HL Deb 18 February 1992 vol 535 cc1117-78
The Minister of State, Department of the Environment (Baroness Blatch)

My Lords, I beg to move that the Bill be now further considered on Report.

Moved, That the Bill be now further considered on Report. —(Baroness Blatch.)

On Question, Motion agreed to.

Schedule 1 [Persons Disregarded for Purposes of Discount]:

Baroness Seear moved Amendment No. 41: Page 85, line 16, at end insert ("or (c) he is regularly and substantially engaged in caring for and lives with a severely disabled person who is in receipt of attendance allowance or such other payment for attendance as may be prescribed. 11A. For the purposes of paragraph 11, a person shall be treated as engaged "regularly and substantially" in providing care in any week when he is, or is likely to be, engaged and regularly engaged for at least 35 hours a week.").

The noble Baroness said: My Lords, the purpose of the amendment is to ask the Government to extend the right of discount to informal carers looking after disabled or frail people. A formal, paid carer would receive a community charge discount, but informal carers do not receive any such discount at present. This seems a somewhat illogical arrangement.

The case for granting a discount to the informal carer is surely strong and not extremely expensive. Many informal carers give up jobs or substantially reduce the hours that they work and thereby lose not only immediate pay but also the prospect of a pension in order to look after people who are infirm and in need of care.

It is the Government's policy that as many people as possible should be looked after in their own homes and not in institutions. If they are properly cared for this is a desirable way of dealing with the problem but it puts heavy burdens, both personal and financial, on the people carrying out the informal caring. That being so, it seems reasonable that they should qualify for the 25 per cent. discount.

The amendment does not ask that every informal carer should receive this advantage. It would be available only for people caring for those receiving an attendance allowance. We understand that that reduces the number of people involved to about 900,000 out of the 6 million carers that are said to exist in the country. Of the 900,000, by no means all would necessarily qualify for the discount. In addition to the need to have the attendance allowance, the carer must be caring for 35 hours a week or more. Because of the curious quirk in the regulations, which we are not discussing at the moment, the carers must be caring for only one person. It is a peculiar fact that if they are caring for two people, taking over 35 hours a week, that does not qualify them for relief. We are not discussing that today, but it reduces the figure of 900,000 quite considerably.

Thus on grounds of equity and that the cost is by no means large. I hope that the Government will consider this concession. I beg to move.

Baroness Blatch

My Lords, I wonder whether it would help the House if I intervene at this point. I indicated at Committee stage that we were considering extending the status discounts applying for care workers under paragraph 9 of Schedule 1 to the Bill. With the leave of the House, perhaps I may not consider these remarks as my winding up on the amendment, which will allow other noble Lords, if they wish, to speak after me.

Broadly speaking, any full-time care worker who is employed by a charity, local authority or the person in receipt of care and who earns less than £25 per week is exempt from the community charge. We had proposed to carry this definition forward unchanged into the council tax by granting discounts to such people.

We have heard many representations from noble Lords, from Members in another place and from organisations representing people with disabilities that many care workers are not covered by this definition. They have argued in particular that a disabled person should not lose the single person discount because he or she needs a resident carer who would not otherwise live in the home. We have listened very carefully to these representations. I pay particular tribute to the Association of Disabled Professionals and RADAR, whose practical advice on the subject has been most helpful. Having listened to that advice I am pleased to tell your Lordships that we have now devised a wider definition of care worker.

We propose that discounts should be available where a disabled person on higher rate attendance allowance lives with a full-time carer. The only exceptions will be carers who are the spouse or partner of the disabled person or the parent of a disabled child under 18 years old. In these cases the carer would normally be living with the disabled person irrespective of the disability and there is no possibility that the bill for the property has been pushed up by his or her presence.

From April 1992 higher rate attendance allowance is to be replaced for new claimants under 65 years of age by the highest rate of the care component of disability living allowance. People receiving that allowance will also qualify.

Some care workers who are exempt from the community charge would not qualify for a discount under the new definition I have described. The Government therefore intend that the old definition should be retained alongside the new one. This extra discount will benefit a large number of people with disabilities and their carers. I am sure it will be welcomed by noble Lords on all sides of the House as well as by the people directly concerned.

Our proposals will be effected in regulations under Schedule 1. There is no need for any amendment to the Bill. I hope that in the light of our proposals the noble Baroness will feel able not to press the amendment.

Baroness Hollis of Heigham

My Lords, perhaps I may be forgiven if I move into slightly more Committee style because this is welcome news from the Minister. The noble Baroness, Lady Seear, identified who would be covered by the proposed amendment, but only 700,000 may be involved. Can the Minister give us an indication of the number of people who may be aided by the proposal?

Baroness Blatch

My Lords, I understand that 190,000 people will benefit from this extension at a cost of £19 million.

Baroness Hollis of Heigham

My Lords, would that be the same group of people as those who would receive invalidity care allowance and the carer's premium, or would it reach a wider or different group of people? The numbers are the same.

Baroness Blatch

My Lords, with the leave of the House, I shall reply to the noble Baroness. I heard what I said. I referred explicitly to people receiving the higher rate attendance allowance. The noble Baroness may be asking whether we can widen the group of people involved. I have already named the exemptions who will be part of the 890,000 figure referred to by the noble Baroness. The lower rate attendance allowance is awarded to people who need care either only in the day time or only at night. Such people are less likely to need a full-time carer living with them. The extension is concerned with people who live in as carers caring for people both day and night and who thereby add to the costs of that person's disability overheads.

Baroness Seear

My Lords, the Minister's comments are welcome and I thank her for them. I wish to read carefully what has been said and work out who has been excluded from the extension. If the exclusion involves a greater number of people than I hope is the case, we may well return to the matter on Third Reading. However, for the present I thank the noble Baroness and the Government for this concession. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Schedule 2 [Administration]:

Lord Henderson of Brompton moved Amendment No. 42: Page 86, line 1, leave out paragraph (c) and insert: ("(c) that where a liable person is in receipt of council tax benefit and so requests, payments on account of not less than an amount to be determined by the Secretary of State in regulation, made in accordance with paragraph (b) above shall be accepted at weekly or fortnightly intervals at no additional cost to the payer.").

The noble Lord said: My Lords, in Committee I moved this amendment in a slightly different form. I note the vein in which the Minister has responded to the proceedings today and I hope that it will continue, now that the amendment has been modified in order to meet criticisms. It is designed to make payment easier for those who are on low incomes and especially those who have to budget on a weekly or fortnightly basis.

The amendment seeks to place a duty on local authorities to make available, if someone so requests, the facility to pay the council tax weekly or fortnightly. I have narrowed down the number of poor people to whom this facility can be extended to those who are in receipt of council tax benefit—

Baroness Gardner of Parkes

My Lords, there must be something wrong with the noble Lord's microphone. We have not been able to hear a word he said. I hope he can move nearer to a microphone.

Noble Lords

Go back a row!

Lord Henderson of Brompton

My Lords, I hope I sound better now that I have moved. I apologise to the House. With the leave of the House, I shall recommence my remarks. I am extremely grateful to the noble Baroness, Lady Blatch, for her receptivity towards the amendment which preceded mine. I hope that her mood extends to this amendment. I have taken note of the criticisms made of my amendment in Committee. The amendment was designed to allow poor people who receive their income on a weekly or fortnightly basis to pay their council tax on a weekly or fortnightly basis. The amendment I now move has the same aim.

The amendment seeks to lay a duty on councils to provide those people with that facility if they so request it. The amendment is narrower than it was in Committee as I have restricted the facility to those who are in receipt of council tax benefit. Therefore the amendment seeks to help the very poor. It is only right that local authorities should follow what is best practice among local authorities and provide this service.

As I said in Committee, in the constituency of the Secretary of State for the Environment, Mr. Heseltine, at Henley, the local district council provides the facility I am discussing. In the constituency of Mr. Robert Key at Salisbury, the facility is also provided. I do not see why all local authorities should not be obliged to provide this service to the poorest people in our community.

It is noticeable that the monopolies that control electricity and gas are also extending this kind of facility to the poorer people of our country. I am concerned that the less conscientious local authorities should have their standards brought up to the standards of our better local authorities. I should add that this kind of facility is also offered in Newcastle. There are good local authorities throughout the land that provide this facility, and I wish to ensure the others do too.

The facility I seek falls squarely into the spirit of the Citizen's Charter which has so recently been given additional force by yet another pronouncement from No. 10 Downing Street. Taken altogether, these are compelling reasons for offering the facility I seek. I also believe that the facility would improve the general climate surrounding the collection of the council tax. Unfortunately, the collection of the community charge has not been well received. I strongly urge the House to take this opportunity to improve that climate of opinion. We want to draw a line after the community charge, forget it and start to implement the council tax with good practice.

The amendment also provides that a minimum charge should be prescribed by the Secretary of State. In Committee there was some criticism that the facility I seek might be counter-productive if councils discovered it cost too much to collect the council tax paid on such a basis for it to be worthwhile. I do not need to prolong the proceedings as the arguments were fully deployed in Committee. The amendment was well received on all sides of the Chamber. As I have modified the original amendment, I hope that the House will find my amendment acceptable on this occasion. I beg to move.

Baroness Hollis of Heigham

My Lords, we on this side of the House supported the amendment in principle in Committee although at the time we registered a concern that without a de minimis element local authorities could spend more collecting the charge than it might bring in. However, the modified version of the amendment moved by the noble Lord, Lord Henderson, has our wholehearted support.

The amendment recognises that debts are multifaceted. People with council tax debts are also likely to have rent debts, fuel debts and perhaps hire purchase debts and may be in arrears with their social fund loan. We hope that the amendment will help float people out of that swamp by instituting as of right small, regular and affordable payments. We hope that such a process will provide a financial structure to what can be chaotic lives for families who are in and out of work, in and out of benefit and who are often poised on the edge of homelessness. Such families find it especially difficult to meet monthly payments when they receive their income weekly or fortnightly and when so many other items of expenditure, paid for on a weekly basis, press for their attention.

As the noble Lord, Lord Henderson, said, most good local authorities already do everything possible to keep such families together and in their homes by means of weekly door-to-door rent collection and other such measures. We can visualise the alternative to this measure if we recall that something like 42 per cent. of all of those in prison for less than six months are debtors. Weekly payments may not be tidy and it may be irritating for local authorities to deal with small sums. But the alternative is infinitely worse, in particular as regards the use of the bailiff procedure. Homes may be broken up and children may be put into care. Indeed, I suspect that the provisions of the amendment, if accepted, would be cost effective in the long run because the alternatives available to local authorities such as the attachment of earnings, the attachment of benefits or the use of bailiffs' warrants, are seldom effective.

As the noble Lord said, the amendment would ensure that weekly or fortnightly payments would not simply be a matter of convenience for the payer; restricting them to families on benefit would identify those most in need. Secondly, a de minimis payment to be prescribed by the Secretary of State—which might be a payment of £1—would ensure that local authorities would at least cover their costs, perhaps through the use of the Giro system, as barely half of all low income families have a bank account or building society account.

In the past the Department of the Environment has quite rightly called on local authorities to be flexible and has suggested such methods of payment, as have the Audit Commission and many local authorities. As the noble Lord, Lord Henderson, said, the amendment would ensure that best practice became common practice. We support it strongly.

3.30 p.m.

Baroness Gardner of Parkes

My Lords, the proposal sounds attractive but I am afraid that I am opposed to the amendment. The proposal is neither practical nor workable and should not be put on the face of the Bill. Councils can and often do and will allow payment on such a basis, but to make it an inflexible rule is unrealistic. It is unrealistic to say that there would be no additional cost to the payer. Which payer? It will cost everyone else a great deal more to set up such a procedure.

When I served on my local gas consumer council we received a request from people who wanted to pay on a weekly basis. We were able to introduce such a facility. There is no doubt that some people find that there is pressure in relation to every penny. Some people find it very difficult to put money aside. A procedure was set up through the local consumer bodies. The noble Lord, Lord Henderson, referred to the fact that one can now pay for gas or electricity or one's television licence on such a basis. There is no reason in the world why councils cannot set up a similar process, but to lay it down in law is unrealistic.

The noble Baroness, Lady Hollis, said that good councils had a weekly door-to-door rent collection service. She is way out of date in respect of London because after rent collectors were murdered in London that was rapidly discontinued.

Baroness Hollis of Heigham

My Lords, I thank the noble Baroness for giving way. I said that in cases where families were in debt most local authorities had such arrangements. That applied to the narrow category of people who were already in debt.

Baroness Gardner of Parkes

My Lords, I think that the noble Baroness will find that in London it is considered such a risk for people to go around collecting money that no one is willing to take on that job. The GLC had to discontinue door-to-door rent collection for that reason. Now people pay their rents at post offices or local housing offices.

Arrangements are already available. This would not be a cheap process to implement. I believe that the cost of every little change to a council tax system has been underestimated. Every time computers or records are altered, that costs a lot of money, not just a little money, in terms of staff time and computer time. Such arrangements can be made on a humane and practical basis without the need to include a requirement in the Bill. For that reason I oppose the amendment.

Lord Stoddart of Swindon

My Lords, we discussed the matter at Committee stage. I still cannot for the life of me understand why there is such resistance to the amendment. The noble Baroness has just asked why local authorities should not be left to do what they think fit and why this should be forced upon them. There are many reasons why it should be forced upon them. People move around the country. Wherever they may be they will still have to pay their council tax. They may move from one area where they have paid weekly to another area where they are forced to pay monthly, half-yearly or whatever the case may be. Therefore there is a case for a standard system to be available to council tax payers.

As I pointed out at Committee stage, there have been considerable problems with the collection of the poll tax. One of the reasons for those difficulties is that the arrangements for the payment of the poll tax have not been satisfactory. Here we have an amendment which attempts to put the matter right and to give everybody the opportunity to pay in a manner which suits their circumstances. It still does not seem to be understood, particularly by noble Lords opposite, that many people in this country, particularly those who are partly or wholly on social security benefits, can budget only on a weekly basis. Once one removes that facility their finances go haywire, they get into debt and eventually find themselves in the courts and, in extreme cases, in prison. That is what the amendment seeks to avoid.

To say that the proposal will cause difficulties is nonsensical. When local authorities used quill pens they collected most of their debts on a weekly basis. Now that they have wonderful computers which can carry out millions or billions of operations in a second or in a minute we are told that that is too expensive and causes difficulties for the local authorities. That is sheer, untrammelled nonsense. If we only thought about people instead of systems, we should be helping not only the local authorities but also families in this country.

I implore your Lordships to think about the problems we have experienced with the poll tax and to give the amendment your support. I feel sure that it will save a great deal of trouble and will bring relief to many ordinary people in this country who are used to budgeting on a weekly or fortnightly basis and will continue to do so.

Lord Jenkin of Roding

My Lords, I have no difficulty whatever in agreeing with the noble Baroness, Lady Hollis, when she said that we all want to make best practice become the norm. The only question to be addressed is whether that has to happen by law or whether it ought to happen simply because it is best practice.

This time round, in contrast to the Committee stage, I have had the advantage of receiving a briefing from the CAB. I am sure that that has nothing whatever to do with the fact that I recently persuaded my colleagues in one of the companies which I chair to make a contribution to the Friends of the CAB. This time I have the briefing whereas last time I did not. One of the interesting facts which emerges from the CAB briefing on the subject is that it is called in aid that many of the privatised utility companies now offer their customers a wide variety of systems for easy payment. However, a law has not been required in order for them to do so. They have done so, often in different ways, to benefit different categories of customer in a way which is most suited to each particular industry's area, whether it is one of the regional electricity companies or one of the water companies. I do not believe that this House would have accepted an amendment which imposed on all the regional electricity companies or all the water companies a single system for making payment of their charges by law.

I accept the point that was made by the noble Lord, Lord Henderson of Brompton, that the amendment carries within it two useful limitations. However, it still imposes on all authorities an obligation which many authorities already meet. In some cases they meet it more widely, extending the benefit of weekly or fortnightly payments to a wider group than those receiving council tax benefit and often without the necessity of a minimum sum. In order to find a scheme which is acceptable to the House the noble Lord has circumscribed his amendment considerably. But it still suffers from the disadvantage of seeking to impose a single uniform pattern on all authorities, whatever their circumstances. We hear enough about the differences between local authorities in rural areas, city areas, and city centre areas (to which my noble friend has just drawn our attention) to recognise that such an action would not be very sensible.

The powers are there. The local authorities can introduce this provision. They can introduce a scheme which is suited to their local conditions. I cannot agree with the noble Lord, Lord Stoddart, who seeks to impose a single uniform pattern right across the local authority field. In other debates on other occasions he and his party bewail the centralisation of power in the hands of central government.

Where it can be left to local authorities to decide how they will collect their council tax, it behoves this House to allow it rather than to impose a single uniform pattern on them. It is not out of lack of sympathy or a desire to help families who budget weekly or fortnightly. Councils have that power and, as the CAB brief makes clear, many of them use it, including, as the noble Lord, Lord Henderson, said, the Secretary of State's constituency and the Minister's constituency of Salisbury. Why should we impose a uniform pattern on everybody? That is the only reason that I oppose the amendment.

Lord Stoddart of Swindon

My Lords, I am obliged to the noble Lord for giving way. He says that I and my colleagues wish to impose a rigid pattern on local authorities. Will he consider what has happened with the poll tax, which I mentioned during my speech? In one part of the country poll tax payers pay 2 per cent. of their bill in respect of non-payers; in other parts of the country, including my own town, as much as 15 per cent., 18 per cent. or 20 per cent. of their bill goes to provide for non-payers. If the noble Lord wants one good reason for supporting the amendment, that is it —on purely financial grounds.

