebone, L.	Young, B.

On Question, amendment agreed to.

Resolved in the affirmative, and amendment agreed to accordingly.

8.33 p.m.

Lord McIntosh of Haringey moved Amendment No. 13A: Page 5, line 10, at end insert: ("( ) No individual shall be treated as having his sole or main residence in the dwelling on any days when he

1. (a) is detained within the terms of paragraph 1 of Schedule 1; or
2. (b) he is employed in a country outside Great Britain and he does not reside in the dwelling for longer than a period to be prescribed by regulation.").

The noble Lord said: My Lords, Amendment No. 13A might be called a probing amendment, if that helps noble Lords to make their travel arrangements. In Committee we were concerned about the definition of "sole or main residence" in Clause 6. In the history of the poll tax there have been considerable difficulties about the definition and case law appears to have come down sometimes on one side and sometimes on the other. In the amendment we have taken two examples to see whether we can tease out the Government's attitude on the matter.

The first example that we give is of someone who is detained. I take that to mean that that person is in prison or at least on remand. At Committee stage in another place the Minister, Mr. Portillo, appeared very confident that someone who was detained under the terms of paragraph 1 of Schedule 1 would not be treated as resident in the dwelling. However, when pressed on the matter, Mr. Portillo did not seem able to cite any examples of what that meant. Nor did he seem able to justify his view. For the avoidance of doubt, we want to translate Mr. Portillo's assertion on to the face of the Bill.

Paragraph (b) of the amendment refers to a more complicated situation in which someone is employed in a country outside Great Britain and does not reside in the dwelling for longer than a period to be prescribed by regulation. As is so often the case with governments, it will be seen from the amendment that we are not able to make up our minds about the period which should be prescribed by regulation. However, local authorities have had difficulty making decisions in the case of somebody who keeps a residence here but is normally resident abroad, returning for periods of home leave or to visit family in this country for relatively short periods of, say, four to eight weeks in any 12 to 18 month period. The most common example might be a married couple living abroad who have children living in this country. We want to make sure that somebody who is employed in a country outside Great Britain but who does not reside in the dwelling for longer than a period to be prescribed by regulation will not be treated as having his sole or main residence in that dwelling.

Those are matters for clarification. I hope that the Government will be able to help us understand the definition of "sole or main residence." I beg to move.

The Earl of Balfour

My Lords, following on from what the noble Lord, Lord McIntosh of Haringey, said, I should like to ask a question in respect of the position of Merchant Navy personnel who may be out of the country for 11 months of the year.

Lord Strathclyde

My Lords, the noble Lord, Lord McIntosh, said that the amendment was a probing amendment. This is the second time the matter has been probed because we discussed it in Committee. As the noble Lord said, there is nothing wrong with that. He can continue probing until the cows come home.

The amendment provides that no person shall be determined to be solely or mainly resident in a dwelling if he is in prison or if he is working abroad for more than a prescribed period. It is unnecessary since the current provisions of the Bill ensure that a prisoner receives a discount whether he is deemed to be resident at home or in prison. Most prisoners will have their sole or main residence in the place where they are detained. Where a sentence is relatively short, prisoners may, however, be deemed still to reside in the dwelling which they own or rent outside a prison. However, whether a prisoner is deemed to have his sole or main residence in prison or outside it, the provisions of this Bill will ensure that he will not add to the bill for any dwelling. If the dwelling is unoccupied while he is in prison it will be an exempt dwelling.

We cannot see any great advantage in a statutory prescription. It will make no difference to discounts. Even if a prisoner is deemed still to be resident in his own home he would be eligible for discounts. The only effect would be to prevent a prisoner from continuing to be jointly liable for the (probably discounted) council tax bill for a dwelling where his wife or joint owner/tenant still lives.

In the case of those working abroad, the Anderton Judgment has already provided clear guidelines for determining what constitutes sole or main residence and we see no reason to go further down that road. From the point of view of a merchant seaman, which was the point raised by my noble friend Lord Balfour, it was proved that a person's sole or main residence cannot be on board ship. It is clear from that judgment that time spent at a dwelling is not the only factor to be taken into account. To base a definition on time would be to risk achieving some very odd results. Sole or main residence is a question of fact to be determined in each case. There are helpful precedents on which to base a decision.

In the light of that explanation I hope that the noble Lord, Lord McIntosh, will feel that he has probed enough and is satisfied.

Lord McIntosh of Haringey

My Lords, the Minister suggested that we could probe until the cows come home. I do not believe he noticed that the cows came home on the last amendment. I do not say on which side the cows were to be found.

In his reply, which I found helpful, the Minister went some way to satisfy me about a person who is detained. As he said, it is reasonable that somebody on a long-term sentence should have his sole or main residence in the place of detention. I agree that there could be complications about short sentences, although such complications are caused by the insistence of the Government adding to a property tax the personal element which is calculated on a daily basis. It would be much simpler if we had an improved rating system. However, I shall not be tempted to go down that path.

His answer about merchant seamen was somewhat curious. He will recall, because it was discussed in Committee, that there have been cases on both sides. In one case it has been found that a merchant seaman could not have his sole or main residence on a ship; in another case it has been found that he could do so. Our probing, even though it has been reasonably persistent, has not got to the bottom of this matter. We shall still find ourselves in the position of having case law accumulate and the situation will take some time to become rational. I feel that to some considerable extent that is the Government's fault for imposing a combination of personal and property taxes in the form of the council tax. However, it is fair to say that this is not a matter to which we shall return at Third Reading. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 14 not moved.]

Clause 8 [Liability in prescribed cases]:

Lord McIntosh of Haringey moved Amendment No. 15: Page 6, line 27, at end insert: ("(7) A person who is liable in respect of any chargeable dwelling under subsection (3) above shall have a duty separately to notify each resident of—

1. (a) the amount that resident shall pay to that or any other person in respect of council tax for that dwelling; and
2. (c) the amount that that resident shall pay to that or any other person in rent.

(8) At no time shall the total of the amounts, in respect of any chargeable dwelling, referred to in subsection (7) (a) above exceed the council tax due for that dwelling for that day or any other period. (9) The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident.").

The noble Lord said: My Lords, this amendment was referred to and discussed to some extent at Committee stage. I do not apologise for returning to this matter. I do not feel that our message adequately penetrated to the Government Front Bench. Noble Lords will forgive me if I remind the House that, during the passage of the poll tax Bill for England we pointed out that the similar Bill in Scotland, which had been enacted the previous year, had already resulted in very considerable injustice because of the Government's refusal to enforce any liability in law for landlords to reduce rents when the rents which they had charged were inclusive of rates and those rates were no longer applicable.

It was shown to the House in considerable detail that in Scotland, where the law had been enacted a year before, landlords were profiteering. They were not reducing rents to represent the reduction in their costs. They were no longer paying the rates and the individual tenants were paying the poll tax. The Government ignored our warnings and the evidence we produced to show that even at that stage, in 1988, profiteering by landlords amounted to something of the order of £40 million. Evidence now available from the introduction of the poll tax in England shows that the amounts of money which were quite unjustifiably retained by landlords, since they should have been handed over to their tenants as a result of the introduction of the poll tax, are very much greater than £40 million. It is almost impossible to put an exact figure on the sum. It is clearly an unknowable statistic since the people concerned are hardly likely to confess to the amounts that they have unjustly retained. However, the sum of £200 million is certainly not an underestimate for the first year of operation of the provision.

The Government having been told that such a thing would happen, having been warned that it would happen again and having been shown that it had happened again, I should find it quite extraordinary that, when they moved over to the council tax, they should still persist in that quite unnecessary protection of exploitation and profiteering by landlords.

This is a very modest amendment. New subsection (7) provides that the landlord should have the obligation to notify all those concerned—all their tenants—about the amount of the poll tax bill that is to be collected on their behalf in the whole dwelling. New subsection (8) states that the total amount added to the rent should be no greater than the additional amount to be paid in council tax. New subsection (9) provides that the division between the different tenants should be equitable, bearing in mind the property which they occupy.

I remind noble Lords that dwellings where payments are collected together—multi-occupied houses—are in any case a difficult kind of dwelling from which to collect rent, poll tax or council tax. The provision exists in the Bill for councils to agree that council tax should be levied collectively from such multi-occupied houses rather than be collected individually. They will do so, although in theory the amount that will be obtained from the council tax will be less, when they realise from the nature of the tenants and the accommodation that they occupy that it would be virtually impossible to collect the council tax individually —in other words to declare them to be separate dwellings. Very often it is short-term accommodation or lodging houses for people who have very few roots. A good deal of the accommodation is shared—bathrooms, kitchens, WCs and so on—and often the rooms have never been rated as separate dwellings in the past. It is therefore commonsense to do as the Government propose.

We now say only that when that happens, landlords should not be able to charge more on the grounds that they are assuming a council tax liability. They should not be given an opportunity to overcharge at the expense of tenants who themselves are very often the poorest people in our society. I beg to move.

8.45 p.m.

The Earl of Balfour

My Lords, while I managed to follow what the noble Lord said, I am extremely unhappy about the wording of the amendment. New subsection (8) mentions: At no time shall the total of the amounts". I have in mind electricity, gas, telephone charges, and so on. If this amendment is accepted as it stands, it appears to me that it could allow the subtenant to live virtually rent free. The amendment is defective, although I understand its intention. Subsection (9) states: The amount each resident may be asked to pay shall be no more than the amount that would reasonably reflect the proportion of the dwelling occupied by that resident". In dealing with that proportion, the provision seems to cover just the council tax and nothing more. There are many other items to be considered.

Lord Monson

My Lords, it seems to me that in principle the noble Lord, Lord McIntosh, made out a very good case for the amendment, although it may possibly have technical defects, as the noble Earl, Lord Balfour, suggested.

Earl Howe

My Lords, Amendment No. 15 and its Scottish equivalent, Amendment No. 36, add three new subsections to Clause 8 which, in particular cases, places liability for payment of the council tax on the owner of a dwelling or other prescribed person. The amendment would require any person who has been made so liable to notify each of his residents of the amounts of council tax and of rent that each shall pay and to whom the payments should be made. It provides that the total of the amounts paid by the residents in respect of council tax should not exceed the amount due for the particular dwelling. The amendment also provides that the amount paid by each resident should reasonably reflect the proportion of the dwelling he occupies.

As the noble Lord reminded us, we discussed the amendment in Committee. We had a full debate at that time. As my noble friend Lady Blatch stated then, the end result of the amendment, for all that the noble Lord said, would be an unwarranted interference in people's private lives. Where the landlord has been made the liable person, he will have to pay the council tax bill. If he then chooses to collect contributions towards the bill from his tenants it is completely up to him how to do so. Landlords cannot sensibly be required to identify every individual component that makes up the rent that they charge tenants. They should be free to decide how they will reflect council tax in rent payments. They do not have to account separately for other overheads such as insurance or maintenance costs when determining rents. So why should they have to account separately for the council tax? The noble Lord cannot ignore the fact that for landlords the council tax is as much an overhead as his utilities' bills.

