Baroness Hanham
Main Page: Baroness Hanham (Conservative - Life peer)Local Government Finance Bill
Baroness Hanham Excerpts
Baroness Hanham
My Lords, I apologise to the noble Lord, Lord McKenzie, for trying to leap in ahead of him. He will have to be quicker getting to his feet and I will have to be slower getting to mine.
I thank the noble Lord, Lord McKenzie, and the three other main contributors to this debate for tabling this amendment, which has been raised before and relates to the monitoring and evaluation of the reforms that we are talking about here—council tax support. However, the amendment would go wider than that, as the noble Lords, Lord Shipley and Lord McKenzie, said, and seek formal review across all the welfare programmes.
This amendment seeks to require the Secretary of State to undertake a formal review of council tax support three years after its implementation, and the noble Baroness, Lady Hollis, was considering whether it should be brought within universal credit. The noble Lord, Lord Shipley, made it clear that he wants the provision to go much wider than that.
We have had several discussions on this issue during the passage of the Bill. I will say again what I have said before: namely, that in the first instance it is for councils to keep these schemes under review. The Bill requires each billing authority to do just that, each financial year, and to consider whether or not to revise or, indeed, replace its scheme, which a local authority is entitled to do. Local authorities are closest to their local communities and therefore are closest to those who need the council tax support. Therefore, they will be in the best position to decide how they set their council tax in future, bearing in mind the needs of their population.
I am not convinced that a major independent review as a set stage is required or, indeed, that it would be particularly helpful for local councils. Therefore, noble Lords will not be surprised when I say that I cannot accept the amendment. However, I recognise that it is right and proper for the Government to keep the framework in which councils operate under review. I can confirm that we will take steps to do this. We are already considering with local government what minimal data we will require from councils to enable us to keep this policy under review. I have no doubt at all that local councils will keep us informed of how it is progressing.
There were rather snide or slightly underappreciative comments about the transition scheme announced last week. As we discussed, the transition scheme has been set up to ease in these changes and to ensure that there are incentives and support for councils to help deliver the Government’s objectives.
Furthermore, as we have debated at each stage of the Bill’s passage, the Government do not believe that council tax support should be part of universal credit. Indeed, it was deliberately separated from it. Therefore, I cannot accept the requirement to consider the integration of council tax support with universal credit, nor am I in a position to accept on behalf of the Government a wide review across welfare provision.
However, the noble Baroness is right to remind us of the importance of monitoring and evaluating policy. The Government do that, particularly where there are major policy changes. The Government will continue to keep this policy under review and make adjustments as they see fit to ensure their objectives are delivered. That seems to me the proper way of doing it. It is far too long to sit and wait for a review in two or three years’ time if something needs to be amended or changed. The Government need to be advised of what is happening and amend something where they can if that is necessary. I assure the House that that is what will happen and that the measure will be kept under permanent review. Therefore, I hope that the noble Baroness will withdraw her amendment.
Baroness Hollis of Heigham
My Lords, I thank very much other noble Lords who have spoken—the noble Lords, Lord Shipley and Lord Best, my noble friend Lord McKenzie, and of course the Minister for her reply. However, points came up in the argument that I did not feel the Minister addressed. The noble Lord, Lord Shipley, who was absolutely spot-on, made the point that because this issue interlocks with welfare reform, it needs a broader approach than the Minister seemed to suggest in her reply. My friend the noble Lord, Lord Best, says he is worried that one possible outcome could be chaos or, equally, we could find that the variations that come our way are acceptable and appropriate, but he remains worried about the implications of this change for the poorest people in our community. As in the Welfare Reform Act, when he successfully persuaded the Minister and the whole House that we needed to monitor the legislation in an independent way, the House backed him, agreed with him and supported his amendment.
We need to know the effects on local authorities, on some of the poorest people in our communities, on work incentives, and on the Conservative Government’s flagship welfare reform—universal credit, which I support. We have to have such a review. The Minister said that individual councils would be keeping the schemes under review; of course they will. This is no substitute for an individual and independent review across the whole field of welfare reform—in so far as this is a part of welfare reform—and council tax benefit. We need that review, otherwise the reviews that the noble Lord, Lord Freud, has agreed to will be incomplete and partial, and no one will be able to put the pieces of the jigsaw together. As I have said, they affect some of the most vulnerable people in our society—disabled people, families with children in poverty, carers and some of the most fragile and frail.