Lord Jenkin of Roding

My Lords, I have wearied the House long enough. However, if the noble Lord believes that local authorities have not learnt some of the lessons about the difficulties of collecting a new tax, as a result of the experience of the community charge, he greatly underestimates the wisdom of many district and borough treasurers. I am sure that a great deal has been learnt. The debate has been helpful in drawing the attention of both sides of the House to the desirability of making it easier for council tax payers to pay their bills. That still does not justify imposing on them all by statute a single uniform system. That is my objection to the amendment.

Baroness Fisher of Rednal

My Lords, the noble Lord, Lord Jenkin, mentioned the citizens advice bureaux and its brief. It is also true to say that in its latest report it brings to the notice of the Government that its main work now lies in the field of debt counselling. It deals with thousands of cases. The CAB discusses a person's income with him and allocates it for individual payments, almost putting it into little boxes.

The noble Lord mentioned the work of the CAB. The noble Baroness, Lady Faithfull, knows the Birmingham settlement very well indeed. These days it does nothing except try to sort out the debt problems in which people have become entangled. This is a very reasonable amendment. One can pay through a bank account by standing order every month. Forms have to be filled in and obviously the local authority has to get in touch with the bank which then makes a proposal. This amendment has a similar effect.

Some local authorities have neighbourhood offices and it is a simple procedure for someone to go in and pay on a weekly basis. That is being done by many local authorities. The noble Lord appears to be saying that if some local authorities can do that successfully and collect the money, so that the people concerned are not in doubt, surely it is a far better vehicle to use than that of bringing them before the courts with all the associated difficulties.

Another point which is not perhaps particularly relevant to this amendment concerns house repossessions. When the Government found out that repossessions were taking place because people were not passing over to the building societies the amount of social security that they received to pay the mortgage, they said that they would stop the amounts out of the social security payments and pay the money directly to the building society. That was an instance of discretion being used. That could not be done with people living in a rented house. It could be done only in cases of repossession, when the money was automatically taken out of income support.

We believe that this amendment may be another way to help people to avoid debt.

3.45 p.m.

Lord Monson

My Lords, when I rose at Committee stage to oppose a broadly similar amendment, my noble friend Lord Henderson of Brompton accused me and the noble Lord, Lord Jenkin of Roding, who was also opposed to the amendment, of doing so only because we had never been paid weekly and had no conception of what it was like to be paid on such a basis. I must assure my noble friend that I can well remember the proud moment 40 years ago when I first received a weekly wage packet containing the princely sum of £5.10s. That subsequently went up to about £9.7s.6d. It was paid in cash and paid weekly.

Lord Jenkin of Roding

My Lords, perhaps the noble Lord will give way for a moment. My first princely pay packet from the Army, for which I queued up, was £1.5s.

Lord Monson

My Lords, the noble Lord, Lord Jenkin, wins hands down in his experience of these matters. My noble friend in fact cannot accuse either of us of not knowing what we are talking about. More pertinently, although more and more people are no longer paid in cash and are paid monthly, I still know many people who are paid weekly or fortnightly or receive pensions on such a basis. They find no difficulty in putting aside the sums necessary to pay their electricity, gas or telephone bills, or their television or road fund licences. Although many of those items have to be paid at intervals of less than a year or less than a quarter, it is rare to be able to pay them on a weekly basis.

Having said that, I appreciate that the current habit of requiring the poll tax (subsequently the council tax) to be paid in 10 instalments is rather confusing. I should prefer 12 instalments. I go so far as to say that, despite the cost, there might be a case for obliging councils to accept payments fortnightly. However, to insist that they accept weekly payments, which must cost more money to collect, would be going too far. For that reason I cannot support even this revised and improved amendment.

Earl Howe

My Lords, the strength of feeling on the Benches opposite about this issue is obvious. I listened carefully to the points made by noble Lords both today and in Committee. As a result of our long debate in Committee, we gave the amendment very careful thought. I recognise that the new proposal before the House limits the arrangements to benefit recipients with a de minimis cut-off. But we cannot ignore the fact that the amendment would place a significant new burden on local authorities and that we should be imposing that burden by statute. We should be handing local authorities significant difficulties.

There would be particular difficulties in dealing with those who move in and out of benefit. For those moving into benefit during the year, the authority, if requested, would have to change those persons' instalments from monthly to weekly or fortnightly. Those who moved out of benefit would lose their right to pay weekly or fortnightly, although the authorities would have the power to continue to accept payments at those intervals. It may be helpful to the House if I illustrate what small sums would be involved in many cases, if we accepted the amendment.

It is likely that most people on benefit will live in properties in bands A, B and C. We do not of course know what the average council tax will be for those properties, However, exemplifications provided last year, with the consultation paper, on the council tax suggested that the council tax for a one adult household would be £200 for band A; £233 for band B and £267 for band C. The actual amounts are likely to be higher but not significantly so. For a single adult on 50 per cent. benefit the annual amount required to be paid would range from £100 to £135 which would mean £2 to £2.70 per week. Those are clearly uneconomic sums to collect on a weekly basis. I accept that the amendment recognises that there should be a cut off point but it is difficult, on those figures, to see where this should be.

So far as concerns costs, the House should recognise that in many cases the only means for making weekly or fortnightly payments—it has been acknowledged by noble Lords opposite —will be through the Post Office. The Post Office charge 50p-60p for that. Under the terms of the amendment who would pay? The cost would fall on all taxpayers.

Let us remind ourselves what local authorities will he able to do under the Bill as it stands. It will remain open to local authorities to respond to requests from individual taxpayers to set up more frequent payment arrangements than the general instalment scheme. I am sure that local authorities will behave sensitively if approached with requests for more frequent instalments. I believe it is right that that should be a matter for authorities' discretion.

I am grateful to my noble friend Lord Jenkin of Roding for reminding us that local authorities will be free to act creatively in setting up schemes to help their taxpayers. As noble Lords know, authorities will be allowed to set up their own instalment schemes for their tenants in accordance with prescribed rules. The power will permit authorities to have a different instalment regime to the standard 10 monthly payments scheme. Authorities will therefore be able to set up a scheme to collect council tax at the same time as they collect council rents. This may well be at weekly or fortnightly intervals. The rules for such a scheme, which the Government will set in consultation with authorities, will ensure that it can be no less generous than the normal 10 monthly scheme.

I am sure that there is one thing that should not escape our attention and in particular the attention of the noble Lords opposite. The Local Authority Associations were not attracted to the broad proposal previously put forward to allow weekly or fortnightly payments as of right to anybody who applied. The ADC and LBA were directly opposed and the AMA argued that unless central Government were prepared to underwrite any extra costs the matter should be left to local choice. I confess that I cannot believe that the associations will be much more attracted to the current proposal.

What we propose, and what noble Lords opposite keep saying that they want, is a tax which is easy to administer and cheap to collect. I find it difficult to square that with the effect of the amendment which will greatly increase the complications and cost of collection and remove local discretion.

We should not exaggerate the divide between the noble Lord, Lord Henderson, and the Government. The difference between us is that the Government intend to give a power to local authorities to use their discretion to implement a scheme for weekly or fortnightly instalments for their council tenants and for others in cases of need. The noble Lord wants to oblige local authorities to institute such a scheme on demand on a much wider basis. We believe that there is a balance to be struck between the convenience to the taxpayer and the cost to the public purse and that we should therefore enable local authorities to set up their own schemes and be as sensitive as they can to local needs.

There are good reasons for thinking that local authorities will respond sensitively. For one thing, it will be very much in the interests of districts to show the Local Government Commission that they are responding efficiently to local needs and concerns.

I hope the House will accept that authorities will be given adequate powers to make different instalment schemes of general application and that it should be for those authorities to respond to individual requests for different arrangements at their discretion. I am sure that we can rely on local authorities to use their discretion in that area with sensitivity.

I have not hitherto mentioned that the amendment is defective, but it is so. However, I hope that I have said enough to show that, quite apart from that, the amendment does not stand up on its merits. I hope very much that the noble Lord will be persuaded to withdraw it.

Lord Henderson of Brompton

My Lords, I much appreciate the tone with which the noble Earl replied to the debate. I welcome the fact that the noble Lord, Lord Jenkin of Roding, said that the debate has been helpful. It appears that citizens advice bureaux, those who supported us, the Government and myself are not so far apart as we were on the last occasion.

To those who oppose the amendment, notably the noble Baroness, Lady Gardner of Parkes, I say the following. The noble Baroness has had experience of the gas industry about which she told us. I believe it was the noble Baroness who spoke about a television licence. That cannot be paid on a weekly or fortnightly basis. One can collect stamps for the next television licence, but that is not the same thing. However, if local authorities are not subject to the Citizen's Charter, it would have very little force if it applied only to central government and their agencies.

I say to the noble Lord, Lord Jenkin of Roding, that the essential difference between such utilities as the gas and the electricity companies and the local government authorities is that local government is imposing and collecting a tax. If central government have a single rule for the collection of tax from all their citizens, why should not local government have a single rule for the collection of local taxes? That seems to make a substantial difference between the utility companies and the local government authorities.

I need say no more. The noble Earl, Lord Howe, states that he is confident that local authorities will come up to the best standards. I am afraid that my confidence is not the same. That is the difference. If local authorities do not have compulsion then they will not come up to the standards, but if they have compulsion they will do so. I shall leave it at that and seek the opinion of the House.

3.57 p.m.

On Question Whether the said amendment (No.42) shall be agreed to?

Their lordships divided: Contents, 109; Not-contents, 146.

Division No. 1
Acton, L. [Teller.] John-Mackie, L.
Addington, L. Kennet, L.
Airedale, L. Kilmarnock, L.
Ardwick, L. Kinloss, Ly.
Aylestone, L. Kirkhill, L.
Banks, L. Lawrence, L.
Beaumont of Whitley, L. Llewelyn-Davies of Hastoe, B.
Birk, B. Lloyd of Hampstead, L.
Blackstone, B. Lockwood, B.
Blease, L. Lovell-Davis, L.
Bonham-Carter, L. McIntosh of Haringey, L.
Boston of Faversham, L. Mackie of Benshie, L.
Bottomley, L. Mallalieu, B.
Brain, L. Mason of Barnsley, L.
Callaghan of Cardiff, L. Mayhew, L.
Campbell of Eskan, L. Milner of Leeds, L.
Carmichael of Kelvingrove, L. Mishcon, L.
Cledwyn of Penrhos, L. Morris of Castle Morris, L.
Cocks of Hartcliffe, L. Nicol, B.
Cudlipp, L. Ogmore, L.
Darcy (de Knayth), B. Parry, L.
David, B. Peston, L.
Dean of Beswick, L. Phillips, B.
Devonport, V. Pitt of Hampstead, L.
Donaldson of Kingsbridge, L. Prys-Davies, L.
Dormand of Easington, L. Rea, L.
Exeter, Bp. Robson of Kiddington, B.
Ezra, L. Rochester, L.
Falkland, V. Ross of Newport, L.
Fisher of Rednal, B. Sainsbury, L.
Fitt, L. Seear, B.
Flowers, L. Sefton of Garston, L.
Foot, L. Serota, B.
Gallacher, L. Shackleton, L.
Galpern, L. Shepherd, L.
Gladwyn, L. Soper, L.
Graham of Edmonton, L. [Teller.] Stallard, L.
Stedman, B.
Granville of Eye, L. Stoddart of Swindon, L.
Greene of Harrow Weald, L. Strabolgi, L.
Hampton, L. Taylor of Blackburn, L.
Hamwee, B. Tenby, V.
Hanworth, V. Thomson of Monifieth, L.
Hatch of Lusby, L. Tordoff, L.
Henderson of Brompton, L. Turner of Camden, B.
Henniker, L. Underhill, L.
Hirshfield, L. Wallace of Coslany, L.
Hollis of Heigham, B. Whaddon, L.
Hunt, L. Wharton, B.
Hutchinson of Lullington, L. White, B.
Hylton-Foster, B. Williams of Elvel, L.
Jay, L. Willis, L.
Jeger, B. Wilson of Langside, L.
Jenkins of Hillhead, L. Winstanley, L.
Jenkins of Putney, L. Wise, L.
Ailesbury, M. Bessborough, E.
Aldington, L. Biddulph, L.
Alexander of Tunis, E. Blatch, B.
Allenby of Megiddo, V. Blyth, L.
Alport, L. Boardman, L.
Arran, E. Borthwick, L.
Astor, V. Boyd-Carpenter, L.
Auckland, L. Brabazon of Tara, L.
Balfour, E. Brigstocke, B.
Barber, L. Brougham and Vaux, L.
Bauer, L. Butterworth, L.
Belhaven and Stenton, L. Caithness, E.
Beloff, L. Caldecote, V.
Belstead, L. Campbell of Alloway, L.
Carnegy of Lour, B. Lyell, L.
Carnock, L. Mackay of Clashfern, L.
Cavendish of Furness, L. Macleod of Borve, B.
Clanwilliam, E. Malmesbury, E.
Clinton, L. Mancroft, L.
Cochrane of Cults, L. Manton, L.
Cockfield, L. Margadale, L.
Coleraine, L. Marlesford, L.
Colnbrook, L. Merrivale, L.
Craigmyle, L. Mersey, V.
Crathorne, L. Middleton, L.
Cross, V. Monson, L.
Dacre of Glanton, L. Montgomery of Alamein, V.
De Freyne, L. Morris, L.
Denham, L. Mottistone, L.
Denton of Wakefield, B. Mountevans, L.
Dundee, E. Mountgarret, V.
Eccles, V. Mowbray and Stourton, L.
Effingham, E. Munster, E.
Elibank, L. Nelson, E.
Elliot of Harwood, B. Newall, L.
Elton, L. Norrie, L.
Erne, E. Orkney, E.
Erroll of Hale, L. Oxfuird, V.
Faithfull, B. Pearson of Rannoch, L.
Fanshawe of Richmond, L. Pender, L.
Flather, B. Perry of Southwark, B.
Fraser of Carmyllie, L. Peyton of Yeovil, L.
Gainford, L. Platt of Writtle, B.
Gardner of Parkes, B. Prentice, L.
Geddes, L. Rankeillour, L.
Gisborough, L. Reay, L.
Gridley, L. Renfrew of Kaimsthorn, L.
Grimston of Westbury, L. Renton, L.
Haddington, E. Rodney, L.
Hailsham of Saint Marylebone, L. Roskill, L.
St. Davids, V.
Hamilton of Dalzell, L. St. John of Fawsley, L.
Hardinge of Penshurst, L. Salisbury, M.
Harlech, L. Seccombe, B.
Harvington, L. Selborne, E.
Havers, L. Selkirk, E.
Henley, L. Stanley of Alderley, L.
Hesketh, L. [Teller.] Strange, B.
Hives, L. Strathclyde, L.
Holderness, L. Strathcona and Mount Royal, L.
HolmPatrick, L.
Hooper, B. Strathmore and Kinghorne, E. [Teller.]
Howe, E.
Jellicoe, E. Sudeley, L.
Jenkin of Roding, L. Swinfen, L.
Johnston of Rockport, L. Terrington, L.
Joseph, L. Teviot, L.
Kemsley, V. Thomas of Gwydir, L.
King of Wartnaby, L. Trumpington, B.
Kinnaird, L. Ullswater, V.
Knollys, V. Waddington, L.
Knutsford, V. Wade of Chorlton, L.
Lauderdale, E. Whitelaw, V.
Lindsey and Abingdon, E. Wilberforce, L.
Long, V.

Resolved in the negative, and amendment disagreed to accordingly.

4.7 P.m.

Baroness Blatch moved Amendment No. 43: Page 86, line 3, at end insert: ("(2A) Regulations under this Schedule may include provision—

  1. (a) that any person appearing to an authority to be a resident, owner or managing agent of a particular dwelling shall supply to the authority such information as fulfils the following conditions—
    1. (i) it is in the possession or control of the person concerned;
    2. (ii) the authority requests the person concerned to supply it; and
    3. 1131
    4. (iii) it is requested by the authority for the purpose of identifying the person who, in respect of any period specified in the request, is or will be the liable person in relation to the dwelling;
  2. (b) that the information is to be supplied within a prescribed period of the request being made and, if the authority so requires, in a form specified in the request; and
  3. (c) that a request may be served on the person concerned either by name or by such description as may be prescribed.").

The noble Baroness said: My Lords, in moving this amendment I shall speak also to Amendments Nos. 45 to 49, to Amendments Nos. 53 to 60 inclusive and to Amendment No. 126. Amendment No. 44A will be moved by the noble Baroness, Lady Hollis of Heigham. These amendments fulfil the undertaking given by my noble friend Lord Howe in Committee that the Government would consider the question of local authorities' information needs and return to the matter on Report.

The amendments ensure that local authorities can obtain the information which they need to operate the council tax. They replace the wide powers currently available to local authorities under Section 16 of the Local Government (Miscellaneous Provisions) Act 1976. That provision enables local authorities to obtain information about the occupiers of land and property. It goes much wider than is necessary or desirable for the council tax.

There is no need for a register of all adults under the council tax. Most households will pay a standard bill. In those circumstances the authority does not need details of adults other than the liable person. But, as with any billing system, it will need to know to whom to send the bill. These amendments, therefore, enable billing authorities to require the resident, owner or managing agent of a dwelling to provide such information as is necessary to identify the liable person.

The power does not enable authorities to require information about discounts. It does not allow them to go on fishing expeditions to find out about adults in households who are not liable to pay the council tax. That is the subject of Amendment No. 44A standing in the name of the noble Baroness, Lady Hollis.

The discount system does not require either a register of adults or a power to require information. If people wish to claim a discount the authority will be able to ask them for information to enable them to verify the claim. If the information is not supplied there is no obligation on the authority to grant the discount. It is in the interest of the household to provide information in support of discount claims. But discounts will apply to a minority of households. It would not be right to provide a power for authorities to require information from all households when most of them will not be affected by the discount provisions.

Amendment No. 44A, which we discussed in Committee, is unnecessary and unworkable. Authorities have no power to require information about discounts in any event. As I have said, they may of course ask for information to verify discount claims or to check that a discount is still available.