Even if a landlord were required to do what the noble Lord proposes, how could it be policed or enforced? The stated intention of the amendment is to prevent landlords from profiteering. But it is always possible for a landlord to load the rent in any number of different ways if he is so minded. The provisions of the amendment in the end would be completely pointless. I am sure we all agree that it is desirable that landlords should deal honestly with their tenants. However, I do not believe that we can or should attempt to write the provision on the face of the Bill.

My noble friend Lady Blatch assured your Lordships that non-resident landlords will be made responsible for the council tax only in a small minority of cases, principally where it would be difficult to bill the residents directly. Under the rating system, to which noble Lords opposite would doubtless like to return, the rates were paid by the landlord in a far greater number of cases. Consequently, contributions for the rates were included in rents in a greater number of cases. However, under the council tax, inclusive rents will, I suggest, be the exception rather than the rule.

The issue has attracted a great deal of attention and a full debate on two occasions. However, I can see no convincing reason why council tax contributions should be separated from rent. I therefore hope that the noble Lord will withdraw his amendment.

Lord McIntosh of Haringey

My Lords, I was very interested in the noble Earl's reply. I was particularly interested in his statement that the landlord may load the rent in any way he chooses. I believe that those were the noble Earl's words. Of course it is all too possible for landlords to do that. They still have that power even in the weakened economic circumstances in which landlords find themselves at present.

There are those who believe that rent control and public intervention in the housing market are an economic disaster responsible for many of the difficulties of recent years. There are those in the Conservative Party who take that view. I see the noble Earl, Lord Balfour, nodding approval. That has never been the position of the Government until now. The Government's approach to the liberalisation of the housing market has been notably cautious in the legislation with which I have been involved in this House in recent years. The Government have shrunk from the implication of what the noble Earl has just said. Certainly, the imposition of a new taxation system which provides an opportunity for landlords to change rents is a matter to which the Government should not be indifferent.

I believe—perhaps the noble Earl does not agree—that the size of the problem is not as great as it was when the poll tax was introduced. With large numbers of inclusive rents, the fact that landlords retained hundreds of millions of pounds when they no longer had to pay the rates does not mean that the problem is on that scale now. The boot is now on the other foot. Landlords are taking on additional obligations. Quite properly, they have to make an additional charge to their tenants to cover those additional obligations. However, anyone who considers the history of the way in which landlords have exploited opportunities—I shall not refer back to Rachman or those issues—must agree that any opportunity which can be taken by landlords to make an extra few pennies or an extra few pounds out of tenants will be taken.

We have remnants of rent control in this country. We have assured and secure tenancies of various kinds. We have rent tribunals. We have assessments of rent. There are a number of ways in which the housing market is controlled by government actions. It seems a modest change to suggest that, because of government action, because of the introduction of the council tax and the provisions in the Bill that houses in multiple occupation may be assessed collectively rather than individually, the tenants of those houses should be protected against exploitation.

I am sorry that the Government take the view that they do. I should have thought that the amendment in no way damaged the thrust of the Bill. I would have hoped that they would be more sympathetic towards it. However, at this time of night I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord McIntosh of Haringey moved Amendment No. 16: Page 6, line 27, at end insert: ("( ) Subsections (3) and (4) of this section shall not apply to any chargeable dwelling owned by a local authority or a registered housing association.").

The noble Lord said: My Lords, the amendment relates to a specific case of joint and several liability. The issue has been the subject of considerable debate in your Lordships' House both in Committee and earlier today. We are concerned with the specific case of a chargeable dwelling owned by a local authority or a registered housing association. We wish to ensure that local councils and housing associations are not made responsible for the collection of the council tax from such dwellings as hostels. We refer to a different kind of landlord. One might call him a social landlord.

Under the poll tax the local authority may designate a dwelling with a high turnover of residents to be subject to the collective community charge. I shall not weary your Lordships with the collective community charge that we debated at such length four years ago. Where the collective community charge applies, the landlord is responsible on a daily basis for collecting the community charge from the residents but it is the landlord who has to pay. Because there is a considerable administrative and financial burden, there is a right of appeal against designation for the collective community charge.

A number of housing associations run hostels and similar dwellings. They were very upset about the provision when it was introduced in the poll tax. They have been fairly successful in arguing against designation for the collective community charge. They are now worried that Clause 8 of the Bill as drafted will enable the Secretary of State to impose a similar regime on all hostels, not just short-stay hostels. It was a matter that we discussed on the poll tax Bill. But this time there would be no right of appeal. The housing associations understand that as causing the same burdens for them as those which could have existed under the collective community charge procedures. When local authorities run hostels they will be in the same position.

At the very least the provisions which existed under the poll tax legislation for appeal should apply in this case. There should be some relief for the social landlords, the local authorities and the housing associations, against what might be in certain circumstances an intolerable imposition. I beg to move.

The Earl of Balfour

My Lords, before the noble Lord sits down perhaps I may ask him one question. Will caretakers in charge of such residences come under the provision?

Lord McIntosh of Haringey

My Lords, the council tax is a property tax; it is a tax on the property and not on the individual. I am sure that the Minister will be pleased to enlighten the noble Earl on that point.

9 p.m.

Earl Howe

My Lords, Clause 8 empowers the Secretary of State to make regulations placing liability for the council tax on the owner of a dwelling, or other prescribed person, rather than the residents in certain cases. Amendment No. 16 seeks to prevent liability being placed on local authorities or registered housing associations.

We intend to transfer liability for types of dwelling where it would be difficult to bill the residents directly. Those are principally houses in multiple occupation (HMOs) and hostels. Some of those may be owned by local authorities or housing associations. We recognise that local authorities would of course be able to bill their residents directly as they would already be billing them for rent. However, as people living in dwellings such as HMOs, for example, are often very mobile local authorities would frequently have to reassess liability and reissue demand notices. It would be easier administratively for there to be one bill directed at the owner.

Local authorities and housing associations will not lose out. They will be able to seek contributions towards the council tax bill for any dwelling from the residents of that dwelling, as with other overheads such as insurance or maintenance costs.

The effect of the amendment would be to make life more difficult for local authorities. I believe that our proposals make administrative sense. I hope that in the light of what I have said the noble Lord will feel able to withdraw his amendment.

Lord McIntosh of Haringey

My Lords, the Minister's answer sounded like mere assertion rather than a reasoned argument. Perhaps understandably the noble Earl is using the short version of his brief, but I do not believe that he has answered the points that were raised by the amendment. I shall have to think about his answer. It is not an amendment upon which I wish to seek the opinion of the House, but I am bound to say that I was not happy about the answer that he gave. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 9 [Liability of spouses]:

Lord McIntosh of Haringey moved Amendment No. 17: Page 6, line 35, at end insert: ("(1A) Subsection (1) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").

Baroness Hollis of Heigham moved Amendment No. 18: Page 6, line 35, at end insert: ("( ) Subsection (1) above shall not apply to any person in respect of any day when he had an income which would not have exceeded his applicable amount as a single person or as applicable as a single parent for the purposes of entitlement to income support calculated according to Part 1 of the Social Security Act 1986 if he made a claim for that benefit on any day during the period when liability arose.").

The noble Baroness said: My Lords, in moving the amendment I shall speak also to Amendment No. 38. We return to the issue of joint and several liability and are dealing with the situation of partners in receipt of low incomes. There are several situations in which a partner may be pursued for an unpaid council tax bill in the name of his spouse or co-habitee. That is most likely to occur when one partner remains in the marital home while the other partner is unobtainable. That may follow, for example, the breakdown of a relationship, the death of a partner, a severe stroke or the development of a condition such as Alzheimer's disease. Clearly there are circumstances in which it is appropriate for a spouse to meet outstanding council tax payments. However, the amendment seeks to exempt local authorities from the requirement to pursue spouses and co-habitees for the council tax which relates to any period when they had an income at or below the income support level and would therefore have qualified for a 100 per cent. rebate in their own right if they had not been living with a partner.

It deals with the situation in which people find themselves with a bill which, had they been eligible for rebate, would have been met because of their low income. However, in a situation in which the liable person claimed a rebate under joint and several liability he or she is not now able to claim that rebate. As a result he or she is being pursued for debts incurred in a situation in which the spouse had no such income.

In Committee I accepted the argument put forward by the noble Lord, Lord Henley, that he would not wish to build into legislation a perverse incentive for a husband to disappear in order to avoid paying debts knowing that the wife could automatically pick up backdated rebates. However, there are two situations which were not then fully explored and on which I hope the Minister will give us some help. First, perhaps the husband has moved away from the area to another local authority and is untraceable. Clearly it is not a matter of convenience and in that situation the local authority is more than likely to turn to the bailiff procedure in order to extract payment. Secondly, perhaps the husband has died leaving debts. The spouse or co-habitee will also have problems of bereavement. It is clear that in both circumstances we are not talking about a perverse incentive but a matter of compassion. We are saying that a spouse in that situation, usually the wife, who had no income or was below income support levels at the time the debt was incurred, should automatically be entitled to the backdated rebate as though she had that income. I hope that in the spirit in which the amendment is moved the Minister will find ways of accepting it. I beg to move.

Lord Henley

My Lords, I remember well the amendment moved by the noble Baroness in Committee. She agreed that it would be wrong to create a perverse incentive. I shall put the matter purely in terms of husband and wife, the husband doing what is called "a runner" leaving debts. The noble Baroness accepted that it would be wrong to provide an incentive for the couple to split up leaving the debts with the wife when before the split they were well above benefit level. The provision suggested would be a strange new addition to the benefit system. The noble Baroness is suggesting that one could look at the wife's state as though she had been single when she had been one of a couple and therefore allow the backdating of benefit.

We do not believe that that would be the right way forward. However, we accept, as the noble Baroness said, that there may be occasions on which the husband is untraceable. Therefore, there may be a danger that the council will pursue a wife who, although she would have entitlement to benefit from the moment he left—and we are at one about the fact that the benefit arrangements will pick her up at that moment—will still be liable for previous debts.

As I have said before, in deciding which partner the authority must proceed against, it must look at who has the greater resources. Therefore, the authority will look at the husband, but as the noble Baroness said, there may be occasions when the husband is untraceable or he has just disappeared. As I mentioned earlier, there is a department practice note on joint and several liability as regards the community charge. That advised local authorities to take particular care when deciding whether to enforce liability in such circumstances. It advised that in cases where the partner has left—for example, the husband who has done a runner and cannot be traced—the authority will need to consider whether to enforce the joint and several liability of the remaining spouse taking account of, for example, policy on write-offs.

In Committee I dealt in some detail with the policy which local authorities have in pursuing debts. In their standing orders they can have a rule that debts below a certain amount need not be pursued but if they are above a certain amount, the authority must go through its finance and general purposes committee. As I understand it, if a larger debt is written off, that must be brought to the attention of the district auditor.

It would be wrong to allow someone benefit in respect of a period when they were still living with the partner whose income was sufficient to take them out of benefit. That could send strange messages about our attitude to marriage. Again, there would he a problem as regards deciding how far benefit entitlement should be back-dated. If it was back-dated long enough to allow the entire debt to be discharged, that would give a blank cheque to people who wished to walk away from their partners.

Having said that, we recognise that authorities must treat those cases extremely carefully. In certain cases it must be appropriate for them to write-off the debt of the deserted spouse. A sensitive approach is required. However, we believe that it is important that the blank cheque proposed in this amendment should not be given. That is not an appropriate way forward. I hope that the noble Baroness will withdraw the amendment.