It is because the amendment is very modest and because this is the only way that we are going to get coherent government policy to ensure, as I and everyone else wish to, that support for welfare reform is effective, especially for those who need it above all, that having failed to persuade the noble Baroness of the desirability of the amendment, I hope perhaps we can persuade the House.
Baroness Hanham
My Lords, I thank those noble Lords who have returned to the battle on this front, and I thank the noble Lord opposite for indicating where his party stands on this.
It might be worth reminding the House why we are in the position that we are in. We still sit on one of the largest deficits that this country has ever seen, and everything and every aspect is having to make a contribution to that. If we had not inherited that financial situation, we would not be here.
Let us be clear: the amendment is a tax rise on millions of single people, even in the reduced form that now comes before us. An amendment to give local authorities complete discretion over the level of discount was discussed for over an hour and a half on Report, but ultimately was not pressed. The Government were opposed to any change in the single-person discount then, and our position has not changed now. The single-person discount was part of the regional council tax system. It was part only of the system, not of anything to do with what was then council tax benefit. It is correct that it was not included or considered as part of the consultation on changes to support for council tax benefit. Noble Lords have said, “Well, that doesn’t matter; we can produce this in this House if we wish to”, and of course that is absolutely right—that can be done. In broad terms, though, the country has not been asked about this, although we have heard views about it. The noble Lord, Lord True, is correct in what he said; it goes back to the fact that this was not part of the original local government scheme.
The single-person discount exists because, by and large, single-adult households make less use of local authority services. I accept that there are some who do not—those who need adult support or social services support—but by and large single people, and I return to the fact that I am a beneficiary of this particular discount, do not make as much use of the facilities.
I do not want to repeat my arguments from Report but I want to be clear on the impact that the amendment would have. Changes to the single-person discount would be, as I have already said, a significant tax increase. Although the amendment clearly excepts pensioners, it would still hit other groups such as single parents and low-income people of working age. It is important, perhaps, to be aware that in October 2011—the noble Lord, Lord McKenzie, came to this conclusion in a different way—more than three-quarters of the claimants of single-person discount were in dwellings that were banded A to C. Only one-third live in band A and only 10% of such claimants live in properties that are band E, so the effect would fall disproportionately on the people who lived in the lower-cost accommodation—and I suspect that most of those would be people who by definition would not be considered to be very well off. So the amendment would tax those whom noble Lords are seeking to help.
Noble Lords have previously commented on the amount of revenue that may be raised by reducing the rate of discount. I would like to sound a note of caution. People losing their single-person discount under this amendment may ultimately find themselves in greater need of help with their council tax. This would mean curtailing the impact of any additional resources, putting more people in need of council tax support and creating unintended pressures on councils. I am sure that the House would agree that it is not quite the outcome for this amendment that would be expected or hoped for.
Finally, without a direct correlation between distribution and financial need, it is not at all certain that the limit of new funds that the amendment would realise would indeed help those councils which the noble Lord is trying to support—another point which the noble Lord, Lord McKenzie, made very strongly in his comments.
I have made it clear from the outset that the Government will not be supporting this tax rise on several million people. I tell the House that the Government will not be able to support this amendment.
Lord Tope
My Lords, I am of course grateful to all noble Lords who have spoken in this debate, particularly to those who have spoken, from all sides of the House, in support of the amendment. I pay particular tribute to the noble Lord, Lord Best, who has indeed fought this fight, not to make policy on the hoof, as the noble Lord, Lord True, suggested, but who has tried to bring it about for many, many months. The noble Lord, Lord Best, will understand if I say that his view that it is not worth entering the race if you are bound to lose is not shared by most Liberal Democrats. Similarly, we are grateful to him for his offer of a protest vote. That is something that we are also used to gratefully receiving; we sometimes put them to surprisingly good effect, as I hope that we will today.
