Local Government Finance Bill

Earl of Listowel Excerpts

Tuesday 24th July 2012 Grand Committee

[Lord Best]

My Lords, sadly, I have to accept that there are cases where local authorities have acted in an insensitive and inept manner in using bailiffs to pursue the debts of vulnerable people who owe council tax. However, I fear that local authorities are the victims too. They have no desire to be sending bailiffs to hound poor people to pay their debts.

The very worst aspect of this Bill is the expectation that councils will have to start collecting council tax from the very poorest households—the 20% or so of those of working age. They will be asked to find the money from their extremely low incomes, which have been provided mostly through benefit for other essential expenditure. The Bill means that councils are bound to face more arrears and more wasted expenditure in trying to extract small sums from poverty-struck people who simply do not have the money to pay. It is no fun for local authorities to be sending in the bailiffs when they feel that they must pursue these debts.

I support this amendment to protect vulnerable households from the heavy-handed action of unscrupulous bailiffs and I am grateful to the Zacchaeus 2000 Trust for bringing these matters to our attention today. However, the solution to the problem of these cases growing in number is to allow councils to avoid having to start taxing the poorest by giving councils the flexibility to raise the funds required by the Treasury in other ways—for example, as I suggested last week, through the painless reduction of the single person discount from 25% to 20%, on average. Councils are victims in this matter too.

[The Earl of Listowel]

I support the amendment and I raise a particular concern about care leavers and care-experienced adults who might be impacted by this. Of course, many care-experienced adults will be in this group of the very poor who have had poor educational experience and may have experienced long-term unemployment. The Committee has heard about parents and families struggling to survive and not functioning very well. Statistics show that if one has been brought up in care and becomes a mother, one is far more likely to have one’s own child taken into care. I am worried that this is an additional burden on particularly vulnerable families that is unwelcome.

I understand that care leavers will be assisted to the age of 22 with regard to council benefit—I may have that wrong and would be grateful for any correction in that area—but one has to keep in mind that while most young people leave home at the age of 24 nowadays, 20% of care leavers will have left care at the age of 16. The statistics for the mental health of young people in care highlights that 40% have mental disorders, which compares with what may be 10% of young people in the general population. That is what one would expect because of the history of trauma before they enter care, the experience of being taken from their families and often, unfortunately, their having an unsatisfactory experience in the care system. This is one group within the groups we are discussing to which we should pay particular attention.

I would be grateful for clarification about the experience of care leavers. In the All-Party Parliamentary Group for Looked After Children and Care Leavers, I have certainly heard of young care leavers describing their difficulties in trying to manage their finances on leaving care, with their homes eventually breaking down and all sorts of adverse consequences arising from that. I support the amendment and I am grateful to the Zacchaeus 2000 Trust for drawing my attention to this issue. I look forward to the Minister’s response.

[Lord Smith of Leigh]

My Lords, noble Lords are absolutely right that poverty is on the increase. I talked to someone from my local advice agency who told me how in the past month the number of cases that he had been dealing with had gone up significantly. One of the growth industries in my area is payday lending. There are increasing numbers of lenders and people relying on them. Unfortunately, while the use of bailiffs by local authorities is regrettable it is unavoidable and necessary on some occasions. We need to make sure that we use them sensitively. As a result of this legislation, however, there will be more need to use bailiffs because we are putting a tax back on to those who are least able to pay.

I remind noble Lords, as I do on any occasion I can, that the nearest we had to this was in the poll tax era: we were putting a tax on the lowest paid then. There were two elements to the campaign against it. There was a “Can’t Pay, Won’t Pay” campaign, which was reflective of the reaction to it, and we got into a downward spiral where people were unable to pay. The cost to local authorities of collecting the poll tax was rising all the time and less money was coming in. There was greater use of the courts and bailiffs at that time, which was a good income for the courts and probably for bailiffs but not very good for local communities. Noble Lords may recall that the consequences were that pensioners were jailed in certain parts of the country because they had not paid the poll tax. The public reaction that followed meant that we lost the legislation.