Baroness Hollis of Heigham

My Lords, before the noble Lord sits down, perhaps I may say that that was a helpful response. Does that mean that he would expect his department to issue a practice note, as was the case as regards the community charge, dealing with joint and several liability? If that is done, guidance will be given to local authorities as to how to respond in this situation. I should be content if that is to be done. We both seek to avoid a situation in which a wife continues to have joint and several liability for debts which she had no income to meet at the time when they were incurred.

Lord Henley

My Lords, I thought that I made it clear in Committee that the department will issue guidance on the matter. We believe that a sensitive approach is required but we still believe that liability should remain with the wife. It may be that the wife has adequate resources to meet the debt for which she is jointly and severally liable. It may be unfair in a situation in which the husband has more resources with which to meet the debt but has disappeared. However, as I said earlier, one cannot legislate for every eventuality. Certainly in a case where a wife has extremely limited resources, it must be a matter for sensitive treatment by the local authority. As I have said, we shall issue guidance on that matter as we did as regards the community charge.

Baroness Hollis of Heigham

My Lords, I thank the Minister for that reply. The guidance as regards the community charge—practice note No. 16—made it clear that local authorities should pursue the person who was liable for the debt and that local authorities would not normally be expected to pursue the wife where she did not have the resources to meet the debt at the time when it was incurred. That is what practice note No. 16 says as regards the community -charge. Therefore, in practice, the substance of the amendment is met.

If the guidance note follows that line, then that is rather stronger than was previously indicated by the Minister and I am content with that. Perhaps the noble Lord will write to me on that matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 11 [Discounts]:

Baroness Gardner of Parkes moved Amendment No. 19: Page 7, line 21, leave out ("a discount equal to twice the appropriate percentage of that amount") and insert ("the full rate").

The noble Baroness said: My Lords, Amendment No. 19 seeks to ensure that those owning a second home pay full council tax. It was pointed out to me that the wording may apply only to empty homes and that is certainly not my intention. I propose that full council tax should be payable on all second homes.

It is against all natural justice that those fortunate enough to own two homes should pay at only half rate. To go from a full—double—community charge to a half council tax charge is indefensible. I say that knowing that if the Government accept the amendment I shall be among the losers by the change in the tax. I therefore make the proposal in the spirit for which your Lordships' House is renowned; that is, with fairness as the prime consideration.

We have spoken throughout our discussion on the Bill about the people who are disadvantaged. Anyone with two homes must be advantaged. I do not intend to go into the matter of lost revenue for local councils, although that is a factor. It is relevant in Westminster but I should make clear that that council has not asked me to raise the matter. My interest is in respect of the property owners who have the asset of a second home, and I can see no case for their receiving preferential treatment, as I believe they do under the present proposals.

I understand that Amendment No. 19 is grouped together with Amendments Nos. 21 to 24 tabled by the noble Lord, Lord McIntosh. I do not support his amendments, which make the tax payable at the discretion of the local authority. That is not the ideal way of being fair. My aim is not to achieve a discretionary arrangement but simply to impose a full council tax rate. I beg to move.

9.15 p.m.

Lord McIntosh of Haringey

My Lords, I understand that Amendments Nos. 21 to 24 are grouped with Amendment No. 19 moved by the noble Baroness, Lady Gardner. I am sorry to hear, as she suggests, that her amendment may be technically defective. If it were effective I should have no difficulty in supporting it. It was out of my natural spirit of moderation and compromise that I tabled amendments which gave some discretion to local authorities not to impose a full council tax if they felt it appropriate under certain circumstances. If Amendment No. 19 achieves the aims of the noble Baroness and does not simply cover empty properties, I hope that she will feel disposed to pursue the matter.

I am again perhaps being a little slow off the mark. We did not fully realise the significance of the issue at Committee stage. However, I am reminded of its importance when I look back at the Second Reading debate, when the noble Lord, Lord Strathclyde, was asked why the Government did not apply the principle in regard to the 50 per cent. rebate on second homes in Wales. On the 9th January at col. 1645 he said: in Wales there is a different cultural history and attitude to second homes. It is for that reason that it was felt necessary by the Secretary of State for Wales to have a different system. It is one of the charms of the British Parliament that we can have these different ways of doing things for different parts of the United Kingdom". I rather feel that the noble Lord failed to read out the next sentence of his brief, which I am sure would have read, "A rather poor argument, but good enough for your Lordships". That is something we have heard on occasion from the Government Front Bench.

It is clearly a nonsense that we should have a provision that there can be a full charge in Wales and yet in England and Scotland there is not that provision. If that is the wish of the House I gladly support the noble Baroness's amendment of a mandatory 100 per cent. council tax being imposed. However, if the amendment is defective in any way perhaps she will think again and recognise that although my amendments allow discretion, in practice, as with the poll tax, they would result in the maximum amount of 100 per cent. being charged by virtually every council in the country. The noble Baroness may find that there is a distinction without a real difference.

Lord Ross of Newport

My Lords, as it was my intervention which brought forth the response, I must say in defence of the noble Lord, Lord Strathclyde, that the noble Baroness, Lady Hollis, concluded with the interjection, "Good effort, my Lords!" That is hardly what the noble Lord, Lord McIntosh, just said.

However, I totally support the amendments. Like the noble Baroness, Lady Gardner, I do not wish to impose a charge on people whose homes are empty because for some reason or another they cannot sell them—there must be many people in that position at the moment—or on people who are abroad on business and may be abroad for more than six months but for one reason or another do not wish to let the property because they are not entirely sure when they will return. That is a situation which befell my own son, who fell foul of the poll tax and faced an enormous bill. I felt that was grossly unfair.

However, it is daft to say that because Wales seems to have a rather more bloody-minded attitude to second homes than England and Scotland, it should have this discretion of either charging the full amount or possibly giving a 25 per cent. discount, whereas in England and Scotland the discount is up to 50 per cent. People feel just as strongly about second homes in Cornwall or in the Lake District, as I am sure they do in Wales. But apparently setting fire to them seems to have stirred the Government into action; they are doing something different.

I was staggered when listening this morning between 9 and 10 a.m. to a discussion on Radio 4 on the curriculum for music. It appears that the proposals of the three wise men have been accepted in Wales and in Scotland but have not been accepted in England and are causing all sorts of problems. We see letters to the press from leading musicians of the country.

We also have a different situation with local government reform. Whereas in England and Scotland we are to have a commission which will look into the matter and report, which must be right, in Wales they are not. Why do we have these differences? That seems to be a great argument for the Scottish Parliament and the Welsh Assembly. Perhaps that is the right thing to do. If they had that jurisdiction to act for themselves I could not complain in one iota. But that is not the case. The Bill applies to the United Kingdom as a whole. Therefore I do not believe that it can possibly be right separately to legislate in Clause 12 so that people with second homes in Wales will not get quite such a big discount or even no discount at all; whereas people with second homes in England or Scotland may get up to a 50 per cent. discount, or possibly more, because it is left to an affirmative order from the Secretary of State.

Therefore, I totally support these amendments. If they are defective, then the Government ought to do something about it. I hope very much that we shall get a reply which concedes that this matter should be looked at again, even though time is short. It would be wrong to put this on the statute book in its present form.

The Earl of Balfour

My Lords, I should like to say a few words from the opposite way round. I apologise for repeating myself because I raised this matter at Committee. I was thinking particularly of Scotland and the case of Ravenscraig where a great many people have lost their jobs. I quoted the example of a man who had an old grandmother living with his wife and two children at home. He went off to look for another job in Birmingham. I said then that when he got his new job he would be on probation for at least a year.

Under the conditions of Clause 11(2) (a) he could argue that he was only a temporary resident in his new home in Birmingham and be eligible for the 50 per cent. discount. I felt that that was very encouraging. I am sorry if this amendment is to be accepted because that man will miss out. He will have to pay three-quarters and not just half the tax. I felt that people looking for another job deserved some help.

Lord McIntosh of Haringey

My Lords, before the noble Earl sits down, nobody disputes the sincerity of his anxiety. But the example he gives is not that of a second home. He is talking about someone who leaves behind a family in a home near Ravenscraig. Under the terms of the Bill, the definition of a second home is a home with no resident.

Lord Monson

My Lords, I strongly support the efforts of the noble Baroness, Lady Gardner, and the noble Lord, Lord McIntosh, to ensure that the owners of permanent second homes—not the sort of people to whom the noble Earl, Lord Balfour, referred—pay their council tax in full or if not in full, at least at a rate considerably greater than the 50 per cent. proposed by the Government.

Like the noble Baroness—and like, I suspect, a number of your Lordships—I own two homes. Although nobody in this world is disposed to look a gift horse in the mouth, in all honesty I do not see that I, or we, deserve this gift from the Government, especially bearing in mind that under the old rating system owners of second homes paid rates in full. Under the poll tax, owners of second homes paid the poll tax in full. If they were among the relatively few owners of second homes who were single, they may have paid double the poll tax on their second home.

Why should the unfortunate permanent inhabitants of Cornwall, many of whom are fishing folk or people who are not particularly well off, have to pay higher tax because the wealthy Londoners who own homes which they inhabit for weekends or for holidays are paying at only 50 per cent.? It is not justice.

Baroness Blatch

My Lords, the Government propose that there should normally be a 50 per cent. discount from the council tax bill for any home which is no one's sole or main residence. That follows from the fundamental nature of the council tax, which takes account both of property and of persons. In general, there will be no discount for homes with two residents; a 25 per cent. discount for homes with one resident; and a 50 per cent. discount for homes which are no one's residence. That is a logical progression. This amendment would remove the discount for properties with no residents, and make them subject to a full bill. That flies in the face of the logical system I have described.

I am in something of a difficulty because, although we have amendments on the Marshalled List, I know that my noble friend has spoken somewhat obliquely to this amendment and has spoken to an amendment that does not appear on the Marshalled List. To that extent, Amendment No. 19 is defective.

The amendment would mean that we impose more tax on an empty dwelling than on one with just one resident. That cannot be right. If enacted, the amendment would have two more effects, which I do not imagine were intended by my noble friend. The first would be to levy a full charge on a dwelling where all the residents fall to be disregarded for the purposes of discount. So a house occupied by two youth training trainees, or by a number of members of a religious community, would give rise to a full bill instead of the 50 per cent. bill proposed by the Government.

The second effect of the amendment would be to introduce incentives for couples with two homes to try to manipulate the system to their own advantage. Under the Government's proposals a couple with a country cottage who were both mainly resident in their town flat would pay a full 100 per cent. bill on the flat and a 50 per cent. bill on the cottage. If one of them were resident in each place, they would pay a 75 per cent. bill on each; and if they were both resident in the country they would pay 100 per cent. there but only 50 per cent. on their town address. Noble Lords will note that, wherever they are resident, these bills add up to 150 per cent. of a full council tax. The exact amounts will of course depend on the banding of the properties and the local authority's spending.

Under my noble friend's amendment, the couple would still only pay 150 per cent. if one of them was deemed to be mainly resident at each address. But if they were both deemed to be resident in one dwelling, their total bill would rise to 200 per cent. I would expect that to encourage some couples to try to arrange their affairs so that it appeared that one of them was mainly resident in each dwelling. I do not think that we should devise a system which contains incentives to abuse of this kind.

