Rating (Property in Common Occupation) and Council Tax (Empty Dwellings) Bill - Committee

Part of the debate – in the House of Lords am 5:30 pm ar 19 Mehefin 2018.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Photo of Lord Bourne of Aberystwyth Lord Bourne of Aberystwyth The Parliamentary Under-Secretary of State for Wales, Parliamentary Under-Secretary (Housing, Communities and Local Government) 5:30, 19 Mehefin 2018

I think the noble Lord’s issue has been that there are so many of them that there is a bit of a logjam. Anyway, we could perhaps debate that on some other occasion.

The amendment tabled by the noble Baronesses, Lady Pinnock and Lady Thornhill, would also require the Minister to determine whether the review should also consider the impact of any penalties on council tax payers who fail to tell their local authority that their property is empty. The review would need to be undertaken within two years of the legislation being enacted, with a report laid before both Houses of Parliament.

I am afraid that the Government are unable to accept the amendments. First, the Government are clear that the use of the premium and the consideration of its impact and enforcement are best undertaken by local authorities. As I have said, we are giving a discretion to local authorities; some local authorities do not apply the premium at all while others apply it in its totality. We have provided local government with complete discretion on whether to introduce the premium. Noble Lords will recognise that local government has been running the empty homes premium now since 2013, with a steady year-on-year growth in the number of councils making use of the power. Fewer than 30 councils have no premium in place at all. That gives a very clear indication that councils across the country consider this to be a useful power to drive behavioural change in owners of long-term empty properties.

In considering the Bill’s proposal to increase the maximum level of the premium from 50% to 100%, I have been struck by the widespread support from across the House—admittedly with variations, but there has been support for that increase. There is clear confidence that this is a sensible step to take. Given that, I am not persuaded that we should introduce uncertainty into the process by committing the Government to a review within two years. That could be perceived as demonstrating a lack of faith in the measure which, of course, is not the case.

The noble Baronesses, Lady Pinnock and Lady Thornhill, incorporate within the text of their amendment calling for a review a suggestion that it might consider the impact of penalties on those who fail to register their dwelling as empty. It may be helpful to the House if I briefly explain that there is actually no requirement for empty homes to be registered with the local authority.

Councils have the flexibility to determine the level of premium, reflecting the circumstances of their area. They can also apply discounts to the council tax bills of individuals, or groups of people, as they see fit. Councils will make reasonable efforts to determine whether properties are empty and meet the requirements of their scheme, then issue a bill accordingly. Council tax demand notices are required to include a statement requiring the council tax payer to inform the council when they believe that the premium does not apply, or applies at a different amount. That is when a penalty of £70 may be payable—when a council tax payer misleads or fails to provide information when requested to do so. It is therefore somewhat different. The level of the penalty, which was set in 2008, is intended to facilitate the smooth operation of the system, rather than to be punitive. I accept that, on the face of it, it appears low, but the Government have no current plans to increase the penalty, nor am I aware of any suggestions from the local government sector that the level is inappropriate or should be changed. However, I am very willing, ahead of Report, to engage with local government if it feels that this should be looked at.

I thank the noble Baroness, Lady Thornhill, very much indeed for her contribution at Second Reading and now. I know that she comes with great experience in Watford, and as a department we listen very carefully to what she has to say. I am sure the noble Baronesses will be encouraged to hear that some councils provide incentives for owners of empty properties to provide notification of them, typically by offering a council tax discount for a short period. That helps to ensure that the council has relevant and up-to-date information on properties that might later become liable for the premium.

These procedures are well established and effective, and contain a number of safeguards for taxpayers. Furthermore, they are administered by those in the locality best placed to consider their impact and make any necessary changes. I entirely appreciate the desire of the noble Lord and noble Baronesses to ensure that the implementation and impact of the change to the empty homes premium are reviewed. However, I assure them that this is what councils across the country should be doing as they make annual decisions about their local council tax regime. I am very willing to engage on the issue of the penalty, if there is evidence that local government is finding that it is hampering them. In the circumstances and in the light of what I have said, I appeal to the noble Lord to withdraw the amendment.