Jeremy Beecham on the government’s latest ruse on probate fees
If ever there was a competition for the chronic misnaming of a piece pf secondary legislation the Non-Contentious Probate (Fees) Order 2018 would be a runaway winner. There is nothing non-contentious about it.
The Order, while exempting estates of £50,000 or less from the payment of fees, increases the cost for larger estates in a range from £250 for estates up to £300,000 to £6,000 for estates above £2million. Thereby generating a profit of £145million per year over and above the £49million collected in fees for the service in 2016-17 – effectively a fourfold increase.
Admittedly, this is somewhat less than the estimated £250million which would have been garnered annually by the original proposals in 2017, as outlined in a government consultation document in 2016. It is also less than the £300million per year extra in additional income as set out in the government’s response to that consultation the following year. If there was a Nobel Prize for elasticity, the Ministry of Justice would, uncharacteristically, be a strong candidate!
The original proposals ignited a blaze of opposition among the public, media, and both the Secondary Legislation Committee of the House of Lords and the Joint Committee on Statutory Instruments.
The Lords committee declared “to charge a fee so far above the actual cost of the service arguably points to a stealth tax and therefore, a misuse of the fee-levying power”.
Meanwhile, the SI committee stated it had: “a real doubt as to whether the Lord Chancellor may use a power to prescribe non=contentious probate fees for the purpose of funding services which executors do not seek to use- namely those provided by courts and tribunals dealing with litigation”.
This latter view was strongly supported by the Law Society and also the Bar Council, which pointed out that the grant of probate “is not really a judicial act of court at tall. It is a simple but authoritative piece of paper, bearing a stamp, produced by a civil servant on a relatively low pay grade in a relatively short, period of time the average cost of which is £166”.
This reads as a mild rebuke compared to the critique of the Secondary Legislation Committee in its report of March 2017, shortly before the last general election, when it dealt with the MoJ assertion that “it is necessary to fund the wider courts and tribunal system to ensure an efficient and effective service”. The Committee quoted Treasury guidance to government departments in ‘Managing Public Money’ that “different groups of customers should not be charged different amounts for a service costing the same”.
This was reiterated in a further Report from the same Committee last month. But it further referred to Treasury guidance that “cross-subsidies always involve a mixture of overcharging and undercharging … so cross-subsidised charges are normally classified as taxes”; and concluded “to charge a fee so far above the actual cost of the service arguably amounts to a stealth tax and therefore a misuse of the fee-levying power”.
Our justice system, with its overcrowded prisons and over-stretched probation service, needs better funding. But it should be done out of general taxation, including inheritance tax and not by a stealth tax.
Lord Jeremy Beecham is Shadow Justice Minister in the House of Lords. He tweets @JeremyBeecham
Published 18th December 2018