§ Amendment made: In page 6, line 10, after "fell", insert "or would have fallen". [Sir K. Joseph.]
§ 9.56 p.m.
§ Sir K. Joseph
I beg to move, That the Bill be now read the Third time.
As I stressed in my Second Reading speech, the Bill has a strictly limited purpose. It does not aim at meeting the complaints of those who argue that the steadily increasing cost of local authority services places an excessive burden on ratepayers, and on domestic 1327 ratepayers in particular. This is a question which will have to be considered as part of the comprehensive review of local and central government finance being undertaken this year. The Bill is concerned only with hardship caused by the extraordinary rating increase associated in some places with revaluation.
The Bill does two things. Clause 1 provides for a grant payable to rating authorities at the rate of £5 for every old person in the local population in excess of a ratio of 100 per 1,000. Clause 2 empowers local authorities to grant relief to domestic ratepayers whose rates in 1964–65 are at least 25 per cent., and £5 higher, than the rates payable by them for the rate period 1962–63. This 25 per cent. minimum effectively excludes from relief cases where the increased rate is due simply to the normal growth of local authority expenditure.
These two provisions in Clauses 1 and 2 are complementary. It is true that the grant under Clause 1 is not directly linked with the question of hardship, but my postbag leaves me in no doubt that, by and large, it is the areas with a high proportion of old people who have felt the pinch of revaluation most. It is in these areas that the need for individual relief is, therefore, likely to be greatest. Under Clause 5, the Exchequer will already be meeting half the cost of individual relief, more in the areas of greatest need. To increase this proportion might undermine local responsibility. The grant given under Clause 1 is independent of the relief granted under Clause 2, but it provides the means whereby, up to a point, relief can be given under Clause 2 without any burden being placed on other ratepayers.
There have been two main criticisms about the relief provisions of the Bill. One is the absence of guidance about the nature of hardship. If I had a working definition of hardship which would convince everyone, a definition which would be as acceptable in St. Marylebone as in a rural district at the opposite end of the country, hon. Members might be sure that I would have put it in the Bill, but to give a guess, to take a pot-shot, would be mischievous when we have the Allen Committee 1328 working very hard to produce for us some hard facts about the impact of rates. We all know that hardship is relative and can mean different things not only to different people, but in different places. I am unrepentant. It must be left to each local authority to decide on the circumstances in its own area how to frame a policy which will weigh the needs of those who claim relief against the situation in the locality.
The other chief criticism is centred on the administrative problem presented by the relief provisions. I do not want to belittle the problem facing—
§ It being Ten o'clock, Mr. SPEAKER interrupted the Business.
That the Proceedings on Government Business may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Hughes-Young.]
§ Sir K. Joseph
I was saying that I do not want to belittle the problem facing perhaps a small handful of local authorities, in particular the Central London boroughs. I can understand their desire for a clear scale of relief and of a yardstick to measure hardship, but it is impossible to offer them in the Bill a hard and fast solution. It may well be that the authorities concerned can get together and evolve some general recognition of what, prima facie, would be the cases deserving investigation and relief, and no doubt they are thinking on these lines.
Some concern has been expressed that local authorities may find themselves in trouble with the district auditor over the meaning that they attach to hardship. In fact, by leaving the question of hardship to the satisfaction of the local authorities, the Clause reserves merits to the authorities so long as they act honestly and so reduces the area of challenge. Although the district auditor is unfettered in his discharge of his functions, his discretion is subject to the ordinary rule of law, and I am advised that the broad position is that a rating authority need not fear disallowance and surcharge unless it has come to a decision improperly, by which I mean arbitarily without evidence, or unless it has decided unreasonably.
1329 As regards unreasonableness, the district auditor cannot substitute his own judgment of whether or not relief should be given for that of the rating authority. To establish unreasonableness, he would have to show that no reasonable man would support the authority's views. I hope that this will reassure local authorities.
This is an interim Bill, not only in title, but now also in fact. If the Government can reach a fully considered balanced view of the rating system leading to long-term proposals for legislation—if it be needed—well before 1968, hon. Members may be sure that they will do so. In the meantime, the Bill provides a palliative. I have made no secret of its being an emergency Measure, and the response that it has had from both sides of the House shows that there is general recognition of the need for it.
§ 10.3 p.m.
§ Mr. G.. A. Pargiter (Southall)
This is probably one of the most slipshod Bills that has been presented to the House during the time that I have been a Member. Hardly any Member is really in favour of it, but we are being virtually blackmailed into passing it because of the desperate need of authorities to receive some form of assistance from the central Government to deal with the ever-increasing problem of rising rates.
It is only in that context that the Bill is acceptable at all. Given a free choice as to how this money might be disposed of to local authorities, I am sure that many hon. Members on both sides of the House could find better ways of dealing with this problem than that chosen by the Government.
There is only one good thing to be said about Clause 1. Originally, the intention was to stick this money on to the block grant. At least the local authorities had the wisdom to oppose this strongly, because if they had not done so this would have been the Treasury's thin end of the wedge to show that in respect of welfare services local authorities were receiving something in the block grant, and the Minister knows that this amount of money will not provide the assistance which local authorities ought to receive. For a long time local authorities have taken the view that they do not receive the assistance which they ought to be given 1330 towards the cost of welfare services, and which should be in the same proportion as for other social services.
The fact that we have been able to keep it separate from the block grant is of some advantage, but beyond that what advantage is it? It is a general relief. The large ratepayer—the corporate bode, and the large insurance company with the huge office block—will receive most of the benefit from this £6½ million. The benefit received will be in proportion to the amount of rates paid, because it is a proportionate relief. In my estimation the average old-age pensioner will receive a benefit of about 1d. or 2d. a. week. He will be lucky if it is as much as 2d. He may benefit to the extent of only 2s. a year.
There is no logical reason why this grant should be based on the proportion of old people living in a borough. That is the formula by which the £.6½ million is to be distributed, but any other formula could have been used. By basing it on the lumber of old people the Government have given the impression that relief is to be granted in respect of the old people, but that is not so. It is a general relief. How it can be regarded as interim relief for hardship I do not know, bearing in mind what the original intention was supposed to be.
