Baroness Meacher
Main Page: Baroness Meacher (Crossbench - Life peer)Local Government Finance Bill
Baroness Meacher Excerpts
Lord Smith of Leigh
My Lords, the Committee may recall that on Second Reading I mentioned revaluation of council tax, which is something that I have raised with Governments of all persuasions. Perhaps we should be buying a cake as it is the 21st anniversary of the current valuations—which, as my noble friend said, are totally out of date.
I agree with the noble Lord, Lord Shipley, that the council tax system is a property tax. Although I support it in principle, one of the problems with it is that it was introduced in a rush. It was brought in because there was such a panic about the poll tax and the need to get rid of it—so anything was better than the poll tax. Because of the rush the valuations were not done properly and a national scale was used. Some of the problems that my noble friend mentioned about the difference in values between areas of the country in 1991 were therefore reflecting the fact that, yes, in my authority the vast majority of properties are in band A and B. Band H is pretty irrelevant to us, and a band I would probably not be of much help either. That use of a national scale for valuing is the problem.
When my noble friend cited the areas from which substantial benefits would come with this measure it just illustrated to me the further geographical bias there has been in the housing market over the past 21 years. The fact is that the areas she quoted are all in the south and the south-east and have had economic prosperity during that period, which has pushed up house prices. In other parts of the country economic prosperity has not been on the same level. House prices have gone up for some of that period but in the past two or three years those prices have been going down in many parts of the country, including my own.
I would clearly therefore be interested in some kind of revaluation. What is missing from my noble friend’s amendment, if I may say so, is that it would have such a huge geographical bias in its outcome that we would have to have a different form of equalisation. Those areas in the north, the Midlands and so on, which would not benefit from this, would be in a much worse situation if all we did was to put the amendment through without following it up with some equalisation.
Baroness Meacher
My Lords, my concern is about the people at the bottom of the heap and the changes in council tax benefit. I know that many colleagues who are in this Room also share that concern. I would be very interested in having the Minister look at what funds might be raised through this amendment and whether something could then be done about the 10% reduction in council tax benefit. As we know, that reduction will not affect pensioners and will therefore affect other households incredibly heavily and disproportionately. Maybe there is a small possibility here to prevent unbelievable hardship as a result of this cut to council tax benefit. We would then achieve less regression—both by the changes at the top end and by using that money to effect changes at the bottom. I would be grateful if the Minister would respond to that.
Lord McKenzie of Luton
My Lords, like my noble friends Lady Hollis and Lord Smith and the noble Lord, Lord Shipley, I am not an advocate or supporter of local income tax. My noble friend Lady Hollis has, as ever, made a challenging case for the introduction of a new band, although her case is, in a sense, seeking a process of consultation. My noble friend is aware that, from this Front Bench, we are not yet able formally to support that proposition, although I note that she has occasionally trail-blazed an opinion and the party—or otherwise—has caught up with her later. There is obviously a range of issues here and my noble friend Lord Smith instanced some of the wider ramifications, such as the redistribution of revenues that might come from this. However, I am interested in the Minister's response on this and we should recognise that there are growing discrepancies and inequities in the current system, if for no other reason than the passage of time. This amendment raises a serious issue.
Baroness Meacher
“Enforcement of council tax
Councils shall include procedures in their contracts with bailiff companies covering the enforcement of council tax which allows for the return of a warrant by the bailiffs to the councils for reconsideration when—(a) there is a mistake in the decision to issue the warrant in the first place;(b) the warrant was imposed by the local authority before the relevant facts of the case were known;(c) the circumstances of the defaulter have changed since the warrant was issued by the local authority;(d) the defaulter is experiencing financial hardship and is unable to pay the tax; and(e) the circumstances of the defaulter fall within the circumstances of “vulnerable situations” on page 9 of the National Standards for Enforcement Agents issued by the Ministry of Justice in 2012.”
Baroness Meacher
My Lords, Amendment 94 proposes a new clause the aim of which is to protect individuals and families in financial need from having their essential belongings, and even their homes, seized by bailiffs executing a warrant for the repayment of debts. Very often, of course, those debts are unavoidable. Let us just think for a moment about the level of income that many of these people are on—I am sure that these income levels have been mentioned during Committee days 1 to 5, and I must apologise that I was not able to be with the Committee on those days. However, I think that this amendment is incredibly relevant because of the fact that many of these people have so little room for manoeuvre as they are on JSA of £71 a week for a couple or £54 a week for a single person. It is a tiny income.
Those of us who were involved in the debates on the Welfare Reform Act and appealed to the Government not to devolve council tax benefit to local authorities will be well aware of the disproportionate hardship being imposed on households which are already in financial hardship due to the welfare reforms. I know that that is, in one way, not relevant to this debate. However, it is incredibly relevant as a context for this discussion.
One of the major issues is the cross-cutting costs imposed on these very poor households by the disconnected policies of the DWP, the MoJ and the DCLG and the ensuing debts which might arise in relation to these three different departments. These debts then generate further costs so that one has not just the debt but the costs associated with the fact that one has been unable to pay one’s debt, creating yet further debts and leaving those households spiralling down to a point where they just cannot get themselves out of that rather deep hole.
