Rating (Caravans and Boats) Bill (Hansard, 18 March 1996)

Lord Lucas
My Lords, I beg to move that this Bill be now read a second time.
The Rating (Caravans and Boats) Bill is a short but important measure. It returns the law on the local taxation treatment of pitches occupied by caravans, and moorings occupied by boats, to which we intended and thought it was.
It is necessary because a recent Lands Tribunal decision held that pitches occupied by holiday caravans were domestic property and subject to council tax rather than non-domestic property and so subject to non-domestic rates. As the provisions for moorings for boats are similar to those for pitches occupied by caravans, the Lands Tribunal decision would also make such moorings subject to council tax. This is the opposite to what we thought was the case and would mean that all holiday caravans, which hitherto have received non-domestic rates bills, would have become liable for community charge or council tax going back to 1990.
Clause 1 therefore substitutes a new definition of domestic property in Section 66 of the Local Government Finance Act 1988 for pitches occupied by caravans and moorings occupied by boats. It is our intention that if, and only if, the caravan or the boat is someone's sole or main residence will it be domestic. In other cases, for holiday caravans and boats, for example, it will be non-domestic. For the majority of caravan and boat owners that will mean a lower local tax bill than would have been the case had we let the Lands Tribunal decision stand.
The Bill's provisions are to have retrospective effect back to the beginning of the new rating system in 1990 to ensure that owners of holiday caravans and boats are not re-billed for higher amounts as a consequence of the Lands Tribunal decision. There is an exception to this for those ratepayers who made an appeal and argued that their pitch plus caravan or mooring with boat was domestic property by virtue of Section 66(1) of the 1988 Act. That is those people who put forward the same arguments as the Lands Tribunal decision last year. They will be able to enjoy the fruits of their litigation.
1138 Clause 2 gives regulation making powers in order to ensure equity of treatment for all ratepayers.
The Bill applies only to England and Wales as Lands Tribunal decisions have no effect on Scottish law. There is a potential time constraint on the Bill as it applies to Wales as new rating lists are to be introduced there on 1st April next. The Bill as drafted does not refer to those new lists and we are considering whether the time constraint should be removed. I commend the Bill to the House.
Moved, That the Bill be now read a second time— (Lord Lucas.)

§ Lord Dubs
My Lords, I welcome the Bill. In years gone by I had a connection with boats on the River Thames. As a Member of the other place I was approached by houseboat owners moored in the Battersea area and in larger numbers by houseboat owners moored at Chelsea. Their concern was the lack of security as regards their moorings. The owner of the mooring could ask them to leave and they would then have a boat which could find no other mooring. That was the main issue at that time.
A different matter is before us today and I welcome the Bill. However, I am not totally clear about one issue and I hope that the Minister will be able to help. I understand that there is uncertainty about a mooring used by a boat which is not residential but on which the owner may go for a week or two along the canal. It is not clear whether the mooring would attract council tax or non-domestic rates. Clearly, in such a situation the boat would not be rated at all because it is used simply for leisure purposes, but there is a problem about the mooring. I understand that to some extent it depends on whether the mooring is adjacent to an individual's house or elsewhere.
Subject to that uncertainty, I welcome the Bill and believe that in a small way it will improve the situation for many caravan and houseboat owners. It is therefore a step forward.

§ Baroness Thomas of Walliswood
My Lords, the Bill has received a general welcome and I do not propose to add to the length of today's business by artificially extending my comments. My honourable friend Mr. Rendel in his speech on Second Reading in another place, drew attention to some of the anomalies of the council tax banding system as they affect caravans, which are usually allocated to Band A. From that point of view, it is a rather broad band. No doubt many people have doubts about the banding of properties for council tax purposes. Perhaps in future it will be possible to tackle such anomalies, but I doubt that now is the correct time to attempt to do so.
I look forward with interest to the Minister's response to the question asked by the noble Lord, Lord Dubs. I wish to raise another minor matter because I believe that there are doubts as to the way in which owners of moorings—in many cases, British Waterways, which I understand does not pay business rates—will pay the non-domestic rate levied on their moorings. Perhaps the 1139 Minister could also enlighten us on that point. The Bill comes to us unamended from another place. It will perform a useful function and in general we welcome it.