The Minister has been told how much better this money could have been distributed if local authorities had been given more discretion in determining what was meant by the word "poverty". If local authorities had been allowed greater discretion in the matter they could have used that discretion to much greater advantage than they can now.
The Bill is accepted not because many people think that it is a good one. As I have said, it is slipshod. If the intention was that it should bring some political advantage to the Government I think that that intention has failed. They will not get much out of it. If it has been introduced in response to demands made at Tory Patty conferences to do something about the burden of rates, I am afraid that many people will be sadly disappointed at what the Bill does. The best that cal be said of it is that it is an interim Measure.
I can only hope that when it goes to another place it will be thrown out—because their Lordships will not be under 1331 the same pressure as hon. Members have been under here. I hope that they will throw it out for want of precision, and that we shall then be able to get something much better, something which will give greater advantage to the people who need help most—the poor people, and those suffering hardship.
The £5 bar will be a terrific handicap in this respect, because it is at the lower end of the scale, among the people who pay the lowest rates, that any increase brings most hardship. We have had no indication of what will happen in respect of old people who are entitled to receive National Assistance. I suppose that those who receive it will rank automatically, because the Assistance Board will pay the additional amount of rate, but what about the person who is entitled to receive National Assistance but does not want to apply? Will his local authority tell him that he will have to apply for National Assistance in order to get the advantage of the Bill?
There is no indication of the Minister's views on such matters, and local authorities will have to use their own discretion. Some may tell elderly persons who would be entitled to National Assistance that they will have to apply for it, or forfeit the benefit, but other authorities may tell them that relief will be given because they do not want to drive the old people to the National Assistance Board. It is a question of the point of view that various local authorities will adopt in providing what they regard to be the best service they can give to those who apply for relief. That is one reason why this is a bad Bill.
I shall not vote against the Bill, because I know the desperate need of local authorities for some additional assistance from the central Government, owing to the increased rate burden, but this is just about the worst way in which this relief could have been given.
§ 10.10 p.m.
§ Mr. F. M. Bennett (Torquay)
The opening and closing remarks of the hon. Member for Southall (Mr. Pargiter) were almost as ungenerous to the Bill as The Times was this morning. We owe a very genuine measure of thanks to the Government for bringing the Bill forward, for precisely the reason mentioned 1332 by the hon. Gentleman, that there has been a desperate need for something to be done of an interim nature before the long-term results of the general review which, we understand, is now well under way can be produced.
If I have a complaint against my right hon. Friend the Minister, it is that he took such a long time to be convinced that there was a need for an interim Bill. It is not so long ago that some of my hon. Friends and I, with on that occasion the support of the hon. Member for Fulham (Mr. M. Stewart)—I dislike throwing compliments across the Floor of the House, but on this occasion I am glad to do so—were pressing my right hon. Friend, in an Adjournment debate, to introduce an interim Measure because the country simply could not afford to wait any longer for something to be done about genuine hardship.
There are one or two points which I should like cleared up.
§ Mr. Dan Jones (Burnley)
Does not the hon. Gentleman agree that, on balance, there are greater hardships in connection with rents than there are in connection with rates? If there was a need for an interim Measure in connection with rates, was there not a greater need for an interim Measure in connection with rents?
§ Mr. Bennett
If I were to pursue that argument, I have no doubt that you, Mr. Deputy-Speaker, would rule me out of order almost as speedily as you would have ruled the hon. Gentleman out of order if he had continued. We are not discussing a rent relief Bill, as far as I know.
I was saying that there were one or two points which I think deserve clarification, particularly after the last speech, because I am, if anything, a little more confused than I was before. I say that in no sense of criticism. It is difficult for us to understand quite how the £5 free grant under Clause 1 operates. As I understand it, such a wide discretion is given that not only will circumstances arise of the type outlined by the hon. Member for Southall when this could be used for a general rate relief, irrespective of hardship, but it could also presumably be used by a council for no sort of rate relief at all. For building an amenity hall, for instance, on the front 1333 in my constituency, or for anything else. I cannot see any compulsion as to use at all on a local authority.
I am not suggesting that the excellent ones in the area I represent would do anything other than devote this money to relieving hardship. Nevertheless, as read the Bill at the moment, a rating area with a large proportion of old people could get this sum from the Exchequer and not use it for any form of rate relief at all. I should like some clarification from my right hon. Friend on this point.
As I understand the Bill, looking at it the other way, a wise and a generous local authority could devote this relief not to overall rate relief but to specific discretionary relief. I should like some confirmation on this point.
§ Mr. Pargiter
This is specifically designed to be given in general relief of rates. Therefore, there can be no question of it being used specifically.
§ Mr. Bennett
I concur with the use of the phrase "general relief of rates", but it comes into a ceiling sum. I am not suggesting that that sum be allocated for sonic other project. When talking of of a sum of so much money in the "kitty", one part could be used for so-called general relief of rates, but the other part could be used for some project which could not have been undertaken had not the local authority got the extra money. It is on this that I need the clarification of my right hon. Friend.
§ Mr. J. T. Price (Westhoughton)
I agree with what the hon. Gentleman is arguing. He may be interested to know that when the same argument was addressed to the Minister in rather different terms in Committee, namely. that an authority could take the relief under Clause 1 but dispense no relief of hardship under Clause 2, the Minister's reply was to the effect that, if this happened in any local authority's area, probably the British Army would have to be called in to deal with the public disturbance which would arise if the authority did not dispense the money which had been allocated to it by the central Government. We could not understand that. Generally, I agree with the hon. Gentleman: he is quite right.
§ Mr. Bennett
I am grateful for these unexpected echoes of support. However, I am seeking clarification from my right hon. Friend because I did not have the good fortune to be on the Standing Committee. It is very rarely that one says that, but I tried very hard to be on the Standing Committee, but was, in fact, not selected. I should have enjoyed nothing more than taking part in the discussions upstairs. I will ask yet again, and this time make it clear that I asked my right hon. Friend, for the clarification I am seeking, much as, I repeat, I welcome the echoes of support which I have been given.