The amendment seeks to prevent them doing that. However, authorities would simply have no means of knowing which households were outside the scope of their inquiries. The new powers ensure that the council tax can be administered efficiently without undue intrusion. I ask the House to reject Amendment No. 44A and accept the government amendments. I beg to move.

Lord McIntosh of Haringey

My Lords, I was glad to have the Minister's explanation of this series of amendments. She presented it as though, somehow, it was the logical consequence of the Government's logical thinking on this issue. That is far from being the case.

What has transpired is that the local authorities have pointed out the difficulties of the provisions in the Bill. They have pointed out to the Government that Section 16 of the 1976 Act could be made to apply to the council tax. The local authorities have taken the lead in bringing the Government to some sense of realism about the problems which will arise from the introduction of the council tax.

The problem is of the Government's own making. It arises because of the complexity of the hierarchy of obligation which is imposed in Clause 6(2). There are no fewer than six different categories of people who are liable persons in a chargeable dwelling. They follow one after another in order of priority. In those circumstances, it is not surprising that local authorities need to have some information about who is liable within a chargeable dwelling. It is not surprising that despite local authorities' natural distaste for prying and for seeking information which is confidential or intrusive in any way, they believe it necessary to have some information in order to perform their duties.

In her introductory speech, the Minister referred to the fact that the proposed amendments do not apply to discounts on the basis that the obligation for discounts is on those who wish to claim them rather than on local authorities to identify those who are eligible for discounts. I am afraid it is not as simple as that. The point about this is that the resources element of the local authorities' grant will depend not on the final outcome of who receives the discounts but on the local authorities' first estimate of how many people are likely to be eligible for discounts.

If the local authorities have no way of knowing how many people will be eligible for discounts and if they do not have the right to obtain the necessary information, they will not be able to claim the discounts against the resources element of their grant and they will lose that.

That position is made considerably worse by the fact that if they do not know that the discount is to be claimed and the discount is not claimed until either the council tax bill is received or, even worse, until there is some pursuit of the bill—in other words, attempted enforcement of the council tax bill—they will be involved not only in loss of grant, but they will be involved in considerable expenditure in seeking to enforce the council tax only to find that a late claim for discount is made.

It is by no means as simple as the Minister claims in her rather cursory introductory speech of this important series of amendments. The Minister spent a good deal of time criticising Amendment No. 44A in the name of my noble friend Lady Hollis. It is true that the relationship between Amendment No. 44A and the series of government amendments is complex. It may well be that we must withdraw Amendment No. 44A in order to see how the Bill reads when the government amendments have been passed, as no doubt they will be. This may be a matter to which we must return on Third Reading.

The way in which this is being introduced in response to quite reasonable attempts by local authorities to ascertain what powers are and should be available to them is not satisfactory. Those matters should have been considered at an earlier stage in the passage of the Bill through Parliament. Although we shall not oppose these amendments, I give no undertaking that they will pass without further scrutiny on Third Reading of the Bill.

4.15 p.m.

Baroness Hamwee

My Lords, I welcome the fact that the House is now addressing this issue which many noble Lords have said must be addressed sooner or later.

I have the same anxieties about the balance between the efficient gathering of information and the intrusion of privacy, which has been touched upon by the noble Lord, Lord McIntosh, and in particular with regard to the question of discounts. It seems to me that it may not be sensible to provide for a part of the exercise by local authorities without addressing the gathering of information concerning discounts in order that a local authority can assess its tax base—and I use that term rather loosely.

I have some questions about the provisions of paragraph (2A) as it appears on the Marshalled List. Perhaps the Minister will be able to help on those matters. It states that to any person who appears to an authority to fall within the category of resident, owner or managing agent is required to supply information. Heading (c) deals with the addressing of an inquiry by name or description. Presumably we must stay away from, "Dear Occupier" because of the hierarchy. Will letters be addressed to "Dear Owner, resident or managing agent"? I cannot see how that will work in practice.

The word "control" in subsection (2A) (a) (i) refers to information: in the possession or control of the person concerned". Does that mean information which is accessible on inquiry, because the word "control" gives a sense of physical control. I am not sure how that is intended to apply to information.

Finally, having addressed briefly those points, I thank the Minister for taking up the points in a much more comprehensive and effective way than I did in moving amendments to Schedule 3 as regards penalties and various other matters. I do not claim credit for raising those matters in the first place because I believe that CIPFA raised them with me but it will be welcomed that those points have been taken on board.

Lord Renfrew of Kaimsthorn

My Lords, these are helpful amendments. As noble Lords on both sides of the House have stressed, one wants a situation in which there is no unnecessary prying and probing for information which is not required for the precise purposes of the Bill. Clearly, a certain amount of information is required.

I am not sure that the spectre of the noble Lord, Lord McIntosh, of the need for a great deal of information when adjustments are being made for discounts is necessarily warranted. After all, discounts are accounted in relation to dwellings rather than persons. It is true that persons give rise to a discount situation, but the discounts are in relation to dwellings.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Lord for giving way. I agree that discounts are given in relation to dwellings. However, I am sure that the noble Lord will agree that the number of discounts which finally result will affect the amount of money the local authority is able to raise from the council tax. If discounts only become apparent after the authority has made its submission, the authority will not receive the resources element of grant on that part of the discount which has not been anticipated. That is my point. I do not disagree that discounts are themselves based on dwellings.

Lord Renfrew of Kaimsthorn

My Lords, that is right, so long as one bears in mind that the maximum number of discounts that take effect in relation to a dwelling is two, as I understand it. That is the point. Any number of persons may fall to be disregarded in respect of the tax, but in the end only two discounts —75 per cent. and 50 per cent.—are allowed in relation to any one dwelling.

In that connection I had a rather detailed question to pose in relation to Amendment No. 44A. Should the amendment be withdrawn the question will not be relevant, unless the amendment is to be brought back in another form. The amendment provides that, where the chargeable amount is subject to a discount, the authority shall not require information from the liable person if other persons who fall to be disregarded under Schedule I become resident in the dwelling". The word "if" is intended to mean "as to whether"; it is information about other persons who fall to be disregarded; it is not that the obligation is modified by the presence or absence of such persons.

My point in that regard is that one can well imagine a situation where a single person lives in a dwelling which is therefore subject to discount on the basis of being occupied by that single person—if the noble Lord wishes to answer my question, he will do well to hear it and perhaps I may pose it. Should other persons move into that dwelling the local authority will clearly need to know whether or not those other persons are persons who fall to be disregarded for the sake of discount. To that extent there is perhaps an element of unclarity in the amendment.

Lord McIntosh of Haringey

My Lords, I do not think that there is an element of unclarity.

Noble Lords


Lord McIntosh of Haringey

My Lords, the noble Lord asked me a question.

Lord Renfrew of Kaimsthorn

My Lords, that is correct.

Baroness Gardner of Parkes

My Lords, this is Report stage.

Lord McIntosh of Haringey

My Lords, I am intervening at the noble Lord's invitation because he asked me a specific question.

Baroness Gardner of Parkes


Lord McIntosh of Haringey

My Lords, I am trying to be quick, if I am allowed. "If" means "if"; it does not mean "as to whether". "Disregarded" refers to cases involving, for instance, students and therefore the amendment is entirely proper. I hope that that was quick enough.

Baroness Phillips

My Lords, I should like to ask the Minister, following questions that have been posed, how the authority is to discover whether or not a person is a resident. In the area where I live—I have said this before—a great deal of property is rented out at ridiculous rents to people who come and go at a great rate. Seeing everyone emerge through the door each morning will not tell an authority who is the permanent and who is the temporary resident. The request for information should be sent to the landlord.

I suspect that in many cases the poll tax is owed in this borough for the very reason that the notice has been issued to the occupier. The renting tenant does not consider himself to be the occupier. As I have mentioned before, one or two of the Australians who have stayed here—I apologise to the noble Baroness —have skipped off back to Australia owing rent, and I hardly think therefore that they will have paid their poll tax.

Seriously, how does one judge the matter without making some inquiries?

Baroness Blatch

My Lords, perhaps I can deal with the question of the noble Baroness first. It was touched on by a number of noble Lords. For a large percentage of houses the local authority will make an assumption about an owner or liable person and be correct. Indeed, it links in with the question posed by the noble Lord, Lord McIntosh, that local authorities are in receipt of a great deal of information about residents in their local area. They will have a large amount of information already available to them.

A hierarchy exists. The local authority will go through the hierarchy—it may be the tenant or chief occupier of the property. That person will be required to give information. It may be that after the first or second question the officer will realise that the wrong person is being approached and will move on through the household until the right person is found.

The noble Baroness, Lady Hamwee, was concerned about paragraph (2A)(a) (i) which states, that any person appearing to an authority to be a resident, owner or managing agent of a particular dwelling shall supply to the authority such information as fulfils the following conditions— (i) it is in the possession or control of the person concerned". First, if a person is in possession of the information that person will be required to pass the information on. Secondly, "control" does not mean physical control. But there may be someone who has a responsibility to acquire that information and it will be important that that person acquires it and passes it on to the officer.

Not a great deal divides us. The issue is important, whether it is a rates bill or a community tax bill. Where the bill is related to the liable person in a property it makes sense to have the powers to require other persons to identify who the liable person is for purposes of the council tax bill.

On Question, amendment agreed to.

Viscount Mountgarret moved Amendment No. 44: Page 86, line 42, at end insert: ("(c) that a Local Billing Authority may charge interest at a rate not exceeding 10 per cent. on any sum due to be paid but outstanding as at the due date having given prior notice, (d) that should any liable person make payment of any sum demanded which is subsequently found to be refundable, interest at the same rate as that notified in (c) above shall be paid in addition to the sum agreed to be refunded provided the Local Billing Authority had already given notice of its intention to charge interest, and (e) that the Secretary of State may by order amend the limit of interest in sub-paragraph (c) above.").

The noble Viscount said: My Lords, we had an interesting debate on this subject in Committee and I believe that I detected a broad sense of support from your Lordships. However, one or two points were not quite right. It was suggested that perhaps one might rethink and redraft the amendment, which is what I have done. I regret to see that on the way I have lost one supporter in the person of the noble Baroness, Lady Hamwee. How on earth I am likely to achieve anything without her sound support I do not know; perhaps I can try and encourage her.

My noble friend Lord Howe said in Committee that the Government would look carefully at the point. I was reassured and felt that something had reached home. Regrettably, I understand from my noble friend Lady Blatch that the Government are not happy with the amendment. It would add an extra administrative burden to local authorities. I detect in that response the principal reason why my noble friend feels unable to bring forward a satisfactory amendment. The Government are somewhat concerned at imposing on local authorities what they perceive to be an extra administrative burden.

I bear in mind also the point made by my noble friend Lord Boyd-Carpenter who suggested that charging 2 per cent. over bank base rate would be administratively complicated and difficult, particularly with the base rate changing from time to time. I take that point on board. The noble Lord, Lord McIntosh of Haringey, suggested a flat 10 per cent., as is done in France or as the Inland Revenue does at the moment —I believe that it charges 9.75 per cent. on unpaid tax. Again, one tried to look at that point.

The object ought not to be repeated at length because the matter was discussed at Committee stage. It must be fairly obvious that, broadly speaking, if local authorities find themselves lacking in funds because people fail to pay the debts due by a certain date, it is only right and proper, as with the payment of any bill, that if one does not pay on the right date interest is charged. Equally—and probably more important with a rather complicated system of rebates which of necessity is contained in the Bill—it is possible that those who pay their council tax bill in good faith may find, on appeal or on question, which sometimes takes several months to unravel, that they have overpaid. It is vitally important that those people should benefit from the interest on the money that they have laid out to the councils. Therefore, the measure works both ways. I would like to think that the amendment as drafted meets the points made by my noble friend Lord Boyd-Carpenter and the noble Lord, Lord McIntosh of Haringey.

Equally important is that the amendment does not interfere with the local authorities. It simply gives power in law for local authorities to charge interest legally if they so choose. It lays down a suggested maximum as at this date. It provides for one aspect of central government where the Secretary of State should keep the figure in the amendment at 10 per cent. or change it to a lower maximum figure or a higher figure, depending on how interest rates go. I do not believe that this amendment imposes anything on the local authorities, but it gives them a power and it is backed by law. If the local authority fails to—

Noble Lords


4.30 p.m.

Lord Stoddart of Swindon

My Lords, I do not know what is the matter with noble Lords opposite this afternoon. They are a bit touchy. Why is that? When an amendment is being moved it is surely permissible for another Member of the House to ask for clarification of the amendment. Of course that is right. If the noble Lord gives way, as he has done, it is perfectly permissible for me to ask him a question. If he is not giving way—

Noble Lords


Viscount Mountgarret

My Lords, perhaps I may finish. I gave way to the noble Lord because it is only courteous to do so. It would be better if I could finish. I apologise to the House if I have been rather long. If the noble Lord has a point to raise I am sure it will be appropriate to raise it when he comes to speak. If I am permitted, I shall try to do my best to answer at the appropriate time.

The final thing I want to say is that the local billing authorities must give prior notice of any intention to charge any form of interest, be it from 1 per cent. to 10 per cent.; otherwise it should not be done. If such notice is given, interest would be paid on any amount overpaid by the taxpayer. I had good support at Committee stage for the general principle. I now look forward to greater support as I feel that I have tried to meet the points raised by my noble friends and noble Lords opposite. I beg to move.

Lord McIntosh of Haringey

My Lords, if I am specifically asked for a response, as I was by the noble Viscount, I can only respond in terms of modified rapture. It is certainly true that it is much better to have a discretionary power for local authorities than a mandatory one. It is certainly true that local authorities should have the right to decide whether to apply an interest charge. I still feel, as I felt when this matter was raised in Committee, that a variable charge is not entirely desirable.

The noble Lord has now introduced, perhaps in a very minor way, a Henry VIII element into his amendment by providing a figure on the face of the Bill and then providing that the Secretary of State may change it by order.

Baroness Gardner of Parkes

My Lords, I definitely support the principle that people who do not pay the council tax at the correct time should not benefit at the expense of others. That is the reason why this amendment received my support last time. As I understand it, the objection to the amendment as it stands is that it would be a very time-consuming and difficult process to work out just how many days under or over-payment there were. For that reason I am persuaded that the amendment is not practical in its present form.

I very much liked the proposition put forward by the noble Lord, Lord McIntosh, last time. I believe he quoted the French system which imposes a flat 10 per cent. Under the method of collection used by most local authorities, 10 instalments are made so that the last one is paid in January. The months of February and March are used to collect the money which has not been received. Therefore, by the end of the fiscal year, and before the council is into the next one, there is a period where someone who has not paid is clearly shown not to have paid. Rather than just calculating to the day of payment, a measure should be designed —I hope the Government will look at this—so that if payment has not been made by the end of the council tax year, the defaulter is liable to a charge for non-payment at whatever percentage is agreed.

I should like to see incorporated in all judgments that if the local authority has to go to court to get its money, not only costs—which are of no benefit whatever to the local authority because they simply cover court costs and its own costs—but interest are chargeable. It should be part of the judgment. I should like the Government to look further at this. People who do not pay should not benefit from not paying. The world has become filled with people who defer payment as long as possible. I do not mean that they do so because they are in difficulties over payment but simply as a deliberate policy. Many people have said to me that, whereas once they always paid their bills on the day they arrived, they now pay them at the last possible date—and these are people who consider themselves to be well paid. If everyone adopted that principle there would be a considerable loss of revenue to the local authorities. I support the principle of the amendment but I do not support its precise terms.

Lord Cockfield

My Lords, my noble friend has a very great precedent in his favour in the sense that for many years now a system has been built up in this country both for the direct taxes and for some of the indirect taxes on which interest is both charged and paid. We do not have to go to France or any other exotic place to find adequate precedents. I am not referring to Swindon. I am referring to my noble friend on this side of the House. We do not have to go to France or any other remote country to find the answers to so many of these problems because we have thrashed out the answers ourselves over a long period of years.

The problem here is not how it is done, because that is very well known, as are also the problems involved. The issue is whether, having regard to the size of the tax—it is a relatively small one compared with income tax or VAT—it is worth while going to the length of setting up this kind of organisation. Increasingly in these days people are inclined to plan their cash flow. I believe that they are perfectly entitled to do so. The 30 days' grace that one is given to pay one's income tax is normally taken advantage of. I see nothing wrong with that whatever. If that is what Parliament has said, why should not the citizen take advantage of the latitude that Parliament in its wisdom has decided to give him or her?

There is a subsidiary point which I should like to raise. It follows directly after the amendment moved by my noble friend. He is quite rightly trying to keep the scales evenly balanced between the authority and the citizen. If one turns to subparagraph (4) (b) which immediately precedes the one which my noble friend proposes to insert, one finds that if the liable person has paid too much the excess, must he repaid or credited against any subsequent liability". I do not believe it is right that the local authority should be given discretion to hold on to the citizen's money if that money was not due to the local authority in the first place. I hope that when the regulations are made they will ensure that they option whether it is to be repaid or that the excess is to be carried forward should be left in the hands of the citizen and not in the hands of the local authority.

Lord Monson

My Lords, now that the undue complexity and the other minor defects of the noble Viscount's Committee stage amendment have been rectified, I am glad to give my support to the revised version. As the noble Lord, Lord Cockfield, pointed out, very broadly it would bring the council tax into line with other forms of taxation in respect of which the Inland Revenue can charge interest on overdue payments as well as refund interest on tax overpaid, which is a logical thing to do. Of course, as the noble Lord, Lord Cockfield, pointed out, the sums involved are generally smaller than they would be in the case of income tax, CGT or other forms of taxation, but the object is not to make money out of the interest charged but simply to encourage people to pay promptly, thereby saving the local authority a good deal of money when clerical expenditure is taken into account.