We have heard from the noble Lord, Lord Monson, an expression of guilt about making, or not making, a full contribution to the council tax on a second home. We recognise that unoccupied properties impose costs on local authorities, because they increase the need for services such as street lighting, refuse disposal, policing, planning and highways. It is therefore right that their owners should contribute to local taxes. But occupied properties impose greater demands on services. If a dwelling is no one's sole or main residence it is unlikely that the owner will make much use of local education or social services. These services together represent a substantial proportion of local authority spending. A 50 per cent. payment will fully reflect the acknowledged costs which noble Lords' second homes are likely to impose upon the community. Noble Lords therefore have no need to feel guilty.

Turning to the Welsh amendments, in England and Scotland these arguments of fairness must prevail, and we must restrict the council tax for empty properties to 50 per cent. of the full bill. However, in some parts of Wales there are very special circumstances, none of which were referred to by the noble Lord, Lord Ross, which have led us to make different provisions. These are contained in Clause 12 of the Bill. Amendments Nos. 21 to 24 seek to extend the special Welsh provisions to England and Scotland. The Government are convinced that that would not be appropriate.

First, I must tell the noble Lord that Amendments Nos. 23 and 24 are defective because Part I of the Bill, which contains Clause 12, relates to England and Wales only. But aside from that technical point, we disagree with the principle of the amendments. Many parts of Wales, particularly rural areas, have large numbers of second or holiday homes. Before noble Lords rise to say that the same is true of parts of England, perhaps I may give a few examples.

According to the Welsh intercensal survey of 1986, the proportion of the housing stock in the districts of Dwyfor and Meirionnydd in Gwynedd which consisted of properties known, or thought to be, second or holiday homes was 17.5 per cent. and 16.8 per cent. respectively. That is a very large percentage in anyone's book. A number of other districts had a high incidence of second homes: Aherconwy, 7.2 per cent.; South Pembrokeshire, 7.1 per cent.; Anglesey, 5.3 per cent.; and Ceredigion, 5 per cent. A total of nine districts out of the 37 in Wales had an incidence of second homes of 4 per cent. or more.

Demand for second homes in Wales means that in some areas house prices are pushed higher, beyond the reach of local people, particularly first-time buyers. That may lead to displacement if local people cannot find alternative accommodation and is probably a factor in outward migration from Wales, the tide of which successive governments have sought to stem. The highest incidence of second homes is often found in the rural areas where Welsh is widely spoken. That can lead to the break-up of local Welsh-speaking communities. In extreme cases, virtual ghost villages can be created, villages where nearly all the houses have been turned into second homes which lie empty for most of the year.

The Government have done much to help local people enter the housing market in rural areas. Housing for Wales—the Welsh equivalent of the Housing Corporation—spends 27 per cent. of its budget, or £32 million, in rural Wales. That includes a village housing initiative to provide continuity of low-cost home ownership. In addition, the Welsh Office has provided over £6.8 million this year for rural housing initiatives.

The Government's proposals for second homes under the council tax in Wales complement those policies and would allow district councils in Wales to continue to have discretion about the level of taxation for second homes, just as they have discretion at the moment in setting multipliers for the standard community charge.

The position is quite different in England. Just one in 15 English districts has more than 4 per cent. of properties which are second homes, compared with 25 per cent. of Welsh districts. There is no comparison between the two. Up to 17 per cent. of properties in some parts of Wales are second homes. By comparison, only one English district outside of London has over 10 per cent. of unoccupied properties.

Second homes in Wales have a particularly pronounced effect on local communities because of the language difference. The areas with most second homes are the predominantly Welsh-speaking ones.

There is, of course, absolutely no parallel to the situation in England. However, it is a matter of degree. There seems to be considerable evidence to show that the situation in Wales is different from that in England.

Nothing noble Lords have said today has shown that the circumstances in England and Scotland are similar to the particular circumstances of Wales. The Government do not accept that the provision in Clause 12 is necessary elsewhere. It is there to meet the particular needs of Wales. For that reason, I hope that the noble Lord will not press the amendment to a vote; but, if he does so, I ask the House to reject it.

9.30 p.m.

Lord Monson

My Lords, before the Minister sits down, does she agree that unoccupied homes are more likely to be burgled or catch fire than occupied ones? To that extent at least, are not unoccupied homes a greater drain on local government resources than occupied ones?

Baroness Blatch

My Lords, I am not sure to which amendment the noble Lord is speaking. However, I believe that I have already said enough on the matter; indeed, my noble friend Lord Balfour mentioned the injustices of going for a full 100 per cent. flat rate on unoccupied homes. I said that there would be no hardship to the noble Lord or to other noble Lords in the House. But I am suggesting that the proposal would be unfair to some people. Simply because we in this Chamber feel that we can afford to pay more, it would be quite wrong to subject other second home owners to such a provision.

I should remind the noble Lord that the amendment to which my noble friend would have preferred to speak related to all second homes. However, we are at present speaking to an amendment which deals with unoccupied homes. In Wales, I have spelt out that the degree and the quantity of unoccupied homes—in other words, almost genuinely holiday homes—is much greater. Therefore, there is flexibility for the Secretary of State for Wales to exercise that a class of home shall be treated in a slightly different way.

Lord Ross of Newport

My Lords, there seems to have been a total change of attitude in the department. I do not think that the Minister was in the department when the poll tax legislation went through, but at that time a person was charged two-and-a-half times for a second home. That was the property element. What has suddenly come across the department for it to change its attitude and to cut the charge right back to half?

Baroness Blatch

My Lords, there was a great deal of unfairness in that the discretion that was given to local authorities to implement the community charge was invariably exercised to the full. The charge was not two-and-a-half times the average, but twice. It was 200 per cent., rather than 250 per cent. We believe that such discretion would again be exercised in a blanket way across all local authorities and that there is therefore a case for charging second homes in this country at 50 per cent. and for allowing flexibility because of the nature of the difference of unoccupied homes in Wales.

Lord McIntosh of Haringey

My Lords, I hope that the House will forgive me if I rise yet again before the Minister attempts for the third time to sit down. I seek simply to correct a mis-statement of my own. In response to the noble Earl, Lord Balfour, I suggested that his example was not apposite to the amendment. On reflection, I accept that the person about whom he was talking, who came from Ravenscraig and was seeking a job in Birmingham, would pay the council tax at his Birmingham address as a second home although his sole or main residence would still be in Scotland. To that extent, the noble Earl is quite correct—and I was wrong. Perhaps, however, that is an argument for my more flexible approach, rather than that of the noble Baroness, Lady Gardner of Parkes.

Baroness Gardner of Parkes

My Lords, I thank those who have supported the spirit of my amendment and am only sorry that its technical wording is not correct. I do not accept the argument of my noble friend the Minister when she said that we should not give people an incentive to abuse the system. That is a small part of it. Our whole taxation system is designed in that way. We continually give people incentives to work out tax avoidance schemes. To me, that is a minor matter.

The major matter is that although it has been said that the provisions might be hard on people with second homes, the legislation is much less fair to those without second homes. My noble friend the Minister made an interesting point and I can see the sense of having a one-person element attached to the second home provisions because that would mean that there would never be any argument about how many persons were in or using the property. I can see that there is an argument for a 75 per cent. rate rather than for the full rate that I propose.

Second homes undoubtedly push prices higher in some areas and disadvantage local people. My noble friend the Minister talked about villages in Wales. I could name some villages in England that are occupied almost only at the weekend and at no other time. That is wrong. Surely people who undertake professional holiday lettings could apply to have the business rate applied to their property if they did not want to pay the full council tax. They would be able to choose. There must be a way of dealing with cases such as those that were raised by my noble friend Lord Balfour. Some type of rebate should be available for such hardship cases.

I hope that the Government will look again at this matter and note that all sides of the House have taken the view that this is a fair amendment, and a fair attitude to adopt. I hope that my noble friend the Minister will ensure that her department looks again at this matter because the present proposals are not just. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Hollis of Heigham moved Amendment No. 20: Page 7, line 26, at end insert: ("( ) On any day when a person who is liable under section 6 is in receipt of council tax benefit in respect of 100 per cent. of the council tax bill, the billing authority may determine that the council tax payable shall be subject to no discount.").

The noble Baroness said: My Lords, this is a modest and simple amendment, and is basically an administrative tidying-up of the clause. We said much in Committee about the complexity of inter-relating rebates and discounts. The amendment seeks to ensure that where somebody is eligible for a 100 per cent. rebate and for a discount, at that person's request, or with his or her consent, he or she should be able to move straight to the 100 per cent. rebate instead of receiving the discount first and the rebate later. In other words, the amendment seeks to reduce two calculations to one.

It is administratively simple, but we are suggesting the word "may" rather than "must" because that makes better sense for somebody whose income is constant and does not fluctuate—in other words, where somebody would be in and out of the 100 per cent. rebate. That might apply, for example, to single-person families, the long-term sick and disabled or the elderly pensioner. It is someone who may be in and out of work and who has a fluctuating income. For such a person it might be simpler to go for the 25 per cent. discount and adjust rebates according to income. Where the position is straightforward a local authority should not be required to make two sets of calculations which have the same financial result when one would do.

Lord Strathclyde

My Lords, it is an interesting little amendment which I believe the noble Baroness recognises creates some anomalies and has some perverse effects. However, in the majority of cases the amendment would have no effect on the amount of tax payable by an individual. Its effect would be to transfer the cost of the discounts involved to the Exchequer through the subsidies payable in respect of council tax benefits. The noble Baroness recognises that fact. She has not made out a good case, and the amendment is not acceptable. Why should local authorities be able to grant themselves additional, automatic Exchequer support? Is that a commitment that the noble Baroness is making on behalf of the Labour Party? Has it been approved by the shadow Chancellor and should it be added to the £37 billion?

Under our proposal, local authorities will be fully compensated through the RSG system for the cost of granting rebates within the fixed total of Exchequer finance for local authorities. The cost of each additional discount will therefore be borne by local authorities as a whole rather than by individual councils. That is fair. It would be wrong to go further and to pin the additional cost on to the Exchequer.

I hope that the noble Baroness agrees that it would be wrong to accept an amendment which placed a new and uncosted burden upon the Treasury. I have explained why I cannot accept the amendment, and I hope that she will withdraw it.

Baroness Hollis of Heigham

My Lords, I was confused by the Minister's reply, because he moved from rebates to discounts and benefits with free abandon. At one point he referred to rebates when I believe he meant discounts which normally would have been taken to have meant benefit. I shall respond to what I believe the Minister meant to say and not to what he said. He will no doubt correct me if I have misunderstood him. It is a mistake into which one can easily slip, because I agree that to some extent the words have changed their meaning.

The basic point that the Minister was making is one I understand: local authorities receive 95 per cent. reimbursement for their benefit payments but receive compensation for discounts through the RSG only. The Minister was therefore suggesting that it was unreasonable to add to direct reimbursement through the Exchequer for benefit as opposed to going through the RSG for additional discount. He is right. We were assured, nonetheless, by Ministers earlier and by Ministers in another place that local authorities would be compensated properly for the number of discounts that they offered. The Minister cannot have it both ways. If that is correct, the amendment would be financially neutral.