My last point is a most important one. I know from some of the correspondence I have received from all over the country that there is a tendency to regard this Bill as introducing a charity and a means test and one which, therefore, proud people should not resort to. I hope that this idea will be got rid of finally, once and for all, tonight. It is a very odd thing that people seem to find something distasteful about setting out their circumstances and claiming relief from local taxation, which is all rates are, yet they are perfectly happy to fill up an Income Tax form claiming every conceivable relief and setting out all their circumstances in detail.
We must repeat tonight that this is not charity. There is nothing more wrong about claiming the reliefs allowed under the law from local taxation than there is about claiming reliefs from national taxation. I hope that people in all circumstances realise that, the Bill having been passed, they will be as entitled to the personal reliefs possible under it as they are to personal reliefs from any proposals which any Chancellor of the Exchequer makes with regard to national taxation.
Having said that, and subject only to receiving the clarification for which I have asked, I wish the Bill every success. However, I suggest to my right hon. Friend that it is very much an interim Measure and it has proved what many of us have long felt on these benches, and doubtless elsewhere, which is that there is a fundamental need for an altogether new look at the relationship between local and national taxation, and this cannot be delayed much longer.
§ 10.16 p.m.
§ Mr. Temple
I was indeed glad that my right hon. Friend stressed in his concluding remarks to the House that this is an interim Measure. It is entirely right that a terminal date should have been put into the Bill. This was pressed on my right hon. Friend from both sides of the House. I very much hope that the help will be channelled to those who need it. Under Clause 2 this is more than likely to happen.
I have two extremely practical points to put to the House, particularly in regard to schemes which local authorities will be almost bound to draw up to administer the Measure. too, have read the leader in The Times today. I found that in one respect The Times leader was itself unsound. It described the Bill as an unsound Bill. I am afraid that The Times leader is itself unsound. It stated that this would be decided…by some anonymous person or panel".I suggest that The Times has erred. What will happen is that local authority members themselves will decide the schemes under which this hardship will be relieved.
We are, in this connection, up against a problem which I foresaw on Second Reading. I raised this point but, in his reply, my hon. Friend the Joint Parliamentary Secretary did not answer it. I said:…local authority members themselves who will have to frame regulations on these matters may well, and I would think many will, actually be candidates for relief under this Measure."—[OFFICIAL REPORT, 18th December. 1963; Vol. 686, c. 1294.I believe that local authority members and local authorities will be in a grave difficulty, because when we discussed the Bill in Standing Committee it was mentioned that in one local authority area 95 per cent. of the ratepayers would qualify to be considered for hardship relief under Clause 2(1,a). If 95 per cent. of the ratepayers in that area will qualify and have a prima fade case for a claim for relief, it is more than possible that 95 per cent. of the members of the local authority will have a prima facie case for a claim.
All hon. Members who are conversant with these matters know that those persons who may be interested in a particular financial measure or decision of 1336 a local authority are not allowed either to speak or to vote when that measure is under consideration. We are thus facing a real practical difficulty because I believe that there are many local authorities which, when faced with making a scheme under the Bill, will just not be able to tackle this in the normal way unless they can be given a special dispensation for members who may qualify for relief to enable them to make a scheme of this nature. I am not saying that I have the answer to this one. I put this point on Second Reading and I raise it again now in the hope that the Minister will comment on it.
§ Mr. Charles Loughlin (Gloucestershire, West)
Because a Question of mine on this issue to the Prime Minister was not reached yesterday I received a Written Reply. The Prime Minister said that his right hon. Friend had power to grant dispensation in these cases and that where dispensation was not granted it would not be possible for the administration to work.
§ Mr. Temple
That was exactly the point I made. I said that my right hon. Friend would probably have to exercise his discretion and grant dispensation in these cases.
§ Mr. Temple
It is comparatively easy to identify, when a local authority is considering a rent rebate or differential scheme, its members concerned with a matter of that nature because they would be living in a local authority house. In this case we are up against a greater difficulty.
The second practical point I wish to raise concerns the giving of information to ratepayers. If this scheme is to work properly and equitably it is imperative that those who have a claim to be considered must know that they in fact have a claim. Unless a local authority will inform all householders whose rates have gone up by £5 or 25 per cent. between 1962–63 and 1964–65 there will be a great many householders who will not know that they have a prima facie case for candidature to be considered for a hardship relief.
It is under the first so-called hurdle—the hurdle to which the Joint Parliamentary Secretary always refers—that it 1337 is the dwelling which is the criteria of the first hardship. It may be that a dwelling changes hands after, say, two years and a ratepayer may then go in and fall into the first category. He may be a candidate for hardship, his predecessor not having been a candidate. It is imperative that the local authority identifies all the dwellings that may then or at a future date by occupied by a person who will have a prima facie case to be considered as a candidate for this hardship relief.
I turn to an even more important question of information. Persons residing in a dwelling by reason of which they can be considered as a candidate for hardship should know, or be informed, of the local authority's scheme which will govern the administration of the hardship relief to be given under Clause 2(1,b). I hope that my right hon. Friend will take steps to ask local authorities to inform all possible candidates of the schemes which are in operation, otherwise a ratepayer will go to his citizens advice bureau, local M.P. councillor and all sorts of people and receive a variety of information when what he really requires to know is about the scheme and that it is being operated equitably.
This is a complicated subject. The hon. Member for Southall (Mr. Pargiter) and my hon. Friend the Member for 1338 Torquay (Mr. F. M. Bennett) found it—if I may say so without in the least being disrespectful—a little confusing. That is only an example of the confusion that may exist among ratepayers. Ratepayers will certainly not have had the privilege of being on the Standing Committee and having that knowledge of the details of this Measure acquired by members of that Committee.
This is an extremely complicated Measure and what should be issued by the local authorities and, possibly, by the Ministry, is a handy brochure—a child's guide. I very much hope that my right hon. Friend will consider that suggestion. I am sure that it is absolutely necessary, just as was the guide issued by my right hon. Friend the present Home Secretary in respect of the operation of the Rent Act.
Having mentioned what I consider to be these two extraordinarily practical points, I agree with my right hon. Friend when he says that what we are looking forward to is a complete review of the rating system. What we want brought in right across the board is far more equity. I hope the Government will give a guarantee to ratepayers that rates will not advance any faster than personal incomes. That will be an assurance of far more value to ratepayers than an interim Measure of this nature.
§ 10.26 p.m.
