Lord Lucas
Main Page: Lord Lucas (Conservative - Excepted Hereditary)Local Government Finance Bill
Lord Lucas Excerpts
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.
Baroness Hollis of Heigham
What the noble Lord is saying is important. As we are in Committee, can he give the Committee any detailed information of the actual cost to a local authority and the alternative charge given in addition to the debt to be recovered from the individual, so that we have some evidence that local authorities are to some extent profiteering from their bailiff actions?
Lord Lucas
My Lords, is the process of getting a liability order, which costs £100, really 10 hours’ work for somebody? That is ridiculous. It is something that is done in bulk; the requests are sent to the magistrates’ court in bulk and signed off in bulk. Doubtless the council can argue that there are associated costs, but if it is spending £100 a time on these things it is being grossly inefficient. It should be able to do the business for £20 a head; that would be a fair estimate of what it should cost a council, if run well, to get a liability order, rather than the £100 that they charge. There is nothing that I am aware of in the legislation requiring them to be slower about it than that, but because there is no statutory limit on these things it has become a practice to charge a large amount.
The other destructive thing that councils are doing is that when somebody falls behind for a month or two with council tax payments, they say that they will not accept instalment payments any more—the whole lot is due. That is daft. As the noble Lord, Lord Stevenson, was saying, the right way in which to deal with these things is to agree proper staged payments. To withdraw that and put the debtor through the whole business of bailiffs and additional charges, in order to come out at the other end with some kind of agreed staged payment, is ridiculous. It is a great injustice to the person who has fallen behind with paying the council tax, particularly if they find themselves in positions of hardship rather than just forgetfulness.
Councils should be taking a more sensible and rational attitude to this. They should look at the citizens who they have charge of and say that if those people are in difficulty, they will work with the sort of organisations that the noble Lord, Lord Stevenson, represents to enable them to pay their bills over a sensible period or to otherwise get out of the difficulties in which they find themselves. It should not be necessary immediately—without question and without thinking—to go to the bailiffs. I can encourage the noble Lord, Lord Stevenson, because I think that we will get bailiff legislation and reform. I saw the Minister a few days ago and have committed to give a half-hour speech on the subject in November. I am seriously optimistic that I will have something to say when we get there, but it has been a long road. I quite agree with the noble Lord.
However, councils are the employers of bailiffs and it is terribly important that when they employ them they have a care for the people whose—
Baroness Hollis of Heigham
Nobody wants to see bad practice, but I have not experienced councils behaving in that way in my time as a local councillor. Using bailiffs was the last, not the first, thing you did. I am perfectly willing to believe that there may be bad councils in this field or that one or two cases may be badly handled. Obviously, that may well be the case. If there has been impropriety in that way at all it should obviously be remedied, but I hope that if the noble Lord is coming back with that argument he will back it up with some information and not just broad assertions about how local authorities behave. I do not recognise his description of that. Certainly, before I sent in any bailiffs we would have gone through hoops to see whether we could have gradual repayments or otherwise help those people through their hardship, perhaps by getting them into a debt counselling agency. To send in bailiffs and make that person homeless is the last thing that a housing authority wants, because then it would have to send them to a B and B.
Lord Lucas
My Lords, my experience of this comes entirely from the bailiff end of things and in particular from the complaints that people make when the bailiffs come through. The complaints are not necessarily about the bailiffs but about the process that has led to them finding the bailiffs at the door. The level of liability or of the charges is a matter of public record, as is their volume. The policy of councils to make the whole debt due immediately if there is a failure over a couple of months to pay instalments is there on council websites. Both of them are fundamental injustices. The council may be good-hearted in the way that it deals with things. I do not have data on which councils are good or bad; I am merely looking at the overall practice, and I am conscious of the level of complaint and anguish that reaches those who deal with complaints against bailiffs, which is where my understanding comes from.
However, coming back to the basic figures, if you charge £100 for a liability order, it seems to me that you are grossly overcharging, and if you say on your website, as councils do, that if you miss a couple of payments the whole lot is due, that is a fundamentally mistaken way to deal with debt. I therefore like this amendment because I read it as putting some of the onus back on councils, which is where it should be.
Lord Smith of Leigh
I thank the noble Lord for setting that out. However, I really cannot accept the two points that he is making, certainly as they apply to my council. First, the cost may well be averaging £100 but that is because of the care that local authorities take in individual cases. They are not simply sending huge numbers of debts to courts or getting orders. Each case has to be looked at properly to make sure of it.
The noble Lord’s second point is, in a sense, a misunderstanding. Essentially, there is a contract between a local resident and the council to pay the council tax. The council says it will withdraw that contract only if the payment has not been received and the resident has not informed the council of a change in their circumstances. If residents come back to councils—certainly to mine—to explain their circumstances, we negotiate a new form of payment. If we did not have that provision, people would simply not inform the council and they would not pay on time—and the costs would be even higher than they are.
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.