The Minister has said, quite rightly, that if this amendment were passed, it would be a tax rise for some. It would. It would be a small tax rise where local authorities chose to vary the single-person discount, and not all of them will do that. It would be a small tax rise for those in receipt of the full 25% discount.
The cut in funding for council tax support being implemented in the way that most local authorities are having to do so is itself a tax rise for the people least well able to afford it. I do not pretend for one moment that the amendment is ideal, the perfect solution, the cure-all. Of course it is not. It is what the noble Lord, Lord Smith, quite rightly described as the least worst option. It is the least worst option that is before us tonight. We have heard speeches in support of it from all sides of the House tonight. I hope very much that we will see them translated into support.
I find it inexplicable—I have used that term before—that the Labour Party is choosing today to vote with the Conservative Government and against the amendment.
Baroness Lister of Burtersett
My Lords, I will intervene very briefly. We have heard two very powerful speeches from my noble friends in support of this amendment. The more I have listened to the debate during the passage of this Bill, the more I have come to the conclusion that all the talk about protecting vulnerable groups is simply a fig leaf. The Government say that they want to protect vulnerable groups but they do nothing to ensure that local authorities do so. Indeed, there is not even any mention of vulnerable groups in the eligibility criteria for the transitional funding. They know full well, while also saying that local authorities should have regard to work incentives, that they are putting local authorities between a rock and hard place.
My own authority, Nottingham, is not going to protect vulnerable groups because it is going to spread the pain out among all working-age people. My noble friend Lord McKenzie has suggested that this is probably what many authorities are going to do. The Government can then turn around and blame the local authorities by saying that it is the local authorities that are refusing to protect vulnerable groups, having set up a scheme but not having given them enough money to ensure that they protect vulnerable groups. It really is not on. What are the Government going to do to monitor the impact of the new scheme on local groups? If this monitoring produces the evidence that vulnerable groups are not being protected, what action will the Government take? Ultimately the buck should stop with the Government, not with the local authorities, in terms of ensuring that vulnerable groups are protected.
Baroness Hanham
My Lords, I thank the noble Lord for introducing this amendment and for his explanation, as well as the other speakers. Amendment 3 is quite a tight amendment—although we have rather waltzed away from it—that would require the Secretary of State to issue guidance setting out who is considered vulnerable for the purposes of local schemes.
As noble Lords are aware, the Government have made it clear that local authorities should make good provision for vulnerable people in their communities. However, we do not believe it would be helpful to create a new definition of vulnerability, particularly when local authorities already operate within a framework of responsibilities in relation to vulnerable groups. The Department for Communities and Local Government is at the moment working with the Department for Work and Pensions to ensure that local authorities will continue to receive appropriate data on current benefits and universal credit for those who would be considered vulnerable. This could include data that would help local authorities identify individuals they considered to be vulnerable, such as those who have a disability, so that they are able to provide that support in future.
As I said before, local authorities are well aware of their responsibilities and their own priorities and do not need further hand-holding by central government. I am satisfied that local authorities are already alive to the need to protect the vulnerable and to draft schemes, which many are considering, on how to support those they consider to be vulnerable. A number of councils, including Arun, South Tyneside, North East Lincolnshire, Portsmouth and Daventry, to name just a few, are all proposing schemes that make some special provision for people who the council consider particularly vulnerable, whether disabled people or families with young children.
As we have discussed previously, we have already published guidance that reminds local authorities of the statutory framework in which they operate and of their existing responsibilities in relation to people who are considered to be vulnerable. I am pleased to have had the opportunity, throughout our discussions at various stages of this Bill, to draw attention to these important responsibilities. As I indicated to the noble Baroness, Lady Lister, on Report, I am content and happy to bring this guidance to the attention of local authorities again, while alerting them to potential future legislative changes relating to carers, as set out in the draft care and support Bill, which they will also want to be aware of. However, given that local authorities already have an established and understood framework of statutory responsibilities in relation to promoting equality of treatment for individuals who are vulnerable through the design of their schemes, I do not believe that there is any value in creating new guidance.
I am aware, however, that a number of draft schemes propose a significant increase in the tax burden on those currently paying no council tax. It is disappointing that a number of councils have not felt able, in the light of their responsibilities towards vulnerable groups, to design schemes that avoid placing very great financial pressures on those least able to pay. That is why we have introduced the transition grant, to help those authorities which undertake to avoid significant cuts to awards in the first year, to find other more sustainable ways of managing the reduction in the future.