§ Mr. John Silkin (Deptford)
This is a Bill that nobody loves. Hon. Members cannot find it in their hearts to love it. The Times newspaper does not love it, and the Minister himself regards it merely as a palliative. It has not aroused very much enthusiasm, because it does not go to the root of the problem. It does not even go to the root of the problem of hardship in an interim manner.
One of the most striking things about the Bill is not so much whether it is good or bad but that it is utterly irrelevant. When we have a situation in which local authorities whose rateable values have gone up and whose rates may be expected to decrease, whether with or without the addition of one or two nuclear stations, are nevertheless entitled to a grant under Clause 1, the utter futility of the Bill is exposed once and for all.
Had it been made a condition that only in cases where there was real hardship could a local authority be permitted to have a grant under Clause 1, there would at least have been the advantage of some degree of logic, but that is not the case. The criterion is: has the authority in question got amongst its population more than 10 per cent. of elderly people? Why elderly people? Why not red-headed people? Why not choose some other criterion altogether?
The Minister says, and I understand the point, that the reason is that where we have a larger proportion of elderly people we are more inclined to have the hardship requiring relief. Then let us accept that position, but let us also say that the local authority itself must make the case for hardship before it avails itself of the grant. That is not done. Local authorities have only to say, "We have over 10 per cent. of elderly people in our area so, even though we shall not apply this for any relief whatsoever, may we please have some money?" The Government must then give the money.
My difficulty is that I should like to vote against the Bill but I can see that, if I do so, I, and those of my hon. Friends who feel this way about it, will be accused, quite wrongly, of not having any sympathy for those people who are being hardly hit by present conditions. We do feel that sympathy, but do not feel that this Bill meets the point. That 1340 is my first reason for not being able to bring myself to vote against the Bill.
The second reason is that in this bingo-like Bill quite fortuitously the Minister may be helping the occasional person who is hardly hit. It is purely accidental, but it could happen. I will give the Minister credit in assuming that he wants to help people, but it is entirely accidental if it occurs.
One small point that I should like to emphasise is this. The Minister said, in defence of the principle that the authority itself decides the criterion of hardship, that, after all, hardship means different things to different people and different things to different localities. Hardship means a very difficult time financially in view of an increase of rates, and that is really all that we are concerned with. We all hope that the permanent review of the rating question will come speedily, but I must say that there would be considerable criticism of it from this side of the House, at any rate, and I assume probably from all quarters of the House, if, when a permanent solution is given to us, it were to have several different criteria—different because, as the Minister has people. We would expect a general for-said, it means different things to different mula. I could never understand why we could not have had a general formula under this Bill.
This is a bad Bill, an irrelevant Bill, but, for the reasons that I have stated. rather reluctantly I would not advise my hon. Friends to vote against it.
§ 10.32 p.m.
§ Mr. William Clark (Nottingham, South)
I do not think it can be emphasised sufficiently that this is an interim Measure, and hon. Members in all quarters of the House are waiting for the Allen Committee to report so that we can look at the whole question of rating in a more realistic manner. I hope that when the Allen Committee does report, this question of hardship will be dealt with, and not in the way that hardship is dealt with under the National Assistance Regulations but rather more on one's annual return of income. This is the way in which people can realise that they are entitled to benefit without the taint of any charity attached to it.
1341 One thing that I like about the Bill is that it is, to a certain extent, selective in its relief of hardship. But there is one thing that I cannot understand. This point has been made by my hon. Friend the Member for Torquay (Mr. F. M. Bennett). Incidentally, I am sorry, as probably other hon. Members are, that he was not on the Standing Committee. It is always nice to have volunteers on a Committee. I cannot understand why we could not have made Clause 1 dependent on a local authority operating the scheme under Clause 5. I should have thought that this would be simple. The idea of the Government is to give relief from rates. Any money paid under this Bill should go to people suffering hardship, and obviously if a local authority were to proceed under Clause I but did not give any relief in respect of rates I think that that rating authority would be getting money under false pretences.
I suggest to my right hon. Friend that in the circular which is to be sent to local authorities he should add a statement to the effect that it is expected that any money received by a local authority under Clause 1 must be utilised not in general relief of rates but for the relief of hardship borne by persons over the age of 65.
§ 10.34 pm.
§ Mr. Edwin Wainwright (Dearne Valley)
This Bill ought never to have been brought forward. I think that even the Minister wishes he could turn the clock back and not have the Bill before the House.
We all know why the Bill has been brought forward. Certain hon. Members opposite were bulldozed into it by their constituents, probably because they live in seaside resorts where quite a number of residents are retired and where, therefore, the proportion of elderly people is well over 10 per cent. Clause 1 will give help to authorities of that kind, but it will not really help the people for whom it is intended.
Anybody residing in an area where there are 10 per cent, or more of elderly people will most likely draw some benefit from the Clause. Many local authorities will qualify for payment under the Clause, but they will be mostly seaside resorts and inland places where 1342 there has been a drift of young people away from the area. Authorities of those two types will be the ones which will get the benefit.
Had the Government made certain that the money received by local authorities under the Clause would be spent on the welfare of elderly people, I could have understood it. But there is nothing in the Bill to compel a local authority to spend any more money on the welfare of the elderly, for whom I a it sure the money was intended. Why did not hon. Members opposite realise that this should be done, and why did they not press the Government to alter the Clause so that it would be fairer and more just in its application? The reason is that the Bill was drawn up in haste and not a great deal of thought was given to it because there was some electoral pressure from hon. Members opposite on the Government to do something to try to ease the viciousness of the Rating and Valuation Act. It means that Government supporters are not playing the game even with their own constituents, because it can easily be proved that under Clause 2 their own constituents can suffer and be in more dire need of relief than those who will get the benefit.
I wish hon. Members opposite would be more open about what they mean by "hardship". There may be a young married man with a family off work through sickness, with a small income which may keep him away from National Assistance, but his rates may have gone up £4 10s. in the period concerned and he will get no relief. There may also be a person with a reasonable income from investments or pension who may prove to the satisfaction of the local authority—I sympathise with members of a local authority who have to decide what may be a hardship—that, his rates having gone up £7 or £8, some relief should be granted. There is nothing fair about it. The Bill cannot be applied fairly and justly to the whom country. Right hon. and hon. Gentlemen opposite know this, and know that this is a Bill which ought never to have been brought here. But in order to give satisfaction to a few of their back trenchers, who seem to have more power than they should, the Government gave way.
