Local Government Finance Bill
Debate between John Redwood and Lord Stunell
Andrew Stunell
When the hon. Lady has taken the opportunity to look at the statements of intent, she will see that they are in effect—indeed, my note refers to it—draft statutory instruments. I remind her that we cannot publish draft statutory instruments until we have a Bill to publish them against. We have brought the statements of intent before both Houses so that matters for consideration are fully in view.
New clause 9 allows the Secretary of State to make regulations to introduce the necessary powers for local authorities to tackle fraud in claims for a reduction in liability to pay council tax, which will be effective from next April. Powers to investigate potential fraudulent claims for reductions in liability to pay council tax and to issue the appropriate penalties are a vital weapon for local authorities if they are properly to administer schemes and protect the public purse. The change from the existing scheme to the new scheme means that the new clause is needed to provide the necessary safeguards. Rather than simply reintroducing all the powers that local authorities have to tackle council tax benefit fraud, the clause allows us to work with local authorities to identify those powers and offences that will be needed to make local schemes work. The overall aim is that the regulations will reinstate only the necessary powers, offences, penalties and safeguards that are appropriate for the new scheme.
Mr John Redwood (Wokingham) (Con)
It would be very helpful if the Minister explained to my constituents what extra power is being granted to the council and how it will prevent fraud.
Andrew Stunell
The provision allows us to enter into discussions with local authorities about the point my right hon. Friend raises. It is our intention not to increase the powers of local authorities but simply to transpose them from the existing scheme to the new scheme while recognising that a range of provisions in the current scheme needs to be considered rather than simply transposed without any further thought. New section 14A, which the Bill inserts into the Local Government Finance Act 1992, will allow the Secretary of State to make regulations giving local authorities the power to authorise officers to carry out investigations. Regulations may provide that officers so authorised may require relevant information from specified bodies to check whether a claim that they believe to be fraudulent is in fact so. The regulations may also provide authorities with powers to require that certain bodies must enter into arrangements allowing access to a person’s electronic records.
Mr Redwood
That is the point I am trying to get at. It is already an offence to make a fraudulent declaration and to try to get out of paying this tax, and we all want to stop the fraud, but we also want to keep some civil liberties in this country. I must press the Minister again. What extra powers to investigate people and get access to their data are being taken?
Andrew Stunell
I am sorry if I did not make myself clear. The powers that local authorities rely on to guard against fraud in the current council tax benefit scheme will, in effect, lapse with the introduction of the new scheme. They are not competent to be used under the new scheme, so we need a new scheme. The purpose of the new clause is to ensure that the scheme takes account not just of concerns such as those held by my right hon. Friend but of the need to protect the public purse and that they are kept in proper and proportionate balance. We will not be giving local authorities powers to enter premises or to conduct inquiries and remove and copy documents from such premises. I hope my right hon. Friend finds that assurance helpful. The powers we are giving will require people to enter into arrangements under which access is permitted to relevant records and will, in our view, be sufficient for council tax purposes.
New section 14C will enable the Secretary of State to make regulations providing that authorities may issue penalties as an alternative to prosecution or where a person has not been charged with an offence. That will ensure that local authorities are able to take proportionate action, rather than being faced with the choice of pursuing prosecution or doing nothing. Before the debate on the amendments in the other place, we intend to publish a detailed statement of intent that will spell out clearly our proposals for regulations in accordance with the new clause. We have also made it clear in the new clause that any regulations will be subject to the affirmative procedure and will therefore be debated by both Houses. I hope my right hon. Friend will be somewhat reassured by what I have said.
Andrew Stunell
I may wish to return to the right hon. Gentleman’s point later in the debate, if the opportunity arises. My understanding is that there is nothing in the provision that in any way takes the powers of public bodies beyond what they are currently able to do in pursuit of council tax benefit and alleged fraud and misuse of council tax benefit. As I understand it, these powers are absolutely parallel to the existing provisions. I am sure that I will have an opportunity to return to that point later in the debate if I have in any way misguided the House.
New clause 10 inserts paragraphs 15A and 15B into schedule 2 to the Local Government Finance Act 1992. Paragraph 15A(1) and (2) will allow Her Majesty’s Revenue and Customs to supply information held for the purposes of its functions to billing authorities in England, as well as to a person authorised to exercise any of an authority’s functions on its behalf.
Mr Redwood
On new clause 10, when the Revenue has shared information with a local authority, what right will the individual concerned have to make sure that the Treasury has shared the correct information and has not made a mistake?