HL Deb 28 January 1992 vol 534 cc1170-90

3.5 p.m.

The Minister of State, Department of the Environment (Baroness Blatch)

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

Moved, That the House do now again resolve itself into Committee.—(Baroness Blatch.)

On Question, Motion agreed to.

House in Committee accordingly.


Schedule 1 [Persons Disregarded for Purposes of Discount]:

Baroness Hollis of Heigham

moved Amendment No. 143A: Page 82, line 26, after ("trainee") insert ("engaged in activities in relation to their course of study for no less than 15 hours per week".). The noble Baroness said: I shall speak also to Amendment No. 143B. The amendments, together with the following amendment which I shall move separately, again raise the issue of students.

Amendment No. 143A seeks to extend the definition of what would constitute a student, a student nurse, an apprentice or a YTS trainee. Within the university world there is no definition of what constitutes a full-time course although the DES tends to use 21 hours. I have checked the draft regulations and they contain no precise definition. The amendment tries to bring the assumption of the DES as to what is a full-time student closer to that of the social security definition of someone in full-time work.

If one looks at social security regulations one sees that at the moment social security assumes that someone is in full-time work if he or she works for 24 hours a week. From next April, that will reduce to 16 hours a week. Therefore, that person will not be eligible for income support. That means that a student will be regarded as a full-time student if he studies for 21 hours but will be ineligible for income support if he studies for more than 16 hours. It is to try to synchronise those two points that the amendment is moved. Clearly, if one is deemed to be a full-time student for income support purposes and loses one's rights to benefits covering housing and community charge, one must clearly be a student. However, as drafted, the Bill states that someone studying for between 16 and 24 hours would not be eligible for a status discount in lieu. In other words, such people are nothing. They are neither students nor unemployed and are therefore invisible.

I have talked to the principal of a leading FE college who makes clear the increasingly desperate financial position of students. He says that many of his youngsters are leaving college to start working life with accumulated debts of between £3,000 to £4,000. We cannot enlarge the participation rate of those doing retakes and topping up their qualifications unless we help.

I repeat that Amendment No. 143A relates to people who lose their entitlement to income support if they are not available for work because they are tied up for more than 16 hours a week. They will not be eligible for benefits as students because they are invisible unless they are tied up for more than 21 hours. Those in between appear to be eligible for neither level of support. That is an anomaly which I am sure the Committee will wish to correct.

Amendment No. 143B seeks a clearer definition of who will count as a student. The existing regulations leave the matter to the Secretary of State. We need clarification about the position of two groups of students; first, further education students who at the moment are ineligible for mandatory grants and student loans, and, secondly, postgraduate students who at the moment have access only to hardship funds which, at most universities, are exhausted.

We are seeking to have applied to institutions the definition of a prescribed educational institution that appears in the Further and Higher Education Bill; namely, that it is an institution aided by a local authority or one which is grant aided or is eligible to receive aid by way of grant.

Amendment No. 143A defines the eligibility of a discount for students in terms of hours of work and study, and Amendment No. 143B by where they study. If the Committee were minded to accept the first amendment that would bring the position of students into line with DSS regulations: if it were minded to accept the second amendment, it would bring the Bill into line with the Further and Higher Education Bill. I beg to move.

Lord Ross of Newport

My noble friend Lady Hamwee will be here shortly. She asked me to say that we support the amendment. It seeks to write into the Bill the definition of those who would be entitled to the discount. My great objection to the Bill, as to many other pieces of legislation which have passed through this place in recent years, is that far too much is left to prescription orders by the Secretary of State. We do not know what will be contained in those orders. The amendments are based, I understand, on previous examples from the DES. I hope that the Minister will look at the amendments sympathetically because there is no doubt that many students are facing great hardship. Unless something is done to give them exemption, I fear for the future. Many young people will start their adult life with enormous debts. What is proposed must be right. We should try to encourage students and give them these exemptions. I support the amendment.

Baroness Blatch

I hope that I shall be able to be helpful to the noble Baroness and the noble Lord, because the amendments would be severely restrictive. Amendment No. 143A seeks severely to restrict the scope of the discount provision. It provides that a person may be disregarded only if engaged on a course of study involving activities lasting for more than 15 hours a week. That could exclude a large number of people whom the provision is designed to include. Apprentices and YT trainees may not be undertaking a course of study as such. Their training is more usually by way of on-the-job instruction, with little or no formal education.

Amendment No. 143B would also exclude many of the people whom we intend to disregard under the provision. The amendment requires a student, student nurse, apprentice or YT trainee to be undertaking education or research at a further or higher education institution. Many apprentices, YT trainees and student nurses do not follow a formal course of education at such institutions. More often, they undertake training in an employment situation and therefore under this amendment would not qualify for the discount.

I can assure the Committee that students, student nurses, apprentices and YT trainees will be defined for discount purposes in an order to be made under paragraph 4 of Schedule 1. A copy of the draft order has been placed in the Library. The amendments would limit the extent of the discount provision so that fewer people in the student group of definitions would be eligible for discounts. I am sure that that is not what the noble Baroness and the noble Lord intended. I hope that the amendment will not be pressed.

As to postgraduates, the Government's proposed discount and exemption arrangements for students will apply to them in the same way that they apply to undergraduates or any other type of student. The definition of student status does not depend on the type of course undertaken or the qualifications sought. Although he is not in his place at the moment, the noble Earl, Lord Russell, was concerned about the nature of postgraduate work as students do not always do their work in neat packages throughout the course of the year. However, if they are PhD students, they are included.