One has only to think about the sorts of results we will see following implementation of the Welfare Reform Act. A household might be in a flat that is deemed too large or too expensive to receive full housing benefit. Perhaps the household will learn of this a little late or it will take them time to move to a cheaper, smaller flat, during which time the debts will mount. That is why I raise the point about levels of income. You just do not have any room for the debts mounting up as a result of these changes over which people have no control, and yet these changes have the most incredibly disproportionate impact on these people. Just imagine what would happen if you lost a piece of your rent and you had to take it—perhaps £8 a week—out of your £54. I cannot imagine living on £54 a week for housing benefit and all the other bits and pieces you get. As for the idea that you then lose a bit of that as well because you are in the wrong flat and have to move, what about the costs of moving and all the rest of it? It is unthinkable that these people will be able to cope at all.
Lord Lucas
My Lords, I find myself in happy agreement with the noble Lord, Lord Stevenson of Balmacara. People should pay their debts, and I imagine that the Minister will join me in looking at things that way too. It is a good basis for looking at this amendment. However, I support the amendment, particularly because of my view of what local authorities are getting up to.
Baroness Meacher
Where errors have been made by officials, most particularly, it is completely immoral to turn on the recipient family, couple or individual and expect them to deal with what can be an enormous debt, about which they have no knowledge whatever. It is not their fault. We need to be careful about saying that in all circumstances people should pay their debts.
Lord Lucas
My Lords, I think that the noble Baroness misunderstands me. I was picking up on what the noble Lord, Lord Stevenson, said and the way in which he described that this should be done. I am not trying to address myself to the particular circumstances of that part of the amendment. I support the amendment, by and large, but I am looking at it from this point of view: when I read this, I see an instrument for getting local authorities to behave better than they do and to pay more attention to their duty of care to the people to whom they are charging council tax.
About 3 million liability orders are issued in respect of council tax each year. Councils charge an average of about £100 a time for this, which is £300 million a year that councils are charging for liability orders. This charge is supposed to be based on the cost to councils of getting the liability orders and the magistrates’ court orders together. It is totally out of proportion to that cost. It is high time that the Government did a little audit to check out what one or two councils are charging and to see whether those costs are real.
It is no good, particularly when you are looking at charging money to people who often do not have it, to proceed in the same way as councils do with motorists: we all know that those charges have nothing to do with the costs of providing services, that they are completely out of proportion and that the councils are running them as a profit centre. I gather from the hornets’ nest that the Royal Borough of Kensington and Chelsea continues to do that, which is certainly my experience from being on the wrong end of their fines. Parking has become a major profit centre for some boroughs, and I can understand why they consider that people who have cars have money to be got. However, that should not be their attitude to those who find themselves unable to pay council tax.
Lord Lucas
My Lords, I should say to the noble Baroness, Lady Hollis, that I will indeed do what I can to provide her with some evidence. I should be grateful if either she or the noble Lord, Lord Tope, or anyone else who was belabouring me for being beastly to councils could point out to me where on a council’s website there are references to the sort of behaviour which they say goes on as a matter of routine. I have just looked at some; I looked in vain at Norwich, and at several others, and they all lay out the bare bones of the charges and the bailiffs and say nothing about finding your way into the care of the noble Lord, Lord Stevenson of Balmacara, or other ways in which to deal with the problems that you may have. It is not there on their websites. I cannot say that I have seen them all, but I have looked at half a dozen in the course of the winding up. I would be very grateful if those who have belaboured me could show me where on the websites of the councils with which they have involvement this sort of attitude to people who fail to pay their council tax is demonstrated. I hope that we shall manage to make some progress at Report in this direction, because it seems that there is considerable scope for not only bailiffs but councils behaving better to take care of the vulnerable but also effectively and efficiently recover council tax while causing a minimum of distress on the way. I am delighted to hear that things are better than I had understood, but I would love to see some evidence.
Baroness Meacher
My Lords, I thank the many noble Lords who have spoken in this debate so powerfully and helpfully. I must also thank the Zacchaeus 2000 Trust and the reverend Paul Nicholson, who has been behind all this.
Important points were made in this debate, albeit that, as I mentioned in our meeting with the Minister, this is a probing amendment raised in the context of the DWP and the MoJ. The point was to bring to Ministers’ notice the relationship between the three departments and the similar issues that apply, whatever words one might use. I certainly agree that the amendment does not deal with all the problems. I particularly endorse the point made by the noble Lord, Lord Stevenson, that we need a regulatory or licensing system. Ten years ago, when I was chairman of the Security Industry Authority, I pressed hard, as far as I could at that stage, for such a regulatory system for bailiffs. Often they say it takes 10 years before an idea comes to fruition, so this is about time for the regulation of bailiffs. I am sure that it was raised 20 years ago, and, no doubt, 30 years ago, but there we go. It is certainly time that that was done.
I also very strongly support what was said about advice agencies. It is in no one’s interest that advice agencies are being cut back now. I appeal to the Minister to do anything that she can to ring-fence or support local advice agencies and prevent the totally destructive withdrawal of funds from those bodies. Of course, as the noble Lord, Lord Smith, said, local authorities need to collect the money, but they seem to be spending an awful lot of money on trying to do so, which again is self-destructive.
I understand the Minister’s comments, but we need this looked at across the three key departments—there may be others—to see whether sensible regulations can be drawn up. As has been said, guidance is fine, but it is not mandatory. We would like mandatory provisions within regulations that cover the collection of debts from those families and individuals who are in financial hardship and where some injustice is being done.
Having said all that, and hoping that we will have further discussions with the department and its officials, I beg leave to withdraw the amendment.