To be compliant with the grant criteria, an authority must develop a scheme that ensures that no one who would be eligible for 100% support based on current criteria can be asked to pay more than 8.5%. We have discussed that previously at length, so I do not need to go through the whole system again. I have the guidance here and I give a commitment to the House that it can be put forward again to local authorities to remind them of their duties.
Baroness Hollis of Heigham
The noble Baroness says that she already has the guidance. The guidance spells out the equality duties and so on under legislation. However, it does not actually cover some groups of people; for example, carers are not part of the groups covered under the legislation. Nor does the guidance easily translate the vocabulary of rights and discrimination, which is what the Equality Act is about, into the need for financial support. If the Minister proposes to reissue that document, could she add an addendum on the implications of that document on this piece of legislation?
Baroness Hanham
The document makes it quite clear that councils have a responsibility, if nothing else, under the Equality Act to ensure that they treat everyone fairly. I think that would take account of what the noble Baroness has said.
Lord McKenzie of Luton
My Lords, I thank my noble friends Lady Hollis and Lady Lister for their support for the amendment. My noble friend Lady Hollis ranged over those draft schemes which, to her knowledge, are in a different place on a whole range of different components. She made the point about how local schemes undermine the import of national benefits, particularly DLA. My noble friend Lady Lister questioned whether there was any serious attempt on behalf of the Government to ensure that vulnerable people are protected.
The Minister said that she would reissue the guidance, such as it exists, which is to be welcomed. However, it does not go very far. Is not the lesson to be learnt from this that when you saw how schemes were being developed, what consultations had taken place and what was emerging from that, there was clearly insufficient protection for vulnerable people in many schemes? I think the Minister recognised that. That is still on the basis that councils, in the Minister's terms, should be well aware of their equalities duties, homelessness duties and child poverty duties. They are already in a position where they should be aware of that framework, yet they are still, as we know, being forced, due to a lack of funding, to come forward with schemes that simply do not protect vulnerable people sufficiently and the Minister herself has recognised that. That is why the transition grant had to be brought in, in a sense, to try to bend what individual councils were doing into some sort of national criteria.
One would have thought that that experience would validate the need for some ongoing guidance because that grant will disappear after a year and the import of it will dissipate over time. It is a great pity that the Minister and the Government do not feel able to do more on this front. It is a very critical time for local council tax support schemes. We know that funding is very tight and we should be doing absolutely everything that we can to protect the most vulnerable. This is an opportunity for the Government to be part of that. I regret that they are choosing not to do that. Having said that and given where we are, I beg leave to withdraw the amendment.
Lord McKenzie of Luton
I support the amendments of both of my noble friends. They speak for themselves very powerfully and there is nothing I can add that would help them on their way.
Baroness Hanham
Rather than rising to speak, the noble Lord was nodding his head, so I was not sure whether he was going to intervene. We shall have to come to an agreement for the next two groups of amendments.
Amendment 2, moved by the noble Baroness, Lady Sherlock, and Amendment 3, spoken to by the noble Baroness, Lady Donaghy, are concerned with the interaction between the local schemes and work incentives. I share the concern that work incentives should be supported. That is why earlier this year the Government published guidance to which the noble Baroness, Lady Sherlock, referred, setting out the key features that local authorities should consider including in their schemes to support work incentives. All noble Lords have acknowledged that the transition grant scheme will provide a financial incentive for local authorities to implement those schemes that support work, ensuring that there are no cliff-edges—that is the 25%—as claimants enter work and increase their earnings, and that support is tapered away steadily as their earnings increase. Amendment 2 is intended to control the rate at which council tax support and other benefits are withdrawn to help preserve those work incentives.
In Committee we set out our intentions for the default scheme that will come into force if a local authority fails to adopt a local scheme. We clarified in particular how we intended to take universal credit income into account in that scheme. Officials from my department have continued to work closely with officials from the Department for Work and Pensions to refine the proposals we set out earlier this year so as to ensure that the default scheme avoids unintended interactions with universal credit and supports the strong work incentives that universal credit was intended to deliver. Indeed, my officials have discussed this with the noble Baroness, Lady Sherlock.
