CARAVANS IN ENGLAND AND WALES: STANDARD COMMUNITY CHARGES AND NON-DOMESTIC RATES
§ Mr. Alan Beith (Berwick-upon-Tweed)
I beg to move amendment No. 1, in page 2, line 21, at end insert—'(7A) It shall be an offence for a caravan site owner, or any person acting on behalf of a site owner, deliberately to misrepresent to any site tenant the extent of that tenant's liability to non-domestic rates.'.This rather hastily drafted amendment is designed to extract from the Minister an explanation of how tenants can have confidence in the apportionment that is made of the rates on a site as a whole. Bearing in mind the possibilities for misunderstanding, not to say tension and disagreement, which can arise on caravan sites, it is important to establish that tenants will not have to face an unchallengeable assertion by a site owner that that is their rates liability at a time when they may suspect that the total amount being collected from tenants exceeds the rates burden placed on the site as a whole and that the amount allocated to them does not fairly represent their share of the total burden. That causes tenants on site considerable anxiety. I hope that the Minister can clarify the position.
§ The Minister for Local Government and Inner Cities (Mr. Michael Portillo)
I thank the hon. Member for Berwick-upon-Tweed (Mr. Beith) for the constructive way in which he spoke to the amendment. I share his concern that caravan owners should be protected from the attempts of site owners to pass on to them excessive charges under the guise of rates liability. As I shall explain, existing provisions should meet his concern.
For many years, it has been standard practice for a caravan site to be assessed for rating as a single entity, with liability falling on the site operator, rather than making a separate assessment of each caravan, with liability falling on the owner. The Non-Domestic Rating (Caravan Sites) Regulations 1990, which we shall extend to cover all caravan sites in non-domestic rating following the passage of the Bill, carry forward that practice into the new rating system. Whether the site owner can pass on an appropriate proportion of his rates bill to the owners of the caravans on site will depend on the terms of his agreement with them.
In making the new regulations, we took care to preserve an important safeguard of the caravan owner's interests. The regulations provide that when the valuation officer enters the value of a caravan site in the rating list, he must also, within a month, inform the site operator in writing of the number of caravans occupied by persons other than the site operator that are included in the assessment and what value is attributed to those caravans. The regulations 141 also provide that any of the caravan owners may, without charge, inspect a copy of the statement giving the information held by the valuation officer.
That means that the individual caravan owner can find out what the average rateable value of a non-residential caravan on the site is and what its rates liability would be were he to pay the rates himself. When the site owner asks for a contribution to rates, he will know what he should be paying, and if the amount seems excessive he can challenge it.
Those who occupy mobile homes as their sole or main residence and pay the personal community charge at that address are not liable for non-domestic rates. They may be required to contribute to the rates for any communal facilities on site that they use, but that would depend on the terms of their agreement with the site owner. It would be unusual for a site operator to attempt to pass on to mobile home residents any part of the non-domestic rate liability that derives from holiday caravans on the same site. Again, that would be governed by the agreement with the site operator.
The agreement that a residential or non-residential caravan owner has with the site operator is a legally enforceable contract. If it follows the format of the standard agreement issued by the trade association, which is widely used, it will contain a condition regarding the payment of rates, and if the site operator attempts to demand a charge for rates that the caravan owner knows to be improper or excessive he will be in breach of that agreement.
Civil law already provides proper remedies for such breaches of contract and I do not think that we need to make provision for a criminal offence further to the offence of obtaining property by deception, which is already contained in the Theft Act 1968. A deliberate misrepresentation of the amount payable in rates under such a model agreement could constitute an offence under section 15 of that Act.
I hope that the hon. Gentleman will be satisfied with that explanation and will not wish to press his amendment.
§ Mr. Beith
I am grateful to the Minister for his explanation, which goes some way to meeting my concern. I remain anxious about when a caravan owner challenges an apportionment, using as his basis the average for the site as a whole. He has been shrewd, has obtained the average for the site and says, "Why are you asking so much from me?" He is in a relatively weak position. If the agreement covers the point and is of the form described by the Minister, he could take the site owner to court for a breach of it, but I am aware of many tenants who have been unable to obtain a copy of their site agreement.
Let us suppose that the tenant has a copy. He must consider whether, as an owner of a caravan on a pretty low income, to take a large, perhaps multi-site owner, to court on a difficult point of law. I cannot think of many caravan owners who would consider themselves in a position to do that. I submit to the Minister that tenants are in rather a weak position when it comes to defending their rights and could well find themselves landed with unreasonable levels of charge, with no adequate means of enforcement.
I know that the creation of new criminal offences is not an activity in which one wishes readily to indulge. The law is complicated enough as it is. Nevertheless, I ask the Minister to consider the matter carefully in the light of the slightly changed circumstances that will result from the 142 Bill, to assess whether there is adequate protection for tenants. It is reasonable that tenants should look to the Government, as the authors of the system as a whole—whatever criticisms we may have of it—to ensure that it is not abused so that it becomes even more burdensome because unreasonable sums are charged without adequate recourse. I ask the Minister to examine carefully how the provisions work.