Baroness Hollis of Heigham

I thank the Minister for that reply. With the leave of the Committee, perhaps I may put a question. Is she saying that, for example, if students are doing a retake of A-levels or if they are mature students doing part of a course, a part-time degree at university—in other words, extending the course over five years rather than three —they fall nonetheless to be disregarded for purposes of the discount?

Baroness Blatch

I am not sure of specific part-time courses to which the noble Baroness refers. A part-time course can be almost cursory or considerable. The draft regulations are there to be inspected at the moment and they include the definition of "trainees". But many trainees would be part of a recognised scheme and for those purposes would be counted for the disregard. If I am able to give the noble Baroness a fuller answer later, I shall do so.

Baroness Hollis of Heigham

I thank the Minister for being so helpful. I take entirely the strictures that the amendment might restrict the position of those other than students in higher education or further education institutes. I am grateful to her for pointing that out.

Perhaps the Minister can follow up another point by correspondence. I still see a problem for the student who is taking a course at a university which is shorter than the one Mr. Portillo defined. In defining a student for these purposes—and I have checked the draft regulations and they confirm it—he stated that, students must be engaged in at least 21 hours of education a week at a qualifying institution for at least 24 weeks a year". —[Official Report, Commons, Standing Committee A; 20/11/91; col. 249.] The problem concerns, 21 hours of education a week". Many courses do not have that limitation; others may be less than that. They may be not entirely full-time in the sense that they can be maintained with a job. Someone may work two days a week to pay their way.

We are concerned that people may lose their eligibility for income support but will not acquire eligibility for student invisibility if they fall between the 15 hours under this amendment and the 21 hours a week as specified by Mr. Portillo. That is the gap for students in further education and higher education institutions. Perhaps the Minister can help me on this point.

Baroness Blatch

First, we are talking about Amendments Nos. 143A and 143B which are restrictive for all categories. I believe that the noble Baroness has taken the point that they would be unduly restrictive. On the specific definition of a student in the category in which students appear, they would have to make a judgment about how much time they spent working and how much time they spent at a course of study. The regulations, I believe, cover that, but if not, I shall give a fuller answer to the noble Baroness.

Baroness Hollis of Heigham

I thank the Minister for that reply and in the light of it, I wish to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 143B not moved.]

3.15 p.m.

Baroness Hollis of Heigham

moved Amendment No. 144: Page 82, line 26, at end insert: (" ()on the day he is a student who is not studying because the day falls within a customary holiday or vacation from his course of study; and"). The noble Baroness said: This is a probing amendment which seeks to ensure that students continue to be invisible over the vacation. In the Standing Committee of another place on 18th November 1991 Mr. Key suggested that during all vacations students would continue to be invisible. That was a helpful response, but we would be grateful if the Minister could confirm it, particularly in the light of the previous discussion. Also, what happens in the long July and August vacation when students have completed their courses before, we hope, going into full-time employment? Will they continue to be students or will they come down to income support?

Will the Minister also explain the situation of a student finishing an undergraduate course in late June or early July who expects to start a postgraduate course in early October? What would be that student's position over the summer? Would he continue to be invisible for discount? I hope for a response clarifying what I appreciate is a complicated group of amendments. I beg to move.

Baroness Blatch

My reply can be brief. Students will be defined by means of an order. I believe we discussed that under the previous amendment. This will ensure that a student, once defined, will be disregarded for discount during any periods of vacation between academic terms and—to answer the noble Baroness's further point—before the last day of the course. In other words, the final day of the course becomes the period after which students will not be counted for disregard. Having given the assurance that students will continue to be regarded as students during their holidays, between academic terms, I hope that the noble Baroness will not press the amendment.

Baroness Hollis of Heigham

Forgive me, but I do not believe that the Minister answered the other questions. What happens between the end of the undergraduate course and when students start work or a subsequent degree? Perhaps the Minister will be kind enough to answer that.

Baroness Blatch

I covered that point when the noble Baroness was not listening to what I said. Students are not counted for disregard following the last day of the course so that after the last day of the course they are deemed not to qualify for the disregard.

Baroness Hollis of Heigham

I am sorry, but what happens if they are starting a postgraduate course?

Baroness Blatch

So far as I understand it, they will then be between two academic terms. However, I need to have that confirmed.

Baroness Hollis of Heigham

I doubt that that is so, but it would be splendid.

Baroness Blatch

I shall have to check, but my understanding is that a student on a course of study between academic terms related to that course of study will be covered until the last day of the course. There is a gap between that day and taking up the PhD course and sometimes not all students take it up the following academic term. However, I shall check the point and let the noble Baroness know.

Baroness Hollis of Heigham

In that case, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Seear

moved Amendment No. 145: Page 85, line 16, at end insert ("or ( ) is severely physically disabled, is in receipt of Attendance Allowance at the higher or middle rate, and requires the services of a live-in carer."). The noble Baroness said: In moving this amendment, I wish also, with the leave of the Committee, to speak to Amendment No. 145A. The amendments are linked. Amendment No. 145 deals with the position of the severely disabled in receipt of attendance allowance at the higher or middle rate requiring the services of a live-in carer. Only people who are seriously disabled would qualify for attendance allowance and a live-in carer. In our view there is a strong case for saying that such people should be exempt from paying the council tax.

