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Lord Rooker: Parliament will fix the penalty. It is not a question of the Government being able to have a penalty without any limit. Parliament will fix it by affirmative resolution, so it could be voted down. If Ministers are to review the penalty they will have to come forward with a proposal that will be reasonable for both Houses to support.
Baroness Hanham: I thank the Minister for his reply. I look forward to all the other strings that will come along. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 75 [Exception of students from joint and several liability]:
Lord Hanningfield moved Amendment No. 153:
- Page 39, line 11, at end insert—
The noble Lord said: We now turn to the provisions in the Bill concerning council tax. Clause 75 allows for the removal of students from joint and several liability with regard to council tax. Perhaps I may say to begin with that we welcome the Government's intention in the Bill to increase flexibility as regards council tax discounts and their objective of supporting students. We are broadly sympathetic towards those principles.
However, we are concerned that these provisions are loosely drawn. As the Minister is aware, the majority of students—for example approximately 60 per cent of entrants into higher education—are mature students, and the majority of mature students study part time. Many might be employed and earning good salaries. Presumably, the way the clause is drawn relies on dealing with this through the definition of "student". I see from the Explanatory Notes that the definition is set out in paragraph 4 of Schedule 1 to the Local Government Finance Act 1992.
However, the schedule states that the Secretary of State may by order set out the definitions. Rather than attempt to continue to pursue this paper trail, I should be grateful to know from the Minister what the order sets out as far as concerns the definition of "student" and whether there is any proposal to change it in the light of these new provisions.
I also suggest that rather than get bogged down in the definition of "student", which will inevitably lead to loopholes in these provisions, Ministers should simply make provision that this clause does not apply where the student is the owner or part-owner of the property in which they reside. In most cases, students might not be homeowners. They are unlikely to be in a position to pay council tax and are quite rightly exempted from joint and several liability. However, if a person who happens to be a student is sufficiently well off to part-own a property, for example, surely they should not be exempt from liability. We would ask the Minister to consider this again. I beg to move.
Lord Bassam of Brighton: I am rather puzzled by the amendment. I have always thought that local taxation is best when kept simple. That is what I liked about the rates system and what I did not like about the poll tax. Poll tax brought in a whole raft of people who previously had no experience, knowledge of or interest in paying local taxes. Many thousands were students. As the leader of my council at the time I had the horrible job of trying to enforce payment orders on students who were subject to poll tax. I appreciate that the noble Lord, Lord Hanningfield—I do not think—has ever been involved in a collecting local authority; Essex is a precepting local authority. So, perhaps he did not have the same experience as me and other noble Lords in the past.
The problem with the amendment is that it muddies the waters. We are trying to get rid of an anomaly which means that students who are not liable for council tax could find themselves with a council tax bill
The way in which the amendments are drafted means that students who are renting a property on a standard six-month tenancy agreement would be caught. The amendments would not apply just to those with long leasehold interests. I can see the noble Lord's argument that such students may well have sufficient resources. However, it makes the situation and the system that we are trying to apply more complex. I have a feeling that the noble Lord's friends in district councils probably would not be too happy about that. During our discussions there have been many complaints about bureaucracy—
Baroness Maddock: I thank the Minister for giving way. He referred to the fact that the noble Lord said that students who own their homes or had a leasehold interest might have sufficient means. Surely the whole point is that when one is a student, regardless of where one lives, it is one's revenue income that is the problem. One may well own a property, just as many elderly people do. We argue vehemently that the elderly poor living in their own homes do not have any revenue. Surely that is the point. So how are these people affected? They may have bought a house but they have given up their job to pursue further education. In particular a lone parent, a mother, would have no other income to pay. It is the income that is important, not the assets.
Lord Bassam of Brighton: I completely agree. I think that the noble Baroness has rather perfected my point for me. I do not see that the amendments are of great benefit. They would penalise certain classes of students and confuse a situation which is already confused with this anomaly. We think that the amendments are unnecessary. We are trying to tidy up and make the system neater. The amendment would bring into liability a class of students whose revenue interests, frankly, we are trying to protect, as the noble Baroness, Lady Maddock, explained.
I hope that the noble Lord will see sense on this point and withdraw his amendment.
Lord Hanningfield: I believe that the Minister has not understood what we are trying to do. No one wants to penalise students who do not have the resources to pay. Perhaps the wording of the amendment is not exactly right and we should consider that again. There is a loophole here. As I said, some 60 per cent of students are adults. I accept that some have given up their jobs and have moved and so forth. However, many people who will not be paying council tax could use this as an excuse to avoid paying it.
I asked who would define "students". The Minister did not provide an answer to that. The regulations state that at some stage someone will have to define "students". That is what I was trying to probe by tabling the amendment. This could be open to abuse. No one—certainly not us—is trying to do anything other than help the students mentioned by the Minister and the noble Baroness, Lady Maddock. No one wants to hurt those students. We want to stop any system of abuse, which I am sure those collecting council tax would not want because they need the revenue. I still need a definition. Who will define "student"? That is what someone has to do.
Lord Bassam of Brighton: I do not have a definition of "student" here. We do not have the statutory instrument with us. Clearly there is a definition. However, that is not what the noble Lord said. He did ask about that but he also moved an amendment which would increase the liability of a whole class of students. Worse than that, it would make for complexity and an added level of bureaucracy for billing authorities. Frankly, we do not think that that is a sensible way to proceed. I hope that the noble Lord will withdraw the amendment.
Lord Hanningfield: Bureaucracy is introduced anyway because someone has to find out who are students and who are not. So, the policy introduces bureaucracy. We are not disputing the fact that we welcome this type of policy but it needs clarity. We shall need to return to the definition of "student" at some stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 154 not moved.]
Clause 76 [Second and empty homes: England]:
Lord Morgan moved Amendment No. 154A:
The noble Lord said: In moving Amendment No. 154A I shall speak also to Amendments Nos. 155A, 159A, 165A and, in Schedule 6, Amendments Nos. 228A to 228C. We believe that it is important that the provisions in Clause 76 being made for England should be extended to Wales.
The thrust of Clause 76 will allow English billing authorities to reduce or remove the 50 per cent discount which applies to dwellings with no residents for classes of dwellings prescribed in regulations made by the Secretary of State. Welsh local authorities already have power under Section 12 of the existing Local Government Finance Act 1992—a Wales-only provision—to reduce to 25 per cent or remove altogether the current 50 per cent discount for classes of unoccupied dwellings as prescribed by the Welsh Assembly.
Clause 76 gives English authorities some additional flexibility over second and empty homes that is not included in the existing provision for Wales. Extending Clause 76 to Wales would allow the Welsh Assembly
The proposals are supported by the Welsh Assembly and the Welsh Local Government Association. I trust, as does the noble Baroness, Lady Gale, that the amendments will be accepted by the Minister. It is important that the powers conferred by Clause 76 on English authorities should be at the disposal of Welsh authorities. I beg to move.
"( ) After section 6(4) of the Local Government Finance Act 1992 (c. 14) there is inserted—
"( ) Subsection (4) shall not have effect in relation to a student who has a freehold or leasehold interest in the dwelling on which a council tax liability has been incurred and is resident in that dwelling.""
Page 39, line 21, after "England" insert "and Wales"
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