Having said that, I think that the noble Lord, Lord McIntosh, may have a point when he criticises heading (e). If the House as a whole agrees with the noble Lord, perhaps the thing to do in order to save time, bearing in mind the pressure that we will be under in the next couple of weeks, is to agree with the amendment today on the understanding that the noble Viscount will move an amendment at Third Reading to delete heading (e).

Lord Stoddart of Swindon

My Lords, I had not wanted to speak on this amendment. I merely wanted to seek clarification regarding a particular word. However, because of the barracking of noble Lords opposite, I am now forced to make a speech, whereas if I had obtained the answer that I wanted I could have just sat down here and listened to other noble Lords speak.

Heading (c) of the amendment states: that a Local Billing Authority may charge interest", at such and such a rate. However, I have been involved in so many debates when I have been told that "may" means "shall".

Noble Lords


Lord Stoddart of Swindon

Oh, yes, my Lords. Indeed I have. I wanted clarification as to whether that "may" really means "may" or whether the Civil Service and the interpreters of the Bill will convert the "may" into "shall". Noble Lords opposite said "No" when I mentioned this point, but I want to be absolutely sure, bearing in mind the previous Vote, that the noble Viscount, Lord Mountgarret, wants to give local authorities the option as to whether to charge late payers 10 per cent. interest or whatever the figure may be.

Generally speaking I prefer to use incentive rather than penalty, or perhaps a mixture of both. Local authorities should be encouraged to give a discount to early payers as well as perhaps a penalty to late payers. That would be doubly helpful.

4.45 p.m.

Lord Boyd-Carpenter

My Lords, I very much disagree with the noble Lord, Lord Stoddart of Swindon, when he suggests that "may" and "shall" are equivalent. Your Lordships are continually dealing with amendments, generally from the other side of the House, which seek to take out "may" and insert "shall". If they were of the same meaning, that would be a sheer waste of time, but they are not. "May" gives a discretion and the courts have again and again made that clear. "Shall" does not give a discretion. "Shall" means that one has to do it whether one likes it or not. That is very important on the only point that has been urged against the amendment.

It has been suggested that it would impose an additional burden on local authorities, when dealing with very small sums of money, to have to pursue the amounts that would be involved under the amendment. But as the wording is "may", it seems quite clear that if it is not worthwhile to pursue a claim local authorities will not be bound to do so, but they can and will be free to do so if they think fit. That seems to meet the point entirely.

On the general merits of the proposition, it seems to me, particularly in the light of our experience of the way in which the poll tax has been operated, that there ought to be some penalty on people who deliberately withhold payment of a local tax of this kind. Simply to provide that interest shall be payable when payment is delayed provides a proper penalty on those who withhold payment.

As to whether heading (e) has the characteristics of a Henry VIII clause, I rather doubt it. We are dealing in a way with matters of taxation which have always been understood to be matters for the Executive and for another place. I do not believe that any serious point arises on that.

Baroness Hamwee

My Lords, the noble Viscount did not lose me other than in terms of sufficiently nimble footwork in putting down my name to the amendment. My mind has strayed a little. I am wondering what one could put down at Third Reading which would tempt the noble Lord, Lord Cockfield, to expand on his views on distant and exotic countries, particularly given the benefit of his experience.

I have one question for the noble Viscount. Under heading (c) the amendment refers to, a rate not exceeding 10 per cent. I am not sure whether the noble Viscount means a rate not exceeding 10 per cent. per annum or whether, if payment is one day late, an extra 10 per cent. is to become payable.

The Earl of Balfour

My Lords, I am concerned about one point in respect of the amendment proposed by my noble friend. Schedule 2 applies to Scotland as well. In Schedule 8, which deals with the enforcement rules for Scotland, we find, in paragraph 2(2), that the sheriff, where an authority has charged someone for failure to pay, may add a further 10 per cent. to that amount. To some extent this could be crossing lines which I do not think would be fair to Scotland. I am concerned about that.

The Parliamentary Under-Secretary of State, Scottish Office (Lord Strathclyde)

My Lords, in this amendment my noble friend presses his view that a local authority should be able to charge interest on council tax unpaid by the due date and to pay interest on sums overpaid to the authority. Each authority would have discretion but would have had to announce its intentions in advance. The interest rate would be monitored by the Secretary of State and subject to change by him.

In Committee my noble friend Lord Howe said that he sympathised with this objective. That remains the Government's position. I do not, however, believe that the proposition before the House overcomes the difficulties that were mentioned in Committee. In fact I believe it might add a further problem.

As I have already argued, the payment of interest, on possibly small sums, is a time-consuming, complex and costly business. I accept that this is done for non-domestic rates, income tax and a number of other taxes, but it tends to cover much larger sums. For the council tax the sums will be much smaller. I believe that that was the point that my noble friend Lord Cockfield made. Overpayment will usually arise when a tax payer wins an appeal against the banding of his property and the property is therefore put in a lower band. The overpayment in these cases is unlikely to be more than about £50. For a whole year this could mean a payment of an extra £5. In most cases this would be lower still as payments would have been made in monthly instalments and thus the full amount would not have been overpaid for the whole year. In the case of unpaid council tax somewhat larger amounts of interest may be due. On an average band D property with a tax of £400, interest for the whole year would be £40. But even in those cases, depending on when the payment was due and whether part payments were made, the amounts would be small and would be complex to calculate.

If I understood him correctly, my noble friend Lord Boyd-Carpenter made the point that we could give local authorities some discretion as regards a kind of de minimis provision.

Lord Boyd-Carpenter

My Lords, if my noble friend the Minister will look at the amendment he will see that the amendment proposes to confer a discretionary power. Therefore, any sensible local authority would not bother where the amount was trivial; but it would bother where the amount was substantial.

Lord Strathclyde

My Lords, I can see the sense in that proposition.

Lord McIntosh of Haringey

My Lords, I trust that the Minister will allow me to intervene in regard to the same point. I do not think that it would be possible for a local authority to exercise its discretionary power as between one tax payer and another. Surely the discretionary power could only be exercised as between one authority and another, regardless of whether the individual amount was trivial.

Moreover, on the same point and in an effort to secure information from the Minister, is there not sufficient case law to show that a discretionary power is very difficult to reject? I believe that a good example would be that of Westminster. The council was forced by the courts to charge for the collection of trade refuse on the grounds of the fiduciary duty; in other words, if the authority has the power it ought to exercise it.

Lord Strathclyde

My Lords, I understood that my noble friend was trying to make the point that it is not so much a choice between different council tax payers, but between different amounts. For example, if the money outstanding was £50, an interest payment may be made, but if it was below that amount then an interest payment would not be made. That seems to me to be sensible. Clearly there is much to be desired in the amendment and in its wording.

We still have problems with the proposal. I doubt that the sums paid to council tax payers, or taken from them, could justify the effort involved. As I mentioned, we have arrangements for local authorities to pay interest on amounts of non-domestic rates which have been overpaid, where much larger sums are involved. That offsets the complexity of payment arrangements necessary to ensure equality of treatment. They certainly are complex. I should be happy to show my noble friend a copy of the practice note which my department has drafted for local authorities in order to help them through the calculations.

As I said, complexity is inevitable if we are to ensure parity of treatment between tax payers. That leads me to the further problem that I foresee with the proposal. I do not believe that we could leave such an arrangement entirely to the discretion of each authority. If, as would probably be the case, very obvious differences of approach emerged between neighbouring authorities, I do not think the position at that stage would be sustainable. We would rapidly be driven to drop the scheme altogether or to impose a national scheme.

Having said that, I am aware that there is an existing power. I believe that it was mentioned by the noble Lord, Lord Stoddart of Swindon. I refer to the incentive argument. I understand that there is an existing power where local authorities can offer incentives of discounts for early payments. That may be a way to deal with the problem rather than having interest payments.

Perhaps I may turn now to the point made by my noble friend Lord Cockfield on the question of crediting overpaid amounts. Overpaid sums must be repaid by the council if the council tax payer so requires, rather than credited. That will be the effect of the regulations that we shall make. In that respect, the provisions will be exactly the same as those that currently exist for the community charge. I hope that I have explained the Government's position clearly to my noble friend. I understand his strong views on the matter and those of other noble Lords. However, I hope that he will feel able to withdraw the amendment.

Lord Monson

My Lords, when he alleges that the proposal would not be cost effective, does the Minister agree that, in practice, the Inland Revenue does not charge interest if it amounts to less than £30. The moment that the sum involved rises to £30.01p it is charged. Similarly, no refund is made if the sum amounts to less than £30. If a similar rule were to apply to the noble Viscount's proposal, would it not be extremely cost effective?

Lord Strathclyde

My Lords, the noble Lord makes a good point. I should be happy to reflect further on the amendment. However, I cannot make a commitment that we shall return to the matter. I believe that there are some administrative difficulties in terms of local authorities. But, as I said, I am happy to look again at the matter and perhaps discuss it with my noble friend.

Viscount Mountgarret

My Lords, I am most grateful to all noble Lords who have taken part in this interesting debate. I sometimes wonder what would send the noble Lord, Lord McIntosh of Haringey, into total raptures. I am only sorry that we have achieved only modified rapture. I hope that on another occasion the noble Lord will become totally rapturous.

In answer to the intervention of the noble Lord, Lord Stoddart of Swindon, perhaps he would be so kind as to look at Amendment No. 70A. We can only presume that the noble Lord, Lord McIntosh of Haringey, will not move that amendment because, apparently, the word "may" equals the word "shall" in the view of noble Lords opposite. However, I shall leave that matter aside. The noble Baroness, Lady Hamwee, asked what the reference in the amendment to "10 per cent." meant. I can tell her that 10 per cent. equals 10 per cent.; in other words, one minute late is 10 per cent. and a year late is 10 per cent. Let us have no complications so that the matter is well understood.

I very much agree with the point made by my noble friend Lord Balfour. It appears that Scotland is being treated rather differently. I hope that my noble friend the Minister will look at that point. The situation should be the same; I do not see why Scotland should be any different.

However, I believe that the important thing that my noble friend the Minister said was that he would look further at the matter. It is not for me to try to run the country. I am not a parliamentary draftsman and of course I may get the wording wrong. But we understand the underlying principle of the proposal. I believe that there is support for it. Indeed, I believe that the people of this country would rather like to see it introduced, especially those who pay on the dot. They may like to see that those who do not pay on the dot have to pay more, and pay interest on outstanding amounts due.

In the circumstances, I believe that it is best for me to retire now. I have had two bites of the cherry. We have had a jolly good talk about the proposal. I hope that my noble friend will take the matter away and look at it again to see whether the Government can produce better wording; or perhaps I should leave it to a more erudite and more experienced Member of your Lordships' House to put forward another amendment. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 44A not moved.]

Baroness Blatch moved Amendments Nos. 45 to 49: Page 89, line 45, leave out ("person concerned") and insert ("relevant person"). Page 90, line 3, leave out ("person concerned") and insert ("relevant person"). Page 90, line 11, at end insert: ("(4A) Regulations under this Schedule may include provision—

  1. (a) that any person appearing to an authority to be a resident, owner or managing agent of a particular dwelling shall supply to the authority such information as fulfils the following conditions—
    1. (i) it is in the possession or control of the person concerned;
    2. (ii) the authority requests the person concerned to supply it; and
    3. (iii) it is requested by the authority for the purpose of identifying the person who, in respect of any period specified in the request, is or will be the relevant person in relation to the dwelling;
  2. (b) that the information is to be supplied within a prescribed period of the request being made and, if the authority so requires, in a form specified in the request; and
  3. (c) that a request may be served on the person concerned either by name or by such description as may be prescribed.").
Page 90, line 12, leave out ("person concerned") and insert ("relevant person"). Page 90, line 15, leave out ("particular period") and insert ("period to which the assumption relates").

The noble Baroness said: My Lords, these amendments were spoken to when I moved Amendment No. 43. I beg to move.

On Question, amendments agreed to.

The Earl of Balfour moved Amendment No. 50: Page 90, line 46, at end insert: ("(e) such other person as may be prescribed in the regulations").

The noble Earl said: My Lords, I shall at least satisfy my noble friend on the Front Bench by confirming that this is a probing amendment. Paragraph 11 of Schedule 2 applies to England and Wales, but paragraph 12 applies to Scotland, hence the reason for the two amendments to cover the same point. Local authorities should have the power to require information from sources additional to those listed in paragraph 11(2) for England and Wales and paragraph 12(2) for Scotland. The bodies of which I am thinking include the Inland Revenue in respect of sales transactions, the Land Registry or, in Scotland, the Court of Sasines, rent tribunals or rent officers.

The amendment is designed to enable the Secretary of State to include such persons as he decides by regulation. This may not be quite the right way to do it, but the local authorities should have the widest possible access. We need to find out who is involved with what property in terms of the community charge or anything else in that respect. I beg to move.

5 p.m.

Lord Strathclyde

My Lords, I recognise that, as my noble friend Lord Balfour has said, this is simply a probing amendment. The provisions which my noble friend seeks to amend deal with the supply of information to billing authorities—and, in Scotland, levying authorities—to enable them to carry out their tax functions.

Paragraph 11—and in Scotland, paragraph 12—of Schedule 2 is not intended to be a wide power. It is deliberately restricted to those public bodies which hold information which may be necessary for the administration of the council tax, and it provides a statutory power for them to supply it to the authority. Without such a statutory power there could be a breach of the Data Protection Act if the information were supplied.

We believe that the list of authorities that we have provided is wide enough for council tax purposes. As my noble friend now knows, we have just amended the Bill to provide specific information powers for local authorities in order to identify the liable person. We believe that we have provided local authorities with all the sources which it would be appropriate for them to access, having regard to the Government's policy on data protection. I hope that that is useful information.

We do not think that it is necessary to make special provision for access to the sources of information that were mentioned by my noble friend Lord Balfour. Both the Land Register in England and its Scottish equivalent, the Register of Sasines, are open to public inspection. Notification of sales transactions is not essential. Local authorities will come to be notified of changes of ownership as part of the conveyancing process, as happened with rates. The government amendments that we have just discussed would enable the authority to discover the identity of the liable person without the need to approach rent officers or rent tribunals.

As I have said, this is a probing amendment and I hope that the probing has given a satisfactory result.

The Earl of Balfour

My Lords, I am most grateful to my noble friend for that answer, which has covered a point about which I was a little concerned. Although I read the government amendments, I felt that they did not cover the point about local authorities, but dealt more with houses. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 51 and 52 not moved.]

Baroness Blatch moved Amendments Nos. 53 and 54: Page 94, line 14, leave out ("Any reference in this Schedule") and insert ("In this schedule: (a) any reference"). Page 94, line 16, at end insert ("and (b) any reference to a managing agent, in relation to a dwelling, is to a person authorised to arrange lettings of the dwelling.").

The noble Baroness said: My Lords, Amendments Nos. 53 and 54 have been spoken to with Amendment No. 43. I beg to move.

On Question, amendments agreed to.

Schedule 3 [Penalties]:

Baroness Blatch moved Amendments Nos. 55 to 60: Page 94, line 20, after ("(1)") insert ("Where a person is requested by a billing authority to supply information under any provision included in regulations under paragraph 2, 3, 9 or 10(2) of Schedule 2 to this Act, the authority may impose a penalty of £50 on him if—

  1. (a) he fails to supply the information in accordance with the provision; or
  2. (b) in purported compliance with the provision he knowingly supplies information which is inaccurate in a material particular.
(1A)"). Page 94, line 26, at end insert: ("(1B) Where a penalty has been imposed on a person under sub-paragraph (1) above and he is requested by the authority again to supply the same information under the same provision, the authority may impose a further penalty of £200 on him if—
  1. (a) he fails to supply the information in accordance with the provision; or
  2. (b) in purported compliance with the provision he knowingly supplies information which is inaccurate in a material particular.
(1C) Sub-paragraph (1B) above applies each time the authority repeats a request.").
Page 94, line 30, leave out sub-paragraph (1). Page 94, line 36, leave out from ("requested") to ("may") in line 38 and insert ("by a levying authority to supply information under any provision included in regulations under paragraph 2, 3, 9 or 10(2) of Schedule 2 or paragraph 5 of Schedule 8 to this Act, the authority"). Page 94, line 41, at end insert: ("(2A) In any case where—
  1. (a) a person is required by any provision included in regulations under paragraph 4, 5, 9 or 10(2) of Schedule 2 to this Act to notify a levying authority; and
  2. (b) he fails to notify the authority in accordance with the provision,
the authority may impose a penalty of £50 on him.").
Page 95, line 29, after ("began") insert ("or anything done").

The noble Baroness said: My Lords, Amendments Nos. 55 to 60 have been spoken to with Amendment No. 43. I beg to move.

On Question, amendments agreed to.

Schedule 4 [Enforcement: England and Wales]:

Lord Henderson of Brompton moved Amendment No. 61: Page 96, line 7, at beginning insert: ("( ) No enforcement order shall be made to recover any sum under this Act unless the court is satisfied that when the application for the summons was made, the authority had correctly determined whether there was an outstanding claim for council tax benefit in respect of that sum.").

The noble Lord said: My Lords, this, again, is a version of an amendment that I moved in Committee. Its purpose is to ensure that people are not summonsed for non-payment of the council tax if they have an outstanding claim for council tax benefit. In other words, it seeks to ensure that local authorities present people with a net sum to pay. I have altered the amendment that was previously tabled to take account of the Minister's concern that people might put in false benefit claims to delay the court process. I think that I have met that point by making the provisions apply only to outstanding claims where the local authority applies for a summons. I hope that that is acceptable to the Minister.

Local authorities are often not up to the requirements that have been imposed upon them by the Government. Under the council tax benefit provisions, as was the case for the community charge, I believe that regulations have been made to the effect that the local authority should pay any benefit within 14 days of a claim or as soon as possible thereafter. However, the experience of the citizens advice bureaux is that that is not always the case—far from it. I have two examples with me, which I do not propose to repeat to the House, which show that the payment of the benefit is sometimes as late as eight months after the claim was submitted. It would be a good discipline if the local authorities were required to be more responsive to the regulations that require such claims to be paid within 14 days after the claim has been made or as soon as possible thereafter. It is unreasonable to think that eight months is "as soon as possible".