Similarly, carers who are looking after severely disabled people—I refer to the person mentioned in Amendment No. 145A—have, in many cases, given up work to look after them in those people's homes. The people they care for would otherwise have to be cared for in an institution. Incidentally, if they were in an institution, they would not pay the council tax. Surely there is a strong case for saying that when someone has made an effort to keep a severely disabled person in the latter's home—I understand that is the Government's policy—and often has incurred great financial loss in so doing, that person as well as the severely disabled person being looked after should not be required to pay the community charge. I beg to move.

Baroness Hollis of Heigham

We on these Benches entirely support Amendments Nos. 145 and 145A. The first of these amendments, as moved so clearly by the noble Baroness, Lady Seear, would ensure that a physically severely disabled person—I am not just talking about someone with Alzheimer's disease—who could only live in the community with the help of a carer would enjoy the same kind of status discount as someone suffering from Alzheimer's disease.

Amendment No. 145A would ensure that a live-in carer—such a person is carefully described and defined in the amendment—would also carry a discount. In other words, he would not bring his dowry with him. Both a severely physically disabled person and a person suffering from Alzheimer's disease would continue to be regarded as though they were a single person, thus enjoying double discount. The first discount would be incurred as a result of Amendment No. 145 and the second as a result of Amendment No. 145A. Thus a severely physically disabled person would be brought into line with a person suffering from Alzheimer's disease and both groups would escape a penalty when they need the support of a full-time carer. We on these Benches are happy to support both of these amendments.

Lady Kinloss

I wish to support particularly Amendment No. 145. The Government accept the need and the desirability of disabled people being able to live independently in the community. That independence is often only possible if there is a live-in carer. However, as they stand, the council tax proposals may achieve the opposite result and send disabled people back into residential care. I am sure the Government realise that care assistance for some people is not a luxury but a necessity. The difference between a full and active life and a life of dependency hangs on the availability of care assistance. I hope that the Government will accept the amendment.

Lord Henderson of Brompton

I wish to follow up what the noble Baroness has just said. Unfortunately the community charge might constitute a breaking point for severely disabled people, if it is imposed. Those people may have to go back into residential care. That could be disastrous in terms of those people's happiness. It is most certainly not the Government's policy that they should go back into residential care. I hope that the Government will consider the relative cost of, for example, a £500 charge and the costs incurred when a severely disabled person who has hitherto lived with a carer has to go back into residential care because he cannot afford the £500 charge. It has been calculated that the cost to the Government of keeping a person in residential care in a home designed for four severely disabled people is £20,800 a year. That sum must be balanced against a community charge of £500. The Government stand to suffer a net loss of more than £20,000. That is a practical example of why this charge should not be imposed on severely disabled people who have live-in carers.

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

Before I deal with the substance of the amendment, I should explain that Amendment No. 145 is defective. I am sure the noble Baroness accepts that. In her amendment the noble Baroness refers to the higher or middle rate of attendance allowance. As I am sure she will remember, there are only two rates—a higher and a lower rate of attendance allowance. There will continue to be only the two rates—

Baroness Seear

I cannot accept that.

Lord Henley

I hope that the noble Baroness will allow me to continue. She is correct in thinking that there will be three rates for the successor to attendance allowance—the disability living allowance—which will apply to those under 65 years of age. However, attendance allowance will continue for the over-65s at the two rates. I believe it is worth pointing that out. For that reason I am sure that, however much we might disagree on the substance of this amendment later on, the noble Baroness will not wish to press it today.

I accept that the spirit of Amendment No. 145 is that a physically disabled person who would otherwise be eligible for a single person discount, should not be disadvantaged because he needs a second person living with him who would not otherwise be a member of the household. As in these circumstances the carer is generally the person whose presence in the household is adding to the bill, it would be more appropriate to the nature of the council tax to discount the carer rather than the disabled person. Amendment No. 145A adopts this approach and would give a discount to the live-in carer of a severely disabled person on attendance allowance where care is provided for at least 35 hours each week.

Discounts for carers are already provided for in Schedule 1 to the Bill. Paragraph 9 of that schedule grants a discount for persons engaged in providing care and support to another person and meeting other conditions prescribed in regulations. Amendment No. 145 would be limited only to physically disabled people, whereas the carer discount in Schedule 1 will not be restricted in this way.

Carers are exempt from the community charge under similar provisions of the 1988 Act which have been implemented by regulations. Groups representing people with disabilities, including RADAR, have pressed us to extend these regulations on the introduction of the council tax to include a wider range of carers. At our suggestion they have prepared some specific proposals which we are considering carefully. As was discussed yesterday, we have already announced a special scheme of reductions to ensure that disabled people are fairly treated under the tax. In respect of carers we have made clear our intention to exempt dwellings left empty because the former resident has moved to provide care to another person. This will be achieved in regulations under Clause 4.

I emphasise that we are presently reviewing the council tax position of carers in the light of the helpful suggestions we have received from RADAR and others. We shall continue to take a constructive approach. In the light of those assurances, I hope that the noble Baroness will not feel the need to press the amendments on this occasion.

Baroness Seear

I thank the noble Lord for that relatively encouraging reply. In view of the fact that Amendment No. 145 is defective and Amendment No. 145A is, I understand, under consideration by the Government, I shall not press the amendments at this stage. However, unless we receive a satisfactory response at a further stage, I give notice that we certainly shall press the amendments. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 145A not moved.]