The approach set out in the default scheme to treating universal credit income clearly supports work incentives, and I will expand on two key features. First, universal credit will be tapered away by 65% before it is taken into account as income under council tax support schemes. This means that the 20% taper under the default scheme will apply only to residual income once universal credit has been tapered away, and helps to control the overall withdrawal rate. For people below the income tax and national insurance thresholds, the combined marginal deduction rate would be 72%, which for many households would be a significant improvement on the current system. Secondly, the default scheme reflects the fact that universal credit will allow people to earn more income before it starts to be withdrawn. The default scheme allows for council tax support to be withdrawn earlier, minimising the extent to which the means tests interact. Local authorities will not be required to treat universal credit cases in the way provided for in the default scheme, but there are very good reasons why they should want to use this framework as a starting point.
Amendment 3 is intended to require local authorities to have regard to work incentives in designing their local schemes. As I explained when this amendment was first tabled in Committee, I agree with the noble Baroness that work should be supported. As I have said, the Government have published guidance that will help authorities to do that. We are very happy to revise and reintroduce this guidance in order to set out clearly the approach that the department is taking to provide for the treatment of universal credit in the default scheme and to emphasise the benefits of this approach to local authorities, which I think is more or less what the noble Baroness, Lady Sherlock, is asking for. I am also content to use the refreshed guidance to set out the implications for work incentives of increasing the taper rate to help local authorities in their considerations. More particularly, officials will continue to discuss the content of the guidance with the two noble Baronesses as it is developed, and I am very grateful to them for their constructive contributions. I hope that, with their help, we will be able to produce guidance that they can accept. While I cannot accept the amendments, I hope that my assurances go some way to addressing their concerns.
Baroness Sherlock
My Lords, I am grateful to the Minister. For the record, I would like to clarify that I think her comments about Amendment 2 in fact relate to Amendment 4 and those about Amendment 3 relate to Amendment 5. Obviously the amendment numbers have changed—I see that the noble Baroness is nodding in assent—so I should like to clarify the record for those who read the proceedings in Hansard later.
I would have preferred it if the Government had felt able to accept the amendment, but I am grateful to the Minister for her willingness to change the guidance in the way she has described, and for her department to continue to engage. In the light of that, I beg leave to withdraw the amendment.
Lord Mackay of Clashfern
My Lords, I assume that the prosecuting authority would have some regard to the circumstances of any suggested offence under the regulations, but it is very important that the regulations should not include people as potentially liable for criminal sanctions who have not been dishonest in some way or other. The noble Baroness has given examples of people who might find it very difficult to comply with regulations within 21 days in some circumstances. I hope that my noble friend, with her colleagues, may find it possible to modify the statutory language to eliminate the risk of people being faced with criminal charges who are not deliberately doing wrong but who find themselves in difficulties of one kind or another.
I have sympathy with the view that the regulations which deal with council tax are extremely complicated and that it would be easy for someone to fall into a mistake without any deliberation. The last thing that we would want is to criminalise people who make honest mistakes; otherwise, most of us would have some difficulty avoiding the criminal law at some stage, and possibly at more than one stage, of our careers.
Baroness Hanham
My Lords, I have listened with sympathy to the noble Baroness, but I think that she is tackling the wrong end of the spectrum. If it was as she suggested, we would certainly need to do something about it. I may need to give the following explanation.
The clause is intended to allow flexibility to create offences similar to those already in existence relating to council tax benefit. It does not create any additional offence beyond those. The offence that exists is under Section 111 of the Social Security Administration Act 1992. It is that of refusing or neglecting to comply with a requirement to enter into arrangements allowing authorised officers to access electronic records. It is also an offence under that section for a person to refuse to provide information or produce any document when required to do so in accordance with the legislation.
The information may be required from one of several classes of persons and bodies: for example, from banks, employers or utility companies. We seek the flexibility to create a similar offence in regulations where a person falling under those categories fails to comply with the requirement to supply information needed in relation to the council tax support scheme. To be clear, that would relate to circumstances where an individual or organisation holding information about a council tax payer has failed to provide information when required to do so. A small number or persons, such as the self-employed, might fall into both categories, but this is not about requesting information directly from vulnerable taxpayers, as has been suggested. I hope that the noble Baroness will be assured on that point.