§ Lord Cochrane of Cults
My Lords, I must first declare an interest in that I am the only speaker in the debate who is engaged in the caravan industry. But equally, outwith the scope of the Bill, that is wholly in Scotland. Having got that off my chest, I believe that the only point is that it illustrates how declarations of interest can be more misleading than helpful.
I welcome the Bill because, as my noble friend said, it brings things back to where we thought they were. I shall confine my comments entirely to dry land because I am aware of no problems as regards moorings except those mentioned tonight. Perhaps one should be glad—and I am glad—that the Department of the Environment has seized upon the anomaly created by the Lands Tribunal and has acted quickly to repair the damage which could have been done. It is to be very much congratulated on that. Its speed of action compares favourably with what one sometimes thinks about the benign neglect of the Department of National Heritage in relation to the caravan industry, which is very large. Were I not on my noble friend's side, I should not have used the word "benign".
My only other minor complaint is that the drafting of the Bill follows the usual horrible practice of putting bits in and taking bits out. How much better it would have been to have repealed the whole of Section 66 and reinstated it with the words added, and so on. Again, because I am on my noble friend's side, I promise that I shall not table an amendment to that effect but I am sorely tempted to do so in terms of the long-term clarity of local government legislation.
Perhaps we shall get through this Second Reading in record time. I have not yet reached minute three on the Clock which, in itself, is a record. I commend the Bill and thank my noble friend for the clarity of his introduction.

§ Lord Skelmersdale
My Lords, I should like to turn your Lordships' attention briefly from land to water. When I was performing the same role as my noble friend Lord Lucas, there was an amendment to a local government finance Bill to include swinging moorings among rateable hereditaments—I believe that is the correct term. Having looked at Section 1(3) of the Bill, it is quite clear that it refers to the mooring and the boat together where the boat is the sole or main residence of an individual. One assumes that that normally means fixed moorings. But there are rare occasions when they could be swinging moorings, and I wonder what is the position in regard to them.

Lord Lucas
My Lords, I deal first with the question raised by my noble friend Lord Skelmersdale because the simple answer to that is that I do not yet know but I may soon!
1140 The general principle is that all the world shall be taxed and one way or another, property is either domestic or non-domestic and gets caught. The occupiers of moorings have generally been liable for rates since the middle of the last century provided they satisfy the basic criteria which determine liability. Those are permanent occupation, exclusive occupation and occupation of benefit to the occupier. suppose that swinging moorings are not likely to be sufficiently permanent to meet those criteria; but for the avoidance of doubt, the Rates Act 1984 introduced a specific exemption for swinging moorings which has been carried through into the new system.
The noble Lord, Lord Dubs, asked a question about boats to which I must confess I do not know the answer, either, but for a better reason; namely, that we are generally uncertain as to what is the answer. We believe that moorings which form part of a domestic property, are attached in some way or located next to a domestic property or are to do with a houseboat will be part of that domestic property for rating purposes, and moorings which do not will be commercial property and will be subject to commercial rates. But we are not quite certain whether the legislation as it is and will be with this Bill makes that the case and we are reviewing the matter. I shall happily write to the noble Lord about it. As I have indicated, we may well have a Committee stage and if an amendment is necessary, we shall certainly bring it forward at that stage.
I am grateful to the noble Baroness, Lady Thomas of Walliswood, for not attempting to use this Bill to re-write the whole of the rating system. I was not aware of any particular difficulty in relation to owners of moorings. The general principle is that owners of moorings pay commercial rates and that applies to British Waterways and its canals and to any moorings which a bankside owner may operate. Whether or not a particular stretch of bank is rated depends on whether the rating authorities know about it, but it should be rated if it is used as a mooring.
I was extremely grateful for the support from north of the Border from my noble friend Lord Cochrane of Cults. It is nice to know that looking at us from his eminence up there as he does, he approves of what we are doing, even though it brings no benefit to himself. I commend the Bill to the House.
On Question, Bill read a second time, and committed to a Committee of the Whole House.