The other objection to my amendment is that it might be administratively difficult to implement. When that claim was made, most of your Lordships felt that computers should now be able to register a benefit on the same file as that containing details of the registration and tax liability of the citizen. With a moderately modern computer system, it should not be difficult to present the citizen with a net bill. This matters because people may well be able to pay their bill if they are presented with a net bill, whereas if they are presented only with the council tax without the council taking due account of their entitlement to benefit, the dreadful irrevocable process of calling in the bailiffs, with all the horrors that flow from that, is triggered. That is despite the fact that the citizen is owed money by the council. That cannot be right and it is not good for either revenue collection or the council's cash flow. It is certainly not good for the subject whose house will be invaded and whose cooker and fridge may be removed in distraint for derisory sums of money.

The amendment is an attempt to make it easier for those on low incomes to pay their due, which I am sure is what they want to do, but who need to be helped. I believe that we have heard expressions of opinion from Ministers to the effect that they recognise that poor people should be helped as much as possible to make their payments. That should be made easier for them. This is one of the amendments that is designed to have that effect. I hope that I have tightened its drafting to make it more acceptable to the Government. I beg to move.

Baroness Hollis of Heigham

My Lords, we on these Benches support the amendment, and we hope that the Government will do so. Someone who is eligible for benefit; in other words, someone who is poor, disabled, unemployed or elderly should not be faced with court procedures merely because a local authority has failed to deliver to them the benefit to which they are entitled as of right. That is transparently obvious.

In support of the amendment moved so eloquently by the noble Lord, Lord Henderson, I wish merely to give one example from evidence submitted by the CAB which makes the point. A CAB in Sussex reported the case of a disabled, single parent on income support with three children who was therefore, under the community charge, eligible for an 80 per cent. rebate —under the council tax it would be a 100 per cent. rebate —and who received a summons for the full community charge. That action cannot be defended. We on this side would not dream of defending local authority inefficiency that creates such distress. I hope that your Lordships will support the amendment.

Lord Monson

My Lords, in contrast to Amendment No. 42, I find myself broadly sympathetic to all the other CAB-inspired amendments. I shall support the noble Lord if the amendment is pressed to a Division.

Lord Wise

My Lords, I too strongly support the amendment. As the noble Lord, Lord Henderson, and the noble Baroness, Lady Hollis, said, there is considerable evidence from the CAB that householders have experienced extreme difficulties and have faced, unfairly, the ghastly trauma of a court summons and bailiffs. That has arisen mostly from delays in processing their housing or community charge benefit. It is not unreasonable to assume that similar circumstances might arise in respect of the council tax. The amendment goes a long way towards ensuring that that does not happen. The wording has been tightened to take account of bogus claims for benefit, a point which worried my noble friend Lord Henley in Committee.

Baroness Hamwee

My Lords, we on these Benches support the amendment. There is no need to rehearse the arguments again. To persuade local authorities that their right hand should be introduced to their left hand, and that they should discuss what each department is doing, can only be a good thing.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, I remember the amendment—and as the noble Lord, Lord Henderson, stressed, it was different from this one—being discussed in Committee. That was the occasion upon which the noble Lord accused me of being shirty. I accept that this amendment is slightly different, but the same arguments apply. I am not sure that I can take the matter much further. As the noble Baroness, Lady Hollis, said, the poor—as she referred to them—should not be faced with court proceedings merely because the local authority has been incompetent.

I have the greatest respect for NACAB and the work it does, but I am not sure that I accept all the evidence that it puts before us in view of the anecdotal nature of much of it. I suspect that if we put forward policies based on anecdotal evidence we should be, rightly, laughed out of court. I accept that there are authorities that do not meet the 14-day limit recommended for dealing with housing and community charge benefit claims. That point was accepted by my honourable friend Mr. Robert Key when he spoke to the noble Lord some time before the previous stage of the Bill. In the main, most authorities do meet that target. The figures I gave in Committee concerned some 65 per cent. of authorities which manage to deal with their claims within 14 days.

The question is whether we want to go down the line—as I argued in Committee—where there might be an incentive or device for some tax payers to put off their liability to pay the council tax by making bogus claims for benefit. An amendment such as this would encourage individuals to make such claims. It would provide authorities with an additional burden in considering them. That is not in the interests of councils, council tax payers or other residents in the area. Most authorities—this is the important point —will continue to act reasonably if approached by someone with an outstanding benefit claim, and would not continue their recovery process until the claim is settled. That is the advice given in a practice note on the enforcement of the community charge issued by the Department of the Environment to all authorities. I stress that it will be reiterated in guidance on the enforcement of the council tax.

I hope that that assurance will prevent the noble Lord from pressing the amendment. The amendment has the grave disadvantage of possibly providing the route for some council tax payers to avoid liability by making bogus claims, and so delaying proceedings. I hope therefore that the noble Lord will feel able to withdraw the amendment.

5.15 p.m.

Lord Henderson of Brompton

My Lords, I am grateful to the Minister for the conciliatory tone in which he replied to me. It could not possibly be described as shirty. He will in any case remember that I withdrew the word "shirty" in all friendliness. I also hope that he remembers the rest of the debate. The amendment has been received with sympathy all around the House except the Government Front Bench. I find that a pity. It gives us no comfort to be told that guidance stressing the policy pursued under the old, discredited community charge is to be pursued in relation to the council tax.

I am surprised that the Minister referred to the CABs documented reports as anecdotal evidence. On the whole, he would do well to withdraw that slur on the CABs. I hope that he will do that just as I withdrew the word "shirty", to which some noble Lords objected. It would make me a little happier if he felt able to do that.

Lord Henley

My Lords, the noble Lord calls upon me to withdraw one word. I am happy to withdraw the word "anecdotal". I was merely trying to make the point that the collection of such evidence, which has no methodological basis, is not the way in which the DSS would like to put forward evidence. If we were to produce new policies based upon a similar evidential process, I suspect that we should be laughed out of court.

Lord Henderson of Brompton

My Lords, I thank the noble Lord for that reply. The principle is the same as that of the previous amendment that I moved. Noble Lords who have spoken agree with me that it is essential that the poorer councils should be brought up to the level of the better councils and that good practice should be established by legislation. It is upon that principle that I should like to take my stand, and ask the opinion of the House.

5.20 p.m.

On Question, Whether the said amendment (No. 61) shall be agreed to?

Their Lordships divided: Contents, 101; Not-Contents, 137.

Division No. 2
Acton, L. Carmichael of Kelvingrove, L
Airedale, L. Carter, L. [Teller.]
Allenby of Megiddo, V. Cledwyn of Penrhos, L.
Ardwick, L. Cocks of Hartcliffe, L.
Aylestone, L. Cudlipp, L.
Barnett, L. David, B.
Beaumont of Whitley, L. Dean of Beswick, L.
Birk, B. Donaldson of Kingsbridge, L.
Blackstone, B. Dormand of Easington, L.
Blease, L. Ennals, L.
Bonham-Carter, L. Ezra, L.
Brooks of Tremorfa, L. Falkland, V.
Butterfield, L. Fisher of Rednal, B.
Callaghan of Cardiff, L. Foot, L.
Gainsborough, E. Monson, L.
Gallacher, L. Morris of Castle Morris, L.
Galpern, L. Nicol, B.
Gladwyn, L. Ogmore, L.
Graham of Edmonton, L. Parry, L.
Greene of Harrow Weald, L. Phillips, B.
Grey, E. Pitt of Hampstead, L.
Hampton, L. Prys-Davies, L.
Hamwee, B. [Teller.] Robson of Kiddington, B.
Hanworth, V. Rochester, L.
Harris of Greenwich, L. Ross of Newport, L.
Henderson of Brompton, L. Saltoun of Abernethy, Ly.
Henniker, L. Seear, B.
Hirshfield, L. Sefton of Garston, L.
Hollis of Heigham, B. Serota, B.
Houghton of Sowerby, L. Shackleton, L.
Hughes, L. Shannon, E.
Hunt, L. Shaughnessy, L.
Hutchinson of Lullington, L. Shepherd, L.
Hylton-Foster, B. Stedman, B.
Iddesleigh, E. Stoddart of Swindon, L.
Jay, L. Strabolgi, L.
Jeger, B. Taylor of Blackburn, L.
Jenkins of Hillhead, L. Thurlow, L.
Jenkins of Putney, L. Tordoff, L.
Judd, L. Turner of Camden, B.
Kinloss, Ly. Underhill, L.
Kirkhill, L. Wallace of Coslany, L.
Lockwood, B. Whaddon, L.
Lovell-Davis, L. White, B.
Macaulay of Bragar, L. Williams of Elvel, L.
McIntosh of Haringey, L. Willis, L.
Mallalieu, B. Wilson of Langside, L.
Mason of Barnsley, L. Winchilsea and Nottingham, E.
Mayhew, L. Winstanley, L.
Milner of Leeds, L. Wise, L.
Molloy, L.
Aldington, L. Derwent, L.
Alport, L. Digby, L.
Ampthill, L. Dundee, E.
Arran, E. Elibank, L.
Astor, V. Ellenborough, L.
Balfour, E. Elliot of Harwood, B.
Barber, L. Elton, L.
Bauer, L. Erne, E.
Beloff, L. Faithfull, B.
Belstead, L. Flather, B.
Biddulph, L. Fraser of Carmyllie, L.
Blatch, B. Gardner of Parkes, B.
Blyth, L. Geddes, L.
Boardman, L. Gisborough, L.
Bolton, L. Gray of Contin, L.
Borthwick, L. Greenway, L.
Boyd-Carpenter, L. Gridley, L.
Brabazon of Tara, L. Grimston of Westbury, L.
Brentford, V. Haddington, E.
Bridgeman, V. Hailsham of Saint Marylebone, L.
Brigstocke, B.
Broadbridge, L. Hamilton of Dalzell, L.
Brougham and Vaux, L. Hardinge of Penshurst, L.
Butterworth, L. Harlech, L.
Caithness, E. Harvington, L.
Caldecote, V. Henley, L.
Campbell of Alloway, L. Hesketh, L. [Teller.]
Carnegy of Lour, B. Hives, L.
Carnock, L. Holderness, L.
Cavendish of Furness, L. HolmPatrick, L.
Clanwilliam, E. Hooper, B.
Clinton, L. Howe, E.
Cochrane of Cults, L. Johnston of Rockport, L.
Cockfield, L. Kemsley, V.
Coleraine, L. Killearn, L.
Craigmyle, L. King of Wartnaby, L.
Crickhowell, L. Knollys, V.
Cullen of Ashbourne, L. Lauderdale, E.
Dacre of Glanton, L. Long, V.
Denham, L. Lyell, L.
Denton of Wakefield, B. Mackay of Clashfern, L.
Macleod of Borve, B. Renfrew of Kaimsthorn, L.
Malmesbury, E. Renton, L.
Mancroft, L. St. Davids, V.
Manton, L. Salisbury, M.
Margadale, L. Sanderson of Bowden, L.
Marlesford, L. Seccombe, B.
Merrivale, L. Selborne, E.
Mersey, V. Shuttleworth, L.
Middleton, L. Somerset, D.
Mottistone, L. Stanley of Alderley, L.
Mountevans, L. Stodart of Leaston, L.
Mowbray and Stourton, L. Strange, B.
Munster, E. Strathcarron, L.
Nelson, E. Strathclyde, L.
Norrie, L. Strathcona and Mount Royal, L.
O'Cathain, B.
Orkney, E. Strathmore and Kinghorne, E [Teller.]
Oxfuird, V.
Pearson of Rannoch, L. Sudeley, L.
Pender, L. Swinfen, L.
Pennock, L. Teviot, L.
Perry of Southwark, B. Thomas of Gwydir, L.
Peyton of Yeovil, L. Trumpington, B.
Platt of Writtle, B. Ullswater, V.
Prentice, L. Vaux of Harrowden, L.
Pym, L. Waddington, L.
Rankeillour, L. Wade of Chorlton, L.
Reay, L. Whitelaw, V.
Rees, L. Wyatt of Weeford, L.

Resolved in the negative, and amendment disagreed to accordingly.

5.27 p.m.

Lord Henley moved Amendment No. 62: Page 96, line 22, at end insert ("in relation to the recovery of any sum falling within that sub-paragraph which a person is solely liable to pay").

The noble Lord said: My Lords, I beg to move Amendment No. 62, and in doing so to speak to Amendments Nos. 63, 64, 76 and 77. These are technical, drafting amendments. They clarify the position in relation to the making of regulations on enforcement in respect of those jointly and severally liable for the council tax as well as those who are solely liable. They will simply ensure that the regulations dealing with enforcement of the council tax will be able to deal with those who are jointly and severally liable for the tax as well as those who are solely liable. The amendments also substitute references to "authority" where "person" is inappropriate; and make minor drafting changes. I beg to move.

Lord McIntosh of Haringey

My Lords, I am puzzled by these amendments. I am prepared to be convinced that they are technical amendments but it seems to me that paragraph 2 of Schedule 4 to the Bill gives the Secretary of State adequate powers to make the kind of regulations which are now provided for. Paragraph 1(2) of Schedule 4 states: The Secretary of State may also make regulations in relation to the recovery of any sum which has become payable (by way of repayment) to a person other than a billing authority"— That meets the point about the person to whom the payment should be made— under any provision included in regulations under paragraph 2, 3 or 6(2) or (3) of Schedule 2 to this Act and has not been paid". What do the amendments add to the power under paragraph 2 of Schedule 4?

Lord Henley

My Lords, on these occasions I have to take advice from those who advise me, particularly on matters relating to drafting. I am assured that the amendments are necessary to cover the point I mentioned in my opening remarks, dealing with those who are jointly and severally liable as well as those who are solely liable. I hope that the noble Lord will accept that assurance. Perhaps I may write to him giving a further explanation.

Lord McIntosh of Haringey

My Lords, I should be grateful if the Minister would write to me.

On Question, amendment agreed to.

Lord Henley moved Amendments Nos. 63 and 64: Page 96, line 23, at end insert: ("( ) Regulations under that sub-paragraph may make, in relation to any sum falling within that sub-paragraph which persons are jointly and severally liable to pay, provision equivalent to any so authorised subject to any modifications the Secretary of State thinks fit."). Page 96, line 25, leave out from ("any") to ("shall") and insert ("sum falling within that sub-paragraph").

On Question, amendments agreed to.

[Amendment No. 65 had been withdrawn from the Marshalled List.]

Lord Mottistone moved Amendment No. 65ZA: Page 96, line 32, at end insert ("and the local authority has taken all reasonable steps to enable the person concerned to pay the debt by instalments which reflect his ability to pay.").

The noble Lord said: My Lords, this amendment follows on from an amendment that I tabled in Committee. I was not entirely sure that the Minister was aware of what the amendment intended to do. That matter is recounted in considerable detail in col. 1231 of the Official Report of 28th January. Suffice it to say at this stage that the Magistrates' Association has advised me on this amendment. The Magistrates' Association is keen that when magistrates sit in court and deal with matters of this kind they should have the discretion to take account of the ability of a debtor to pay.

My noble friend said on a previous occasion that the Government did not wish means inquiries to be conducted. Consequently, I have amended the amendment so that all the court has to do is to satisfy itself that a local authority has, taken all reasonable steps to enable the person concerned to pay the debt by instalments which reflect his ability to pay".

There is no question of there being another stage of inquiry. Some other amendments would perhaps introduce another stage of inquiry but my amendment does not seek to introduce such a measure.

My main point is that it is important that magistrates should be seen by their local communities to be taking good care of people who have difficult monetary problems and who may also have young families. The magistrates should take care not to put those people into an impossible position. The magistrates should not appear to be acting like rubber stamps. As it stands, the legislation tends to have that effect. I beg to move.

Lord McIntosh of Haringey

My Lords, the Opposition certainly support the principle of this amendment. We agree that good local authorities will normally take steps to offer payment by instalments. However, we see two problems with the amendment as worded. I am sorry to say this to a noble Lord who speaks on behalf of the Magistrates' Association, but we are not happy with the word "reasonable". We believe that lawyers would find themselves in paradise trying to decide what is and is not meant by the word "reasonable". It may well be extremely difficult and expensive to establish what is and is not reasonable.

Further, my next point is an interesting one to us at any rate. The amendment refers to instalments which reflect a person's ability to pay. However, the council tax is not about ability to pay. The council tax is a fixed tax in which ability to pay is dealt with by discounts and rebates. The ability to pay the resulting amount is not a consideration in the levying of the council tax. I shall be interested to see how the noble Lord, Lord Mottistone, and his advisers get round that problem.

Lord Henderson of Brompton

My Lords, I hope I may briefly repeat what I said in Committee as regards the amendment of the noble Lord, Lord Mottistone. I like the amendment and I am prepared to support it. I accept that some of the reservations expressed by the noble Lord, Lord McIntosh, are valid, but in principle I support the amendment. In view of the results of the Divisions on Amendments Nos. 42 and 61, I do not propose to move Amendments Nos. 66, 67 and 68. Clearly, the Government, I and a sizeable minority in the House, are unable to agree on the principle of compulsion. Therefore it would be absurd to ask the House again to decide whether the principle of compulsion applies. That matter has been decided twice in two other contexts. I happily support the amendment of the noble Lord, Lord Mottistone. I reserve the right to speak to the amendments of the noble Baroness on the subject of bailiffs. I give an advance welcome to those amendments.

Baroness Blatch

My Lords, as my noble friend has said, Amendment No. 65ZA seeks to require magistrates' courts to ensure that a local authority has taken all reasonable steps to enable a debtor to pay by instalments which reflect his ability to pay before making a liability order.