Baroness Meacher
I am grateful to the Minister, but she referred to the fact that failure may not necessarily apply to the person themselves. My concern is that it can apply to a vulnerable person—just out of hospital, for example—who has not opened their mail and who unwittingly therefore falls foul of compliance with regulations. That is my concern. There may be all sorts of crimes in relation to bankers and what have you, but my concern is for vulnerable people. It seems from the wording that those people could be caught up in those crimes.
Baroness Hanham
My Lords, I am seeking advice from the Box about the words, “not necessarily”. My understanding is that this is not about the person concerned; this is about organisations from which information may be sought with regard to the ability to pay council tax or possible fraud. It is not about the individual taxpayer.
Perhaps I may read what has been passed to me, because it is important. To be clear, the powers that the noble Baroness seeks to amend relate to powers to require information about a council taxpayer—for example, about their income. Many investigations take place across the system. The powers recreate those which exist in relation to council tax benefit, as I said, and regulations made under the powers are subject to the affirmative procedure, so will be subject to debate in both Houses.
What the noble Baroness seeks to achieve is not part of the provision, because it does not affect the person themselves—the noble Baroness described accurately people who might not be able to give that information, who may be vulnerable and who should be looked after in a different way by the council.
I share the desire of the noble Baroness to protect vulnerable taxpayers, but the amendment will not, for the most part, impact on them. It affects powers that would apply only to those who hold information about the taxpayer—I say this again because we need to be clear about it—not to council tax payers themselves and only in certain circumstances which recreate offences which currently exist under council tax benefit. Those are criminal offences, as I outlined.
Council tax payers who accidentally or unintentionally fail to provide information to the local authority should not be prosecuted or convicted for a genuine mistake, but that is not what the power provides for.
I recognise the concerns expressed by noble Lords, but I think that the noble Baroness is shooting at the wrong fox. When the regulations come to this House, which they will in due course, we will be able to make that absolutely clear. I have done my best to assure the noble Baroness that this is not about individual taxpayers who should not be pursued, but is about where information may be required to see whether it is appropriate to undertake further investigation. I hope that with those explanations the noble Baroness will withdraw her amendment.
Baroness Meacher
I am very grateful for the Minister’s response and to my noble and learned friend Lord Lloyd, the noble and learned Lord, Lord Mackay, and the noble Lord, Lord Beecham, for their contributions to this debate. I have to say that if I am shooting at the wrong fox, the fox is very well camouflaged because I do not see it. It is not clear to me—perhaps it should be, but it is not—that the person and their advice worker, who is also feeling very vulnerable in this situation, cannot be caught up in this legislation. Therefore, I ask the Minister for further discussions about this to see whether there is a way of improving the wording to clarify that the council tax payer and their adviser will not and cannot be charged with a criminal offence when they have acted in good faith.
Baroness Hanham
My Lords, it is not possible to change the legislation because we are in the last dying hours of passing it through this House, but the regulations will come to the House for the affirmative procedure. I am happy to have further discussions with the noble Baroness in the interim.
Baroness Meacher
I am very grateful for that reassurance. I beg leave to withdraw the amendment.
Baroness Hanham
(h) amounts received by the Secretary of State in the year under regulations under paragraph 42 (payments following estimates of amounts to be disregarded).”
Baroness Hanham
This is a group of very minor amendments to tidy up the Bill. The amendments introduce nothing new. They are consequential on amendments accepted on Report in your Lordships’ House and correct or insert references to new provisions inserted on Report as appropriate. I hope that, with that explanation, noble Lords will be happy to accept them.
Baroness Thornton
My Lords, I take the opportunity offered by these government amendments to Schedule 1 to raise the issue that I have been pursuing throughout the course of this legislation, which I discussed with the Minister last Thursday, and to seek clarification at this last stage of the Bill. I declared all my interests at the previous stages of the Bill and they remain the same.
