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Clause 3

Volume 897: debated on Monday 4 August 1975

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Power To Charge Rates

Lords amendment: No. 7, in page 3, line 22, leave out Clause 3.

I beg to move, That this House doth disagree with the Lords in the said amendment.

I take it, Mr. Speaker, that it will be convenient to the House if with this amendment we take Lords amendments Nos. 9 and 10?

The purpose of these amendments is to prevent a council from recouping any part of its rent loss by means of charges to the rates. They illustrate once again the fundamental lack of confidence which the Opposition place in local authorities. The Opposition are constantly wanting to instruct local authorities about their procedure.

As it left this House, the Bill presented those local authorities to which a rent loss certificate was issued with clear options. They could recover their losses by means of rent increases, over their whole area or over the defaulting area only, or they could charge all or part of the amount to the rates, with a similar opportunity to restrict the increases to the defaulting area only. There was also a clear provision to ensure that a decision to charge any amount to the rates could only be made after the most thorough consideration. Such a decision had to be taken at a meeting of the full council, with publicity to ensure that ratepayers were aware of the purpose of the meeting.

We cannot be aware of all the particular circumstances which may pertain in each of the local authorities involved. That is why we have made their options as wide as possible. We have complete confidence that councils will make the right decisions for their own areas. The policy attaching to these amendments would be a total negation of that confidence.

Local councillors are the elected representatives of their ratepayers. Ratepayers who disapprove of their council's policy have the opportunity to show their disapproval in the polling booth. Similarly ratepayers of the new area are not powerless should a council decide to make rate increases over the new area. Indeed, the hon. Member for Aylesbury (Mr. Raison) made this very point during Standing Committee. Any council which decided to charge all or part of the amount to the rates would be fully aware of the possible electoral consequences of that decision.

9.45 p.m.

It is also likely that without this Bill a large proportion of councils' losses might well have fallen on the rates anyway. Since the means of the councillors concerned are limited, their debts, for the great part, would probably have had to be written off with a consequent burden on the rates. The aim of the Government is to extend local authorities' options so that they can make the appropriate increases for their own area. I ask the House to vote for confidence in local authorities by rejecting these amendments and also to approve the two amendments to Clause 3 which have the effect of bringing the rates option into line with the rent option in Clause 2. They provide a similar relaxation to Lords amendments No. 2 and No. 3 which we have already approved. Where a rent loss certificate becomes effective in February or March, a council will be released from the obligation to recover one-fifth of the amount during the first year. These amendments were approved in another place before it so unwisely rejected the whole clause.

I agree with the Minister on one thing. If his motion is carried, the amendments in lieu should also be carried in order to introduce consistency. But that is the limit of the area in which I can agree with him.

I hope the Minister will not mind my saying that he has just made another really pathetic speech and there has now been a series of them. I do not think he even realised what the amendment is about. He says we are constantly telling local authorities what to do, but this is not an amendment dealing with charging rates over a limited area. With the clause out of the Bill, local authorities have no power to put this loss on the rates. Our position has always been that there is no reason to charge ratepayers who got no benefit from their councils' actions any of the sums necessary to make good the losses.

I am not going to take too much time, because this view has been expounded more than once. The Minister spoke about putting an end to bitterness and divisiveness, but does he not realise how bitterly ratepayers will resent being called upon to make good deficiencies from whose creation they derived no benefits?

Supposing North-East Derbyshire Council decided to levy a rate over the whole area to make good the very large deficiencies arising in Clay Cross.

It would mean one-third of a penny rate each year for five years. That is not a tremendous amount of money.

That is totally irrelevant. Some people object to doing things on principle. I thought that is what the hon. Member was saying to justify the actions of his friends.

I just heard the Minister say sotto voce "We have heard it five times before". Yes, we have, but we have not yet had an answer. Let us try once more. It only requires a single-word reply, "Yes" or "No". The Minister can even say it sitting down; we will not complain. Supposing North-East Derbyshire Council decided to raise the sum by levying a rate and a ratepayer objected on principle to having to pay any part of that loss, however small. Is that person to be taken to court and subjected to the full rigours of the law or is he also to be excused? Can we have a "Yes" or a "No" from the Minister? [HON. MEMBERS: "Answer."]

As I have said, they will exercise their democratic rights at the next election.

The Under-Secretary cannot get away with that. What democratic rights does the ratepayer have at any election in the circumstances envisaged by my hon. and learned Friend the Member for Southport (Mr. Percival)?

We are told that a third of a penny rate is involved. For a house with a rateable value of £300, that amounts to £1. Let us suppose that a person chooses to pay his rates but on principle deliberately withholds £1. Will the council in North-East Derbyshire take him to court and obtain a distress summons for the £1? That is the question which the Under-Secretary has not answered. As power is taken in the Bill to absolve from penalty people who choose not to carry out the law, on what basis could action be taken against a person who chose to withhold his £1?

The Opposition wanted the full rigour of the law to operate with regard to Clause 1.

Question put and agreed to.

Amendments made to the Bill in lieu thereof, to the words so restored to the Bill: In page 3, line 33, leave out from 'in' to end of line 34 and insert 'appropriate annual portions'.

In page 3, line 37, at end insert—

'( ) In subsection (1) above "appropriate annual portions" means annual portions each of which is not less than one-fifth of the sum charged to the general rate fund, except that, if the effective date of the rent loss certificate falls in February or March, the council shall not be obliged to charge any amount in respect of the year commencing on the 1st April following the effective date'—[Mr. Armstrong.]