1343 The hon. Member for Nottingham, South (Mr. W. Clark) suggested that brochures should be issued. Of course they should. The fullest information should be made available to the ratepayers to ensure that those who are entitled to qualify make the necessary application. In some areas there is really going to be a means test. Some local authorities will be generous in their interpretation and application of Clause 2 while others will not. They may be adjoining local authorities, and friends will be discussing with one another what has happened in each local authority. This will create acrimony because one authority has been more generous than the other.
It is going to be left to each local authority to decide what is hardship and what is not. How will they decide? There will be some people who have their own private businesses or people with investments who are comparatively wealthy, but the local authority will not necessarily be aware of this fact. Such people could get the full benefit of the Clause. Their friends and neighbours, who might know a little more about their financial standing than the local authority will say that to give such people the benefit of the Clause is very unfair. They will say, "We are more entitled to benefit under the Clause than they are. We cannot get the benefit because our local authority has been more diligent in obtaining information or has not been so generous. Our income has been there for anyone to see."
As I say, it will be nothing but a means test. If it is to be run fairly it will have to be that. The hon. Gentleman opposite said that it must not be accepted as being charity. The hon. Gentleman does not want it to be charity because he is probably thinking more about people who are better off than of those who have to accept charity at the present time. What surprises me about the Bill and about the attitude of hon. Gentlemen opposite is that when the 1957 Rent Act became law and some people found it difficult to afford the rents asked, even though they had to afford the rates, it was said that they should find accommodation more suited to their income. That is what hon. Gentlemen opposite said then, but 1344 it is quite different now when we are discussing rates.
The Bill would have been more just if it had said that some relief should be given for every house or bungalow in the country occupied by old people On which the rates had been increased. It should not have been done in the way proposed in the Bill. Does the Minister think it fair that a person with a very low income, perhaps just above the National Assistance level, and whose rates have gone up by £4 10s. a year should get no benefit at all while another person who may have a substantial income, as I have explained, should receive relief? How can the right hon. Gentleman justify a Bill of this sort? I do not think that anyone can.
My hon. Friend the Member for Deptford (Mr. Silkin) said that he could not oppose the Bill. Of course, the Government know that we cannot oppose it. I should like to do so because it does not deal fairly with those people who are in need and who will be in need as a result of increased rates. I have as great a desire as anyone in the House to give relief to those who will be hurt very badly and unjustly under our rating system, but I want to do it more fairly and properly than the Bill will do it. I hope, therefore, that the Government will make certain that the Allen Committee reports as early as possible and that the unfair and unjust provisions of this Bill will be corrected well before 1968.
§ 10.45 p.m.
§ Mr. Bryant Godman Irvine (Rye)
We have had speeches from three hon. Members opposite. It has been quite clear that not one of those hon. Members has the slightest idea of the type of conditions which exist in the part of Sussex which I represent. In my constituency I have two councils which have had very steep increases in their rates and I have other areas nearby which have had little or no increases at all. From one hon. Member we had it that the Bill gave no real relief to old people. The hon. Member for Deptford (Mr. Silkin) told us that the point about elderly people was quite irrelevant. Now, the hon. Member for Dearne Valley (Mr. Wainwright) says that we were bulldozed into action by elderly people. It 1345 seems very strange to me, after having been in the House for some time and having heard some of the speeches made from the Opposition benches, to hear a series of attacks on elderly people on this occasion.
In my constituency, there was no question of being bulldozed. When I saw what the situation was, I did everything I could to find out the facts. It took a great deal of trouble and a good many months of hard work before I was able to obtain all the information which I could present to my right hon. Friend. I take this opportunity to thank my right hon. Friend for the way in which he dealt with this subject so speedily and for the interest which he has taken in the matters which I have put before him.
Like my hon. Friend the Member for Torquay (Mr. F. M. Bennett), I genuinely regret that I was not a member of the Standing Committee which considered the Bill. I happened to be on two other Standing Committees at that time, and I imagine that three would have been a little too much for anyone.
§ Mr. Wainwright
The hon. Gentleman will agree that, even in his constituency, if rate relief were given to all old people who were ratepayers, it would be far better than what the present Bill will do.
§ Mr. Godman Irvine
No. There are elderly people in my constituency who would not necessarily need this relief. On the other hand, there are others who do desperately need it. It is just because there are these people that I have done my best to direct the attention of my right hon. Friend to the hardship which they were suffering. I have a great many people in my constituency who have worked hard in their lives and who have small savings. When they retired, they thought that their savings would meet their requirements, hut they now find that, with this sudden increase of rates, they cannot carry on.
My right hon. Friend has speedily brought forward this interim Measure, and, as many hon. Members have said today, we are waiting for the final survey of the whole situation. One noticeable fact is that the Liberal Party does not seem to be taking much interest on this matter. Its attitude is precisely 1346 as it was on the occasion of the Adjournment debate when some of us spoke on the same subject and there was not one Liberal Member present. It seems odd that there is no one here to say anything on behalf of the Liberal Party.
My hon. Friend the Member for Torquay referred particularly to the way in which some people are a little reluctant to put forward their financial position even though they have a perfect right to do so. I came across examples of that when I was trying to find evidence about these cases in my constituency. I found great difficulty in persuading some of these people even to put forward the facts which would enable me to place them before my right hon. Friend. I do not think we can make the point too often nor too strongly that we sincerely hope that when this Measure is on the Statute Book no one will feel he is not entitled to take full advantage of the relief the Bill offers.
We hope that my right hon. Friend will see that the larger survey will be pressed on with as fast as possible, because we all realise that this is only an interim Measure.
§ Mr. Mapp
Will the hon. Member consider conceding the point that there is a stratum—it may be a large one—in his constituency which fits the circumstances he described? Can he with equity and justice say to the 230-odd authorities which will not qualify for a Clause 1 grant that the Government want to exhibit a measure of sympathy for hardship in the manner the hon. Member has in mind, but that the authorities will find it a very serious strain on their resources despite the fact that 50 per cent. will be borne by the Government? Dees he think that contradiction is fair and sensible in a Bill in 1964?