If local authorities are to be compensated for their discounts and rebates, they are merely compensated in two different ways. By accepting my amendment, administrative complexity would be reduced. I should have thought that the Minister would support that. The only reason he can have for rejecting it is that local authorities will not be compensated properly for the number of discounts they will have, as compared to the number of rebates involved. That suggests, as my noble friend Lord McIntosh said on earlier amendments, that local authorities and their local taxpayers will have to pay, through higher bills, for the discounts given to single occupants. If the Exchequer is not going to pay, they will have to. Which is it? By going for single person occupancy discounts, will everyone have to pay more, or will they be paid for by the Exchequer? In that case the Minister just might as well accept the amendment, because there is little difference between that and reimbursing benefit. Perhaps the Minister will tell us what will happen.

Lord Strathclyde

My Lords, with the leave of the House, I do not wish to use up noble Lords' patience. I hope that there is no confusion here. I said that the cost of each additional discount would therefore be borne by local authorities as a whole rather than by individual councils. I am not sure that I can help the noble Baroness much further. Where there is an additional cost per discount, it will be borne by local authorities as a whole. Local authorities as a whole will pay for discounts, whether or not the recipients get the benefit, but the individual local authority will not have to pay. There is a collective rather than an individual responsibility per local authority.

9.45 p.m.

Baroness Hollis of Heigham

My Lords, I am delighted that the Minister's position was clarified in the course of his comments. I sympathise. However, he will accept with this side of the Chamber the fact that discounts will cost someone £780 million. Is he saying that with the finite revenue support grant, any local authority area which has a larger than average number of discounts will be reimbursed and that as a result other authorities will receive a smaller than average revenue support grant by virtue of the occupancy discount? In that case, if the taxpayers in the local authority which is affected will not pay for it, other local taxpayers will. The Minister cannot have it both ways.

It is interesting that with what I thought was a modest, little, inoffensive administrative tidying up, we have blown a large hole in the Government's philosophy as to who pays for what. Throughout the earlier debates, Ministers said that discounts would be compensated for through the revenue support grant. They were therefore at pains to establish that some council tax payers would not pay more because other people were paying less. Now the Minister has conceded precisely that.

I hope that I have made my point. I suspect that because of this difficulty we may need to come back to the matter. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 12 [Discounts: special provision for Wales]:

[Amendments Nos. 21 to 24 not moved.]

Clause 13 [Reduced amounts]:

Lord McIntosh of Haringey moved Amendment No. 25: Page 8, line 31, at beginning insert ("Subject to subsection (4A) below").

The noble Lord said: My Lords, in moving Amendment No. 25 I wish also to speak to Amendment No. 26. We had what I suppose I might describe as a more rigorous version of this amendment at Committee stage. The significant amendment is Amendment No. 26. In Amendment No. 25 we are talking about transitional relief. The clause is entitled, "Reduced amounts". It is really transitional relief and an attempt to spare Tory voters from the early effects of a slightly less unjust system of local government finance than the poll tax. That is the dictionary definition of transitional relief.

Amendment No. 26 provides that: The Secretary of State shall lay before Parliament a statement", about what he intends to do on transitional relief. In doing that, he shall consider whether such rule should have the effect of setting an amount for the purposes of subsection (2) (a) above which is calculated from the liability of domestic rates which a person would have borne in the same property during the last financial year in which a liability was applicable".

I shall give an abbreviated version of the more complex argument which was necessary at Committee stage. Basically, we had a system which, while far from perfect, worked for local government finance. It was called the rates. We then moved to a system called the poll tax which was not only wildly unjust but did not work at all. It was introduced because the Government felt that Conservative supporters would benefit from a flat rate tax in which all attempts at consideration of ability to pay was completely abandoned. When that was introduced a whole series of provisions were implemented for transitional relief so that the change to a new taxation system should not be too sudden. Indeed it was intended for some time that the change to a poll tax should be carried out over a period of four years and that the rates and the poll tax should co-exist. The Government decided—wrongly from their own point of view—that the benefits to them of moving immediately to an unjust system which benefited Tory voters were great. Little did they realise what damage the poll tax would do to the Government from an electoral point of view as well as in terms of a common reputation for good administration.

Transitional relief between the rates and the poll tax could be considered a good thing on the whole in that it tempered the move towards a more unjust system. What we now have is a move from the most unjust system to the next most unjust system, that is the council tax. Transitional relief in this case is designed purely to protect Conservative voters and purely to protect better off people. It is also designed to ensure that, although the poll tax has in theory been abandoned, its effects will linger on after its death. That is why we have transitional relief which is left entirely to the discretion of the Secretary of State.

Previous attempts at transitional relief, however clumsy they may have been and however often they may have had to be changed, were at least carried out in public. Secretaries of State had to make statements to Parliament when they made changes either to the period over which transitional relief was implemented or to the amount of money concerned or when they made changes to who should pay, that is to say whether the relief should be paid out of an equalisation fund or should come from the Treasury. All of those were considered to be matters of considerable public concern and Secretaries of State made announcements to Parliament accordingly.

Under the Bill as drafted, transitional relief is entirely a matter for the Secretary of State. It is a provision he can extend as long as he likes. He may spend as much Treasury money as he likes and Parliament has little say in what he decides to do. In Committee we pointed out that that position was unsatisfactory. Apart from its obvious failings there was no attempt whatever to consider the longer term effect of the changes. After all, we have a tax system for local government which is being changed dramatically not once but twice within the course of one Parliament. We have a local government finance system where the effects of the rates still apply. The effect of rating revaluations is still coming through and affecting the council tax to be charged. That will certainly be the case in inner London next year. Arrears from the rating system are still outstanding.

Under the circumstances, to have such a modest amendment as to suggest that the Secretary of State should consider whether the rule he applies will have the effect of setting an amount which is calculated from the liability of domestic rates is not a great change. It seeks to insert a little realism in the headlong flight towards and from disaster which has been the history of the Government in local government finance in the course of this Parliament. I hope that in the light of those temperate words the Minister will feel inclined to accept this modest little amendment. I beg to move.

Baroness Blatch

My Lords, the prime purpose of these amendments is to build an additional and undesirable feature into the transitional arrangements which we propose for the council tax. Our proposals for limiting excessive increases in local taxation between the community charge and the council tax are straightforward. In essence we propose to take a snapshot of community charge liability at the end of March 1993 and compare it to a snapshot of council tax liability at the start of April 1993. Increases in liability will be limited to a fixed amount, though the council tax payer would have to meet the cost of any increase which was not due to the change in tax systems but was the result of additional local spending.

The aim of the amendments appears to be to prevent the council tax transition scheme from producing bills lower than those under the old domestic rating system. I wonder how many people will thank the noble Lord for taking them back to the bad old days of the rates. The underlying assumption of the amendment seems to be that in some way that produces a fairer transition by punishing those who gained from the introduction of the community charge. That is an assumption I find hard to accept. Many single people gained from the replacement of the rates by the community charge. A single person this year could expect to pay an average of about £250 in community charge compared with a rates bill for the property of perhaps £500 or £600. It would be quite wrong to disqualify that person from any significant help in the transition to the council tax simply because of the rates that used to be paid—perhaps by another person altogether—on that property.

If anything the amendments appear to be designed to deny help to those who need it most. By April 1993 the community charge will have been in place for three years. Household budgets will have been tied to the community charge for three years. It is against that background, not the rates, that we should provide transitional help. I hope that the amendment will not be pressed.

Lord McIntosh of Haringey

My Lords, the Minister can stand up here and say that a very large number of people have benefited from the introduction of the poll tax but she would find great difficulty in standing up on any public platform around the country and making that claim. I am bound to say that statistically she must be correct. Some people benefited from the poll tax and some people were worse off. The Minister failed to say that, with obvious exceptions, the bulk of the effect of the poll tax was to make the rich richer and the poor poorer. That has been shown over and over again. It has been shown by the CIPFA analysis, which proved it by looking at the incidence of poll tax liability on the different deciles of household income. I shall not repeat in detail the figures which I gave in Committee, but noble Lords who were present will recall that it was found that 80 per cent. of those in the top decile of household income benefited from the introduction of the poll tax as compared with the rates whereas about 70 per cent. of those in the bottom decile were worse off as a result.

At that time I pointed out that transitional relief between the rates and the poll tax was not particularly effective and that transitional relief now between the poll tax and the council tax is not necessary because the amounts of money involved in most cases are not very great. This is a pay out. It is what the Americans call payola. It is an attempt to make sure that the hard road back to a just local government finance system, on which only the first faltering step is made in this Bill, will have no noticeable effect on Conservative voters until after the election is over. The intent is that they should not notice what is happening. I can assure the Minister and the Government that notice is being taken and that it will be a major topic of political concern in the next election. It is not necessary, therefore, for me to pursue the matter to a vote. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 26 not moved.]

Baroness Hollis of Heigham moved Amendment No. 27: Page 9, line 2, after ("dwelling") insert ("including where a garage, whether or not it forms part of a larger property which is itself a dwelling, is needed for use by a disabled person.").

The noble Baroness said: My Lords, when the Minister was kind enough, very courteously and helpfully, to see a group of us, we raised with him the issue of garages. I hope that he may be able to indicate to us whether he feels able to move towards the arguments which we put to him.

This is a probing amendment. Clearly we shall not press it. The intention is to discover whether a dwelling will be eligible to move down one band because it contains a garage needed by a disabled person. That may be not only a person who is physically disabled and who, because of the problems of manipulating or storing a wheelchair, may need not just a single garage but a double garage; it could be a disabled person who is severely mentally impaired, who may be liable to bizarre behaviour and who is able to travel only by private car. For example, as a result of earlier discussions 18 months or so ago, they may well be eligible for the highest rate mobility element. If so, it is only logical to assume that a garage is as essential for them as is a ground floor bathroom for others.

RADAR sent a letter dated 26th November to Mr. Portillo, the Minister in another place, which was quoted by the noble Lord, Lord Henley, at the Committee stage. RADAR thanked Mr. Portillo for the banding arrangements and drew his attention to the problem of garages. It said that a garage should be regarded: as an extra room if used by a severely disabled person".

We sought to persuade the Minister of that at an earlier meeting. I wonder whether he could indicate to us that on the strength of the arguments we put to him he has in any way been persuaded. I beg to move.

10 p.m.

Lord Ross of Newport

My Lords, I support this amendment on behalf of the noble Baroness, Lady Hamwee, who apologises to the House for not being present. She had to go to an important meeting at half-past eight. I hope I am right in saying that there is already a concession to such people, who have been moved down a band. That is obviously very welcome. This amendment seeks to ensure that they will not be pushed back up a band if they happen to have a double garage or something of that kind, which is obviously extremely necessary and which could add value to the property. One could visualise a number of houses of a similar type, some of which have garages and some of which do not. One of the properties with a garage might be necessary for someone very disabled who needs a car to enable him to get about.

The amendment seeks an absolute assurance that such a garage would not affect the reduction of one band. I am sure that we should be very happy if the Minister could give us that assurance.

Lord Henley

My Lords, as the noble Baroness said, this point was discussed at the meeting we held when she was so securely chaperoned. It is not necessary for me again to go through the scheme under Clause 13 and the reductions that it will give to people who need wheelchairs and so on. As the noble Baroness said on the occasion that we discussed the scheme under the regulations which will be introduced under Clause 13, we considered the features that should trigger a reduction and the case for including a garage.