I shall not rehearse the arguments that we have already heard in this House. I am grateful to the Minister for her time at the meeting on Thursday. I also thank Sporta, SEUK, my noble friend Lord McKenzie and the noble Lord, Lord Best, for coming along to the meeting and lending their support and great expertise. I was also able to inform the Minister that the noble Lords, Lord Shipley, Lord Tope, Lord Adebowale, Lord Mawson, Lord True and Lord Smith, sent their apologies. I thank the Minister and her team for the letter which she sent to me and copied to all those concerned.
I am sure that noble Lords and others are very pleased that, at last, the Government seem to recognise a problem which the political parties, the Cross-Benchers and all the organisations concerned with community-based charities and mutuals have articulated for months. Sporta, in particular, has been active in doing most of the leg-work research and in meeting officials during the summer. However, it is a matter of regret that the Government have decided not to take action on the concerns of a wide range of local community organisations with charitable status during the course of the Bill.
In her letter to me the Minister referred to, “the persuasive arguments that you and your advisers have used”. However, she also said that the department would need to see evidence of the problem. I think the fact that all the leaders and ex-leaders of councils in this Chamber and all the organisations concerned at community level are clear that there is a problem should be persuasive. However, all is not lost. The Minister also informed us that a way of addressing the issue is provided by the amendments that were brought forward on Report specifically with enterprise zones in mind. The Minister’s letter gives a broad assurance that, “the same powers could be used in respect of other reliefs such as charitable relief”. The Minister will not be surprised to learn that what I am seeking today is confirmation of that and that the powers can apply to the central funding of all mandatory reliefs given by all local authorities to charitable organisations, should we be able to persuade the Government of the rightness of this decision in the next year.
I would also welcome confirmation from the Government that they will open their doors to the evidence which the many charitable bodies associated with this cause will work hard to gather over the next period and that they will assist the main representatives of these bodies to understand how and when to present this evidence to the department. Indeed, can a specific mechanism be offered to do this? I would also like to take this opportunity to encourage local authorities to co-operate in supplying evidence of the effect of the legislation on their decisions as regards the formation or expanded use—or otherwise—of local charitable organisations. Indeed, I intend to raise this issue with the Local Government Association. This is especially necessary if, as is feared, such decisions are taken with negative effect at an early stage in the consideration of options.
In the year of the Olympics, the Paralympics and the big society, we are concerned about the impact that these changes might have on sport and exercise for the disabled, the less able, the old, working mothers—everybody, actually. I know of no one in the sport and leisure field who has welcomed these proposals. Indeed, Social Enterprise UK has written to the Cabinet Office about the policy clash produced by these proposals and advised the Minister on why the Bill could have a damaging effect.
We suspect that the impact of these proposals will be damaging for the future of theatres and museums outside London; in other words, there will be fewer of them at local level. Social Enterprise UK believes that, as time moves on, this policy could have a chilling effect on new proposals in the Localism Act for the right to bid and the right to challenge community facilities by local charities, so a great deal is at stake. I thank the Minister for her help with this and for the meeting and the letter. I hope that she will feel able to reassure me that arguments will be heard at an early stage and that adjustments will be considered before too much damage is done.
Lord McKenzie of Luton
My Lords, so far as the government amendments are concerned, I understand them to be consequential and to correct other parts of the Bill. I am grateful for the short briefing note that the Bill team gave us. I have no problems with these amendments.
As for the contribution by my noble friend Lady Thornton, I, too, thank the Minister for her engagement and the engagement of the team, and particularly for facilitating the meeting last week. I hope the Government will be able to put on the record the assurance that was given at that meeting, particularly as it concerns the prospects of dealing with the matter through secondary legislation, once the Government become convinced, as I hope they will be, that we do not need to amend primary legislation.
Baroness Hanham
My Lords, the noble Baroness referred to mandatory and discretionary rate relief under particular circumstances. She kindly did not put an amendment forward, but she has done very well in getting her speech recorded in Hansard so that there is no escaping what she has been talking about. I gave her two clear messages when we met. One was that while we accept that there is concern about the effect of the percentage amount of relief available to charitable organisations, we are not totally satisfied that it will have the effect that she thinks. If the organisations that were there provide good evidence and the Government decide that it is of serious significance, there are measures within the Bill that would enable us to make the changes that she seeks. I am very happy to see her again if that should be necessary.