As it appears that the Minister is willing to do that, I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Mr. Beith
I beg to move amendment No. 2, in page 2, line 21, at end insert—'(7B) No person who has registered for a personal community charge in respect of their residence in a caravan shall be liable to make any contribution to non-domestic rates in respect of the same caravan, at the same site, in the same yea r.'This amendment deals with a more complex matter, which is very important to those who are affected. It is designed to ensure that nobody who has paid a personal community charge or has been registered as liable for one shall be rendered liable to pay non-domestic rates in respect of the same caravan.
I have found it necessary to table the amendment because of the confusion—which I described earlier—on sites as to who is and who is not permitted to be a permanent resident having no other home. Circumstances can arise—they have certainly arisen in my constituency—in which there are more people on a caravan site whose only home is a caravan or a mobile home than the site operators licence permits or than the site operator is prepared to admit.
Such circumstances may arise for a number of reasons. A site operator may have taken on more permanent residents than his licence permits or it may have been unclear, when someone bought a caravan or mobile home, whether he was allowed to be a permanent resident. For whatever reason, a site owner may not wish to treat a caravan resident or group of caravan residents as a permanent resident or residents with no other home and may wish to ignore the view of the community charge officer that that is what they are.
A specific case has arisen, affecting a number of tenants at the Haggerston Castle holiday park outside Berwick-upon-Tweed. A notice issued by Bourne Leisure Group Ltd., which uses that caravan park, said:Holiday caravans on holiday caravan parks are controlled by the relevant planning permission and their Site Licence to be used for holidays and recreational purposes only and therefore, no registration of a holiday caravan for the Community Charge (Poll Tax) is permissible …. Accordingly, any registration for the Community Charge of a caravan on a holiday caravan park will be a breach of this agreement and the caravan will be disconnected and have to leave the park.That represented a direct threat from the site owners to the tenants, saying that, if any tenant who registers—as he is legally obliged to register—the fact that he has no other permanent home, his caravan will be disconnected and removed from the park. It is a direct threat to someone carrying out a legal obligation to identify his permanent home.
I wrote to the then Minister about this issue, and he replied:Even though the terms of Haggerston Castle's site licence may be restricted to holiday and recreational purposes"—which, incidentally, they are not entirely— 143where a person considers that he might nonetheless be subject to a charge he must comply with the community charge regulations. For the purposes of the personal community charge, the status of the caravan—whether or not it counts as domestic property—is irrelevant; what is at issue is whether the person is solely or mainly resident in that place. It would be more appropriate for Haggerston Castle to frame its notice in the terms of what use of their caravans is acceptable under the terms of the agreement with the individual, rather than to suggest that a person may not inform the local authority if he thinks he subject to the charge.Naturally I drew the attention of the tenants and the site operators to the Minister's views, but that was not sufficient. The community charge registration officer had to write to the site operators saying:It has come to my notice that you are sending out misleading literature to persons registered for the personal community charge. I quote an extract from a letter sent to one of your clients. 'This states that the caravan is for holiday and recreational purposes only. You have not been offered residential status, therefore the rates are legally due.'12 midnight
The site owner told the tenant that, because he did not recognise the tenant as having residential status, he had to pay rates to the site owner as well as paying the personal community charge to the local authority. The registration officer went to some lengths to state:Any person who considers that their caravan or chalet is their sole or main residence, has a statutory duty to register for the personal community charge whether the property they occupy has a residential licence or is for holiday and recreational purposes only.He stressed that the site owners should give more correct advice to their tenants.
However, that was not enough. The community charge registration officer had occasion to write to the site operators again. He wrote:I am still rather dismayed that you have been charging rates to persons registered for the community charge, when I have advised you to the contrary and where regulations and advice given to me from the Department of the Environment, clearly states that rates will not be paid on a property where someone is registered for the community charge, irrespective if that property is a caravan, on a protected site or on a holiday site.The correspondence continued, with the community charge officer trying to insist that the site operators should not seek to claim rates from tenants when those tenants had already paid, or were liable to pay, community charge.
I am not satisfied that this legislation has solved the problem. I am concerned that many of those tenants who have other anxieties about their future security on the site, will remain very worried that they will have to continue to pay the personal community charge because they are legally obliged to do so and they will also have to pay rates to the site owner because he can extract the money from them. They cannot do very much to protect themselves.
I have already said that, even where there is a simple dispute about the level of rate, those tenants are not in a strong position. However, in the case that I have described, they received demands for contributions to local government from two different sources, each of which claimed to be 'valid—one with the authority of the community charge registration officer and the other from the site owner on whom they were dependent for services. 144 If they continued to give correct information to the council offices, there was the threat that their caravans would be disconnected and towed away.
The Minister must understand how dreadful that is, not just for people with a second home, but for people whose only home is that caravan or mobile home, and who rightly or wrongly have nowhere else to go and, in many cases, had take up residence on the site under the impression that they were allowed to do so by the planning permission and that there was no other reason why they should not regard themselves as permanent residents. Their permanent residence had not been challenged until the poll tax came along. That is so unsatisfactory that I hope that the Minister can give us clear assurances about it.