§ Mr. Godman Irvine
What the hon. Member has said illustrates again that he does not appreciate the type of situation I represent. There are authorities in my area where the type of point he has just put would not arise at all. This Bill is directed to places where there have been sleep increases in rates. Where there is not that kind of situation that point does not arise.
§ 10.52 p.m.
§ Mr. Michael Stewart (Fulham)
There has been a great deal of criticism from both sides of the House about the unprincipled nature of this Bill. I use the word "unprincipled" in its precise sense, that this is a makeshift Bill hurriedly got together to deal with a particular emergency. It is just as well that it is a makeshift Measure because of the dangerous principles it introduces into our finances. It was hurriedly put together because as recently as August the Government were telling their supporters that it would be wrong to nourish hopes of a Measure of this kind. Then, when the pressure increased at the Tory Party Conference, this Measure had to be hurriedly devised.
Let us have a look at some of the criticisms. First, there is the case against Clause 1 that was so well made by one of the Government's supporters the hon. Member for Torquay (Mr. F. M. Bennett). He represented himself as being bewildered about it, but, in fact, I think that he understood it very well. What we are all bewildered about is why it is still in the Bill when there is a much better way of helping local authorities.
The hon. Member for Rye (Mr. Godman Irvine) seemed so eager to make party points that he failed to understand what the argument about Clause 1 and relief to local authorities with a certain proportion of old people is about. Let us spell it out. This is the relief given to local authorities which satisfy the condition in Clause 1. It is not tied at all to the question whether those authorities give any relief whatever to the persons for whom the hon. Member claims to be concerned.
To take two possible extremes, a local authority benefiting under Clause 1 might argue to itself like this: "We are going to get £X under Clause 1 and under Clause 5 we shall get half of whatever sum we part with in relief to individuals. Therefore, we shall resolve that £X shall be granted in relief of rates. Then we shall be properly and fully using all the help the Government give under the Bill to help hard hit individuals."
That is one end of the scale. At the other end of the scale there is nothing in the Bill to prevent an authority from 1348 getting help under Clause 1 and not giving a penny of rate relief to anybody—
§ Mr. A. Bourne-Arton (Darlington)
I am surprised to hear the hon. Gentleman echoing the argument put forward by his hon. Friends the Member for Dearne Valley (Mr. Wainwright) and the Member for Deptford (Mr. Silkin). If it really be the case that there are local authorities who lack consideration, or the will and wish to help those in hardship, is it not a good thing that they should be judged in comparison with their neighbours who do not lack the will and the wish to use the permissive powers given in this Bill?
§ Mr. Pargiter
When my hon. Friend replies will he also deal with the point that an authority which, by virtue of the nature of the new rating regulations, has no increase in rates at all, if it has the proportion of old people prescribed in the Bill, will receive the benefit which the Bill provides, without having any increase at all for those it is supposed to be relieving?
§ Mr. Stewart
I am grateful to my hon. Friend. I take the point. It means a local authority may well have no need to give relief to get help under Clause 1.
On the second point, it may be true that a local authority which behaved less generously than was right would be, as the hon. Gentleman put it, judged in comparison with its neighbours which behaved more generously. The fact that it was being so judged would be remarkably cold comfort to the people in its area who ought to be getting relief and were not getting it.
What we are dealing with under Clause 1 is the taxpayers' money, which is to be granted to particular, favoured local authorities, and we ought to have some sort of guarantee that it will be used for the purposes with which ostensibly the Bill is concerned. I am still mystified, like the hon. Member for Torquay (Mr. F. M. Bennett), as to why the Government stick to this.
1349 Why not remove Clause 1 from the Bill and give the whole of the help which is to be given to local authorities by making the terms of Clause 5 more generous, and say, for example, that a local authority instead of getting half the sum it spends out in reliefs to individuals from the Treasury is to get three-quarters from the Treasury? Or even, if one were to be very reckless, to get the whole 100 per cent. grant from the Treasury. I shall be told that the Treasury would never sanction so reckless an idea. Yes, but the Treasury, and the Minister, and the Government as a whole must have some idea of what they are let in for under Clause 5 as it stands. It lets them in For half the cost of reliefs granted. They are not underwriting a totally unknown liability. If they altered Clause 5 so that it would be 100 per cent. grant. they would be let in for twice what they know they are let in for. It would not be a vast, immeasurable sum, and they would have, to set against it, the fact that they would not have to give help under Clause 1, some of which may be given away where it is not necessary at all.
I am still mystified—and I think everybody is—why the Government do not pursue that course. We should have liked to have amended Clause 5 in the sense I have described when the Bill was in Committee, but we were precluded from doing so by the narrow circuit of the Money Resolution.
§ Mr. F. M. Bennett
It is probably too late to make the drastic alteration which the hon. Member is suggesting, and which find an interesting one, but of course, the same principle could be served, even at this late stage, if it were possible to tie the grant under Clause I to local authorities which would operate Clause 5.
§ Mr. Stewart
Yes, I think that that is so, but we should need to make some sort of measure of what extent they would operate it.
§ Mr. Stewart
And that brings me to the next point I was about to make. This is that one would have to put on to the Minister some responsibility for the way in which local authorities use their powers under the Bill.
That brings me to the second major criticism made of the Bill on both sides 1350 of the House—that there is no guidance by the right hon. Gentleman to the local authorities as to what shall be the test of hardship. This criticism was well developed by my hon. Friend the Member for Deptford and the hon. Member for the City of Chester (Mr. Temple) pointed out, with a wealth of knowledge and skill, the administrative difficulties of all kinds which will face the local authorities. One of these, in particular, I will mention; it is one which the Minister dealt with but not very satisfactorily.
What about the danger of a local authority that tries to be quite generous under the Bill getting itself into trouble with the district auditor? The Minister's answer was that if the district auditor was to get it into trouble he would have to show that it no reasonable man could approve of the decision it had taken in the matter. One pictures the local authority at risk with the district auditor scouring the streets for a reasonable man to put into the box to say that he agrees with what it has done.