I have written to my noble friend to explain why we could not agree to accept his previous amendment which he has now withdrawn. I am afraid that this amendment would still require a court to hold a means inquiry before making a liability order against a council tax defaulter. That would be the only way a court could find out about the debtor's ability to pay. At this stage of enforcement the taxpayer will have failed to pay despite the opportunity of instalments and a reminder notice from the authority and a summons from the court. To a certain extent the summons and liability order stage is the final reminder. Many people pay at this stage and most people do not attend court. It would be impractical to hold a means inquiry at this stage. It would place unacceptable burdens on both the courts and authorities. Having obtained a liability order, we believe it is reasonable for authorities then to be able to enforce payment using the remedies provided such as distress, attachment of earnings and other remedies, and to decide which of them is the most effective to pursue. Magistrates will of course have to inquire into a taxpayer's means before imposing the ultimate sanction of imprisonment. I do not believe such an inquiry is either necessary or desirable at the earlier stage of granting the liability order.

The noble Lord, Lord McIntosh, commented to my noble friend that the council tax is not related to ability to pay. I should say there is an effective system that reflects ability to pay in the rebate system. There are rebates of up to 100 per cent. for those who are on low incomes and are not able to meet the council tax.

Lord McIntosh of Haringey

My Lords,—

Baroness Blatch

My Lords, I hope I may complete my point. When someone stands before the courts with debts from whatever source, as I have just said the courts can take into account ability to pay. That occurs irrespective of whether the debt has been incurred as a result of a failure to pay the council tax, a gas bill, an electricity bill or any other debt. As I have just said, magistrates will have to inquire into a taxpayer's means before imposing the ultimate sanction of imprisonment.

Lord McIntosh of Haringey

My Lords, I hope the Minister will allow me to intervene on a point of clarification. I have made exactly the point that she is making. I do not necessarily agree with her about the effectiveness of the ability to pay provisions in the council tax; but I made exactly the point the Minister has made when I said those provisions are supposed to be dealt with by means of the rebate and discount structure and that it is the resulting amount that the courts consider.

Baroness Blatch

My Lords, I was dealing with the criticism that the noble Lord made of the council tax as a system. I am simply saying that the council tax as a system of raising revenues for local authorities contains a sophisticated and effective mechanism to determine people's ability to pay through the rebate system. I should also remind the House that under the council tax system those with the least means will be entitled to 100 per cent. benefit. I hope my noble friend will feel able to withdraw the amendment.

Lord Mottistone

My Lords, I thank my noble friend for her explanation. I appreciate the point that has been made both by my noble friend and by the noble Lord, Lord McIntosh. However, I believe it is reasonable to use the word "reasonable". All too frequently courts have to decide whether steps are reasonable or whether some action is reasonable.

I understand the point that has been made. I believe that what my noble friend has said may meet one of the points I have made in that the courts will still have a discretion in the sense that the Bill as drafted states: The magistrates' court shall make the order if it is satisfied that the sum has become payable". If the courts are not satisfied that the sum has become payable, they have the discretion not to proceed further. As my noble friend says, in the event that a person cannot pay for whatever reason he will appear before the courts again. However, my advisers persuaded me—although I have not been able to persuade your Lordships—that that whole process involves yet another stage and the whole matter goes on longer. We wish to try to abbreviate that process.

It is not a sufficiently important point to press further at this stage. I shall consider what my noble friend said. I may come back to the matter at Third Reading and I reserve the right to do so. I am grateful to the noble Lord, Lord Henderson, for his support. I do not think that it is relevant whether or not he intends to move Amendments Nos. 66 and 67. Much of the confusion on the part of the Government rose because our amendments were inadvertently grouped together earlier as a result of a printing error and therefore I received a letter which was relevant to the amendments of the noble Lord, Lord Henderson, and not to mine. That did not help at all. I shall take steps to see whether we can have arrangements to punish the printers when they make mistakes, but that is by the way. At this stage I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.45 p.m.

Baroness Hollis of Heigham moved Amendment No. 65A: Page 99, line 46, leave out ("may") and insert ("shall").

The noble Baroness said: My Lords, in moving Amendment No. 65A I should like to speak also to the other amendments grouped with that amendment. As one of the Opposition peers involved in the Committee stage debate on bailiffs, I should like to say how genuinely delighted we are that the Government have felt able to respond to our anxiety. I should like to congratulate the Ministers on the amendments which have been tabled today. They represent a welcome response to what is a matter of wide concern. Congratulations are due to the Government for that.

In addition, and I hope that the Minister will support me, I should like to pay tribute to NACAB and NCC for their briefing, lobbying and pressure. Without them this item might very well not have been on the agenda and we might not be making the moves which I hope we shall make today. We should acknowledge that.

Amendments Nos. 65A and 70A are designed to strengthen the Secretary of State's hand and impose a duty on him to use his regulation-making powers. We all recognise the need to have effective but humane ways of recovering small debts and the need to strike a balance in so doing between the needs of debtors and the needs of creditors. The better ways are those explored in previous amendments; for example, the acceptance of small debt repayment by instalments, the payment of benefit claims rapidly or appropriate attachment of earnings or even of income support. All of those are preferable to the use of bailiffs. Why is that so? We explored the arguments in Committee but they bear brief repetition this afternoon.

Private bailiffs too often—and even once, twice or three times is too often—are people of dubious reputation and dubious practice whose very effectiveness in collecting debts requires intimidation, threatening behaviour and harassment. Too often those are the inevitable tools of the trade. Too often such bailiffs confuse "won't pay" with "can't pay". Too often there have been examples of them impounding essential household goods—washing machines and cookers—which have been provided by the social fund to families suffering hardship. Too often they have added unreasonable charges, savagely increasing the debt owed by the family, and then have gone on to sell the goods at unregulated auctions without fixed prices. As a result we see the type of advertisements which appear in our Sunday newspapers for government auctions at which washing machines and the like are marked down from £250 to £20. That is a testimony to private misery and private greed.

We have seen bailiffs do all of those things. We have seen them selling goods without a fixed price, leaving the family without essential goods while still having to pay off loans for those goods, still having to pay off outstanding bailiffs' debts and still having to replace the goods distrained, all out of income support. As the CAB said in a very effective report, distress or the use of warrants is particularly ineffective because it simply drives the debt problem elsewhere. The client either takes out loans at a very high interest rate to cover the debt or loses essential items such as a cooker, which means that he then has to buy take-out food, or the washing machine, and has to pay the higher costs of a launderette. Even if he clears the debt, if the problems underlying the indebtedness remain the person is afloat only until the next bill.

It is clear that the voluntary code of practice on which local authorities as well as the Department of Environment placed such hope has broken down. That is clear if one examines the current situation with regard to bailiffs. Apart from sheriff's officers operating from the High Court, there appear to be three main categories of bailiff.

The first is county court bailiffs, who are civil servants based at local county courts and regulated effectively and properly by the Lord Chancellor's Department. They normally collect arrears within the framework of the Consumer Credit Act and small claims. There are very few complaints about their behaviour. Of 1.25 million warrants they pursued, only 1,900 resulted in the forced sale of goods. They exempt essential goods. That is a model which we hope will be emulated.

The second category of bailiff, about which there are most complaints, is the private bailiffs working for private firms. In the main they are instructed by magistrates' courts for the collection of unpaid fines and by local authorities in respect of the poll tax. They are not directly registered and have no fixed scale of fees and charges.

Thirdly, there are certificated bailiffs who are private bailiffs who have applied for or been granted a certificate by county courts for the collection of rent arrears. That process of certification provides some modest regulation. It covers any previous record and the placement of a bond. However, many of us feel that it still does not go far enough.

At present a household in multiple debt can face visits from several different bailiffs, their goods threatened from all directions. Viable alternatives to the distraint of household goods then become very difficult. Poll tax bailiffs may make an agreement with the debtor to pay an outstanding bill. That can quickly be followed by a visit from a private bailiff who is collecting a fine. As there is no spare income he seizes the goods. By the time the county court bailiff has arrived to distrain for arrears under a judgment neither money nor goods remain. Hanging over the household is the threat of a prison sentence.

Therefore the whole system needs review. That is why we wholeheartedly welcome the Lord Chancellor's review as announced by his department. In the meantime we very much welcome the Government's amendment. However, I should like to finish by asking the Minister to clarify some questions which the amendment raises.

First, have the Government any idea as to the timetable for the issue of such regulations? In other words, will the Lord Chancellor's review unduly delay the control of bailiffs which we should all like to see? Secondly, we welcome the introduction of prescribed conditions, a useful broad phrase. However, can the Minister say whether those will include costs, the giving of notice and reference to the gaining of rights of entry? In one case a certificated bailiff who happened also to be a private landlord used the key which he had as a private landlord to gain entry into a property from which he then distrained goods as a certificated bailiff. We want control over such action. Will control over the sale of goods and auctions also be included? Thirdly, will the Minister clarify the phrase, "prescribed goods"? We presume that that will include basic domestic goods, but does it also include, for example, tools for work or goods purchased with money from the social fund?

I should like to end as I began by thanking most warmly Ministers on the Government Benches who have responded to the anxieties and again to pay tribute to the voluntary organisations—the CAB and NCC—which have made this an issue of such salient significance. I beg to move.

Baroness Blatch

My Lords, I welcome the comments of the noble Baroness about the way in which the amendments have been received. However, I should also like to say that in speaking to the amendments the noble Baroness did local government an injustice. Certainly I do not wish to criticise the fact that the noble Baroness used specific examples to illustrate her very real concerns. Those concerns are echoed from all over the Chamber, as she knows. However, that does not recognise what I believe is good practice—best practice —in many local authorities where they exercise their duties in these matters in a very sensitive way. Certainly their practices would not be consistent with what has been described by the noble Baroness at the Dispatch Box. I do not want the impression to be given of local authorities at large that they are not capable of being sensitive and responsive to the needs of local people, particularly the most vulnerable.

Perhaps I may deal with the specific questions before I address the issues generally. With regard to the timetable for the regulations, we wish to await the outcome of the Lord Chancellor's review of these matters. That is important. The noble Baroness mentioned prescribed conditions and asked whether they could include certain items. They could include all those things but, like all regulations, they will be put out for draft consultation. We shall be talking to local authorities and hope to arrive at prescribed conditions that will make sense and achieve the objectives that have been discussed in this House.

Again on the issue of prescribed goods, the noble Baroness gave examples and asked whether they would include fundamental domestic living and tools for work. Those are precisely the kind of things that would be included in such a list of prescribed goods.

As has already been said, the group of amendments includes Amendments Nos. 65A, 67A, 69 and 70A which appear in the name of the noble Lord, Lord McIntosh, and which were spoken to by the noble Baroness, Lady Hollis. It also includes Amendments Nos. 70, 71, 107, 112 and 115 which appear in my name. With the permission of the House, I propose that we consider that part of Amendment No. 107 which relates to computer evidence when we discuss Amendment No. 75.

The group of amendments relates to the process of enforcing the community charge, the non-domestic rate and the future council tax, and in particular to enforcement by distress and committal. During our debates in Committee a number of concerns were expressed about the activities of bailiffs. We have recognised the position and hope the decisions that we have taken to bring forward the amendments in my name go a long way to meet those concerns.

Before describing the amendments in detail I should draw noble Lords' attention to the announcement made by my noble and learned friend the Lord Chancellor about the review that he is conducting of civil enforcement agents. Perhaps I may explain that they are sheriffs, court bailiffs, certificated bailiffs and other private bailiffs. For those noble Lords who have not seen the announcement, the review will consider whether changes should be made to the organisation and management of agents involved in the civil enforcement process; the part which the state should play in the organisation and management of enforcement agents; the way in which any changes in the organisation and management of enforcement agents could be achieved; and whether any changes to the law governing the work of enforcement agents are necessary or desirable. I am sure that noble Lords will welcome that decision by my noble and learned friend. I believe that the review will address many of the concerns expressed by noble Lords in this House.

Nevertheless, we felt that there were two further steps that we should take on the community charge, non-domestic rate and council tax. First, we propose a regulation-making power which would enable the Secretary of State to prescribe those goods which a bailiff should not be able to distrain. That provision is intended to bring greater clarity to the work of bailiffs and to ensure that items essential to the charge payer for his domestic and work use are protected from distraint. We propose to consult on the items that should be included on the list. There are a number of models already in statute to which we can look, in particular in the County Courts Act 1984 as amended by the Courts and Legal Services Act 1990. However, I should not wish to specify in advance of consultation whether we would wish to adopt that particular model in whole or in part. We can indeed get on with the consultation on those regulations.

Secondly, we propose a regulation-making power which will enable the Secretary of State to prescribe by description those persons whom local authorities may employ in community charge, non-domestic rate and council tax enforcement work in addition to their own staff. I must stress that we do not intend to use that power until the outcome of the Lord Chancellor's review is known and only then, if we think it appropriate, in the light of full consultation. In the interim, it is my understanding that most authorities already use certificated bailiffs in carrying out enforcement work on their behalf. I have already made reference to the sensitivity of the work carried out by many local authorities.

I turn now to Amendment No. 71, tabled in my name, which also relates to the activities of bailiffs. It has been argued that there is some ambiguity in the wording of paragraph 8 of Schedule 4 to the Local Government Finance Act 1988, replicated in the Bill before us now, as regards the link between the attempt to levy distress and an application for committal. As the statute and the regulations stand, the local authority may apply for a committal warrant where a bailiff has sought to levy distress but no goods or insufficient goods have been found. It is argued that if a bailiff fails to gain access to a property he is in no position to say whether there are no goods or insufficient goods to distrain. If the local authority has no evidence on which to conclude that there are no goods or insufficient goods, it is prevented from applying for committal.

Bailiffs have no power to make a forcible entry to a property. If, therefore, a defaulter simply denies the bailiff access to his house, the authority may be unable to apply for committal. That would make nonsense of the enforcement process. The amendment before us therefore provides that if, for whatever reason—which includes failure to gain access—bailiffs fail to find sufficient goods to distrain from a defaulter, the local authority may proceed to seek committal. None of that affects the rights of individuals at the committal hearing. It would certainly be open to an individual to argue, as can be done now, either before the magistrates or a higher court, that an authority failed to take the steps necessary to enable it to apply for a committal warrant.

I hope that the House will agree that, having identified this potential ambiguity of wording, it was right for the Government to put matters beyond doubt and ensure that no defaulter is able to evade the proper enforcement process simply by not opening the door to a bailiff when he is in fact present and at home.

Amendments Nos. 112 and 115 ensure that the amendments have effect immediately on Royal Assent.

I should like to end by making a general point about bailiffs. Noble Lords have expressed considerable concern about the activities of bailiffs. I acknowledge that concern and believe that we have responded positively to it. Nevertheless, I should not like to leave the House with the impression that we are unaware of the valuable role played by the bailiffs. Over the past two years they have been given many millions of commissions in community charge matters. Their task is not an easy one. The problem of debt is undeniably traumatic for those concerned. Nevertheless, against those many millions of commissions there have been remarkably few complaints against the bailiffs. That is a record that I believe we should acknowledge also in addition to acknowledging the sensitive work that is being done by local authorities.

In the light of what I have said, I hope that the noble Baroness and all her supporters on these amendments will agree to withdraw the amendment. In asking the noble Lord, Lord Henderson, to do so, I should note that the power to prescribe in regulations the costs of distress is already available to the Secretary of State under the Bill. I therefore hope too that the House will agree to support the amendments that we have put forward.

Lord Henderson of Brompton

My Lords, I hope that it is in order for me to rise to say briefly that I fully endorse everything that the noble Baroness, Lady Hollis, said about the Government's actions in regard to bailiffs. Both the amendments which have been tabled by the noble Baroness and the Lord Chancellor's decision are most welcome and could hardly have been a more comprehensive response to the kind of pressure that we have been putting on the Government. That response is most welcome, both in the Bill and for what might come out of the Lord Chancellor's commission.

I thank the noble Baroness also for explaining so well the contents of the Bill. That has enabled me to cut short my questions to her. Amendment No. 71 had puzzled me. I shall read her explanation with great care and if we need to come back on the Question of whether the Bill do now pass, I might possibly seek further elucidation. Certainly there is no need to pursue this matter further by way of amendment. That, if I may say so, is a very happy issue indeed.

Baroness Blatch

My Lords, with the leave of the House, it might be helpful if I also say in response to the timing that the Lord Chancellor will be issuing a consultation document - we believe by this summer. It will go out for very wide consultation. The timing will depend very much on the conclusions of that consultation process as to precisely what goes into the regulations or into primary legislation if that should be needed.

6 p.m.

Baroness Hollis of Heigham

My Lords, I believe that it falls to me to comment because Amendment No. 65A was moved first. The noble Baroness, Lady Blatch, answered the question on timing that I was about to ask. There appears a long history of willingness to consider the subject of bailiffs, in particular private bailiffs, but of nothing happening as a consequence. I refer to 1968, the Withers Payne Report, and so on. The provision is now on the face of the Bill with the support of the House. That gives me much greater confidence that whatever the outcome of political events in the future we shall now see a remedy for those problems.

In that spirit, I warmly welcome everything that the noble Baroness has said. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Henderson of Brompton

My Lords, I fear that Amendment No. 65ZA has not been moved.

Baroness Blatch

My Lords, perhaps I can be helpful. We have passed Amendment No. 65ZA.

[Amendments Nos. 66 to 69 not moved.]

Baroness Blatch moved Amendment No. 70: Page 100, line 17, at end insert: ("( ) The regulations may include provision that—

  1. (a) no person shall make a distress unless he is an officer of the authority concerned, or he is a person of a prescribed description and any prescribed conditions are fulfilled;
  2. (b) no person making a distress shall seize goods of a prescribed description.").

The noble Baroness said: My Lords, I have spoken to this amendment. I beg to move.

[Amendment No. 70A, as an amendment to Amendment No. 70, not moved.]

On Question, Amendment No. 70 agreed to.