I am afraid that I cannot move on this occasion in the way that the noble Baroness would like me to do. However, let me explain the thinking behind the use of garages by those who are severely mentally impaired, which is the point that she and her advisers raised at that meeting. The fact of the matter is that it is very unlikely with a banded system that a garage would result in a higher band and thus a higher bill. I shall certainly consider the point made by the noble Lord, Lord Ross, as to whether there might be occasions when a particularly large garage is necessary. However, I cannot imagine a case which could raise the banding. I hope that I shall be able to write to the noble Lord and give him the assurance that there would not be cases in which people were pushed up into a higher band as a result of a garage which it could be argued was necessary.

The reduction scheme takes into account features which are required for a disabled person and which could affect the banding of a dwelling. As I said, we believe that a garage is unlikely to affect the banding in that way. We also have to bear in mind that, even in these days, by no means all dwellings have a garage. It would not be fair if one person were allowed a reduction because he had a garage but another equally disabled person could not benefit from a reduction simply because he did not have a garage and parked his car in the street. Clearly many disabled people will require a car as essential to their mobility. But I question whether a garage to house that vehicle is necessarily essential. The case was put by the noble Baroness that a disabled person needs a garage because of difficulty experienced in getting into and out of a car and the need to do it sometimes under shelter.

Certainly for wheelchair users we accept that that will often be the case. However, such people are almost certainly likely to be in receipt of the reduction under the scheme as it stands. I certainly remain to be convinced that the same applies to people who have difficulty in walking but who are not wheelchair users. They may be severely mentally impaired. In fact, one could argue that the garage would have to be extremely well proportioned to make it easier for such people to get into the car inside the garage rather than outside, given the confined space of most garages.

I recognise that the 1978 Act allowed a reduction in rates where a garage was provided. However, one of the reasons for that, as the noble Baroness knows, was historical. At one time having a garage was a condition of obtaining an invalid carriage. It was therefore reasonable to assume that those who required an invalid carriage also required a garage, but that is no longer the case.

I believe that the measures we have taken ensure fair treatment for all those who have to live in a dwelling which is in a higher band than would be the case were it not for their disability. However, we must guard against discrediting the scheme by allowing features which are not necessarily essential to a disabled person. One must also remember the very different nature of the reductions under the old rating system of so much for each day. That system is very different from a banded scheme. Therefore to allow something separate for a garage when it was probably already going to be allowed for as regards other disabilities would not be necessary.

I am sorry that I cannot go as far as the noble Baroness would like me to go. I hope she will understand that we have considered the matter. I do not see the issue as being the problem that she envisages. If the noble Baroness wishes, I am prepared to have a further look at what she stressed at our meeting is a small group consisting of the severely mentally impaired. However, I very much doubt that I shall be able to take the matter further. I hope that the noble Baroness will be content to withdraw the amendment.

Baroness Hollis of Heigham

My Lords, I thank the Minister for that conciliatory reply. I accept the contours within which he is negotiating. With reference to our meeting, I made the point that it was he who was chaperoned rather than the remainder of us. Nonetheless we welcome his assurance that he will review the position raised by the noble Lord, Lord Ross, to ensure that, where a garage might have pushed a property into a higher band, that will not occur.

I accept that a severely physically disabled person is likely to enjoy a material reduction under one of the four circumstances outlined earlier today. Apart from the garage there would he other physical adaptations. The amendment continues to be urged strongly by MENCAP on behalf of the severely mentally impaired. For the most part any adaptations to the property relating to a severe mental handicap would be quite modest. It might involve additional sound proofing or some additional secure glazing on windows so that people cannot smash glass. Special taps might be required so that one does not bang one's head against them, and so on.

The severely mentally impaired groups had hoped that the garage, if essential, would count. It could be associated with receipt of higher mobility allowance or some such allowance at a later stage. Nonetheless those categories of people who would not, by virtue of their disabilities, enjoy a reduction with regard to their property, would hope that the garage, where it is essential, would count.

It is a probing amendment. If the Minister is minded to consult further with associations, in particular MENCAP, associations relating to Alzheimer's disease and so on, perhaps we can achieve some further movement. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 14 [Administration, penalties and enforcement]:

Lord McIntosh of Haringey moved Amendment No. 28: Page 9, line 38, at end insert: ("and billing authorities shall in undertaking preparations in the financial year beginning on 1st April 1992 for the fulfilling of the requirements of that Schedule as to the administration of the council tax have regard to any determination made by the Secretary of State which is applicable to that financial year in accordance with section (Determination of liability for personal community charge contributions) below").

The noble Lord said: My Lords, in moving the amendment, I speak also to the substantive amendment, Amendment No. 108, which provides a new clause after Clause 102. The new clause is a modified version of that which we debated in Committee. It provides first that, the Secretary of State shall not later than 13 March 1992 lay before Parliament the results of a determination by him under this section".

In other words, he has until the time that the Bill is likely to become law to make up his mind what he wishes to do.

Subsection (2) provides that in doing so he shall, consider and determine whether the appropriate maximum community charge benefit for the purposes of section 131(10) of the Social Security Contributions and Benefits Act 1992 (Community Charge Benefits) should be up to 100 per cent.

One could not get more tentative than an amendment of this kind. It provides that the Secretary of State shall make a determination, but in doing so he shall consider and determine whether the maximum community charge benefit should be up to 100 per cent.

Perhaps I may remind noble Lords of the issue to which the amendment refers. We hardly need a reminder because the issue was a matter of continuing public anxiety before and after our discussions on the subject in Committee. It is common knowledge that whatever one says about the individual figures, the decision of the Government in the name of accountability to ensure that everyone, however poor, should pay 20 per cent. of their poll tax assessment has been the cause of considerable dispute. I am putting the issue as moderately as I can. The evidence suggests that a high proportion of non-payment of the poll tax has related to those who are condemned to pay 20 per cent. and who have only an 80 per cent. rebate on their tax, however poor they may be. In terms of the collectability of the poll tax the 20 per cent. rule appears to have been enormously unsuccessful.

It is also common ground that the cost of collection of that 20 per cent. minimum payment is high in relation to the proceeds. I shall not return to the arguments in detail, and I shall not raise again the constitutional points raised by the noble and learned Lord, Lord Hailsham—I should not dare to do so. Nevertheless, it is clear that those are anxieties not only for the Exchequer but for the reputation of government and law enforcement. It is right that your Lordships should concern yourselves with such matters, even if the effect of a determination by the Secretary of State might involve increased public expenditure.

It cannot be said that these are matters of great political principle. Both of the principles on which the 20 per cent. minimum collection were based have been abandoned by the Government. Noble Lords will recall that the principles were, first, that the 20 per cent. collection was needed because it was necessary that everybody who used any local authority service should contribute something and therefore feel responsible. That principle will be abandoned as from 1st April 1993 because the council tax does not contain that provision. The second principle was that as regards the poorest people, the 20 per cent. minimum collection was supposed to be covered by increased social benefits. It was argued that if the 20 per cent. minimum rule were abolished, the social security benefits would have to be clawed back. Mercifully and admirably the Government have abandoned that principle, too. They have said that from 1st April 1993 not only will there be 100 per cent. rebates were appropriate but there will be no claw back of the social security benefits which were given to compensate in part for these payments.

I shall not enter into the technical arguments about the adequacy of the social security benefits. I do not believe that would be appropriate in a Bill which is concerned primarily with local government finance. In any case, the issue has in principle been conceded by government. I am now making a purely practical plea. I am saying that this a remnant of a discredited tax is self-evidently very expensive to collect and is the cause of a high proportion of the law breaking which has resulted from the poll tax.

In some local authorities 30 per cent., 40 per cent. or even 50 per cent. of poll tax payers are in default and are breaking the law for the first time in their lives. We now have an opportunity to put right that situation. This amendment would give the Secretary of State the opportunity to say, as I believe the noble Earl, Lord Onslow, said, "Let us cut our losses. Let us recognise that the principle which has been recognised for 1993 could and should be adopted from 1st April 1992".

By doing that, the Government would not lose face. They would not be adopting any alien principle. They would not be doing anything other than bringing forward a principle which they have accepted for 1993. They would gain great credit for flexibility and realism. They would gain the undying thanks of local authorities, which are pursuing people for relatively small sums, and would gain the undying thanks of those who at present are suffering from being pursued for relatively small amounts of money which are large amounts of money to them. The benefits would be enormous were the Government to accept the amendment. The payment by government would be slight. I hope that the Government will look more sympathetically at the amendment than they have done in the past.

I say that because it is common knowledge that senior Ministers in the Department of the Environment are in favour of this amendment. The dispute has been between the Department of the Environment and the Treasury on this matter. In this case I hope that the Department of the Environment, which is closer to the issues, may be persuaded to prevail in the debate within government. I beg to move.

10.15 p.m.

Lord Henley

My Lords, the noble Lord made what he called a practical plea and asked the Government to make further moves which would gain the undying thanks of the noble Lord and others.

Lord McIntosh of Haringey

My Lords, perhaps the noble Lord will allow me to say that I did not say they would gain my undying thanks. I suggested that they would gain the thanks of local authorities on the one hand and the thanks of those who have to pay the amounts which, although small, are significant to them. The noble Lord will have to do a lot more to gain my undying thanks.

Lord Henley

My Lords, I shall look elsewhere for the noble Lord's undying thanks. The noble Lord said he would not re-argue the case and proceeded to spend nine minutes telling us why he would not re-argue it. I shall be considerably briefer and I shall not re-argue the case as to whether the 20 per cent. contribution should be removed for the last year of community charge. That was argued and debated at considerable length in Committee and the issue was decided by a good majority.

The noble Lord brings back the amendment in a new guise and I do not object to that. However, the amendment simply seeks to give discretion to the Secretary of State to remove that 20 per cent. contribution.

There are two or three points which I should like to make. First, I stress, as did my noble friend Lady Blatch on a previous occasion, that this would involve considerable cost. Whatever noble Lords opposite may say, the cost would be some £500 million. That is a large figure of which one should take note in these matters.

Secondly, it has been said that the costs of collection of the 20 per cent. are so great that, in fact, the cost is much less than £500 million. At that earlier stage the Audit Commission made the point that the 20 per cent. charge payers were contributing a mere £6 per year net to the public purse compared to the collection costs of some £15 per person. That was based on a thoroughly misleading comparison. It looked merely at amounts charge payers were asked to pay—on average around £71—minus the amount added to their income support. There was no validity in comparing that notional amount with the collection costs. The real comparison is between the actual amount paid and the collection costs. In 1991 they amounted to around £12.50 and not £15. The net revenue was therefore almost £60.

As I said, it would have cost around £440 million to increase the benefit rate to 100 per cent. in 1991–92. No government could lightly add that amount to net public expenditure.

Lord McIntosh of Haringey

My Lords, does the noble Lord mean 1991–92? The amendment is about 1992–93.

Lord Henley

My Lords, I was giving the figure for 1991–92, which is £440 million. In 1992–93 the figure would be £500 million, as I said earlier.

