Non-Contentious Probate (Fees) Order 2018

Debate between Baroness Meacher and Lord Hunt of Wirral

Tuesday 18th December 2018 Lords Chamber

[Baroness Meacher (CB)]

My Lords, I speak in support of the amendment in the name of the noble Lord, Lord Marks, to the statutory instrument on so-called non-contentious probate fees. As a member of the Joint Committee on Statutory Instruments, I am very concerned that—as other noble Lords have said—the SI appears to be introducing a hypothecated tax on estates for use in subsidising parts of the HM Courts & Tribunals Service that will not at all be used by the fee payer. The SI introduces a huge increase in the cost of probate, which is just a document to enable the executors to administer the estate. It is nothing to do with courts and tribunals, which obviously involve vast costs.

The current fee of £155 if the application is made by a solicitor, and £215 if it is made by the executors in person, completely covers the cost of the probate service. Until now the fee has rightly not included any tax element at all, so this is a major departure from the way probate fees have been exercised in the past. Will the Minister explain why we suddenly need an entirely new approach to probate fees? Has it something to do with the massive cuts in the Treasury’s support for the courts service? I presume it is, but I do not think that makes the action of the justice department acceptable.

As other noble Lords have said, the proposed new fees are going to be on a sliding scale, up to £6,000 for estates of £2 million. This is a hike of 3,770% on larger estates. All but about £200 of the fee will in fact be a tax.

The committee accepts that Section 180 of the Anti-social Behaviour, Crime and Policing Act 2014 allows a fee to be prescribed that exceeds the cost of the provision of the service. I imagine that this probably allows for, for example, exempting very small estates from the fee at all, so then you need to have a slightly higher fee on bigger estates. That is perfectly reasonable. But the term “fee” has a clear connotation of recovery of costs incurred in the provision of the service. Although Section 180 permits enhanced fees, it remains a power to prescribe a fee, which clearly limits it to a relationship with the costs incurred.

The word “fee” does not equate to the term “tax”. A fee surely cannot comprise £200 to cover costs and £5,800 to the individual as a tax on the estate. If Parliament had intended the Lord Chancellor to be able to raise taxes in this way, it would have included such provisions very clearly in Section 180 to acknowledge that charging such a tax might be ultra vires. In the committee’s view, the 2018 order is a measure of taxation for which there is no clear statutory basis. Indeed, the committee could find no evidence that the Government suggested to Parliament during the debates on the Bill for the 2014 Act that the Section 180 powers would be used to prescribe probate fees in order to fund the operation of the courts generally or to provide for such huge and immediate increases in fees—let us call them “taxes”—in the way now proposed.

Furthermore, our committee’s view was reinforced by the report of the House of Lords Secondary Legislation Scrutiny Committee, as the noble Lord, Lord Beecham, mentioned. This points out that the proposed fees do not appear to conform to paragraph 3.6 in chapter 6 of Managing Public Money, the standard guidance to government departments from HM Treasury. Of course, that guidance makes it very clear that a fee should be equal for everyone involved and should represent the cost of the service. There should not be a sliding scale of a fee: that is made very clear in the Government’s own guidance.

As others have mentioned, the original proposal was to have a sliding scale up to £20,000. That was dropped as a result of the objections of the Joint Committee on Statutory Instruments. Can the Government can explain why, when they now accept that £20,000 is unreasonable, they think that £6,000 is somehow reasonable in this context? I suggest that the importance of this issue is that it could represent a precedent for other government departments. Just imagine the implications for citizens if government departments increased fees by some 3,000% for a wide range of services in order to incorporate a tax element to fund public services more generally. This would of course be ultra vires, as they are meant to be fees, as they are in this case. I hope that the Minister will give an assurance to the House today that the department will revisit the proposed probate fees and reduce them to bring them within the permitted limit.

[Lord Hunt of Wirral (Con)]

I declare my interests as set out in the register, particularly my having been a practising solicitor for more than 50 years. During that time I have dealt with many estates and made many applications to the probate registry. Looking around the Chamber, I see several of your Lordships who have very kindly given me the honour of naming me as one of their executors. I am not seeking any further orders this evening, but this year, for example, I have been in constant touch with the probate registry in dealing with the estate of one of our colleagues who, sadly, died a little while ago.

I want to say at the outset how much I compliment the staff of the principal registry and the district registries, who give a service second to none. I want the House to be aware that they give considered, careful advice and guidance to anyone who contacts the registry. They are to be commended on that first-class service.

--- Later in debate ---

[Baroness Meacher]

Does the noble Lord accept that under the Government’s own guidance this will in fact be a tax, and that taxes should be raised in primary legislation and debated properly in both Houses of Parliament?

[Lord Hunt of Wirral]

No doubt the Minister will give a more considered reply, but I certainly do not regard it as a tax, particularly as it is described as, and actually is, an enhanced fee. I have to admit that I was troubled by the original proposal, but the Government have listened to those concerns and have significantly reduced the enhanced fees from that proposal.