Schedule 1 agreed to.

Schedule 2 [Administration]:

3.30 p.m.

Lord Henderson of Brompton

moved Amendment No. 146: Page 86, line 1, leave out paragraph (c) and insert: ("(c) that, where a liable person so requests, payments on account 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: We have now reached Schedule 2 to the Bill. This is a simple amendment. It is designed to ensure that, wherever requested, weekly or monthly payments may be made, and accepted, at no additional cost to the payer. Since I tabled this amendment some Written Answers have been provided in another place by Mr. Robert Key. Mr. Key very kindly met representatives of the National Association of Citizens' Advice Bureaux and me yesterday afternoon. He was extremely receptive to the arguments we put forward and promised that the department's representatives in this House would be in a listening mood. Therefore I have some hope that the amendment will be treated sympathetically.

I should say immediately that I consider the amendment to be defective. It provides that, where a liable person so requests", he may pay weekly or fortnightly. It would be ridiculous if a millionaire requested to pay his contributions weekly or fortnightly. The amendment is therefore not as watertight as it might be.

Nevertheless, the purpose of the amendment is plain. People at the lower end of the income scale on very low incomes usually think in terms of weekly budgets. It is a great hardship if they are not allowed to pay their tax weekly or fortnightly. They are accustomed to doing so with their rent and it is only fair on those with very low incomes who know how to keep their heads above water only on a weekly basis that they should be able to pay their council tax on a weekly basis.

Councils have the power to allow that. At present they offer payment of community charge by 10 monthly instalments, but that is outside the capability to pay of those on very low incomes. I believe that councils even have the power to allow weekly or fortnightly payments. However, there is all the difference in the world between councils having a power and having a duty. They ought to have such a duty. At present it is left entirely to councils' discretion. Some councils are very good indeed and others are very bad indeed. The amendment is put forward in order to remove that gross discrepancy between the practice of good councils and the practice of bad councils. We all agree that in the matter of the collection of the community charge best practice should be followed. The amendment is designed to secure best practice.

Some people may say that it is not cost-effective to collect a low council tax by weekly or fortnightly instalments and that it could cost more than is received by the council in council tax. However, that would be so only in exceptional cases. I ask the Committee to consider whether it is cost-effective if the local taxpayer is unable to pay. Then the whole machinery of debt collection lumbers into action. That is extremely expensive for the council and it is very hard on the person who cannot pay his council tax. It may lead to distress and the entry of the bailiffs into the private dwelling. That would be extremely costly and would drive very poor people to desperation. It is with that in mind that I move the amendment.

Without commitment Mr. Robert Key listened patiently to the powerful accumulated evidence of the citizens' advice bureaux yesterday. The CABs have been inundated with clients who have serious difficulty in paying their community charge out of very low income. In order to maximise the ability to pay of those on very low incomes it is imperative that frequency of payment matches receipt of income.

I could give many illustrations but I have said enough to show that this is a matter of great importance. It is in the interests of the councils that something should be done because they could well earn a better reputation among their electorate. They could well be acting more in line with the Prime Minister's objectives as set out in the Citizen's Charter. For those two very good reasons alone the Government ought to give serious consideration to the amendment. I beg to move.

3.30 p.m.

Lord Ross of Newport

I should like to speak briefly in support of the amendment. The noble Lord, Lord Henderson, is ahead of me. He saw the Minister yesterday and received a fairly favourable response, and I hope that the Government will agree to accept the amendment or come up with an alternative of their own.

The noble Lord made the point very strongly that there is a tremendous problem with hundreds of millions of pounds being owed in community charge. Everyone in this Chamber expects that money to be paid and I understand that an amendment to the Bill will be introduced to enable the courts to overcome the problem in relation to computer evidence. That money should be paid, but many people will find themselves in difficulties if they have to find that money as well as the council tax. I pay my community charge monthly by direct debit and I expect most Members of the Committee do the same. I believe that it would be better if it were written into the Bill that local authorities should accept either weekly or fortnightly payments, either in cash on in some form of direct debit. I imagine that many people who are paid weekly do not have bank accounts.

We have heard that certain councils already adopt the practice. Newcastle is one of them. Unfortunately they do not all do so. It would therefore be a very good idea if the Government made it clear that they expect such a facility to be provided and that that was written into the Bill. I hope that when he replies the Minister will give a favourable response.

Lord Monson

I understand the view of my noble friend Lord Henderson of Brompton but I should like to put a contrary view. First, the poorest people will not have to pay the tax in any event. Those who are slightly above that level are used to paying their electricity bills, gas bills, telephone bills, water rates, television licence and road fund licence annually, half yearly, quarterly or monthly. In aggregate those total a great deal more than the new tax will amount to. Therefore I cannot see that there is any case for a council having to go to the enormous expense of providing for people to pay fortnightly or weekly.

Lady Kinloss

I should like to support the amendment of my noble friend Lord Henderson. It is vital to create a new climate with the new council tax and find measures which will enable people on a low income to pay. One means of doing so is to set up weekly or fortnightly payment arrangements. Surely it is unfair that if one lives in one area the local authority will allow one to do that but if one lives over the boundary one is not allowed to do so.

The system already exists for council rents. Why can it not be extended? There is already a power to set up weekly payments but not a duty to do so. Does the Minister not agree that it is in line with the Citizen's Charter to enable people to have the same standards of service regardless of where they live? I hope that the Minister will feel able to accept the amendment.