§ Mr. Portillo
I understand the concern of the hon. Member for Berwick-upon-Tweed (Mr. Beith) that people living in mobile homes should not be required to pay both the personal community charge and non-domestic rates in respect of their homes. The Local Government Finance Act 1988 clearly provides that, on any given day, a property must be either domestic or non-domestic. A person cannot be liable under both systems on the same day, although he could be liable to different charges at different times in the year.
The treatment of rates liability under the 1988 Act broadly reflects the position under the old rating system. In general, under the terms of the Non-Domestic Rating (Caravan Sites) Regulations 1990, the owners of non-residential caravans are not personally liable for non-domestic rates. Instead, the caravan site is treated as a single property with a single rateable value, and the site operator is liable for all non-domestic rates. Any residential caravans on a site that are occupied as a sole or main residence will of course be left out of the assessment, because they will be domestic and therefore not rateable.
§ Mr. Portillo
I shall refer to the hon. Gentleman's point.
On a site which has residential and non-residential caravans, the rates bill may have two elements. One will be the amount attributable to holiday caravans, and the second might be any amount attributable to any other non-domestic property on the site—for instance, communal facilities such as a launderette or games room.
How the site operator meets the cost of his rates bill and the extent to which he passes it on to caravan owners will be a matter for him to consider in the light of his agreement with caravan owners. He may in some circumstances share the rating costs associated with communal facilities across all caravans, residential and non-residential alike. That might be perfectly reasonable if they all benefited from the use of the facilities. However, as I have said, it would be improper for him to try to impose on mobile home residents any part of the rate liability attaching to holiday caravans on the same site.
I must agree with the hon. Gentleman that there is a possible difficulty on sites where the number of residential caravans exceeds the number permitted by the licence. The residents of those caravans will be liable to the personal community charge, and quite rightly so. The assessment of the non-domestic extent of the caravan site will be a matter for the valuation officer and will reflect the particular local circumstances. I would expect him to take account of the number of caravans permitted by the licence for residential 145 use and the number of caravans that are actually being so used in forming a view on the level of the non-domestic assessment of the site.
Enforcement of the site licence conditions is a matter for the local authority, not for the valuation officer. The valuation officer, however, in valuing a site takes into account the rent that a hypothetical tenant would pay for it if it were vacant and to let. In the light of that consideration the legal limit on the number of permanent residents would govern the amount of the assessment as a hypothetical tenant would be bound to take into account the likelihood of the local authority enforcing the conditions of the site licence.
In other words, I believe that the law is fairly clear. The hon. Gentleman seemed to imply that, by saying that the community charge registration officer had written to the people involved making it clear that not only was it his view that the community charge was due from those persons' non-domestic rate but that that view had been backed up by the Department of the Environment.
I fear that the hon. Gentleman, in trying to go further, even though the law is clear, is putting forward an amendment which goes too far because it would prevent a site operator from seeking to recover that part of his rates bill which relates to any communal facilities. It might be legitimate for the site owner to do that if the agreement allowed him to do so. I can see the argument for the amendment to the extent that it would prevent a site owner imposing on residents that part of his rate bill which relates to holiday caravans; however, I do not think that an additional statutory provision is needed to achieve that. Residents' proper protection lies in enforcing the terms of their agreements if necessary through the courts.
To end on a positive point, the law is clear, but we are certainly ready to do our part when the Bill is enacted, by writing to the trade associations to offer our guidance to their members on the proper treatment and attribution of non-domestic rates liability under the legislation. I hope that that may be of some considerable assistance to caravan owners in enforcing their rights against site owners. I hope also that that will be a valuable reassurance to the hon. Gentleman.
§ Mr. Beith
I am grateful to the Minister for underlining what I take to be the law as it stands and for his willingness to write to trade associations to try to ensure that all site owners know what their position is. There remain some anxieties, but I hope that they will be met by the terms of the Minister's letter, asking them, for example, to envisage what would happen when the valuation officer has duly taken account of the terms of the planning permission and the site licence and has told the site owner that there are only 30, say, permitted permanent residents, although about 40 or 50 people point out that they are registered for the community charge and have no other home.
At that point, the site owner may say, "It is not my fault. More people are claiming to be permanent residents than I have ever permitted or the site licence permits. I am entitled to reclaim my rates from them." According to the Minister, the site owner is not entitled to reclaim rates from those who have been registered for the community charge, except any rates in respect of communal facilities, which were not covered by my amendment. I accept that that is a separate point, which must be dealt with in some way.
146 I am never reassured when the Minister refers to the site agreement as the basis on which the tenant can solve his problems because such agreements are often difficult to obtain and are frequently written in such a way as to make the tenant's position weak. Therefore, I hope that the guidance issued by the Department will be strong enough to remind site owners that when someone has been registered for the personal community charge, that person cannot be liable for rates other than those for communal facilities, in respect of the same caravan on the same site. That needs to be firmly underlined, and I shall take every opportunity to remind tenants in my constituency that that is the law.
I beg to ask leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Clause I ordered to stand part of the Bill.