Baroness Hanham
(f) payments made by the Secretary of State in the year under regulations under paragraph 42.”
Baroness Hanham
Baroness Hollis of Heigham
My Lords, I support my noble friend. He is absolutely right. When we raised the issue of whether changes in the scheme following the transitional grant would require going out to consultation, the Minister seemed to indicate that they would not. Some of us were worried about judicial review. Since then, she has written a letter to my noble friend Lord McKenzie in which she says that individual councils must take their own legal advice on the matter. That suggests to me that the department is no longer as clear as it at first was that local authorities might not be exposed to judicial review if they were substantially to change their scheme from, say, a 30% minimum down to virtually nil or 5% as a result of the transitional grant without going out to further consultation. Given that, I hope that, as a result of the move that the noble Baroness has herself made between the earlier stages of Committee and Report and her subsequent correspondence, she will give some consideration to how best she can meet my noble friend’s concerns.
Baroness Hanham
My Lords, in responding to the noble Baroness, Lady Hollis, I have always made it clear that local authorities are, or have been, out to consultation. I think that those consultations are due to close very shortly and may in many cases already have closed. There is no requirement on the Government, and we are not going to make any regulations, on consultation. I have made it clear, and I do so again now, that if a local authority thinks that the changes that it is going to make as a result of the transitional grant are so significant that it changes its scheme so much, then it must decide whether it thinks that it needs, for its own protection, to go out to further consultation. It will seek its own advice about that. I cannot answer the noble Baroness any more clearly than I already have.
Baroness Hollis of Heigham
I am just wondering whether the noble Baroness can give an example of what would constitute a significant change triggering possibly going out to consultation.
Baroness Hanham
No. Local authorities have their different transitional schemes. A transitional scheme has come in. It will provide local authorities which wish to take it up with extra resources to help them ease into the new system. They must know themselves if they decide that they need it. In many cases, it will not be necessary but, if they need to, they will take that advice.
Local authorities now know what they are going to get from the transitional relief; that has already been published. They will know whether they need to change their scheme according to what they have received from transitional relief and on the basis of what they are proposing if they are going to amend it.
I do not believe that they need extra time. January 31 is, after all, a full four weeks. Most local authorities can undertake a quick consultation on this. I imagine it will be very limited indeed. Most local authorities which are principal authorities are very quick and adept at having consultations with other councils. I must resist the amendment on the basis that it is completely unnecessary.
Lord McKenzie of Luton
My Lords, I respond on behalf of my noble friend as this is the last time that we will be speaking on the Bill. With great respect to the Minister, she has not fundamentally dealt with the point that my noble friend was probing. We accept that it would be up to local authorities to make a judgment as to whether or not they needed to consult. However, given where they are and the processes that councils have to go through to come up with a revised scheme—and sometimes the agonising decisions as to whether they can put in the additional funding to close the gap because the transitional money is not going to cover it all in many circumstances—I wonder whether there is time to do that. It would be perverse indeed if, in attempting to take advantage of these provisions, the system simply did not allow them to do that in time to hit the 31 January deadline. That is the point that we were pressing, and it has not been fully addressed. However, we are where we are on it.
I close by saying a brief thank you to some people, certainly to the Minister and the Front Bench for engaging on this Bill and to all noble Lords who have participated. Around the Chamber, we have seen a lot of expertise and wisdom, some of it very long-standing, brought to bear. I certainly thank my team, both Back Bench and Front Bench. I conclude by thanking the Bill team. I know that we see a bit of what the Bill team does. A lot goes on behind the scenes and I am grateful for what it has done on this piece of legislation.
Baroness Hanham
Having seen the noble Lord rise, I apologise for the number of times that I have tried to out-step him throughout the Bill. I am grateful for the noble Lord’s good humour. I am grateful to all Members of the Opposition for the way in which they have put their amendments. I am particularly grateful to those of my political colleagues who have, in most cases, supported me. I have enjoyed taking the Bill through the House. I also thank, of course, my Front Bench and also the Bill team who has been completely outstanding.