Inheritance and Trustees’ Powers Bill [HL]

Baroness Hamwee Excerpts

Monday 3rd February 2014 Lords Chamber

[Lord Lloyd of Berwick (CB)]

My Lords, in his very helpful letter of 30 January 2014, the Minister referred to the amendment moved by the noble Viscount, Lord Hanworth, at a meeting of the Special Public Bill Committee on 16 December. He indicated that the present amendment is to the same effect.

These things go out of one’s mind so quickly that I have had to refresh my mind as to what took place at the two meetings that we have had. At our previous meeting on 13 November, the noble Lord, Lord Beecham, asked why the fixed net sum should be reviewed only every five years and not annually. The noble Viscount, Lord Hanworth, strongly supported that suggestion. Professor Cooke said that she would look into why the Law Commission had come up with the figure of five years in the first place. In her letter of 28 November, she explained the Law Commission’s reasons: on the evidence that it had received, five years was a compromise figure.

By the time of our next meeting on 16 December, the noble Viscount had drafted his amendment, but it contained two, quite separate features. It contained, first, the requirement of an annual review such as we had discussed at our first meeting, but it also contained the new feature of a compulsory order if the consumer prices index should increase by more than 15%.

There was support for an annual increase from the noble Lord, Lord Beecham, but doubts were expressed by the noble Baroness, Lady Hamwee. I took the same view as the Law Commission; in other words, that an annual review was too frequent, certainly if it led to an annual revision of the fixed net sum. There was very little, if any, discussion of what is now before your Lordships; that is, the proposal for a compulsory review if the index rose by more than 15%—I think that a passing reference to it was made by the noble Lord, Lord Plant.

In due course, the noble Viscount sought leave to withdraw his amendment, but said that he would come back on Report. It is now proposed by the Government that we should accept the second half of the noble Viscount’s amendment but not the first—I think that I understand the Minister right in saying that. There is to be a compulsory review if the consumer prices index is increased by 15%, but there is to be no annual review.

My only concern is that this new amendment now before your Lordships, confined as it is to the compulsory feature, was not considered in any way by Professor Cooke—at least not to my knowledge. However, it seems a sensible amendment, and I cannot imagine the Law Commission, had it been asked for its views, having any objection. It makes sure that the Lord Chancellor will in only limited circumstances be, as it were, brought up to the mark, even though he will then—again, if I understand the noble Lord correctly—have discretion as to the amount. In my view, this represents an improvement to the Bill and I therefore support the amendment.

[Baroness Hamwee (LD)]

My Lords, I will not be the only person in the Chamber this evening who remembers when mortgage interest rates were 15%, and very painful they were too. I have one question for the Minister, relating to the term “available” in proposed new paragraph 3A(1)(a). When does the figure become “available” within the meaning of the provision? Does it mean published or “available” to the public? The figure must be available to others privately before it is published. I do not know whether it means published in the sense that the consumer prices index uses the word “published”, but we need to be clear about how one identifies when a figure becomes available.

[Lord Beecham (Lab)]

My Lords, in Committee, I raised a number of issues and said that I would consider the position further before Report. I took advantage of seeking advice from leading counsel, Mr Nugee, who gave evidence to the Committee. I have to say that he received the same fee for his services as the Minister receives for his in his present capacity, and I am obliged to Mr Nugee for his advice. Having considered it, I am not proposing any further amendments today. He would perhaps be inclined to support such amendments but, taking things in the round, thought that the position that had been reached in Committee was reasonable.

We are discussing an amendment stemming effectively—I agree with the noble and learned Lord, Lord Lloyd—from the contribution of my noble friend Lord Hanworth. As I said to him just before we entered the Chamber, he has the law in his genes because his grandfather, the first Viscount Hanworth, was Attorney-General in the coalition and subsequent Conservative Governments in the early 1920s. Clearly, he has inherited that gene and deployed it to some effect. I have no difficulty with the amendment that the Minister has moved, but I have one query.

In Committee, I moved an amendment to Clause 1 which did not succeed because it referred to simple interest. Are the amendments now being proposed compatible with Clause 1 as it now stands, which appears to provide for the interest rate referred to in paragraph (B) of case (2) of the table to be the Bank of England rate? I may have misunderstood the original effect of Clause 1 and the amendment. I assume, but perhaps wrongly, that Clause 1 deals with the situation that the amendments now seek to modify. I just hope that the provisions are compatible but that, if they are not, perhaps by Third Reading we might have the necessary change. On the face of it—again, I may have misunderstood the position—the two are to some degree in conflict.

--- Later in debate ---

[Lord Faulks]

My Lords, I am grateful for the contributions to our short debate on this and for the thorough contributions to the Bill Committee which discussed these important, although relatively obscure to some, provisions.

The noble and learned Lord, Lord Lloyd, referred to the fact that Professor Cooke had not specifically considered the question of the 15% trigger. I can assure him, and the House, that she has now considered it and approves the amendment, which has her blessing as well as that of the Government. The Government think the 15% trigger is high enough to ensure that the level of the statutory legacy is adjusted only where there has been enough of a rise in inflation to warrant it. I, too, remember the days referred to by the noble Baroness, Lady Hamwee.

In answer to the question raised by the noble Baroness about the word “available” in new paragraph 3A of the amendment, this refers to the Statistics Board publication of the consumer prices index for a particular month. The index is published on the website of the Office for National Statistics. The monthly publication dates are published a year in advance.

I turn to the query of the noble Lord, Lord Beecham. Clause 1 refers to the interest payable on an unpaid statutory legacy. New Schedule 1A refers to the level of the statutory legacy overall. I understand that the different rates apply in different circumstances and are compatible. We will take cognisance of this matter and refer it back at Third Reading if there is any residual doubt on it.

[Baroness Hamwee]

My Lords, before the Minister finishes, I will test the patience of the House and say that I understand his common-sense answer, which was what I expected. However, I am not completely convinced that the Bill, incorporating this amendment, actually says that. I will leave that with him, as it is not very sensible for the noble Lord, Lord Ahmad, to go to and from the Box to answer a rather technical question. However, we are all such pedants in this Chamber that I know we all want it to be correct.

[Lord Beecham]

I follow the noble Baroness to take a little further our discussion on the impact of Clause 1 and the amendments. If I understand the noble Lord correctly, there are two situations. One will be governed by one rate of interest, as specified in Clause 1, and the other will be covered by these amendments. This raises a further question of why there should not be consistency, in terms of the interest to be calculated, in respect of what appear to be two separate situations. If they are not separate situations, there is a degree of confusion; if they are separate, there needs to be a rationale for having two different rates of interests. I invite the noble Lord to consider that before Third Reading. It may or may not need tidying up. On the face of it, there seems to be something slightly awry with the position we will be in when the amendment is passed.