The Earl of Balfour

There is a great deal to be said for the amendment. However, I suggest that, if the Government are prepared to look at the matter, instead of payment at weekly or fortnightly intervals they will consider weekly or monthly payments. Most people are paid either weekly or by the calendar month. Many people on incomes of £10,000 a year or less are extremely bad at budgeting and managing their expenses. Equally, there is a very good provision in paragraph 19 of this schedule and in the arrangements with Scottish housing bodies to collect the council tax.

I regret that I am not fully familiar with English procedure, but I should have thought that a similar provision could be made with English housing associations whereby they collect both rent and what used to be the rates and in future will be the council tax. That might well be worth considering. I feel that there is much to be said for the principle of the amendment.

Baroness Hollis of Heigham

This side of the Chamber very much supports the amendment in principle. The noble Lord, Lord Henderson, was entirely right. When people are facing financial problems and an array of debts, weekly or fortnightly budgeting—fortnightly arrangements can be very useful for a council tenant who pays rent fortnightly —is a constructive way to deal with those problems.

I have only one reservation, which was indeed addressed by the noble Lord, Lord Henderson. Given that the cost of giro payments and handling costs can amount to between 50p and 75p a transaction, there clearly needs to be a de minimis figure so that one does not spend more to collect than is brought in, as happens with the poll tax. We have that proviso. Nonetheless, the principle of the amendment has our full support.

Baroness Hamwee

With regard to the last point, I understand the difficulties that local authorities may encounter. Nevertheless, the balance must come down on the side of allowing weekly, fortnightly and—as mentioned by the noble Earl, Lord Balfour—monthly payments. The provision for 10 payments a year does not fit in easily with budgeting on a monthly basis.

Unhappily, one of the growth industries at the moment is debt counselling. The advice given to those who find themselves in financial difficulties is to deal with the matter in small amounts at a time. We support the amendment.

3.45 p.m.

Lord Wise

I should very much like to support this amendment. We have heard and must appreciate that people on low incomes have extreme difficulty in meeting their commitments. They have even more difficulty in putting money aside at frequent intervals when they have extra commitments. It seems to me that such people are more likely to be able to meet their council tax if they can pay it in small amounts, weekly or fortnightly, as they receive payments, wages or benefit.

In respect of ability to pay, it is imperative that payment frequency should match the receipt of their income. Making weekly or fortnightly payments to a local authority is a well established principle. Most council tenants pay their rents in such a way. I am sure that giving people the right to pay their council tax at similar frequencies would minimise the possibility of arrears. Arrears of payment most certainly do not benefit anyone; the household gets deeper and deeper into debt while the local authority has a lower collection rate and incurs considerable cost in trying to obtain payment. The administrative costs of collecting payments as proposed in the amendment will surely be of benefit to everyone concerned and is best suited to individual needs.

It is interesting to note that some councils propose to collect payment in that way. One report from the Henley citizens' advice bureau mentions the South Oxfordshire District Council. I believe that Henley is the constituency of my right honourable friend the Secretary of State for the Environment. Salisbury, the constituency of my honourable friend Sir Robert Key, is adopting this method and likewise Norwich City Council, with which the noble Baroness, Lady Hollis, is strongly connected. However, it seems unfair that some authorities will offer these facilities and others will not. The arrangements must operate right across the board to be fair and equitable. I hope that my noble friend the Minister will be able to give a favourable response to the amendment.

Lord Henderson of Brompton

Before the Minister replies, perhaps I might briefly say that the noble Baroness, Lady David, whose name appears on the amendment and who feels very strongly about it, would have been present but for a more important engagement. She feels it right to be with her husband on his eightieth birthday.

Earl Howe

I have listened carefully to the noble Lord, Lord Henderson, and others. I understand the arguments and the concern that they have expressed. However, there is a difficulty with the idea for reasons which I shall try to explain.

If council tax payers were allowed to choose how to pay their council tax, it would lead to unacceptable administrative difficulties for the local authorities. I say that despite the confidence that we all have in the way in which local authorities in general administer the collection of revenue. A council tax payer cannot sensibly be given the opportunity to decide the instalment regime that he wants to use because of the very serious burden that it would place on the authority's computer system. There is a real cost factor involved.

Having said that, I hope that I can reassure Members of the Committee in several ways. Paragraph 2(2) (b) of the schedule provides power to make regulations allowing an authority to set up its own instalment scheme in accordance with prescribed rules. That power will permit authorities to have a different instalment regime from the usual 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. That may well be at weekly or fortnightly intervals. The rules for such a scheme, which the Government will set up in consultation with local authorities, will ensure that it can be no less generous than the normal 10 monthly payments scheme. Because that scheme would apply to council tenants, it is likely to apply to people on low incomes. However, as the noble Lord, Lord Monson, reminded the Committee, the poorest among the liable persons will be entitled to benefits. One must not lose sight of that factor.

We should also remember that we cannot compel local authorities to institute a scheme of that kind. That would be quite wrong.

Lord Henderson of Brompton

Perhaps the noble Earl would be kind enough to tell the Committee why it would be quite wrong. Why cannot Parliament compel local authorities in this very important respect to help a large number of people who have a low income and who find difficulty in paying?