What the right hon. Gentleman said about this was not reassuring because some of us have made a study of what has happened to the rents of council houses in the hands of district auditors. Local authorities which have, on their own judgment and after careful consideration of the facts, wanted to reduce council rents have found sometimes that they were unable to do so without getting into trouble with them because they are constantly making comparisons with other rents and the behaviour of other local authorities.
If that sort of thing is to crop up, may not arty authority which is rather more generous than the rest find itself in danger of being in trouble with the district auditor? This is one of the many administrative worries that still surround the operation of the Bill and which are still not resolved.
Turning from particular objections to the Bill to the unsatisfactory nature of Clause I and the failure of the Minister to include any guidance or criterion on hardship by which the local authorities might act, we now come to something that underlies the whole nature of the Bill. There is, at the moment, a minimal power of total authorities to make some 1351 remission of rates in cases of extreme hardship.
I may say at this point that it is to be hoped that some of the local authorities faced with the kind of problem described by the hon. Member for Rye and the hon. Member for Torquay will, at any rate, use that power in respect of rates that fall to be paid this year and which this Bill will not help at all.
I had even today a letter from an elderly couple to whom the Bill will give much needed relief and which illustrates very well the point made by my hon. Friend the Member for Deptford that, deplorable as the Bill is in many respects, we cannot, having people like that in mind, vote against it.
The unfortunate position of this elderly couple is that, although they will be helped next year, they are already running heavily into arrears with this year's rates, which are beyond their means. It is very much to be hoped that the local authorities will make the fullest use they can of the very limited power they now have to grant relief of rates in cases of extreme hardship even before this Bill becomes law.
In the Bill we go a bit further. We make the power to grant relief of rates in case of hardship more firmly based in a Statute than it has been before. When all is said and done, despite that statutory basis, we cannot get away from the fact that this is a means test. I ask the hon. Member for Torquay to consider further his parallel between claiming rate relief under the Bill and filling up one's Income Tax return. The basic difference between the two is that when I inform Her Majesty's inspector of taxes of any ground on which I can claim relief, I am not asking him of his goodness to do something to help me particularly; I am telling him of a fact, and, if the fact is established, he has got to give me the relief; he has no discretion in the matter. Under the Bill, if I present the facts of my circumstances to the local authority, it still remains within its discretion to say whether it thinks that I am hard up and ought to have the relief. That is why it must be regarded as a means test.
Suppose that we were to go further than that and to put it into the Bill that 1352 anybody who is hard up to a certain extent, measured by size of income and other circumstances, is to get the relief, removing the discretion of the authority; we would then have taken the first tiny step towards the principle of local Income Tax. It may be that the moment that we say that the amount a man has to pay for the cost of local services is to be determined not simply by the rateable value of the property which he occupies, but, in the case of some people, at any rate, by reference to his whole income and what he could afford, we would be beginning to admit that it is a man's whole income and what he can afford which ought to be the determinant of what he should pay towards the cost of local services. We have not done that yet, but what we have done in the Bill is a pointer as to the road along which we ought to be thinking of travelling.
§ Mr. F. M. Bennett
There is some validity in what the hon. Gentleman says about there not being discretion in the case of the national Exchequer, but, once a standard has been set, presumably local authorities will within that standard apply the reliefs within their discretion to everybody within those brackets, not to one, but to another. The hon. Gentleman's argument is valid only to some extent.
§ Mr. Stewart
The scheme is something which can be varied or destroyed at any time by the decision of the local authority. The more precise and firm it is made, the nearer we get to accepting the principle of some kind of local Income Tax, that is to say, proportioning a man's contribution to the cost of local services to his whole income and his whole situation, rather than basing it simply on the rateable value of the property which he occupies.
Meanwhile, however, and in the first operation of the Bill, it involves a hardship test, a means test. I say that not in any way to discourage anybody who is in real need from making an application under the Bill. I say it because it points out the fact which underlies the Bill throughout—that there is something basically wrong with our local government finance. If there is a system of taxation—and although we use the word "rates", in fact it is a kind of taxation—which works out so that we 1353 then have to go round and say that there are poor fellows who cannot afford to pay the taxes under the legal arrangements which we have made so far, that shows that there is something wrong with that system of taxation and that we have not been able generally to proportion it to ability to pay. It is at that kind of thing that the Government ought to be looking and I suppose are looking, but ought to have been looking years ago.
It is about three years since my hon. Friend the Member for Widnes (Mr. MacColl) and I took part in a half-day debate urging the Government to review the relation of local and central Government finance and to find alternative sources of local government revenues. If, on that occasion, we had had the help of the hon. Member for Rye, it might not now be necessary for him to go round hunting out the individual victims of an error of general policy.
The Bill has to go through, but it should go through with a lesson to the Government to pay a little more attention to the advice that has been given lo them for so long about the unsatisfactory nature of local government finance, and of the results that will be achieved if year after year we add to the services of local government without realising that after a time this will build itself up into a situation in which the total amount of money that local authorities have to collect is such that under our present system of rating it is bound to require intolerably large amounts from the particular individuals whom we trust the Bill may help.
§ 11.11 p.m.
§ Mr. Corfield
The hon. Member for Fulham (Mr. M. Stewart) will not expect me to follow him in the development of ideas for local income tax. He will no doubt have read the various studies on this, as I have, and realise that they would occupy a good deal more time than I could reasonably inflict on the House tonight.
The hon. Gentleman started by saying that this was an unprincipled Bill. Let me endeavour to try, once again, to get the principle across, because I suggest that it is a clear one, although I know that I shall have some difficulty in persuading my hon. Friend the Member for 1354 Nottingham, South (Mr. W. Clark) that the connection between Clause 1 and Clause 2 is as it should be.
The whole basis of the grant under Clause 1 is to channel some extra Exchequer money to those local authorities who, on the face of it, are likely to have the heaviest burden and demand under Clause 2, and to do so in a manner, not as the hon. Member for Fulham would suggest, or indeed as my hon. Friend the Member for Nottingham, South would suggest, which would give the local authority in effect 100 per cent. specific grant, but in a way in which the local authority will still have a financial responsibility for the judgments it makes, and, at the same time, will have some extra money to ensure that the consequent extra burden on other ratepayers does not become excessively heavy.
