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Lord Elystan-Morgan: My Lords, as it is now some weeks since the federal Government of India invoked Article 335 of the constitution, which allows them to intervene in the affairs of a constituent state where there is a serious breakdown of law and order, can the Minister say whether there have been any discernable beneficial effects of that decision?
Lord Bach: My Lords, I must be careful what I say. The noble Lord will know better than me of India’s federal structure, allowing states a large amount of power over law and order. The central Government were concerned enough to invoke that constitutional article.
I do not want to place much emphasis on this, but there is some suggestion that some of those who have been displaced may be moving back to where they lived. Frankly, however, there is currently not much evidence that I can put before the House.
The Lord Bishop of Peterborough: My Lords, in their representations to the Indian Government, will our Government ensure that the compensation offered by the Indian Government for those who have lost their homes and businesses is adequate? I understand that what is currently offered is not even enough to cover the cost of homes, let alone compensate those who have lost their businesses.
Lord Bach: My Lords, the right reverend Prelate makes a very important point. The state Government of Orissa have promised compensation, but my information suggests that that has not yet been put into action.
The Minister of State, Department of Energy and Climate Change & Department for Environment, Food and Rural Affairs (Lord Hunt of Kings Heath): My Lords, we are going into the 24th minute.
Taxation: Inheritance Tax
3 pm
Baroness Gardner of Parkes asked Her Majesty’s Government:
What plans they have to review the inheritance tax liability of executors responsible for winding up estates which include properties that are currently unsaleable.
Lord Davies of Oldham: My Lords, the Government already have in place arrangements to meet this eventuality. While a house remains unsold, the inheritance tax due on it can be paid in instalments for up to 10 years. Where a house is sold within four years of the death for less than the value on which inheritance tax was paid, the personal representatives can in most cases make a claim for inheritance tax “loss on sale” relief.
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Baroness Gardner of Parkes: My Lords, I thank the Minister for that reply, but that is a long-standing arrangement. I am asking for more help given the present circumstances. Does he agree that it is a vicious cycle that you cannot sell your asset until you have the grant of probate, but you cannot get the probate until the inheritance tax is paid, so you may well need to borrow in order to pay the inheritance tax and to get the probate? Then, when you are heavily in debt, you may be unable to sell but are paying heavy interest on a valuation which, according to all the top accountants, is being assessed at a price which reflects those at the top of the market and does not allow for the current drop in values. In some cases, people who lived in homes with their parents are being forced to sell those homes, or be badly in debt. What happens if it reaches the point where you have paid out so much in interest and borrowing that even if you get that money back after the four-year period, it does not cover all the interest you have had to pay to whoever lends you the money, if you can borrow it?
Lord Davies of Oldham: My Lords, the present arrangements are reasonable. The individuals concerned can delay the payment of inheritance tax. I appreciate the point that the noble Baroness makes about falling house values, but the Inland Revenue is not in the business of dispossessing people of the houses they have inherited in which they are still living. The Inland Revenue, of course, adjusts its values to the level at which houses are sold. It is for the personal representative to make the case that the price the house has achieved is below the valuation price on which inheritance tax was charged, and to claim a refund.
Baroness Noakes: My Lords, one of the difficulties is getting valuations agreed with the Valuation Office in a falling market. This year the Valuation Office Agency has a key performance indicator of increasing its inheritance tax yield of 5 per cent—5 per cent per unit of cost, 5 per cent per person. Does the Minister agree that that KPI is making it more difficult for executors to agree realistic values with the Valuation Office and that the KPI should be suspended for the rest of this year?
Lord Davies of Oldham: My Lords, the Valuation Office, like any other government department, is expected to give value for money—they all fall under the same rubric. However, it works within very clear rules as regards charging inheritance tax: first, as I indicated, the Inland Revenue is not in the business of dispossessing householders of the houses that they have inherited; secondly, inheritance tax can be deferred; and, thirdly, the current rate at which inheritance tax is paid, if deferred, is 3 per cent. I do not think that any of those propositions is unreasonable.
Lord Campbell-Savours: My Lords, is it actually true that property is being valued for probate at a higher level than today’s market value?
Lord Davies of Oldham: My Lords, I cannot comment on individual cases, but the Valuation Office operates on the information that it has before it. Of course, there will be a downward adjustment because, as
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Lord Newby: My Lords, the Minister said that HM Revenue and Customs is not in the business of dispossessing people. Does he find an interesting contrast with Northern Rock, which is adopting the most aggressive stance of any bank in the country in dispossessing people who get into difficulties paying their mortgage? Could he suggest that the considerate people in HM Revenue and Customs who are not dispossessing people have a word with the people in Northern Rock and tell them to be more generous-spirited?