Lord Harmar-Nicholls

I should like to go further with that point. My noble friend says that it is not possible to make a local authority adhere to a statute that has been placed properly upon the statute book through parliamentary procedures. If Parliament says that local authorities must produce a scheme which will allow that kind of payment, can they say that they are not prepared to adhere to the statute? Is he saying that?

Earl Howe

No, I am not saying that. I was trying to say that it would be wrong to compel local authorities to institute a scheme of that kind, because that would mean that anybody would have the statutory right to insist that he pays weekly or fortnightly. That would pose unacceptable administrative difficulties for local authorities.

Local authorities will have the discretion to depart from their general scheme of payments for exceptional cases. They will not be tied in to a rigid regime. If they see particularly deserving cases in those situations they will be able to depart from their general scheme. That is a welcome element of flexibility that the authorities will have.

As the noble Lord, Lord Henderson, admitted, the amendment as drafted is technically defective. Leaving that aside, I hope that Members of the Committee will accept that as it stands the amendment would not be workable in practice and that authorities will be given adequate powers to make different instalment schemes without it. Therefore, I hope that the noble Lord will be persuaded to withdraw his amendment.

Lord Harmar-Nicholls

My noble friend on the Front Bench put his case with great confidence and I congratulate him on that. However, it was a bad case and there is no argument about that. The idea that it is not possible for Parliament to lay down how an impost imposed by Parliament can be paid is not acceptable. If it is acceptable for some local authorities to adopt a certain procedure and they have the blessing of the central powers in doing that, without any doubt the measure should be made universal. I suggest to my noble friend that this is a matter that he should be able to accept. I understand his argument. I also understand that when collecting money people like to do so in a way that is preferable to them. However, if people do not pay and the matter reaches court, the court will almost invariably allow any payment of this kind to be made by instalments. Why go that way round when we can lay down the methods of payment enabling everyone to have the freedom to pay—they are not suggesting that they are not going to pay—in a way that is most suitable to them?

Earl Howe

I was not saying that Parliament could not compel local authorities by incorporating a provision in the Bill. Of course we could do that. I was trying to say that it would not be sensible to do that given the unacceptable adverse consequences that would ensue in terms of administrative difficulties. We have here a flexible scheme which will enable local authorities to devise weekly or fortnightly methods of payment for council tenants who, almost by definition, will be those who will be most in need of that provision. Discretion will be allowed in particularly deserving cases where the individual involved is not a council tenant. That is a satisfactory outcome.

Lord Hughes

I cannot understand why the Minister is speaking about this discretion as being something new. I refer to giving the authorities power to exercise discretion so that they may accept payment on a weekly or fortnightly basis. We have been told from more than one part of the Committee that many authorities are doing that already. Is the Minister suggesting that the authorities which are already using that procedure are doing so without having the power to do it? If the authorities do have the power to follow that procedure at the present time, what does the Government scheme add to the present situation?

Earl Howe

There is no suggestion that local authorities are exceeding their powers at the moment. We are discussing a new tax. The Bill needs to set up the necessary regimes to enable local authorities to collect the tax. That is quite distinct from the community charge.

Lord Stoddart of Swindon

I did not intend to enter into this debate because I had fully expected that the Government would accept this very reasonable and essential amendment. I can only express my surprise that the Government are opposing it. The point was made by the noble Lord, Lord Harmar-Nicholls, that it is essential for there to be some universal provision of this kind otherwise one will have people in one local authority being in a privileged position vis-à-vis people in an adjacent authority. In other words, Reading may very well put in a weekly scheme, but seven miles away the authority at Wokingham will not allow a weekly scheme although it is part of the Reading conurbation. In the case of large cities and large conurbations the absurdity will be even worse than that.

Having had experience of the difficulties involved in the collection of the poll tax, I should have thought that the Government would wish to make it as easy as possible for people to pay. I assure the Minister that there are still large numbers of working-class, ordinary people in this country who budget not by the month or the year, but by the week. If they are not allowed to budget by the week there are difficulties, and the people who are owed money are also in difficulties.

I urge the Government to reconsider their attitude on this matter and to make universal provision for weekly and certainly fortnightly collections. The noble Earl said that that would be administratively difficult. I must go back to my experience with local government when I was chairman of the finance and general purposes committee. The borough treasurer, in persuading me that he needed a computer, said "We need a computer so that we can more easily make weekly collections of debts due to the authority". Of course I fell for that argument. I said "Of course, borough treasurer, you must have a computer because people must be enabled to pay their debts weekly if that is the way they wish to do it".

Now I am being told that this great computer, which we introduced at huge cost, is unable to allow ordinary folk to pay their debts on a weekly basis. It is absurd that this nonsense should be trotted out by the Government. I sympathise with the noble Earl because he is obviously reading from a brief. However, I hope that his own common sense will tell him that what Members of the Committee from all sides have been saying this afternoon is sound sense and that the Minister should now accept the amendment that has been moved by the noble Lord, Lord Henderson. Although it may need some alteration, I hope that the Minister will accept the amendment in principle and bring back his own amendment at Report stage in order to deal with this matter.

Lord Jenkin of Roding

Like the noble Lord, Lord Stoddart of Swindon, I had not intended to take part in this debate. I must confess to a sense almost of unreality about some of the speeches we have heard. I have sat listening, perhaps not as long as some Members of the Committee, to plea after plea from the party opposite for local autonomy. It was said "Let local authorities make up their own minds. Why do the Government have to impose all these factors?" As my noble friend rightly said, the Government are now saying that there is a pattern which will apply universally, but where they are needed regulations will be made to allow local authorities to vary the system of payment. That will leave the local authorities to decide for their own areas how this scheme is best administered.