It is arguable that one could have instead a specific grant—as the hon. Member for Fulham suggested—but I do not think that I would go with him in suggesting that this would result in precisely the same bill to the Exchequer, because I am sure that the essence of a discretion in this matter is to couple with it the task of financial responsibility, and that is the purpose of the separation of the grants under Clause 1 and Clause 5.
The hon. Member for Fulham also endeavoured to draw a distinction between the means test as it arises, or is likely to arise, in substantiating a claim of hardship, and the means test to which my hon. Friend the Member for Torquay (Mr. F. M. Bennett) drew attention, under which most of us come from time to time in regard to income tax. The hon. Member for Fulham said that the difference is that having established a fact one has a right to relief under Income Tax law, whereas under the Bill, relief is discretionary. But I understand that even under the National Assistance provisions there are certain items in respect of which, if one establishes a fact one creates a right. I do not believe that because a person has a right, the fact that he has still to declare the whole of his personal financial circumstances makes it in any way less a means test than if there is merely a claim for discretion.
I welcome the comparison made by my hon. Friend the Member for Tor 1355 quay because it is immensely important, not only in relation to the Bill, but in relation to National Assistance, to persuade people that there is nothing derogatory in declaring their incomes for this sort of purpose. I always blatantly tell my constituents that it is the taxpayer who finds the money, and goes through a much more virulent means test, and that it is stretching their pride a little too far to object to doing so when they are at the other end. I hope that we shall be able to persuade people who have a claim to come forward and not to feel that their pride is hurt in doing so.
My hon. Friend the Member for the City of Chester (Mr. Temple) raised two points—one the slightly academic one, at the moment, of the possibility of a local authority's being composed entirely or mainly of members who might be eligible for relief under the Bill. If that position arose I am sure that my right hon. Friend would be asked to exercise his dispensation under Section 76 of the Local Government Act, and I have no doubt that that dispensation would be given.
The general principle is that where local authority members have an interest, within the terms of that Section, in sufficient numbers either to make the council's business unworkable or to upset the balance of the parties, a dispensation is always given. I believe that in such a situation a local authority will be careful to ensure that its members' personal interests do not predominate.
My hon. Friend went on to refer to the question of publicity. I am glad to say that already the Institute of Municipal Treasurers and Accountants has considered the matter and has circulated a paper emphasising the importance of bringing to people's notice the terms of the Bill, to the extent that those terms affect their eligibility. Whether or not local authorities will require any guidance on the second hurdle, in relation to the sort of scale that individual local authorities should apply, I will certainly consider. No doubt, suitable advice can be incorporated in a circular.
I believe that local authorities will be able to decide this sort of thing for them 1356 selves. They will normally be quite clear about the incidence of hardship in their area, and about the houses that qualify, and in many cases a simpler form of publicity will be appropriate, although something more complex may be required in some areas. I will certainly take my hon. Friend's words to heart and see what we can do to make sure that people understand the position, and that local authorities, having considered the scales they will apply, will make suitable efforts to give those scales publicity.
The hon. Member for Dearne Valley (Mr. Wainwright) seemed to be arguing against himself. He came to the conclusion, after some logic which I found difficult to follow, that it would be much better to give relief to all households occupied by elderly people. In the course of his argument he said that a married man in the lower income group and with a large number of children might be suffering great hardship. That is the whole point of the discretion in the Bill. It ensures that although those areas with large numbers of old people are likely to be the areas of greatest hardship, nevertheless all cases of hardship, whether they involve the young, the old, the sick or the fit, will be considered in exactly the same way. As has been pointed out, there are a large number of elderly people who are unlikely to suffer hardship and who may be well off.
Several hon. Members seemed to be following the argument of The Times in its leader this morning; that one could define "poverty"—that the definition already exists in legislation—and save a great deal of trouble in defining "hardship". Hon. Members who take that view should spend five minutes in the Library looking up the definition of "poverty" in the Oxford Dictionary, for they will see that it is given as:indigence, destitution, want…That sounds definite, but at the end of the definition of "poverty" is added, in brackets, the words:In various degreesOnce one has that one gets nowhere nearer a definition. I also took the trouble to look up the word "definite" and found the definition of that to beA precise statement of the essential nature of a thing".1357 How one can have anything fairly definite, as The Times describes "poverty", is playing with words. It may be that a purist would say that it is wrong to have discretion in a system of taxation. But, after all, this has been inherent in the whole history of the rating system in this country and it is only a very few years ago that we had the sympathetic rating assessments by local authorities to meet this sort of thing for charities.
I do not claim that we have solved or have begun to solve all the problems that arise from rating, but I want to make it clear that despite the claims of hon. Members opposite about a review two or three years ago, let us remember the futility of a review of any sort when we had different classes of property all valued on the basis of different dates. We had houses on 1939 values, commercial property on 1955 values with 20 per cent. Berating and industrial property at 50 per cent. Until we had revaluation it would have been absurd to imagine that we had the data on which to embark on a realistic review which would be likely to produce realistic results.
That review is in progress. Meanwhile, it is inevitable that over the years, with revaluation taking into account very nearly a 25-year jump, values will have changed. The general pattern in this respect has changed throughout the country and in some cases the effect of revaluation on individual households has been severe. It is right to endeavour to meet that problem and I think that the Bill is a valuable instrument to do so.
§ Mr. F. M. Bennett
Will my hon. Friend say something about the main item of complaint in almost every speech tonight; the uneasiness about the lack of relationship between Clause 1 and the operation of any hardship scheme? What 1358 sanction, if any, is then; to local authorities which claim benefit under Clause I without offering any hardship scheme?
§ Mr. Corfield
I endeavoured to deal with that. If we are going to place on local authorities a discretion of this sort, I suggest that we must treat them as responsible bodies and give them a degree of financial responsibility. If my hon. Friend really feels that we are unjustified in trusting local authorities in this direction, I think that he would also feel that they cannot be trusted with any form of discretionary power. My hon. Friend cannot haw it both ways. Whatever the defects of local authorities may or may not be, we certainly will not improve them or increase their responsibility by treating them in the way my hon. Friend suggests.
§ Question put and agreed to.
§ Bill accordingly read the Third time and passed.