Lord Davies of Oldham: My Lords, the noble Lord is adroit in picking up some interesting cross-references but he will recognise that the process we have in place for inheritance tax—which, I emphasise, involves only the 4 per cent of estates in this country that are above the level requiring tax to be paid—consists of arrangements that are fair and proper. Northern Rock, as the noble Lord will be aware, was set up to run its business as a commercial operation. The Government made it absolutely clear that while the bank is in temporary public ownership, we will not be involved in day-to-day commercial decisions about how it operates.
The Countess of Mar: My Lords, will the noble Lord address the question of executors’ inability to obtain probate until inheritance tax is paid? Is what the noble Baroness, Lady Gardner, said correct: will it take 10 years for some people to get probate?
Lord Davies of Oldham: No, my Lords. That issue concerns the time taken for inheritance tax to be agreed and levied. The payment period can be as long as 10 years, as I have indicated. I have also indicated that the interest rate paid on the outstanding amount owed is 3 per cent. I find it difficult to conceive how anyone could suggest that such arrangements are unreasonable.
Business
3.06 pm
Lord Bassam of Brighton: My Lords, at a convenient point after 3.30 pm, my noble friend Lady Royall of Blaisdon will repeat the Statement, “World Leaders Summit: Financial Markets and the World Economy”.
London Local Authorities Bill [HL]
London Local Authorities and Transport for London (No. 2) Bill [HL]
Transport for London (Supplemental Toll Provisions) Bill [HL]
Broads Authority Bill
3.07 pm
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the first four Motions standing in my name on the Order Paper.
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Moved, That this House resolves that the promoters of the London Local Authorities Bill [HL] and the London Local Authorities and Transport for London (No. 2) Bill [HL], which were originally introduced in this House on 22 January 2008; the Transport for London (Supplemental Toll Provisions) Bill [HL], which was originally introduced in this House on 22 January 2007; and the Broads Authority Bill, which was originally introduced in the House of Commons on 23 January 2007 should have leave to suspend any further proceedings on the Bills in order to proceed with them, if they think fit, in the next Session of Parliament according to the provisions of Private Business Standing Order 150A (Suspension of bills).—(The Chairman of Committees.)
On Question, Motions agreed to.
Examiner of Petitions for Private Bills
The Chairman of Committees (Lord Brabazon of Tara): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That, in accordance with Private Business Standing Order 69 (Appointment of Examiners of Petitions for Private Bills), Mr Liam Cledwyn Laurence Smyth be appointed an Examiner of Petitions for Private Bills in place of Mr Alan Sandall.—(The Chairman of Committees.).
On Question, Motion agreed to.
Pre-release Access to Official Statistics Order 2008
Legislative Reform (Lloyd’s) Order 2008
National Assembly for Wales (Legislative Competence) (Social Welfare and Other Fields) Order 2008
3.08 pm
Lord Davies of Oldham: My Lords, I beg to move the Motions standing in my name on the Order Paper.
Moved, That the draft orders laid before the House on 17 and 21 July, and 15 October be approved.27th and 28th Reports from the Joint Committee on Statutory Instruments, 13th Report from the Regulatory Reform Committee, Considered in Grand Committee on 12 November.—(Lord Davies of Oldham.)
On Question, Motions agreed to.
Social Security (Lone Parents and Miscellaneous Amendments) Regulations 2008
Lord Tunnicliffe: My Lords, I beg to move the Motion standing in the name of my noble friend Lord McKenzie of Luton on the Order Paper.
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Moved, That the draft regulations laid before the House on 6 October be approved.27th Report from the Joint Committee on Statutory Instruments, 30th Report from the Merits Committee, Considered in Grand Committee on 12 November—(Lord Tunnicliffe.)
On Question, Motion agreed to.
Medical Profession (Miscellaneous Amendments) Order 2008
Civil Contingencies Act 2004 (Amendment of List of Responders) Order 2008
Baroness Thornton: My Lords, I beg to move the Motions standing in my name on the Order Paper.
Moved, That the draft orders laid before the House on 16 and 29 October be approved. 28th and 30th Reports from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 12 November.—(Baroness Thornton.)
On Question, Motions agreed to.
Armed Forces (Alignment of Service Discipline Acts) (No. 2) Order 2008
Lord Tunnicliffe: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the draft order laid before the House on 21 October be approved. 30th Report from the Joint Committee on Statutory Instruments, Considered in Grand Committee on 12 November.—(Lord Tunnicliffe.)
On Question, Motion agreed to.