For the life of me I cannot see why it should be necessary for the Committee to seek to impose an obligation on every authority to allow any taxpayer who wishes to do so to pay fortnightly or monthly. I am not a great computer boffin, but I can well understand that it would enormously complicate the programming of computers if there were a wide variety of methods of payment. I can understand that that would add to the costs and perhaps increase the chances of error.

I believe that my noble friend made a most convincing case for leaving the Bill as it is. I would like to leave each local authority to decide how to use the power in the regulations which will be made and to which my noble friend referred.

4 p.m.

Lord Desai

I welcome the Government's recent conversion to local autonomy. The point in this case is that the taxpayers should have as much choice as possible; action should not be taken for the convenience of local authorities. The taxpayers should be given maximum facilities to pay the council tax as and when they wish, provided that the tax is paid. I must point out that enabling a computer to deal with payments weekly as against fortnightly is an extremely simple matter of software programming. Do not let anyone pretend that insuperable administrative difficulties will be caused. If the Government do not wish to agree to the provision, let them say so, but they should not say that their action enhances local authority freedom. The council tax should be taxpayer friendly and not local authority friendly.

Lord Harmar-Nicholls

I am sorry to differ so violently with my noble friend whom for a long time I have supported on all manner of issues. However, if one carries his argument to its logical conclusion we shall have to give the local authority the power to decide whether there should be a tax. If central government decide that there is a need for a tax they are entitled to lay down in the interests of the whole community how it should be collected. I believe that in this case the noble Lord, Lord Henderson, has put forward a good argument.

I do not know how many of my noble friends think in partisan terms on such issues; I often do. The whole of the parliamentary system is based upon the party system and parliaments rely upon that. I know very well that the absence of a provision similar to that suggested in the amendment made the poll tax so objectionable to so many people. I am convinced that the damage done to the party—which happens to be the party in government—was to a large extent due not to the principle of the poll tax, which was good and which I shall support in any argument, but to the way in which the tax was presented and collected. That was its Achilles' heel and I do not wish to see a repeat of the damage in respect of the council tax.

Lord Monson

Perhaps we may look at the realities of the argument. We are talking of little more than a payment of £20 per month by the poorer people at whom the amendment is directed. The noble Lord, Lord Stoddart of Swindon, spoke about the problems of working people. I accept that he knows a great deal more about them than I do. However, I happen to know a large number of farm workers' widows who do not have the slightest difficulty in saving £20 per month to pay the nominal rent on their cottages. I do not see why other people cannot do so, bearing in mind that they pay for their electricity, gas, water, TV licence and car at monthly or longer intervals.

Viscount Mountgarret

I strongly support the amendment if only because of the spurious argument that my noble friend put forward; that it would make the council tax administratively difficult to collect. I suggest that that is a red herring because there would be no difficulty. Already people have the option of paying the poll tax monthly by standing order—the total amount is divided by 10 and not 12, which is even more complicated—half-yearly or quarterly. I believe that the provision would be simple to administer, computers or no computers. When one's bank statements are delivered one merely ticks off what has been paid and what has not. A necessary and useful addition to the Bill would be such provision allowing or requiring local authorities to accept requests for weekly payments made by people who find it difficult to think ahead more than that, which for whatever reason many people find difficult.

Lord Ross of Newport

I bow totally to local autonomy. I agree with the noble Lord, Lord Jenkin, that local authorities should be left to do their own thing in as many cases as possible. The noble Lord, Lord Stoddart, put his finger on the problem. When the Finance and General Purposes Committee asks for the advice of the Treasury, the Treasury will say that it would be much more convenient to take the payments on a monthly basis and not on a weekly basis. Unfortunately, if my experience is anything to go by, the committee will probably accept the Treasury's advice.

These amendments were suggested by the CAB, which deal day in and day out with many people who have a problem with paying their debts. We are trying to help such people. If the amendment is defective and cannot be voted on today, and if the Government cannot take on board the widespread feeling in the Committee, I hope that the noble Lord, Lord Henderson of Brompton, will say that he will come back on Report with another amendment. The requirement in the amendment is necessary and it should be written into the Bill.

Baroness Carnegy of Lour

There is a point as yet not mentioned which the Government should consider. I hope that the Committee will not vote on the amendment today because the balance of the argument needs to be considered by the Government —I do not believe that the Ministers on the Front Bench are listening.

Noble Lords


Baroness Carnegy of Lour

When the community charge was first introduced in my area boxes were placed in supermarkets in which one could deposit one's weekly payment. That was greatly appreciated by many people, not only by those who used them. For all I know not many people used the boxes but the idea was considered to be user friendly and a good one. The boxes were removed as the local authority began to want to be less user friendly and to try less hard to collect the tax. The boxes are no longer in the supermarkets—indeed, many of the facilities no longer exist. I believe that the Government ought to look carefully at the amendment and ascertain whether the local authority case is genuine. User friendliness is connected with the Citizen's Charter to which I personally am most committed.

Baroness Hollis of Heigham

I do not know whether the noble Lord, Lord Henderson of Brompton, intends to test the opinion of the Committee. Although the amendment may be defective I understand that that is not necessarily a bar to pursuing it. Members on this side of the Committee would certainly support the noble Lord on the understanding that, if his amendment were successful, we may wish to come back on Report with a modest de minimis clause in order to avoid the absurdity of spending more to collect less. However, we entirely support the substance of the amendment.