I should add also that the Audit Commission's comparison assumes that the amounts added to income-related benefits to help people meet that 20 per cent. minimum contribution would be clawed back in 1992–93 if we were to follow the argument of the noble Lord, Lord McIntosh. That would cost the benefit recipients some £580 million. I do not believe that the noble Lord himself would argue that we should claw back that money from the benefit recipients. If the noble Lord is suggesting that that is the Opposition policy, then he must say so. On the basis that it is not their policy we can say that the amendment would cost £500 million.

On those grounds I must resist the amendment. The Secretary of State does not wish to have the discretion to remove the 20 per cent. contribution. The cause was argued well at an earlier stage. The Committee came to a decision and I do not propose to take the matter any further.

Lord McIntosh of Haringey

My Lords, I recognise that the Committee made a decision on an amendment on this subject, but it was not the same amendment. I did not seek to enter a debate regarding the quality of the advice given by the Audit Commission. I still find it surprising that the Government should be so sceptical of the analysis of the Audit Commission. Even if the Government have good cause to query the figures given, in particular for the cost of the collection of the 20 per cent. minimum poll tax, I am surprised that they should concentrate on those costs rather than on the final conclusion; that is, that the introduction of the council tax would be helped enormously if local authorities no longer had the obligation to collect the 20 per cent. minimum from all poll tax payers. That is the most important element of the Audit Commission's conclusions and that is an issue which the Minister has not addressed.

I did not refer back to claims made by Ministers at Committee stage regarding the £500 million cost. The main reason is that I do not have independent evidence on the subject, although I strongly suspect that the £500 million —which incidentally is only one quarter of the cost of taking 1p off the income tax at the next budget—is a gross figure which takes no account of the cost of collection of the 20 per cent. minimum. Above all, it takes no account of the fact that a large number of defaults on the poll tax concern those who are due to pay that 20 per cent. minimum.

If the figures were to be more realistic and took into account the reality of non-payment and costs of collection, we should arrive at a different figure from the £500 million mentioned by the Minister. However, as in all these matters, we in Opposition do not have access to independent information. We must accept that Ministers are telling the truth when they give us the figures. We can only look at the basis of the figures and try to understand whether or not they are calculated on a credible basis. I do not find the gross figure of £500 million credible. I am not convinced by the arguments which Ministers have put forward.

In a sense, I would be helping the Government if I succeeded in persuading the House that this amendment should be accepted. I would be helping the Government because I would be giving them an opportunity to introduce their own council tax in a more orderly way among local authorities which no longer had the extraordinary burden for one more year, and one more year only, of collecting a tax which is clearly ineffective in fiscal terms. But Ministers do not wish to listen. Under those circumstances, there is nothing that I can do to help them any further. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 [Valuation tribunals]:

Lord McIntosh of Haringey moved Amendment No. 29: Page 10, line 6, at end insert: ("(3) Such tribunals shall compile, and the Secretary of State shall publish annually in respect of each financial year from 1st April 1993 reports summarizing—

1. (a) the total number of appeals;
2. (b) the proportion of appeals allowed; and
3. (c) estimate of the average delay (if any) in hearing appeals.").

The noble Lord said: My Lords, Amendment No. 29 is a version of an amendment which we debated at Committee stage and which referred to information on appeals to valuation tribunals.

Ministers were critical of the wording of Amendment No. 93B at that time because we used the phrase, "the proportion of appeals which were successful". They suggested that perhaps "successful" was not the right word, because an appeal is successful from the point of view of the applicant if it is allowed, and successful from the point of view of the authorities if it is not allowed. I take that point. Therefore, we have amended the amendment in order to provide that the information which the Secretary of State shall publish annually shall be as before, the total number of appeals; but now also, the proportion of appeals allowed; and instead of an estimate of the waiting time before appeals are heard, an estimate of the average delay (if any) in hearing appeals. I hope in that sense the amendment is no longer technically defective, and that Ministers will feel less opposed to it on those grounds.

I find it very difficult to understand on what other grounds Ministers can effectively oppose the amendment. I do not think that I shall be very encouraged if I hear a repetition of the argument about unnecessary and expensive work, either for local authorities, for local authority associations, or for valuation tribunals and anybody else. I cannot believe that the valuation tribunals will not know the number of appeals that they hear and the proportion of the appeals which are allowed. I cannot imagine that it will be enormously difficult for them to record the date on which the appeal is set down and the date on which the appeal is determined, which would meet the requirements of paragraph (c) of the amendment. Therefore I shall not be impressed by arguments that there is any great administrative difficulty in introducing this amendment.

However, the issue behind the amendment is, in our view, as powerful as it was when we first tackled the subject at Committee stage. We do not believe that the valuation system which is proposed will produce a smaller number of appeals simply because it is crude and because the numbers of bands are relatively small and because, above all, individuals do not know the valuation of their own property but only know into which band their property falls.

For all the reasons we have already given, and for the reasons we elaborated earlier this afternoon when we began to look at the preparations which the estate agency profession, or trade, is now making to anticipate a large number of appeals, we think that the number of appeals will be very high, and we think the public should know about it.

The purpose of the amendment is no more than to secure that the tribunal shall compile the necessary information, and that the Secretary of State shall publish it annually in respect of each financial year from April 1993. I beg to move.

10.30 p.m.

Lord Ross of Newport

My Lords, I support the amendment although my grounds for doing so are not quite the same as those put forward by the noble Lord, Lord McIntosh. I believe that it will persuade valuation officers, who presumably will have to deal with the appeals, to buck up. Perhaps I may point out that when I qualified estate agency was a profession and not a trade. However, I admit that I made money out of estate agency, and therefore I suppose that that criticism falls fairly and squarely upon me.

Lord McIntosh of Haringey

My Lords, if the noble Lord will forgive me, I am a tradesman myself in market research. I meant no disrespect in calling it a trade.

Lord Ross of Newport

My Lords, neither would my father, because his mother was horrified when he announced after the First World War that he was going into the trade. However, that was long ago.

I believe that the amendment will buck up valuation officers to get on with the job and the courts to hear these appeals. There is every ground for putting down the amendment. As the noble Baroness, Lady Blatch, admitted when I intervened during the Committee stage, the timetable to deal with appeals against the uniform business rate has been a disgrace. I do not know whether my words were listened to when I made that point earlier but I have to say that the district valuer is now actually dealing with both of my cases. However, it has taken nearly two years, which is far too long.

If I were to put down a Question in a year's time to ask how many appeals had been submitted and how many had been dealt with, the Government would have to provide those statistics. They are provided under the uniform business rate. Therefore, to suggest that this would be an extra piece of bureaucracy does not stand up. I do not believe that there will be quite so many appeals because, having used the profession of valuers to help in deciding the bands into which houses are put for the council tax, those who consult other valuers about whether or not an assessment is fair will probably get the answer that it is fair. There will not be so much attraction to other members of the profession to encourage people to appeal. However, it is important that we should know. I see it as a gee-up to valuation officers and courts to get on with the job and deal with them and not leave them lying about as they have done with the uniform business rate. That is why I support the amendment.

Earl Howe

My Lords, this amendment seeks to add a statutory duty on valuation tribunals to compile statistics and for the Secretary of State to publish these in an annual report. None of the suggested items will, in itself, enhance the rights of any prospective appellant; nor will it have an effect on the number of appeals.

Debating a very similar amendment during Committee my noble friend Lady Blatch mentioned that the department has just undertaken a wide-ranging financial management and policy review of valuation and community charge tribunals. One of the key aims was to involve tribunals more in their own strategic management, and in particular in setting targets for the clearing of appeals.

Statistics concerning the handling of appeals are already presented in a quarterly monitor. Aggregate clearance rates for the service as a whole are included, as appropriate, in my department's annual report. At the moment we do not maintain statistics on waiting times. But we will discuss qualitative measures such as these with the tribunals with the aim of incorporating them into the management strategy for tribunals. Targets should not only encompass broad measures of the number of appeals cleared each year, but also measures of the quality of the service provided. Achievement of such targets would be very much in the spirit of the Citizen's Charter.

We are committed to encouraging tribunals to strive for the highest standards of service, in line with the Citizen's Charter. But this is a management rather than a policy question. Therefore I do not think the face of the legislation is an appropriate place for this type of detailed statistical requirement to be made. Further, I am not sure that the formulation of the statistics proposed in the amendment has been well thought through.

The noble Lord, Lord McIntosh, suggests that the effect of using broad valuation bands will be to encourage taxpayers to appeal against their banding. I must say that I find his argument unconvincing. Basing bands on capital values, about which most householders have ample evidence, will result in greater understanding of the valuation process than was ever the case under domestic rates. I believe that that will result in a readier acceptance of valuations than would otherwise have been the case. It seems to me that a system of precise capital evaluations would be bound to give rise to more appeals almost by definition than would a banded system. I hope that on reflection, and in the light of what I have said, the noble Lord will not feel bound to press the amendment.

Lord McIntosh of Haringey

My Lords, I suppose it is intended that I be encouraged by the noble Earl's remarks about the Citizen's Charter provisions and about targets. Indeed, to that extent, I must say that I am. I think that that was a response which could well have been given with advantage in Committee, instead of some of the slanging which took place across the Chamber at that time. I am glad that the noble Earl has found it possible to give that response. I am satisfied to a considerable extent on the technical question of reporting of quality of service by rating tribunals. I am grateful for that part of the answer.

The noble Earl then went on to say something with which I am much less in agreement. He repeated the argument that, because there is a banding system and because it is based on a single criterion of capital values, that, in turn, will result in a smaller number of appeals. I can only repeat what I said before; namely, that the very fact that it is a banding system which has a noticeable step at each boundary and that no one knows how close he is to the boundary because he does not know the individual value of his property is in our view likely to increase the number of appeals rather than reduce it. That is confirmed by the preparatory activity already taking place in the estate agency trade or profession. We shall not know for some months which one of us is right. It is clear that each of us will hold our views until that time. In the meantime, in the light of the noble Earl's earlier remarks, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 16 [Appeals: general]:

Lord McIntosh of Haringey moved Amendment No. 30: Page 10, line 16, leave out subsection (3).

The noble Lord said: My Lords, the subject of the amendment has not been discussed before. It is not a matter with which I intend to take up much of the time of the House. There is a provision in Clause 16(1) whereby an aggrieved person may appeal to a valuation tribunal on certain grounds which are set out therein. But in subsection (3) the right of appeal is qualified if the grounds, fall within such category or categories as may be prescribed".

I simply do not know what that is intended to achieve. I do not know what grounds will disqualify appeals, although I presume that they will be in the regulations. On the face of it, I cannot imagine on what grounds appeals might be disqualified. I suggest that the provision in subsection (3), which we would propose to delete by way of Amendment No. 30, is undesirable. I beg to move.

Lord Strathclyde

My Lords, the noble Lord is clearly looking for some clarification as to what the regulations will say. I believe that that is the point he was trying to make. The regulations will provide for the executor or administrator of a deceased person to become liable to pay any sum outstanding before the death of the liable person. Any outstanding payment can be deducted from the assets or effects of the deceased person.

Lord McIntosh of Haringey

My Lords, I was moving Amendment No. 30, but the Minister was speaking to Amendment No. 31. Perhaps I should have let him finish—it would have been much more interesting.