Baroness Blatch moved Amendment No. 71: Page 100, line 33, leave out from ("and") to ("on") in line 34 and insert ("the person making the distress reports to the authority that he was unable (for whatever reason) to find any or sufficient goods of the debtor").

The noble Baroness said: My Lords, I spoke to Amendment No. 71 with Amendment No. 65A. I beg to move.

On Question, amendment agreed to.

Lord McIntosh of Haringey moved Amendment No. 72: Page 101, line 1, after ("concerned") insert ("to the constables of the police area in which the warrant is issued").

The noble Lord said: My Lords, in moving the amendment I speak also to Amendment No. 73. The matter has been debated in Committee. There are two, I hope good, reasons why we should return to the issue now. The first is that the noble Baroness, Lady Blatch—with such an array of Ministers facing me I have to specify which Minister—was good enough to agree at Committee stage that she would speak to colleagues in the Home Office about the direction of warrants from the courts to the police.

In Committee I made a deplorably lengthy speech in which I cited a number of cases from local authorities, and indeed from police forces around the country, in which it was clear that, although there is a general duty on the police to enforce warrants if they are asked to do so, a number of police forces are not doing so when it comes to poll tax warrants. I gave examples where they were flatly refusing to do so and examples where they said, "We'd like to do so but under present circumstances, with present manning levels and so on, it is impossible for us to get involved". In response to that amendment, Ministers said that they would indeed consider the matter and that they would talk to colleagues in the Home Office. I hope to hear the results of those talks in a minute.

There was also criticism of the wording of the amendment, with some justification. It was pointed out that it would not be desirable to direct warrants solely to the police; there ought to be greater flexibility. Therefore the amendment that we have put down for debate today allows that warrants should be directed to the constables in the police area in which the warrant is issued but also, as already exists in the text of the Bill, to the authority concerned or to any such others as may be specified. We are simply adding the power for warrants to be directed to the police as well as to those to whom they are directed at present.

I await with interest to see what Ministers say. I very much hope that they will not make the remarks that they made in Committee when I was assured that in general the police would accept the direction of warrants to them. I was assured that no extra power was required and that the only matter in dispute was the priorities of chief constables in this matter. I am sorry to say that experience has shown that the situation does not work. Unless there is a specific power for magistrates to direct a warrant to the police, it will not necessarily be directed to the police. The police will not in practice accept it.

I hope that the discussions with the Home Office will result in some more positive response from Ministers. I beg to move.

The Earl of Balfour

My Lords, since Amendment No. 72 is grouped with Amendment No. 73, does the noble Lord, Lord McIntosh, intend that the words in the Bill "England and Wales" shall be substituted by "Great Britain" to allow provision for authorities in England to apply across the Border in Scotland? I have the feeling that that is his intention. Otherwise the enforcement procedures for Scotland are in Schedule 8. The legal provisions in Scotland in civil law are quite different from those of England. I believe that there is confusion with regard to Amendment No. 73. I am not quite certain what the noble Lord is driving at.

Earl Howe

My Lords, Amendment No. 72 seeks to emphasise that a committal warrant can be directed to the local police to execute. Amendment No. 73 seeks to ensure that a warrant can be executed in Scotland for a debt due in England and Wales.

I understand that some authorities are concerned about the execution of arrest warrants. Under domestic rates and the community charge it has been possible for the courts to direct a committal warrant to the local authority concerned, to the police or to any other person. The fact that the police are not specifically mentioned in the legislation makes no difference. However, in the large majority of cases we would not expect it to be necessary for the police to become involved in the process and that it should be for the local authority to execute the warrant or to employ agents to do so on its behalf. Of course there are bound to be particularly difficult cases. As to those, I am sure that the best course is for local authorities to consult with their local police about arrangements for handling those matters. I can say that my department is currently discussing those questions with the Home Office to see whether it would be helpful to provide some general guidance to those involved.

Amendment No. 73 proposes the extension of jurisdiction to Scotland, but I am not aware of any significant problems in this area. The amendment covers a wider question than merely enforcement of the council tax and, therefore, we do not believe that it is appropriate to deal with it in this Bill. In the light of my comments, which were intended to be helpful, I hope that the noble Lord will feel able to withdraw his amendment.

Lord McIntosh of Haringey

My Lords, I am sure that the Minister's comments were intended to be helpful and I am grateful for them.

Perhaps I may first deal with the more limited issue of Scotland. The noble Earl, Lord Balfour, was right in saying that the intention of the amendment was to allow pursuit into Scotland. In tabling the amendment I relied on the statement which the Minister, the noble Baroness, Lady Blatch, made in Committee. It appears at col. 1260 of the Official Report and the noble Earl has repeated it. The noble Baroness said that she was not aware of any problem in extending jurisdiction to Scotland. However, one can read that statement in two ways: either that there is no problem now because jurisdiction can be extended to Scotland or that it will not cause any problem to extend jurisdiction to Scotland. I am not sure which of the two versions the noble Earl intended. Since he is now in charge of this amendment, perhaps he will be good enough to enlighten me on that point.

Earl Howe

My Lords, I am not aware of a general problem involving debtors in England and Wales escaping arrest simply by crossing the Border into Scotland. That is what I intended by the remark.

Lord McIntosh of Haringey

My Lords, again that remark is ambiguous. I am still unclear about the position, but I shall not pursue the matter by asking the noble Earl to respond again. I do not know whether the lack of a problem is because there already are powers to pursue a debtor across the Border or because it does not happen. However, I shall leave that matter.

The noble Earl's response to the principal point of the amendment is, I am afraid, still disappointing. He confirmed that I was right in saying that the previous existing law for both domestic rates and the poll tax is that a warrant may be directed to the authority, to a constable or to others. It is now proposed that the power to direct a warrant to the constable—to the police—should be removed. The noble Earl gave no good explanation or justification for that. Instead he gave a most temporary and interim report of the discussions with the Home Office. I had hoped that those discussions would have taken place and reached some kind of conclusion before this stage of the Bill.

If we are to be satisfied on the matter, the minimum requirement is that the Home Office should agree to issue guidance to all police forces indicating that where warrants are directed to them (as they can be under the power to direct warrants to any others) police forces shall make serious efforts to implement them. I do not imply that any but a small minority of warrants should be directed to the police. I entirely agree with the noble Earl that the normal procedure should be that warrants should be directed to the local authority and that it should seek to implement them. That is the less burdensome and threatening way to deal with a warrant. However, as the noble Earl acknowledged, there are cases in which it is necessary because trouble can properly be anticipated.

Before I give an undertaking not to return to the matter at a later stage I hope that the noble Earl will be able to repeat rather more forcefully that it is likely that guidance will be issued by the Home Office to police forces indicating that they should comply with warrants when addressed to them.

Earl Howe

My Lords, with the leave of the House, we believe that the way forward is to agree guidance. However, I can give no specific undertaking about the timing or when that will be achieved. Certainly the discussions that are now taking place between my department and the Home Office have that aim in view.

Lord McIntosh of Haringey

My Lords, I am grateful to the noble Earl. It is clear that timing is significant but we have at least a year before the guidance needs to be brought into effect. The power to address warrants to the police exists in respect of the poll tax and that will continue till 31st March 1993. I am grateful for the Minister's reply, which was slightly more helpful. I shall not return to the matter at Third Reading and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 73 not moved.]

6.15 p.m.

Lord McIntosh of Haringey moved Amendment No. 74: Page 102, line 31, at end insert: ("Reduction or remission of liability 11A.—(1) For the avoidance of doubt, a billing authority may, whether under provision of its standing orders or otherwise, reduce or remit any amount of council tax which a person would otherwise be liable to pay. (2) An authority may not act under this paragraph unless it is satisfied that—

  1. (a) the person would sustain hardship if the authority did not do so; and
  2. (b) it is reasonable for the authority to do so, having regard to the interests of persons subject to council tax in its area.
(3) Where any maximum amount is prescribed in the standing orders of an authority in relation to the reduction or remission of liability for local taxation, the relevant committee of the authority may approve a reduction or remission up to the full amount of the liability. (4) Any reduction or remission made under sub-paragraph (2) above shall be subject to the approval of the Chief financial officer or head of the paid service in the relevant authority. (5) Any reduction or remission made under this paragraph shall be subjected to the scrutiny of the auditor, and the chief financial officer shall record the amount and reason for the reduction or recession.").

The noble Lord said: My Lords, we return to the issue of reduction or remission of liability for the council tax. We are attempting to specify the powers of local authorities to reduce or to remit the payment of council tax on grounds of hardship. The amendment relates to a subject which was discussed in Committee and has been revised to take account of the comments that were then made. In particular, some noble Lords and Ministers objected to the idea of reduction or remission on grounds of poverty. It was said that poverty was presumed to be an imprecise concept, although poverty has been well established by statisticians. It is a reasonably well-understood concept which could have a place in legislation, even though it does not do so at the moment.

In Committee we moved an amendment which would have allowed billing authorities to reduce or to remit the payment of council tax on account of the poverty of the person liable to pay. The noble Lord, Lord Henley, who I assume will respond to the amendment, called that an archaic concept. He said that in any case authorities had the power to write off small amounts. I raise the matter again because the noble Lord repeated those remarks yesterday. He said: In Committee I dealt in some detail with the policy which local authorities have in pursuing debts".

I assume that he meant the powers rather than the policy. He continued: 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 he brought to the attention of the district auditor".—[Official Report, 17/2/92; col. 1074.]

That statement has puzzled the local authority associations. It would be helpful if in reply the Minister indicated the statutory authority for debt write-off.

It is not simply a technical point because the write-off of debt is a potentially explosive issue. The reason why there are restraints on the ability of local authorities to write off debts is not a matter merely of financial management, although it is that too. The restraints exist because the Government still retain not so much in the back but in the forefront of their mind the idea that there is a large number of loony authorities around the country which are only too willing and ready to write off debts.

I can assure the noble Lord that the accusation, which was made frequently in the early 1980s and even at the beginning of the introduction of the poll tax, has no foundation whatever. Local authorities of all political persuasions have no incentive whatever to seek to write off debts which they should not write off.

They have no incentive to use revenue which they desperately need in order to balance their accounts. They have no incentive to charge their poll tax payers or council tax payers amounts any greater than are absolutely necessary to compensate for non-collection. The evidence of the extent to which councils have been pursuing non-payers through the country—the number of summonses that have been issued, the burdens that there have been on the courts and the whole issue of the extensive use of bailiffs which has been recognised in recent amendments —lends support to my argument.

Local authorities do not wish to write-off debts if it is to their financial disadvantage to do so. They want the power to write off relatively small debts where the cost of collection will outweigh the return from pursuing the debt. That is what the previous amendments were about. The present amendment is more satisfactory in its drafting. I should be grateful for the Minister's response as to what powers local authorities currently have and whether they can be applied practically, without breach of fiduciary duty, to the collection of relatively small poll tax debts and, for the future, council tax debts. On the basis of what the Minister says, I shall consider whether I should test the view of the House on this matter. I beg to move.

Lord Ross of Newport

My Lords, I speak in the absence of my noble friend Lady Hamwee who has had to leave in order to attend another engagement. I support this amendment. In the year ending 31st December 1991 there were 80,000 mortgage repossessions. It seems to me that local authorities must play some part in trying to help people who face problems as regards the payment of mortgages and obviously future possible payment of rates—what is at present the poll tax.

The amendment is sensibly worded because it gives protection from abuse. It may be that Ministers feel that some councils are too easy going and are prepared to remit far too easily payments which are due. However, the amendment states that any reduction or remission must be: subject to the approval of the chief financial officer or head of the paid service in the relevant authority". My experience of local government is that we used to try and help small businesses, particularly in 1981–82 when there were similar problems to those which exist today. We never provided any finance without the approval of the financial officers of the county council. We took their views into account very strongly. The amendment gives that protection. I have an extremely high regard for county treasurers and paid-up members of local authorities who are involved with finance of one kind or another. One would not normally act as an elected member without confirmation that there was genuine hardship.

I give the Government credit for trying very hard, as they have done, to persuade building societies and others to come forward with schemes to delay or resist some of the enormous number of repossessions which are in the pipeline. If local authorities are to play their part in that, then this kind of amendment is highly desirable. I hope that the Government will accept it.

Despite the fact that local authorities have the ability to help small businesses, that has not happened in many cases. Local authorities should look at some of their smaller shopkeepers to see whether or not, in cases of genuine hardship, they can help them rather more than they have done in the past. Figures quoted in Committee showed that very little has happened despite the local authorities' ability to provide that help. Perhaps the Government will say that they will consider this amendment.

Lord Henley

My Lords, we consider all amendments and we have looked at this very carefully, as I said we would on a previous occasion. However, I do not believe that the case has been made for bringing in such a power.

As I have already explained on two occasions, there are procedures already in place designed to waive payment where the debt is positively irrecoverable or would involve disproportionate collection costs. The noble Lord, Lord McIntosh, asked by what authority local authorities could do that. I understand that it is a matter for the standing orders of local authorities. It is not a statutory matter but is a matter of prudent financial management. Local authorities have provision in their standing orders or their financial regulations to enable small amounts to be written off. As I explained on an earlier occasion, there would be a ceiling on that amount which would be subject to the approval of the chief financial officer or chief executive. For audit purposes, the details of the amount and the reason that the debt is regarded as irrecoverable must be recorded. If a sum exceeds the authority's ceiling, as I explained yesterday, the authority's general purposes committee, or equivalent, may approve write-off, and that sum would be written off at the end of the year by the auditor as part of his accounting adjustments.

The amendment appears to go no further than the existing procedures. I welcome the fact that it is tighter than the previous amendment moved by the noble Lord, Lord McIntosh. For example, paragraph (4) provides that there must be the approval of the chief financial officer or head of the paid service. However, it goes further. Instead of using the criteria of irrecoverability or excessive cost, it seeks to allow write-off or reduction in cases of hardship.

I accept the fact that under the rates local authorities had discretion to waive payment in cases of extreme hardship. However, as I explained in Committee, that provision stemmed from the time before the development of a comprehensive benefit system. Under the council tax people on low incomes will be protected in a number of ways. The benefit system will ensure that they can claim rebates of up to 100 per cent. of their liability for council tax. Under those circumstances there would clearly be no need to write off or reduce liability on the grounds of hardship. People who live on their own or others who benefit from the status discounts will receive help through the discount system in addition to any benefits to which they may be entitled.

I believe it would be wholly undesirable if those sensible procedures were undermined by local authority decisions based on the authority's subjective view of a person's means. Under current procedures, if the decision to write off a debt is challenged, local authorities will be required to demonstrate why the amount was irrecoverable or uneconomic to collect. It is right to retain those as the criteria for write-offs rather than to have the subjective view of a person's ability to pay as a basis for audit scrutiny.

We believe that local authorities already have the necessary powers to deal fairly and effectively with cases of this kind. In addition, the system of discounts and benefits will provide help for those on low incomes. Therefore, the amendment is unnecessary and I hope that the noble Lord will withdraw it.

Lord McIntosh of Haringey

My Lords, I am surprised by that answer. I wonder whether it is based on an adequate analysis of the powers which local authorities have under local government legislation.

Of course the standing orders of local authorities are their own standing orders. They draw them up. However, there are severe restrictions in legislation on what local authorities can do in their standing orders. In particular, when it comes to financial matters of this kind, those restrictions are reinforced by the powers of the district auditor. If a local authority were to grant itself wide powers of writing off debts, the district auditor would be the first to come down upon it like a ton of bricks and say, "You are not controlling your income and expenditure properly". Indeed, it may go so far that a ratepayer or poll tax payer questions whether the council was acting in accordance with its fiduciary duty.

I realise that it is the third time the Minister has given this response. However, I still find it imprecise. I am surprised that he should say that no statutory authority is required for the provision in the standing orders of local authorities, which he described in some detail. I am surprised also that it should be thought possible for the Audit Commission to give advice on the matter. I would not have thought that that was the Audit Commission's function.

I shall be interested to know whether, on reflection, the Minister feels that that is his final word on the matter. Clearly it is not something we can pursue ad infinitum. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.30 p.m.

Baroness Blatch moved Amendment No. 75: Page 103, line 6, at end insert: ("Admissibility of evidence .—(1) Regulations under paragraph 1(1) above may include provision that, in any proceedings before a magistrates' court under any provision included by virtue of the preceding provisions of this Schedule—

  1. (a) a statement contained in a document of record shall be admissible as evidence of any fact stated in it of which direct oral evidence would be admissible; and
  2. (b) a certificate which is made with respect to a document of record produced by a computer and purports to be signed by a responsible person shall be admissible as evidence of anything which is stated in it to the best of his information and belief.
(2) In this paragraph— document of record" means a document constituting or forming part of a record compiled by the authority concerned; responsible person" means a person occupying a responsible position in relation to the operation of the computer; statement" includes any representation of fact, whether made in words or otherwise.").

The noble Baroness said: My Lords, Amendment No. 75 and part of Amendment No. 107, which was held over with the agreement of your Lordships, in essence provide for the Secretary of State to make regulations to do two things.

First, the regulations will make computer evidence admissible in community charge, non-domestic rate and council tax hearings in the magistrates' courts. That may apply to any aspect of the enforcement process under Schedule 4 to the 1988 Act and Schedule 4 to the Bill. Secondly, in presenting computer evidence the local authority will be required to provide a certificate signed by a responsible person, for instance the computer manager, stating that the computer which produced the documents in question was in proper working order to carry out the required task.

We propose to make regulations under these provisions immediately this Bill receives Royal Assent. We have placed a copy of the draft regulations in the Library to give noble Lords the background. They are, of course, subject to the possibility of some amendment before making. The provisions will provide local authorities with the certainty they need without a new and elaborate set of procedures. The requirement to provide a certificate signed by the responsible person will, at the same time, provide a necessary safeguard for the chargepayer, ratepayer and council tax payer.