Counter-Terrorism Bill
3.09 pm
Lord Lloyd of Berwick moved Amendment No. 1:
1: After Clause 22, insert the following new Clause—
“Independent Commissioner for Terrorist Suspects
(1) The Secretary of State shall appoint a person to be known as the Independent Commissioner for Terrorist Suspects (the “Commissioner”).
(2) The principal function of the Commissioner shall be to monitor the detention and treatment of terrorist suspects held under section 41 and Schedule 8 to the Terrorism Act 2000 (c. 11). He shall also perform such other related functions as the Secretary of State may from time to time determine.
(3) The Secretary of State may appoint not more than two deputy Commissioners to assist the Commissioner in the performance of his duties.
(4) The police shall give the Commissioner such assistance as he may reasonably require to enable him to perform his functions.
(5) The Commissioner shall make an annual report to Parliament as to the carrying out of his functions under this section.”
The noble and learned Lord said: My Lords, this is a shortened version of the amendment that I moved on Report. The noble Lord, Lord West, was good enough to say that he would accept the substance of
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Lord Howarth of Newport: My Lords, briefly, the new amendment that has been tabled by the noble and learned Lord, Lord Lloyd of Berwick, deserves the most constructive consideration, simply on the principle that if—it is no longer part of this Bill but it is part of the Government’s intention—we are liable to take actions that may be necessary and in the public interest to curtail civil liberties, it is even more important, if it can be, than it otherwise would be, that we should be utterly scrupulous in ensuring that the manner in which people are detained and the manner in which legal proceedings are taken against them should match the highest possible standards. The safeguard that the noble and learned Lord proposes in the substance of his proposal must be right. I very much hope that my noble friend will be able to respond in a constructive spirit.
The Parliamentary Under-Secretary of State, Home Office (Lord West of Spithead): My Lords, the Government absolutely accept the substance of what the noble and learned Lord, Lord Lloyd, is trying to achieve, and we have had considerable negotiations and discussions about this. We accept that there is a need for an independent commissioner for terrorist suspects. It is a lot more difficult actually to achieve these things than when one is an admiral achieving something in the Navy. Trying to get all the people together, and trying to get them to agree to all the various bits and pieces, whether it is the Crown Prosecution Service, what exactly happens in Scotland and Northern Ireland, whether we need something in the regions, aspects of the judiciary; there are a whole raft of things to be debated. Although initially, being a slightly hasty naval type, I thought we should be able to get something down, I accept that it is important that we do not legislate in haste and do not get this wrong.
I absolutely make a commitment that we intend to go down this route. Given that, I ask the noble and learned Lord to withdraw his amendment. I thank the noble and learned Lord for pursuing this initiative, which he first talked about with me some 12 months ago. It is an important measure, and it is an issue that the Government believe is of value. Certainly, even if some people do not think it is, the perception is very important, and it is of value. I give a commitment that we will do something. I cannot promise exactly which bit of legislation we will fit it into. If I did so, I would probably get it wrong. We are absolutely committed to doing something, and on that basis I ask for the amendment to be withdrawn.
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Lord Lloyd of Berwick: My Lords, I am grateful for what the noble Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 44 [Offences to which this Part applies: offences having a terrorist connection]:
Lord West of Spithead moved Amendment No. 2:
2: Clause 44, page 32, line 26, leave out subsection (1) and insert—
(a) an offence as to which a court has determined under section 32 (sentences for offences with a terrorist connection: England and Wales) that the offence has a terrorist connection, and
(b) an offence in relation to which section 33 applies (sentences for offences with terrorist connection: Scotland).”
The noble Lord said: My Lords, I shall speak to Amendments Nos. 2 to 4. Amendments Nos. 2 and 3 improve the drafting in relation to the provision that the notification requirements attach to offences with a terrorist connection, taking account of the differences in the system attaching to such offences for Scotland. Amendment No. 4 is consequential to the amendments that we made on Report to the notification requirements that varied the time periods for which notification requirements would apply. The amendment would ensure that if a person subject to a notification requirement has their sentence varied, the notification period would be altered accordingly. I beg to move.
On Question, amendment agreed to.
Lord West of Spithead moved Amendment No. 3:
On Question, amendment agreed to.
Clause 63 [References to a person being “dealt with” for an offence]:
Lord West of Spithead moved Amendment No. 4:
4: Clause 63, page 45, line 42, leave out paragraph (d) and insert—
“(d) if the sentence is varied so as to become one by virtue of which the notification requirements would apply for a different period, the period for which those requirements apply shall be determined as if the sentence as varied had been imposed at the time of the original decision;”
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