Persons Liable to Pay Council Tax

Orders of the Day — Local Government Finance Bill – in the House of Commons at 5:23 pm on 4 March 1992.

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Lords amendment: No. 4, in page 5, line 10, at end insert— ("(3A) Subsection (3) above shall not apply as respects any day on which one or more of the persons there mentioned fall to be disregarded for the purposes of discount by virtue of paragraph 2 of Schedule 1 to this Act (the severely mentally impaired) and one or more of them do not; and liability to pay the council tax in respect of the dwelling and that day shall be determined as follows—

  1. (a) if only one of those persons does not fall to be so disregarded, he shall be solely liable
  2. (b) if two or more of those persons do not fall to be so disregarded, they shall each be jointly and severally liable.")

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

With this it will be convenient to take Lords amendments Nos. 7, 8, 10, 21, 22 and 24. All the amendments in this group involve privilege.

Photo of Mr Michael Portillo Mr Michael Portillo , Enfield, Southgate

Lords amendment No. 4, and the amendments grouped with it, are about joint and several liability where one of the liable persons is severely mentally impaired.

This was a matter which we discussed at length in Committee in the House. The Government were extremely concerned that the system should not be unfair. I explained that there were difficulties in trying to legislate for the private financial affairs of households.

I can well understand concern about a severely mentally impaired person being jointly liable for a council tax bill, but, as I explained in Committee, there will be cases where the interest in the property and all the resources will be in the name of the person who is impaired. There are obvious difficulties in providing that the sole liability should fall on the partner with no resources. In practice, it is clear that there would be no question of pursuing a person who was severely mentally impaired, and that in circumstances such as I have described, arrangements would be made for the bill to be paid.

Nonetheless, there continued to be concern. Opposition amendments were moved in another place, and carried. Those amendments were intended to prevent joint and several liability for the council tax from applying to people who are severely mentally impaired. But the effects of the amendments were unclear. Although they removed joint and several liability from the person with the impairment, it was unclear where the liability would fall. Indeed, the Opposition seemed not really to have thought through the way liability should work in these circumstances. However, following very helpful discussions, in which it was recognised that the situation was not straightforward, the Government were able to bring forward the amendments on Third Reading in the House of Lords, where they were accepted by the Opposition.

A particular problem arises in the case of a couple where the partner with the impairment has the sole interest in the property. He or she will continue to be liable, jointly and severally, with the other spouse or partner, but it would be wrong to provide that a partner who has no interest in the property should nonetheless be solely liable for the council tax on it. We have ensured that no person who is severely mentally impaired can be made liable when there are other liable people in the property, but we do not believe that it is right to impose sole liability where it would not otherwise exist.

I was a little puzzled by what the hon. Member for Dagenham (Mr. Gould) said when he spoke on the timetable motion. He implied that there remained disagreement between the Government and the Opposition over the issue. First, the Opposition have not tabled an amendment to the Lords amendment. In another place, Baroness Hollis said on behalf of the Opposition: My Lords, I shall be very brief. I should like to express our thanks to the noble Lord for coming back with amendments which will adequately reflect in drafting terms the intentions of your Lordships' House. We are delighted to support them."—[Official Report, House of Lords, 27 February 1992; Vol. 536, c. 399.] I hope that the Opposition in this House will take the same attitude today.

Photo of David Blunkett David Blunkett Opposition Spokesperson (Local Government & Poll Tax), Member, Labour Party National Executive Committee 5:30, 4 March 1992

I shall be as brief as is necessary for the guillotine resolution to be effective. There is no fundamental disagreement between the Government and the Opposition about the amendment. However, we regret that it was due only to the diligence of Members in another place and their willingness to challenge the Government that the amendment has been introduced to resolve the outstanding problems.

We are aware that there are still outstanding questions that concern housing associations about those who will become liable for bills where there is multiple occupation—for example, those people who are not suffering from Alzheimer's disease but who share a dwelling with a sufferer. There is also the question of the liability of the owner of the property.

We understand the technical difficulties. It will not be long, I hope, before we are in a position to draw on the vast expertise currently available to the Government.

Photo of Mr David Bellotti Mr David Bellotti , Eastbourne

There have been many discussions about joint and several liability and, at last, the Government have conceded that principle in one minor area. It is a great shame that we cannot persuade them, even at this late stage, to consider the principle even further. With any property-based tax, there is the problem of who is responsible for paying it. The Lords amendment, which the Government are prepared to accept, will at least bring some small comfort to a small number of people. However, I suspect that there will be many disagreements about whether a person will qualify under the amendment.

The last thing that we would want to do with a person who suffers from a mental handicap of any sort would be to subject him and his family to the sort of inquiries that would be necessary to establish whether, under the amendment, that person would qualify not to be jointly and severally liable.

At least the Government have had something of a shock. It is a shame that they did not feel able to consider the rest of the principle. We will not reject the few small crumbs of comfort available, but we remind the Government that property taxes are unfair because they do not relate either to the ability to pay or to the ability to take the decision to pay. In that regard, the ability to know that a tax is necessary and that it must be paid is perhaps more important that the ability to pay.

We warmly welcome the amendment, although the Minister went far too far when he suggested that the Government were concerned about unfairness. If they had any such concern, the council tax Bill would not be before us and the poll tax legislation would have been repealed a long time ago.

Question put and agreed to.—[Special Entry.]

Lords amendment: No. 5, in page 5, line 12, leave out from ("person") to end of line 13 and insert ("as regards whom the following conditions are fulfilled—

  1. (a) he has a material interest in the whole or any part of the dwelling; and
  2. (b) at least part of the dwelling or, as the case may be, of the part concerned is not subject to a material interest inferior to his interest;")

Photo of Robert Key Robert Key , Salisbury

I beg to move, That this House doth agree with the Lords in the said amendment.

Photo of Mr Harold Walker Mr Harold Walker , Doncaster Central

I inform the House that the amendment involves privilege. With this, it will be convenient to consider Lords amendments Nos. 6, 9, 20 and 23.

Photo of Robert Key Robert Key , Salisbury

Amendments Nos. 5 and 6 redefine "owner" for the purposes of the council tax.

Clause 6 provides for the owner of a dwelling to be liable to pay the council tax where there are no residents. The amendments made in the other place revise the definition of "owner". The new definition is based on a person's interest in the dwelling and covers both freeholders and long leaseholders. It is similar to the definition currently used for the standard community charge, under which the owners of unoccupied property are liable.

Clause 8 contains a power to place liability on the owner of prescribed dwellings instead of the residents. There is also a power to prescribe who should be regarded as the owner in certain cases. The new definition of "owner" may not, however, cover the person on whom it would be appropriate to place liability in all situations. Amendment No. 9 clarifies the position with regard to the definition of "owner". It extends the order-making power to provide for liability to be placed on a prescribed person in particular cases.

Dwellings occupied by Church of England ministers are one such example. We do not believe that those ministers should be liable to pay council tax on dwellings which they occupy in order to perform their duties. We discussed that matter in some detail with the Church authorities and agreed that the Church should be liable. However, the definition of "owner" introduced by amendments Nos. 5 and 6 would not, in all cases, cover the appropriate Church body. Amendment No. 9 allows us, through regulations, to place liability on the Church in the form of the Diocesan Board of Finance. The provision also allows for flexibility should difficult cases arise in the future.

The amendments are necessary to ensure fairness and they will assist in the administration of the council tax. I commend them to the House.

Question put and agreed to.—[Special Entry.]

Subsequent Lords amendments agreed to, some with special entry.