Lord Strathclyde

My Lords, I apologise for that and thank the noble Lord for interrupting me.

The primary purpose of this power will be to prescribe that any grievance which arises from assumptions made about entitlements to council tax benefit cannot be the subject of an appeal to a valuation tribunal. Grievances about entitlement to council tax benefit are quite properly a matter to be pursued with the benefits review board established by the billing authority. Such boards already deal with queries about benefit entitlements under the community charge. Questions about entitlements to benefits are not, and should not be, matters for valuation tribunals.

I hope that, having said that, the noble Lord agrees that this amendment would be counter-productive. I hope that I have made myself clear.

Lord McIntosh of Haringey

My Lords, I cannot for the life of me see why it would be counter-productive. If the Minister had argued that it would be unnecessary, I might have listened to him even more carefully than I did, but to say that it is counter-productive seems to be going much too far. What damage could be done by accepting this amendment? The word "counter-productive" means that things would be worse if subsection (3) were to be left out. I am sure that the House will give the Minister leave to respond on that point.

Lord Strathclyde

My Lords, with the leave of the House, perhaps I can go a little further. We do not think the proposal would be appropriate because tribunal members do not currently adjudicate on benefits. They would need more training in both housing and council tax benefit. Tribunals will also face a significant workload. It would not be right to overstretch them.

In the light of research carried out by the social policy research unit, we intend to recommend to local authorities a number of procedural improvements to the internal review process. The need for further change is still being considered, including the need to replace housing benefit review boards. The Department of Social Security will be consulting relevant organisations as proposals are developed.

Lord McIntosh of Haringey

My Lords, I must seriously question whether the Minister is dealing with Amendment No. 30. Perhaps I may repeat its purpose. Clause 16 relates to appeals. Clause 16(1) states: A person may appeal to a valuation tribunal if he is aggrieved by—

1. (a) any decision of a billing authority … or
2. (b) any calculation made by such an authority".

Subsection (3) states: Subsection (1) above shall not apply where the grounds on which the person concerned is aggrieved fall within such category of categories as may be prescribed". In other words, subsection (3) states that the Secretary of State may, by regulation, say that there are grounds on which an aggrieved person cannot appeal to a valuation tribunal, but the Minister did not refer to that in his reply. What are the proposed grounds on which somebody may be denied the right to appeal to the valuation tribunal? It is a simple question, but it deserves an answer.

Lord Strathclyde

My Lords, I hope that we are not talking at cross-purposes. I feel that I have made the Government's position clear, but perhaps I should repeat that grievances about entitlement to council tax benefit are quite properly a matter to be pursued with the benefits review board established by the billing authority. Such boards already deal with queries about benefit entitlements under the community charge. Questions about entitlements to benefits are not, and should not be, matters for valuation tribunals.

I hope that I am not mistaken about the point that the noble Lord is trying to make. I shall read his comments carefully and may write to him.

10.45 p.m.

Lord McIntosh of Haringey

My Lords, I should be grateful if the Minister would do that. Clearly, we cannot pursue the matter on Report. As I understand it, Clause 16 has nothing to do with benefit. It relates to the decision of a billing authority that a dwelling is a chargeable dwelling and that a person is liable to pay council tax in respect of such a dwelling. There is no reference to benefits. I shall not strain the procedures of the House on Report by pursuing the matter. I should be grateful if the Minister would write to me on the subject. It appears to me that we have been talking largely at cross-purposes, and since it is my amendment, I am not the one who can be crossed. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 18 [Death of persons liable]:

Lord McIntosh of Haringey moved Amendment No. 31: Page 11. line 42, leave out ("as he thinks fit") and insert ("to give effect to any of the provisions of subsections (3) to (6) below or as he considers appropriate").

The noble Lord said: My Lords, with this amendment we move to the issue of the death of the liable person. Clause 18 contains a provision that, The Secretary of State may make such regulations as he thinks fit to deal with any case where a person dies", and the consequent liability for council tax. In the amendment we suggest that the wide provision that the Secretary of State may make such regulations as he thinks fit should be qualified to reflect the wording of Clause 18(3) to (6). The regulations that he makes under subsection (1) should follow the points made sensibly, and relatively clearly, in subsections (3) to (6).

It seems that Clause 18 is a belt and braces clause; in other words, the Government seek, admirably, to try to set out in the clause the conditions which might apply in the case of the death of a person liable to council tax; but then in subsection (1) they negate all the admirable precision of the clause by giving the Secretary of State a wide and undesirable power. I beg to move.

Lord Strathclyde

My Lords, with the amendment, the noble Lord is seeking clarification of how the regulations will be drafted. I shall deal with that point. As the noble Lord is aware, liability for the tax is to be calculated on a daily basis; it is necessary therefore to make it clear that any liable person who dies will not be liable to pay the council tax for any part of the day on which he or she dies, or for any part of the remaining financial year.

Regulations made under this clause will provide for the executor or administrator of the deceased person to become liable to pay any sum outstanding before the death of the liable person. Any outstanding payment can be deducted from the assets or effects of the deceased person as with other outstanding debts. Similarly, the executor or administrator would be entitled to receive any sum which was owing to the deceased person where he or she had paid in excess of his or her liability. They will also enable the executor or administrator to act on behalf of the deceased person by instituting, continuing or withdrawing any relevant proceedings, for example, appeals.

The regulations have not yet been drafted. I can assure the noble Lord, however, that it is our firm intention that regulations made under this clause will reflect the provisions in subsections (3) to (6). I hope that the noble Lord will accept those assurances.

Lord McIntosh of Haringey

My Lords, I am delighted to hear the assurance, but subsections (3) to (6), which we are told will be the basis of the amendments, are qualified in two ways: first, by the provision contained in subsection (1), that the Secretary of State may make such regulations as he thinks fit, and by the provisions contained in subsection (2) that, Nothing in the following provisions of this section shall prejudice the generality of subsection (1) above". In other words, it is a case of when I use a word, it means what I want it to mean, nothing more and nothing less. What is the point of having subsections (3) to (6) if subsections (1) and (2) provide that the Secretary of State can do what he wants? It does not make good sense. I have noted what the Minister says about the intention in the regulations which have not yet been drafted. I note in particular—and I repeat it for the record—that it is the intention that the regulations shall reflect—that was his word—subsections (3) to (6). But I seriously question whether in saying so he has not made a nonsense of subsections (1) and (2) of Clause 18. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 [Exclusion of Crown exemption in certain cases]:

Lord McIntosh of Haringey moved Amendment No. 32: Page 12, line 33, at end insert ("and he shall within three months of the date of Royal Assent specify the classes of dwelling which are eligible for such an order").

The noble Lord said: My Lords, again this is a probing amendment on the issue of Crown exemption. Clause 19 is the last clause of Chapter I of the Bill and it provides that council tax is payable on dwellings which would otherwise be subject to Crown exemption. However, for some reason Clause 19(4) states: The Secretary of State may by order provide that subsection (2) above". Subsection (2) provides that Crown exemption, shall not prevent … the dwelling being a chargeable dwelling; or any person being liable to pay council tax in respect of the dwelling". Subsection (4) provides that it, shall also apply in relation to any dwelling of a class prescribed by the order".

This again seems to be an example of the Government making a tentative move towards open government, a tentative move towards setting out on the face of the Bill the Government's intentions, and then saying, "Oh no, we can't go that far. We can't really make a commitment about Crown exemption, so we will protect ourselves by saying that the Secretary of State may alter anything in the clause that he likes, by order".

Although the subject matter is different, I think that the issue is similar to that which was raised in Clause 18. I urge Ministers, when replying, to be a little more cautious about the conflict between the general powers provided and the specific examples which are included in the Bill.

If we go on like this, attempting to define Crown exemption, attempting to define liability of dead people and then taking back all the provisions by giving an overriding regulation-making power, I seriously question whether the clauses are worth having at all. I beg to move.

Baroness Blatch

My Lords, Clause 19 ensures that Crown exemption shall be ineffective so far as concerns police houses and similar dwellings. The residents of such dwellings will be liable to pay the council tax in the usual way. If a dwelling covered by the clause is left empty, liability will fall on its owner. For police houses, this will of course be the police authority. Subsection (4) allows the Secretary of State to prescribe by order additional classes of dwelling to which the clause shall apply. Amendment No. 32 would require him to specify the dwellings which are eligible for such an order.

I take that to mean that the Secretary of State is to be required to specify the classes of dwellings which are to be subject to Crown exemption. But eligibility for Crown exemption will depend on whether the Crown is the liable person in a particular case. That is a matter which could ultimately be determined in the courts. Any specification by the Secretary of State under the amendment could not affect a court's determination of what is a matter of fact. The amendment would therefore have no effect.

However, the noble Lord may be seeking some indication of the likely scope of Crown exemption and of the Government's intention for the use of subsection (4). On the first point, the principal class of dwellings which will be affected by Crown exemption are Ministry of Defence barracks and married quarters in which no one has his sole or main residence. In fact, we propose that all barracks and married quarters should be exempted under Clause 4 of the Bill and that the Ministry of Defence should pay contributions in lieu to the appropriate local authority. The cost of those contributions will be recovered from service personnel at rates which depend on the type of accommodation rather than on the local authority area. I am sure that that will be welcomed by many service personnel. Other dwellings likely to be covered by Crown exemption will be relatively few in number. They will include empty dwellings owned by government departments and retained for the use of a variety of employees ranging from night duty staff to agricultural workers. I do not have a list to hand and in any case it would be a tedious and, I suspect, rather long list.

The Government's intentions for the use of subsection (4) are simple. We have no plans to use the power. It is there only in case dwellings come to light that should be treated in the same way as police houses. With that explanation which I hope has been helpful to the noble Lord, I hope he will not feel the need to press the amendment.

Lord McIntosh of Haringey

My Lords, the explanation was helpful. I wish the Bill, as drafted, stated that provision with the same clarity as the Minister has managed to use in responding to the amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 74 [Different amounts for dwellings in different valuation bands]:

[Amendment No. 33 not moved.]

Clause 75 [Persons liable to pay council tax]:

[Amendment No. 34 not moved.]

Lord McIntosh of Haringey moved Amendment No. 35: Page 50, line 30, at end insert: ("( ) Subsection (3) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").

The noble Lord said: My Lords, this amendment has already been spoken to with Amendment No. 13. I beg to move.

Clause 76 [Liability in prescribed cases]:

[Amendment No. 36 not moved.]

Clause 77 [Liability of Spouses]:

Lord McIntosh of Haringey moved Amendment No. 37: Page 51, line 23, at end insert: ("( ) Subsection (1) above shall not apply to any person on any day who is a person to be disregarded for the purpose of discounts under paragraph 2 of Schedule 1.").

The noble Lord said: My Lords, this amendment has already been spoken to with Amendment No. 13. I beg to move.

[Amendment No. 38 not moved.]

Clause 79 [Discounts]:

[Amendment No. 39 not moved.]

Clause 80 [Reduced amounts]:

[Amendment No. 40 not moved.]

Clause 82 [Appeal procedure]:

[Amendments Nos. 40A and 40B not moved.]

Earl Howe

My Lords, I beg to move that further consideration on Report be now adjourned.

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

House adjourned at three minutes before eleven o'clock.