My department has today discussed the amendment before us and the draft regulations with the local authority associations, and in particular how the proposed new procedures will work in practice. The associations put forward a range of points about the draft regulations and, more generally, about the approach and requirements of local authorities in giving evidence in magistrates' courts on all local taxation matters. My department agreed to consider those matters and meet the local authority associations again for further discussion in a few days' time. At this stage I cannot say how we will respond to the points made. But should we be persuaded that some change is necessary to the amendments before us in response to what they say, I shall bring forward proposals at Third Reading.

As noble Lords will appreciate the amendments do not have retrospective effect, but they will apply in proceedings to enforce payment of the community charge and the non-domestic rate whenever the liability arose, including in cases where a summons was issued before the Local Government Finance Bill and the regulations take effect. Perhaps it will help the House if I explain why we do not think retrospection is necessary.

Our understanding in relation to liability orders which have been made under existing powers is as follows. The new provisions will not invalidate any order previously made. Local authorities can continue to act on orders which the magistrates' courts have granted. An individual may, of course, apply to challenge the liability order in a higher court—for instance by applying for leave to apply for judicial review if the order was granted within the past three months. Each case would need to be looked at separately and on its merits. If the only ground on which an individual sought relief was the inadmissibility of computer evidence, and he had not raised that issue in a lower court, it seems unlikely that a court in the exercise of its discretion would entertain an application. If it came to a hearing, I understand it is equally unlikely that a court in the exercise of its discretion would quash a liability order solely on the ground of a procedural defect if no injustice had been done and the community charge remained unpaid.

I am sure that all noble Lords will agree that it was necessary to end the uncertainty on the matter of computer evidence. We believe that these provisions will do that in a straightforward and practical manner which does not interfere with the rights of charge payers and tax payers. As we have continually made clear, we will take whatever steps are necessary to ensure that local authorities have the powers they need to collect the community charge and to recover from those who do not pay. I beg to move.

Lord McIntosh of Haringey

My Lords, this is an amendment of great importance and deserves the full consideration of the House. Indeed, when the matter was first raised there was talk that it may be the subject of a separate urgent Bill. At that stage the Opposition in another place indicated that they would support such an urgent Bill if it were felt desirable.

I confess that this is one of those occasions when my lack of legal training places me at a disadvantage. I am not sure that I understand all the legal complexities of the debate and I shall therefore preface my remarks about what I see as being the political and practical issues by saying that we shall not oppose the amendment. We welcome the statement that the Minister has just made. If there are further changes to be made as a result of the negotiations taking place with local authority associations which produce further amendments at Third Reading, that would be extremely helpful. It may give us an opportunity to consider further amendments which, after all, we saw for the first time only last Friday.

The matter is of importance because of the large amounts of money involved. It is only because of the quantity of enforcement action in the courts which has taken place as a result of the poll tax that we have reached this state. It began to become clear last summer that some legal supporters of poll tax rebels—I believe that to be the correct description—were starting to complain that computer records were not valid as evidence in court. That did not matter too much in the magistrates' courts but when conflicting views began to be given by stipendiary magistrates it became clear that urgent action was required. I understand that two different stipendiary magistrates gave differing views about differing cases both relating to the London Borough of Camden. Local authorities and my honourable friends in another place took action as soon as they could to encourage the Government to act on the matter.

With regard to the issue of retrospection I can only accept what the Minister says and accept her advice that orders which have already been obtained will be valid. However, in responding perhaps the Minister can say what advice she would give to local authorities about the action they should take between now and Royal Assent when the provision comes into force. Should local authorities avoid producing computer evidence in the knowledge that the law will be changed but has not yet been changed? What effect will that have on the way in which they treat applications for liability orders?

I return to the issue of retrospection. Around 5 million orders of this kind have been made during the past few years. Perhaps the Minister can say why the clause does not specify, as has happened in the recent past, that the provision should come into effect from midnight tonight rather than from the date of Royal Assent. If it had been proposed that it should come into effect from midnight tonight in order to avoid any difficulty between now and Royal Assent, we would have supported such a provision and local authorities would have been relieved.

It is also clearly a matter where justice must not only be done, but it must be seen to be done. I am not in favour of government advertising campaigns, particularly just before a general election, but on this occasion I urge the Minister to consider what publicity should be given to this matter in order to ensure that everyone understands that there is no escape from paying the poll tax because of the use of computer evidence. It is particularly important because the Government have continued to resist our attempts to abolish the minimum 20 per cent. payment from the end of March this year.

Another question for the Minister is this: why should not this provision apply to pre-1990 rates cases? As the Government well know, a number of these cases are outstanding. The problem with computer evidence has existed for a number of years. I believe it proper that this measure should apply also to the older cases. The Audit Commission has recommended to local authorities that where they have large numbers of cases coming before the courts they should have computer terminals available in the courts so that the accuracy of the information supplied can be verified. In her opening remarks the Minister referred to safeguards that the computer system is operating properly. Can she can give noble Lords and local authorities any advice about whether the Government are encouraging local authorities to provide computer terminals in the courts in order to expedite the cases concerned?

The Minister has referred to evidence in liability orders. Is there not a question about the evidence which is valid in committal hearings as well? Would the Minister care to comment on whether the new provisions which are being made apply to committal hearings? I understand that, at a meeting which took place between the local authority associations and the department earlier today, local authorities indicated that they prefer something like the powers under Section 10 of the General Rate Act 1967, which provides that an officer of the authority could certify a statement of account, the posting of documents and so forth. That would seem to cover the wider issues of which computerised records are only one part. It would be a pity if we dealt only with computer evidence and left other gaps in the provision in law. Perhaps that is a matter which will be debated with the local authorities between now and Third Reading. It may be that that is a matter which will have to be referred to in further government amendments at Third Reading.

In general, with those rather wide-ranging questions—and we are bound to question something of this importance which comes to us at such a late stage of the Bill—we welcome the purpose behind the amendments. We believe that it is necessary to plug any loopholes which make it more difficult for local authorities to secure that people obey the law. We support the principle behind the amendments.

The Earl of Balfour

My Lords, I am very glad that the noble Lord, Lord McIntosh, said what he did. In view of what he said I wonder whether some provision can be made as regards the admissibility of computer evidence. Perhaps such a provision can be introduced into Schedule 8 of the Bill, which deals with Scotland, between now and Third Reading. This is such a very important legal matter. The noble Lord, Lord McIntosh, has brought up a very important point. I am no lawyer either. It should be so arranged that legal brains from perhaps opposite political parties put their heads together in order to make certain that this provision is legally correct in the first place and that it will work.

Equally, as the noble Lord has said, an indication should be written onto the face of the Bill as to when the measure will come into force. The noble Lord made a very good point in that respect. If that is not done there will be considerable doubt as regards local authorities as to when they can bring forward the relevant cases, whether they should hold them back or what will be the intervening period. The noble Lord was absolutely right and I wholeheartedly support him.

6.45 p.m.

Lord Hailsham of Saint Marylebone

My Lords, I was not going to enter into this discussion, but for the fact that I heard the noble Lord, Lord McIntosh of Haringey, say that this was an important amendment and I heard my noble friend say that he agreed with him. The amendment is of no importance at all, but it is absolutely urgent. It is an illustration of the idiocy of some of our laws of evidence that apply the best evidence and hearsay rules to matters of this kind. The measure should be made part of the general law at once, although that would not be possible in this Bill.

Some years ago we had to legislate about another idiotic offshoot of this foolish and obsolete rule. We got into trouble over the numbers stamped on the engines of motorcars. It was held by some legal pundit on the Bench—and rightly so—that in order to prove the issue one had to call the actual workman who hammered the number onto the engine of the motorcar. Now we have this case about computers which is equally silly. It is high time that we had some rationality in our rules of evidence.

As regards retrospection, that is rubbish. The rule should never have been the law at all; everyone of commonsense realises that computer evidence should be admissible. It should not be admissible only in these cases. The matter is only urgent because of the number of outstanding cases, so let us get on with the matter.

Lord McIntosh of Haringey

My Lords, before the noble and learned Lord sits down, perhaps I may say that the matter is important because of the amount of money concerned. I understand that local authorities are losing approximately £3 million a week because of the delay in action on this matter. As I understand it, the reason there has not been more comprehensive legislation, as the noble and learned Lord is rightly urging, is that there has been no agreement between the Department of the Environment and the Home Office on the matter.

Lord Hailsham of Saint Marylebone

My Lords, I do not believe that I and the noble Lord have any difference of opinion about this. The amount of money involved makes the matter urgent and makes it necessary to deal with the issue in this Bill, but it is of no other importance at all.

Lord Ross of Newport

My Lords, I very much welcome this amendment. I hope that it will now make the provision legally foolproof. In the meantime local authorities are on the horns of a dilemma. Once in a while the government Benches should recognise such a fact. We always hear about the enormous amounts of money which are due but local authorities are not taking action to bring in that money. When they do so and then find that the courts are throwing out the cases through the inadmissibility of computer evidence, it is very hard on them. I hope that this measure works and that it works very soon.

Baroness Blatch

My Lords, I was asked what happens between now and Royal Assent. In the short period before the Bill will be enacted authorities should consult the Clerk to the Justices about how to proceed. There is nothing to prevent a court issuing summonses for non-payment of the community charge and many are doing that. Many local authorities are getting on with the work of enforcement. I am very attracted by the comments of my noble and learned friend. I am reminded of the Dickensian phrase that the law is an ass in these matters.

It is a matter for each local authority to decide how to continue with enforcement action during this period. There is no obstacle to authorities continuing to apply for liability orders where they believe that their present procedures for the presentation of cases meet the requirements of the existing law. I understand that a number of local authorities are continuing to do so.

As regards retrospection, I believe I addressed that point in my opening comments. We were encouraged by the decision in the High Court yesterday. We know that there is another decision pending. The noble Lord, Lord McIntosh, asked why the provision is not made effective tonight. The regulations will not be laid until Royal Assent. At Royal Assent we will lay the regulations immediately, with immediate effect. To choose tonight as a date would be no different from taking the principle of retrospection right back. The noble Lord proposes an impossibility. We are having useful discussions with—

Lord McIntosh of Haringey

My Lords, there is plenty of evidence. The Department of the Environment has done it very often. The point is that when people know that new provisions will be introduced into the law they very often seek the gap between the time when they are announced and the time when they are introduced in order to flout the law. I should have thought it highly desirable to make sure that the provisions are introduced straight away. This confirms the noble and learned Lord's point about urgency.

Baroness Blatch

My Lords, in speaking earlier I referred to some useful discussions that we are having with the local authority associations on the draft regulations. I can confirm to the noble Lord that on the agenda are matters of drafting, the nature of the computer documents referred to, the contents of the certificate which a responsible officer is to sign, procedures which the regulations should cover and indeed the very point that the noble Lord raised about physically having a computer terminal at the court. Those issues are being discussed with the local authorities. They are useful and where we believe it appropriate we will of course use an opportunity at Third Reading to do something about it. I think that I have addressed most of the points that were raised during the course of the debate.

On Question, amendment agreed to.

Baroness Blatch moved Amendments Nos. 76 and 77: Page 103, line 23, leave out ("person to whom") and insert ("authority to which"). Page 103, line 25, leave out ("that person") and insert ("the authority").

On Question, amendments agreed to.

Clause 21 [Valuations for purposes of lists]:

Lord Stanley of Alderley moved Amendment No.78: Page 13, line 26, at end insert: ("(2A) For the purposes of the valuation under this section of a dwelling occupied by a person who is employed in agricultural operations on the land in the service of an occupier of an agricultural holding and is entitled so to use the dwelling only while so employed, it shall be assumed that such a dwelling forms part of the composite hereditament represented by the agricultural holding.").

The noble Lord said: My Lords, in Committee I raised the question of how a cottage that is part of a farm will be valued for council tax, and I received a reply from my noble friend Lord Strathclyde which I am afraid I could not understand. I have tabled this amendment to make it quite clear that dwellings that are part of the farm are part of the composite hereditament of that holding.

I hope that my noble friend will accept that that is so, for if he does not it may mean rewriting every agricultural tenancy agreement in the country. Indeed it would almost certainly mean altering the agricultural holdings Acts. If, therefore, the farm cottage is part of the composite hereditament it should be valued as such and be similar to the farmhouse, which is dealt with as follows. I now quote from a letter to my honourable friend Sir Geoffrey Johnson Smith from my honourable friend the Minister for Local Government and Inner Cities. The letter, which was written in December, states: Farmhouses will normally continue to comprise composite hereditaments. As such they will not be valued in isolation from the rest of the farm but rather as domestic accommodation forming part of the farm. This will mean that in areas where there is a demand for farmhouses by people who are not farmers, any increase in the value of a farmhouse over what a farmer might expect to pay in the context of his ownership of the entire farm will be ignored".

If, as the letter states, there is a demand for farmhouses by non-farmers, there is a far greater demand for farm cottages from non-farm-workers. So the equitable solution is to make sure that for the purposes of the council tax they are valued similarly as part of the composite hereditament. I am sorry about that word. I always get into a muddle with it. Indeed this difference in valuation between a dwelling that is within a composite hereditament, or outside it, is acknowledged in Amendment No. 82 that will be proposed by my noble friend Lady Blatch. If my amendment is unnecessary, my noble friend will no doubt say so. But in saying so I hope that he will accept my argument that they should be so valued for it will avoid a good many unnecessary appeals.

To sum up, as the Government have accepted that farmhouses will be valued as a composite hereditament, I should like an assurance that provided the farm cottage is part of the composite hereditament it will be similarly valued. If this is accepted, I wonder whether it should be put on the face of the Bill or perhaps in the regulations. Of course I realise that there may be borderline cases as to whether the cottage is or is not in the composite hereditament. Can my noble friend give an assurance that marginal cases could be heard on appeal by the valuation tribunal? I beg to move.

Lord Ross of Newport

My Lords, I have great support for the amendment. The noble Lord, Lord Stanley, will probably agree with me that farmers who have surplus cottages have probably sold them off already. There may be a few left as holiday cottages which should obviously be valued separately. Presumably, if research is done on this point, those will come to light. However, there are still cottages within agricultural holdings which are essential to the working of those holdings and should be valued as such. They should not be valued as free standing dwellings. I hope very much that the Minister can give that assurance. A later amendment may cover this, but I cannot believe that many farms in this country today have surplus cottages. They have almost certainly been sold off.

Lord Monson

My Lords, I strongly support the noble Lord's amendment. Perhaps he can explain when he replies why retired farm-workers have not been catered for. It appears that a worker who continues to live in one of the cottages after his retirement would not be covered by the amendment as it stands and therefore might have to pay the council tax at a higher rate than he did when he was employed.

Lord Strathclyde

My Lords, I thank my noble friend for his explanation of the purpose of the amendment. He asked for clarification. I hope that I shall be able to give it to him. First, I believe that the amendment itself is unnecessary. For England and Wales, Clause 3 defines as "dwellings" properties which are composite hereditaments under the current non-domestic rating provisions. This means that properties with mixed domestic and business use would be subject to both non-domestic rating and the council tax. For non-domestic rating, the rateable value for such properties is based on the value attributable to non-domestic use. Regulations will provide a mirror image of this for the council tax; that is, the appropriate council tax band will be assessed depending on the extent of domestic use. This will ensure that the property is valued fairly for both non-domestic rates and the council tax, with no double taxation.

Agriculture does of course enjoy exemption from non-domestic rates. Dwellings which form part of a farm will, however, be subject to the council tax. Where those dwellings are composite properties they will be valued accordingly with only the value of the domestic use taken into account. In practice this means that where a tied cottage is part of a composite hereditament there is a factor which will properly be taken into account in the council tax valuation. If the effect of being part of the farm is to reduce the value attributable to that cottage, then the council tax band will be set accordingly. Any value over and above what would be paid for the dwelling as a part of the farm will be disregarded.

This amendment seeks to introduce a provision which defines agricultural cottages as composite hereditaments, regardless of the facts. I think that my noble friend would agree that that in itself would not necessarily be right but I can assure him that tied cottages will be valued as composites where the facts support that approach. I can confirm that appeals will be heard by the valuation tribunal where those facts are in doubt. I understand that there is precedent in that respect. Therefore, with that assurance, I trust that my noble friend will feel able to withdraw the amendment.

7 p.m.

Lord Stanley of Alderley

My Lords, I am most grateful to my noble friend the Minister for that reply. Perhaps I should also say that I am grateful for the amount of time that he has given me since the Committee stage to discuss the matter. The issue is rather more complicated than I thought initially. I am not sure whether the provision needs to be put into the Bill, but perhaps we can discuss the matter between now and Third Reading.

So far as concerns the point made by the noble Lord, Lord Monson—and I am sure that my noble friend will correct me if I am wrong—I believe that if a retired worker is living in a cottage which is part of the composite hereditament, then he will be all right; but, if he is not, I suspect, from listening to my noble friend's remarks, that he can always appeal to the tribunal to determine the matter. In the meantime, I must express my thanks for the support of noble Lords. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 24 [Alteration of lists]:

Lord Stanley of Alderley moved Amendment No. 79: Page 15, line 1, after ("regulations") insert ("and, in the case of subsection (6) below, shall make regulations").

The noble Lord said: My Lords, I raised this issue in Committee. My noble friend said then that she thought that I was right. I wonder whether she is now able to confirm that view. I beg to move.

Baroness Blatch

My Lords, during the debate in Committee on identical amendments I agreed to seek assurance on my noble friend's behalf that the use of the term "may make regulations" was normal phraseology in legislation. I am pleased to be able to confirm that now. I can reiterate that we have every intention of making regulations under Clause 24. In the light of that assurance, I hope that my noble friend will not press the amendment.

Lord McIntosh of Haringey

My Lords, surely the Minister is not saying that in this case the word "may" means "shall"?

Baroness Blatch

No, my Lords.

Lord Stanley of Alderley

My Lords, I must say that I have some sympathy with the noble Lord, Lord McIntosh. But if my noble friend says that may means shall, then so be it. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe

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

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

7.2 p.m.