Earl Howe

The noble Lord, Lord Desai, said that the legislation should be taxpayer friendly. It would be decidedly taxpayer unfriendly to have a system of payment for a small minority of council tax payers which involved local authorities in inordinate and unwarranted expense. Local government taxes are the only type of payment which households have a statutory right to pay by 10 instalments. Gas, electricity, telephone and other bills may be paid in monthly instalments but not weekly or fortnightly. Some council tax bills will be modest—for example, in Westminster and Wandsworth—due to the prudent policies adopted by those councils. Are Members of the Committee really saying that such bills should be payable in weekly instalments, perhaps only £1 or £2 per week?

I am not convinced of the case that Members of the Committee have made. The noble Lord, Lord Stoddart, appealed for common sense. Common sense works both ways: I believe that it is the task of government to be responsible in framing their legislation and not to burden council tax payers with the undue costs that would be involved in administering a universal collection scheme of that kind.

Lord Henderson of Brompton

I am sorry that the noble Earl made a second speech in such a vein. It did not take on board the evident opinion of the Committee which came from all quarters. There have been two dissidents. One was my noble friend Lord Monson, who rightly said that councils should not be out of pocket as regards the collection of the charge because that would bear heavily on other taxpayers. The other was the noble Lord, Lord Jenkin of Roding, who joined my noble friend in a minority of two. I should have thought, honestly, that if one compared the wide experience of the great number of citizens' advice bureaux throughout the country with the experience of my noble friend Lord Monson and the noble Lord, Lord Jenkin of Roding, most Members of the Committee would put their faith in that of the citizens' advice bureaux. They are dealing with people at the coal face. They know the problems of those who have weekly incomes and who therefore pay their expenses weekly. I wonder whether the noble Lords, Lord Monson or Lord Jenkin of Roding, have ever had to budget weekly. I wonder whether they really know what that is like.

Lord Jenkin of Roding

I must tell the noble Lord that for many years I have been one of those who has believed that one of the weaknesses of our economic system is that, unlike any other country in Europe, people are hooked on the idea of the week rather than the month. The contrast in pay between those who are paid weekly and those who are paid monthly is one of the problems which we face. We should steadily encourage—as a great many industries and employers are encouraging—people to think and budget in terms of monthly payments.

I recognise that some people still budget very carefully on a weekly basis. Is it so impossible for the citizens advice bureaux to draw this problem to the attention of the local authorities in their area and ask them to use their powers? Why should this provision be imposed universally on the entire country?

Lord Henderson of Brompton

Does the noble Lord imagine that the citizens advice bureaux have not done so? There are local authorities which do not take the trouble to make such a provision and that causes me to move the amendment.

The noble Lord did not answer my question as to whether he had any experience of budgeting on a weekly basis. He skilfully avoided that by making a speech on the desirability of everybody budgeting at monthly or longer intervals.

I am pleased to see that the Leader of the House is present. He will have listened to the arguments and will recognise that Members of the Committee on all sides have supported the amendment. The support does not come only from Members of the Committee sitting opposite him. That is extremely important.

I agree with the noble Baroness, Lady Hollis, that there should be a de minimis provision. The amendment is defective in that respect. I agree also with the noble Earl, Lord Howe, that the amendment is defective. As I admitted at the outset, it is not acceptable that weekly or fortnightly payments should be available at the request of the payer. Therefore, for those two reasons I shall not press the amendment at this stage.

However, some of the arguments advanced by the Minister against the amendment are extremely feeble. He said that it would be an administrative difficulty for the poor computer to have to cope with. It must be a very old-fashioned and powerless computer which could not cope with the small additional burden which this amendment would impose. Therefore, I cannot take that as a serious argument.

Earl Howe

It is not simply the "poor computer", as the noble Lord puts it. It is the time involved in accepting people's coins and banknotes as they go to local authorities to pay their bills on a monthly or fortnightly basis, and the costs involved in manning the appropriate desks. It is all concerned with man hours.

Lord Henderson of Brompton

I ask the noble Earl how it is that the local authority of the Secretary of State's own constituency of Henley manages to cope with this system without detriment to the richer members of his constituency as does Salisbury's local authority in Mr. Robert Key's constituency. They manage that without protests from the Monsons of this world. I do not see why other local authorities should not do so.

The problem is that some local authorities do not follow that system. It is not good enough to have regulations which empower local authorities to do so. Otherwise, we shall not bring the worst practice up to the best practice. That is what this amendment seeks to achieve.

I am glad to have the support of the noble Lord, Lord Harmar-Nicholls, on this issue. It shows that the feeling of the Committee is united in its belief that something should be done. We have spent 45 minutes on the amendment and I am amazed that it has engendered such interest. I hope that the Government understand that the latest pronouncements on the Citizen's Charter by the Prime Minister go very strongly in conformity with the amendment. They include greater choice and greater user-friendliness. I believe that seven out of the eight points which the Prime Minister mentioned recently support the principle behind the amendment.

Finally, Mr. Robert Key gave an undertaking to listen to the arguments. I hope the Minister will tell his honourable friend that there is all-party support for the amendment, and that the Committee wants something to be done on this issue. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Howe

I beg to move that the House do now resume.

On Question, Motion agreed to.

House resumed.